Major Engineering Pty Ltd v Timelink Pacific Pty Ltd [2007] VSCA 228

2 This is an appeal from a judgment given in the Admiralty Division. It concerns the failure of hydraulic cylinders supplied by the appellant ('Major Engineering') to the respondent ('Timelink') to power the canting keel of the racing yacht Wild Thing. The judge held that Major Engineering had breached its contract with Timelink by providing cylinders that lacked the capacity to withstand a working force of 262 kN, and that the breach caused the cylinders to fail while the yacht was racing in the 2004 Sydney Hobart yacht race (causing damage to the yacht). His Honour gave judgement in favour of Timelink for damages to be assessed.

**3 There is a preliminary issue as to whether Major Engineering needs leave to appeal. Major Engineering contends that the judge's order was a final order so that leave is not required. Out of an abundance of caution, however, it applied for leave to appeal in advance of the hearing of the appeal and that application was adjourned to be heard by this court at the same time as the appeal.

4 There is some debate about whether a judgment for damages to be assessed is an interlocutory order or a final order. Commonsense suggests that it should be regarded as a final order. As Sir John Donaldson MR said in White v Brunton:[1]**

It is plainly in the interests of the more efficient administration of justice that there should be split trials in appropriate cases, as even where the decision on the first part of a split trial is such that there will have to be a second part, it may be desirable that the decision shall be appealed before incurring the possibly unnecessary expense of the second part. If we were to hold that the division of a final hearing into parts deprived the parties of an unfettered

right of appeal, we should be placing an indirect fetter upon the ability of the court to order split trials.

**5 As his Lordship also pointed out, it is possible to regard such an order as a final order if it is treated as an exception to the general rule that a final order is one which finally determines the rights of the parties.[2] But there are some indications which point the other way.

6 In this country the preponderance of authority is that, in cases in which damage is not the gist of the action, a judgment for damages to be assessed is a final order. In Hall v Busst[3] Dixon CJ, with whom on this point the other members of the court may be taken to have agreed, held that a judgment for breach of contract for damages to be assessed was a final order for the purposes of s 35(1)(a)(2) of the Judiciary Act 1903 (C'th). Similarly, in City of Camberwell v Camberwell Shopping Centre Pty Ltd,[4] the Appeal Division held by majority that a judgment for breach of contract for development of a shopping centre with damages to be assessed was a final judgment. Marks and Gobbo, JJ[5] reasoned that:**

In Hall v Busst[6] Dixon CJ considered an objection to competence of an appeal then before the High Court on the ground that an order made in analogous circumstances was interlocutory.

At 218, Dixon CJ said: "I think that the order was intended as a judgment for the plaintiff for damages to be assessed and therefore that it is final in the sense that word bears in s.35(1)(a)(2) of the Judiciary Act 1903-1955 (Cth).

In the present case, the hearing below and the appeal were conducted on the basis that all issues as to liability were canvassed and that the question of liability was wholly decided. S 10(2) of the Supreme Court Act 1986 permits appeal to the Full Court from a "determination", so that it is a determination rather than an order which must be final, not interlocutory.

The circumstances are, in our opinion, analogous to those in Hall and such that it may fairly be said that the determination of the learned judge was intended as a judgment for Podgor for damages to be assessed and that therefore it is final, if not, a determination as to liability to pay damages which is final. Thus the appeal is of right from "a determination" within the meaning of s.10(2) of the Supreme Court Act 1986.[7]

7 In National Australia Bank Ltd v Maher (No 2)[8] this court went further in applying Busst to a case where there had been judgment for the respondent for knowing participation in breach of trust with damages to be assessed. Callaway JA, with whom the other members of the court agreed, said that:

Unless Hall v Busst has been expressly or impliedly overruled by other decisions of the High Court, those cases would not justify our departing from Hall v Busst or from the way in which the Computer Edge case was understood in City of Camberwell v Camberwell Shopping Centre Pty. Ltd.

Different considerations apply to the decision of a preliminary question or issue, as opposed to a decision on the whole question of liability that has been carried forward into a judgment, as in the present case: see Dunstan v Simmie & Co. Pty. Ltd. [1978] VicRp 62; [1978] V.R. 669 at 670; Metcalf v Permanent Building Society (1993) 10 W.A.R. 145 at 149; Barnes v Australian Telecommunications Corporation [1996] 2 Qd. R. 1, especially at 3 lines 49-52, where the Computer Edge case is said to vindicate Dunstan v Simmie & Co. Pty. Ltd., and Griffiths v Malika Holdings Pty. Ltd. (1997) 140 F.L.R. 353 at 355-9. It may be that some of the cases in the Federal Court fall into that category. The position is different in England and New Zealand: see White v Brunton [1984] Q.B. 570 at 573 and Strathmore Group Ltd. v Fraser [1992] 2 A.C. 172 at 178-9.[9]

**8 With respect, I agree with Callaway JA. As far as I can see, there is as yet no decision of the High Court which has expressly or impliedly overturned Busst. To the contrary, in The Electricity Commission of New South Wales v Lapthorne,[10] Barwick CJ and McTiernan and Owen JJ, although holding that a finding of negligence with damages to be assessed was an interlocutory determination, expressly distinguished Busst on the basis that it was concerned with an action for breach of contract and thus of which damage was not the gist. Similarly, in Hahn v Conly[11] Barwick CJ and Walsh J[12] held that a finding of negligence with damages to be assessed was an interlocutory determination which was distinguishable from the declaration in Busst. Walsh J stated that the point was covered by The Electricity Commission of New South Wales v Lapthorn.[13]

9 It has been suggested that the decision of the High Court in Computer Edge Pty Ltd v Apple Computer Inc[14] impliedly overruled Busst. But in my view that is not so. In Computer Edge, Gibbs CJ, with whom Murphy and Wilson JJ agreed, held that where quia timet injunctions had gone to restrain apprehended infringements of copyright and it was ordered that the question of whether any damage had been suffered be referred to a judge, the latter order was interlocutory because it did not finally determine rights. But the point of the decision was that, because there had been no determination of whether copyright was infringed, the order referring the question of damages was necessarily interlocutory. That is to be contrasted with Busst where there had been a binding determination of breach of contract.

10 There are two decisions of the Federal Court which are not easy to reconcile with Busst. In National Australia Bank Ltd v Cunningham,[15] a Full Court of the Federal Court held that a declaration of contravention of s 52 of the Trade Practices Act 1974 with damages to be assessed was an interlocutory order. With respect, I should have thought that it is of the essence of a declaration of right that it finally determines rights (unless, perhaps, the declaration goes to rights which are themselves essentially interlocutory).[16] It may be, however, that the decision is to be explained on the basis that damage was thought to be the gist of the proceeding. In Fisher & Paykel Healthcare Pty Ltd v Avion Engineering Pty Ltd,[17] another Full Court of the Federal Court held that a declaration of infringement of registered design and petty patent was an interlocutory order. Once again, it is difficult to see why such a declaration should not be thought of as final, and it is not immediately apparent that damage is any more the gist in an action for infringement of copyright or petty patent than it is in an action for damages for breach of contract.

11 But be that as it may, in this case the claim was one for breach of contract[18] and accordingly I consider that the position is controlled by Busst. In my view, the judge's declaration of breach of contract was a final order and thus one from which this appeal lies as of right.**

**12 Timelink is a company of which the renowned yachtsman, Grant Wharington, is sole director. In or about 2002, Timelink engaged a yacht designer and design engineer, Donald Allen Jones, to design for it a new 30 metre "cutting edge" ocean racing yacht, Wild Thing, to be capable of taking line honours in the Sydney Hobart yacht race and competing in major ocean yacht races around the world. In the course of the design development of Wild Thing, Mr Jones determined that the yacht should have a canting keel, to be activated and restrained by a pair of hydraulic pistons fixed in parallel, at one end to the head of the keel and, at the other end, to the port side of Wild Thing's hull.

13 Some years before, Mr Jones had had dealings with Major Engineering, which he understood to be a well established engineering firm in the business of designing and supplying hydraulic equipment, and with Mr Reginald Petty, who was by trade a fitter and turner and was the sales manager of the Major Engineering's Hydraulic Division. At that earlier time, Major Engineering supplied and fitted a retractable hydraulic propeller for Mr Jones' own racing yacht, Cadibarra 7, and, as a result of their work, Mr Jones had formed a favourable impression of Major Engineering and of Mr Petty. Consequently, when Mr Jones began to consider the canting keel for Wild Thing, he turned to Major Engineering and hence to Mr Petty.

14 The two men had a number of meetings at which they discussed the hydraulic aspects of the proposed canting keel system. As it was envisaged, the system would involve pumps to deliver oil into the hydraulic cylinders at the required pressure, as well of course as the cylinders themselves, including pistons and connections. The discussions focussed on the hydraulic cylinders. Major Engineering was an agent for Parker Cylinders of the United States and was also in the habit of having cylinders made up by a local manufacturer, Air Valve Engineering Pty Ltd, according to Parker designs.

15 In March 2002, Mr Jones spoke by telephone to Mr Petty. He asked Mr Petty to tell him what size cylinders would be required to produce a given force on two alternative bases. One was a single hydraulic cylinder set-up with a capacity for a force of 60,000 lb. The other involved a pair of hydraulic cylinders each with a 30,000 lb capacity. Thirty thousand pound capacity is the equivalent of 133.5 kN or 13,604 kg.

