On 8 May 1953, the SS Mangola was on a voyage to Madang, Papua New Guinea, when it grounded on a coral reef. The shipowner had two other ships in the vicinity, the MS Bulolo, and the MS Malaita. The Bulolo helped lighten the stricken ship and the Malaita pulled it off the reef. On 15 May 1953, the Mangola proceeded on its own power. On 21 May 1956, the shipowner brought a salvage claim against the owner of a part of the cargo on the stricken vessel. The first instance Judge ruled that the suit was time-barred, as it was brought more than two years after the salvage services were rendered. The shipowner appealed.

Held: The appeal is dismissed with costs.

Dixon CJ, McTiernan, Williams JJ: It is well settled that the owner of a ship rendering salvage services to another ship, owned by the same shipowner, laden with cargo which is thereby saved, is prima facie entitled to obtain a salvage award from the cargo owners: see The Miranda (1872) 3 LR Ecc & Ad 561; The Cargo of the Laertes (1887) LR 12 P 187. It is, or may be, otherwise, if the shipowner happens to be liable upon its contract of affreightment to the cargo owners for the loss or injury to the cargo from which it was saved by the salvage services: see The Glenfruin (1885) 10 PD 103; The Beaverford v The Kafiristan [1938] AC 136; The Susan v Luckenbach v Admiralty Commissioners [1951] P 197.

The matter to be decided is whether the true interpretation of s 396(1) of the Navigation Act 1912 (Cth) (the Act) covers the claim and thus bars the action.

Section 396(1) of the Act states as follows:

No action shall be maintainable to enforce any claim or lien against a vessel or her owners in respect of any damage or loss to another vessel, her cargo or freight, or any property on board her, or damage for loss of life or personal injuries suffered by any person on board her caused by the fault of the former vessel, whether such vessel be wholly or partly in fault, or in respect of any salvage services, unless proceedings therein are commenced within two years from the date when the damage or loss or injury was caused or the salvage services were rendered.

There is a choice of three points to which one may go back and attach the alternative 'or in respect of salvage services', when one notionally omits the intervening first alternative, containing what may be called the operative statement, with reference to damage or loss caused by the interaction of two vessels. Thus, so far as the section relates to salvage services the provision may be read as:

(i) No action shall be maintainable ... in respect of any salvage services unless the proceedings therein are commenced within two years from the date when ... the salvage services were rendered; or,

(ii) No action shall be maintainable to enforce any claim or lien ... in respect of any salvage services unless proceedings therein are commenced within two years from the date when ... the salvage services were rendered; or,

(iii) No action shall be maintainable to enforce any claim or lien against a vessel or her owners ... in respect of any salvage services unless proceedings therein are commenced within two years from the date when ... the salvage services were rendered.

On either the first or second of these three readings, an action for a salvage award with respect to cargo, like an action for an award with respect to ship and freight, must be brought within two years. On the third reading, the time bar cannot apply to an action brought only for an award for salvage services by which only cargo was saved. Such an action will be against cargo owners, and not against a vessel or its owners. The appellant says that the grammatical meaning of s 396(1) requires that they should be read in the third way. This reliance on grammar is a mistake.

'Arrangement or symmetry' and 'grammar' are different things. Each of the foregoing divisions of s 396(1) is equally grammatically correct as the others, but the third represents a more symmetrical use of formal arrangement. It balances the two uses of the words 'in respect of one against the other', just as if 'either' had been put before the first of them. As a result, it is more natural for the mind to treat the repetition of the words 'in respect of' as indicating that the alternatives are 'in respect of any damage or loss to another vessel', and 'in respect of any salvage service'. It may indeed be conceded that prima facie, at least to one who attends to the arrangement rather than to more substantial considerations, this is the more natural meaning of the sentence that s 396(1) embodies. But conceding that at a first reading one may find it somewhat more natural to balance the two uses of the expression 'in respect of' against one another is, in other words, mentally to read 'either' before the first of them. However, as soon as one's consideration turns to the substance of the matter, such a reading is seen to mean a distinction between the salvage of ships and the salvage of cargo, for which no reason can be found. The law of salvage has a wider application, and no reason can be advanced for dividing up salvage claims so that a limitation period of two years applies only to actions against a ship or its owners, and not to an action against cargo owners. It is difficult to suppose that it was really intended to exclude claims against cargo owners for a salvage award from the operation of s 396(1).

