This case arose from an allision between the Goliath with two tugs and a wharf owned and operated by Tasmanian Ports Corp Pty Ltd (TasPorts). The tugs sank, emitting diesel fuel and other hydrocarbons. TasPorts brought claims against CSL Australia Pty Ltd (CSL), the owner and operator of the Goliath, for breach of the contract under which the vessel entered the port, in negligence, and in public nuisance. TasPorts claimed AUD 2.17 m for the loss of the tugs, AUD 114,869 for the loss of hydrocarbons, AUD 2,958,595 for the hire of replacement tugs, and AUD 117,152 for the damage caused to the wharf. TasPorts also claimed about AUD 17,245,743 for costs of and associated with the containment, removal, and disposal of hydrocarbons, and the removal and disposal of the tugs, claims under the Limitation of Liability for Maritime Claims Act 1989 (Cth) (the Act), Sch 1, art 2.1.d, which TasPorts claimed were not limitable under s 6 of the Act.

CSL later commenced a limitation proceeding seeking to limit its liability for all claims arising out of the allision within the meaning of art 2 of the LLMC 1996 as further amended by Resolution LEG.5(99) (2012) of the Legal Committee of the International Maritime Organization. The Convention, except for arts 2.1.d and 2.1.e, is given the force of law in Australia by s 6 of the Act. CSL also sought to establish a limitation fund pursuant to art 11 of the Convention for 7,401,416 SDRs based on the gross tonnage of the Goliath.

The issues for the Court were as follows:

1 With regard to whether CSL contractually excluded or waived its right to limit liability for the claims of TasPorts:

(a) Was the agreement between TasPorts and CSL subject to TasPorts’ STCs?

(b) If so, upon its proper construction, did cl 26.2 of the STCs exclude the right of CSL to limit its liability to TasPorts under the Act?

2 With regard to the wreck removal issue, were TasPorts' claims in respect of the raising, removal, destruction, or the rendering harmless of the tugs, including anything that was on board the tugs, limitable under art 2.1 of the Convention?

Held: As to issue 1(a) yes; as to issue 1(b) no. As to issue 2, yes.

TasPorts asserts that CSL, by cl 26.2 of its STCs, contractually waived or excluded any right to rely on limitation. It is common ground that the limitation regime under the Convention can be contractually excluded: see Bahamas Oil Refining Co International Ltd v The Owners of the Cape Bari Tankschiffahrts GMBH & Co KG (The Cape Bari) [2016] UKPC 20, [2016] 2 Lloyd’s Rep 469 [19]-[20], [27] (CMI114). On the evidence, the STCs did apply to the Goliath's port movements. The next issue is whether cl 26.2, properly interpreted, excludes CSL's right to limit liability under the Convention. Of particular pertinence is The Cape Bari. The principles extracted from The Cape Bari include that for a party to be held to have abandoned or contracted out of valuable rights arising by operation of law, the provision relied upon must make it clear that that is what was intended ([31]). In construing such a contract one starts with the presumption that neither party intends to abandon any remedies for its breach arising by operation of law, and clear express words must be used in order to rebut this presumption. To rebut that presumption one must be able to find in the contract clear unequivocal words in which the parties have expressed their agreement that a remedy for a breach arising by operation of law shall not be available in respect of breaches of that particular contract ([32]).

Clause 26.2 is not materially different from the full indemnity clauses in Sun Wai Wah Transportation Ltd v Cheung Kee Marine Services Co Ltd [2009] HKCFI 1098, [2010] 1 HKLRD 833 and The Cape Bari in so far as any exclusion of the right to limit is concerned. Those clauses provided for the shipowners to fully indemnify their counterparties with no mention of limitation. Despite the full indemnity and because of the failure to deal explicitly with limitation, in both cases it was held that the important right to limit was not excluded. Similarly, cl 26.2 makes no mention of the important right to limit, which is in any event a right that arises from statute and not from the parties’ contract. It is also a right that applies by art 2.1 of the Convention.

