In Tasmanian Ports Corporation Pty Limited v CSL Australia Pty Limited ("The Goliath") [2025] FCAFC 53 (unreported judgment delivered 29 April 2025), the Full Court of the Federal Court of Australia (comprising Burley, Derrington and O'Sullivan JJ) upheld an appeal, finding that the shipowner, CSL Australia Pty Limited (CSL), was not entitled to limit its liability for claims relating to the wreck removal of the sunken tugs "Campbell Cove" and "York Cove".

The appeal required consideration of the proper construction of Article 2 of the 1976 Limitation Convention, as amended by the 1996 Protocol, which is given force in Australia pursuant to the Limitation of Liability for Maritime Claims Act 1989 (Cth).

In January 2022, the bulk cement carrier "Goliath", which was owned and operated by CSL, allided with a wharf in Devonport, Tasmania, and two tugs moored alongside the wharf. The allision caused both tugs, owned by Tasmanian Ports Corporation (TasPorts), to sink and pollute the Mersey River. 

CSL commenced a limitation proceeding after being sued by TasPorts for approximately $17.25 million for wreck removal and clean-up costs. 

At first instance, the trial judge found that TasPorts’ wreck removal claims were subject to limitation under Article 2(1)(a) of the 1976 Limitation Convention and were not excluded by Australia’s reservation of rights not to implement Article 2(1)(d) and (e). 

The 1976 Limitation Convention provides in Article 1 that “shipowners and salvors … may limit their liability in accordance with the rules of this Convention for claims set out in Article 2”.

Article 2 then lists the claims which may be limited, providing that:

"(1) Subject to Articles 3 and 4, the following claims, whatever the basis of liability may be, shall be subject to limitation of liability:

(a) claims in respect of loss of life or personal injury or loss of or damage to property (including damage to harbour works …), occurring onboard or in direct connexion with the operation of the ship or with salvage operations, and consequential loss resulting therefrom;

(b) claims in respect of loss resulting from delay in the carriage by sea of cargo, passengers or their luggage;

(c) 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 or salvage operation;

(d) claims in respect of the raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been onboard such a ship;

(e) claims in respect of the removal, destruction or the rendering harmless of the cargo of the ship;

(f) claims of a person other than the person liable in respect of measures taken in order to avert or minimise loss for which the person liable may limit their liability in accordance with this Convention, and further loss caused by such measures."

The Convention also provides in Article 18:

"(1) Any State may, at the time of signature, ratification, acceptance, approval or accession, or at any time thereafter, reserve the right:

(a) to exclude the application of Article 2, paragraphs 1(d) and (e) …"

In implementing the Convention, Australia exercised its rights under Article 18 by excluding the application of Article 2(1)(d) and (e).

Despite the reservation of the right to exclude liability for wreck removal under Article 2(1)(d), the primary judge held that the TasPorts claim fell within Article 2(1)(a), as they were claims for expenses consequential upon loss of, or damage to, property that occurred in direct connection with the operation of "Goliath", the wrongdoing ship.

The spilt hydrocarbons, which were not carried as cargo, fell within Article 2(1)(c) as claims for losses resulting from the infringement of rights other than contractual rights.

Following a review of the history of the Limitation Convention and its implementation, along with a close analysis of case law from various jurisdictions—including the recent decision of the UK Supreme Court in "The MSC Flaminia", the appeal court found that, as Australia had made a reservation under Article 18(1) of the 1976 Convention, Articles 2(1)(d) and (e) had no application in Australia.

Accordingly, claims in respect of wreck removal and associated clean-up, whatever the basis of liability for those claims, could not be the subject of limitation in Australia.

Further, and importantly, it was held that there is no basis for restricting Article 2(1)(d) to claims made by public authorities.

In reaching its conclusion, the Court was mindful of the importance of international comity and stated:

“The present case is one which has at its centre the proper interpretation of an Article of an International Convention which has been acceded to by 54 States (the 1976 Convention simpliciter) and 61 States (the 1996 Protocol). Where there is jurisprudence of other superior courts, which have considered the very same issue, particularly a superior court of a congruent jurisdiction, and where the reasoning of those courts is compelling, it would be contrary to the principles of comity to adopt an alternative construction unless convinced that those decisions were plainly wrong in the context of the enactment of the 1976 Convention by the Parliament of Australia. We are not so convinced. Indeed, we consider the decisions of the Hong Kong Court of Final Appeal in "The Star Centurion", and of the Supreme Court of the Netherlands in "The Wisdom", "The Sichem Anne" and "The Margreta" to be persuasive.”

An argument by CSL that Article 2(1)(d) should only relate to limitation in respect of the wrecked ship was also rejected by the appeal court, the 1976 Convention having preserved the reference in the 1957 Limitation Convention to “any ship”.

This decision provides important clarity on the construction of Article 2(1)(d) in Australia, particularly in the context of the Article 18 reservation of rights. The ruling also serves as useful guidance for parties in other jurisdictions facing similar issues. 

Should you wish to discuss this matter further or explore similar issues, please feel free to contact our Transport & Logistics team.