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

In a recent judgment⁽¹⁾ the High Court ruled that certain provisions of the Navigation Act drawn to apply to ships registered in Australia or engaged in the coasting trade were not applicable to ships wholly employed in the domestic trade of a State.

A serious difficulty has now arisen as regards the application of those provisions to ships engaged at one time in the intra-State and at another in the inter-State trade. The following is given as an example of the class of vessel mentioned. The s.s. ⁽²⁾ trades during the sugar season exclusively between ports on the Queensland coast, carrying, the one way, raw sugar from the mills to the refineries and, on the return trips, fertilisers, foodstuffs, stores etc. of local production. During such time, it would appear, the vessel may be regarded as employed exclusively in the domestic trade of a State (Queensland). At the close of the sugar season, the vessel proceeds to Sydney, an inter-State voyage, taking general cargo. The vessel may then be commissioned to bring several cargoes of coal from Newcastle to Sydney, in intra-State service. Then, carrying general cargo from Sydney, she is dispatched to Fremantle (inter-State), and from that port as headquarters she engages for a number of voyages in the carriage of cattle and cargo from the north-west ports to Fremantle, taking stores, building material etc. on the return trips. This, again, would be purely intra-State trade.

As a matter of convenience, in order that the vessel might be available without delay for engagement in whatever trade might offer round the coast, the owners engage the crew upon Australian-trade Articles of Agreement i.e. for trade, to and from, in any succession of voyages, between any ports in the Commonwealth, the agreement to terminate on the first arrival of the vessel at her home port (the port where the Articles are originally taken out) after the expiration of a period of six months from the date of its commencement. This agreement is prepared in the form prescribed by section 46 of the Navigation Act and the Navigation (Master and Seamen) Regulations 1922 (S.R. 1922 No. 34). For the same reason, that the vessel may be ready for whatever trade offers, the owners also obtain a licence for the vessel to engage in the coasting trade.

From decisions of the High Court (e.g. in the Merchant Service Guild of Australasia v. Commonwealth Steamship Owners Association (1913) 16 C.L.R. 664 and Clarke v. Union Steamship Company of New Zealand Ltd (1914) 18 C.L.R. 142) it appears that the question of whether or not a vessel comes within the scope of Federal legislation, i.e. whether she is or is not engaged in trade with other countries or between the States, depends upon the nature of the voyage in which the vessel is at the time engaged, and that the term 'voyage' in this connection means the actual voyage of the ship, being the period, in commercial parlance, 'from empty ship to empty ship'. The ship's papers, it has been ruled, are not conclusive as to what the voyage is. A voyage commences, it would appear, when a ship, having cleared her holds of cargo and (if a passenger ship) her cabins of passengers, takes fresh cargo and passengers for another port, and the voyage ends at whatever port the holds and cabins are again emptied.

The question has been raised as to whether, when a ship such as described above enters upon a purely intra-State voyage, dealing only with the domestic trade of the State, she clears herself for the time being of all obligations under the Navigation Act. If such is the case, the further question then arises as to whether, if the ship's agreement with her crew has been issued under the Navigation Act, her entry into a purely intra-state trade automatically determines that agreement and renders it necessary that fresh Articles of Agreement be taken out under the local State law. Again, if such a vessel holds a licence to engage in the coasting trade, do the conditions of the licence, as set out in section 288 of the Navigation Act, cease to operate from the date of the entering of the vessel upon a purely intra-State voyage, and, if such is the case, do those conditions revive and again become operative when the vessel takes cargo or embarks passengers for a voyage to a port of destination in another State?

The matter is one of very great importance, and I shall be glad if the Solicitor-General will be so good as to advise thereon as early as possible.

Wherever Commonwealth legislative power in regard to a ship depends on whether she is or is not engaged in inter-State or external trade, the question whether a vessel is one to which the Act applies should primarily be determined by ascertaining whether the passengers or cargo are being carried on a voyage extending beyond the limits of a State.

In the Newcastle and Hunter River Steamship Co. case it was decided that the provisions of the Navigation Act 1912-1920 and the regulations thereunder as to the manning of and accommodation on ships, to the extent that they purport to prescribe rules of conduct to be observed in respect of ships engaged solely in the domestic trade and commerce of a State, are beyond the power of the Commonwealth Parliament and are to that extent invalid. The provisions of the Act declared invalid in their application to intra-State ships were enumerated as sections 14, 43, 44, 135, 136, 288 and 293 and Schedules I and II and Statutory Rules 1921 No. 84.⁽³⁾

In my opinion a ship engaged on a purely intra-State voyage is not exempt from all the provisions of the Navigation Act.

Where an agreement has been made under the Navigation Act in contemplation of an inter-State or foreign voyage and during the currency of the agreement the vessel ceases to be engaged in inter-State or foreign trade the agreement in my opinion remains in operation and can be enforced as a contract according to its terms in respect of the period for which it was made.

Where a ship holds a licence to engage in the coasting trade the obligation to comply with the conditions attaching to the issue of the licence operates only during the time during which the ship is engaged in Australian trade beyond the limits of any State. Should she cease to be engaged in coasting trade to which section 288 validly applies the necessity of compliance with the conditions of any unexpired licence, or, of the renewal thereof if expired, revives upon her again becoming so engaged.

[Vol. 18, p. 401]

(1)Newcastle and Hunter River Steamship C0. Ltd v. Attorney-General for the Commonwealth 29 C.L.R. 357.

(2)In the instructions as appearing in the Opinion Book the name of the ship was not ?lled in.

(3)The Navigation (Manning and Accommodation) Regulations 1921.