Indigo International Holdings Ltd and Another v Brave Challenger, Owners and/or demise charterers of

JurisdictionEngland & Wales
CourtQueen's Bench Division (Admiralty)
JudgeMr Justice David Steel
Judgment Date26 May 2004
Neutral Citation[2003] EWHC 3154 (Admlty),[2004] EWHC 1294 (Admlty)
Docket Number2002 Folios 411& 518,Case No: 2002 Folio 411 & 518

[2003] EWHC 3154 (Admlty)

IN THE HIGH COURT OF JUSTICE

QUEENS BENCH DIVISION

ADMIRALTY COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

The Honourable Mr Justice David Steel

Case No: 2002 Folio 411 & 518

Between
(1) Indigo International Holdings Ltd
(2) Urbane Limited
Claimants
and
The Owners and/or Demise Charterers of the Vessel "Brave Challenger"
Defendants
(1) Ronastone Limited
(2) Wensley Grosvenor Haydon-Ballie and Dr Derek Geoffrey Layton (Trustees of the Succession Trust)
Claimants
and
(1) Indigo International Holdings Limited
(2) Urbane Limited
Defendants

Mr Wensley Haydon-Baillie appeared on behalf of Ronastone and the Succession Trust as litigant in person.

Mr Richard Wood (instructed by Ince & Co) on behalf of Indigo International Holdings Limited and Urbane Limited.

Mr Justice David Steel
1

These two actions arise out of a sale contract made on the 14 th April 2000. The sale related to a vessel called "Brave Challenger". The sellers were Indigo International Holdings Limited ("Indigo") and Urbane Limited ("Urbane"). The sellers are claimants in Folio 411, an action in rem, and defendants in Folio 518, an action in personam.

2

The buyers were Ronastone Limited ("Ronastone"), a company wholly owned by a trust called the Succession Trust. The trustees of the Succession Trust were Mr Wensley Haydon-Baillie ("WHB") and Dr Derek Layton ("Dr Layton"). Ronastone is the defendant and counter claimant in Folio 411 as the registered owner of Brave Challenger. The buyers and the trustees are Claimants in Folio 518.

3

The Brave class of vessel was designed and built as a fast naval attack vessel by way of evolvement from wartime MTBs. Brave Challenger was a unique member of the class having been built by Vosper Thorneycroft ("Vospers") for the shipping magnate Stavros Niarchos in 1962 as a one-off luxury yacht capable of 60 knots.

4

WHB acquired the vessel in October 1978 and, over a period of some 10 years, put the vessel through a hugely expensive and elaborate rebuild. Following re-launch and sea trials, the vessel was put on display at Southampton in a museum created by him which celebrated Rolls Royce Engineering. At that time the museum was its registered owner.

5

The vessel is some 102ft in length and 25ft in beam. She is powered by 3 Rolls Royce Proteus gas turbines developing 12,750 h.p. She is also fitted with twin GM diesels for harbour manoeuvring. There is accommodation for the owner and eight guests, together with a captain and four crew.

6

By the early 1990's, WHB was both suffering from poor health and in financial difficulties. His affairs were taken over by an accountant. At some stage the accountant had arranged to transfer the ownership of Brave Challenger to a company called Victory Marine Ventures Ltd. The vessel was then mortgaged to United Overseas Bank to secure a loan, the proceeds of which, WHB asserts, were embezzled by the accountant

7

In due course WHB entered into a voluntary arrangement with his creditors. As part of the subsequent realisation of his assets, the vessel was moved to Lymington in early 1997 and marketed by the mortgagee bank at an asking price of US $3,500,000. No sale was achieved for a very considerable time. Eventually, Indigo, an investment company owned by Mrs Nuria Planella, a national and resident of Andora, offered $750,000 for the vessel in the autumn of 1998. This was accepted by the bank and the sale took place on the 7 th October 1998.

8

The bank appears to have granted power of attorney to the then chief engineer of the vessel, Mr Ian McDougall, to act for the owners in executing the Bill of Sale in favour of Indigo. WHB was unaware of this transaction since by this time, as from September 1998, he had once again been admitted to the Churchill Priory hospital. This reflected an excessive dependence on benzodiazepams and other sedatives. He remained as an in-patient until the 12 th December 1998.