16 Mr Petty responded by a fax dated 27 March 2002 that, for the single cylinder set-up, a five inch bore would operate at a pressure of 3,050 psi; or, for each of the dual cylinders in the twin cylinder set-up, a 4 inch bore would operate at 2,400 psi. He attached four pages from a Parker Infinity Series catalogue showing relevant engineering data, including the dimensions of the cylinders and the piston shafts. The fax stated: 'use the dimensions as per sheet' [meaning the attached pages of from the Parker Infinity Series catalogue] and that: 'These we can make locally'.

17 Subsequently, as Mr Jones worked on the design of the yacht, he came to the conclusion that there should be two hydraulic cylinders and that the compression and tension forces to which the hydraulic system would be subject would be much greater than those he had discussed with Mr Petty and specified in the 27 March 2002 fax.

18 Consequently, on 4 June 2002 Mr Jones sent an email to Mr Petty as follows:**

The cylinder arrangement I have decided on for WILD THING's canting keel includes two 5" x 930 mm stroke cylinders, one with a cylinder end as in the "Infinity Pin Eye Series Style R" with pin diameter 1.25" and a spherical bearing rod end for a 1.75" diameter pin. Oil connections are to be in the "Position 3" (Parker Hannifin). The other cylinder is to have spherical bearings for 1.75" diameter pins at both ends and oil connections at "Position 1".

Based on the data you gave me [scil. The Parker Hannifin Infinity Catalogue pages that were attached to Mr Petty's fax of 27 March 2002] I am assuming 2" rod diameter and a retracted length for both cylinders of 1241 mm.

The maximum static loads (i.e. in the locked condition) shared by the two cylinders will be 44500 kg push force and 38267 kg pull force. Would you please check that my assumptions are OK and forward a quotation.

**19 Shortly after 4 June 2002, Mr Jones provided Mr Petty with a drawing of the yacht's upper section of the canting keel, pivot bearing, main former and hydraulic cylinder anchorage point.[19] It showed maximum pin to pin dimensions of the hydraulic cylinders of 2,171 mm extended and 1,241 mm contracted. It was also possible to derive from the drawing the maximum stroke of 930mm which was referred to in the 4 June 2002 email, being the space between the keel head (with the keel canted at 19.5˚ to starboard) and the proposed fixing place at the port side of the hull, less the specified length of the cylinder of 1,241mm when retracted.

20 Mr Petty checked Mr Jones' calculation of the capacity of the proposed cylinder - by multiplying the maximum compressive force of 3,000 psi by the area of the piston, producing a product of 58,920 Ib (26,719 kg; 262 kN) in compression and 46, 920 lb (21,278 kg; 209 kN) in tension - and that exercise showed that the operating pressure of the cylinder was comfortably less than 3,000 psi. Mr Petty did not, however, make any check as to whether the 2" diameter rods would be adequate to withstand the increased forces. Nor did he respond to Mr Jones' email.

21 About two weeks later, Mr Jones telephoned Mr Petty and asked whether it would be possible to shorten the pistons, because he was still very constrained by available space and the need for weight reduction. Mr Petty said that he would

21 make inquiries and get back to Mr Jones. Mr Petty later called Air Valve Engineering Pty Ltd, who were the intended manufacturers of the cylinders, and ascertained that dimension 'C' on the Parker Infinity Catalogue could be reduced by shortening the neck of the clevis bearing and putting it closer to the cylinder's end cap. On 20 June 2002, Mr Petty faxed that information to Mr Jones.

22 Later still in June, or possibly early in July 2002, Mr Jones and Mr Petty met at Mr Jones' home at Mornington. During that meeting, Mr Jones said that he had calculated that the cylinder forces corresponding to an operating oil pressure of 3,000 psi would equate to a maximum compression force in a 5"cylinder of approximately 59,000 lbs (equivalent to approximately 262 kN) and a maximum tension force of 49,500 lbs (equivalent to approximately 220 kN),[20] but that the maximum static forces with which the cylinders were expected to have to deal were as specified in Mr Jones' email of 4 June 2002, namely, 44,500 kg push force (218 kN) and 38,267 kg pull force (188 kN).[21]

23 On or about 22 July 2002, Mr Jones telephoned Mr Petty to discuss the width of the spherical clevis bearings on the ends of the hydraulic cylinders and on 22 July 2002 Mr Petty faxed back to Mr Jones a rough sketch showing the bearings' width and pin size.[22]

24 On 25 July 2002 Mr Petty sent a fax on behalf of Major Engineering as follows:**

**25 Mr Jones then telephoned Mr Petty and told him to direct the quotation to Wildthing Yachting for the attention of Grant Wharington, as his company would be purchasing the hydraulic cylinders.

26 On 29 August 2002, Mr Petty sent to Mr Wharington a Major Engineering quotation as follows:**

2 only 5 inch Bore x 2 inch Rod x 930 mm Stroke Cylinders fitted with 40 mm Diam Spherical Bearing Both Ends.

Delivery: 2-3 Weeks from Receipt of Order[23]

**27 By fax dated 3 September 2002 Mr Wharington on behalf of Timelink accepted the quotation of 29 August 2002.

28 The cylinders were thereafter manufactured by Air Valve Engineering Pty Ltd to the order of Major Engineering and supplied and installed by Major Engineering. They operated satisfactorily throughout the 2003 sailing season before failing during the 2004 Sydney Hobart race.

29 At the point of failure, Wild Thing (by that time renamed Skandia), was on port tack heading in a south westerly direction towards the Tasmanian coast. She was about 70 nautical miles east of the Eddystone Lighthouse at the north-eastern tip of Tasmania. The wind was blowing a gale at between 30 and 40 knots south-south-west and the prevailing swell was from the port bow, and thus from the south. The depth of the water was approximately 3,000 m. The majority of waves were four to six metres high and the yacht was following what was said to be a conservative sail plan. The yacht came off a wave which was larger than those then prevailing and the two piston rods failed and broke off. This meant that the keel head was no longer laterally restrained and thus, despite efforts of the crew to lash it down, it swung within the hull causing damage to surrounding components. The vessel was abandoned when it appeared that the keel might come away altogether and so cause the yacht to capsize. The crew were rescued. Their apprehensions were fulfilled. The keel became detached and the yacht capsized and suffered considerable damage.**

30 Timelink's case below was put in contract and tort but the judge decided the case only on the basis of contract.[24] The contractual case as pleaded was that there was a contract between Timelink and Major Engineering for Major Engineering to design, manufacture and sell to Timelink a hydraulic system incorporating the cylinders, and that there were terms of the contract that the hydraulic system:

(a) would be reasonably fit for the purpose of controlling the canting keel on Skandia in ocean racing conditions;

(b) would have a working capacity to withstand a compression force of up to 262kN in ocean racing conditions;

(c) would be designed and supplied so that the piston rods would not buckle or fail under compression when they were subjected to a working[25] compression force of up to 262kN in ocean racing conditions;

(e) would comply with the guide contained in the Parker Industrial Cylinder Products (Hydraulic and Pneumatic Cylinders) Catalogue ("the Parker Catalogue") in relation to required piston rod size selection for metric hydraulic cylinders based upon the required thrust (push) application.

**31 Each of the alleged terms was said to be partly oral, and to that extent comprised of the conversations between Mr Jones and Mr Petty to which reference has already been made, and partly implied:

(i) by operation of law in order to give business efficacy to the agreement;

(iii) by the Goods Act 1958, s 19; and

(iv) by the Trade Practices Act 1974, s 71(2) and/or s 74(2).

32 The judge rejected (i) and (ii) on the basis that the contract was efficacious without any of the suggested terms[26] and because there was no evidence of industry custom.[27] His Honour held too that, since the three suggested statutory bases of implication were all expressed in terms of a warranty of fitness for a disclosed purpose, they were incapable of supporting any of the alleged terms except (a). Consequently, as his Honour reasoned, if it were to be accepted that any of the other alleged terms was part of the contract, it had to be shown that it arose from the conversations between Mr Jones and Mr Petty. As his Honour put it:**

The question whether any of the suggested terms should be imported in the contract involves a consideration, based on what passed between the two men, of what the reasonable bystander would infer was the obligation offered and accepted as part of the contract between their principals. What Timelink must show is that Major Engineering assumed a contractual responsibility for the matters contained in the suggested terms.[28]

**33 The judge rejected term (a). His Honour held that, although it was obvious that the yacht and therefore the hydraulically driven canting keel were to be used for ocean racing, the dealings between Mr Jones and Mr Petty showed that Major Engineering did not assume a general responsibility for ensuring that the cylinders would cope with whatever forces might be imposed upon them during ocean racing. Mr Jones as designer made those decisions.

34 The judge held, however, that the contract did contain the terms pleaded in (b) and (c).[29] His Honour reasoned that:**

Term (b) depends upon the requirement of Timelink that the cylinders be capable of withstanding a compressive force of 262 kN. Major Engineering recommended to Timelink's design consultant [Mr Jones] that Parker cylinders would be appropriate and provided him with material from the manufacturer which suggested that the piston rods should have a two inch diameter. Mr Jones made known to Major Engineering his requirement as to the capacity of the cylinders to withstand a certain force. The email of 4 June [2002] gives this requirement as a total of 44,500 kg in compression. This translates to 218 kN for each cylinder. The higher figure of 262 kN is derived from the capacity of the cylinder to withstand 3,000 psi which Mr Jones required.

