The plaintiff, Kirmani, was injured on a cruise in Sydney Harbour, and subsequently brought a personal injury claim for damages against the shipowner, Captain Cook Cruises Pty Ltd (CCC). It was established that CCC's ship, the Captain Cook II, was not a sea-going vessel and thus the LLMC 1957 did not apply. CCC alleged that its liability was limited to 15 pounds sterling per ton of the ship, as per Part VIII of the Merchant Shipping Act 1894 (UK) (MS Act), s 503. In answer, Kirmani argued that s 104(3) of the Navigation Amendment Act 1979 (Cth) (NA Act) repealed that law in Australia. The question then arose whether the NA Act had repealed the UK legislation to the extent it applied to a cruise taking place wholly within Sydney Harbour, and, if it intended to do so, whether that intention was invalid or otherwise.

Held, per Mason, Murphy, Brennan, and Deane JJ (Gibbs CJ, Wilson and Dawson JJ dissenting): s 104(3) of the NA Act validly repealed Part VIII of the MS Act, and para 4 of the defendant's notice of grounds of defence (relying on the supremacy of the MS Act) should be struck out.

Gibbs CJ (dissenting): Section 333 of the NA Act provides that all provisions of the LLMC 1957, save art 1.1.c, have the force of law in Australia, while s 334 provides that certain ships not being sea-going ships can still be treated as such for the purposes of the amending legislation and the applicable provisions of the LLMC 1957. As of 1980, s 334 applied to most vessels as though they were sea-going vessels, with limited exceptions for pleasure craft, inland waterways vessels, and the like. Article 8 of the LLMC 1957 allows Contracting States to determine what classes of ship they will treat as sea-going ships when applying the Convention.

Section 103 of the NA Act describes the MS Act and provides that this Imperial legislation is, as amended or affected by any other Imperial Act or Act, part of the law of the Commonwealth. However, s 104(3) states that Part VIII of the MS Act is repealed. The issue then arises how to reconcile these sections in relation to the present case, and whether Part VIII of the MS Act was repealed insofar as it was part of the law of NSW. Gibbs CJ was of the view that the expression 'the law of the Commonwealth' from s 103 referred to the law of the Australian nation, but not the law dealing with matters within the Commonwealth's legislative powers. In essence, ss 103 and 104 were performing the same function as s 2(2) of the Statute of Westminster 1931 (Imp) (the Statute) which allowed Imperial Dominions to repeal or amend UK laws to the extent that a law of the Dominion addressed the same matters and the UK law was redundant. Section 2(2) did not apply to state legislation or legislatures. The Statute superseded the previous Colonial Laws Validity Act 1865 (Imp) which rendered colonial laws invalid to the extent they clashed with UK laws extending to the Colony. Section 9(1) of the Statute clarifies that it does not allow the Commonwealth of Australia to make laws in the domain of the States, outside of the Commonwealth's authority. Ultimately the Statute strengthened the powers of the Dominions, but for those Dominions which were also federations, a balance was reached between State powers and Commonwealth powers.

This made it necessary to discern whether Part VIII of the MS Act, in particular s 503 (about limited liability in personal injury cases), dealt with matters in the hands of the States, and whether these matters could nonetheless be within the authority of the Commonwealth. Section 509 of the MS Act states that it applies to the entirety of 'Her Majesty's Dominions', which Gibbs CJ interpreted as incorporating ships used intrastate, such as the Captain Cook II. Applying this to the present case, the Captain Cook II's liability was a matter under NSW jurisdiction. Because the Statute of Westminster did not extend to the States, but only to the Commonwealth, NSW laws concerning limited liability for ships would still be invalid if they contradicted an Act of the UK Parliament extending to NSW (in this case, the MS Act s 503).

In the alternative, was repealing s 503 a matter for the Commonwealth, in its application to ships on the internal waters of the States? The external affairs power was not in question, because the Commonwealth was not implementing the LLMC 1957 when it legislated on matters outside of the treaty (in the NA Act, with regard to ships that were not sea-going ships). Nor was a Commonwealth Act which repealed a UK Act (to the extent it applied in Australia) a matter with respect to the external affairs power. When enacted, moreover, the MS Act became part of the law of NSW and other colonies, meaning it could not be 'external' to Australia, even if the law's source was external. Section 104(3) of the NA Act is not concerned with the relationship between the UK and Australia, but rather intends to repeal part of an Act that had become law in NSW, thus dealing with issues specific to Australia and not the UK.

