DMC Rating Category: Confirmed

This case note has been contributed by Danella Wilmshurst, Partner, and Amy Lay, Solicitor, of Ebsworth & Ebsworth Lawyers, Sydney. Ebsworth & Ebsworth Lawyers are International Contributors to the website for Australia

Facts
The plaintiff’s bulk carrier, "Amarantos", collided with a jetty in the harbour of Wallaroo, South Australia while under compulsory pilotage. The collision caused damage to the vessel, to the jetty and equipment on the jetty, which was owned by the South Australian Ports Corporation (SAPC), and to items of plant and equipment owned by the third party interveners. Both the pilot and the tugs assisting the berthing were employed and supplied by the SAPC. Prior to the hearing, the State of South Australia (the State) elected to stand in place of SAPC. The plaintiff sued the State for the cost of repairs to the "Amarantos". The State counter-claimed against the plaintiff for the costs of repairing the jetty and equipment, pleading that the plaintiff was strictly liable for the damage under s21 of the Harbour and Navigation Act 1993 (SA). Both plaintiff and defendant sought to limit their liability under Imperial legislation, the Merchant Shipping (Liability of Shipowners and Others) Act 1900 (UK) (the 1900 Act).

The 1900 Act was an amendment to the British Merchant Shipping Act 1894 (the 1894 Act). The 1894 Act introduced a scheme limiting liability of shipowners for loss of life, personal injury or damage to property on a ship. The scheme extended to the British colonies by virtue of an express provision applying the relevant Part of the 1894 Act enacting limitation of liability to "the whole of Her Majesty’s dominions". The 1900 Act extended the categories of cases to all incidents where property is damaged by reason of the improper navigation or management of a ship. The 1894 Act was repealed by the Commonwealth in 1979 by the Navigation Amendment Act 1979 (Cth) (Navigation Act).

Justice Debelle at first instance held that the 1900 Act did not apply and that the plaintiff could be held strictly liable for the damage even though the ship was under compulsory pilotage. The plaintiff appealed to the Full Court of the Supreme Court of South Australia.

At common law, the owner of a ship was liable for the negligence of the pilot if the pilot was engaged voluntarily, but was not liable for the negligence of a compulsory pilot. South Australian state legislation, the Harbors and Navigation Act 1993 (SA) (Harbors and Navigation Act) imposed a strict liability for damage to harbour works, which applied irrespective of whether the vessel was under compulsory pilotage at the time the damage was caused. The Appellant Shipping Company pointed to Commonwealth legislation making a shipowner vicariously liable for the acts of a compulsory pilot¹ and submitted that this legislation impliedly enacted a negligence [emphasis added] standard of proof before the owner is liable for the acts of a voluntary and compulsory pilot. If the State legislation were found to be inconsistent with Commonwealth legislation – in this case by providing for strict liability - then the Commonwealth legislation would override the state legislation to the extent of any inconsistency.

Judgment
The Full Court rejected this argument. Chief Justice Doyle, who gave the leading judgment, found that the Commonwealth legislation merely eliminated the distinction drawn by the common law between voluntary and compulsory pilots. As the Commonwealth legislation did not prescribe the basis upon which a shipowner could be made liable for damage, it was open to State legislation to deal with that matter by making that liability a strict liability.

The Court of Appeal also rejected the argument that the plaintiff was entitled to limit its liability under the 1900 Act at the rate of eight pounds sterling per ton of the "Amarantos". The Court held that the Imperial limitation of liability provisions in the Merchant Shipping Act 1894 (UK) (the 1894 Act) were repealed in 1979 when the Commonwealth of Australia enacted the provisions of the 1957 Limitation Convention by the Navigation Amendment Act 1979 (Cth) (Navigation Act). Although the Navigation Act did not specifically refer to the 1900 Act, the 1900 Act simply amended the 1894 Act and was not an independent enactment that could survive the repeal of the 1894 Act.

Before the Court of Appeal, Counsel for the Appellant raised a further submission which the Appellant argued provided for an alternative basis for applying the 1900 Act limitation scheme to any liability to borne by the Appellant. The Appellant submitted that the repeal of the 1900 Act by the Commonwealth Navigation Act applied only to the Commonwealth, and that it did not affect the operation of the 1900 Act within South Australia as part of the law of the State of South Australia. This was because the limitation scheme introduced into the British colonies in 1894, and extended in 1900, applied equally to the Commonwealth and each of the States of Australia, in effect as an independent enactment within the Commonwealth and equally within each of the States. The Appellant then submitted that there was no inconsistency between the Commonwealth and the State limitation schemes, permitting the 1900 Act limitation scheme to operate alongside the Commonwealth limitation scheme because the Navigation Act, did not purport to "cover the field" of limitation of liability.

This submission was also rejected by Chief Justice Doyle. Addressing the second part of this submission (accepting for the purpose of argument that the 1900 Act formed part of the law of South Australia), he found that it was inconsistent with the limitation scheme established by the Commonwealth Navigation Act to have alongside it a limitation scheme established by State law, which enabled a shipowner to limit its liability at a lower rate than the rate provided by the 1957 Convention. As the Navigation Act introduced an incompatible limitation scheme, it constitutionally overrode the limitation scheme provided for the 1900 Act.