It is apparent from my summary of the dealings between the parties that both the maximum pressure within the cylinder and the maximum working load to be imposed on the rod were discussed. In the abstract, the two are not related because there are many factors which might bear upon the thrust which is produced by a piston in a cylinder subjected to a pressure of 3000 psi. In the present case, however, these factors, or possibly the more significant factors, were known to the two men. For practical purposes, Mr Petty knew that the five inch cylinder at 3000 psi would generate a thrust of 262 kN through the piston so that, in operation, the hydraulic cylinder assembly including the piston shaft must be capable of operating in this environment. His conduct prior to the delivery of the Major Engineering quotation and its acceptance shows that he accepted that this was so and, further, that Mr Jones understood this and that he relied upon it.[30]

35 The judge did not deal with the term pleaded in (d) (because, as he said, it was not alleged that it had been breached) and his Honour rejected the term alleged in (e); for the reason, as he put it, that:

The Parker Catalogue was not given to or shown to Mr Jones at any relevant time. It was put in final address that this is beside the point. The suggested term was intended to mean that Major Engineering in making its recommendation as to a suitable cylinder assembly, would have regard to and apply the recommendations of the Parker Catalogue. The short answer is that this is not the term pleaded.[31]

36 In the end, therefore, the judge decided the case on the sole basis that:

The conclusion which I reach is that the cylinders were unable to withstand the forces which were exerted upon them in what were not abnormal conditions.

a) The judge erred in holding that it was a term of supply that the cylinders should have a specified working load of 262kN ;

b) Alternatively, the judge erred in holding or finding that the terms 'maximum static load' and 'maximum compression force' were synonymous with the term 'working force';

c) There was no evidence or it was against the weight of the evidence to find that the cylinders were not capable of withstanding a maximum compression force of 262kN;

d) The judge erred in holding or finding that it was an implied term of supply that the maximum designed compression force of the cylinders should incorporate a safety factor of at least two;

e) Further or alternatively, the judge failed to afford the appellant procedural fairness, by holding that the appellant was under a contractual obligation to ensure that maximum designed compression force of the cylinders incorporated a safety factor of at least two, given that no such contractual obligation was pleaded or relied upon by the respondent at trial and that judge did not give notice to the appellant that his Honour might be inclined to hold that the appellant was subject to such a contractual obligation.

38 Timelink contends that the judge was right for the reasons which his Honour gave and, significantly, Timelink does not seek to uphold the judgment on any basis other than upon the breach of contract on which the judge decided it.**

The term that the cylinders should have a specified working load of 262kN

**39 It was but faintly argued that the judge erred in holding that it was a term of the contract that the cylinders should have a working load of 262 kN, as opposed to 218kN. In the end, I took the point really to have been abandoned. But in case that is not so, I should say that I agree with the judge on the point. The figure of 218 kN corresponded with the 44,500 kg push force specified by Mr Jones in his email of 4 June 2002. It was, in effect, confirmed in the meeting between Mr Jones and Mr Petty late in June or early July 2002, which is referred to above in paragraph [22]. But, as the judge put it, before the quote was submitted or accepted, the figure of 218 kN was amended to 262 kN.

40 I referred above to the substance of the conversations between Mr Jones and Mr Petty which preceded the quotation of 25 July 2002. They include the conversation between Mr Jones and Mr Petty late in June or early in July 2002 in which Mr Jones made the observation that he had calculated that at the maximum pressure of 3,000 psi the force would be 262 kN. Plainly enough, in my view, that meant that the cylinders had to be capable of withstanding a force of 262 kN, even if it were expected that the forces to which the cylinders would be subjected would not exceed 218 kN. As Mr Jones explained in answer to questions put to him in cross-examination:**

Q: So were you asking him [Mr Petty] to provide you with a cylinder assembly that would deal with that static load [218kN] or was he to make some further assumption as to allow for other loads?

A: The only other assumption as I had separately discussed with him [was] the fact that the components were good for 3,000 psi which if you provide that then the cylinder was also to be required for a push force of 262 kN, but I was telling him in these particular conditions [scil. 3,000 psi] what the loads were under those conditions. In other words, although I was saying I wanted the cylinders capable of 3,000 psi, these [44,500kg (218kN) and 38,627 kg (188 kN)] were in fact the maximum static forces that the cylinder would be expected to have to deal with.[32]

Furthermore, Major Engineering, both at this time [presumably 4 June 2002] and on 5 January [2004] immediately after the incident and, indeed, at trial, appeared to accept that, if there was a performance specification, it was by reference to a 262 kN working load.

**42 Unlike the judge, however, I do not think that anything which occurred after 'the incident' was relevant to the construction of the contract. As at present advised, I take the law to be that post-contractual behavior cannot be used in aid of the construction of a contract,[33] unless it amounts to an admission,[34] and I am unable to see that anything which was said after the failure could be treated as admitting that it was a term of the contract that the cylinders would be able to withstand a working compression force of up to 262 kN in ocean racing conditions. I assume that what the judge referred to as post-incident conduct were actions of Mr Petty of reading off a Parker data table at the point of 262 kN (when asked in the immediate aftermath of the failure to demonstrate how a shaft size was selected from the Parker table). Possibly, that could be seen as an acknowledgment by Mr Petty that he understood that the maximum force to which the cylinders would be subjected could go as high as 262 kN. But to my way of thinking such an understanding was not inconsistent with his sworn belief that the maximum working load of the cylinders was to be 218 kN. In any event, it was not suggested that Mr Petty, as a sales manager, had authority to make post-contractual admissions binding on Major Engineering.[35] Nor did Major Engineering or any of its witnesses accept at trial that the figure was 262 kN. To the contrary, its case throughout and the evidence of Mr Petty and of Major Engineering's expert witness, Dr Baigent, was all based upon the figure of 218 kN.

43 For present purposes, I confine consideration to the objective construction of what passed between Mr Jones and Mr Petty before the submission of the quotation. On that basis, I conclude that it was a term of the contract that the cylinders would be capable of withstanding a maximum static force in operation of 262 kN.**

44 Some of the witnesses used the expressions 'maximum static load' and 'working force' as if they were synonymous. Where they did it seems to me that it was a shorthand fashion of expressing the maximum static force which was likely to be imposed in working conditions. I do not see that any of the witnesses was in error. Indeed, as Dr Keays put it, the meaning of the terms all depends on context. And, with respect, it seems to me that the judge was well aware of the position. As will appear later in these reasons, the maximum static force as calculated by Mr Jones was the greatest force to which he considered that the cylinders could be subjected in use and he calculated that figure after building into his calculations what he assessed to be an adequate safety factor. In words which Dr Keays used in evidence, it was in effect a once in a lifetime load beyond which Mr Jones thought it inconceivable that the forces could ever go, no matter how inclement the conditions. The working force was the force required to withstand a maximum static force of 262kN in working conditions. The judge accurately explained the distinction as follows:

For practical purposes, Mr Petty knew that the five inch cylinder at 3000 psi would generate a thrust of 262 kN through the piston so that, in operation, the hydraulic cylinder assembly including the piston shaft must be capable of operating in this environment. His conduct prior to the delivery of the Major Engineering quotation and its acceptance shows that he accepted that this was so and, further, that Mr Jones understood this and that he relied upon it.[36]

I therefore conclude that the agreement between Timelink and Major Engineering contained a term that the hydraulic cylinders including the pistons would, in operation, have a capacity to withstand a compression force of 262 kN. I accept the term pleaded in paragraph 4(b) of the statement of claim.[37]

For similar reasons I accept suggested term (c).[38]

Was there evidence that the cylinders were capable of withstanding a maximum compression force of 262kN?

**45 Remarkably, the judge did not make an express finding as to whether he was satisfied that the cylinders failed in operation at a static force of no more than 262 kN. Rather, his Honour approached the matter by considering, separately, first, the results of a number of theoretical analyses of the likely buckling and ultimate failure points of the cylinders; then, the results of practical tests conducted by Dr Baigent in order to ascertain whether the theoretical analyses were accurate; then, the concept of safety factors and in particular the question of whether the cylinders incorporated an adequate safety factor; and then, the question of how likely it was that Mr Jones had accurately calculated the maximum static force which the cylinders were required to withstand in operation. Ultimately, the only express finding that the judge made about the breaking point of the cylinders was that they were 'unable to withstand the forces which were exerted upon them in what were not abnormal conditions'.

