Victrawl Pty Ltd v Telstra Corporation & Anor S34/1994 [1994] HCATrans 109 (8 November 1994)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S34 of 1994

B e t w e e n -

VICTRAWL PTY LIMITED

Appellant

and

TELSTRA CORPORATION LTD & OTHER CO-OWNERS OF ANZCAN CABLE

Respondents

Office of the Registry

Sydney No S29 of 1994

B e t w e e n -

THE SANKO STEAMSHIP CO LIMITED and GRANDSLAM ENTERPRISE CORPORATION

Appellants

and

SUMITOMO AUSTRALIA LIMITED

Respondent

BRENNAN J

DEANE J

DAWSON J

TOOHEY J

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 8 NOVEMBER 1994, AT 10.17 AM

Copyright in the High Court of Australia

____________

MR B.W. RAYMENT, QC: May it please Your Honours, in the matter of Victrawl, I appear with my learned friend, MR A.W. STREET, for the appellant. (instructed by Phillips Fox). And, and in the matter of Sanko, I appear with my learned friends, MR I.A. SHEARER and MR A.J. MEAGHER, for the appellant. (instructed by Ebsworth & Ebsworth)

MR R.B.S. MacFARLAN, QC: If the Court pleases, in the first matter, the matter of Victrawl, I appear for the respondents with my learned friends, MR J.L.B. ALLSOP, SC, and MS K.M. GUILFOYLE. (instructed by Ebsworth & Ebsworth)

MR. T.E.F. HUGHES, QC: May it please the Court, in the second appeal, I appear with my learned friend, MR P.E. KING, for the respondent, Sumitomo. (instructed by Withnell & Co)

BRENNAN J: Yes, Mr Rayment.

MR RAYMENT: Your Honours, there is a convenient chronology of the conventions and the legislation in Australia behind tab A in the bundle of documents which should be before Your Honours. The 1957 Brussell's Convention entered into force internationally in 1968. Australia acceded to that Convention in 1975. In 1979 the amendments necessary to give the 1957 Convention the force of law in Australia were made to the Navigation Act and the provisions were contained in Part VIII of the Navigation Act 1912. In 1982 Australia enacted the 1979 Protocol upon which nothing turns in the present matter to the 1957 Convention.

The London Convention, convened to review the limits and provisions of the 1957 Convention, entered into force internationally on 1 December 1986, being a date a year and a month after 12 nations had signed the Convention. In 1988 the Admiralty Act was passed in this country; 1989 Australia enacted the Limitation of Liability for Maritime Claims Act, which gave the force of law in Australia to the 1976 Convention, which amended the Admiralty Act, repealed Part VIII of the Navigation Act and gave jurisdiction to the supreme

courts by section 9, to deal with limitation matters.

On 30 May 1990 Australia denounced the 1957 Convention which had effect the year after its date under the rules of the 1957 Convention. On 20 February 1991 Australia acceded and 1 June 1991 was the date of commencement of the Act of 1989. There were no transitional provisions, as Your Honours will be aware, enacted at the time of giving the force of law to the 1976 Convention in Australia. There are no transitional provisions as such within the Convention of 1976.

So that Your Honours may know what is in that bundle, behind Tab A is the principal legislation which has just been referred to, including the Navigation Act, the Navigation Amendment Act, the Admiralty Act, and the 1989 Act, and of course the Conventions are reproduced in full in schedules, first to the Navigation Act, secondly to the 1989 Act. Then section B of the folder contains two other Conventions to which reference will be made - the Vienna Convention, which was referred to in the Full Court, and the Arrest Convention, to which it is necessary to refer for certain purposes.

Section 3 of it contains some ultimate appellate court decisions on the 1976 Convention. The first is a decision of the French Court of Cessation in the Mariabel, and the second is the decision of the Dutch High Court in the Sylt I. Finally, within the folder, there is taken from a CMI publication of last year the current status of accession and ratification of each of the relevant Conventions, limitation of 24, 57, and 76 of the Protocol, and also the Arrest Convention.

Just one other housekeeping matter before I start, Your Honours. In the Victrawl appeal, which I would wish to argue first if I may in this address, the notice of appeal has been wrongly reproduced in the appeal book in that its second page is left out, and a page of Mr Justice Gummow's judgment has been left out. So may I please hand to Your Honours, as page 42A, the third page of Mr Justice Gummow's judgment and separately the notice of appeal as it ought to have been reproduced in the appeal book.

BRENNAN J: I think we have 42A.

MR RAYMENT: I see. But Your Honours may not have the correct notice of appeal. Your Honours, in our submission the first inquiry is whether the 1976 Convention, according to its terms, provides an answer to the first question in the case stated. Your Honours, it appears from Article 15.1 of the Convention that the Convention is applicable to three kinds of curial proceedings: first, an application to limit liability before the court of a State party; secondly, an application to procure the release of a ship or other property and, thirdly, an application to procure the discharge of any security given within the jurisdiction of a State party.

The appellant submits that the Convention discloses an intention that, in the case at any rate of a party acceding late to the Convention, that is after the date of commencement internationally of the Convention, a State party would be required by the Convention to enact legislation providing that.

All applications to limit liability made by persons falling within the category of claimants for limitation referred to in Article 1.1 and 1.2 should be subject to the Convention whenever the occurrence giving rise to the liability of such persons took place. Secondly, that all applications to procure the release of vessels made by persons falling within the same category who have constituted a limitation fund in a Convention or in a State party, to use the language of the Convention, whenever they constituted that fund would also be subject to the rules of this Convention.

In effect, our submission is that the Convention gives rise to a progressive set of rights and obligations of a private law nature, but affecting those bound by the laws of each State party, and when a thing happens under the Convention it has recognition in all of the other State parties. When a new State party joins the Convention, in our submission, the citizens of that country or the person subject to its law succeed to the same rights and obligations. A limitation fund, once constituted, is good for all purposes under the Convention. If you, for example, constituted a limitation fund in France in 1990, it can be prayed in aid in Australia to procure the release of a vessel in 1992, as it were - - -

BRENNAN J: What is the provision of our municipal law which so affects the intention of the Convention?

MR RAYMENT: The enactment of the Convention into Australian law is section 6 of the Act of 1989, which Your Honours will find behind tab A, which provides that:

Subject to this Act, the provisions of the Convention, other than paragraphs 1(d) and (e) of Article 2, have the force of law in Australia.

The Act, as would be necessary in a multinational treaty where recognition takes place of events overseas, contains provision for evidence of the accession or ratification of other countries. The purpose of that, in our submission, is that so that the Convention may operate as a multinational reciprocal Convention.

Your Honours, going back to Article 15.1, in our submission, the second sentence of the rule contains an indication supporting the view that the critical event in the application of the Convention is the making of one of the three kinds of curial application referred to in the first sentence. That is the fact that the power of exclusion from the benefit of the Convention conferred upon State parties when they enact municipal law refers to the qualities of the persons seeking to invoke the Convention at the date of indication rather than at any other date. That is, in our respectful submission, the critical date to determine the application of the Convention when the matter is before a court or other competent authority. BRENNAN J: When you say "before", do you take it at the time of an application to the court of a State party or at the time at which that court exercises its jurisdiction or at some intermediate time?

MR RAYMENT: There certainly is a question whether it is the very moment of filing an application in a court which constitutes the invocation of the Convention or whether it is a later point of time. In our respectful submission, the outcome of this appeal is not affected by whichever of the various possibilities is correct. One view on traditional rules in this country - - -

BRENNAN J: It may not in Victrawl's case but it will in Sanko's case, will it not?

MR RAYMENT: No, in my submission. If I may seek to come to it later in the argument, Your Honour.

BRENNAN J: Yes.

MR RAYMENT: Your Honours, in the matter of limitation of liability, a central role is given by the Convention to the courts of State parties. The fund has to be constituted with the court or other competent authority by Article 11.1. The fund is to be calculated having regard to Articles 6 and 7 and presumably the court has a role to confirm that the amounts are correct. The fund is then distributed under court order and Article 12.1.4. If conduct barring limitation is alleged, then the court will adjudicate upon that matter.

The reason why the role of the court is central from the point of view of payments upon the parties seeking limitation is that the rateable distribution of the fund is an important advantage to persons whose claims are subject to limitation. The Convention reserves to each State a limited power only to enact that certain claims will have priority, and that, Your Honours, is Article 6.3 which has been exercised in this country by section 8 of the Act of 1989.

Except in that respect, the claims of all persons with a claim for loss of life or personal injury, Article 7, stand on equal footing with each other, and the claims of all persons having other claims, Article 6, stand on an equal footing with each other, and the consequence is similar to the position of unsecured creditors in the winding-up by the court preventing the first creditors suing and exhausting the assets.

Your Honours, this is a matter that has been referred to in this Court in respect of predecessor legislation in this country and it is referred to in the literature concerning such Conventions. Your Honours will have a bundle of additional materials, the first of which is The Bowbelle, but the last of which is an address by Mr Cyril Miller, who was one of the participants in the 1957 Convention to the International Maritime Committee. I do not ask Your Honours to read it now but it contains a discussion of the importance of the matter I have just referred to in the context of the 1957 Convention and explains in brief form, and perhaps usefully, the history of limitation provisions in Europe and the United Kingdom at least. The matter I have just referred to was emphasised in relation to the Merchant Shipping Act 1988 by Mr Justice Gibbs in - and I do not ask Your Honours to open this - China Ocean Shipping Company v South Australia [1979] HCA 57; (1978) 145 CLR 172 at 193.

Your Honours, in the next place, a matter of great importance dealt with in the Convention is the question of release of vessels from arrest. Of the 22 countries which have now ratified or acceded to the 1976 Convention, 17 were parties to the Arrest Convention of 1952. Australia was not among the 17 countries but in this country somewhat similar provisions are made by the Admiralty Act to those that I am about to refer to in the Arrest Convention. Your Honours, the Arrest Convention is the second Convention behind Tab B in the bundle.

By that Convention, claims called maritime claims, which are enumerated in Article 1, may found the arrest of a vessel in Convention countries and, in the case of vessels flying the flag of a Convention country, only those claims may found the arrest of a vessel in a Convention country. Not only would the vessel be capable of arrest pursuant to the Arrest Convention, but a sister ship is capable of arrest under Article 3 of the Convention. The arrest must be made:

under the authority of a Court or of the appropriate judicial authority -

by Article 4, and then Article 5 provides that release must be ordered:

upon sufficient bail or other security being furnished -

and the court is to determine the amount and nature of the bail or other security in the event of dispute.

Your Honours, in this country the law of actions in rem is now codified by the Admiralty Act 1988 . Section 14 of the Act provides that the Act is a code. Your Honours will find it behind tab A. Part III of the Act contains provisions which may be compared with the provisions of the Arrest Convention, for instance, section 19 of the Act provides - and I think this was the first time such a provision was inserted into Australian law - that, what is described as a "surrogate ship" may be arrested in support of certain maritime claims but not others, that is, all but proprietary maritime claims as defined in the Act. And the Act provides statutory authority for the release of vessels in sections 51 and 52.

Now, Your Honours, within the Convention, the subject-matter of release of vessels from arrest is dealt with by Article 13.2, and rule 2 contains two possible kinds of relief which a person seeking the release of a vessel may obtain: the first is discretionary and the second is as of right. In each case, the right depends upon the constitution of a limitation fund in accordance with Article 11, but it is important to note that the right does not depend upon the limitation fund being constituted in the particular place where the arrest is sought. So that, in effect, within the Convention, one recognises limitation funds constituted in one State party in the courts of another for the purposes of Article 13.2.

The second right begins with the word "however", at the end of rule 2:

However, such release shall always be ordered if a limitation fund has been constituted -

in one of three courts, or:

in the State where the arrest is made.

Now, turning back to Article 11, Your Honours, the first sentence of it seems to restrict the power to constitute a fund by reference to the commencement of legal proceedings against the person seeking to constitute the fund, or rather the commencement of legal proceedings, I should say, in that place:

Any person alleged to be liable may constitute a fund with the Court or other competent authority in any State Party in which legal proceedings are instituted in respect of claims subject to limitation.

Your Honours, the rules were construed in the United Kingdom at first instance in The Bowbelle, which is at the top of the bundle of additional materials handed up, by Mr Justice Sheen, who contrasted the previous law with the law enforced in the United Kingdom after 1 December 1986, which gave effect to the 1976 Convention.

It had been held under provisions which were enacted as part of the Merchant Shipping Act 1981 to give effect to the 1957 Convention, that if there was an issue about conduct barring limitation, the shipowner could not obtain the release of vessels pursuant to that Convention without providing security equivalent to the entire value of the vessel, because of the possibility that the limitation provided for in 1957 might be broken, and reference is given, in Mr Justice Sheen's judgment, to The Wladyslaw Lokietek, page 1335, which had so held. The shipowner had to show that there was no arguable case of fault or privity before he could merely obtain release upon constituting the fund referred in the 1957 Convention.

And then he contrasted those provisions with the 1976 convention and discussed them, starting at letter C on page 1335, and he concluded that the effect was to reverse the result which had followed from The Wladyslaw Lokietek, now it was sufficient that the limitation fund amount be provided by a person seeking release, whether or not there was an issue about conduct barring limitation under the 1976 Convention.

Now, Your Honours, in this country the appropriate comparison, if one was looking at The Bowbelle, would be not to the provision of the Merchant Shipping Act, which His Lordship set out, but to the 1957 Convention itself which was enacted as such into Australian law in the 1957 Convention, and the appropriate provision at that Convention is Article 5.

Your Honours, in connection with Article 13 it is necessary to refer to the second sentence of Article 15.1 and to Article 1. Article 1.5 provides that:

the liability of a shipowner shall include liability in an action brought against the vessel herself -

and I have already drawn attention to the power of exclusion in the second sentence, from persons who may have the benefit of the rules of the Convention relating to release of vessels. That is characterised by reference to the date of invocation of the rules.

The important point is that a fund, once constituted under this Convention, will answer all of the claims made against the shipowner arising "on any distinct occasion." That is Article 9.1. The only criterion nominated by Article 13.2, both with respect to the mandatory and to the discretionary release of vessels, is the fact of constitution of a fund under the Convention. The Convention, Your Honours - - -

BRENNAN J: Before you leave that, could I ask why is it that in Article 13.1 a person whose claim is barred is one who has made a claim against the fund, whereas in Article 9 that requirement does not seem to be present?

MR RAYMENT: It occasioned some debate, I think I am right in saying, before the persons who drew this Convention and it was suggested by some that one or other of those provisions ought to be changed. Your Honours, it would seem that the literal effect of Article 13.1 is only to stop a person who has actually gone to a place where the limitation fund has been constituted and proved from being barred pursuant to rule (1). The right, which is given by the Convention, Article 1.1, is to limit liability and, in our submission, Article 13.1 does not exhaust the effect of that.

BRENNAN J: What is it that bars the claim of those who have not made a claim against the fund?

MR RAYMENT: The liability is limited, pursuant to the limitation decree. Usually the only asset within the jurisdiction will be the ship and to that Article 13.2 will apply. Article 13.1 is only to deal with other assets and it arguably could have been drawn in wider terms than it has been. I think Your Honour is actually asking me why the drafters of this Convention did not draw it more widely, and I do not really know the answer to that question, in honesty.

TOOHEY J: But the language of Article 13.1, Mr Rayment, does not suggest that the mere making of a claim operates as a bar, does it? Because it then goes on to refer to the exercise of a right in respect of the claim.

