Delaware North Marine Experience Pty Ltd v The Ship “Eye-Spy” – Federal Court of Australia (McKerracher J) [2017] FCA 708 – 23 June 2017

Charterparty – Due diligence – Latent defect – Bareboat charterers bringing admiralty proceedings in rem for breach of charterparty – Whether shipowners in breach of due diligence obligation – Whether defect in stern tube assembly was latent – Whether defect caused by negligence of charterers – Whether charterers in breach of obligations relating to redelivery – Effect of delivery “as is – where is” – Whether daily rate for delay in redelivery was a penalty – Whether security for arrest excessive

On 6 February 2015 the plaintiff charterers bareboat-chartered the passenger ferry Eye-Spy from the defendant owners on the Barecon 89 form for a period from 6 February to 19 February 2015. The vessel was delivered on 6 February 2015 at Redcliffe, Queensland.