Gibbs CJ concluded that s 104 of the NA Act was invalid to the extent that it intended to repeal s 503 of the MS Act, as part of NSW's law governing personal injuries aboard vessels (which are not sea-going vessels) in its internal waters.

Mason J: His Honour reiterated that when s 2(2) of the Statute refers to 'part of the law of the Dominion', what it means is the law in force within that Dominion. It eliminates prior restrictions on the legislative powers of Dominions through the doctrine of repugnancy, and allows Dominions to repeal or amend Imperial Statutes that apply to them. This power does not allow the Commonwealth Parliament to repeal or amend an Imperial Statute which is in the legislative domain of the State (s 9(1) of the Statute). However, if repealing Part VIII of the MS Act could be brought under the external affairs power, then it would be unnecessary to decide whether a State could repeal it.

Because of Australia's long-lasting and special relationship with the UK as a prior Dominion, and the ongoing application of various Imperial Statutes in Australia at the time, of their own force, Mason J considered the repeal or amendment of a UK Statute to be an element in Australia's relationship with the UK. This made the repeal of the MS Act an act pursuant to the external affairs power. The operation of a foreign law, being Part VIII of the MS Act, was an intrusion into Australian domestic affairs and supported the exercise of the external affairs power. At the time the MS Act was part of the law in force in Australia. It would be a matter of external affairs if Australia opened negotiations with the UK to have an Imperial law repealed, and the same if the Commonwealth Parliament is initiating the repeal, bringing a longstanding foreign law to an end by use of the external affairs power. This allows the Commonwealth Parliament to repeal an Imperial Statute even if the law's subject matter would otherwise be the States' concern and in their legislative domain.

Section 103 of the NA Act refers to the provisions of the MS Act insofar as it is part of the law in force in Australia, and the NA Act repeals Part VIII pursuant to the external affairs power.

Murphy J: His Honour agreed with the overall conclusion reached by Mason J and found that ss 103 and 104(3) of the NA Act were valid.

Wilson J (dissenting): Division 1 of the new Part VIII that the NA Act inserted into the Navigation Act 1912 (Cth) applied only to sea-going ships. This was because it was implementing the LLMC 1957, which is limited in that way. The Act provided, in s 332(3), that the Division did not apply to intrastate vessels to the extent that a State or Territory made provision giving effect to the LLMC 1957 in relation to such vessels. It would be possible for the Commonwealth Parliament to implement the LLMC 1957 in such a way that it repealed Part VIII of the MS Act, to the extent it applied to sea-going intrastate vessels. If the Captain Cook II was a sea-going ship, therefore, CCC's defence based on the MS Act should be struck out. Wilson J desired to have the case remitted to the NSW District Court to decide on this particular point (the status of the vessel).

Wilson J also considered s 2(2) of the Statute, and the manner in which it removed the shackles from Dominion Parliaments, allowing them to repeal or amend UK legislation that was inapplicable or redundant, disavowed the repugnancy doctrine, and specifically separated the rights of the Australian states from Commonwealth powers (through 'safeguards' in ss 7, 8, and 9).

Section 9(1) of the Statute prima facie prevents the Commonwealth Parliament from legislating in respect of matters within the States' authority, which would extend to intrastate shipping if this was deemed a State matter (and the external affairs power did not apply). Legislation with respect to intrastate shipping that did not go to sea was a matter within state control, not Commonwealth control, satisfying s 9. Repealing the MS Act insofar as it applied to NSW was a State matter, thus the Commonwealth legislation purporting to do this on NSW's behalf was invalid.

Was the Commonwealth nevertheless validly legislating pursuant to the external affairs power? Ratifying the LLMC 1957 brought an external affair into being with regard to which it could legislate. However, that external affair encompasses the limitation of liability for sea-going ships. It was incidental to the implementation of the LLMC 1957 that the Commonwealth sought to repeal Part VIII of the MS Act. The subject matter in both is the same. However, the power to implement the LLMC 1957 did not consist of the power to repeal Part VIII with respect to all shipping in Australia, including intrastate shipping that was not sea-going. The small class of intrastate non-seagoing vessels that exist may be legislated for by the States. If the NA Act's repeal did apply to such shipping, it would have the effect of removing an existing protection without substituting anything else. The external affairs power was not in issue because the repeal would be a law with respect to the law of an Australian State, not a foreign State or country.