MR RAYMENT: Is it not intended to refer, Your Honour, to a person who has proved in respect of who, as it were, made a claim in the court.

TOOHEY J: That is what I am suggesting. The reference to the word "right" rather suggests that, that the mere making of a claim, an unfounded claim, is not enough to constitute a bar to the bringing of other proceedings.

MR RAYMENT: Rule 3, which was debated rather more extensively before the persons who drew this Convention, limited the effect of both rules 1 and 2 to a case where the claim against the limitation fund could in fact be proceeded with, and it was freely transferable and actually available to the person making the claim. But the Convention binds only State parties, of course. Article 17 provides that the Convention shall enter into force on a date calculated in accordance with its terms, which became 1 December 1986. Article 17.3 then provides that:

any State subsequently becomes a Party to this Convention, the Convention shall enter into force on the first day of the month following the expiration of ninety days after the date when such State deposited its instrument.

The Convention was prepared on the basis that after it entered into force, other States may accede to it, pursuant to that rule. It is, of its nature, multinational. The fund constituted at any time under Article 11 may be prayed in aid to obtain release at any time in the future, and in the courts in any State then parties to the Convention where the municipal legislation has been enacted.

Your Honours, the fund, once constituted, will be good for all countries which ratify or accede to the Convention and once and for all under Article 9.1. If, to take an example, in 1989 a limitation fund were constituted in the United Kingdom and after 1 June 1991 the vessel or a surrogate vessel within the meaning of the Admiralty Act called at an Australian port and were there arrested in respect of a claim subject to Article 2, there would be a right to obtain the release or a right to seek the discretionary release of the vessel under Article 13.2, depending on the circumstances referred to in that rule.

Again, Your Honours, if a French flag vessel damages cargo in a French port in 1990, and that vessel or a surrogate vessel, calls at an Australian port after 1 June 1991, the French cargo interests may proceed to arrest the vessel in Australian ports pursuant to the Admiralty Act. The French vessel's shipowner may, in those circumstances, in our submission, constitute a fund in Australia and thereby procure the right to release of the vessel in Australia under Article 13.2. Otherwise, the uniformity and reciprocity of the Convention is disturbed every time a new State accedes to the Convention. And, of course, the preamble makes it clear that these are to be uniform rules.

BRENNAN J: What happens if the fund has been constituted in France under the 1957 Convention, and the ship is arrested here after 1 June 1991?

MR RAYMENT: In our respectful submission, such rights as flow from the constitution of a fund pursuant to a spent Convention would, in this country - if the law were Australian law I think I can answer Your Honour's question rather more clearly than if the law were French law. If the law were presumed to be the same, in our submission the rights which flow from an actually constituted fund of limitation, assuming those to have local effect, would be saved by section 8 of the Acts Interpretation Act, notwithstanding the repeal of the Convention. I do not mean to suggest that the case Your Honour referred to would not give rise to most difficult questions of what law governed the relevant matter and the like, it certainly would, but one thing that one would not take away by repealing an Act under our law would be the consequences flowing from the establishment of the limitation fund under that law, and if claims were barred they might remain barred, for example, or limited, as the case may be. But certainly this Convention would have nothing to say about that event. This Convention depends upon a limitation within the terms of this Convention.

Now, Your Honours, in our submission, to take my case of the French damage, so long as the French shipowner satisfies the description in Article 1, it will make no difference that the time of the occurrence giving rise to his liability was a time before the accession of Australia to the Convention, so long as when he is before Australian courts, he then satisfies the criterion of application of the Convention, that is; he is before the court seeking limitation in respect of a relevant vessel. Nor will the nationality of the claimant matter under Article 2. Article 2 speaks of claims but does not seek to limit those claims by reference to the country in which they might arise or whose nationals might own those rights. Nor does the country in which the incident occurred, or the place at which the incident occurred matter for any purpose under this Convention. One would obviously be concerned, not only with incidents on the high seas but with incidents that arise within the territorial jurisdiction of any country of the world. Nor does the date of the occurrence or the date on which the claim arose, which might be different dates by the way, matter for Article 2 or for any other purpose under the Convention. Nor, finally, does the flag of the vessel or the identity of the applicant for limitation matter, so long as the applicant falls within the class mentioned in Article 1 and so long as at the date of indication of the rules the national State in which he makes the application has not excluded him pursuant to the second sentence of Article 15.

We submit the point of the 1976 Convention is uniformity. The private rights as between shipowner and cargo interest are to be resolved by the Convention rules before the courts of all State parties in accordance with the Convention itself. So that, in our submission, the effect of Australia's accession to the Convention was henceforth to subject private rights arising in this country, or subjected to our law, to resolution consistently with the Convention and the reciprocal rights of the persons who were affected, necessarily had regard not only to what happens after accession by Australia to the treaty, or after enactment of the treaty as part of local law, but to what has happened elsewhere in the world pursuant to the Convention itself, at any time after the Convention entered into force internationally.

We do not submit there is, but there might be a different question if this case concerned the position arising before 1 December 1986, even, for example, provided for a cut-off date in its enacting legislation, a transitional provision, subjecting events before 1 December 1986 to the old law and events after 1 December 1986 to the new law or, rather, liability arising from those events, so that there were two limitation regimes according to the English transitional provision. Now, whether that could be done in a country where the power to enact this Convention as part of local law depends on the external affairs power might be a difficult question, but one question it would give rise to is whether it was intended that even from the very day of commencement of the 1976 Convention all applications for limitation thenceforth should be made pursuant to the Convention. That is the view to which the Cour de Cassation came in the Mariabel, which we will go to in a moment. It could be that that question gives rise to different questions from those which face this Court, because the possibility of an event before 1 December 1986 being litigated in Australia after 1 June 1981 is slight and, of course, the events here in both these cases were early 1991.

Your Honours, another point of importance under the 1976 Convention is that interest is added to the limitation fund constituted pursuant to the Convention, calculated from the date of the occurrence giving rise to liability. That is Article 11.1. And in the next place, the amount of the fund for limitation purposes is calculated having regard to the special drawing rights prevailing at the date of the constitution of the fund in the case of State parties belonging to the International Monetary Fund; that is Article 8.1. Now, those two provisions, in our submission - it is not quite the same, I should add, so far as countries which are not parties to the International Monetary Fund is concerned - make the provisions of the Convention capable of application to the limitation of liability for occurrences whenever they took place.

Your Honours, another provision of importance, in our submission, in the Convention, is Article 17.4. The prefatory words of Article 17.4 should be observed in respect of relations between States which ratify, et cetera. The reason, in our submission, for those prefatory words is to make it clear that as between State parties what follows will be applicable, but it will not follow from that, for example, that the 1957 Convention will not continue to affect relationships between any State parties under 76 and non-parties to the 1976 Convention, who were parties to the 1957 Convention.

So that it is not, for example, requisite for a State becoming party to 1976 to denounce 1957 and thereby give up all mutual rights and obligations which it had against parties who are not parties to 1976. This country did, but you did not have to by the terms of Article 17.4. But in our respectful submission, what follows is an accurate description of an effect within municipal law rather than an effect of an international nature between the parties. The only obligation of substance undertaken by a party to the Convention to another party was to enact a law. Article 17.4 is not concerned, in our submission, with that matter; it is concerned with the effect of the Convention treated as part of the municipal law of the various countries which become State parties and it expresses an intention - perhaps an inevitable intention - that the 1976 Convention should cause the earlier Conventions, 24 or 57, to be abrogated and replaced entirely by the 1976 Convention - the word "entirely" supplied by me, of course.

Now, Your Honours, turning from Article 17.4 to questions arising under local law, in our respectful submission, the effect of Australia enacting the whole of this Convention with the force of law in Australia is this, that a parliamentary intention is evinced, consistent with Article 17.4, that henceforth the provision for limitation of liability should be governed by the 1976 Convention to the exclusion of the 1957 Convention. It was replaced in the sense that it covered the field previously covered by the 1957 Convention. That would leave section 8 of the Acts Interpretation Act to have such effect as it has, but whatever effect it has will not affect the fact that within the 1976 Convention it is intended all applications may be brought forward henceforth.

Obviously, in our respectful submission, it is not possible to obey both laws in the sense of establishing a limitation fund under both laws. Therefore, at the time of the commencement of the 1976 Convention as part of the law of Australia, the Act which gave effect to the 1957 Convention was repealed. In the Victrawl case, on that date, no step had been taken to invoke the 1957 Convention. Therefore, in our submission, there was nothing pending upon which section 8 of the Acts Interpretation Act could operate.

After the repeal of Part VIII of the Navigation Act, the only application available to Victrawl, with respect to limitation, was one pursuant to the 1976 Convention. The application purportedly made in the alternative, by Victrawl, under the 1957 Convention, which is referred to in the pleadings in the case - it was an alternative application pursuant to 57 - was incompetent, in our submission.

The French Cour de Cassation had before it in 1991 a question relating to the interregnum between the 1957 and 1976 Conventions, with the difference that France was one of the original signatories to the 1976 Convention, and the day on which the 1976 Convention formed part of French municipal law was the same as the English date and the international commencement date, 1 December 1986.

The facts of the Mariabel were that on 20 January 1980, a pleasure craft, of that name, sank, giving rise to loss of life and the widow of one of the, I think, crew members, wished to claim on the vessel and the vessel's insurers. It is behind, Your Honours, tab C in the bundle of materials, as the first case. Your Honours, the shipowner failed a request for limitation, as it was called, under the 1957 Convention on 10 October 1986 and on 2 December 1986, the day after the law came into force, a judge made an order, in effect, constituting the limitation fund and, Your Honours, the case went from the judge who was prepared to constitute the fund under the 1957 Convention to the judges of the second degree, who upheld an appeal, and from the court of judges of the second degree, the case went to the Cour de Cassation.

The appeal raised Article 2 of the French Code civil, which provides, in translation - it refers to "la loi" - it says, the law, in an abstract sense, applies only to the future, it has no retrospective effect. The argument was that, apparently, the effect of the 1976 Convention would not apply to the question of limitation, in respect of a vessel which sank in 1980, or in respect of a limitation fund, the preparation for the constitution of which commenced prior to the operation of the 1976 Convention. The report simply notes the arguments and then dismisses the appeal.

The Cour de Cassation held that the constitution of the limitation fund was governed, not by the law in force either at the date of the maritime casualty nor by the law in force at the date of the formal request by the shipowner for limitation, but by the law in force at the date of the order of the court putting in train the constitution of the fund.

BRENNAN J: Do you read that as a decision which flows from Article 2 of the civil Code, or something which flows from the Convention?

MR RAYMENT: It flows, in our respectful submission, despite Article 2, from the terms of the Convention. Article 2 was the argument utilised by the shipowner to suggest that the decision of the judges at the second degree was wrong. Your Honours will see a reference to Article 2 only in the recitation of the argument but not - is Your Honour looking at the English?

BRENNAN J: Yes, indeed.

MR RAYMENT: At the foot of the page which has C2, the translation, the Court gave its decision, in our submission:

Whereas the liability limitation fund, the institution procedure of which is governed by an order of the President of the Tribunal, is governed by the law currently in force, not by the law on the date when the damages were caused by the nautical event following which the funds were constituted, nor by the date of the filing of the application by the shipowner, but by the date when the order has been made; whereas it has been shown that the order which opened the procedure was made on 2 December 1986, after the entry into force, set at 1 December 1986.....the Court of Appeal has correctly held that this law was applicable to the case; from which it follows that the appeal has no merit in either of its parts.

Argument of the shipowner had made reference to Article 2 of the civil Code. The critical event, perhaps, in our terms, seems to have been the order constituting a fund.

BRENNAN J: That is so, but I may be reading this wrongly, but the way that I read that paragraph at the bottom of C2 and the following page is that it is the order which was being brought on appeal and the Court is saying that the validity of the order is to be judged by the law in force at the time when the order is made. Then the question arises whether they are saying that because Article 2 of the civil Code says it, or whether they are saying it because they say that was the intention of the Convention. It may be that you cannot take it any further, Mr Rayment, it is just that I do not get from it, I think, what I understand you hoped that I should.

MR RAYMENT: Your Honour, let me assume that it is based upon Article 2 of the French civil Code. That would direct the inquiry to the question, "What is the critical event in the Convention?" which, if it is to have a prospective effect, "What is the prospect judged from?" and the French Cour de Cassation say that it is to be judged from the order of constituting the fund. So the two come together, in my respectful submission.

The argument that found favour with the Full Court of the Federal Court is the precise argument rejected, on the view that there is some retrospective effect being given to the Convention by denying its application to the liability for occurrences predating the commencement of the Convention.

Now, Your Honours, there is also included in the materials a case which Mr MacFarlan's client found before the special leave application of Sylt I. It appears to turn, in our respectful submission, upon provisions of Dutch law which had a transitional provision at the time in 1990 when the 1976 Convention became part of the law of the Netherlands. I will not say too much about it, I will leave it to my learned friend, Mr MacFarlan but, in our respectful submission, a case decided in a country with a transitional provision answering the question, which is decided upon the basis of that transitional provision, would not ultimately assist.

The case went from the District Court of Rotterdam, through two appellate courts before it went to the High Court and if Your Honours are reading through the long report, it is not until the last three pages that you come to the High Court's view of the matter which comments upon the Cour de Cassation in The Hague, which is mentioned immediately beforehand.

The result in that case was that the Convention was not allowed to apply because of the transitional provision, in respect of an event predating the application of the Convention. The result was that an application for limitation of liability arising before the commencement date of the Convention was, because of the transitional provisions, refused.

Your Honours, to this point, the submissions in the Victrawl case depend on the view to be taken of the Convention itself, without regard to the particulars of other Australian legislation or rules. We submit that a consideration of those provisions and rules leads to no different consequence.

In the first place, the second reading speech of the minister introducing the 1976 Convention as part of the law, makes it clear, in our submission, that the 1976 Convention is to take over from the 1957 Convention, filling the void which the repeal created. The 1957 Convention was similar in some respects to the 1976 in that its operation within the forum was attracted by invocation of its terms by Article 7, which also contained a provision similar to the second sentence of Article 15, giving a power of exclusion.

The court had the same role in the constitution of the fund - Article 7. Limitation was the right of a shipowner - Article 1 - without the claimants having any correlative right to compel such a right to be exercised. That, in our respectful submission, is the same pursuant to the 1976 Convention.

Limitation might be sought in the courts of any contracting State and that fund was entitled to recognition as a fund limiting liability in all of the other contracting States. The right to release of vessels depended upon, not the constitution of a fund but the establishment of security in accordance with Article 5.

In our respectful submission, if, prior to the repeal of the 1957 Convention as part of the law of Australia, no limitation fund was constituted in Australia or any contracting State, in the 1957 Convention. Then, no rights were affected. No money was payable by the shipowner for any fund. No rights on his part to obtain or to seek the release of vessels arose under the 1957 Convention. After repeal of the 1957 Convention, the rights of shipowners and others to invoke the jurisdiction of the court to decree limitation or to order the release of vessels, ceased to exist. Indeed, it is only if section 8 of the Acts Interpretation Act operated upon pending applications to limit that any pending applications under the repealed enactment could be proceeded with after 1 June 1990. In the submission of Victrawl, section 8 does not so operate because a contrary intention is manifest in the 1976 Convention.