The further issue with regard to whether the wreck removal claims are limitable under the Convention as it applies in Australia arises from the fact that in becoming a State Party to the Convention, Australia exercised its right of reservation under art 18.1 to exclude the application of arts 2.1.d and 2.1.e. CSL says that TasPorts' wreck removal claims come within art 2.1.a as consequential loss claims arising from damage to or loss of property (the tugs, the wharf and the hydrocarbons) and are therefore subject to limitation regardless of whether they also come within art 2.1.d. Against that, TasPorts says that art 2.1.d, which deals specifically with wreck removal claims, qualifies the earlier paras which, by necessary implication, exclude the claims covered by art 2.1.d - otherwise art 2.1.d and the right of reservation in relation to it in art 18.1 have no work to do.

Limitation has a long history. It was explained in Victrawl Pty Ltd v Telstra Corp Ltd [1995] HCA 51, 183 CLR 595, 600-601 (CMI667), that the inconvenience caused by disparity among the laws of the respective maritime nations relating to limitation of liability led to the conclusion of international Conventions to standardise the rules. The purpose of these Conventions was not only to protect shipowners and their employees, but also to provide for the equitable distribution amongst claimants who had suffered losses from a particular casualty of a fund that would likely be insufficient to meet their claims in full. In China Ocean Shipping Co v South Australia [1979] HCA 57, 145 CLR 172, 185 (CMI1927), it was observed that the policy underlying the concept of limitation 'is the protection of the owner engaged in the maritime carrying trade from financial ruin where his vessel causes damage of the described kind'. That statement was adopted in Strong Wise Ltd v Esso Australia Resources Pty Ltd [2010] FCA 240, 185 FCR 149 (The APL Sydney) [31] (CMI1187).

In CMA CGM SA v Classica Shipping Co Ltd (The CMA Djakarta) [2004] EWCA Civ 114, [2004] 1 Lloyd’s Rep 460 [11] (CMI728) it was accepted by the English Court of Appeal that the object and purpose of the Convention in giving owners, charterers, managers, and operators the ability to limit their liability was to encourage the provision of international trade by way of sea carriage. That was endorsed in MSC Mediterranean Shipping Co SA v Stolt Tankers BV (The MSC Flaminia (No 2)) [2023] EWCA Civ 1007 [62] (CMI2276) where it was said that that meant that the provisions of the relevant Convention should be applied, if possible, to all cases which can reasonably be brought within the language of the Convention.

It is plain that TasPorts’ claims, as asserted, satisfy the elements of art 2.1.a. That is because the asserted claims are 'in respect of' - a relational phrase requiring only a loose connection - 'loss of or damage to property' that occurred in direct connection with the operation of the ship the owner of which seeks limitation (ie the Goliath) and include 'consequential loss resulting therefrom' (ie the clean-up, removal, and disposal costs). To the extent that TasPorts' claims are not within art 2.1.a, as not arising from loss of or damage to property, the non-contractual claims (ie in negligence and nuisance) could come within art 2.1.c as claims 'in respect of other loss resulting from infringement of rights other than contractual rights, occurring in direct connexion with the operation of the ship'. That said, it is clear enough that as characterised in the amended statement of claim, the claims are within art 2.1.a so that there is no need for CSL to rely on art 2.1.c. Also, the spilled hydrocarbons were not carried as cargo on the tugs, so art 2.1.e does not arise for consideration. On that simple textual approach, CSL would be entitled to limit in relation to TasPorts' claims.