It is said, however, that some support can be found in s 396(3) for the view that s 396(1) is entirely restricted to actions against ships or their owners. Section 396(3) authorises a court to extend the time of limitation prescribed by s 396(1). It gives a discretion applicable over the whole field covered by s 396(1), whatever that field may be. But then a second limb of s 396(3) requires the court to extend the period, if the court is satisfied that during the period of two years there has been no reasonable opportunity of arresting the vessel within the jurisdiction of the court, or within the territorial waters of the country to which the plaintiff's ship belongs, or in which the plaintiff resides, or has its principal place of business. In that case, the court is to enlarge the time to an extent sufficient to give such reasonable opportunity. It would be illogical to treat this second limb as intended to cover the whole field of s 396(1), and on that supposition to read s 396(1) as limited to the area in which s 396(3) could apply. In truth except for the natural instinct to read the two uses of 'in respect of' as representing the introduction of the alternatives, there is nothing to support the view that actions in respect of salvage services are within s 396(1) only when they are brought against vessels or their owners.

The source of s 396 is s 8 of the Maritime Conventions Act 1911 (UK) (the UK Act), a provision which contains the same equivocation of meaning. That Act begins with a preamble which refers to two Conventions signed in 1910 at Brussels, one dealing with collisions between vessels and the other with salvage. The preamble recites that it is desirable that such amendment should be made to the law relating to merchant shipping as will enable effect to be given to the Conventions. The preamble may not be looked at or called in aid to control the meaning of words, in themselves, clear and unambiguous: Lord Parker in The Cairnbahn [1914] P 25, 30. But the provisions relating to the limitation of actions with respect to salvage services can hardly be said to speak with clearness or certainty. The preamble remits the inquirer to the Conventions. Article 10 of the Salvage Convention 1910 states as follows:

A salvage action is barred after an interval of two years from the day on which the operations of assistance or salvage terminate. The grounds upon which the said period of limitation may be suspended or interrupted are determined by the law of the court where the case is tried. The high contracting parties reserve to themselves the right to provide, by legislation in their respective countries, that the said period shall be extended in cases where it has not been possible to arrest the vessel assisted or salved in the territorial waters of the State in which the plaintiff has his domicile or principal place of business.

If this article is compared with s 8 of the UK Act, or with s 396(1) of the Act, it helps to explain those provisions as a whole. But the only point upon which assistance is needed in this case is covered by the general words 'a salvage action is barred'. These words clearly include all salvage actions. Unless s 8 was meant to stop short of carrying art 10 of the Convention into full effect, it makes it almost certain that there was no intention of excluding actions for a salvage award in respect of cargo from the time bar. It greatly increases the probability that the whole difficulty is the accidental result of an attempt to give effect in one provision, to both Conventions, so far as they respectively deal with a limitation upon the time within which proceedings must be brought.

