If she were flooding (beyond the capabilities of the bilge pumps) for whatever reason, stability would have been lost based on:
An increase in the centre of buoyancy, and the loss of water plane area - thus a loss of the water plane moment of inertia - decreasing the metacentric height and pushing her to the point of vanishing stability where she would roll over.
This additional mass would also have reduced freeboard (distance from water to the deck) and the ship's angle of downflooding (minimum angle of heel at which water will be able to flow into the hull).
Note that Waratah's freeboard was significantly lower than other vessels of her size.
The range of positive stability would thus have been reduced to the angle of down flooding resulting in a reduced righting lever.
When a vessel is inclined, the fluid in the flooded volume will move to the lower side, shifting its centre of gravity toward the list, further extending the heeling force. This is known as the free surface effect.
In tanks or spaces that are partially filled with fluid (ballast water or flooded watertight compartments), as the tank or space is inclined the surface of the liquid, or semi-fluid, stays level. This results in a displacement of the centre of gravity of the tank or space relative to the overall centre of gravity.
The effect is similar to that of carrying a large flat tray of water. When an edge is tipped, the water rushes to that side, which exacerbates the tip even further.
This is of significance in ballast tanks and in flooded or partially flooded compartments of damaged ships.
If the Waratah had been taking on water due to fractures in the hull (snapped rivets, cracked seams or coal fire damage), this accumulating water would have had a significantly negative impact on her metacentric height and angle of list.
Flooded watertight compartments would have trapped water on one side of the Waratah causing her to list dangerously (as in the case of the Princess of Ireland).
It is ironic to think that watertight compartments designed to keep vessels afloat could in effect be the cause of the vessel's demise.