Opinion Number. 1122



Key Legislation

CONSTITUTION, ss. 51 (i), 98: NAVIGATION ACT 1912, s. 2

The Comptroller-General of Customs

The Comptroller-General of Customs forwards the following memorandum for advice:

From a perusal of the text of the judgment of the High Court in the recent case, Commonwealth ats. Newcastle and Hunter River Steamship Co. Ltd(1), it would appear that whilst the judgment, being limited to the pleadings, was given in favour of the shipping companies, it is nevertheless substantially a victory for the Commonwealth.

As understood, the judgment, in so far as it relates to the application of the manning, accommodation, and licensing provisions of the Navigation Act to intra-State shipping, is that none of those provisions apply to vessels engaged solely in the domestic trade of a State, but that vessels are not solely engaged in such trade, even although carrying goods only between ports in the same State, if they are used to carry goods consigned through to another State, but are in such case engaged or used for the purpose of interstate trade.

The corollary of this ruling appears to be if an intra-State ship in any voyage between ports, carries (a) goods destined for interstate transfer or exportation, or (b) imported goods either trans-shipped from another vessel or re-shipped, ex warehouse or store, in the original packages as imported, it becomes by that act engaged in the interstate or foreign trade of the Commonwealth, and consequently comes within the ambit of Commonwealth jurisdiction.

In this view of the matter, practically all the larger sea-going intra-State ships will remain subject to the provisions of the Navigation Act, as it is understood that, with few exceptions, they carry, on almost every voyage they make, goods either intended for other States or for exportation overseas, or brought from other countries by overseas ships and transferred to the coasting ships either directly from the wharf or ex warehouse. In the State of Victoria, for example, the Courier and Edina, trading between Melbourne and Geelong, and the Casino, running to Warrnambool, all carry goods, either 'Under Bond' or cleared through the Customs, and trans-shipped directly from the incoming oversea vessels. In Tasmania, a fleet of intra-State traders brings apples from the districts surrounding Hobart directly alongside the larger steamships which convey the fruit overseas or to other States. In New South Wales, local traders bring butter from Byron Bay, timber from Northern Rivers ports, and coal for bunkering purposes from Newcastle, all intended for export or interstate transfer, and mostly taking to those outports, on their return voyages, goods from other States or foreign countries. These remarks apply with equal force to vessels trading within State limits in Queensland, South Australia, and Western Australia.

It would seem, therefore, that the High Court judgment, while it exempts from the operation of the Navigation Act vessels engaged exclusively in the domestic trade of a State, leaves unimpaired the application of that Act to the more important sea-going intra-State vessels.

It is desired, if possible, to lay down, for the guidance of officers and the information of the public the general principles, deduced from the judgment of the High Court, governing the application of the Navigation Act to intra-State shipping. The following draft, setting out these principles in the form of two general propositions, has been prepared for the purpose, and is submitted for consideration and comment:

  1. All ships, with their masters and crews, engaged in the transportation between ports in the Commonwealth of articles of interstate or foreign trade, are subject to Federal control, and unless specifically exempted therefrom, come under all provisions of the Navigation Act purporting to apply to such ships; and
  2. Goods become and remain articles of interstate or foreign trade from the moment when, in the case of goods for export or interstate transfer, they are delivered to the first common carrier for exportation or transfer, and, in the case of goods imported into a State, until they either pass, in the original package, into the hand of a purchaser from the importer, or are broken up for retail by the latter. The fact that shipment and trans-shipment, or trans-shipment and delivery (as the case may be) may both be effected in the one State, does not break the Federal control.

I shall be glad if the Solicitor-General will be good enough to favour me with his comments and advice in the matter. As there is considerable confusion in the minds of shipowners as to the effect of the judgment, and as a number of matters are calling for decision and settlement, an early reply would be much appreciated.

The decision of the High Court as to the invalidity of the manning and accommodation provisions of the Navigation Act as regards intra-State ships is expressed to apply to those ships only when engaged solely in the domestic trade of a State.

The Court points out that a ship may be engaged in interstate or foreign trade though only plying between ports of a State; but as regards such ships it decides nothing.

It is, therefore, impossible to deduce from the judgment of the Court any set of rules as to the facts and circumstances which constitute, in the case of an intra-state ship, engaging in trade with other countries or among the States'.

Such rules may be tentatively formulated on the basis of general principles and the application of American and other cases; but this decision of the High Court does not give any basis for their formulation. Whether the elaborate American decisions as to original packages, and the beginning and end of interstate transport, would be followed in their entirety by the High Court is a matter of speculation.

Under the circumstances, I would suggest that it would be better not to attempt to specify what is or what is not interstate and foreign trade, and to limit any official pronouncement to proposition (a) as drafted, omitting proposition (b).

[Vol. 18, p. 5]

(1)Newcastle and Hunter River Steamship Co. Ltd v. Attorney-General for the Commonwealth 29 C.L.R . 357.