Webb J, dissenting: For the plaintiff, it is submitted that s 396(1) is not ambiguous; that given its grammatical construction and natural meaning it provides for two categories of claims each introduced by the phrase 'in respect of'; so that the antecedent common to both categories is the phrase 'against a vessel or her owners'; and that there is no reason to depart from this grammatical construction and natural meaning because of anything elsewhere in the Act. If this is the correct view of s 396(1) of the Act, the limitation of two years has no application to salvage actions against cargo owners. For the respondent, it is submitted that the first category begins with the phrase 'against a vessel or her owners', so that these words are incorporated in, and apply exclusively to, that category. If that is so, the limitation of two years applies also to all salvage actions. But it is further submitted for the respondent that if either of the maritime Conventions can be called in aid, more particularly, art 10 of the Salvage Convention 1910, it shows that the parties thereto intended that the limitation of two years should apply to all salvage actions. The argument for the respondent is that as the terms 'another vessel', 'former vessel' and 'vessel wholly or partly in fault' refer to 'vessel' where the term is first used in s 396(1) of the Act, the latter term should be included in the first category, as being indispensable to it; and further that if the term 'vessel wholly or partly in fault' were placed after the term 'vessel' where it first appears, the significance of this description would not be affected. That is true; but that transposition, whilst leaving the first category unaffected, does destroy the operation of the phrase 'against a vessel or its owners', as an antecedent common to both categories. It is for that reason that the transposition is relied upon, either as showing the true meaning of s 396(1), or at least as revealing an ambiguity warranting the Convention being called in aid. But it does not follow that because the term 'vessel' where it first appears in s 396(1) is indispensable to the description of the first category, it is necessarily exclusive to that category; it can still perform a dual purpose and be at the same time a common antecedent of both categories. Nor is it justified to make a transposition of the words of a section in order to create an ambiguity that does not otherwise exist. The grammatical construction or natural meaning of s 396(1) is as submitted for the appellant, and there is nothing to warrant a departure therefrom. In the absence of any ambiguity in the section there is no liberty for the Court to call the Convention in aid: Lord Parker in The Cairnbahn [1914] P 25, 30; Ellerman Lines Ltd v Murray [1931] AC 126, 147, 148. It is interesting to note that English High Court judges and textbook writers, without exception, appear to have construed s 8 of the UK Act as not barring all salvage actions after two years, although it should be stated that their Lordships do not appear to have had the assistance of similar arguments in any of the cases. Apparently, both Bar and Bench thought that the meaning of s 8 was so clear as not to permit of argument: see Hill J in Llandovery Castle [1920] P 119, 124; Willmer J in The Hesselmoor and The Sergeant (1951) 1 LL LR 146, 147; Kennedy's Law of Salvage (3rd edn 1931) 189; McLachlan on Merchant Shipping (7th edn 1932) 542–543; Temperley on the Merchant Shipping Act (5th edn) 565-566. Their Lordships and the textbook writers would have known the history of s 8 and the terms of the Conventions, and if it occurred to them that the language of the section was ambiguous, they would have called the Convention in aid and taken a different view from that which they applied or adopted in their judgments and textbooks.

Kitto J, agreeing with the majority: Section 396 deals with two disparate classes of action, and the reasons which exist for describing an action of the one class as being against a vessel or her owners, and which fully account for the use of the disputed words, do not exist with respect to an action of the other class. There is another reason for not carrying those words down into the second class of action description. Section 396(1) derives from, and, so far as material, is in terms identical with s 8 of the UK Act. That Act contained a recital (since repealed) that at a conference held at Brussels in the year 1910, two Conventions, dealing respectively with collisions between vessels, and with salvage, were signed on behalf of His Majesty, and that it was desirable that such amendments should be made in the law relating to merchant shipping as would enable effect to be given to the Conventions. Sections 1-5 were headed 'Provisions as to Collisions, etc'; ss 6 and 7 were headed 'Provisions as to Salvage'; and the remaining ss 8-10 were headed 'General Provisions'. Each Convention provided for a time limit of two years, the Collision Convention 1910 by art 7, and the Salvage Convention 1910 by art 10. The latter was not confined to salvage actions against ships and their owners, and indeed art 1 provided that the salvage, not only of vessels, but of 'any things on board', should be subject to the provisions which followed. The UK Act, in the course of giving effect to the Conventions, took up the topic of a time limit upon actions it dealt with, in respect of the two kinds of action, together. It did so unhappily, in terms which were not free from ambiguity; but that circumstance supplies a sufficient justification, and indeed a strong reason, for comparing the section with the relevant articles of the Conventions: see The Cairnbahn [1914] P 25. The comparison is wholly against construing s 8 of that Act in the sense for which the appellant contends, for a provision dealing with a time limit internationally agreed upon for all collision actions and all salvage actions could hardly intend to make an exception for salvage actions in respect of cargo. If an intention existed it would almost inevitably be expressed directly. The time limit in the UK Act must therefore surely extend to salvage actions in respect of cargo. If it does, the appellant's argument as a whole must fail; for it would be plainly unsound to give to the Australian provision a meaning different from that of its UK prototype.