Opinion Number. 1100

Subject

NAVIGATION AND SHIPPING WHETHER CARGO INCLUDES FREIGHT WHICH IS PROPERTY OF SHIPOWNER

Key Legislation

NAVIGATION ACT 1912, ss. 7, 423

Date
Client
The Comptroller-General of Customs

The Comptroller-General of Customs has forwarded me the following memorandum for advice:

The question has arisen as to whether an unlicensed ship can carry, between Commonwealth ports, goods the bona fide property of the shipowner without such constituting engagement in the coasting trade; in other words, as to whether the goods referred to are to be regarded as 'cargo' within the meaning of section 7 of the Navigation Act.

A case in point is that of the vessels owned by the Broken Hill Proprietary, which convey coal, the property of the Company, from Newcastle to South Australia, and return to Newcastle with iron ore from the Company's mines in that State.

I shall be glad if the Solicitor-General will be so good as to give a ruling in the matter as early as possible.

Section 7 of the Navigation Act 1912-1920 supplies a test for the determination of the question whether a particular ship is engaging in the coasting trade. If the ship does so engage the master owner and agent are required to satisfy certain requirements of the Act as to manning, accommodation and wages of the officers and seamen employed on the ship.

Part of the test is whether the ship takes on board cargo at one port in the Commonwealth for carriage to and delivery at another port in the Commonwealth.

The meaning of the word cargo is the freight or lading of a ship. The fact that the freight or lading is the property of the shipowner does not exclude it from the category of cargo. The necessity of compliance with the coasting trade provisions of the Act by ships carrying cargoes owned by the shipowner is not less than in the case of ships carrying goods for hire.

The Governor-General has power under section 423 to declare that the provisions of the Act shall not apply to 'vessels not carrying passengers or goods for hire'. In the absence of such an order it would appear that ships carrying goods which are not carried for hire are subject to the Act.

I am unable to find any authority for the proposition that cargo not carried for payment is not covered by the word 'cargo' in section 7. Such a view would, in my opinion, defeat the intention of the Act as regards any vessel of the class referred to in the above memorandum.

[Vol. 17, p. 420]