46 Dealing first with the theoretical analyses, the judge concluded 'on this basis' that the critical failure point of the cylinders 'would be' no higher than 230 kN. As his Honour put it:**

It is not easy for me to evaluate these various theoretical analyses, depending as they do upon complicated and technical concepts and difficult mathematics. I have rejected Dr Baigent's estimate of 320 kN for reasons which I have given. I will not accept as accurate Professor Joubert's figure of 194 kN, given his warning about its unreliability. The remaining calculations produce results which vary from 218 kN to a figure less than 260.6 kN. All of them are likely to be excessive because they assume fixed connections. In the [Skandia] the cylinders were connected at each end by a spherical joint which is less rigid than a fixed connection. I assume, too, that the ANSI based calculation has a factor of safety built in. I conclude that, on this basis, the critical failure point of the cylinders would be no higher than 230 kN.[39]

47 It is apparent, however, that the judge was not satisfied that the theoretical analyses were necessarily an accurate representation of the critical failure point of the cylinders. For having concluded that:

upon a theoretical analysis, the cylinders supplied did not meet this requirement because the critical failure load in each case was calculated to be less that 262 kN.[40],

his Honour then turned his attention immediately to evidence of Dr Baigents' practical tests of the actual yield load and ultimate failure load of the cylinders; and, after noting (and by and large rejecting) various criticisms of those tests, he stated that:

I have no way of knowing whether these criticisms, particularly the last, would invalidate the reported results. I would prefer simply to bear them in mind when I come to compare the test results with the theoretical analyses and such other evidence as bear on these issues.[41]

48 That led to an assumption or perhaps a conclusion that Dr Baigent's second test demonstrated that the critical failure load was 309 kN:

This means that Dr Baigent's conclusion from this second test can be interpreted as showing that the buckling load for the cylinder at 19.5˚ port cant is 309kN.[42]

This is sufficient to resolve the case, assuming that the second test accurately reports the critical failure load of 309 kN.[43]

While it is true that the test cylinder, if fully extended, may be taken as having a critical failure point of about 309 k[N]...[44]

49 That led in turn to consideration of the subject of safety factors and ultimately to a conclusion that, because the difference between the critical failure point of 309 kN and the maximum static force of 262 kN was not as large as any of the safety factors which experts suggested in evidence would be reasonable, the cylinders were in breach of the contract. As his Honour put it :

If, however, [309 kN] is taken to be the same figure, it shows a critical failure point which is greater than that required of Major Engineering. It is 1.41 of the load of 218 kN specified in Mr Jones' email of 4 June 2002 and 1.18 of the load of 262 kN specified in the agreement, as I have found.[45]

This is sufficient to resolve the present case, assuming that the second test accurately reports the critical failure load of 309 kN. The difference between this load and the contractually specified working load of 262 kN means that the application of any of the suggested factors of safety would not show that there has been compliance with the contractual specification.[46]

50 It will be convenient to leave until later the judge's consideration of Mr Jones' calculations of the maximum static force which the cylinders were required to withstand in operation.

Implied term that the safety factor be not less than two?

**51 As has been noted, Timelink's case as pleaded was that it was a term of the contract that the cylinders would have a working capacity to withstand a compression force of up to 262kN in ocean racing conditions and that Major Engineering breached the contract because the cylinders were "unable to withstand a working compression force of up to 262kN in ocean conditions" and "failed when both piston rods buckled whilst subject to a compression force of less than 262kN in ocean racing conditions." It was not alleged that it was a term of the contract that the cylinders incorporate a "safety factor" above 262 kN and it was not alleged that the cylinders were deficient because they were unable to withstand a working compression force by some safety factor or margin above 262 kN. Nor was any application ever made to amend, either below or on appeal.

52 Despite the pleadings, the case at trial seems to have been conducted on the basis, as the judge put it, that:**

It was generally accepted before me that, where a working load is specified for a column, this is not met by providing a column whose theoretical critical failure load is equal to that working load. Put another way, a column is not, in ordinary engineering practice, expected to work at its ultimate point of failure.[47]

It remained, however, that there was no agreement as to how large the safety factor needed to be. To the contrary:

1) In his first report (dated September 2005), Professor Peter Numa Joubert, who was formerly professor of mechanical engineering at Melbourne University with a particular interest in ship resistance and ship motions, and called as an expert witness by Timelink, said this:

It is usual for a vital component such as a swing keel to have a substantial safety factor. This allows for additional effects of imperfections in manufacture, corrosion and fatigue and unusual situations such as grounding. Timoshenko remarks (p9), "In the case of suddenly applied loads or variable loads - a larger factor of safety (larger than 2) becomes necessary." Again on pp271 and 272, "In selecting this factor it must be considered that as the slenderness ratio increases various imperfections, such as initial crookedness of the column, are likely to increase. - For 1/k > 100 the factor of safety is taken as 3.5." Note the compliance of the piston and piston rod in the cylinder would add to this effect of initial crookedness.[48]

2) In his first report (dated 22 September 2005), Dr Russell Keays, who was an engineer with primary expertise in the design of structures and of the structural aspects of mechanical equipment, and was called as an expert by Timelink, said this:

I would expect the supplier to provide a product with a Factor of Safety over failure of at least 1.66...[49]

3) In his first report (dated March 2006), Dr Andrew Baigent, who was a civil engineer with extensive experience in the evaluation of the buckling capacity of structural elements, and was called as an expert by Major Engineering, said this:

Using my buckling curve, I have estimated that the critical buckling load for the fully extended hydraulic cylinder is 320kN. This load is approximately 47 per cent greater than the required static load capacity [of 218 kN] that was calculated by Mr Jones and specified to Major Engineering Pty Ltd. It is my opinion, that because of the extreme design loading that I would anticipate had been calculated by Mr Jones to be applied to the hydraulic cylinders, a 47 per cent buckling load reserve is adequate. It should be noted that if the hydraulic cylinder had been replaced by a solid bar of steel, the appropriate Australian Standard (AS 3990) would required a buckling load reserve of 25 per cent for an extreme loading condition.[50]

In order to verify that the theoretical buckling load calculation was realistic and that the actual capacity was in excess of the load specified by Mr Jones, load testing was conducted on an identical hydraulic cylinder. The testing was conducted at the premises of Major Engineering Pty Ltd on 11 October 2005.

...A maximum oil pressure of 3000 psi was used in the experimental study. This pressure is equivalent to a hydraulic cylinder load of approximately 261.8 kN. This load is approximately 20 per cent greater than the required static load capacity [218 kN] that was calculated by Mr Jones and specified to Major Engineering Pty Ltd... In addition to the measurement of the oil pressure, deflection dial gauges were placed on the piston rod. Even at a load of 261.8kN, the deflection gauges indicated that the piston rod was stable.

In a similar manner to the theoretical buckling calculation, the aim of the experimental study was to verify that the hydraulic cylinder would not buckle and fail at a load less than the 218.05 kN specified load.

... However, even if the required load was 262 kN, my testing of the cylinder revealed that it was capable of withstanding a considerably greater load than 262 kN. Moreover, it is my opinion that even if the cylinders had been subjected to a load of 262 kN at the time of the incident, failure of the cylinders would not have occurred. For the cylinders to have failed, a load considerably greater than 262 kN must have been applied.[51]

4) That provoked Professor Joubert to respond in a second report (dated March 2006), as follows:

Dr. Baigent refers to Australian Standard 3990 as being appropriate to this matter. I disagree! I cannot find any Australian Standard that covers hydraulic pistons fitted to ocean racing yachts.

AS 3990 applies to steel work associated with mechanical equipment NOT for the design of that equipment (1.1, 1.2).

There is no mention of elements such as hydraulic jack.

There is no provision for loading conditions which might be produced on a vessel at sea engaged in ocean racing (3.1).

There is a requirement that dynamic forces should be considered (3.2.1).

The load factor required is not less than 2.0 for experimentally based designs (3.2.5).

Provision must be made for lateral forces. The lateral forces due to slamming, which are a regular occurrence in an ocean racing yacht, are such a source (3.3.3).

Strut design does not include design of a composite hydraulic jack system (6.1.2, 6.3).[52]

5) Dr Baigent countered in a supplementary report (dated June 2006) as follows:

In my first report, I described a load test that was carried out on an identical cylinder to those which failed. This original test was conducted at the premises of Major Engineering on 11 October 2005. ...the test demonstrated that the hydraulic cylinder was capable of carrying at least 20 per cent more load than that specified [218 kN] by Mr Jones.

Based on the retraction of each cylinder that as measured during our examination of the cylinders, I designed a further load test. Since it had been established that the maximum cylinder length at the time of failure was approximately 2096 mm, I conducted a further load test using this overall length. This new load test, which was conducted again at the premises of Major Engineering Pty Ltd, occurred on 21 June 2006.

The same testing procedure as was adopted in my first test was used for this new test. Load was slowly applied to the cylinder and measurements were made of the vertical and horizontal deflection of the cylinder rod adjacent to the head of the cylinder. This location was approximately mid-length of the cylinder. By observing the incremental change in the measurements, I was able to determine when the cylinder became unstable. The load at which the measurements indicated that the cylinder had become unstable, corresponded to the buckling load of the cylinder. As soon as instability was observed, the cylinder was unloaded to prevent the cylinder from suffering from irreparable damage.

My test on the cylinder revealed that instability occurred at a pressure in the cylinder of between 3730 psi and 3750 psi. The lower value of pressure would indicate that the buckling load of the cylinder, with an overall length of 2095mm, was approximately 325 kN.

The ratio of the buckling load to the maximum calculated load that can be applied to the cylinder is referred to as the "factor of safety". Based on the results of my test on the cylinder and the bending moment calculated by Mr Jones, the hydraulic cylinder had a factor of safety of 1.53 (325 kN/213.1 kN) for the configuration of the cylinders immediately prior to the buckling event....

In my first report I expressed my opinion that an appropriate safety factor for the cylinder was 1.25 for an extreme loading event. This factor of safety was derived from Clause 3.3.1(b) of AS 3990, which states that a load factor of 0.75 is appropriate when all of the loads are considered to be acting simultaneously. However, the usual load factor is 1.67 (1/0.6) for a compression member, as is stated in Clause 6.1.1. of AS 3990. Therefore, the

safety factor can be reduced to 1.25 (0.75 x 1.67) when an extreme loading event is considered ....[53]

6) In turn, Dr Keays responded in a second report (dated 4 July 2006), as follows:

In paragraph 4.4 of Dr Baigent's Supplementary Report, he discusses the Factor of Safety he considers appropriate to this application. In this he refers to AS 3990 Clause 3.3.1(b). I disagree with his conclusion that a Factor of Safety of 1.25 is appropriate. In AS 3990, three types of load are defined. There is (i) Dead Load, which is the effect of the actual weight of the structure, (ii) Live Load, which is defined as the load assumed to arise from the intended use of the structure, but excluding wind, snow and earthquake forces, and (iii) Wind Load, which is forces in the structure resulting from wind pressure. In Clause 3.2.1 there is a requirement, "A structure and part of a structure shall be capable of sustaining the most adverse combination of static and dynamic forces that may reasonably be expected from all the loads specified in Clause 3.1." (Clause 3.1, in turn, refers to Dead, live and Wind Loads ...

