Global Technologies Racing Ltd v 5 West (t/a Alex Thomson Racing)

A buyer remains liable for the contractual price unless it proves, on the balance of probabilities, that a failure was caused by a manufacturing defect amounting to breach and that the goods were worthless. In a case involving competing possible causes, the court need not accept one merely because another is rejected; both may be unlikely, and the burden of proof remains decisive.

A contractual variation reducing the price is not subject to a payment condition precedent without sufficient evidence of such a term. A bonus is payable according to its agreed terms, and subjective intention cannot establish an additional condition. Storage charges are not recoverable without contractual incorporation, trade practice or an established course of dealing.

The claimant manufactured carbon-fibre hydrofoils for the defendant’s racing yacht under a time-and-materials supply agreement. One hydrofoil failed during testing before the intended race. The claimant claimed the outstanding purchase price and a race bonus, together with storage charges. The defendant alleged that the hydrofoils were worthless because the failure resulted from defective manufacture and counterclaimed sums paid and consequential losses.

The central issues were whether the defendant had proved a manufacturing defect causing the failure, what price and bonus terms governed after contractual discussions in September 2016, and whether storage charges had been incorporated into the contract.

1. Liability and causation. The defendant had the burden of proving that the hydrofoil failure was caused by manufacturing error. The immediate failure mechanism was established, but the evidence did not show, on the balance of probabilities, that the weakness resulted from manufacture rather than design. The court was not required to choose manufacturing defect merely because the proposed design explanation was considered unlikely. Both explanations could be unlikely, and the less unlikely explanation was not automatically proved.
2. Expert evidence. The court rejected reliance on the change to DT124 resin, because the evidence showed that it contained nano particles, its use had been agreed by the designers, and no manufacturing defect was established. The alleged squalene contamination was equivocal and could have occurred after failure. Late evidence based on non-destructive testing and electron microscopy was not sufficiently reliable to establish a manufacturing defect.
3. Contractual price and bonus. The claimant failed to prove that the reduced price was conditional on prompt payment. The varied price therefore governed. The defendant failed to prove any term making the bonus conditional on use of the V2 hydrofoils. The claimant was entitled to the balance of the varied price and the bonus for second place in the race.
4. Storage charges. The principal contract contained no storage-charge term. No trade practice or course of dealing justified implication, and the delivery-note wording had not been shown to be incorporated. The storage claim therefore failed.
5. Disposition. Judgment was entered for the claimant for the balance of the varied purchase price and the bonus. The storage claim and the defendant’s counterclaim were dismissed. The judge refused permission to appeal.

This was a first-instance decision. The judgment records that permission to appeal was sought and refused.