TasPorts' argument to the contrary principally relies on the interpretive assistance to be derived from the maxim generalia specialibus non derogant. Put differently, it is said that it is necessary to give effect to the Convention as a coherent whole. The contention is that claims in respect of wreck removal are specifically dealt with in art 2.1.d, and are thus to be regarded as excluded from the more general provisions of arts 2.1.a and 2.1.c, in particular because a reservation in relation to art 2.1.d would otherwise be ineffective, leading to incoherence in the Convention. Support for this approach is to be found in Perusahaan Perseroan (Persero) PT Pertamina v Trevaskis Ltd [2023] HKCFA 20, (2023) 26 HKCFAR 297 (The Star Centurion) (CMI2253). That is high authority from which a single Judge, albeit in a different jurisdiction, would not readily depart, particularly having regard to the importance of the Convention being given the same meaning in the jurisdictions of all States Parties.

TasPorts also relies on Barameda Enterprises Pty Ltd v O'Connor [1988] 1 Qd R 359 (The Tiruna) in which it was decided on similar reasoning that claims in relation to wreck removal as described in art 1.1.c of the LLMC 1957 were to be regarded as excluded from the more generally described claims in arts 1.1.a and 1.1.b. TasPorts finds further support in Atlasnavios Navegacao LDA v The Ship Xin Tai Hai (No 2) [2012] FCA 1497, 215 FCR 265 [139] (CMI1920) and in Scheepvaartbedrijf MS Amasus BV v ELG Haniel Trading GmbH ECLI:NL:HR:2018:140 (2 February 2018) (The Wisdom) (CMI160) for the contention that it is necessary to remove from the reach of arts 2.1.a and 2.1.c claims coming within the description in art 2.1.d in order to give some effect to any reservation in relation to art 2.1.d.

With reference to the text, context, object, and purpose of the Convention, TasPorts’ claims as characterised in the pleadings come within the text of art 2.1.a and are on that basis prima facie subject to limitation. However, they also come within the natural meaning of art 2.1.d, which is not part of Australian law. On the ordinary meaning of the language employed, the Court sees no reason to limit the meaning of arts 2.1.a and 2.1.c with reference to 2.1.d. There plainly is an overlap, but it is not complete - art 2.1.d has its own, non-overlapping, sphere of operation. Giving the Convention a purposive construction, limitation should be available in respect of all claims reasonably within the language of the Convention. Recourse must now be made to the preparatory work of the Convention and the circumstances of its conclusion.

The history of a shipowner’s right to limit liability can be traced back to Spain in the 14th century from whence it spread, and in England to the 18th century. The different approaches between England and continental Europe led to efforts by the Comité Maritime International (CMI) to prepare a draft Convention to deal with the limitation of liability for maritime claims. The publication of the proceedings of the 1921 Antwerp Conference of the CMI record the discussion of national delegates on the wording of a draft Convention on Limitàtion de la Responsibilité des Propriètaires de Navires, ie Limitation of Shipowners’ Liability: see Bulletin No 47: Conférence d’Anvers (CMI, July 1921). Apparently because of the disruption caused by World War I, no further work had been done since a draft Convention had been prepared in 1910. That draft included, in art 1.5, as claims subject to limitation, 'De l’obligation d’enlever l’épave d’un navire coulé et des obligations s’y rattachant', ie the obligation to remove the wreck of a sunken ship and the obligations relating thereto.

The story can next be taken up with reference to the CMI Madrid Conference in 1955. The British Maritime Law Association (BMLA) presented a report representing the unanimous views of those engaged in maritime commerce in the UK. The British delegation recorded that the British Government reserved the right to exclude wreck liability from art 1 of the draft Convention. The draft was the subject of further debate and then adoption at the 1957 Brussels Diplomatic Conference on Maritime Law (published as Conférence Diplomatique de Droit Maritime, Dixième Session, Bruxelles 1957 (Royaume de Belgique, Ministère des Affaires étrangères et du Commerce extérieur, 1958). Several delegations spoke to the importance of retaining the right, as in the 1924 Convention, to make a reservation in relation to the inclusion of wreck removal claims in the list of claims subject to limitation.

