This was an appeal from, among others, Victrawl Pty Ltd v AOTC Ltd (CMI722). On 13 April 1991, the fishing vessel Lorna Dorn owned by Victrawl Pty Ltd (Victrawl) collided with a cable owned by Telstra Corp Ltd (Telstra). Victrawl did not admit liability, but nonetheless sought to constitute a limitation fund under the LLMC 1976, which would become law in Australia through the enactment of the Limitation of Liability for Maritime Claims Act 1989 (Cth) (the LLMC Act) on 1 June 1991. Telstra disputed Victrawl's right to limit under the LLMC 1976.

The issue was that the LLMC 1976 was only set to enter into force in Australia on 1 June 1991, alongside the domestic legislation enacting it. That date fell after the incident occurred. If the LLMC 1976 was held not to be applicable, the LLMC 1957 would be applicable instead.

Held: Appeal dismissed by the majority. The appellant was precluded from relying on the LLMC 1976 since it was not in force for Australia when the incident occurred.

It was a practical matter that neither the LLMC 1976 nor the LLMC Act were in force when the incident occurred. The Brussels Convention, or the LLMC 1957, had also not yet been denounced by Australia and so remained in force. The LLMC 1957 was incorporated into Australian law through the Navigation Act 1912 (Cth). Moreover, State and Territory Supreme Courts had the jurisdiction to hear matters relating to limitation of liability under the LLMC 1957 when the incident occurred under s 335(1) of the Navigation Act 1912 (Cth). The Federal Court's jurisdiction to hear questions relating to limitation of liability was drawn from s 25(1) of the Admiralty Act 1988 (Cth). The reference in s 25 of that Act to 'a claim for compensation under a law' contemplated claims under both the LLMC 1957 and LLMC 1976, once the LLMC Act was amended to adjust to the newer Convention. That 'law' did not have to be a law giving effect to a Convention, but could be a law defining or qualifying types of claims against a limitation fund.

The majority turned to considering whether, since the LLMC 1976 was prima facie inapplicable to the incident in this case, s 6 of the LLMC Act had a retrospective operation. If so, Victrawl might still be able to constitute a limitation fund under the LLMC 1976. However, would the retrospective application of s 6 impact on pre-existing substantive rights or liabilities? The majority affirmed that it would.

The two Conventions were very similar, each describing the circumstances in which a limitation fund could be created, restraining claimants from targeting other assets and assisting shipowners in resisting the arrest of their vessels. Neither Convention provided a means of claiming compensation, but instead clarified the sources of claims and defined limitation limits according to tonnage, and so on.

One important difference between the two Conventions was that the LLMC 1957 did not allow shipowners to limit where an incident resulted from their 'actual fault or privity'. The size of limitation funds was also much larger in the more recent Convention. These differences alone were a significant departure from the previous Convention and meant that the law surrounding limitation funds in Australia would be massively reformed once the LLMC Act became law, affecting substantive pre-existing rights and liabilities. The right to limit, in itself, was a substantive statutory right, which impacted on the substantive rights of claimants.

This conclusion led the majority to find that s 6 of the LLMC Act should not be read retrospectively in the absence of an express intention on the part of the legislature or out of necessity. The impact on substantive rights and liabilities enforced the importance of reading statutes as prima facie having a prospective application. Further, art 28 of the Vienna Convention on the Law of Treaties 1969 (VCLT) states that an international treaty must not be applied to events occurring prior to the treaty's enactment for the relevant State. The majority noted that the VCLT was not in force when the LLMC 1976 was settled. However, it was an important source of many rules of customary international law including that relating to retrospective treaty application. Based on this rule, described in art 28, the LLMC 1976 could not be applicable to an incident occurring prior to it entering into force for Australia.

Articles 15.1, 17.3 and 17.4 of the LLMC 1976 offered bare hints regarding the drafters' intentions for the Convention to apply retrospectively, but there was nothing concrete in them. Neither did the Convention's objectives or the context surrounding it, beyond updating the previous LLMC 1957 for those States that would become party to it, suggest that it would cover events occurring prior to it entering into force.

Nor was there any clear reason to read the LLMC Act as applying retrospectively and overpowering the common law presumption against retrospectivity, or anything in it that encouraged a different reading to that applied to the LLMC 1976. If the LLMC Act provided that the LLMC 1976 was to be read retrospectively, that would directly contradict the VCLT and customary international law.

Therefore the LLMC 1957, and not the LLMC 1976, applied to the incident that occurred on 13 April 1991.

Brennan J, dissenting: His Honour referred to the history of the LLMC 1957 and LLMC 1976, and the purpose of these Conventions in standardising rules of limitation, protecting shipowners and their servants, as well as protecting the interests of claimants by increasing the chances of their claim being met. Article 15.1 of the LLMC 1976 explains the circumstances when State Parties must apply the Convention in the State's courts, but does not explain exactly how either the LLMC 1957 or LLMC 1976 should be applied prior to the LLMC 1976's commencement date on 1 June 1991, or any other date for any other State. From its entering into force, the LLMC 1976 would be the relevant limitation Convention for any party to it and the LLMC 1957 would have no further relevance.

Brennan J was of the opinion that it would be nonsensical and at odds with art 17.4 of the LLMC 1976 (which abrogates the LLMC 1924/1957 for all States party to the LLMC 1976, at least between those States) to continue applying the LLMC 1957 after 1 June 1991. Australia should apply the LLMC 1976 from the moment it became bound by it, to fulfil its obligations.

The date that an incident occurred was irrelevant. It would be difficult for parties to the Convention to fulfil their obligations in tandem if their application of the Convention depended on whether the incident happened before or after the LLMC 1976 came into force. If that were so, then it would be possible for one State Party to be obliged to release a ship in accordance with the constitution of a limitation fund under the LLMC 1976, while another State Party, which was also bound by the LLMC 1976, would be obliged to release a ship after a limitation fund has been constituted under the LLMC 1957. That would be anomalous.

LLMC 1976, arts 1 and 2 operate regardless of when an incident has happened. This Convention governed the making of all limitation decrees and the constitution of all limitation funds after 1 June 1991, thus it should be applied, regardless of the fact that the LLMC Act had no retrospective effect. Victrawl was entitled to take advantage of the LLMC 1976 and was precluded from relying on the LLMC 1957.

Brennan J also briefly considered the situation of Coulston, who was skippering the vessel when it collided with Telstra's cable, and concluded that as a shipowner's servant, Coulston had the right to avail himself of Victrawl's limitation fund constituted through the LLMC 1976. This was according to art 1.4 of the LLMC 1976.