9

Much earlier, sometime in the 1980's, WHB had purchased Wentworth Woodhouse, a vast 300 roomed 18 th century property in South Yorkshire. By November 1998, this too was on the market at the instance of mortgagees. That month, shortly after the sale of the vessel, Mr Ian Stuart ("Mr Stuart"), the husband of Mrs Nuria Planella ("Mrs Stuart"), made telephone contact with WHB in hospital. Mr Stuart was at that time a co-director of Indigo. The primary topic of the conversation was the impending sale of Wentworth Woodhouse. Whether the topic of the Brave Challenger was also discussed at the time (and in particular whether Mr Stuart encouraged WHB to buy back his former yacht and, with that in mind, indicated that he was contemplating that WHB should be given a form of preferential opportunity to do so) was a matter of some controversy.

10

In the meantime, the new owners had embarked on a programme of refurbishment, repair and maintenance of Brave Challenger which by now had lain idle and untended for a very considerable period. To this end Mr Stuart engaged a team to assist him. It included:

a) Mr McDougall, the former chief engineer.

b) Mr Warren Briggs, a close friend with extensive experience in automotive mechanics.

c) Captain Nicholas Allen an experienced yacht master who was also a qualified shipwright.

11

This team carried out a considerable amount of work on the vessel between January and August 1999, including the installation of a new generator, the inspection of the tailshafts and propellers, the fitting of water tanks and pumps, the provision of new electronics equipment, the replacement of anodes, the installation of new carpeting and other general refurbishment work.

The painting

12

Some of the major items were, however, contracted out, including the paintwork and the main engines. As regards to the paintwork, quotations were sought from various yards. In the event a quote from Vospers dated 5 th November 1998 was accepted. This covered both the painting of the topsides, superstructure and hull and the laying of a teak deck on the existing structure. The agreed price was £100,000. A part payment of £33,000 was made.

13

Initially Vospers embarked on the construction of a tent under which to carry out the painting work. This proved to be unworkable. Consequential delays led to the postponement of the installation of a teak deck (constituting some £58,000 of the total contract price) until the winter of 1999/2000. In "compensation", Vospers agreed to undertake all external varnish work for their own account.

14

The vessel was eventually moved into a shed at Vospers in April 1999 and the painting undertaken there. The painting work proved highly unsatisfactory. Mr Stuart instructed a surveyor to comment on the quality of the work. He eventually reported in July 1999. The surveyor drew attention to four major problems, namely shrinkage and movement of timber owing to change of moisture content, poor colour matching, suspect filling and faring associated with the incompatibility between the existing paint scheme and the new coatings and poor application. In short, extensive repainting was required.

15

The problems must have been manifest much earlier since the publication of the report led to an immediate settlement agreement whereby the contract was terminated upon payment by Vospers of £125,000. This settlement was expressly stated to be confidential. The money appears to have been paid, not to Indigo, but to Mundial Investment SA, another company controlled by Mr Stuart and his wife, under the umbrella of which the work was being conducted.

16

Neither the repainting nor the installation of the teak deck was accomplished before the vessel was delivered to the buyers in April 2000. Accordingly the net cost of the work effected by Vospers was a credit of £92,000.

The main engines

17

As regards the main engines, the company that was selected to undertake the work on them was HW Turbines. This company was apparently chosen on the recommendation of Ian McDougall. Given his long association with the vessel, it was unquestionably a surprising choice given that the evidence clearly demonstrates that H.W. Turbines have an unsatisfactory record with regard to repair and maintenance of gas turbine engines in general and those formerly owned by WHB in particular.

18

As already indicated, the vessel was equipped with three such engines, nos: 10168, 12009 and 10170. It would appear that engines 10170 and 12009 were sent to H.W. Turbines in November 1999. The instruction was for a "bulk strip". A bulk strip consists of separating an engine into its separate large sections for inspection. No details are available as to the defects found as a result of the bulk strip on these two engines or the work (if any) carried out as a result.

19

According to the diary of Captain Allen, engine 10170 was in due course returned to the vessel in mid January. As regards engine 12009, this was apparently dismantled by H.W. Turbines but not re-assembled. The sellers asserted that this was attributable to their termination of the contract by reason of their concern about an invoice from H.W. Turbines which contained a claim for wholly improbable hours allegedly worked over the Christmas period. Despite this apparent fraud, HWT's account, said to have been in the sum of £24,000, was apparently settled in full.

20

Six months later, in July 1999, Midland Gas Turbines were called in to inspect one of the engines and in particular the flame tubes. The identity of the engine remains somewhat obscure but it was almost certainly 10170, the only engine which had been purportedly worked on by HW Turbines. The conclusion of Midland Gas Turbines (MGTS) is clear enough: -

"The condition of the flame tube was in line with that expected in 4000/5000 hours aero running time, assuming that burner condition was normal. There is no possibility that with burners...

To continue reading

Request your trial
2 cases

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT