In Australia, maritime financial claims cannot be the subject of limitation in respect of wreck removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such a ship, according to a three-judge ruling of the Federal Court, which sat as an appeal court.
The ruling arose in the context of shipping company CSL losing a battle to limit its financial liabilities after the ship, Goliath, struck and wrecked two moored tugs in Devonport, Tasmania, in 2022 (see the case: Tasmanian Ports Corporation Pty Ltd v CSL Australia Pty Ltd (The Goliath) [2025] FCAFC 53 (29 April 2025)).
Facts of the case
Goliath (IMO 9036430; 11,754 gt; dwt 15,599 t), an Australia-flagged, self-discharging bulk carrier accidentally struck two moored tugs, the York Cove and the Campbell Cove, while it was turning in the swing basin to berth at the Port of Devonport, Tasmania.
No-one was hurt. The Goliath sustained damage to the bulbous bow and to internal structures. It was subsequently detained by AMSA, and later repaired then returned to service. According to various vessel tracking websites, the Goliath remains in service today. Both tugs sank, were wrecked and written off. The wrecks were removed and were disposed of. An extensive response, including hydrocarbon containment, removal, and disposal, followed the incident.
Limitation of liability
International maritime law allows for limiting of financial liabilities in ways not seen in most other sectors on the basis of public policy for a variety of reasons: as in incentive to encourage investment in shipping, to help create a level playing field, to give comfort to marine insurers so that they will provide catastrophe insurance, to impose a discipline on claimants, and to encourage the development of a system based compensation rather than punishment.
In this particular context, the key international convention is the Convention on Limitation of Liability for Maritime Claims, 1976 which is enacted in Australia as the Limitation of Liability for Maritime Claims Act 1989 (see Schedule 1 of that Act for the text of the Convention). The convention has been amended over time and there are a range of other conventions that can apply.
Bid for limitation of liability
A legal battle got underway on various grounds of law as TasPorts sought to recover costs from CSL which are known to have reached at least AUD$23 million (so far) of which, about AUD$17.25m relates to hydrocarbon containment, removal, disposal etc. CSL launched a legal bid to claim that it was entitled to limit its liability under the Limitation Convention. Tasports opposed that bid.
The fight went before a single judge of the Federal Court of Australia (the “primary judge”) who ruled that TasPorts’ wreck removal claims are subject to limitation under the 1976 Convention.
What the 1976 Convention says
The difficulty seems to lie in how the law is structured in this area. Article 2(1) of the 1976 Convention has six parts (a) to (f). Article 18 of the same Convention allows countries to opt out of Article 2(1)(d) and Article 2(1)(e), which allow for limitation of liability in the raising, removal, destruction or the rendering harmless of a ship which is sunk or wrecked, and also any claims in respect of the removal, destruction or rendering harmless of the cargo of a ship.
Australia has opted out of both of those parts of Article 2 of the 1976 Convention (see section 6 of the Limitation of Liability for Maritime Claims Act 1989 (Cwlth)).
Legal troubles
However, the primary judge ruled that claims could be limited under Article 2(1)(a) of the 1976 Convention which states that liability can be limited in respect of loss or damage to property in direct connection with the operation of the ship, or with salvage operations, and any consequential loss.
TasPorts then appealed the decision to a three-judge bench of the Federal Court which over-turned the ruling of the primary judge. In layman’s terms, the three-judge bench basically looked at Article 2 as one whole piece of law rather than as a piece of law with six sub-laws.
It ruled that because Australia had opted out of the limitation of liability regime in Articles 2(1)(d) and (e) of the 1976 Convention, then, whatever the basis of liability, in Australia claims cannot be the subject of limitation in respect of wreck removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such a ship.
In reaching its conclusion, the learned judges carried out a long, detailed, and scholarly analysis of a wide range of international maritime cases decided in jurisdictions around the world including Hong Kong, the Netherlands, the UK and more. It also reviewed a range of academic articles, and – as this is a case dealing with international law – a range of so-called “preparatory works” that were created during the development, drafting and creation of the treaties.
Further Reading
“Collision involving the bulk carrier Goliath and tugs York Cove and Campbell Cove, Devonport, Tasmanian, on 28 January 2022,” final report of the Australian Transport Safety Bureau, 22 March 2023
“CSL Australia Pty Ltd v Tasmanian Ports Corporation Pty Ltd (The Goliath) [2024] FCA 824 (26 July 2024)” (the primary limitation of liability case before a single judge), 9 July 2024, Austlii
“Tasmanian Ports Corporation Pty Ltd v CSL Australia Pty Ltd (The Goliath) [2025] FCAFC 53 (29 April 2025),” (the limitation of liability appeal case before a three-judge bench), 29 April 2025, Austlii
“Limitation of Liability for Maritime Claims Act 1989 (Cwlth)” (as consolidated / amended), Austlii