In this case it turns out that the design load on the cylinder is one where only the Dead Load contributes. As illustrated in Figure 1 of my Report, the design load for the hydraulic cylinder occurs after the wind has blown the yacht onto its side. Then the load on the cylinder comes simply from the gravity effect of the weight of the keel, and so, in my opinion, combination (i) applies. Hence I consider the appropriate Factor of Safety would be (1/0.6) or 1.67 (and not 1.25) if AS 3990 was considered the appropriate standard for the cylinder ...

AS 3990 provides some guidance on the use of testing in Clause 3.2.5 "Experimentally based design". It allows the use of experimentally based design "where a structure is of an unconventional or complex nature". In my opinion, the hydraulic cylinders used in Skandia were not unconventional nor complex, which makes the direct application of the tests carried out by Dr Baigent a dubious interpretation of the Code. Nevertheless, the second paragraph of 3.2.5(a) is one particularly relevant to this test. It says, "Where the design is based on failure loads, a load factor of not less than 2.0, on the loads or load combinations in Clause 3.3.1 shall be used".

In conclusion, the writer's opinion is that, in general, hydraulic cylinder rods should be designed using the charts and procedures provided by the suppliers. In critical cases, the design process could use the formulas in AS 3990 Section 6 for struts using the standard "crookedness", minimum yield strength of the material, and a buckling assessment to ANSI (NFPA) T3.6.37-1991, and a Factor of Safety of at least 1.67 as specified in AS 3990, with a higher factor applicable where there is any uncertainty with respect to the design load.[54]

7) Professor Joubert rejoined in a third report (dated 4 July 2006) with an emphatic reiteration of his view that AS3990 had no application to the hydraulic piston on an ocean racing yacht, but then went on to say that:

A better guide comes from AS 4100 -1998, section 17, Testing of---elements.

Due to variations in manufacture, the required test load on a single unit is 1.5 times the design load (table 17.5.2). If the design load is 218 kN, then the unit should be tested at 1.5 x 218 = 327 kN. In fact the unit failed in a second test with a shorter extended piston rod at a load of 325 kN....

The swing keel on Skandia was experimental. It had not before been tried by the designer or builder. Consequently it should have had a factor of 2 applied to its steady design load of 218 kN and tested to 536 kN (see AS 3990, s3.2.5.) As it failed at 325 kN again it did not meet this Standard requirement.[55]

53 The judge concluded on the basis of all that evidence that:

The difference between the critical failure load and the maximum working load will depend upon the circumstances, including the experience and conservatism of the designer. These circumstances will include the confidence of the designer in the estimated maximum working load, the reliability of the structure and the consequences of failure. This was referred to as the factor of safety but, for present purposes, it may be seen to be a factor to cope with the unknowns or uncertainties inherent in the operation of any structural member.[56]

54 The judge did not make a finding as to the size of the safety factor which in his view was required. He said that 'if it were necessary' he would reject Dr Baigent's figure of 1.25 (for reasons which his Honour gave).[57] He also said that 'if it were necessary for me to reach a conclusion as to the critical failure point of the cylinders which Major Engineering ought to have provided under the contract, it would be arrived [at] by the application of a factor of safety of not less than 2.'[58] But his Honour did not conclude that it was necessary to reject Dr Baigent's figure, or to reach a conclusion as to the size of the safety factor which was required. As has been seen, he proceeded instead on the basis that, upon the evidence, the safety factor of the cylinders as supplied was not more than 1.18, and, therefore, less than any of the figures suggested by the experts. As his Honour put it:

On 21 June 2006 a second test on this cylinder was carried out, again at the premises of Major Engineering and under the direction of Dr Baigent. The piston was extended so that the total length of the assembly from connection to connection was 2095mm. This was done because this was the dimension at the time of the failure. It is the equivalent of the keel in a canted position of 16˚ to port. Load was applied to the point where the cylinder exhibited instability. This was taken to be the buckling load. At this point the pressure within the 5 inch diameter cylinder was between 3730psi and 3750psi. This translates to a compressive force on the piston shaft of between 326 kN and 328 kN. Dr Baigent concluded from this that the buckling load of the cylinder under test, and that of each of the cylinders in Skandia, was 325 kN. Dr Keays was of opinion that the reduction of the length of the cylinder under test by 70mm, compared with that at full extension of 2171mm, would increase this load by 8%. This means that Dr Baigent's conclusion from this second test can be interpreted as showing that the buckling load for the cylinder at 19.5˚ port cant is 309 kN. This produces a critical failure point which, for reasons offered by Dr Keays which I have mentioned, must be somewhat less than this figure. If, however, it is taken to be the same figure, it shows a critical failure point which is greater than that required of Major Engineering. It is 1.41 of the load of 218 kN specified in Mr Jones' email of 4 June 2002 and 1.18 of the load of 262 kN specified in the agreement, as I have found it.[59]

55 Hence, his Honour came to the conclusion, earlier referred to, that it was:

sufficient to resolve the present case, assuming that the second test accurately reports the critical failure load of 309kN. The difference between this load and the contractually specified working load of 262 kN means that the application of any of the suggested factors of safety would not show that there has been compliance with the contractual specification.[60]

**56 Those passages of the judge's reasons imply that his Honour considered that there were terms of the contract that the cylinders had to incorporate a safety factor of not less than was suggested by Dr Baigent and, perhaps, of not less than two. But, if so, there is a difficulty, to which counsel for Major Engineering refers, that his Honour nowhere identified the basis on which he conceived those terms to arise.

57 Counsel for Timelink submits that it was self evidently a concomitant of the requirement that the cylinders have a working capacity to withstand a compression force of up to 262 kN in ocean racing conditions that the cylinders incorporate a 'reasonable safety factor'. He argues that it was just as obvious that what was 'reasonable' fell to be determined by reference to all of the circumstances, including expert opinion and Parker's recommendations. Further, in his submission, when one had regard to the expert opinions to which the judge referred, it was clear that the cylinders did not incorporate a reasonable safety factor - because, at 1.18, it was less than any which the experts thought to be acceptable - and it followed, as he would have it that, even if the buckling point of the cylinders were greater than 262 kN, but by an amount of less than a 'reasonable safety margin', the cylinders failed to comply with the terms of the contract.

58 I do not accept those submissions. It was not an express term of the contract for the supply of the cylinders that the cylinders include a safety factor; still less a safety factor of not less than two. On the evidence, there was nothing noted about a safety factor in any of the written communications between Mr Jones and Mr Petty or said in any of their conversations. Furthermore, in the circumstances which obtained, a term for a safety factor of not less than two could not be implied unless the adoption of that factor were the subject of an invariable, certain and general usage of custom or trade[61] or were otherwise so obvious as in effect to go without saying.[62] But as has been seen, the judge found that there was no evidence of custom or trade usage (and there was certainly no evidence of an invariable, certain and general usage of any particular trade), and his Honour expressly excluded Timelink's allegation that it was a term of the contract that the cylinders comply with the guide contained in the Parker catalogue in relation to required piston rod size selection for metric hydraulic cylinders based upon the required thrust (push) application.

59 Counsel for Timelink submitted that, even if that were so, it was plain the judge must have concluded that the need for a reasonable safety factor was so obvious as to go without saying, and he submitted in support of that conclusion the analogue of a contract for the supply of an aeroplane or a lift for a multi-storey building which requires the plane or lift to have a load capacity of not less than a specified weight. In counsel's submission, it could not reasonably be supposed that such a contract would be satisfied by the supply of a plane or lift which did not incorporate a reasonable safety margin.[63] As he would have it, it must be allowed that the express requirement of capacity to withstand a specified load necessarily imports a requirement for a reasonable safety margin above the specified weight and the dimensions of a reasonable safety margin must be determined by reference to what informed opinion would consider to be reasonable.

60 I accept those submissions up to a point. The judge may well have come to the view that it was so obvious as to go without saying that the cylinders had to incorporate some sort of safety factor. Indeed, at one point in his reasons, his Honour went very close to saying so expressly:**

Views as to what is an appropriate factor of safety will differ. What was agreed in this case was that some factor should be applied. Otherwise, the working load would be equal to the critical failure load. Moreover, it was accepted that multiple factors of safety may be applied in any design process. In a case such as the present, the designer will form a view as to the worst possible circumstances in which the keel must operate. Having arrived at this worst case scenario, the supplier of components will then provide its own safety factor. It is for this reason that the Parker Catalogue appears to provide a safety factor of over 5 and the expert witnesses spoke of factors varying from 1.25 to 4.[64]

But even so, that still leaves unanswered why the judge should have thought it so obvious as to go without saying that the factor had to be more that 1.18.

**61 A possible explanation is his Honour's observation[65] that 'if it were necessary for me to reach a conclusion as to the critical failure point of the cylinders which Major Engineering ought to have provided under the contract, it would be arrived [at] by the application of a factor of safety of not less than 2.' But, with respect, that conclusion is problematic. As I follow the evidence, the factor of two is likely to have come from the American Bureau of Shipping 'Guide for Building and Classing Offshore Racing Yachts 1994' ('ABS'), which recommended that the keel of a racing yacht should be designed to withstand twice the maximum force to which it is calculated that it may be subjected, or the factor of 2 recommended in AS3990, s3.2.5. which was referred to by Professor Joubert in his third report and by Dr Keays in his second report, but, as it appears to me, both ABS and AS3990, 3.25 were probably irrelevant.

