This case relates to an incident that occurred on 19 February 2006 in which the respondent, Mody, allegedly consumed caustic liquid out of a bottle labeled as 'water' whilst he was on the SV Sea Spray owned by the appellant, South Sea Cruises Ltd (SSCL). Mody was on a holiday in Fiji with his family. As a result of consuming caustic soda, Mody suffered chemical burns to his mouth, throat, esophagus and stomach. He sued SSCL in the New South Wales Supreme Court in Australia where he was from.

SSCL sought to have its limitation of liability determined pursuant to s 178(1) of the Marine Act 1986 which gives domestic effect in Fiji to the International Convention Relating to the Limitation of the Liability of Owners of Sea-Going Ships 1957 (LLMC 1957). 

Prior to the incident, the chef on board the SV Seaspray, Setareki Ratatagia, cleaned the griller with the caustic liquid. He then decanted the caustic liquid into an empty water bottle. After cleaning the barbeque griller, Mr Ratatagia placed the bottle containing the caustic liquid near the main mast. During the cruise, Mody was having his lunch on board the SV Seaspray near the main mast. He had been previously sitting near the main mast drinking water from a bottle that had a label indicating it was water. Mody picked up the bottle containing the caustic liquid, thinking that it was the bottle of water that he had been drinking from, consumed some of the contents of the bottle containing the caustic liquid thereby causing him personal injury.

Ratatagia was engaged by SSCL as a chef because he had cooking experience. Any ordinary and reasonable person involved in the cooking profession, should, as a matter of common sense, know better than to decant caustic liquid into a water bottle and to leave the caustic liquid in a water bottle in a popular eating area of the SV Seaspray. It is self-evident that Ratatagia should, in the exercise of the reasonable skill which SSCL was entitled to expect from a person engaged as a chef, have placed the bottle containing the caustic liquid in safe storage.

SSCL contends that the actions of the chef in leaving the bottle containing the caustic liquid near the main mast where it could be mistaken by guests on board the SV Seaspray for water and the subsequent injury suffered by Mody was without the actual fault or privity of SSCL and it is therefore entitled to limit its liability.

The High Court found that (1) the LLMC 1957 and its domestic implementation in Fiji only applied in situations where personal injury occurred as a result of a collision between two vessels (see CMI271), and that (2), in any event, the personal injury was caused with the fault and privity of South Sea Cruises Ltd, which meant that it was not entitled to limit its liability (see CMI272). The High Court therefore dismissed South Sea Cruises Ltd's application. South Sea Cruises Ltd appealed both findings to the Court of Appeal.

Held: Appeal upheld on the first finding; denied on the second.

As to the first finding, art 1.1.a of the LLMC 1957 states as follows:

(1) The owner of a sea-going ship may limit his liability in accordance with Article 3 of this Convention in respect of claims arising from any of the following occurrences unless the occurrence giving rise to the claim resulted from the actual fault or privity of the owner;

(a) loss of life of, or personal injury to, any persons being carried in the ship, and loss of, or damage to, any property on board the ship.

Fiji is a signatory to the LLMC 1957. Instead of deciding on the aspect of collision the court below should have considered the principle of the actual fault or privity of the shipowner. Although the court below quite properly considered as a preliminary issue whether the injury must result from a collision at sea between ships, it erred in its conclusion. The limitation of liability that can be claimed under the LLMC 1957 is not restricted to injury and loss resulting from a collision at sea between ships. On this issue the appellant is successful.

As to the second issue, considering all the evidence submitted, it is abundantly clear that the appellant failed to establish that there was no fault or privity which entitles the appellant to limit its liability. The appellant submitted that there is no evidence offered by Mody that Ratatagia's actions of decanting the caustic liquid in a water bottle in a popular eating area of the Seaspray was done without the actual fault and/or privity of the appellant. However, the onus of establishing that there was no actual fault or privity lies with the appellant owner of the Seaspray. The onus cannot be shifted to Mody. The appellant's submission fails.

The appellant failed to establish it had taken safety measures by instructing, giving directions to its crew, and/or having a code accessible by the crew giving them proper guidelines and directions which by implication could have avoided the incident. The respondent's injury resulted from the actual fault or privity of the shipowner. As such the appellant cannot limit its liability under ss 178(1) and (2) of the Marine Act 1986.