Your Honours, whether that be so or not, Victrawl, itself, is in the position in which many or most shipowners, both local and foreign, might have found themselves on 1 June 1991 of having no pending application at the time of repeal of the 1957 Convention. It cannot have been intended, in our respectful submission, to deprive that class of persons of limitation altogether, by passing one Act to replace another.

TOOHEY J: Mr Rayment, are you suggesting that section 8 of the Acts Interpretation Act by its terms does not apply or that it is excluded by reason of contrary intention?

MR RAYMENT: Only that it is excluded by reason of contrary intention. Your Honours, in our respectful submission, what was there filed by Sanko, for example, prior to the repeal of the 1957 Convention and the Navigation Act provisions, as part of the law, was, unless a contrary intention appears, capable of being preserved under section 8, comparably to the position discussed by Mr Justice Kitto in the Heublein case, but, in our respectful submission, the same result would be arrived at by the Court looking at this Act as was arrived at in the Full Court on appeal from Mr Justice Kitto; that is, it should be concluded, in our submission, that the 1976 Convention manifests a contrary intention so as to produce the result that the application under the 1957 Convention ceased to be viable, capable of being proceeded with, as from 1 June 1991.

But, whether that be so or not, in our submission, can only affect whether something is preserved, notwithstanding the repeal; it cannot affect the construction of a new Act as to whether it, in its generality, applies to liability being limited in respect of events which arose prior to its date and, even if at the very best the pending application would be preserved and could be proceeded with, the comprehensive terms, in our respectful submission, of the 1976 Convention still have full effect. But it cannot have been intended that the international shipping community should fall between two stools, neither having the benefit of 1976 on some view such as commended itself to the Full Court nor having the benefit of a repealed statute giving effect to the 1957 Convention.

Your Honours, looking at the matter as a matter of local law, numerous cases - - -

DEANE J: Mr Rayment, I was just trying to work out what was happening. Justice Gummow said that question 2, both parties agreed it should be answered no and was inappropriate to deal with it. What do you say?

MR RAYMENT: Your Honour, as we pointed out on the special leave application, what Mr Justice Gummow said is incorrect.

DEANE J: I do not remember that.

MR RAYMENT: Your Honours, I handed up - perhaps I should do it again for the sake of making it clear. Can I hand up the supplementary submissions which were made to the Full Court. In Victrawl the submission was made in paragraph 5 of the supplementary submissions that Victrawl lost its rights under the 1957 Convention when it failed to make an application to the court prior to 1 June 1986. Your Honours see that in Sanko, the submission was then made in the Full Court that, consistently with Hublein in the first instance, it could be pressed. But now I submit in this case that that was wrong and that a contrary intention was evinced by the 1976 Convention.

Your Honours, numerous cases have shown that in applying the presumption against retrospectivity, the first task is to identify the critical event on which the operation of the statute depends.

DEANE J: Can I just really understand. What you say is that Justice Gummow is simply wrong and that both parties did not agree it should be answered no but that it was fully argued?

MR RAYMENT: Yes.

DEANE J: But that was specifically pointed out in the leave application?

MR RAYMENT: Yes, Your Honour. What happened was that written submissions were filed in the Full Court. My side put that 1957 was available - Mr MacFarlan I think agreed with that - and then, during the course of the argument, we made those supplementary submissions which took a different view of the matter.

DEANE J: Did you go back to the Full Court to point out that the question that had been argued was not answered?

MR RAYMENT: No, Your Honour.

DEANE J: Why not? Why should we deal with it without the benefit of the Full Court's views on it?

MR RAYMENT: In our respectful submission, it was relevant to look at question 2 in order to answer question 1 in any event. I do not think I can put it any - - -

BRENNAN J: But that was in order to propound a negative answer to question 2 in order to propound an argument in your favour on question 1.

MR RAYMENT: Yes. It is a relevant consideration, in our respectful submission, in the answering of question 1, but I do not put it any higher than that.

BRENNAN J: Well then, so far as you are concerned, the answer to question 2 can stand.

MR RAYMENT: There was no answer, I think, to question 2. They simply did not answer it because there was no contradictor. So far as we are concerned, in Victrawl, the only questions that actually matter are questions 1 and 4; 2, not answered at all does not affect us. In our respectful submission, the true view would be that 2 should be answered as we just put.

DEANE J: I am just looking at the transcript for the leave application, for where the fact that the question had been mistakenly not answered was adverted to, because - I am not questioning that you are right, I am just surprised I do not remember it.

MR RAYMENT: Can you just give me a moment, Your Honour, I will see if I can find it. It is on page 6, I think, Your Honour. And then we handed up those submissions and the transcript of the second day's argument, I think, before the Full Court.

DEANE J: I must say that the fact that those submissions were advanced as an attack on the fact that the Federal Court had been under a complete misapprehension passed me by at the time you made them.

MR RAYMENT: Yes, thank you, Your Honour. It was actually - my learned junior reminds me, Your Honour - referred to in the affidavit - this fact - paragraph 5 of the affidavit, 20 October 1993, of Miss J...., which was filed - - -

DEANE J: That paragraph of the affidavit also passed me by.

MR RAYMENT: It is not of great consequence, if I may say, to seek any answer to question 2 or 3. The only material answers are, really, 1 and 4.

GAUDRON J: Even if you can make no application for limitation at all?

MR RAYMENT: Well, we would respectfully submit the question is relevant to the determination of question 1, but obtaining a formal answer to it may be a different question.

Your Honours, for example, as Your Honours would be aware, the matter of difference, often in this Court, is, on questions of retrospectivity, what is the critical event upon which the operation of the statute depends, for example, Geraldton Building Co Pty Ltd v May. Now, we submit that the critical event, under the 1976 Convention, is the making of an application to the court of one of the three kinds mentioned in Article 15.1, and that, in our respectful submission - - -

BRENNAN J: The making of an application?

MR RAYMENT: Well, can I just perhaps use the language of Article 15.1 itself. It is the seeking to limit liability or the seeking "to procure the release of a ship or other property or the discharge", the seeking to secure the discharge, of property "given within the jurisdiction of any such State", within the meaning of the first sentence of Article 15.1. It is, in other words, the time of invoking the application of the Convention itself which is the critical act for the purposes of the 1976 Convention, and it does not matter, in our respectful submission, when the occurrence was giving rise to the application for limitation, when the liability arose, when the claim arose, all that matters is that after 1 June 1986 one of those three kinds of curial application is being dealt with by a court.

BRENNAN J: Do you make your submission the equivalent of the decision of the Cour de Cassation in Mariabel?

MR RAYMENT: Yes, Your Honour. We would submit that you often have a problem like arose in The Territory Pearl when these kind of events occur. The Territory Pearl is one of the cases referred to by our opponents. There, there had been an application for limitation under the 1957 Convention, the initiating documents being filed while the 1957 Convention was plainly part of the law of this country. But when, I think, the case came on to be heard or concluded, the relevant law was the 1976 Convention. In our respectful submission, if the point had been taken - which it was not, apparently, in The Territory Pearl - the appropriate law to be applied, if any, was the 1976 Convention.

TOOHEY J: Mr Rayment, in regard to The Mariabel, we appear to have a translation of the judgment of the Cour de Cassation, but the French suggests that there is quite a lengthy commentary that follows. Is there a translation available of that?

MR RAYMENT: We have one prepared by an attorney, but not one certified.

TOOHEY J: I do not know whether it is likely to be of any value, but you have referred on more than one occasion to the decision. It might help our understanding to have a copy of the commentary.

MR RAYMENT: Yes. I do not think I can promise it for today, but we will do our very best to have it done overnight if we may, Your Honour.

TOOHEY J: Yes.

MR RAYMENT: The commentary was that of a practitioner who wrote in the French journal Le Maritime Francaise, reporting the case.

If in the Victrawl case if the critical event under the 1976 Convention is either the making or the determination of an application by the Court, then that is an end to the matter in the Victrawl case, in our respectful submission. Considerations as to the repeal of the 1957 legislation and its unavailability to shipowners in all or most cases after 1 June 1991 are additional indications and tend to the same conclusion.

Limitation under the 1957 Convention involved much more than invoking the jurisdiction of the Court. It involved proof of absence of fault or privity in this country, as in England, the onus resting upon the applicant limitation. It was a matter left by the 1957 Convention to individual State parties to decide whether the onus should be one way or the other. If an application for limitation produced a limitation decree, then obviously there were accrued rights stemming from the decree which would be saved in this country by section 8.

But if no more occurred then that application to limit was made, which was pending at 1 June 1991, then that application itself could only be saved by section 8 if there was no contrary intention. In our submission, for the reasons already advanced, there was a contrary intention evident in the terms of the 1976 Convention which effectively covered the field previously dealt with by the 1957 Convention.

It even could be the case that a person who sought limitation under the 1957 Convention and was found to be guilty of conduct barring limitation might nevertheless, if it was not too late in fact, because he had paid already, seek to limit under the 1976 Convention. That in a way sounds surprising, but in this area of the law more than one limitation application in respect of the same vessel is no surprise. If you have a vessel which circumnavigates the globe it will pass through areas where limitation is either available or not available.

If it is available it would be available on different terms in different jurisdictions and the effect of a limitation decree in any one of those jurisdictions will be to affect the local remedy of those having a claim against the vessel, it will not be to affect their rights. The underlying cause of action will be able to be asserted anywhere, for example, the Arrest Convention is in force as a maritime claim. If in a country, for example, subject to the Arrest Convention, the vessel has been the subject of a decree of limitation, let us say in Australia, but the country into which the vessel goes is not a party to the Convention and does not recognise the limitation decree, then the only way in which the vessel owner can protect himself will be to make another application for limitations under the local law. For example, the American jurisdiction has so far stood apart from all of the 1924, 1957 and 1976 Conventions. They have an Act of the 1850s which is the only source of limitation of liability usually available to vessels in the United States.

In order to have the advantage of that, even if you have a local limitation decree in Australia, you will need to make a separate application to the United States' courts. You would not be barred from making such an application because you had failed to limit under the law of some other country. It flows, in our respectful submission, from the essentially local nature of the effect of limitation decrees. They are only going to be enforceable within the jurisdiction. That is why it is so important to have a Convention such as 1957 or 1976, which gives local limitation decrees a wider effect.

Your Honours, from the point of view of the claimants, a statute of limitations such as this effectively limits damages as distinct from taking away a head of damages. In a choice of law purposes, this Court, in Stevens v Head, held, consistently with the House of Lord's decision in Chaplin v Boys, that such a law was a procedural law. A decree of limitation has effect only within the jurisdiction and does not affect the underlying cause of action which may be in force in full in other jurisdictions or subject to such limitation legislation as is there in force.

This was referred to a long time ago in The Titanic, in the United States Supreme Court, which is one of the cases to which we have given a reference. It is the last of the materials handed up, the first of which is The Bowbelle, and for the relevant part of the United States Supreme Court decision in The Titanic, it is - under the United States limitation law, the British shipowner of The Titanic was able to limit liability in respect of that calamity to the value of the remaining freight and lifeboats and so on, on the vessel, because under United States' law you value the limitation fund after the calamity, and The Titanic was however many fathoms under. This decision debated the effect of the various possible limitation proceedings elsewhere. Their Honours said on the last page:

We see no absurdity in supposing that if the owner of the Titanic were sued in different countries, each having a different rule affecting the remedy there, the local rule should be applied in each case. It can be imagined that in consequence of such diverse proceedings the owner might not be able to comply with the local requirements for limitation, as it also is conceivable that if it sought the advantage of an alien law it might as a condition have to pay more than its liability under the law of its flag in some cases. But the imagining of such possible difficulties is no sufficient reason for not applying the statute as it has been construed; on the whole, it would seem with good effect.

Now that, in our respectful submission, correctly describes the effect of a limitation decree.

BRENNAN J: What do you mean "correctly describes a limitation"?

MR RAYMENT: Well, it has effect so as to deal with remedies enforceable in whatever jurisdiction the limitation decree is recognised, but not otherwise.

BRENNAN J: Well it has such effect as a municipal system of law accords it.

MR RAYMENT: Yes, that is right, Your Honour. Now, Your Honours, I next go to the judgment of the Full Federal Court, using the page numbers in the Victrawl appeal book. The page, which we have suggested is 42A, contains an error to which we should refer. The effect of this matter is not easy to determine in relation to the judgment of Mr Justice Gummow. Your Honours, section 25 of the Admiralty Act, which Your Honours will find behind tab A, subsection (1) speaks of a claim for compensation under a law, but gives effect to the provisions of a Liability Convention. Where:

A person who apprehends that a claim..... may be made against the person by some other person may apply to the Federal Court to determine the question whether the liability.....may be limited under that law.

Now "Liability Convention" is defined to include "the Civil Liability Convention". Secondly, "the Limitation Convention", which originally was the 1956 Convention, and:

any other international convention that is in force in relation to Australia and makes provision with respect to the limitation of liability in relation to maritime claims;

Now, Your Honours have been provided with the Protection of the Sea (Civil Liability) Act , which is the law giving effect in Australia to what is called the Civil Liability Convention and it therefore is, within section 25, one of the Liability Conventions to which the Admiralty Act 1987 applies. The Convention contains provisions making a person liable for certain kinds of pollution and providing for compensation and claims for compensation are dealt with in section 9 of the Protection of the Sea (Civil Liability) Act and applications to determine limit of liability are dealt with in section 10. There jurisdiction is conferred on the:

Supreme Court of a State or Territory -

by section 10.

Now that, in our respectful submission, is a liability Convention which falls within the terms of section 25(1) because under it there is a claim for compensation available. But section 25(1), in our submission, is not apt to refer to the Maritime Conventions either of 1957 or of 1976 because claims for compensation by persons whose rights or persons are injured are not able to be brought by virtue of either of those Conventions.

The jurisdiction of the Federal Court, in our respectful submission, stemmed from a different source so far as, for example, the Sanko application which was made in early 1991 to the Federal Court. That source was section 335 of the Navigation Act plus section 4 of the Jurisdiction of Courts Cross-Vesting Act. Your Honours will find section 335 behind tab A immediately after the Navigation Amendment Act, and that gave to the Supreme Court of any State or Territory, amongst other things, jurisdiction to deal with an application for limitation:

in respect of any liability of that person that he may limit in accordance with the applied provisions of the Convention.

Then to give the Federal Court the benefit of that you take so much of section 335 as refers to the Supreme Court of a Territory, and you add to it section 4(2)(a) of the Jurisdiction of Courts Cross-Vesting Act and you get the Federal Court having jurisdiction, because if a Supreme Court of a Territory has jurisdiction with respect to a civil matter, whether conferred before or after the commencement of the Act, then inter alia the Federal Court has jurisdiction.

Your Honours, can I turn then to page 55 of the appeal book. There again Mr Justice Gummow takes section 25 of the Admiralty Act 1988 and in effect repeats what he had said at page 42A. At page 60 there appears an error of a slightly different kind which is in some ways consequential. There, Mr Justice Gummow adopts the assumption that section 25(1) does apply to the 1976 Convention, in this case, and seems to treat the claims of persons against shipowners as if they were claims under the Maritime Convention. Then when he defines, at page 60, the crucial question, it is:

whether a claim for compensation under the 1989 Act could arise on or after 1 June 1991, but in respect of an occurrence before that date.

That is not precisely correct, in our submission.

Then, Your Honours, at page 61 His Honour refers to the principle under customary international law:

that a treaty does not bind a Party in relation to any act or fact which took place before the date of entry into force of the treaty with respect to that Party -

and he then sets out as declaratory in effect of that, Article 28 of the Vienna Convention.

Now, Article 28, in our submission, is limited in its effect to State parties. It is concerned with the mutual rights and obligations strictly of States pursuant to treaties. It is not concerned with the private rights under municipal law which State parties may mutually agree to enact. The only obligation undertaken by Australia when it acceded to the Convention was to pass a law to give effect to it and Article 28 could only impact upon that obligation by making it clear that Australia's obligation to pass the law would arise after accession to the treaty.

If you were to use Article 28 to construe a treaty like the 1976 Convention, then its purpose would be frustrated. You would have, for example, no possibility of procuring the release of a vessel in one country after the constitution of a fund in another if that limitation fund was constituted before the courts of the first country became parties to the Convention. So that, in our respectful submission, if this presumption in some way applies, contrary to what we primarily put, a different intention does appear within the treaty in the respects in which we have already mentioned.

Your Honours, then we come to the fourth question asked in the case stated in the case of Victrawl. I should say that the reason why the present appellant and the respondent are at issue about the matter - the present appellant being the shipowner - is that the appellant would indemnify Mr Coulston, the master, who has been sued in separate proceedings which have been commenced against him. The Full Court did not come to this question, which is one of construction of the 1976 Convention only. Article 1.4 of the Convention is the starting point for submissions that we make about this matter.

Your Honours will see that different language is used in respect of agents and servants by rule 4 from that which is used in rules 1 and 2 of Article 1:

Shipowners and salvors, as hereinafter defined, may limit their liability in accordance with the rules of this Convention -

conferral of a right, and rule 2 expands the meaning of the word "shipowner" to include others connected with the ship.

If any claims set out in Art.2 are made against any person for whose act, neglect or default the shipowner or is responsible, such person shall be entitled to avail himself of the limitation of liability provided for in this Convention.

So, in my respectful submission, it is rather like a Himalaya clause. The person with the benefit of the Convention is the shipowner, or the salver, as the case may be, but the benefit of it is extended to those agents and servants of the shipowner who may be sued, otherwise the Convention can be got around by simply suing the crew members and finding that the shipowner will indemnify the crew members for industrial reasons.

Article 4 is the principal provision of the Convention which was intended, apparently, to change the position which had arisen under, for example, the 1957 Convention in the United Kingdom when limitation was rather easy to bar. The Marion in the House of Lords, for example, made shipowners liable in a wide variety of cases where the early law would not have. Actual fault or privity is, after The Marion, a very difficult thing to negative. Article 4 was intended to, in effect, create a virtually unbreakable convention for all except the most outlandish cases:

A person liable shall not be entitled to limit his liability if it is proved that the loss resulted from his personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result.

The word "personal", in our submission, was there to ensure that the test would be applied to the top management of the shipowner. You have to look at it seriatim from the master down to the least member of the crew who may have been involved in some incident and each of them has the word "personal" applied to him, then you destroy the notion that you limit the class of persons who must be guilty of recklessness and the like, to the top management. The word "personal" does not help if it can be applied seriatim to each crew member by a person who brings an action.

The next matter is this: Article 5 seems to assume, in our submission, that the parties to the limitation suit will be the shipowner and any person interested, for example, in another vessel. Article 5 provides that before you apply the limitation convention you will set off the mutual rights of the parties and the Convention will only apply to the balance, if any. That, obviously, directs attention to the shipowner, or the salvor, on the one hand, in our submission, as the persons having the entitlement to limit liability. Your Honours will see that it does not use the words of Article 1.4, it does not say where a person is entitled to avail himself of limitation, it says where a person is entitled to limit. Similarly, Article 4 speaks of persons "entitled to limit", not persons entitled to avail themselves of limitation.

Your Honours, Article 9 then provides that:

The limits of liability determined in accordance with Art.6 shall apply to the aggregate of all claims which arise on any distinct occasion:

(a) against the person or persons mentioned in par.2 of Art.1 -

that is the shipowner, as defined -

and any person for whose act, neglect or default he or they are responsible -

so that, when a shipowner limits, the aggregate of all claims made against his servants and agents, will also be capable of limitation, and will be within the fund. And then, finally, Article 11.3, provides that a fund constituted by one is deemed to be constituted by all of those persons, in substance.

Now, if the master, or any other member of the crew, who is sued, has to pass the test referred to in Article 4, and if the master is not himself a member of the top management of the ownership of the vessel, then the notion of personal liability in Article 4 is less efficacious and the primary objective of this Convention, that is extending the limits but making the convention virtually unbreakable, would be frustrated.

Your Honours, we have handed up the official records of the conference, which is a little blue book. At page 153 of it Your Honours will see a proposal submitted by Australia, as a matter of fact, to amend Article 4, and it becomes important to look at the debates on this. Australia proposed to amend Article 4 by making a special provision about the master being:

entitled to limit this liability in all cases unless it is found that:

(a) he is at the same time the owner, co-owner, charterer, manager or operator of the ship; and -

then, in effect, the barring provision referred to in Article 4 would not be satisfied by him so understood.

The debate upon that was at 388 in the volume, when the chairman drew attention to the Australian proposal which I have just mentioned. Mr Unkles, for Australia, suggested that his proposal matched the provisions contained in Article 6.3 of the 1957 Convention. Your Honours, may I go to that. Article 6 provided as follows:

In this Convention the liability of the shipowner includes the liability of the ship herself.

Subject to paragraph (3) of this Article, the provisions of this Convention shall apply to the charterer, manager and operator of the ship, and to the master, members of the crew and other servants of the owner, charterer, manager or operator acting in the course of their employment, in the same way as they apply to an owner himself: Provided that the total limits of liability of the owner and all such other persons in respect of personal claims and property claims arising on a distinct occasion shall not exceed the amounts determined in accordance with Article 3 of this Convention.

Then, Article 6.3 had said this:

When actions are brought against the master or against members of the crew such persons may limit their liability even if the occurrence which gives rise to the claims resulted from the actual fault or privity of one or more of such persons. If, however, the master or member of the crew is at the same time the owner, co-owner, charterer, manager or operator of the ship the provisions of this paragraph shall only apply where the act, neglect or default in question is an act, neglect or default committed by the person in question in his capacity as master or as member of the crew of the ship.

The debate records that Mr Selvig of Norway supports the proposal, and points out:

that the provision proposed was not as wide in scope as the corresponding provision in the 1957 Convention, since it mentioned only the master or a member of the crew -

Mr Unkles said he would amend it. Then Lord Diplock said, leading the United Kingdom delegation:

that the Australian proposal was essentially a matter of drafting; in any event it was not necessary, because the principle it contained was already covered by Article 1(4) and by the existing Article 4.

They stood, at that time, in their final form.

The CHAIRMAN noted that, according to the proposal, limitation of liability would be available "in all cases" - for example, in acts committed with intent to cause damage.

Then Mr Wiswall, Liberia - - -

BRENNAN J: Do we need to note any more than that Lord Diplock thought that it was unnecessary and Mr Herber thought that it was a matter of substance?

MR RAYMENT: I have gone as far as I need to, Your Honour.

BRENNAN J: Where does this take us then?

MR RAYMENT: Your Honour, in my respectful submission, if there be doubt arising from the matter that my learned friend Mr MacFarlan is about to submit on this question, those statements which were made in the committee of the whole.....the persons who drafted the Convention may be resorted to as an aid to confirm the meaning suggested by the appellants in the case.

BRENNAN J: Do they confirm any meaning?

MR RAYMENT: The effect of Article 6.3 was plainly that a master, himself alleged to be personally to blame for an incident, would only be deprived of the right of limitation if he were an owner. That is the very point that we make. We submit it will only be if the master is himself the owner that Article 4 will apply to him. Your Honours, in our respectful submission, for those reasons - we have put in the outline that answers should be given to questions 2 and 3, but I frankly did not have page 2 of the notice of appeal when I wrote that outline. In our respectful submission, it is convenient for those answers to be given, but we press for answers 1 and 4 and we ask for answers 2 and 3 without seeking to take the matter further than I already have.

Your Honours, then I come to the Sanko appeal. There are two - - -

DEANE J: Mr Rayment, before you do that, can I take you to the chronology which I think is A1. What does 10 mean on page 2? Is that - - -

MR RAYMENT: It is the date of receipt by the Belgian - - -

DEANE J: The date of lodgment?

MR RAYMENT: No, date of receipt.

DEANE J: By - the same thing, is it not?

MR RAYMENT: By Belgium. Well, it probably is. We have the date of the document.

DEANE J: Then should we insert 11(a) 30 May 1991 denunciation became effective.

MR RAYMENT: Yes.

DEANE J: Then that means that on the assumption that the sections of the Act remained operative, there was a very brief period in which the position was difficult.

MR RAYMENT: The position under municipal law was clear. The 1957 legislation was still in force.

DEANE J: And what, you would read that as giving legal effect to the Convention even though the Convention had effectively become inoperative in that from Australia's point of view there were no other bound contracting parties?

MR RAYMENT: Yes, in my submission.

DEANE J: Well, that may well be; I am just understanding.

MR RAYMENT: The denunciation itself had no effect in Australian law, in our submission. For example, you would not repeal by denouncing; you would repeal by an Act, and the Act came into force on 1 June 1991.

DEANE J: Except that may be relevant to the legislative intention, so far as the new Act was concerned.

MR RAYMENT: I suppose so, Your Honour, yes.

DEANE J: Now, can I just ask you to be more precise about something else?

MR RAYMENT: I do not think those facts were known when they passed the 1989 Act, Your Honour; they anticipated that they would be bringing them both into force at an earlier time than actually happened. The legislative intention, in other words, may be 1989, rather than 1991, although query.

DEANE J: Well now, can I ask you to be quite specific about question 2? Is it clear that it was submitted by your client that question 2 should be answered and should be answered "yes", as distinct from what Justice Gummow says and that is that question 2 needed to be considered for the purposes of answering question 1, but not otherwise, because I just find it strange that you would have submitted that if question 1 was answered "yes", question 2 should have been also answered "yes"?

MR RAYMENT: Your Honour, I would like to check the transcript, but my recollection of it is this, that when the argument - we do have, I think, the transcript.

DEANE J: Well, do not trouble now, but on what we have been told to date, Justice Gummow was mistaken in thinking that your client did not affirmatively ask for an affirmative answer to 2, even if 1 was also affirmatively answered. Now, no doubt everybody else is completely happy to have 2 answered "yes", if you fail on question 1. As long as that is clearly understood, there would seem to be no problem about it.

MR RAYMENT: Yes, well it may be better if I take it up with my learned friend over the lunch hour, may it not, Your Honour?

DEANE J: Well, as I say, I would have thought that they would be enthusiastic that if 1 was answered against you, 2 should be answered the way you ask, as long as that is what the Full Federal Court was asked to do and what we have been asked to do.

MR RAYMENT: Yes. Your Honours, I move to the Sanko case. There are two possible distinguishing features in the Sanko case from the Victrawl case. The first is that Sanko first applied under, we would say, section 335 of the Navigation Act plus section 4 of the Jurisdiction of Courts legislation pursuant to the 1957 Convention prior to 1 June 1991.

The second matter which should be referred to is a matter of concession which is noted at page 3 of paragraph 11 of the case stated in respect of which no question is asked in the Sanko case of the court. Can I take them in that order. Your Honours, before Mr Justice Sheppard, who has, by the way, still not given judgment, the application of Sanko and Granslam for limitation was put forward under the 1957 Convention and under the 1976 Convention. The respondents suggested that the 1957 Convention was not available, not for any reason of law but because my clients had not negatived actual fault or privity. They submitted that the 1976 Convention was not available as a matter of law and they submitted that in any event there was conduct barring limitation under the 1976 Convention.

The way in which the matter proceeded before Mr Justice Sheppard was that he had heard argument upon whether the 1957 Convention was available, particularly having regard to the question of fact. He heard argument on the 1976 Convention and conduct barring. If he finds in his judgment for my client on either basis, then no question of election arises. If he found for my client on both bases, then a question of election would have arisen before His Honour, and that was debated, together with questions of estoppel and waiver which have been pleaded by the respondents.

Your Honours, if section 8 of the Acts Interpretation Act preserved the right of Sanko to proceed with the 1957 Convention application, and if there was no contrary intention in the 1976 Convention, then, in our submission, the question of construction raised in relation to the 1976 Convention would be answered in the same way. That is because at most section 8 would make an exception from the repeal, in effect, of Part VIII of Division 1 of the Navigation Act without in some way making an exception from the enactment of the 1976 limitation as part of our law.

In our submission, neither in the case of the 1957 Convention nor in the case of the 1976 Convention is any right conferred on persons having a claim against the shipowner to have the shipowner proceed to file or to press an application for limitation under one Convention or another or at all. Their rights are unaffected unless and until the Court constitutes a limitation fund or makes it a plea of limitation without constitution of a fund under Article 10 of the 1976 Convention. At the moment of their creation, in our submission, the rights of the claimants arose at common law, whether in contract or in tort or both, and they are enforceable and remain enforceable wherever the defendant can be found, subject to any locally effective limitation decree.

Your Honours, can I come then to the matter in paragraph 11 of the case stated. It is, in our respectful submission, a note of a legal concession made by both parties. It is not a fact for the purposes of the case stated and, in our respectful submission, it is in the same category as a concession of fact made below on a legal matter which does not affect any question of evidence. If that not be right, then the only submissions which we put to the Court are all of those in the Victrawl case except those summarised in paragraph 7 of the outline of argument in the Victrawl case.

TOOHEY J: Why do you ask for an answer to question 2 in general terms, Mr Rayment, rather than an answer that specifically relates to the parties?

MR RAYMENT: Your Honour, I just have in mind, avoiding any possible argument, that this Court was concerned with more than the one question which seems to be referred to the Court by the case stated, namely, whether the 1976 Convention is capable of application to events before its commencement. If it speaks of the Sanko harvest, one could arguably be involved in looking at some of the other facts in the case stated about dates of invocation and the like. I just had in mind, to seek to make it clear, by the answer that we seek, that the Court is not asked in Sanko to deal with that matter.

TOOHEY J: But answering the question in general terms might leave other questions unanswered, might it not, or are you content with that?

MR RAYMENT: Your Honour, it would seem that the principal matters which might arise, apart from the question that we have suggested be answered, are before Mr Justice Sheppard, rather than ever having been referred to the Full Court, and I just had in mind that this Court would not wish to go beyond the matter mentioned at the end of the case stated, which specifically kept from the Full Court any questions of fact that might arise in connection with those matters.

TOOHEY J: And if you got the answer that you seek, then having regard to paragraph 11 of the case stated, you would have, in effect, an answer that both Conventions were available to your client.

MR RAYMENT: And then the question would be, if we sought to take advantage of paragraph 11 in some respect - if we are held to paragraph 11 here, the question would then arise whether we can hold the other side to it before Mr Justice Sheppard.

GAUDRON J: Is that not a matter that should be left to the final washup between the parties? I can well see there may be prejudice or disadvantage arising by reason of the concession being made and now withdrawn.

MR RAYMENT: Yes, well that is our submission, that the question ought to be dealt with in a limited way.

GAUDRON J: So that you cannot rely on paragraph 7 in the Sanko case now?

MR RAYMENT: I am sorry.

