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ARTICLE · 07 FEBRUARY 2010

Marine Brokers' Exposure in Consumer Sales

DLA Piper Australia
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The recent High Court decision of Walters v Taylor Marine Limited, HC Auckland, CIV-2006-404-2772, 19 October 2009, illustrates that in New Zealand a marine broker can face liability for breach of statutory guarantees under the Consumer Guarantees Act 1993 as a ‘supplier’ of goods, even if its client seller has no liability to the purchaser. Given the potential risk exposure illustrated by this decision, brokers (and their insurers) should be mindful of their obligations under this Act as both s

AustraliaConsumer Protection
Neil Beadle
Neil Beadle
Aisha Lala
Aisha Lala

Background

United States resident, Mr Bishop engaged Taylor Marine Limited to be his agent for the purpose of selling a 63' ocean-going yacht, 'Blaze'.

Mr Walters purchased the vessel in his personal capacity for NZ$650,000 in 2003. Unknown to Mr Walters, Blaze was subject to a mortgage held by a United States financier, Keybank National Association. The mortgage secured sums that Keybank had advanced to Mr Bishop.

In 2005, Mr Walters sold Blaze to a company that he controlled, Barrington Charters Limited (BCL). Blaze was later arrested at the instigation of Keybank due to a default on loan repayments. Keybank issued proceedings against Blaze in New Zealand and was partially successful in its action, ultimately resulting in a settlement between Mr Walters and Keybank for $150,000 (see Keybank National Association v The Ship 'Blaze' [2007] 2 NZLR 271).

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