The Blue Anchor Line steamers were known for their prominent upright funnels and hulls with hardly any sheer. This pattern of design was not overtly problematic in the steamers, including Geelong, with minimal top hamper. Then along came Waratah, hull based on Geelong's.
Firstly the funnel would have contributed to top heaviness and enhanced broadside wind force, which was noted when Waratah held in a list to leeward. A practical adjustment could have been made after the maiden voyage, but there again, a reduced funnel would have diluted the image gravitas of the flagship.
The sheer is a measure of longitudinal main deck curvature, in naval architecture. The sheer forward is usually twice that of sheer aft. Increases in the rise of the sheer forward and aft builds volume into the hull, and in turn increases its buoyancy forward and aft, thereby keeping the ends from diving into an oncoming wave and slowing the ship. In the early days of sail, one discussed a hull's sheer in terms of how much "Hang" it had. William Sutherland's The Ship-builders Assistant (1711) covers this information in more detail.
The practice of building sheer into a ship dates back to the era of small sailing ships. These vessels were built with the decks curving upwards at the bow and stern in order to increase stability by preventing the ship from pitching up and down.
Sheer on exposed decks makes a ship more seaworthy by raising the deck at fore and aft ends further from the water and by reducing the volume of water coming on deck.
There is no doubt just by looking at profile images of the Waratah that she had limited sheer. I don't even have to go into any details. The claims by Mr Richardson et al that Waratah had a tendency to plough through oncoming swells, often taking seas over her decks, even in calm weather, prove the above and further enhance my belief that with her reduced freeboard, Waratah displayed the characteristic features of reduced buoyancy.
I believe this settles the issue.