Wilson J concluded that s 104(3) of the NA Act was valid, but it exceeded the Commonwealth's legislative power if it purported to repeal MS Act Part VIII throughout the States. 

Brennan J: The phrase 'part of the law of the Dominion' in s 2(2) of the Statute includes in its scope any Imperial laws in force in any part of that Dominion, as well as any other law, from whatever source, in force at the time. The grant of the power under s 2(2) to repeal or amend an Imperial law was intended to assist in resolving conflicts between UK Parliament and the government of a Dominion once the Colonial Laws Validity Act ceased to apply. Section 2(2) of the Statute did not invalidate inconsistent Imperial laws extending to the Dominion - it merely allowed Dominions to override them.

Brennan J interpreted s 2 of the Statute as both removing fetters from Dominion Parliaments in terms of what powers they could exercise, and also providing a new power to repeal and amend Imperial laws specifically. This power is also affected by s 9 of the Statute, which prohibits the Commonwealth Parliament from enacting laws on matters in the domain of the States, and not being a matter within the Commonwealth's authority. For the Commonwealth Parliament's power under s 2 of the Statute to be confined, it must fit both of these 'criteria' from s 9. The power is unfettered so long as the law is on a matter within either exclusive Commonwealth jurisdiction or in concurrent jurisdiction with the State in question.

Because the Statute specifically excluded the Australian States from its operation, they remained limited by the Colonial Laws Validity Act, meaning they could not make laws repugnant to a law of the Imperial Parliament, extending to that State expressly or by necessary intendment. The law would be rendered invalid to the extent of the inconsistency. However, if the Commonwealth Parliament amends an Imperial law (relying on a head of power under s 51 of the Constitution) extending to an Australian State and thereby expresses its own legislative intention as against the Imperial Parliament's, the Colonial Laws Validity Act has no operation. The effect is the same as if the Imperial law applying to the State was repealed. The State may then enact a law repugnant to the Imperial law that previously applied and was amended, provided the subject matter is within the State's purview.

Brennan J also considered the effects of ss 735 and 736 of the MS Act. Section 735 allows the legislature of a British possession (including the Australian States) conditional authority to repeal parts of the MS Act that relate to ships registered in that possession. This would include Part VIII, concerning the limitation of liability. Section 736 grants the legislature of a British possession the power to regulate coastal trade. Confirmation from Her Majesty in Council is also required by s 735, limiting the power of the States to rely on the section. When the Commonwealth Parliament enacted s 104(3) of the NA Act, the matter it legislated with regard to was not within NSW's authority. Because of this, the NA Act was created by the Commonwealth government within the power bestowed by s 2 of the Statute, and the application of the external affairs power was irrelevant.

Deane J: His Honour rejected the argument that the reference to 'law of the Dominion' in s 2(2) of the Statute referred only to laws in force in the federal jurisdiction. Rather it incorporates the various kinds of internal laws that exist simultaneously in the States. The Statute was created following two Imperial Conferences in 1926 and 1930, during which 'Australia' was represented as one entity possessing consistent interests, as a singular member of the international community. At the Conference, unitary nations and federations were treated alike. This all leads to the conclusion that the ultimate expression 'law of the Dominion' in the Statute refers to Australia as a whole. Although ss 8 and 9 and their distinction between federal and state legislatures in Australia exist, they nonetheless rely on an express division not used in s 2, cementing the idea that s 2 has an indiscriminate application.

Because of this, and other related reasons, the relevant provisions of the NA Act should be interpreted as repealing Part VIII of the MS Act, insofar as those provisions constituted part of the law at federal and state level. The repeal is within the Commonwealth's legislative power and competence because, first of all, s 2(2) contains a new legislative power, not just the removal of pre-existing fetters. This is suggested, for example, by the phrasing 'the powers of the Parliament of a Dominion shall include', before going on to identify a legislative power to repeal and amend redundant Imperial laws. Further, the notion that s 2(2) bestows an independent legislative power is supported by the Privy Council's decision in Moore v Attorney-General for the Irish Free State. In that case, it was implicitly accepted that the Statute conferred on the Irish Parliament a 'new power'. That power was adjusted for the Australian context in ss 8 and 9 of the Statute, confining the new power in such a way that it excluded matters falling within the exclusive authority of the States.