62 The ABS guide was a standard for computation of the maximum static forces to which a conventional keel might be subjected. Consequently, it was for Mr Jones as the yacht's designer to observe its requirements when calculating the once in a lifetime worst possible maximum static force of 262 kN and, according to Mr Jones' evidence, he did just that:

[HIS HONOUR]: Let's go back before the boat was ever put in the water. You made calculations which you are not able to recall which produce a figure of so many kilo-Newtons operating on the head, if that's the correct terminology of the keel? - - - Yes.**

[HIS HONOUR]: So that's what the cylinder has to cope with? - - - Yes.

[HIS HONOUR]: And 3,000 psi will do the job? - - - M'mm.

[HIS HONOUR]: The figure which you don't recall, is the load that is going to be on the head of the keel, you have adopted as 262 kN from the ABS calculation? - - - No, the ABS calculation showed a lower figure than that.

[HIS HONOUR]: About 198 or something like that? - - - Something like that, and all my other scenarios that I was able to analyse or did analyse of loading, led to forces which were significantly less than the ABS loading, including dynamic forces and so on. So, on that particular basis, the fact that I was taking worst case things, allowing for dynamic loading and so on, the loads were always such that the pressure was well less than 3,000 psi, I regarded the cylinder as being adequate.

[HIS HONOUR]: So within your figure of 262 kN there is a - that is a figure which has a safety factor built into it? - - - Correct.

[HIS HONOUR]: Over and above your worst case calculation? - - - Correct, yes...[66]

[HIS HONOUR]: But there is an allowance from the worst case that you calculate, to the 262 kN that you give to Mr Petty? - - - Correct.[67]

63 As Mr Jones said, therefore, he did not expect Mr Petty to make any allowance for a possibility that the keel might be subjected to a force greater than 262 kN - as far as Mr Jones was concerned, it was not possible that the maximum static force could exceed 262 kN - and the only safety factor which he assumed would be included in the cylinders was one sufficient to ensure that the yield load and ultimate failure load were sufficiently greater than the maximum static force of 262 kN as to enable the cylinders to function in operating conditions at up to a worst case maximum static force of 262 kN:

[HIS HONOUR]: As an engineer, would you expect Mr Petty to say, right, we have got 262 kN, you can have something which is capable of that so - or is he going to provide you with something and says right, there's going to be a 1.5 or 2.5 factor of safety. What would you, as an engineer, expect someone in his position to do? - - - If it was somebody designing the equipment, then you would apply - you automatically apply a factor of safety in this sense: generally or almost always if you are talking about metals, you would be applying a factor of safety, in other words you would be saying the stresses at the working load must not exceed a certain percentage of the yield strength but the yield strength, if you are talking about to failure, because there's two different things, it's a question about the factor of safety and working conditions but there is also the factor of safety to failure, in that [at] the ultimate loads, the ultimate tension - you wouldn't expect the cylinder when it got up to its full load to extend so when if came back again the whole thing was stretched a bit.

[HIS HONOUR]: Within its elastics? - - - It's operating exactly within its elastic zone. You would expect to have some factor of safety relating to the yield within the factor but then there is another factor of safety in the sense the ultimate strength is also greater than the yield by a considerable margin, therefore if you're talking about the factor of safety to failure I would have expected therefore the cylinder to have had a substantial margin in - between operating conditions and ultimate failure if only because there is a considerable difference between the yield strength of the material and the ultimate strength of the material.[68]

**64 As to AS3990, s3.2.5, Professor Joubert said that in his opinion it was an inappropriate standard[69] and, if were to be applied, it necessitated a factor of 2 because the swing keel on Skandia was experimental. He considered, however, that a better guide came from AS 4100 which required a factor of 1.5.[70] Dr Keays, on the other hand, was of the view that AS 3990 s3.2.5 was inapplicable because it related to testing "where a structure is of an unconventional or complex nature", and in his opinion the hydraulic cylinders used in Skandia were not unconventional nor complex. Hence his conclusion that the applicable safety factor was 1.67 as provided for in clause 6.1.1 of AS3990.[71] In the circumstances, it is to be doubted that either man was right.

65 Moreover, and more fundamentally, whatever the various codes may have offered on the subject of an appropriate safety factor, the evidence was that they were only guides designed to assist in ensuring that the yield force and the ultimate failure load of struts is greater than the maximum operating force of the struts. As Dr Keays explained in his second report,[72] there are five parameters to be assessed when selecting a safety factor and an engineer can either work from first principles [in effect, as Mr Jones did as he calculated the maximum operating forces for the keel] or select the safety factor recommended by one of the codes. Therefore, even though it may have been implicit in the contract that the cylinders had to incorporate some sort of safety factor, it could not have gone without saying that Major Engineering was required to adopt the safety factor recommended by one or other of the codes, as opposed to a safety factor which (however it may have been calculated, or for that matter not calculated) resulted in the yield load and ultimate failure load forces of the cylinders being greater than the maximum static force of 262 kN in working conditions.

66 The contractual requirement was to supply cylinders capable of resisting a maximum static force of up to 262 kN - not a static force of up to 1.67 times 262 kN (or twice 262 kN or any other number of times 262 kN) - and so, in my view, the only term as to safety margins which could be implied as going without saying would be that the cylinders should have within them such safety margin as would enable them to resist a static force of up to 262kN in operating conditions.**

**67 Counsel for Timelink submitted that, even if that were so, it was apparent that the judge had in effect found that the cylinders failed in operation at a force of not more than 262 kN. He argued that, whatever reservations the judge may have had about the validity of the theoretical calculations standing alone, his Honour should be taken to have decided that there was sufficient in the theoretical calculations, in conjunction with the reliability which his Honour ascribed to Mr Jones' calculation of the maximum possible static force to which the cylinders could be subjected in operation, and the expert evidence as to appropriate safety factors, to conclude on the balance of probabilities that the cylinders must have failed at a force of no more than 262 kN.

68 I do not accept that argument either. For the reasons already given, I do not consider that the judge was persuaded that the theoretical calculations could be taken as an accurate reflex of reality or even that his Honour was prepared to put a great deal of weight upon them. As his Honour said, it was not easy for him to evaluate the various theoretical analyses (because they depended upon 'complicated and technical concepts and difficult mathematics'),[73] and, as I read his Honour's reasons, it was because of his inability to assess the reliability of the theoretical analyses that he turned his attention to the practical tests conducted by Dr Baigent and rested his conclusion on an assumption that the buckling point force of 309 kN as determined by those tests was accurate. It may be added in passing that the first of the two tests showed that the cylinder was stable at 262 kN (which is to say, was yet to reach buckling point let alone the point of ultimate failure) and so, assuming, as I take the judge to have done, that the practical test results were accurate or at least not shown to be inaccurate, it would follow that his Honour could not possibly have been satisfied on the balance of probabilities that the cylinders failed at or at less than 262 kN.

69 Admittedly, the experts called by Timelink criticised the accuracy of the practical tests. But, significantly, the judge rejected all but two of those criticisms[74] and, as to the remaining two, although his Honour said that they may have had greater force, he does not appear to have been much impressed by them:**

Two further criticisms of Professor Joubert may have greater force. It was that the set up of the rig and the application of the compressive forces lacked a significant aspect of the environment in which the cylinders were required to operate on the yacht. This environment involved the constant and often violent movement of the vessel as it travelled through the waves. This movement in a vertical direction imposed dynamic lateral loads on the cylinders which were not replicated in the test. Further, the compressive forces imposed on the cylinders in operation were not constant or constantly increasing as in the test. The changing forces acting on the keel were transmitted to the cylinders as impulse loads. I should add immediately that these differential forces were noted and recorded on the yacht some time after the incident and were not observed to be great.[75]

I have no way of knowing whether these criticisms, particularly the last, would invalidate the reported results ...[76]

**70 There is perhaps a temptation to reason that, because the safety factor of 1.18 was less than most experts considered to be desirable, and substantially less than the Parker recommended factor of more than five, it was more probable than not that the cylinders failed in operation at a static force of not more than 262 kN. But, logically that does not follow.[77] It is axiomatic that one can employ a safety factor of considerably less than the majority of other designers would regard as prudent and yet still come up with a cylinder for which the maximum static force in operation remains less than the buckling point. No doubt, it would be less by a smaller margin than if a more conservative safety factor were employed. But it would still be less. And, if it were less, it must follow that the cylinder would be capable of withstanding a maximum static force in operation of the required amount. Dr Baigent's first practical test demonstrated that the cylinders were still stable at 262 kN and thus must have had a buckling point and an ultimate failure point of more than 262 kN. The second test showed that the cylinders did not reach their ultimate failure point until 309 kN. If one takes that to mean that the buckling point of the cylinders was greater than the planned maximum static force of 262 kN, it is for present purposes not to the point that a prudent designer may have allowed a greater safety margin. A larger margin might have resulted in the cylinders being able to resist static forces of greater than 262 kN, and so thereby better covered for any deficiencies in Mr Jones' calculation of the maximum static forces to which the cylinders could be subjected in operation. But that was not what the contract required.