GAUDRON J: You say you can or you cannot?

MR RAYMENT: Well, Your Honours, what we have put about it respectfully is this: we put that paragraph 11 is foreign matter in the case stated. We put that it is an agreement of law which - - -

GAUDRON J: But it is an agreement as to the basis on which the litigation is to be conducted between the parties surely.

MR RAYMENT: No, because - there was contest before Mr Justice Sheppard - - -

GAUDRON J: It may well be. It may well have been taken as such.

MR RAYMENT: Yes. There was contest before Mr Justice Sheppard on the basis that we had no right under 1957 at all. The great contest before Mr Justice Sheppard about 1957 was fault or privity. There is no agreement that we can invoke 1957 because of the fault or privity point. Your Honours, can I say this: if Your Honours take the view that my client is bound by paragraph 11, we respectfully accept that. We do not object, nevertheless, to Mr Hughes making submissions contrary to what I put in the Victrawl case on that matter. You really have a choice with respect to this matter, and one consideration was that. If the Court pleases, those are our submissions.

BRENNAN J: Thank you, Mr Rayment. Mr MacFarlan.

MR MacFARLAN: If the Court pleases. May I hand to Your Honours a copy of our outline of submissions.

BRENNAN J: Yes, Mr MacFarlan.

MR MacFARLAN: Your Honours, before coming to the outline, may I put, in broad terms, what we see are the relatively narrow issues which arise on this hearing. First, Your Honours, bearing in mind that there is no transitional provision in the 1989 statute, the first issue, as we see is, is: is there any clear intent manifested by the 1976 Convention or the 1989 legislation, an intent that the Convention operate in respect of events or occurrences, happening before the date of operation of the legislation, and one would have to bear in mind, we submit, that such an intent would have to be very clearly manifested because one is dealing with retrospective or a potential retrospective operation of the legislation.

That is the first issue as we see it. The second is, assuming no such intent is manifested, is there, as a matter of law, a presumption as to the non-retrospective operation of legislation, in other words, a presumption against a finding that the legislature intended to interfere with existing rights, and that issue is probably not one of great controversy.

The third is, assuming there is such a principle, on the occurrence here, did the parties acquire rights within the meaning of this principle, and were they rights which have been purported to be subsequently interfered with by the 1976 Convention, if it is to be construed as my learned friend would have it construed?

As we see it, Your Honours, the major focus of attention would have to be as to the third of those issues: can one truly say that there were rights acquired by the parties when the accident in question in this case occurred? If there were such rights acquired in the absence of a very clear manifestation of intention, we would submit that the law would readily find that there was no intent to interfere with them.

I will come to the terms of the 1957 Convention but, to put it broadly, what happened was that the shipowner acquired, when this incident occurred, a right to limit his liability under that Convention. True in a sense it was conditional upon him being able to demonstrate certain facts to the court, but that same comment could be made in relation to any right, that to vindicate it through the court process one has to prove the elements which give rise to the right. So my learned friend's comment to the effect that the right was here so conditioned, with his apparent implication that that prevented it being a right at all, is not one with any substance. What is important, in our submission, is that the right in question here was not one which depended upon the favourable exercise of discretion by any court.

That has been the point at which some of the cases have drawn the line in this sense: if one can only say that one has a right to approach a court and ask the court to exercise a discretion in one's favour, it is difficult, if not impossible, for the purpose of these principles to say that that right is an existing one before it is availed of. But such is not the case here. No element of discretion comes into it. If the relevant facts have occurred then there is a right which cannot be gainsaid on the part of the vessel owner to limit.

BRENNAN J: What do you mean by "a right to limit"?

MR MacFARLAN: He is entitled, Your Honour, to raise the Convention and the legislation which brought it into effect as a defence and he can bring substantive court proceedings to give effect to his right to constitute a fund.

BRENNAN J: Is that right? I mean, if he was ceded on the day after the casualty, what would be his defence, that he would be able to then invoke the Convention?

MR MacFARLAN: Yes.

BRENNAN J: Does that not rather indicate that anterior to the application, at all events, there is no defence?

MR MacFARLAN: No, we submit, because there is no discretion which he has to have exercised in his favour. If the facts are right he is entitled to say that the claim for $10 million cannot succeed beyond $1 million, or whatever the figure may be. That is so at the instant the incident occurs.

In a sense, it is perhaps approaching a right in the nature of an option in that he has the right but he may not wish to avail himself of it. It is not easy to contemplate why that would be so but, in theory, he could waive it in the same way that a defendant who had a limitation defence available to him. If the claim is brought outside the limitation period, a defendant could waive that. But only in that sense is there any element of option. In every other sense it is a right which cannot be withdrawn from the shipowner. It is matched by a correlative right which accrues upon the happening of the incident in favour of the property owner. The property owner, when the accident happens, assuming negligence on the part of the vessel owner, acquires a right to damages under the general law, circumscribed only by the right of the vessel owner to limit, if he can prove the relevant conditions, under the 1957 Convention.

What the property owner is not subject to is a broader defence available to the vessel owner to limit his liability in a different way - and the two regimes are different because they introduce different methods of breaking the limitation, and different limitation amounts.

So, the property owner's right to damages was unrestricted by the London Convention, the 1976 Convention, which later came into force and, if this happened, to later provide that that was to affect his right to damages, was very much to interfere with an existing or accrued right that he had.

Put it another way, upon the happening of the incident the property owner acquires a right to a certain amount of money and the vessel owner acquires a corresponding right which ensures that he is not going to be liable beyond a certain amount of money, and those rights are crystallised and fixed at the date of the incident.

The 1957 Convention in Article 1 speaks of the owner of a seagoing ship limiting his liability. The words used are, "The owner of a sea-going ship may limit his liability", with the qualification about actual fault or privity. But the language there is language appropriate to the conferral of a right.

Can I take Your Honours to some - very few, I should say - authorities which deal with the presumption against retrospectivity and which emphasise that it does not matter that one might for some purposes classify the provisions in question as procedural, whether "procedural" in form or not, if they in fact touch on existing rights then they are subject to the presumption against retrospective operation, and the authorities I wish to refer to are noted in paragraph 2 of our outline. The first is Rodway v The Queen, [1990] HCA 19; (1990) 169 CLR 515, in the judgment of five Justices at 518 point 4.

What is set out just above point 4 on 518 is the Tasmanian Acts Interpretation Act, which substantially follows the language of the Commonwealth Act section 8. It is then said:

The rule at common law is that a statute ought not be given a retrospective operation where to do so would affect an existing right or obligation unless the language of the statute expressly or by necessary implication requires such construction. It is said that statutes dealing with procedure are an exception to the rule and that they should be given a retrospective operation. It would, we think, be more accurate to say that there is no presumption against retrospectivity in the case of statutes which affect mere matters of procedure. Indeed, strictly speaking, where procedure alone is involved, a statute will invariably operate prospectively and there is no room for the application of such a presumption. It will operate prospectively because it will prescribe the manner in which something may or must be done in the future, even if what is to be done relates to, or is based upon past events. A statute which prescribes the manner in which the trial of a past offence is to be conducted is one instance. But the difference between substantive law and procedure is often difficult to draw and statutes which are commonly classified as procedural - statutes of limitation, for example - may operate in such a way as to affect existing rights or obligations. When they operate in that way they are not merely procedural and they fall within the presumption against retrospective operation. But when they deal only with procedure they are apt to be regarded as an exception to the rule and, if their application is related to or based upon past events, they are said to be given a retrospective operation provided that they do not affect existing rights or obligations.

Could I go back to Maxwell v Murphy 96 CLR - - -

BRENNAN J: You might like to do that at a quarter past two.

MR MACFARLAN: If Your Honours please.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.16 PM:

BRENNAN J: Yes, Mr MacFarlan.

MR MacFARLAN: Thank you, Your Honours. I was about to go to Maxwell v Murphy, [1957] HCA 7; 96 CLR 261, at 267 point 2 in the judgment of the Chief Justice, to what is a well-known statement of principle:

The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events. But, given rights and liabilities fixed by reference to past facts, matters or events, the law appointing or regulating the manner in which they are to be enforced or their enjoyment is to be secured by judicial remedy is not within the application of such a presumption.

And then His Honour, at 270 point 3, in a passage cited from an earlier decision, puts this, under the letter (c):

A statute which, while procedural in its character, affects vested rights adversely is to be construed as prospective."

Something similar is to be found in the judgment of Mr Justice Williams at 279 point 9:

The right to enforce a cause of action (sometimes called an accrued claim) is an existing substantive right. It is of the same character as the right to prosecute an appeal which was held by the Privy Council in Colonial Sugar Refining Co v Irving to be in this category. There can be no distinction in principle between a right given by law to commence an action and a defence given by law which bars an action. A law which has the effect of taking away such a right or immunity could not be classed as merely procedural. Procedural statutes are statutes which regulate the procedure and practice of the courts. The Statute of Frauds and Lord Tenterden's Act are examples of statutes which relate to procedure but they have been held to affect substantive rights and therefore to be prima-facie statutes which should not be construed as having a retrospective operation.

We draw the Court's particular attention to that first complete sentence at the top of 280:

There can be no distinction in principle between a right given by law to commence an action and a defence given by law which bars an action -

and both of those are properly to be regarded as rights for the purpose of this rule.

There is a short passage, Your Honours, in Fisher v Hebburn, [1960] HCA 80; (1961) 105 CLR 188, if I could read that. It is a passage at 194 point 3, and there is a rather lucid and succinct statement of the principle by Mr Justice Fullagar:

There can be no doubt that the general rule is that an amending enactment - or, for that matter, any enactment - is prima facie to be construed as having a prospective operation only. That is to say, it is prima facie to be construed as not attaching new legal consequences to facts or events which occurred before its commencement.

That statement, Your Honours, encapsulates what we wish to put about this rule. We say that is precisely what my learned friend's construction of the 1989 Act and the Convention would lead to, that there were certain consequences which attached as a consequence of the incident in question and that they are sought to be varied and new legal consequences are sought to be attached if my learned friend's construction is correct.

While I am at that point could I just read on a little, because there is a passage that relates to another point we put concerning the construction of the Convention. Could I just anticipate what that point is. The word "whenever" appears in Article 15 of the 1976 Convention and, particularly below, it was relied upon by my learned friend as indicating an intent that the Convention was to apply not only prospectively but retrospectively as well, and that the events with which it was concerned were those which had yet to occur as well as those which had occurred.

But our response to that is that such language is frequently encountered by the courts and the courts readily understand such expressions as "whenever" as meaning "whenever henceforth", or words to that effect. There is a passage dealing with that issue in what Justice Fullagar says at 194, point 3:

The rule has been frequently applied to amending statutes relating to workers' compensation, and it has often been held that such amendments apply only in respect of "accidents" or "injuries" occurring after their coming into force: the cases of Moakes.....and Kraljevich are familiar examples. But there is no rule of law that such statutes must be so construed, and it would not be true to say that a retrospective effect can only be avoided by confining the operation of such a statute to subsequently occurring "accidents" or "injuries". It may truly be said to operate prospectively only, although its prospect begins, so to speak, with some other event than accident or injury.

This is, I think, the case here.

So, on a construction of the legislation there in question, that was found not to be the case, but the point we make is that words such as, "whenever" and "accidents" and "injuries" are not simply because of their generality and indication of a retrospective operation.

Then, Your Honours, Esber v The Commonwealth[1992] HCA 20; , 174 CLR 430, assists in relation to the point we seek to make under paragraph 2. This was a case concerned with redemption of weekly workers' compensation payments and the relevant passage in the joint judgment commences at 439 about point 2 The appellant put his case on two footings, and this is in the context of section 8 of the Acts Interpretation Act which is set out in the judgment.

First, he says that he had, in the circumstances, a right to redemption of weekly payments. Alternatively, he says that he had a right to have the Tribunal determine his application to review the delegate's decision. In either event, the appellant contends, the repeal of the 1971 Act did not affect the right.

Although the appellant put this aspect of his case in two ways, it is fair to say that he relied much more on the second approach. As to the first approach, the question is whether, if the Commissioner was satisfied of the matters -

referred to -

he had any residual discretion to refuse redemption or, perhaps more accurately, whether there were other factors he could properly take into account in so refusing.

That was the issue that was crystallised. Ultimately the Court said there, there was a doubt about that. At least it was arguable and it may be they went a bit further and said there was a discretion but, in this case, one does not encounter those problems because here there is an entitlement to limit, either by way of defence or cause of action to set up a fund.

If I could then just go on to 440 in Esber, at about point 1. It says:

And in the end it does not matter because, at the least, the appellant had, at he time of the repeal of the 1971 Act, a right to have his application to the Tribunal determined -

And that was so, Your Honours, because he had filed an application - he had made an application - and even if it were assumed that the Tribunal had a discretion, the fact the jurisdiction had been invoked was considered to entitle the appellant to have his application determined. And then, if I go down to point 4:

If it be assumed that the appellant did not have a right to redemption in the sense first discussed, he had a right to have his claim to redemption determined in his favour if the delegate had wrongly refused his claim.

And so forth. And then there is reference to section 8 again.

Now, Your Honours, those principles of municipal law we say are consistent with and reflect principles of international law. Article 28 of the Vienna Convention is framed in similar terms to the way in which the municipal law principle has been framed and as has been said in a number of cases, that article of the Convention reflects customary international law principles. Without taking Your Honours to it, perhaps if I just give one reference to such a statement. It is to be found in Theil v Federal Commissioner of Taxation, [1990] HCA 37; 171 CLR 338 at 356 point 6 in what Justice McHugh says, and at page 343 point 3 in what Justice Dawson says.

Your Honours, the Cherifien decision in the House of Lords, which we mention in paragraph 4, has not been relied upon by my learned friend, so I can pass quickly over it. We would only make these comments, that the House of Lords did not significantly depart from the principles as expounded in Maxwell v Murphy. Rather they gave emphasis to the rationale underlying those principles and indicated that in the absence of special circumstances, it would be unfair to deprive someone of an existing right. But that case was a very special one because the alleged right was one to maintain the arbitration in question, notwithstanding inordinate delay upon the part of the party resisting application of the new law. Lord Templeman put it in this way at page 517F to G:

the owners never had a right to.....cause serious prejudice by inordinate and inexcusable delay -

So, Your Honours, if there was a right in that case, it was not such as the law considered it appropriate to protect. No such special consideration arises in the present case.

We have referred in paragraph 5 of the outline to Carr v Finance Corporation. We have quoted virtually in terms the passage, so I will not repeat it. What was said there was that no narrow conception of a right is appropriate in this context. That was a case concerned with a statutory mortgagee's power of sale and it was held that that conferred a right for the purposes of this principle, with the consequence that the introduction of legislation requiring a notice of default to be given before the right could be exercised was one to be construed as not applying to a power which had accrued prior to the operative date of the legislation.

We have referred then to the James Patrick decision, and to what Mr Justice Dixon said in that case. That is reported in [1938] HCA 22; 60 CLR 650. That raised a number of issues as to section 503 of the Merchant Shipping Act which was the predecessor of the 1957 Convention and those issues are, in general, not pertinent to the matters presently before this Court but one comment made in passing is, and that is at 673 point 8 where His Honour describes what the court does. His Honour said:

The court ascertains the claims upon it, marshals them and distributes the fund ratably among the claimants. In principle the title to relief of such a nature is a substantive right enforceable by independent proceedings.

