The Minister of Marine of the State of South Australia (the Minister) sued the owner (China Ocean Shipping Co), agent (Patrick Operations Pty Ltd), and master (Li Zhong Yi) of the Wuzhou in the Supreme Court of South Australia for damage done by the ship to a jetty at Wallaroo, South Australia, which was the property of the Crown. The Minister's action against the owner and agent was based on s 124(1)(a) of the Harbours Act 1936-1974 (SA) (the Harbours Act). The liability under that section is absolute. The Minister also sued the master under s 124(1)(b) of the Harbours Act, asserting the master's mismanagement of the vessel. In a third action, the Minister sued the vessel in rem for the injury done to the port installation.

These parties (the petitioners) then sought to limit their liability under s 504 of the Merchant Shipping Act 1894-1900 (Imp) (the Merchant Shipping Acts).

Held: The questions in the case stated should be answered as follows:

Q 1. Does s 504 of the Merchant Shipping Acts entitle the petitioners or any of them in any circumstances to make an application under that section relating to liability alleged to have been incurred by them or any of them in respect of the property (having in mind the nature and description of that property and disregarding for the purpose of this question its ownership)?

A. As to the owner, yes.

As to the agent, not answered.

As to the master, no.

Q 2. Does s 503 of the Merchant Shipping Acts apply of its own force to the Crown in right of the State of South Australia so as to entitle the petitioners or any of them in any circumstances to limit their liability for damages?

A. No.

Q 3. If s 503 does not so apply of its own force, does it apply by virtue of s 64 of the Judiciary Act 1903-1976?

A. No.

Per Gibbs J: The State of South Australia argued that the provisions of the Merchant Shipping Acts ceased to be applicable in South Australia on the formation of the Commonwealth in 1901. To accept this argument would be to abandon both authority and principle. It is established by a number of decisions of this Court that the Merchant Shipping Acts are of continued operation in Australia. When Pt VIII of the Merchant Shipping Acts, upon their enactment, became part of the law of South Australia and the other Australian colonies, the provisions of that Part did not occupy a separate and exceptional position. They became part of the whole body of the law by which the colony was governed. They were just as much a part of the law of the colony as the principles of common law and equity, the statute law of England enacted before the colony was settled, and the enactments of the colonial legislature. They would remain part of the law until they were repealed or amended by a legislative body which had power to affect them. The UK Parliament had such power, but the legislature of the colony had only the limited powers conferred by ss 735 and 736 of the Merchant Shipping Acts. Since the Statute of Westminster Adoption Act 1942 (Cth), the Parliament of the Commonwealth has been free from the restrictions of those sections, and its enactments since that time have no longer been liable to be held void or inoperative on the ground that they are repugnant to any statute of the UK. It is, however, unnecessary to discuss the effect of the Statute of Westminster on the powers of the Commonwealth Parliament, since no legislation relevant to the present question has been enacted by the Parliament. Part VIII of the Navigation Act 1912 (Cth), as amended, contains provisions for the limitation of liability in respect of government ships, but does not deal with the limitation of liability when damage is caused by a private vessel. The establishment of the Commonwealth in 1901 did not have any effect on the operation of the Merchant Shipping Acts - like other laws of the colonies, they continued in force in the States, although subject to the Constitution.

For completeness, it may be added that s 1 of the Merchant Shipping Acts was repealed by the Merchant Shipping (Liability of Shipowners and Others) Act 1958 (UK) (the 1958 Act [which gave domestic effect to the LLMC 1957 in the UK]). It was held in Bistricic v Rokov (1976) 135 CLR 552 (CMI1923) that s 2(4) of the 1958 Act was not in force in New South Wales, but it follows from the reasoning of Mason J in that case, with which a majority of the Court agreed, that no part of that Act became part of the law of any of the Australian States. The repeal of s 1 of the Merchant Shipping Acts was therefore not effective in Australia.

Accordingly, in the circumstances as stated in the special case, if the fact that the property damaged was owned by the Crown is disregarded, the company which owns the Wuzhou is entitled to limit its liability under s 503 of the Merchant Shipping Acts, and for that purpose to bring limitation proceedings under s 504 of the Merchant Shipping Acts.

However, neither the master nor the agent has a similar privilege. The limitation of liability for damages to an arbitrary amount, which may be far less than that suffered by the persons whose property was injured by the improper navigation of the ship, is entirely the creature of statute law. Section 503 of the Merchant Shipping Acts confers the privilege only on the 'owners' of a ship, and s 504 similarly enables only an 'owner' to make an application for limitation under that section. The ambit of the sections has been extended, in respects presently immaterial, by amendments to the Merchant Shipping Acts, notably those passed in 1898 and 1906. By s 3 of the 1958 Act that privilege has been extended in certain circumstances to the master of a ship, but that Act is not in force in South Australia. There is no express provision of the Merchant Shipping Acts in force in South Australia that extends the provisions of s 503 either to masters or agents. No doubt the word 'owner' is not to be construed in a narrow technical sense, but by no legitimate extension of its meaning can it include a master or agent who does not happen also to be an owner of the ship.

Per Stephen J: None of the considerations which led this Court in Bistricic v Rokov to deny to the 1958 Act operation in Australia apply to the Merchant Shipping Acts.