71 Near to the end of his reasons for judgment, his Honour said that he 'accepted the accuracy of Mr Jones' design assessment' of the cylinders and that he concluded that the cylinders 'were unable to withstand the forces which were exerted upon them in what were not abnormal conditions'.[78] Taken at face, that suggests an acceptance of Mr Jones' opinion that the cylinders could not have been subjected to a static force of more than 262 kN in operation and, therefore, that his Honour was satisfied that the cylinders must have failed in operation at a static force of not more than that amount.

72 But, read in context, it will be seen that his Honour did not mean to go so far. Earlier in his reasons, he stated that, if it were necessary to reach a conclusion as to the critical failure point of the cylinders, it was that they failed at less than 524 kN (scil. twice 262kN) and, therefore, that 'the breach has been established';[79] and having then later referred to the accuracy of Mr Jones' design assessment and as to being satisfied that the cylinders failed in what were not abnormal conditions, his Honour continued immediately with this:**

While it is true that the test cylinder, if fully extended, may be taken as having a critical failure point of about 309 k[N], this would mean that the cylinders had a safety factor of about 0.18 [sic, 1.18]. This is very much less than any of the expert witnesses would consider sufficient. I conclude, therefore, that it was this insufficiency which was the effective cause of the failure.[80]

**73 It appears to me, therefore, that when the judge said that he accepted the accuracy of Mr Jones' 'design assessment', his Honour intended to convey no more than that he accepted that the cylinders failed in operation at a static force which may have been greater than 262 kN but by a factor less than 'the expert witnesses would consider sufficient'.[81] As I read his Honour's conclusion, he was either not satisfied that the static force at which the cylinders failed in operation was or was less than 262 kN or, alternatively, he deliberately avoided reaching a conclusion as to whether it was or was less than that figure.

74 I add, however, that if I were wrong about that, I would take leave to doubt that Mr Jones' 'design assessment' may be relied upon as establishing that the static force to which the keel was subjected in operation could not have exceeded 262 kN.

75 As the judge found, Mr Jones endeavored to calculate the maximum static force to which the cylinders could be subjected in operation by reference to the ABS Guide, and thus by incorporating a safety factor of two.[82] But as against that, as the judge noted, Mr Raymond (who was an expert called by Major Engineering) was of opinion that the static forces to which the keel could be subjected during a knock down were simply the beginning of the design process to which must then be added the acceleration and deceleration forces (pulse loads) which are likely to occur in bad weather. The judge rejected Mr Raymond's view on the basis, he said, that Professor Joubert and Dr Keays accepted that Mr Jones was correct in using ABS and thus a factor of two to arrive at a worst case scenario.[83] But, with respect, that was not the tenor of their evidence. With the exception of Mr Jones, the weight of expert opinion on both sides was that a safety factor of two was not enough.

76 Professor Joubert, like Mr Raymond, recognized the significance of pulse loads and said that he was of opinion that a safety factor of twice two was required:**

Q: Would you consider canting keels to be a novel feature of racing yachts back in 2002?---Yes. There was more than one yacht racing with a canting keel but there weren't many in Australia, very few. That's why you've got to be careful with your safety factors on new designs.

Q: Indeed. For your racing designs of yachts, did you apply the rules of any - have you applied any classification standards?---ABS. To go in the Sydney-Hobart Race with a yacht you have to have a certificate to say that you - well, the times I went, you had to have a certificate to say you had met the ABS requirement.

Q: Would you agree an engineer would have to bring his own experience and knowledge into play over and above the ABS guide in the design of a racing yacht?---I do.

Q: Professor, have you got your third report there?---Yes ...

Q: That's the very point you are making?---That's right. We had to rescue eight people on a black night in a strong gale, not one of these lower wind speeds, in big seas, not enormous, not mountainous, just big seas and all you could see when you put the light on was their eyes staring at you. We pulled eight of them out of the water and their keel had come loose.

Q: Fallen out?---I think they had left the boat a bit early actually, but it had come loose.

Q: Was that the ABS compliant keel?---It would have had to have met that requirement to be in the race.

Q: Can I ask you this: if you were asked to design a canting keel for a racing yacht, what rules would you follow?---ABS have got some good grounding rules, I would certainly follow that and I would make it a bi[t] stronger, like in the knock-down case.

Q: So you would increase the safety factor?---Yes.

Q: How much?---That's a big question, isn't it? I would double it, I would say. Timoshenko - I withdraw that.

Q: In your expert opinion, why do you say you would double it?---Because I don't want to drown, that's why, and you never know what extra things happen to yachts. They run into rocks, I've run into rocks at speed, it weakens everything or you may...you may go into a harbour and be picked up by a sea and dropped down hard on the sand. I've seen yachts where the keel's been pushed right up into the boat, running aground at Queenscliff, and a bit of a swell comes along and drops them on their keel. It was ABS but the boat drowned...

Q: Professor, are you aware of any classification rules which specify design parameters for canting keels...---No.

Q: What you would say then, it's then up to the skill and judgment of the designer?---Yes.

Q: With something as novel as this, they would have to be extra careful?---Extra careful? I don't know what you mean by that. You would have to pay attention, that's for sure.

Q: In your words, in terms of safety factors?---Yes.

Q: You said you would apply a safety factor double?---Yes, about four I would say.

HIS HONOUR: What do you mean four; double, what?---The one that is normally applied in steel work and so on is about two... So two is a reasonable factor in normal conditions. Under certain conditions these factors can be lowered a bit, as I just mentioned.

Q: But you would double them?---In the case of a yacht where you have suddenly imposed loads which have a much more severe effect on a structure than one that's built up in little bits and where you may have side loads, then you've got to have a reasonable safety factor. Many of these things are difficult to estimate.[84]

[COUNSEL]: What factor of safety would you have provided for with a pin in the circumstance that it was in the Skandia? --- Four.

Q: What about for what's been described in this case as the keel to hull assembly, so it's everything holding it up, so to speak? --- Any structure is only as strong as its weakest part so that's all got to be compatible.

Q: So without identifying each part you can't make some general observation? --- They have got to be equally strong.

Q: It follows, does it not, from that answer, that there has to be, as well, would you say, a safety factor of four in respect of those components? --- Yes.[85]

77 To similar effect, although hesitant to criticise Mr Jones, Dr Keays said that he would also be inclined to allow for a safety factor of greater than two because of the unusual nature of the canting keel structure:

Q: Professor Joubert's evidence was that he would apply a safety factor of four; would you disagree with a safety factor that he said he would apply? --- I have no qualms with another engineer making structures stronger than I would. That's his prerogative.

So you would just simply apply the ABS guide, without any additional safety factor, is that what you are telling His Honour? --- No, that's not what I'm saying. I'm saying that Professor Joubert is quite entitled to apply a safety of factor of four if he wishes to.

Q: Mr Jones could have applied whatever factor of safety he liked but the recommendation of the ABS is the factor of safety should be at least two. When I do designs of unusual structures, and if I was to be designing this keel structure, I would treat it as an unusual structure, I would take the ABS guide as one of my references for working out the factor of safety that I was going to apply but I would also seek - I would read other literature on the subject and one of my favourites is Pugsley's Safety of Structures and I would go through the procedures that he's got to suggest a factor of safety and I may well come up with, say, let's work to two and a half, three, four, and then when I had finished my design, if it's an unusual thing that I hadn't been doing before or if it's quite complicated I would do an analysis which I call the weakest link and I look through my structure from top to bottom, isolate the weakest point in the structure and spend some time, as least one cup of coffee, one cigarette, to determine whether there's a smart way of making that stronger without compromising this.

Q: You would agree, wouldn't you, that the keel pin is a very important component in the keel to hull assembly and its relationship to these hydraulic rams? --- The ABS guide, you may have noticed, doesn't talk about the design of rigs. It talks about the design of the hull, the keel and the rudder and virtually nothing else, or there's a bit on the structure but it's associated with maintaining the safety of the structure that's supporting the men that live on the ship and it sets rules for those. Where something is secondary, such as the rig, such as the sails, it's left to the discretion of the designer, but the ABS guide gives you basic guidelines to say, our experience says that you should make these parts of the structure this strong.

Q: But you would agree, wouldn't you, that with an innovative design, and I think you said this yourself, you would, as a professional engineer dealing with the design load case, knowing it was an innovative design, you would add in an additional factor of safety because of the unknown and because of the innovative nature of what it is you are designing? --- You are

extrapolating from my unusual structure to somebody else's unusual structure. I can't speak for every other designer.

Q: Assume you were asked to design this canting keel structure? --- Yes.

Q: What factor of safety would you have applied in those circumstances? --- It would be a minimum of two.

Q: Any additional safety factor on top of the two? --- That I can't say at this point. I would have to consider what was my design load and that pin is designed for the transverse force and the grounding force so I would to check how big the pin needed to be for the grounding force before I decided how big it needed to be for the transverse force. I would see which one was critical and I wouldn't spend time worrying about the factor of safety of the pin in the case that wasn't critical because it would come out in the wash."[86]

78 There was also this evidence given by Dr Baigent, who like Professor Joubert and Mr Raymond placed considerable emphasis upon the need to allow for the complex agglomeration of dynamic forces likely to apply to at least some parts of the canting keel structure and thus to provide for a safety factor of greater than two:

It would appear to me that the requirements of Clause 6.3.1 [of ABS] have been derived from many decades of practical experience and that the inherent or specified safety factors have been adopted with the intent of ensuring that the keel does not break away from the hull. However, as I have stated above, the requirements specified in [ABS] apply only to conventional fixed keels. It is my opinion that the loading which would be applied to the connection elements of a canting keel (i.e. the keel pins and hydraulic cylinders) is larger than that for a conventional keel because of the additional dynamic effects that a canting keel would be subjected to. In particular, the canting keel provides the yacht with the ability to race at higher speed in rougher weather conditions and differential momentum effects between the hull and keel bulb would cause greater load to be placed on the connection elements of a canting keel, compared to a conventional fixed keel.