BRENNAN J: Mr MacFarlan, as I understand it the argument against you seems to be passing, as it were, either side of what you are putting. As I understand it, the argument is that it is a substantive right, but the nature of the right has to be ascertained and the nature of the right is one which is to be understood as no more than a power in the Court to grant a particular order which will give the relief which the Convention has in mind, and that it is only in and through the proceedings that one can obtain and ascertain the nature of the right in question.

MR MacFARLAN: Yes.

BRENNAN J: And that seems to be quite consistent with what Sir Owen Dixon says in this passage.

MR MacFARLAN: Yes, it is perhaps not inconsistent with it, Your Honour. The answer we would make to such a submission is that that submission would have force if there reposed in the Court a discretion to grant or withhold the relief.

BRENNAN J: I can understand that because the existence of the discretion would then give you a better understanding of the nature of the right.

MR MacFARLAN: Yes.

BRENNAN J: But the real question is whether, absent a discretion, that none the less is the nature of the right.

MR MacFARLAN: Yes. Where there is a discretion, to use language used in some of the cases, the so-called right could be described as being more in the realms of hope or expectation, but where there is no discretion, all the facts and events have occurred which entitle the party in question as of right to the relief, then it is no answer, we submit, to say, "Well, the ordinary means of enforcing that right is to come to court and prove the facts", because every right, in a sense, is conditioned in that way.

The power of sale, on the part of the mortgagee in Carr's case, it could be purported to be exercised by the mortgagee, but if there is any challenge to it ultimately he would have to support his rights by proving facts such as that there had been a mortgage, a client payment on a particular day; there had been default, and the like. But that circumstance does not deprive it of the character of a right.

BRENNAN J: But is it a question of looking at the operation of the Convention and seeing how, in terms of international law, one construction rather than another is to be preferred?

MR MacFARLAN: Well, that is part of the exercise, Your Honour, and that would be relevant, we submit, to ascertaining - there are two ways in which it might be relevant. One would look at the 1957 Convention to understand the nature of the right conferred, and then one would look to the 1976 Convention to ascertain whether there has been any contrary intent, so far as the Maxwell v Murphy type rule is concerned.

But when one looks first at the 1957 Convention, one finds the simple conferral of a right to limit liability. The party may limit liability, so the Convention says. There are then specified certain means by which it may be given effect to. None of them put in doubt the right of the shipowner to enforce his right. None of them impose any condition which is out of his power and it is clear, on the law, that he is entitled to raise the facts as a defence; all he has to do is to point to facts that have occurred in the past and the court has no choice but to, in effect, declare his liability is limited.

So, whilst one try and finds some detail about how funds are constituted and the like, they are really simply procedural mechanisms for describing how the right may be pursued in certain circumstances, but they do not put in doubt the existence of a right in any way - no different, in principle, we would submit, than if one finds in the New South Wales Supreme Court Act requirements as to procedural matters such as statements of claim and summonses, and so forth. To vindicate a right, it may well be necessary to comply with court procedure as it exists at the relevant time, but no one would suggest, we submit, that the right is not there because one has to follow the procedure of the time.

If one goes back a step further to the rationale of the rule and to questions of fairness or unfairness, one has legitimate expectations being created immediately upon the occurrence of the event in question that a limitation defence may be raised and will be successful or, on the other hand, that the owner will be circumscribed in his claim to damages only to a limited extent. I will come to the Dutch decision in a minute, but that seems to be the sort of consideration that the Dutch court was adverting to.

Your Honours, perhaps I should just say something about those foreign decisions at the moment. Your Honours, we submit that the French decision would not be of any assistance to Your Honours as it contains no reasoning. It would only be of assistance if the power of its reasoning was such as to persuade Your Honours of a particular result, but one just finds it completely bereft of any reasons.

BRENNAN J: Why would it not have a persuasive effect simply as a decision by an ultimate court of a contracting power?

MR MacFARLAN: It might, Your Honour, if it was accompanied by an indication that in other countries a like position had been taken, such that Your Honours were driven to thinking that uniformity was a powerful factor. However, in the present case all one knows is that there is a French decision one way, there is a Dutch decision the other way and the Dutch decision does have reasoning in it. We know that the English legislation - I will hand up a copy of that - by express transitional provision, has precluded the Convention from applying to past acts or events. It would appear none of the parties have done a widespread investigation of the position in different countries. One is left with 2:1, in effect, at the moment. The appellant has not put it on the basis that there is a worldwide tendency to this particular operation of the Convention, and that should be followed here for the sake of comity.

The English position, as I mentioned, is that there is an express transitional provision. That does not help us on the construction because the legislature has stepped in there but, in terms of any suggestion of uniformity being appropriate to be considered, one finds that one of the great maritime nations has declared in its case that the Convention is not to operate retrospectively. So we would be out of line with that if, in Australia, we adopted a different position.

Could I hand up to Your Honours copies of a publication which contains copies of the English legislation. If Your Honours were to go to the third sheet of what I have just handed up, section 17 in the top half of the page, "Convention shall have the force of law", and then the last sheet, section 19(4), "Nothing in the sections or the schedule shall apply in relation to any liability arising out of an occurrence which took place before the coming into force of those sections", and so forth.

Now, as to the Dutch position, if I could take Your Honours to the volume made available by my learned friend, in particular tab C, Your Honours will find the Dutch decision at item C4, and the page to which I wish to go is 14 of that decision. There are numbers in the top right-hand corner. At the very foot of page 14 of that judgment, this is said - it begins by referring to a transition clause and says:

This does not justify the conclusion that the stipulations of the London Convention take direct effect and should therefore also be applicable to requests for limitation of liability with respect to claims following from incidents which occurred prior to its coming into force. Such an immediate effect leads to complications in as far as the stipulations of the London Convention differ from the law which was previously applicable and thus harms the protection of the interests of ship owners which the Convention aims at. For, the ship owners involved may have tuned their course of action after an incident to the possibilities of limitation of liability as these resulted from the law which was applicable forthwith after the incident. The conclusion that consequently the London Convention cannot take immediate effect is supported by the transitionary provision of Article VI of the Act of 14 June 1989 -

and I will turn to that in a moment, Your Honours, but Your Honours will see that a reason is given for the Convention not applying retrospectively and then support is derived from the Convention. So we say there is independent reasoning or reasoning independent of the transitional provision. The transitional provision is the last sheet under tab C, that is document C6:

It will only apply to liability arising from an incident which has taken place after that date.

While I am with this volume may I make the point that there is no precise correlation between the State parties to the 1957 Convention and those parties to the 1976 Convention. Your Honours will see from the last section of this book, that is under D, if Your Honours leaf through to the fifth sheet under D, Your Honours will see near the top "Limitation of liability 1957". There are then listed a large number of countries. Those are to be compared with those listed on the last sheet of the volume who are the parties to the 1976 Convention. Your Honours will see that the numbers are much greater for 1957, and I think the numbers are approximately these: some 45 under the 1957 Convention together with 13 United Kingdom dependencies, whilst under the 1976 Convention there are 22 of whom only 17 were parties to the 1957 Convention.

I would add to that, Your Honours will see on the last sheet in the book by looking down the far right-hand column that the dates of accession differed very greatly. So the idea of any worldwide uniformity, whereas at any particular date the whole world, or virtually so, is covered by the same Convention, is, unfortunately, a pipe dream and there will always be problems of private international law which will arise where one State is party to one Convention and another State concerned with an incident is a party to another.

Picking up paragraph 7 of our outline submission, the inquiry made in a private international law context as to whether rights are procedural or otherwise is not a relevant inquiry so far as the present case is concerned, in our submission, and I will not repeat the references we gave, but Rodway and Maxwell v Murphy support what I said there because they emphasise that rights which are, in a sense, procedural may in fact affect existing rights and be well within the Maxwell v Murphy principle. But could I add to the two references the further one that we have referred to in paragraph 7 of Kraljevich in [1945] HCA 29; 70 CLR 647, at 652 point 8.

Your Honours, that case concerned an amending Act altering the method of assessment of redemption of workers compensation payments. Where the accident in question occurred before the change, then the change was inapplicable. I refer Your Honours to 652 point 8, the new paragraph at the foot of the page:

In the present case, we have an example of a provision which at first sight looks to be expressed in terms more appropriate to procedure, but one, in substance, measuring liability. For to prescribe the basis of calculating redemption is in reality to express the measure of liability. But, when the statute is examined in detail, the form also of the amended clause is seen less as a statement about proceedings for the realization of rights than as a delimitation of their measure.

And so forth. But the material statement we would rely on is that whilst it might appear to be related to procedure in substance, it measures liability. The present case is concerned with a provision that measures liability in that it limits that liability.

Your Honours, my learned friend mentioned the United States case of The Titanic. Our first response to that is of course that what is said in the context of conflict of laws in this connection is not relevant to the present inquiry. That is, the distinction between substantive and procedural matters in that context is not of assistance. The second comment we would make is this, that the United States decisions have nevertheless recognised that it is a matter of construction of each particular limitation statute as to whether it is truly concerned with procedure or substance, even from a private international point of view.

There are two cases in America which illustrate that as a matter of construction it may be found, and even for conflicts purposes, a foreign limitation statute is substantive. Could I hand Your Honours copies of those. One is named Geophysical Service and the other is Chadade Steamship Co. Could I just briefly refer Your Honours to Chadade at 521 point [5]:

At the argument on the Committee's motion, both parties presented expert testimony on Panamanian law by qualified Panamanian lawyers in open court. The shipowner's amended petition to limit liability and the testimony of experts for both parties establishes substantial agreement that Panama has codified the generally recognized principle of maritime law -

If I can go through to the next page, 522, right-hand column, about point 8, the point numbered (4):

If I can then go through to the next page, 522, right-hand column, at about point 8, the point numbered (4):

The limitation of liability contained in the Panamanian law is substantive rather than procedural and attaches specifically to the right.

And then, on page 523, there is a discussion of The Titanic and The Norwalk Victory. Can I then go to the later Geophysical decision, because that makes reference to the earlier one, and at 1355, left-hand column, point 5, the point numbered (7) there:

Under general conflict of law principles, a forum will apply that body of substantive law which governs the rights and liabilities of the parties according to recognized choice of law principles. However, with respect to rules of procedure, the forum usually applies its own law.

And then, 1356, having commenced to refer to The Titanic on 1355, right-hand column - perhaps should refer to the bottom of 1355, the last few lines:

Reading the Titanic, however, in light of the Supreme Court's ruling in Black Diamond Steamship Corp v Robert Stewart & Sons (The Norwalk Victory), it is clear that a limitation statute may be both procedural and substantive. In Norwalk Victory, the Supreme Court expressly modified its former pronouncement in the Titanic, holding that if the foreign limitation "attaches" to the right created under the foreign law, then the foreign limitation governs, regardless of existing remedies provided under the forum's limitation laws. In short, if the foreign limitation law is part of the substantive law of the foreign country whose law governs the controversy under normal choice of law principles, the United States court can, and should, apply the foreign limitation law along with the rest of the substantive law of the foreign country.

Then the court goes on to find at 1357, right-hand column point 5 that the Canadian Shipping Act "is substantive". It says:

Since the provision is part of the substantive law of Canada, the Court also finds that the Canadian limitation statute should govern the instant action.

So even in conflicts cases, there is no inflexible rule. It is a matter of looking at the particular statute in question. A more important point, however, we would remind Your Honours of, is that it is not a question of procedure or otherwise, but a question of whether existing rights are affected.

Moving on to paragraph 8 of the outline, Your Honours. The expression used in Mathieson v Burton was that there must be more than a power to take advantage of an enactment. That was a case in which it was held that the child of a deceased person had a right to remain in possession, as conferred by the relevant legislation, and that that right was unaffected by a statutory change which intruded in the course of that enjoyment of possession. Justice Windeyer said in a passage I will not take Your Honours to but is to be found at 12 point 7, "It is not a question of analytical jurisprudence", and that is consistent with the earlier statement about no narrow conception of a right being appropriate.

Your Honours, two cases which illustrate the line to be drawn in this area, are the Ho Po Sang and the Free Lanka cases we have referred to in paragraph 8. Ho Po Sang was a case in which there was an issue about a rebuilding certificate but there was a discretion in the relevant authority as to the grant of that. Because of that element of discretion, there was no existing or vested or accrued right of the relevant type and a statute was presumed - was allowed to operate retrospectively without inhibition from the presumption of which I have spoken. The contrast is to be drawn with the Free Lanka case, (1964) AC 541. That was a case in which there was a motor vehicle accident and after the accident had occurred there was a change in legislation which would have affected the rights of the parties. It was held that that legislation did not operate retrospectively, and one can see the principle stated at 552 point 5. Just above point 5, it is said:

In Director of Public Works v Ho Po Sang the Board was concerned with an analogous problem -

reading on a little further, Lord Morris said:

"It may be ...that...a right has been given but that in respect of it some investigation or legal proceeding is necessary. The right is then unaffected or preserved. It will be preserved even if a process of quantification is necessary. But there is a manifest distinction between an investigation in respect of a right and an investigation which is to decide whether some right should or should not be given."

That is the distinction which I have been seeking to put to Your Honours. It does not matter that facts need to be proved, but it does matter if the court has a discretion. Reading on:

In the present case, as it seems to the Board, the appellants cannot now be heard to say that the respondent was not immediately after the accident an injured third party entitled to recover damages -

and so forth. The notice that he gave was

an assertion by him of his statutory right against the appellants; and nonetheless effectively so because the quantum of his claim was dependant upon the finding of the court in a decree made in his favour in his action against -

the other party. That last sentence is one that we rely on particularly also.

We have mentioned, Your Honours, in paragraph 8 of the outline also the decision in Continental Liquers. Again I will not go to that, but that was a case concerned with a discretionary power to order removal of a trademark and because of that element of discretion, as there was no existing right that could be found to be in the relevant party at the time of the later legislation. As we put in paragraph 9, Your Honours, the rights here are akin to rights of appeal which have not yet been availed of by the filing of notices of appeal but which were then vested or accrued.

The CSR v Irving case, [1905] AC 369 is in fact one where a notice of appeal had been filed before the amending legislation, and that appears at 371 at about point 6. What was said, and this is a statement of principle that is relevant, at 372 point 8 was:

Was the appeal to His Majesty in Council a right vested in the appellants at the date of the passing of the Act, or was it a mere matter of procedure? It seems to their Lordships that the question does not admit of doubt. To deprive a suitor in a pending action of an appeal to a superior tribunal which belonged to him as of right is a very different thing from regulating procedure.

And then another case is referred to:

In either case there is an interference with existing rights contrary to the well-known general principle that statutes are not to be held to act retrospectively unless a clear intention to that effect is manifested.

I am corrected, Your Honours. In one of these cases a notice of appeal had been filed; in the other it had not been, and CSR v Irving is the case where a notice of appeal had not been filed. The case where one had been filed is the next one referred to in our outline of Australia Coal v Shale Employees - - -

DEANE J: Mr MacFarlan, what is the situation as to cases where proceedings are brought in a Convention country for limitation, and then someone else seeks to bring proceedings against the ship in a non-Convention country? There must have been cases in which the question whether the proceedings in the Convention country had any effect, or whether the limitation provisions applied there were simply procedural.

