The Amarantos, a bulk carrier owned by Amarantos Shipping Co Ltd (AS) (the plaintiff), collided with a jetty while berthing, damaging itself, the jetty, and equipment upon the jetty which belonged to the South Australian Ports Corporation (SAPC). Some items of plant and equipment on the jetty belonging to third parties were also damaged. When the collision happened, the bulk carrier was under compulsory pilotage, the pilot being supplied and employed by SAPC; SAPC also supplied several tugs involved in the operation.

AS claimed against the State of South Australia (the State) for the damage to the bulk carrier, alleging negligence on SAPC's part, which the State denied. It denied any responsibility for the pilot's conduct, and alternatively claimed to be able to limit its liability. The State also counter-claimed against AS, arguing that AS was strictly liable for the damage done to the jetty, basing this claim on two State Acts. AS contended that this legislation was inapplicable and that it could limit its liability under the Merchant Shipping (Liability of Shipowners and Others) Act 1900 (Imp) (the MS(LS) Act), the same legislation that the State was relying upon to limit its own liability.

The trial Judge identified twelve questions of law to resolve before trial, based upon AS's allegations and the points of law it raised, and answered these in the State's favour. AS appealed on these questions of law.

Held: Appeal dismissed, adding that it was appropriate for the Court to determine the appeal although the matter had not yet proceeded to trial.

AS based its negligence claim on the allegations that SAPC negligently supplied tugs with insufficient power for the berthing operation, did not warn AS of the limited depth of the harbour, and gave misleading representations in respect of both matters. AS also took issue with the pilot's supposed misleading representations, lack of experience in berthing vessels like Amarantos, and with the methods adopted by the pilot during the operation.

The State, standing in SAPC's place, denied liability. It denied liability for the pilot's conduct, based on s 36 of the Harbors and Navigation Act 1993 (SA), and argued that its liability was limited under the MS(LS) Act. In its counter-claim against AS, the State relied on s 21 of the Harbors and Navigation Act 1993 (SA), as well as the South Australian Ports Corporation Act 1994 (SA) (the SAPC Act) to support the allegation that AS was liable for the damage to the jetty.

Regarding potential claims by third parties for damage to plant and equipment on the jetty from the collision, the State and AS sought indemnity from one another for those claims, and AS sought to limit its liability in respect of these as well.

Relevant Conventions in this matter included the LLMC 1957 and the LLMC 1976, as part of the general historical background, as well as guidance to the context of domestic legislation. The former was adopted as part of Australian law by inclusion as a schedule to the Navigation Act 1912 (Cth), via the Navigation Amendment Act 1979 (Cth), s 65 (the NA Act). The limitation provisions (Part VIII) of the Merchant Shipping Act 1894 (Imp) were replaced through operation of s 104(3). It was clarified in Kirmani v Captain Cook Cruises Pty Ltd (No 1) (1985) 159 CLR 351 (Kirmani) (CMI860) that s 104(3) of the NA Act was sufficient to repeal Part VIII of the Merchant Shipping Act 1894 (Imp) (MS Act) as part of Australian law at federal and state levels.

The provisions giving effect to the LLMC 1957 were repealed and replaced by the Limitation of Liability for Maritime Claims Act 1989 (Cth), which gave force of law to the LLMC 1976.

AS claimed that the repeal of the MS Act did not affect the operation of s 1 of the MS(LS) Act, which it was relying upon to limit its own liability in this matter. The State was also arguing that it could limit its own liability under s 2 of the MS(LS) Act. AS argued that the Commonwealth Parliament lacked the power to repeal the MS(LS) Act through the NA Act, and that Commonwealth legislation granting the force of law to both the LLMC 1957 and LLMC 1976 did not displace the MS(LS) Act.

This line of argument required the Court to consider how the MS Act and the MS(LS) Act, a subsequent amendment, were related. The effect of the MS(LS) Act amendments was to extend the ability to limit liability to cases where the loss or damage to property happened on land or on water, not merely loss of life, personal injury or damage to vessels as the original legislation provided for under Part VIII. Section 2 of the MS(LS) Act, which the State was relying upon, allowed harbour authorities and other owners of docks and canals to limit their liability for the first time.

Section 5 of the MS(LS) Act stated that the legislation should be considered in conjunction with the earlier MS Act, as well as all other amendments up to 1900. The entirety of the MS(LS) Act applied in Australia until the NA Act was enacted, amending the Navigation Act 1912 (Cth), and giving the force of law to the LLMC 1957, while repealing Part VIII of the MS Act through s 104(3). Section 103 of the NA Act states that all references to the 'Merchant Shipping Act' in that part of the Act referred to the MS Act 'as amended, or otherwise affected in its operation', insofar as those amendments or alterations were part of the law of the Commonwealth. A similar definition of the 'Merchant Shipping Act' was provided in s 6 of the NA Act.

