In 1999, Gert Bergvall, a seafarer, joined the crew of the Flinders. He was employed by ASP Ship Management Pty Ltd (ASP), an Australian company. On a voyage to or from the Persian Gulf, Mr Bergvall injured his wrist.

The Flinders was owned by Mobil Shipping & Transportation Co of the United States (Mobil US) and registered in Panama. The ultimate management of the vessel was Mobil Shipping Ltd of the United Kingdom (Mobil UK). Mobil UK had a ship management agreement with ASP. Mobil UK directed where the Flinders should go and what cargoes it should carry. However, the master and crew were employed by ASP.

In 2002, Mr Kelk joined the crew of the Lorelay. He was employed by Mermaid Labour & Management Ltd (Mermaid), an Australian company. He later injured his hip.

The Lorelay was owned by Societé d’Exploitation du Lorelay SA, a Swiss company, and registered in Panama. The management of the vessel was in the hands of Allseas Marine Contractors SA (Allseas), also a Swiss company. At the time of Mr Kelk’s accident there was a labour and catering agreeent between Allseas and Mermaid.

Both Mr Bergvall and Mr Kelk sought compensation pursuant to the Seafarers Rehabilitation and Compensation Act 1992 (Cth) (the Act). Their applications were refused.

Mr Bergvall and Mr Kelk applied to the Australian Administrative Appeals Tribunal (AATA) for review of their claims. The preliminary question arose as to whether these were reviewable decisions before the AATA. The Act applies to the employment of employees on a 'prescribed ship' engaged in trade or commerce between Australia and places outside Australia or between the Australian States.

A prescribed ship is a ship to which Pt II of the Navigation Act 1912 (Cth) applies and is 'a ship ... of which the majority of the crew are residents of Australia and which is operated by ... a company that is incorporated or has its principal place of business in Australia'.

Held: Both decisions are reviewable.

The primary question of fact is whether each ship was 'operated' by an Australian company. A useful area to define ship operation is the legislation relating to the limitation of liability for maritime claims. The right to limit liability was originally conferred by s 503 of the Merchant Shipping Act 1894. This right only applied to a registered or beneficial owner. The Convention for the Unification of Certain Rules relating to the Limitation of Liability of Owners of Seagoing Vessels 1924 (the LLMC 1924) contains the first use of the description 'operates' in art 10: 'Where the person who operates the vessel without owning it or the principal charterer is liable under one of the heads enumerated in article 1, the provisions of this convention are applicable to him.'

The International Convention relating to the Limitation of the Liability of Owners of Sea-Going Ships 1957 (the LLMC 1957) extended the class of persons entitled to limit their liability to 'the charterer, manager and operator of the ship, and to the master, members of the crew and other servants of the owner, charterer, manager or operator ... in the same way as they apply to an owner himself'.

This history of limitation of liability for maritime claims was set out by David Steel J in CMA CGM SA v Classica Shipping Co Ltd [2003] EWHC 641 (Comm) (CMI732). His Honour’s analysis confirms that the word 'operates' was first used in the LLMC 1924.

The right to limit liability in Australia is presently conferred by the Limitation of Liability for Maritime Claims Act 1989 (Cth) enacting the Limitation of Liability for Maritime Claims Convention 1976 (LLMC 1976) which defines 'shipowner' to 'mean the owner, charterer, manager and operator of a seagoing ship’.

The role of the master of a ship as the ultimate decision-maker relating to the navigation of a ship, particularly when safety is involved, has been established for centuries. The master of the Flinders was employed by ASP. Any right that Mobil UK had to direct him must have come from a direction by ASP that the master should accept Mobil UK's instructions. The source of the authority of the master was ASP, even though actual instructions were given by Mobil UK. The master was not the operator of the vessel, but when he acted in the operation of the vessel he was acting in his employment by ASP. The whole of the crew were in the same position. By whom a ship is 'operated' will vary with the facts of each case. However, a company closely involved with the actual navigation of a ship and its daily activities will frequently answer the description. A company which directs the voyages of a ship but has no involvement in its actual navigation or day to day activities may not answer the description.

Taking into account the facts that ASP employed the master of the Flinders and all of its crew, that it was contracted to do so pursuant to an agreement which proceeded on the basis that its role was a management role, and particularly crew management, and that the day to day navigation and activities of the ship were effectively under its control through the crew it employed, the conclusion drawn is that ASP is at least an operator of the Flinders.

The position of the Lorelay is not so clear. The ultimate master of the Lorelay was an employee of Allseas Construction, not Mermaid. The agreement between Allseas Construction and Mermaid was not a management agreement but a Labour and Catering Agreement supplemented by a Construction Labour Agreement. However, the actual role of Mermaid was not materially different to that of ASP. It employed all the Australian crew. During the mobilisation and demobilisation voyages it was agreed that the Australian master should be the person in charge.

The involvement of Mermaid could be said to be at a lower level than that of ASP. However, it is not so low that it does not include activities which are among those appropriate to an operator. The Lorelay was operated by Mermaid in association with Allseas Construction, Allseas Marine, or both.