MR MacFARLAN: Your Honour, I do not know of any such cases. The United States cases are getting close to it. They are not dealing with a country in which there is no limitation regime, but they are dealing with one where there is a different one from that prevailing under the foreign law, and there there are no doubt difficult private international law questions of the sort discussed in The Titanic and related cases.

DEANE J: Would not one assume, in the case of a multinational Convention, that if the convention was to apply only to future incidents, that would be the legislative intention in making it part of national law, but that if it was to apply to past incidents, as a matter of international law, that would be the intention of the local legislature.

MR MacFARLAN: We would accept that that would be a powerful factor, Your Honour. It may be a function of the degree of clarity of the Convention. If the Convention said in express terms it was to operate in respect of past acts and events, that inference would readily be drawn.

DEANE J: But it is a step that we must face along the way here. I mean, the first question must be: does one construe the Commonwealth Act as intended only to operate with respect to future incidents, taking account of whether you regard its operation as procedural or substantive. Now, there is surely something to be said for the answer to that question being, "Well, that will depend on the Convention". If not as a matter of local presumption, but as a matter of international law, the Convention operates only in relation to future incidents, then the answer would be obvious. But if the Convention operates as a matter of international law, in relation to past incidents, on one approach local presumptions have not got much to do with it.

MR MacFARLAN: Yes, Your Honour. We accept what Your Honour puts.

DEANE J: Well, I was not putting it. I was just trying to identify the precise problem.

MR MacFARLAN: Yes. We would not see it as a conclusive factor, Your Honour, but as I said before, it would be certainly relevant and the degree of clarity of the Convention itself must come into play as, if it expressly states that, one can readily draw the intention that the local legislation tends to incorporate that statement of intention in its own operation.

DEANE J: A final thing that I was just wondering about is, is it relevant that the parties to the two conventions have not taken a uniform approach but that some of them at least have adopted the approach that the 1957 Convention should continue to bind them as a matter of international law and to operate in terms of their municipal law? I was just wondering whether that supports your argument.

MR MacFARLAN: We say it does, Your Honour. It indicates that one should not be putting aside our municipal law principles in a desire to achieve some sort of uniformity of the construction for which my learned friend contends, because it is simply not there worldwide; if anything, it would seem that there is a preponderance in favour of the construction, or the operation, for which we contend. If it were seen that countries all over the world had taken the same approach to this Convention and we were the one out, then certainly one would have to think very hard before applying the municipal presumption. So we point to the reasoning of the Dutch decision, what the English have done, and I will come to the 1976 Convention in a moment but there is simply nothing in there, we submit, which supports the view that the presumption against retrospectivity was intended to be overridden by a contrary intention, whether that presumption be the municipal law presumption or whether it be the one which derives from the Vienna Convention, Article 28.

DEANE J: What I had more in mind was a combined operation of what I was asking about, and that is, if one is led to the view that the legislative intent was that the Convention would operate according to its effect under international law, vis-a-vis future and past incidents, is it relevant to note that there is no substitution of one regime for another under international law, but that many countries took the view that both Conventions should continue in terms of the overlapping situation?

MR MacFARLAN: Yes, it would be, Your Honour. But I take Your Honour, in speaking of overlapping, not to be talking of overlapping within one country but at different countries at different Conventions, and in that sense there was no overlap.

DEANE J: What I was wondering about is, if this was a purely national exercise, there would be great force in the view that one Act was repealed by another Act which commenced to operate, therefore you simply substitute one regime for another in terms of procedure. But if the relevant legislative intent was that the Convention would operate in accordance with its international effect, there is no basis for that approach on what is before us. Whether it is the correct approach under international law or not, I simply would not know.

MR MacFARLAN: No. We respectfully accept that, Your Honour. The appellants have just not set out to provide any comprehensive view of what has happened worldwide which would support their case. So one is left with either nothing, or a situation that favours us - - -

DEANE J: Except Justice Brennan has just pointed out to me something that obviously has to be put into whatever I am putting to you, and that is Article 17.4 of the current Convention.

MR MacFARLAN: Yes. Yes, that accords with the way we approach the matter, that both the Convention itself and the legislation of 1989 manifest an intent that one replace the other. The critical question is at what point of time. But we do not see that within a particular country there was likely to be any time at which two Conventions were capable of applying in respect of the same incident and that is certainly emphasised by 17.4. We would only add to what I have put in response to Your Honour is that international principles of construction seem to be the same as Australian municipal ones. So that although one might have an inclination to pay particular regard to international principles here, it does not really lead one anywhere but back to the same principles.

That brings me to paragraph 10, Your Honours, which raises the question of what is in the 1976 Convention which might constitute the contrary intention. Article 15 was what has been relied upon particularly. In subrule 1 it is said:

This Convention shall apply whenever a person referred to in Art 1 seeks to limit his liability -

As I have already put, the Fisher v Hebburn dictum indicates what we submit is obvious, that the word "whenever" is quite apt to refer to incidents occurring prospectively. It is no necessary indication of an intent that this Convention operate retrospectively. It is quite neutral in that respect.

BRENNAN J: But that does not really take you very far, does it?

MR MacFARLAN: We do not rely on it, Your Honour. We seek to respond to my learned friend's reliance on that.

BRENNAN J: I understand you do not rely on it because, if one says it operates prospectively, one of the things which one might then look to see is whether it is speaking about prospective seeking to procure the release of the ship, for example.

MR MacFARLAN: Did Your Honour have in mind a particular passage there?

BRENNAN J: Looking at Article 15.1:

This Convention shall apply -

when any shipowner -

seeks to procure the release of a ship -

in future. Does that assist you?

MR MacFARLAN: The language, speaking as to the present or future, does assist us, yes, Your Honour.

BRENNAN J: Even though the ship has been arrested in respect of an occurrence in the past?

MR MacFARLAN: The release from arrest has to arise out of an act or event to which the Convention applies. We submit those words are not against us. If anything, they are simply neutral, but they talk prospectively and they are apt, as is the word "whenever", to be read as inapplicable to events occurring prior to the operation of the Convention.

BRENNAN J: The events to which "whenever" applies are events which occur in a court.

MR MacFARLAN: Yes.

BRENNAN J: But you are seeking to give the Convention an operation with respect to applications made to a court relevant to an occurrence that occurs before the Convention comes into operation.

MR MacFARLAN: Relevant only to occurrences after.

BRENNAN J: I am sorry, relevant only to occurrences that occur after the Convention has come to office.

MR MacFARLAN: Yes, that is so, in the same way that legislation might confer particular rights or remedies flowing from accidents or injuries, an expression which is general in form but, by use of the strong presumption against retrospectivity, is understood as speaking prospectively, despite the fact that the language might be capable of being read more broadly.

BRENNAN J: Mr MacFarlan, would it be right to say that the approach that must be taken to the question that is at issue is one of the construction of the Convention as a matter of international law? It may be that the domestic authorities can be of some assistance but the operation of section 6 would seem to me to require that the question of prospectivity or retrospectivity is to be resolved as a matter of construction of the Convention and that alone.

MR MacFARLAN: We would not have put the same emphasis on the international position, Your Honour. We would say primarily it is a question of construction of the 1989 legislation but, in light of the nature of its content, the Court must have regard to the international position if it is led to conclude that the international position does or may differ from that obtaining under domestic law.

BRENNAN J: It is a question of giving effect to a Convention which is binding on States' parties, is it not?

MR MacFARLAN: Yes. One then is thrown back to Article 28 of the Vienna Convention, which really duplicates the domestic principle.

BRENNAN J: Yes, I understand that argument. It just seemed to me that perhaps we will be constrained in the analysis of the problem to a consideration of international law rather than national law in determining the proper construction to place upon the Convention.

MR MacFARLAN: We would submit that would not be the appropriate emphasis because the domestic statute does not say that the Convention shall operate in accordance with its international effect and one has seen that, at least in two of the three countries that have been looked at, there is an express transitional provision, and those countries at least have not seen it as emerging clearly from the Convention itself as to whether it is to have the retrospective operation or not, or perhaps they have done it through abundance of caution. May I put it more accurately this way: it is obvious that those countries have not taken the view that the Convention according to its terms is plainly intended to operate retrospectively.

BRENNAN J: Well, the United Kingdom case says "notwithstanding section 17".

MR MacFARLAN: Yes.

BRENNAN J: Now you are saying, as a matter of argument, "notwithstanding section 6".

MR MacFARLAN: Yes. It cannot be assumed to have been thought to be any inconsistency in England between the Convention and the legislation. One must assume it was thought to be consistent with it that the State identify the date from which it was intended to be operative.

DEANE J: While you are being interrupted, can I just try and understand how this works? Assume there is - well, in this case, assume a fund is set up in Australia in relation to a post-commencement incident and the ship being released then sails to New Zealand which is not a party to the Convention - and presume their case is for personal injury - and another person injured arrests the ship in New Zealand; what happens?

MR MacFARLAN: As we would see it, Your Honour, in New Zealand the shipowner would allege that the appropriate substantive law to be applied was Australian law, principally because the incident occurred here.

DEANE J: No, say the incident occurred on the high seas.

MR MacFARLAN: Still, the shipowner may allege that the appropriate substantive law to be applied is Australian law because of the connection and perhaps because of the institution of the fund.

DEANE J: And he fails?

MR MacFARLAN: He fails in that argument.

DEANE J: The New Zealand plaintiff says, "I am a New Zealander - New Zealand is not a party to this. I bought my ticket in New Zealand and I boarded the ship in New Zealand. Why should I be limited by something Australia saw fit to do?"

MR MacFARLAN: If he fails in that argument - - -

DEANE J: No, if he succeeds in that argument.

MR MacFARLAN: If the plaintiff succeeds in that argument, the shipowner simply does not have an available limitation.

DEANE J: And then say the ship goes to somewhere else that is under the 1957 Convention but not under the 1976 Convention - I mean, it is a passenger ship that goes round - and the same argument is put that the 1957 Convention is a lot more generous - "Why should I be landed?". Does the 1957 Convention apply there to some new fund, or what happens?

MR MacFARLAN: Well, I do not know, I think is the direct answer, Your Honour. I do not think it has been - - -

DEANE J: What all this is leading to, Mr MacFarlan, it just seems to me that if we have to determine these questions ultimately by reference to how these Conventions work under international law, we need to have a little bit of an understanding of what the answer to that sort of question is.

MR MacFARLAN: Well, I do not know that anyone does have a real understanding of that, Your Honour. I do not think that type of situation has been elucidated by relevant authorities and one can guess at answers but unless and until the issue arose - - -

DEANE J: Well, as long as there are not any relevant authorities I suppose that, in its own way, is a good enough answer.

MR MacFARLAN: We can give that some further consideration, Your Honour.

BRENNAN J: There is nothing in that big blue book that was printed at such expense, is there?

MR MacFARLAN: No, well, just about everything is in there, Your Honour, but I do not think that is there. May we give some further thought to whether there are any authorities that might assist, Your Honour, but all that I have in my mind are the American authorities dealing with the related but somewhat different issue. Your Honours, staying with paragraph 10, another aspect of Article 15 that was relied upon by my learned friend was the reference in that Article to the time of invocation. We say that that does not assist one way or the other, it is simply dealing with the procedural aspect or is permitting a State party to deal with the procedural aspect of in what country the rights may be enforced. It is open to a State party to exclude the operation of the Convention in relation to certain people who are not sufficiently connected with the State party and that does not shed any light, we submit, on whether or not this Convention applies in respect of events which have already occurred.

Finally, in relation to this point we refer to Article 9 of the 1976 Convention that speaks of the limits applying "to the aggregate of all claims which arise on any distinct occasion." It contemplates, we submit, that the claims will have arisen at the time of the incident - that is consistent with the submission we put about rights accruing at the time of the incident in question - and the other aspect of it that is relevant is that it appears to speak prospectively in terms of claims arising in the future, and thus in relation to events or incidents occurring in the future.

Your Honours, we then turn to the Master's position - perhaps one thing before I do that. My learned friend mentioned the question of jurisdiction and section 25 of the Admiralty Act. Your Honours, there is no issue between us concerning jurisdiction. I think all parties accept and propound the position that the Federal Court had jurisdiction. My learned friend said there were some problems in founding it on section 25 of the Admiralty Act and referred to an alternative basis which called in aid the cross-vesting legislation.

We would simply wish to say in relation to that alternative basis that it may have problems because the cross-vesting legislation, as we read it, does not operate to vest in a federal court jurisdiction of a State court which has been conferred by a federal law. We just bring that to the Court's attention.

Your Honours, we differ from my learned friend in relation to section 25 of the Admiralty Act. He put on the special leave application, in response to a question from Your Honour Justice Brennan, that the section was badly worded, and that is undoubtedly so. All we can add is that this 1989 Act in section 9(5) is only explicable upon the basis that section 25 of the Admiralty Act does in fact apply to the making of claims such as the present. That 1989 Act in section 9 confers certain jurisdiction on State courts, in subsection (1) and then in subsection (5) says:

This section does not exclude or limit the operation of section 25 of the Admiralty Act -

which, we say, could only be made sense of if it contemplated that that section was relevant to matters of limitation.

Your Honours, it does not seem to advance the argument on retrospectivity one way or the other, and we would emphasise that all parties are ad idem on the existence of jurisdiction and precisely how it comes about we would see as not being of any consequence in this case.

I turn then to the position of the master and deal first with Article 1.4 of 1989 Act schedule, that is the Convention:

Shipowners and salvors.....may limit their liability in accordance with the rules -

and then subrule 4 of Article 1:

If any claims set out in Art.2 are made against any person for whose act, neglect or default the shipowner or salvor is responsible, such person shall be entitled to avail himself of the limitation of liability provided for in this Convention.

If one took those words alone, Your Honours, in our submission they would indicate that the master, or other employees, would be able to limit their liability only to such extent as is permitted to other persons by the Convention. There is nothing in those words to indicate that the master or other employees are to be in a special position where they are not subject to the same qualification as is applicable to the shipowner himself.

Your Honours will recall that the conduct barring limitation provision is Article 4; my learned friend has referred to the word "personal" in that. He relied on it. We rely on it because it is a word that shows that the Article is readily able to apply to someone such as the master. It emphasises that if the owner has been guilty of the sort of conduct described in the Article, that is not going to effect the master's right to limit. It is only his personal conduct which will inhibit his right. But the corollary, of course, is that if he has been guilty of that conduct, he cannot limit, and Your Honours will notice that the type of conduct described in Article 4 is of a very serious kind, either "intent to cause" the loss, or, action "recklessly and with knowledge" that loss would probably result.

Our final submission as to this is that it would be contrary to public policy to contemplate someone limiting liability if that person had personally been guilty of such conduct. Now, we do not put that as an independent principle, but rather as a factor involved in the court's approach to the construction of this Convention, that is, we would say, the court should not be inferring that the Convention was intending that someone guilty of what amounts to quasi criminal conduct would be allowed to limit, and if there is a construction which is consistent with such conduct precluding reliance upon limitation, then that should be adopted.

BRENNAN J: Mr MacFarlan, could I just ask you one other question about section 25 of the Admiralty Act. Am I right in thinking that the jurisdiction that is conferred there on the Federal Court is a jurisdiction to make only one of the three kinds of orders contemplated by Article 15, namely the limitation of liability but not the discharge of a security or the release of a ship?

MR MacFARLAN: It is pointed out to me, Your Honour, that this is 1988 and although it is before the adoption of the 1976 Convention, it may be relevant but that seems to be its effect, yes.