Counsel for AS nonetheless argued that this Act did not repeal s 1 of the MS(LS) Act, and that it remained in force. Part of this argument rested on the fact that when the NA Act gave the force of law to the LLMC 1957, art 1.1.c was excluded under s 333. Article 1.1.c concerns the limitation of liability in respect of obligations or liabilities imposed by law in relation to wreck removal, and also the limitation of liability in respect of obligations or liabilities arising out of damage caused to harbour works, basins, and navigable waterways. AS's submission was that it was held in China Ocean Shipping Co v South Australia (1979) 145 CLR 172 that both the MS Act and the MS(LS) Act did not bind the Crown, meaning that shipowners could not limit their liability in respect of claims by the Crown for damage done to docks and harbours owned by the Crown (or State). The fact that art 1.1.c of the LLMC 1957 was excluded from operating in Australia under the NA Act suggested that Parliament intended that shipowners should not to have any right to limit their liability in respect of damage to Crown-owned harbour works. Therefore the intention must have been to preserve s 1 of the MS(LS) Act, which also prohibits limitation of liability in respect of harbour works that are the property of the Crown (or State).

In regard to the LLMC 1976 and the Limitation of Liability for Maritime Claims Act 1989 (Cth), AS pointed out that s 6 of that Act excludes arts 2.1.d and 2.1.e from having the force of law in Australia. Article 2.1.d allows for limitation of liability in respect of claims involving the raising, removal, destruction or rendering harmless of a sunk, wrecked, stranded, or abandoned vessel, and art 2.1.e concerns claims in respect of the removal, destruction, or rendering harmless of a ship's cargo.

The Limitation of Liability for Maritime Claims Act 1989 (Cth) repealed Div 1 of Part VIII of the Navigation Amendment Act 1979 (Cth), which enacted the LLMC 1957. The Limitation of Liability for Maritime Claims Act 1989 (Cth), s 5 also stated that it would not apply to a ship to the extent that a law of a State or of the Northern Territory made provision giving effect to the LLMC 1976 in relation to that ship.

Taking the above into account, the Court came to the conclusion that the LLMC 1976 provided a general scheme for limiting liability, including the conferring of the ability to limit liability for damage to harbour works. However, it remained necessary to deal with AS's arguments in turn.

Effect of the repeal of Part VIII of the 1894 Act

In the Court's opinion, s 103 of the NA Act, as explained above, was meant to encompass the provisions of the MS(LS) Act as part of the general repeal effected by s 104(3). That is because the MS(LS) Act was an Act amending the MS Act, thus falling into the definition of the 'Merchant Shipping Act' as used in the NA Act. The MS(LS) Act was not an independent enactment. Rather, it formed part of the same 'series' and extended the categories of cases in which liability could be limited. Section 1 did not incorporate, by reference, the limitation of liability scheme from Part VIII of the MS Act, but rather extended the scheme as the Act presumed that it remained in force. The Court rejected the submission that Parliament could have intended to leave s 1 of the MS(LS) Act in operation. Parliament's exact intentions when choosing not to give art 1.1.c of the LLMC 1957 force of law in Australia, or the later exclusion of LLMC 1976, arts 2.1.d and 2.1.e in the Limitation of Liability for Maritime Claims Act 1989 (Cth), were unclear.

The NA Act repealed Part VIII of the MS Act (the old limitation of liability scheme), as well as s 1, at least, of the MS(LS) Act. It was not possible for the enactment of the LLMC 1957 as the enactment of a legislative scheme to coexist with the ongoing existence of the MS(LS) Act, including those parts of the MS Act that the MS(LS) Act incorporated or adopted. Further, the Court did not accept that the Parliament could have meant to allow s 1 of the MS(LS) Act to exist concurrently with the LLMC 1957 legislative scheme, when there is already considerable crossover between what each regime covers. The limitation amounts are different in the MS Act and the LLMC 1957. Thus their coexistence could only have had the effect of, bizarrely, allowing a shipowner to choose between two disparate schemes when their subject matter overlapped. The scheme as enacted through adopting the LLMC 1957 was meant to 'cover the field', including the areas that the MS Act and MS(LS) Act had previously covered.

