Court confirms Australia's treaty reservation excludes wreck removal claims from cap
The High Court on May 13, 2026 unanimously dismissed a shipowner's appeal seeking to limit liability for approximately $17.2 million in wreck removal and hydrocarbon clean-up costs.
In CSL Australia Pty Ltd v Tasmanian Ports Corporation Pty Ltd [2026] HCA 15, the court confirmed that Australia's reservation under the 1976 Convention on Limitation of Liability for Maritime Claims excludes wreck removal claims entirely from the statutory liability cap, even where those claims could also be characterised as property damage claims.
The dispute arose after the MV Goliath, a bulk cement carrier, crashed into two tugs and the wharf at which the tugs were moored in the Port of Devonport, Tasmania, in 2022. The tugs sank causing diesel fuel and other hydrocarbons to escape into the Mersey River. Tasmanian Ports Corporation Pty Ltd (TasPorts), which owned and operated the tugs and the wharf, sued CSL Australia Pty Ltd (CSL), the owner and operator of the Goliath, for damages.
One claim, referred to in the courts below as the "para 22(e) claims", was for about $17,245,743 for "costs of and associated with the containment, removal and disposal of hydrocarbons, and the removal and disposal of the [t]ugs". CSL argued it could cap its exposure under the Convention, which has the force of law in Australia through s 6 of the Limitation of Liability for Maritime Claims Act 1989 (Cth).
Section 6 provides that "the provisions of the [1976 Convention], other than paragraphs 1(d) and (e) of Article 2, have the force of law in Australia". Australia exercised its right under art 18(1) to exclude those provisions, which deal with claims for wreck removal and removal of cargo.
CSL argued the carve-out did not matter because TasPorts' claim also fell within art 2(1)(a), which covers claims for loss of or damage to property occurring in direct connection with the operation of the ship. TasPorts countered that once a claim fell within the excluded art 2(1)(d), it was excluded from art 2 altogether.
The primary judge in the Federal Court held that the para 22(e) claims, being within art 2(1)(a), were limitable irrespective of also falling within the disapplied art 2(1)(d). The Full Court (Burley, Sarah C Derrington, and O'Sullivan JJ) allowed TasPorts' appeal, and the High Court agreed.
Chief Justice Gageler and Justices Gleeson and Jagot held that art 18(1) gave each state party the right to "exclude the application of Article 2, paragraphs 1(d) and (e)" in their entirety. The plurality used the phrase "unspoken gloss" in rejecting CSL's submission that a contrary construction would create a "perverse" incentive favouring ships that sink over those that do not.
Justices Gordon and Edelman, in separate reasons reaching the same result, confirmed the reservation operates "on an all or nothing basis", such that any claim falling within those sub-paragraphs is not limitable at all under the 1976 Convention.
The court aligned Australian law with the Hong Kong Court of Final Appeal's decision in Perusahaan Perseroan (Persero) PT Pertamina v Trevaskis Ltd ("The Star Centurion") and two unanimous decisions of the Supreme Court of the Netherlands. The Full Court had noted, and the High Court endorsed, that comity is "of especial importance" in maritime law because "it is not the law of any one nation, but is developed separately from, and independently of, national laws".
The High Court also considered the UK Supreme Court's decision in MSC Mediterranean Shipping Co SA v Conti 11 Container Schiffahrts-GmbH & Co KG MS ("The Flaminia"), finding it did not assist CSL because that case did not involve a state's exercise of the art 18(1) reservation.
The plurality observed that the state parties, in negotiating the 1976 Convention, "provided for the inclusion of Art 18(1)", and that effect must be given to the terms of the exercise of the right in accordance with the text of that article.
The High Court dismissed the appeal with costs.
