In our edition of 22 October 2009, we reported on the decision
of Justice Finkelstein in the Federal Court of Australia dealing
with certain issues under the Convention on Limitation of Liability
for Maritime Claims 1976. These arose from the damage caused in
December 2008 in Port Phillip Bay, Melbourne, when the container
ship 'APL Sydney' dragged an anchor during heavy weather
and damaged a submarine pipeline carrying gas from one side of Port
Phillip Bay to the other. In our note, we mentioned that Justice
Rares of the Federal Court was considering some other interesting
points arising out of the Convention. His Honour has now handed
down an 81 page judgment in the case of Strong Wise Limited v
Esso Australia Resources Pty Ltd  FCA 240.
The issue before Justice Rares was whether for the purpose of
the Convention, the owners of the 'APL Sydney' could limit
liability on the basis that there was only one incident (as the
ship owners maintained), or whether there were actually four
separate incidents (as argued by the owners of the pipeline). In
the end, his Honour reached what might be described as a neat
compromise by determining that there were actually two separate
incidents, thus requiring the ship owners to establish two separate
The four separate incidents asserted by the pipeline owners were
The ship's anchor fouling the pipeline.
The order to manoeuvre astern shortly after the fouling.
The actual rupturing of the pipeline about half an hour later
when the ship sought to move ahead.
Further bending of the pipeline some six or eight minutes after
the rupture of the pipeline.
Justice Rares observed that under Article 9 of the Convention,
the limits of liability were to apply to the aggregate of 'all
claims which arise on any distinct occasion'. After going
through the background to the Convention and after reviewing much
authority, both in the maritime and non maritime areas, he
'I am of opinion that a claim
arises on a distinct occasion within the meaning of the
Convention in the following way. Where a single act, neglect or
default of a shipowner places him in such a relationship that, as a
matter of commonsense, it is a cause of loss or damagesuffered by a
third party, that third party will have a claim under Art 2 of the
Convention. And, such a claim will be caused by an
occurrence and, if so, will arise on that distinct occasion for the
purposes of Arts 6, 7, 9 and 11.'
Justice Rares continued by stating that where a subsequent act,
neglect or default of the same ship owner separately operates to
cause different or separately identifiable loss or damage to the
same third party or others, then a new claim or claims will arise
on that later distinct occasion. This occasion is distinct because
firstly, there is a new event, secondly there is new loss or damage
and thirdly, the new cause is, as a matter of commonsense, not a
necessary or inseparable consequence of the earlier act, negligent
or default. He therefore concluded that whether one occasion is
distinct from another will depend upon whether the causes of the
claims that arise from each act, negligent or default are
sufficiently discrete that, as a matter of commonsense,they can be
said to be distinct from one another.
After detailed consideration of a substantial body of evidence,
including much expert evidence, Justice Rares concluded that while
the first distinct occasion was thefouling of the pipeline, the
ordering astern of the ship after the fouling was truly part of the
first occasion, and therefore did not amount to a distinct
occasion. While he then went on to conclude that the fracturing of
the pipeline sometime later when the ship began to manoeuvre ahead
was indeed a separate occasion, thus amounting to a second
incident, he was not satisfied that the further bending of the
pipeline a short time after the fracturing was a separate and
distinct occasion. His Honour expressed his view by saying that the
first distinct occasion was the chain of events leading to and
immediately following the anchor fouling the pipeline and that the
second distinct occasion was the chain of events leading to and
immediately following the rupture of the pipeline.
If we may say so from the sidelines, Justice Rares' decision
appears to be a very commonsense one. That having been said, and in
view of the apparently substantial sums involved, we will not be
surprised if both parties appeal, the ship owners to maintain that
there was only one distinct occasion and the pipeline owners to
maintain that there were four.
For more information, please contact:
Ron Salter, Consultant
DLA Phillips Fox is one of the largest legal firms in
Australasia and a member of DLA Piper Group, an alliance of
independent legal practices. It is a separate and distinct legal
entity. For more information visit
This publication is intended as a first point of reference and
should not be relied on as a substitute for professional advice.
Specialist legal advice should always be sought in relation to any
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