It is clear from the history of the 1924 and 1957 Conventions that the inclusion of wreck liability within the descriptions of claims subject to limitation was intended to extend limitation to such claims that were not otherwise covered by the other described claims, and that the provision for reservation in relation to that extension was motivated by a concern that shipowners should not be able to limit their liability to port and other authorities for the expenses incurred in the removal of their own wrecks. That was not only to protect the authorities, funded as they no doubt were by public money in the days before widespread privatisation of public assets, but also to ensure that there was an incentive for shipowners to remove their own wrecks. In none of the debates is there any discernible concern with regard to limiting a shipowner’s liability for claims against it in respect of the removal of some other shipowner’s wreck.

Work began on a possible new Convention in 1972, as recorded in The Travaux Préparatoires of the LLMC Convention 1976 and of the Protocol of 1996 (CMI 2000) 2. As with the earlier Conventions, the focus of attention was not on wreck removal. Nevertheless, the differences in views about whether limitation should be available for wreck removal claims, whether they should be uniformly excluded, or whether States Parties should have the right of reservation in relation to such claims, were aired from time to time. It is clear that what became arts 2.1.a and 2.1.c were regarded as the 'hard core' of limitable claims, covering damage to property and loss consequent on such damage and 'abstract loss' respectively. Articles 2.1.b, 2.1.d, 2.1.e and 2.1.f were seen as necessary in so far as they defined limitable claims which were not covered by arts 2.1.a and 2.1.c, 'such as wreck removal and the rendering harmless of the cargo'.

The report of the Legal Committee's 25th session in January 1975 explains that the concern with regard to wreck removal claims being limitable was that that might be conducive to the neglect of wreck removal by shipowners, and might similarly discourage removal, destruction, and rendering harmless of cargoes in cases of necessity. Since owners' liability for wreck removal was readily insurable, what lay at the heart of the wreck removal claims under consideration were the claims of authorities against owners for the expenses in removing their wrecks from public waterways - the authorities would not be insured for any amount they could not recover from the owners of the wrecks. The insurance considerations demonstrate that there was nothing peculiar or problematic in the innocent owners of a wreck being unable to limit in relation to the claim against them by an authority which is charged with having the wreck removed but when they claim that loss from the wrongdoing ship, the latter's owners can claim limitation. The difference between the innocent owners' liability and what they could get back from the wrongdoing owners would be the P&I insurer’s loss.

There are a number of points that emerge from the history of the Convention, and in particular the travaux. First, the inclusion of a head of limitable claim expressly including wreck removal can be traced back to the 1924 Convention. Initially, no option to make a reservation in relation to that head was envisaged, but that was changed following advocacy on behalf of dock and harbour authorities because of their concern that their claims in relation to wreck removal should not be subject to limitation. Secondly, essentially the same position was carried through to the 1957 Convention, the debates once again showing a concern from a number of countries to avoid the wreck removal claims of harbour and like authorities from being subject to limitation. Thirdly, much the same concerns came forward in the debates leading to the adoption of the 1976 Convention. In particular, a concern with regard to wreck removal claims being limitable was that that might be conducive to the neglect of wreck removal by shipowners. Another concern was that the claims of harbour authorities with regard to wreck removal should not be limited. Finally, although in each case provision was made for States Parties to exercise a reservation in relation to wreck removal claims, the inclusion of wreck removal claims within the heads of claim that were (or could be) subject to limitation was to extend limitation to such claims which were clearly regarded as not necessarily being otherwise covered by the other heads of claim.

The history accordingly recognises that art 2.1.d of the Convention was conceived of and intended to include claims within the heads of limitable claims that were not otherwise regarded as being included, and the principal objective in allowing for a reservation from that para was to enable States Parties to exclude the claims of harbour authorities from being limitable. Neither art 2.1.d nor art 18.1 was expressed in that way, but that was clearly their underlying rationale. TasPorts' wreck removal claims, as particularised in its amended statement of claim in the liability proceeding, are claims that come within art 2.1.a of the Convention, and they are not excluded from being subject to limitation by Australia's exercise of its right of reservation not to implement art 2.1.d.