Sanko Steamship Co Ltd & Grandslam Enterprise Corporation v Sumitomo Australia Ltd [1995] HCA 50; (1995) 183 CLR 628; (1995) 69 ALJR 773; (1995) 131 ALR 490 (3 October 1995)

HIGH COURT OF AUSTRALIA

THE SANKO STEAMSHIP CO LIMITED AND GRANDSLAM ENTERPRISE CORPORATION v. SUMITOMO AUSTRALIA LIMITED
F.C. 95/034
Number of pages - 3
[1995] HCA 50; (1995) 183 CLR 628 (1995) 69 ALJR 773, (1995) 131 ALR 490

HIGH COURT OF AUSTRALIA
BRENNAN J(1), DEANE, DAWSON, TOOHEY AND GAUDRON JJ(2)

CATCHWORDS

HEARING

CANBERRA, 8-9 November 1994
3:10:1995

ORDER

Appeal dismissed with costs

DECISION

BRENNAN J This appeal arises from a casualty occurring on 14 February 1991 when the "Sanko Harvest" ran aground and sank with the loss of its cargo. The appeal was heard at the same time as the appeal in Victrawl Pty Limited v Telstra Corporation Limited (the "Victrawl Case") and turns on the construction and operation of the same Acts and Conventions as are considered in the judgments in that case.

2. The appellants, The Sanko Steamship Co Limited (the time charterer of the vessel) and Grandslam Enterprise Corporation (the demise charterer of the vessel), filed an application in the Federal Court of Australia on 4 March 1991 naming Sumitomo Australia Limited as respondent and claiming an order limiting their liability to owners of property being carried on the "Sanko Harvest" pursuant to the Brussels Convention. No order has been made on that application. A case was stated reserving the question whether the 1976 Convention was the governing text. Is the Brussels Convention applicable because the application was filed before 1 June 1991 or is the 1976 Convention applicable as the law now in force when the orders are to be made?

3. The proceedings between Sanko Steamship and Grandslam Enterprises and Sumitomo Australia differ from the proceeding in the Victrawl Case in two respects. First, limitation proceedings were commenced in the Federal Court of Australia on 4 March 1991 under s 333 of the Navigation Act and the Brussels Convention. Secondly, all parties agreed that the Brussels Convention applied in respect of the grounding and sinking of the "Sanko Harvest" and that the appellants' application for limitation under that Convention might be pursued notwithstanding the repeal of Sched 6 to the Navigation Act which set out that Convention.

4. However, the appellants' entitlement to a limitation decree now depends solely on the 1976 Convention. For the reasons I have given in the Victrawl Case, the Brussels Convention has had no application in Australian municipal law since the repeal of s 333 of the Navigation Act 1912 (Cth) on 1 June 1991 and, having been denounced by Australia and the denunciation having taken effect, that Convention no longer regulates Australia's relations with any other State Party. The agreement of the parties to the contrary effect has not been acted on by the Federal Court by the making of a limitation decree and, being erroneous in point of law, should not be acted on once the appellants contend that the 1976 Convention applies. As the 1976 Convention applies, the question reserved by the special case should be answered as follows:

"Does the 1976 Limitation Convention set forth in the first schedule to the Limitation of Liability for Maritime Claims Act 1989 (Cth) apply in respect of the grounding and sinking of the 'Sanko Harvest'?"

Answer: Yes.

I would allow the appeal and answer the question reserved in the manner above stated.

DEANE, DAWSON, TOOHEY AND GAUDRON JJ The appellants, The Sanko Steamship Co Limited ("Sanko") and Grandslam Enterprise Corporation ("Grandslam"), appeal from the answer given by a Full Court of the Federal Court of Australia (Lockhart, Gummow and Cooper JJ) to a question reserved by a case stated by a judge of that court in proceedings between them as plaintiffs and the respondent, Sumitomo Australia Limited ("Sumitomo"), as defendant. That question was:

"Does the 1976 Limitation Convention set forth in the first schedule to the Limitation of Liability for Maritime Claims Act 1989 (Cth) apply in respect of the grounding and sinking of the 'Sanko Harvest'?"

The Convention referred to in the question is the Convention on Limitation of Liability for Maritime Claims done at London in 1976 ("the 1976 Convention"). The answer which the Full Court gave to the question was: "No".

2. On 14 February 1991, the vessel "Sanko Harvest" ran aground in the Archipelago of the Recherche while approaching the Western Australian port of Esperance on the final stages of a voyage from the United States of America. Four days later, the vessel sank. Its cargo of fertiliser was totally lost. At the time, Sanko was the time charterer of the vessel for a period of years. Grandslam was the demise charterer under a long-term charter party and the employer of the vessel's master and crew. Sumitomo was the voyage charterer of the vessel for the particular voyage and the owner of the lost cargo.

3. The proceedings in the Federal Court were instituted on 4 March 1991 by Sanko and Grandslam pursuant to s 25 of the Admiralty Act 1988 (Cth), claiming a declaration limiting their liability pursuant to the provisions of the International Convention relating to the limitation of the liability of owners of sea-going ships done at Brussels in 1957 ("the Brussels Convention") which, at that time, enjoyed the force of domestic law in this country by reason of the provisions of s 333 of the Navigation Act 1912 (Cth). Sumitomo filed a defence and cross-claim seeking damages from Sanko and Grandslam for breach of the contract, breach of bailment and negligence. By their defence to the cross-claim, Sanko and Grandslam pleaded limitation of liability pursuant to the Brussels Convention. After the repeal of the Navigation Act and the commencement of the Limitation of Liability for Maritime Claims Act 1989 (Cth) giving the force of domestic law to the 1976 Convention, Sanko and Grandslam filed an amended defence to the cross-claim in which they sought to rely upon limitation of liability pursuant to that Convention.

4. The central issue raised by the question reserved by the stated case was whether the 1976 Convention was applicable to an occurrence which took place in February 1991 which was before the date upon which the 1976 Convention entered into force for Australia and was given the force of domestic law in this country, namely, 1 June 1991. That central issue also arose for consideration by this Court in Victrawl Pty Ltd v Telstra Corporation Ltd which was heard at the same time as the present appeal and in which judgment has just been delivered. For the reasons given in the Victrawl Case, it must be resolved adversely to the present appellants. Under the law of this country, the 1976 Convention is inapplicable to occurrences which took place before 1 June 1991. That being so, nothing turns upon the fact that, in the present case but not in Victrawl, proceedings claiming limitation of liability under the Brussels Convention had been instituted prior to that date.

5. It follows that the Full Court of the Federal Court was correct in the answer which it gave to the question reserved in the stated case. The appeal must be dismissed with costs.