Discovery Yachts Group Ltd sold in pre-pack deal

Discovery Yachts Group Ltd has appointed administration – and been sold in a pre-pack deal – following the conclusion of undefended court action which has left the company owing nearly £1.2m according to Boating Business.

This comes after a couple was awarded £1m for being sold a leaky ship they branded ‘HMS Disappointment’.

According to the Daily Mail, Andrew and Maria France bought the Elusive for £1.5m in 2017 after a house fire. The former deep-sea diver, 58, and his wife planned to sail around the world, but the ship developed leaks, navigational glitches and proved unseaworthy.

The couple wanted Elusive to become their new home and for her to be fit for long-term habitation and extended periods at sea, his barrister, Noel Casey, told London’s High Court. But they had to ditch their dream due to multiple ‘defects on the yacht’ which rendered her ‘unfit for purpose’ and ‘not suitable…for blue water cruising’.

They claimed the vessel was ‘not fit to sail’ the high seas and ‘not watertight,’ with one of the cabins flooding just three days after the boat was delivered.

Andrew France, 58, sued Southampton-based Discovery Yacht Sales Ltd (DYS), from whom he bought his boat, and Discovery Yachts Group Ltd, which dealt with and supported France after a buyout of DYS in April 2017.

In late December 2019, High Court judge Mr Justice Teare ruled in the Frances’ favour against both companies, awarding around £1m in compensation.

The judge said the faults were caused by the failure of the seller to ensure it complied with the specification, was of satisfactory quality and was fit for purpose.

“The yacht appears to have been delivered hurriedly and before it was ready to be delivered,” he said. “It was delivered without an adequate sea trial or commissioning.”

And he said he was satisfied that Discovery Yachts Group had agreed to ensure that repairs outstanding in September 2017 would be completed.

Defence

Defence lawyers had argued that ‘inexperienced’ sailors should bear part of the blame for the defects, which they said were caused by ‘negligent seamanship or a lack of maintenance and competence’.

The court heard that France had spent over 20 years working as a saturation deep sea diver before he set his heart on seeing the world from his own boat and splashed out on Elusive.

Defects showed up soon after her delivery on January 12, 2017, the court heard.

“On the first day of her maiden voyage, the mast collar began to leak, and on 15 January the forward cabin was flooded with water because of an unfinished cable penetration in the watertight bulkhead,” explained Mr Justice Teare.

Over the next few months, a range of further problems emerged, lawyers said, including a sail block ‘disintegrating’ and the davit arm – a crane-like structure used for lowering the yacht’s lifeboat – coming loose, leaving the dingy dragging in the water behind the yacht.

Problems continue

On January 18, Elusive berthed in La Coruna, Spain, for repairs, but the mast continued to leak and the professional skipper who was helping France find his feet reported: “Crew morale is extremely low.”

On January 29, she set sail for the Caribbean on the Atlantic leg of her world cruise, but was forced to retreat to the Canary Islands when her generator packed in.

The skipper reported: “We are suffering problems never experienced before and the general feeling is that the boat is not fit.”

Other problems included the navigation equipment playing up and the autopilot temporarily ‘shutting down’.

France reported that Elusive was attracting ‘admiring glances’ from fellow sailors due to her appearance, but complained: “I am embarrassed to show them the state of the boat, with blue tape holding drawers and cupboards shut, towels to catch water leaks, badly stained furniture and stink of diesel in the saloon.”

But by May 2017, Elusive had reached Antigua, where he claimed Discovery Yachts Group personnel effected superficial repairs after he sent out a list highlighting the defects.

The same month, he sent a ‘message of complaint’ to Discovery Yachts Group, which read: “Surely this is not the standard of build quality one should expect when spending £1.5m. At this time the boat is not fit to sail, and certainly not fit for an ocean passage. I have no confidence in the boat.” France referred to it as ‘HMS Disappointment’ in a later message.

Annapolis repairs

Elusive’s next port of call was Annapolis, where Discovery Yachts Group carried out further repairs on the boat in September 2017, but the couple were ‘underwhelmed by the work’.

France said he even agreed to let Discovery Yachts Group exhibit Elusive at the October 2017 Annapolis Boat Show if they overhauled her with full repairs.

Justice Teare backed France’s claim, ruling: “It is plain that an agreement had been reached whereby in return for the yacht being exhibited at the Boat Show the outstanding items of repair would be carried out.”

France’s legal team said Elusive remains vulnerable in the high seas and is ‘not watertight’, although capable of tackling calm waters, according to the Daily Mail.

The yacht, which should have become the couple’s permanent base, is now beached on a stand near Lymington awaiting an overhaul, while France and his wife are in rented accommodation.

Neither company was represented in court, but in their defence partly blamed France for the yacht’s troubles, while Discovery Yachts Group also maintained it had no contractual relationship with France or his company. It was under no obligation to put right any defects in the yacht but had made ‘extra efforts’ to assist him by doing repairs, the company claimed.

The judge awarded France about £900,000 from DYS, based on the reduced value of the boat. Discovery Yachts Group is liable to pay £260,000 in repair costs, he said.

On top of that, they must together pick up France’s legal costs bill, which his lawyers have estimated at £432,000.

Both DYS and Discovery Yachts Group had their defences ‘struck out’ at the start of the trial when neither party appeared in court.

Shortly before the trial kicked off, ‘notice of an intention to place DYG into administration’ had also been served, the judge said.

According to Boating Business the company appointed Chris Moore of K J Watkin & Co. as liquidator on 9 December 2019 and went into administration ten days later. Continuity of employment has been assured.

“Immediately upon appointment, a pre-pack sale was completed to Binti Marine Holdings Limited, a UK subsidiary of Binti Holding GMBH,” says Simon Wall of K J Watkin & Co.

“This business rescue has ensured continuity of employment for all employees and all yachts in build will be completed.”

It is unclear whether Discovery Yachts Sales Ltd has also appointed administrators.

Read more in Boating Business.