Tort Law Update - Commonwealth seeks $120m in damages over Barrier Reef Oil Spill

Tort Law
Martin Scott Headshot
The Chinese coal carrier, Shen Neng 1
The Chinese coal carrier, Shen Neng 1

The Facts

On 3 April 2010, the 36,575 tonnes bulk carrier Shen Neng 1 carrying a full cargo of coal steamed engine ahead into Douglas Shoal in the Great Barrier Reef Marine Park and grounded.

The grounding was due to the admitted negligent navigation of the Chief Officer. In the 8.5 days between the initial grounding and the successful refloat, the ship passed over more than 40ha of the Douglas Shoal and she grounded on numerous occasions.  In terms of grounding footprint, this was the world’s largest ship grounding.

In the nine or so hours immediately after the grounding, the Master unsuccessfully attempted to anchor the vessel to arrest her movement and he unsuccessfully attempted to refloat the vessel.

The physical impact of the groundings and the dragging of the anchor smashed, crushed and flattened the benthic communities and substrate and created extensive rubble beds which significantly changed the topography of the Douglas Shoal.  The groundings also scraped anti-fouling paint from the ship’s hull which contained tributyltin (TBT) and other chemicals.  As a direct result of the groundings, the Shoal became contaminated with chemicals, in particular TBT, and required remediation.

The Commonwealth Case

The Commonwealth brought an action in damages for the cost of remediation against the shipowner in the Federal Court in Brisbane.  The case proceeded to trial in Brisbane in September 2016.

The shipowner (a) disputed that it was liable for the negligence of the Chief Officer and for the want of seamanship of the Master; (b) disputed there was damage to the Douglas Shoal, (c) disputed that the Commonwealth suffered loss and damage or had standing to bring action, (d) contended that the “manner” of remediation proposed by the Commonwealth was unreasonable, (e) contended the Commonwealth has failed to mitigate its loss by not remediating the Shoal promptly after August 2010, and also (f) claimed a right under the Limitation of Liability for Maritime Claims Act 1989 (Cth) to limit its liability on the basis that any damage arose from the initial grounding as a single distinct occasion.

Substantive Legal Issues

(a) navigational i.e. whether the following were separate wants of seamanship for the purposes of the limitation convention:

  •      the anchoring of the vessel following the initial grounding; and
  •      the decision taken to attempt to refloat the vessel by heaving the anchor, notwithstanding the engine was disabled;

(b) whether the Commonwealth’s remediation proposal was reasonable i.e. removing excessive rubble and removing contaminated paint;

(c) whether the shipowner was liable, directly or vicariously, for the acts and omissions of the Chief Officer and the Master; and

(d) whether the Commonwealth had sufficient standing to bring action through its assertion of sovereignty in the Seas and Submerged Lands Act  1973 (Cth).

Martin Scott QC appeared for the Commonwealth.  He also appeared in the leading Australian decision on the Limitation of Liability for Maritime Claims Act 1989 (Cth) Strong Wise Ltd v. Esso Australia Resources Pty Ltd [2010] FCA 240; 267 ALR 249, [2010] FCA 575.

Martin Scott Headshot

Martin Scott KC specialises in large project disputes in shipping and transport, civil engineering and energy infrastructure.

Share on