When Parliament enacted the LLMC 1957, this effectively concluded the operation of s 1 of the MS(LS) Act. Parliament had the requisite power to repeal that Act. It was already confirmed in Kirmani that the NA Act validly repealed Part VIII of the MS Act, which for all intents and purposes incorporates the MS(LS) Act, as a subsequent amendment. Kirmani applied to the repeal of the MS(LS) Act. Consistent with the High Court's reasoning in that case, there were several potential sources of the power to repeal the MS(LS) Act before Parliament, including the Statute of Westminster 1931, and the Constitution (s 51(xxix), the external affairs power).

As s 1 of the MS(LS) Act was found not to be in force, AS could not limit their liability by reference to that provision.

The 1989 Act

Like the NA Act and the LLMC 1957, the LLMC 1976 and Limitation of Liability for Maritime Claims Act 1989 (Cth) enacted a scheme for limiting liability, repealing Div 1, Part VIII of the Navigation Act 1912 (Cth) and giving the LLMC 1976 the force of law in Australia, with the exception of arts 2.1.d and 2.1.e. The question was raised whether enacting the LLMC 1976 could amount to a repeal of the MS(LS) Act, assuming that the Court in this case did not already reach the conclusion that s 1 of the MS(LS) Act was validly repealed, or whether enacting the LLMC 1976 could be inconsistent with the operation of the MS(LS) Act as part of the State's law. The Court found that it would be inconsistent for the LLMC 1976, as part of the law of Australia, and the MS(LS) Act to coexist. This is because, as explained above, the legislative scheme introduced through the enactment of the LLMC 1957 is intended to 'cover the field', offering shipowners one clear, applicable scheme upon which to rely. It would be nonsensical to assume that there was room remaining for a contrary scheme in the form of the MS(LS) Act, with different limitation limits and rules. Nor is the Limitation of Liability for Maritime Claims Act 1989 (Cth), s 5 conducive to such an argument, because this section relates only to conflicting laws that actually implement the LLMC 1976, something that the MS(LS) Act does not do. The MS(LS) Act could not be regarded as a law of the State for such purposes.

The Court also considered art 15.3 of the LLMC 1976, which states that States Parties to the Convention may regulate through their own domestic law 'the system of limitation of liability to be applied to claims arising in cases in which interests of persons who are nationals of other States Parties are in no way involved'. The Amarantos was registered in Malta, which was not a party to the LLMC 1976, leaving open the possibility that the Commonwealth Parliament might depart from the LLMC 1976 in this case, given that it involves a national of Malta as well as Australian nationals. However, the MS(LS) Act was not such a provision, because it was not limited to the circumstances described in art 15.3, nor could it reasonably be read down to apply only to a case falling under art 15.3. The ongoing operation of provisions like those in the MS(LS) Act was not consistent with the LLMC 1976 scheme.

In the circumstances, the Limitation of Liability for Maritime Claims Act 1989 (Cth) regulated AS's claim to limit its liability. Further, this Act had rendered the MS(LS) Act ineffective.

Section 2 of the MS(LS) Act

Section 2 of the MS(LS) Act is in a slightly different category to s 1 of that Act because, unlike s 1, s 2 does not amend or affect the operation of the MS Act. Instead, s 2 created a new right to limit liability, available specifically to the class of persons referred to in that section, rather than shipowners. However, s 5 of the MS(LS) Act suggests that s 2, like s 1, should be read in conjunction with and treated as encompassing and contemplating the scheme that was introduced in Part VIII of the MS Act. Due to this, the Court was of the opinion that the repeal effected by s 104(3) of the NA Act also incorporated s 2 of the MS(LS) Act.

Consistent with the reasoning above, moreover, it appeared that the enactment of the LLMC 1976 through the Limitation of Liability for Maritime Claims Act 1989 (Cth) was incompatible with the ongoing existence of s 2 of the MS(LS) Act. This was true although the subject matter of s 2 was, admittedly, not touched upon in the LLMC 1976, which deals only with limiting the liability of shipowners. The two regimes remain inconsistent because nonetheless, the LLMC 1976 still seemingly intends to cover the field in connection with the operation of ships, and clearly the subject matter covered in s 2 of the MS(LS) Act was excluded for a reason.

Despite these findings, because the final decision on this point of law was not in active contention, it was unnecessary to decide on whether s 2 continued to operate.