BRENNAN J: It may be quite an appropriate effect because it may be that the courts which have taken the security or arrested the ship might be the appropriate courts to deal with that element.

MR MacFARLAN: I think, Your Honour, the jurisdiction in respect of the 1976 Convention is conferred by the 1989 Act, and my learned junior is referring me to section 9 of the 1989 Act. I am not sure that that last submission was right, Your Honour. I would really need to give that question of jurisdiction a little thought.

BRENNAN J: Perhaps nothing turns on it, but it certainly seems to be a matter of some mercantile and commercial importance that is clouded in obscurity that should be one up on the use of clarity.

MR MacFARLAN: The only thing clear, I think, Your Honour, is that the section is badly worded.

BRENNAN J: Yes.

MR MacFARLAN: Your Honours, those are the submissions we wish to put.

BRENNAN J: Mr Hughes.

MR HUGHES: First of all, Your Honours, may I hand up six copies of our outline, together with another document which we hope will be helpful, which is a chronology of events affecting the second appeal.

BRENNAN J: Thank you.

MR HUGHES: Your Honours, before I embark on the substance of the argument that we wish to put in opposition to the second appeal, there is one matter arising out of my learned friend, Mr Rayment's, submissions to the Court this morning that I ought to mention and deal with. The special case in my appeal is to be found at page 1 and following of the appeal book. The opening paragraph says that:

The Court states a case and reserves a question for the determination of the Full Court of this Court on the basis of the following facts, agreed by the parties -

Then one goes to paragraph 11 which says:

All parties agree that the 1957 Limitation Convention comprised in schedule 6 to the Navigation Act, 1912 applies in respect of the grounding and sinking of the vessel and that Sanko's and Grandslam's application for limitation under it may be pursued notwithstanding the repeal of schedule 6.

That explicit agreement of the parties is referred to in the leading judgment in the Full Federal Court at page 51 below line 20 in the paragraph, which I will not read: "All parties agree", and so on. In other words, His Honour Mr Justice Gummow noted the agreement and it may be presumed that the answer to the only question submitted to the court on the special case in the second appeal was that the judgment was given in the light - or at least expressly conscious of that solemn agreement between the parties.

Now, my learned friend, to put it quite bluntly - and I do not say this in any pejorative sense - wishes to resile from that agreement; an agreement upon the basis of which the Full Court below dealt with the only question submitted to it, which is the question recorded in the stated case at page 4 below line 10 and noticed in the judgment at page 52.

I should add that if one consults the transcript of the argument on the special leave application, this point of the agreement between the parties was specifically and very clearly, if I may say so, adverted to by my learned junior who opposed special leave at page 18. Mr King is recorded as saying, in the middle of the page, "As to the first point" - I will not read it all - but Your Honours will see he specifically drew the Court's attention to the agreement recorded in the stated case. It is, with respect, to be presumed that the Court which granted special leave did so in the light of that agreement, brought specifically to Their Honour's attention, and we submit that if my learned friend wishes to subvert the very agreement recorded in the stated case and notice by this Court on the special leave application, it should only be on the basis that special leave is rescinded.

We submit, with very great respect, that this Court would be loathe to tolerate a withdrawal or an attempted withdrawal from an agreement so solemnly recorded and made.

TOOHEY J: Mr Hughes, how does that bear upon the answer to the question that is asked in the case of your appeal?

MR HUGHES: There is nothing express in the judgment, I readily accept, Your Honour, but the point which I should go on to mention is this - and I think my learned friend, Mr Rayment, has made some mention of it himself - the shipowner wishes to take up the position, and that is evident from the recorded agreement in paragraph 11 of the case, that it is entitled to take the benefit of either Convention at its choice. And, of course, the answer to the question by the Full Court has a vital bearing on that proposition or argument.

TOOHEY J: But if he was precluded by reason of paragraph 11, then there would be nothing for us to think about, would there?

MR HUGHES: No, that is the oddity of the situation.

TOOHEY J: Well, we may as well pack up.

MR HUGHES: We do not recoil from making that polite invitation to Your Honours.

TOOHEY J: I see how the argument bears in relation to the other appeal because there is a specific question asked, but in your appeal the question that is asked does not - certainly expressly does not involve a consideration of paragraph 11, because the answer we are invited to give by Mr Rayment in your appeal is one that is couched in very general terms, apparently with a view to avoiding some sort of dilemma that might arise because of paragraph 11.

MR HUGHES: Well, the position is, and my learned friend was very frank in making some reference to this, that the shipowning interests in the second appeal wish to look, Janus-like, both forwards and backwards, two ways, and claim they are entitled to exercise an option to elect for one Convention or the other at the moment of judgment on the main case.

TOOHEY J: But are these not matter that are presently before Justice Sheppard in the Federal Court?

MR HUGHES: Yes, but so far as the Full Federal Court is concerned, the availability of the 1957 Convention is conceded, and the only basis upon which the question posed in the special case can have any relevance is if the present appellant can somehow exercise an option, on the footing that for the purposes of its case both conventions are in force at the same time, with respect to this casualty.

TOOHEY J: But in the end would you be inviting this Court, by reason of paragraph 11, to reject the appeal?

MR HUGHES: Certainly, as one argument.

GAUDRON J: That is only if we do not rescind special leave, I take it.

MR HUGHES: If Your Honours do not rescind special leave. The attempt to resile from this agreement puts a new complexion on the situation that the Court had to deal with when it decided to grant special leave. I do not want to labour the point but it does seem, Your Honours may think and we submit, the case warrants careful evaluation of the question whether special leave should be continued.

BRENNAN J: How does it affect the question of law that we would have to determine?

MR HUGHES: It does not affect the question of law but it operates as a Convention between the parties to this appeal.

GAUDRON J: But does it not affect the question of law because there is not the assumption on which Mr Rayment's argument was based that there is simply no operative effect available for the 1957 Convention at all?

MR HUGHES: It affects the question of law in that sense in a very real way, and that is perhaps my second point.

GAUDRON J: Which is an entirely different case from the one that you met below.

MR HUGHES: Yes. In any event, Your Honours, I state the position and I put my submission and of course it is entirely a matter within the discretion of the Court.

BRENNAN J: Your application has been made.

MR HUGHES: Yes.

BRENNAN J: It would be convenient, however, if you were to continue to put the rest of your argument on the assumption that the application is unsuccessful.

MR HUGHES: Yes, Your Honour. Now, Your Honours, proceeding on that footing, there is a critical factual distinction with, we submit, important legal consequences, between my client's case and the case of the other appellant and that is, as we notice in paragraph 1 of our outline, the shipowning interests commenced limitation proceedings under the 1957 Convention within a couple of weeks of the casualty. It appears from the - - -

DEANE J: Am I right, Mr Hughes, that putting to one side the supportive comments of Mr MacFarlan's argument which you make, your argument only comes into play if Mr Rayment's argument succeeds in terms of question 1 in the other case?

MR HUGHES: Yes, Your Honour. Your Honours will notice from the chronology that the limitation proceedings were commenced on 4 March 1991. Sumitomo, that is the respondent to this appeal, put on its defence and cross-claim - that is defence to the limitation claim and cross-claim alleging negligence, breach of contract - on 19 August. The shipowning interests filed their defence to the cross-claim on 30 September. The hearing before Mr Justice Sheppard commenced on 30 August - I think that must be wrong, the defence must have been filed before the hearing.

BRENNAN J: The following year.

MR HUGHES: I am sorry, 1992, and then there was an amended defence to the cargo interests cross-claim of negligence and breach of contract which raised for the first time, on 21 0ctober 1992, a claim for limitation of liability under the 1976 Convention.

In our submission, the correct legal analysis of the respective rights of the parties at the time of the occurrence of the casualty - the grounding and sinking - was this, assuming negligence or breach of contract on the part of the shipowning interests, one, the cargo interests had a cause of action for damages under the general law qualified only by reference to the provision in the 1957 Convention which entitled the shipowner to limit liability if it could prove the onus lying on it that the occurrence giving rise to the loss occurred without the shipowner's actual fault or privity.

That position, so far as limitation of liability was concerned, was solidified when on 4 March the shipowner invoked the 1957 Convention by instituting the limitation proceedings.

DAWSON J: I am not sure what you mean by solidified, Mr Hughes.

MR HUGHES: We say there was a right that accrued to the cargo interests on the occurrence of the accident. That was a right in terms that I have endeavoured to define. The only effect of the commencement of the proceedings - limitation proceedings under the 1957 Convention - was that the shipowner was asserting his qualified right which existed at the time of the occurrence to limit liability if he could discharge his burden of proof.

DAWSON J: He exercised an option, as it were.

MR HUGHES: He had an exercisable right which he exercised. That is perhaps why I used the word, solidified. He exercised the option so that became his relevant right, at latest when the limitation proceedings were commenced in March 1991. That is the way we would put it.

DAWSON J: It modified your right and the right that you have is one modified by the claim for a limitation of liability.

MR HUGHES: If successful it would modify our right. But if one adopts that analysis, which I would submit with respect is the correct one, then there were rights and liabilities which accrued at latest in March 1991 when the limitation provisions of 1957 were invoked. In that situation, one comes to consider the possible application or non-application of the 1976 Convention. If the 1976 Convention operates to define the respective rights and obligations of the contending parties, Your Honours, a very different picture of rights and correlative obligations would emerge. Under the 1976 Convention the shipowner, at latest when proceedings be commenced to invoke the 1976 limitations, would have - or to put it better, the shipowner had a right of a very different and less and more beneficial kind to it than the right that it had under the 1957 Convention because, under the 1976 Convention, the onus of proving the exempting conditions, namely recklessness or intentional causing of loss, the onus of negating those factors lay fairly and squarely on the cargo interests. In other words, the shipowner had an unqualified right to limitation under the 1976 Convention unless the cargo interests could displace it by proof of the matters that lay upon the cargo interests under Article 4.

TOOHEY J: I must confess, Mr Hughes, that I just have some difficulty with the notion of rights in the shipowner. I know the expression has been used throughout the hearing and it is to be found in judgments of courts, but it is one thing to talk about the right of the person who suffered injury or loss, but it just jars a little to talk about the rights of the person who is being sued to limit liability. It may not make any difference in the end.

MR HUGHES: Your Honour means the right of the shipowner to limit liability, so-called, whether that is a right or a privilege or an option.

TOOHEY J: Yes, whether that is a right or a privilege or an immunity or something of that sort.

MR HUGHES: Well, viewing the problem from that perspective, the important factor, I submit, is that when this casualty occurred my clients had a right to damages under the general law unless the shipowner could discharge a burden of proof, and that was a valuable right and it is easier, perhaps - bearing, however, in mind, what Your Honour has just said - to characterise the shipowner's opportunity, option, call it what you will, as a right under the 1976 Convention because his right to limitation has to be displaced.

TOOHEY J: Yes, it has to be invoked and displaced.

MR HUGHES: And displaced.

TOOHEY J: Yes, I see that.

MR HUGHES: So that if one is comparing the relevant operation of the two conventions, it must follow, in my respectful submission, that if the 1976 Convention were given operation in respect of this February 1991 occurrence, the cargo interests would be losing rights or a right that they had under the 1957 Convention.

Now, what consequence, one asks, flows from that? There are several. In the way we wish to present the argument - and I hope we have made it clear enough in our outline - we say there are three strands of sub-argument that coalesce, without contradiction or tension, to reach the ultimate conclusion for which we contend and which the Full Federal Court reached. There is the argument based upon the common law principle expounded in cases such as Maxwell v Murphy, Fisher v Hebburn, to name but two, that, as a general rule, in the absence of an indication of contrary legislative intent, a statute will not be construed so as to attach new legal consequences to acts and events that antedated its coming into operation; that is the Maxwell v Murphy principle.

TOOHEY J: But what role is the common law to have in this situation, given as I understood Mr Rayment to acknowledge, that a right existed which section 8 of the Acts Interpretation Act would preserve, subject only to a contrary intention being found in the later legislation.

Now, what consequence, one asks, flows from that? There are several. In the way we wish to present the argument - and I hope we have made it clear enough in our outline - we say there are three strands of sub-argument that coalesce, without contradiction or tension, to reach the ultimate conclusion for which we contend and which the Full Federal Court reached. There is the argument based upon the common law principle expounded in cases such as Maxwell v Murphy, Fisher v Hebburn, to name but two, that, as a general rule, in the absence of an indication of contrary legislative intent, a statute will not be construed so as to attach new legal consequences to acts and events that antedated its coming into operation; that is the Maxwell v Murphy principle.

TOOHEY J: But what role is the common law to have in this situation, given as I understood Mr Rayment to acknowledge, that a right existed which section 8 of the Acts Interpretation Act would preserve, subject only to a contrary intention being found in the later legislation.

BRENNAN J: Yes, it is a substantive right that a party who is liable, absent the right, to suffer a judgment in damages against him, may seek to enforce. His Honour goes on to say:

A limitation decree operates upon claims that have passed into judgment as well as upon those that rest upon the original cause of action.

Now, your argument, as I understand it, is that everything was consolidated on the issue of the process for a limitation decree under the 1957 - - -

MR HUGHES: Only in the sense that if it be right to say that up to that point of time there was only an option for the shipowner, he exercised the option.

BRENNAN J: Yes.

MR HUGHES: He exercised the option by availing himself of his right and, thereafter until well into the hearing, the case was fought on that basis.

BRENNAN J: It really comes down to this, does it not, that you identify the right as something which is possessed ab initio from the occurrence itself. And there is only one right, and it does not change. It does not change when the 1957 Convention ceases and the 1976 comes in.

MR HUGHES: That is so, Your Honour, yes.

BRENNAN J: The real point at issue then is whether it is a right, the nature of which is thus to be understood, or whether it is a right which is to be understood in terms of something which arises uno flatu with the conferring of the right to apply.

MR HUGHES: I am not trying to escape the question, but even if the shipowner's right to limitation arose uno flatu when it applied, it so happened in this case that it did while the 1957 Convention was in force, and that had a reciprocal effect as it were on the cargo owner's right which accrued to it on the occurrence of the loss and was conditionally modified when the shipowner availed himself of his right in March 1991 to seek limitation.

That situation, we say, is one that falls squarely within the Maxwell v Murphy principle and falls squarely within section 8 of the Acts Interpretation Act. That is section 8:

Where an Act repeals in the whole or in part a former Act, then unless the contrary intention appears the repeal shall not:

(b) affect the previous operation of any Act so repealed, or anything duly done or suffered under any Act so repealed.

On my attempted analysis of the respective rights, section 8(b) applies, absent a contrary intention appearing in the 1989 legislation. We would also say (c) applies. It reads that unless the contrary intention appears the repeal shall not:

(c) affect any right privilege obligation or liability acquired, accrued or incurred under any Act so repealed.

Looking at it from the cargo owner's viewpoint, the effect of the repeal - if the 1976 Convention were allowed to take over in respect of this loss - would be that the cargo owner's obligation or liability, which is a very conditional one under the 1957 Convention, would be affected by the enlargement purportedly pursuant to the 1976 Convention of the shipowner's limitation entitlement.

BRENNAN J: Is this a convenient time, Mr Hughes.

MR HUGHES: Yes, Your Honour.

BRENNAN J: We will adjourn until 10.15 tomorrow morning.

AT 4.17 PM THE MATTER WAS ADJOURNED

UNTIL WEDNESDAY 9 NOVEMBER 1994