Section 9 of [ABS] is concerned with the design of rudders and their supports and keels. The [ABS] devotes more than three pages to the design of rudders and their supports, as well as a further three pages of diagrams which detail the forces and bending moments that are applied to the rudders. Complex engineering formulae are provided to enable the yacht designer to adequately proportion the rudder and its supports. In my opinion, the [ABS] considers the design of rudders and their supports to be [a] significant component in the overall design process. Moreover, it is my opinion that the rudders and their supports are a significant component because of the complex manner in which the rudders are supported within the framework of the yacht, and because of the complex forces that the rudders are subjected to under sailing conditions. Furthermore, it is my opinion hat if the [ABS] had specifically considered the design of canting keels, then there would be similar detailed requirements.

In summary, [ABS] does not consider and does not provide any advice on the design of canting keels. However, it is apparent that the design of keels and their bolted connection to the hull in particular, requires a conservative approach. For the case of a yacht on its side, the keel connection, which involves bolts in a conventional fixed keel and involves a keel pin and hydraulic cylinder for a canting keel, must be capable of supporting a load which is twice that of the keel bulb, i.e. a safety factor of two.

... In my opinion, the ABS Guide required the keel connections to be designed for a safety factor of 2. However, because the keel is not a conventional keel as envisaged in the ABS Guide, but rather is a canting keel, I believe that loads in excess of 2 G should be considered by the yacht designer.[87]

79 It seems to me, therefore, that the evidence as to the point at which the cylinders failed needs to be considered further.

80 It is unnecessary to consider the separate issue of procedural fairness.

**81 In the course of argument, both sides submitted that, if this court determined that the judge had not reached a view as to whether the cylinders failed in operation at a static force of not more than 262 kN, the matter should be remitted to the trial judge. Counsel for Major Engineering contended that it was clear from the judge's reasons that his Honour was not satisfied on the balance of probabilities that the cylinders failed at not more than 262 kN, and so, therefore, that there should have been judgment for Major Engineering. Alternatively, he submitted that, if this court came to the view that the judge had not come to a conclusion on that issue, the matter should be remitted to the judge for determination of that issue on the basis of the evidence already adduced and with such further evidence as the parties may seek to call. Counsel for Timelink contended that it was clear that the judge was satisfied on the balance of probabilities that the cylinders failed at not more than 262 kN but he submitted further that, if this court were of the view that the judge had not come to a conclusion on that issue, the matter should be remitted to the judge for determination of the issue (although, as I understood the submission, on the basis only of the evidence already adduced).

82 I am hesitant to remit the matter to the trial judge. Authority makes plain that if this court allows an appeal it should not order a new trial unless the facts in dispute cannot be determined on the material before it.[88] A new trial is generally regarded as an oppressive burden to impose on a successful appellant and obviously it is a burden to impose on the judge. I tend to the view that the issue of whether the cylinders failed at not more than 262 kN could just as well be determined in this court as by the trial judge. All of the evidence is of a technical or expert nature. Virtually all of the evidence in chief is in writing in the form of witness statements and expert opinions. There are only a few hundred pages of transcript of cross-examination that appear to be relevant. It is accepted on both sides that there are no issues of credit or reliability in respect of which the trial judge would be advantaged by seeing the witnesses give their evidence. We have had to consider all of the evidence for the purposes of deciding the appeal. And we also have a transcript of the final addresses below.

83 It is, however, said on both sides that the judge has had the advantage of immersing himself in the evidence over the fortnight which it took to conduct the trial, and the advantage of considering the issues when preparing his reasons for judgment, and that the parties would not be confident that this court could master the evidence and issues as well as his Honour without at least giving to the parties a**

further opportunity to make written submissions and allowing them another day for oral argument of the issue. Thus, it is submitted on both sides, it is more advantageous to the parties and more practical simply to remit the matter to the judge.

84 On balance, I am persuaded by those submissions, but on the basis that the parties should be confined to the evidence already adduced and that it be for his Honour to determine whether he requires or will entertain further submissions.

85 In the result, I would allow the appeal. I would set aside the judgment below and remit to the trial judge for determination the sole issue of whether the static force at which the cylinders failed in operation was not more than 262 kN. If the judge determines that issue in favour of Timelink, which is to say, if the judge is satisfied on the balance of probabilities that the static force at which the cylinders failed in operation was not more than 262 kN, it should follow that there will be judgment for Timelink. If, however, the judge determines the issue in favour of Major Engineering, which is to say, if the judge is not satisfied on the balance of probabilities that the static force at which the cylinders failed in operation was not more than 262 kN, it should follow that there will be judgment for Major Engineering. Subject to hearing counsel, I would order that Timelink pay the costs of the appeal but that Timelink should be granted an indemnity certificate under s 4 of the Appeal Costs Act 1998.

86 For the reasons given by Nettle JA, I would allow the appeal and remit the issue of whether the static force at which the cylinders failed was not more than 262 kN to the trial judge for determination.

[1] [1984] QB 570, 572.

[2] Carr v Finance Corporation of Australia Ltd [1981] HCA 20; (1981) 147 CLR 246, 248, 254, 258.

[3] [1960] HCA 84; (1960) 104 CLR 206.

[4] [1994] VicRp 10; [1994] 1 VR 163.

[6] [1960] HCA 84; (1960) 104 CLR 206.

[7] [1994] VicRp 10; [1994] 1 VR 163, 174.

[8] [1999] VSCA 189; [1999] 3 VR 589.

[10] [1971] HCA 11; (1971) 124 CLR 177.

[11] [1971] HCA 56; (1971) 126 CLR 276, 278.

[13] See also Burns v Lipman [1975] HCA 2; (1975) 132 CLR 157, 159.

[14] [1984] HCA 47; (1984) 54 ALR 767, 768.

[15] (1990) ATPR 41-047.

[16] Telstra Corporation Ltd v Desktop Marketing Systems Pty Ltd [2001] FCA 814 [4] (Finkelstein J); Dousi v Colgate Palmolive (1987) 9 NSWLR 374, 379, et. seq (Kirby P and Glass JA).

[17] [1991] FCA 434; (1991) 103 ALR 239, 242.

[18] There was also a claim in tort and for damages for breach of the Trade Practices Act 1974, but they were not determined and are no longer in issue.

[20] Jones' Witness Statement, [21], C98. (This was originally shown as 120 kN but amended in his subsequent Witness Statement of 4 July 2007.)

[21] Jones' Witness Statement, [21], C98; Jones XXN T.327.27-328.5.

[24] Because counsel for Timelink below conceded that if Timelink failed in contract it would fail in tort.

[25] The adjective 'working' did not appear the Statement of Claim as first drawn and filed on 12 January 2005. It was added by amendment on 21 April 2005.

[26] Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337, 346 (Mason J).

[27] Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14; (1986) 160 CLR 226, 236.

[30] Reasons, [44]-[45], footnotes omitted.

[33] FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] VicRp 76; [1993] 2 VR 343, 347-351; Ryan v Textile Clothing & Footwear Union [1996] VicRp 67; [1996] 2 VR 235, 238; Bowesco Pty Ltd (receiver and manager appointed) v Zohar [2007] FCAFC 1; (2007) 156 FCR 129, [79]; cf. Spunwill Pty Ltd v BAB Pty Ltd (1994) 36 NSWLR 290.

[34] Grey v Australian Motorists & General Insurance Co Pty Ltd [1976] 1 NSWLR 669, 684; FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] VicRp 76; [1993] 2 VR 343, 351.

[35] Fraser Henleins Pty Ltd v Cody [1945] HCA 49; (1945) 70 CLR 100; Heydon, Cross on Evidence, Aust Ed, [33540].

[48] Professor Joubert, First Report, [23], C425.

[49] Dr Keays, First Report, [45], C 642.

[50] Dr Baigent, First Report, [3.7], C722.

[51] Ibid at [4.1]-[5.1], C723-724.

[52] Professor Joubert, Second Report, [12] - [12.7], C 537-538.

[53] Dr Baigent, Supplementary Statement, [3.1]-[4.4] , C 760-762.

[54] Dr Keays, Supplementary Report, [60], [63], [66] and [75].

[55] Dr Joubert, Third Report, [8]-[9], C570.

[61] Chitty on Contracts (Vol 1, 29th ed) [13-018]; Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Aust) Ltd [1986] HCA 14; (1986) 160 CLR 226, 236-238.

[62] The Moorcock (1889) LR 14 PD 64,67; Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410, 422.

[63] Between the specified weight and the weight at which the plane would fall out of the sky or the lift cable snap.

[69] Professor Joubert, Third report, [8], C582.

[71] Dr Keays, Second report, [75], C 676.

[72] Dr Keays, Second report, [55]-[56], C 670.

[77] As indeed counsel for Timelink properly and fairly conceded.

[82] T. [404-407], (plus, as it turned out, a very small additional factor representing the difference between 218 kN and 262 kN).

[87] Dr Baigent, Supplementary Statement, [5.8]-[8.6], AB 7, 764-772.

[88] Tsouvelis v Victorian Railways Commissioners [1968] VicRp 13; [1968] VR 112, 129; Williams, Civil Procedure - Victoria, [64.23.25].