Deane J, however, concluded that it was irrelevant whether ss 103 and 104(3) of the NA Act covered matters within the authority of the States for the purposes of s 9(1). More importantly, this law fell within the Commonwealth's legislative powers regarding external affairs. This power is usually invoked when giving effect to an international treaty, but this was not the only way in which it can be used. It also applies generally to laws affecting or concerning Australia's relations with other countries, including the UK.

In this case, the NA Act was a law with respect to a matter concerning external affairs, because provisions of a UK law were being precluded from operating in Australia. The law necessarily involved Australia's relations with the UK. The UK law in question was also not part of the 'inherited' law, but was instead a Statute of the UK Parliament applying in Australia by force of its operation as a UK Act, because the UK Parliament had decreed it should operate in Australia.

Dawson J (dissenting): Section 2 of the Statute gives no indication that it intended to extend the powers of the Dominions it affected. It merely removed pre-existing shackles on that legislative power. It speaks to the doctrine of repugnancy and the need to recognise the greater independence and legislative competence of the Dominions. It strengthens existing powers rather than adding onto them. It would be inconsistent with the purpose of s 2(2) of the Statute to grant Dominion Parliaments legislative powers beyond their own Constitutions. In that event a Dominion could theoretically repeal an Imperial law without the capacity to create a law of its own to fill the gap. Section 9 of the Statute preserves existing constitutional practice in Australia by separating the competencies and authority of state and federal parliaments, and reading s 2(2) as bestowing greater power to the Commonwealth parliament would contradict ss 8 and 9's intentions. Dawson J also argued that a closer reading of Moore indicated that the Judicial Committee did not give any real consideration to the idea that s 2(2) provides an independent, additional source of legislative power.

The NA Act's attempt to repeal Part VIII of the MS Act had as its subject matter the liability of shipowners. Section 735 of the MS Act authorises State legislatures to repeal provisions of the MS Act to the extent it applies to ships registered in that State. Although ss 735 and 736 alike require Royal assent, this does not detract from the fact they grant authority to the states, not the federal Parliament.

Dawson J dismissed the argument that the NA Act was a valid law with respect to the external affairs power, as s 103 of the NA Act and the phrase 'part of the law of the Commonwealth' did not extend to the States. The MS Act still formed part of the law of the States. The MS Act was only repealed insofar as it applied as part of the law of the Commonwealth. This reading of s 103 was the same as of s 2(2) of the Statute (involving the phrase 'part of the law of the Dominions').

Section 503 of the MS Act (concerning limitation of liability) also did not preclude the implementation of the LLMC 1957. Section 65 of the NA Act inserted a new Part VIII into the legislation, implementing the LLMC 1957 and giving it the force of law in Australia. Even without the express repeal of Part VIII of the MS Act through ss 103 and 104(3), the provisions of the MS Act inconsistent with the LLMC 1957 would have been impliedly repealed because of s 65 of the NA Act. When s 104(3) sought to repeal Part VIII of the MS Act, it was going beyond the boundaries of the LLMC 1957, and could no longer rely on the external affairs power regardless. The external affairs power cannot support a repeal of Part VIII of the MS Act beyond matters which the LLMC 1957 governs. The LLMC 1957 only applies to sea-going ships, and s 503 of the MS Act applies also to vessels that are not sea-going ships. As the Captain Cook II is not a sea-going ship, this creates a dilemma whereby the LLMC 1957 does not apply but the MS Act does.

Having disposed of the external affairs argument, Dawson J also asserted that the repeal of an Imperial law was not a matter concerning external affairs, because the supremacy of the Imperial parliament remained a crucial aspect of constitutional theory and practice, and the continuing existence of an Imperial law was not an intrusion into domestic affairs. Both the Constitution and the Statute derived their authority from the Imperial Parliament and were crucial parts of Australia's legal identity. The continuing existence of Imperial legislation was not a matter of external affairs in the same way as Australia's relations with the UK would be. If anything, the subject matter of the repealing provisions in the NA Act was the liability of shipowners, the same as the provisions it was repealing, which did not concern external affairs.

For all these reasons, s 104(3) of the NA Act was not adequate to repeal Part VIII of the MS Act.