Imposition of strict liability by State law and inconsistency with Commonwealth law

This point of law related to the State's counter-claim that the plaintiff (AS) alone was strictly liable for the damage to the jetty, despite the Amarantos being under compulsory pilotage at the time. In support of this claim, the State relied on s 21 of the Harbors and Navigation Act 1993 (SA), which states that where property of the Crown or the Minister is damaged by a vessel, the vessel's owner is liable for the cost of the damage. The shipowner will likewise be responsible for damage to harbour facilities, or a navigational aid that are privately owned. The provision also states that this liability can be enforced against either owner or vessel, or both, and that the liability described is strict liability, regardless of whether the responsible vessel was under compulsory pilotage when it caused the damage. Secondly, the State relied on s 24 of the SAPC Act, which provides that where property of the SAPC is damaged by a vessel, the shipowner is liable to the SAPC for the amount of the damage, and such liability can be enforced against either the owner or the vessel, or both. Like s 21, this provision is a strict liability provision.

In response, AS argued that these provisions (and the imposition of strict liability for negligence of a compulsory pilot) were inconsistent with s 410B of the Navigation Act 1912, which provides that regardless of any law of the Commonwealth, a State, or a Territory, an owner or master of a ship that is under compulsory pilotage due to a State or Territory law is liable for any damage caused by the vessel, such as they would be if the vessel were under voluntary pilotage. The section also provides that pilots are subject to the master's authority while on the ship, and that the master retains responsibility for what happens regardless of the pilot's presence.

The effect of s 410B is to remove any distinction between compulsory and voluntary pilotage, rendering the shipowner answerable to the degree the master would be if under voluntary pilotage. The shipowner is made vicariously liable if the pilot is negligent, but if the pilot was not negligent, then none of the shipowner's liability will be attributable to the pilot's behaviour.

The Court turned to the question whether it would be inconsistent with s 410B of the Navigation Act 1912 for South Australian law to impose strict liability on a shipowner for damage its vessel has done to Crown property or the SAPC's property while under compulsory pilotage. It concluded that such an imposition would be inconsistent with s 410B, if s 410B sought to do more than wipe out any differences between voluntary and compulsory pilotage, and if s 410B purported to say that a shipowner's liability for damage caused while their vessel is under pilotage (compulsory or voluntary) was dependent on proof of negligence on the part of the pilot.

Put differently, the imposition of strict liability under laws of the State would be contrary to s 410B if s 410B purported to remove the distinctions between liability of an owner when their vessel is under voluntary pilotage and liability when the vessel is under compulsory pilotage, and if s 410B simultaneously set out to retain the standard of proof in negligence cases before imposing liability on the shipowner. If s 410B did not purport to do both of these things, then a law of the State could impose strict liability on the shipowner without consequence and without being inconsistent with the Commonwealth law.

In considering the history of the enactment of s 410B of the Navigation Act 1912 (Cth), the conclusion was reached that there was no Parliamentary intention to prescribe the circumstances under which an owner/master could be held liable for the actions of a voluntary pilot. There was no intention to maintain the standard of proof in usual negligence cases.

Because of this, State legislation could 'step in' and deal with this issue without being inconsistent with Commonwealth legislation. The State law was free to impose strict liability on shipowners in this regard, regardless of whether the vessel was under compulsory or voluntary pilotage. The State law was only unnecessary to the extent that it tried to regulate the difference between compulsory and voluntary pilotage, which was a matter already contemplated by the Navigation Act 1912 (Cth) and s 410B. The State laws and the Navigation Act 1912 (Cth) could otherwise coexist.

Imposition of strict liability by State law - invalidity

Counsel for AS also argued that in the event that s 21 of the Harbors and Navigation Act 1993 (SA) and s 24 of the SAPC Act were not inconsistent with s 410B, they were nonetheless improperly enacted, in accordance with the requirements under the MS Act (ss 735 and 736). Those particular sections originally allowed British possessions to repeal, wholly or in part, provisions of the MS Act relating to ships registered in that possession, but only after permission was received from the British Crown.

Could the State enact an unqualified repeal of provisions of that Imperial Act in their application as part of the State's body of law? Reference was made again to Kirmani. The Court dealt with this peripheral issue in some depth, reaching the conclusion that at the relevant time, the power to enact an unqualified repeal of the provisions of the MS Act in their application to the State was a power reserved for the Parliament of the United Kingdom. This made it a power belonging to the Commonwealth Parliament under s 51(xxxviii) of the Constitution, thus s 4 of the Australia Act 1986 (Cth) was capable of validly repealing ss 735 and 736 of the MS Act, which it did.

As a general conclusion to these considerations, it was found that the relevant provisions of the Harbors and Navigation Act 1993 (SA) and the SAPC Act, respectively, were not invalid or inoperative.