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

The Melbourne agents of the Canadian Government Merchant Marine Limited receive from time to time from their head office in Canada packages of printed matter relative to the Canadian National Railways, the scenic aspect of Canada, etc.

This literature is cleared at the Customs and repacked for distribution to the branches of the Line in other Australian ports.

The question has been raised as to whether the repacked parcels can be carried from Melbourne to other Australian ports by vessels of the Line without involving an engagement by such vessels in the coasting trade.

The parcels, it is explained, would be carried free of freight and would not appear on the ship's manifest, being forwarded in charge of the chief officer of the vessel.

I shall be glad if the Solicitor-General will be good enough to advise in the matter.

In this connection, reference is invited to the Solicitor-General's opinion of 15.7.21, on the question of whether 'cargo' includes the bona fide property of the owner carried without hire, and to the decision of the High Court, in the Kalibia case 11 C.L.R. 689 that a package carried by the chief officer of the vessel from Adelaide to Brisbane, under circumstances similar to those mentioned above, was not cargo within the meaning of section 4 of the Seamen's Compensation Act 1909, a section practically identical in terms with the first clause of section 7 of the Navigation Act, defining engagement in the coasting trade.

In my opinion of 15 July 1921⁽¹⁾ I advised that where the freight or lading of a ship are the property of the shipowner, such freight or lading is none the less 'cargo' within the meaning of section 7 of the Navigation Act.

In connection with the circumstances now submitted, I am referred to the case of the Kalibia 11 C.L.R. 689⁽¹⁾ in which the Court held that a package, carried by the chief officer of a vessel from Adelaide to Brisbane, which was not entered in the ship's manifest and in respect of which no bill of lading or shipping note was signed and no freight paid, was not cargo within the meaning of section 4 of the Seamen's Compensation Act 1909.

In that case the package was carried as a voluntary courtesy by the chief officer and without the knowledge or authority of the owners.

Griffith C.J. in his judgment said: 'I think that as a general rule a ship cannot become engaged in the coasting trade . . . without the knowledge and volition of the owner . . . '

The decision of the Court on this part of the case is based partly on the fact that no freight was paid for the carriage of the package. The Lion L.R.2 P.C. 525 is cited with approval as showing that a passenger is a person who pays a fare and consequently 'cargo' when used in juxtaposition with 'passenger' implies the payment of freight.

I have, however, previously expressed the opinion that 'passengers' and 'cargo' as used in the Act may include persons and goods carried without payment of fares or freight. The judgment goes on to state that the word cargo connotes trading and suggests that the element of trading as usually understood in relation to cargo was absent from the action under consideration.

The circumstances upon which I am now asked to advise differ from those in the Kalibia case. The goods are the property of the shipowner and not of a stranger and this is the reason for there being no freight paid. Further, the carriage of the goods in this instance does amount to trading, as the conditions appertaining to the carriage of cargo would apply but for the fact that the goods are carried on vessels belonging to the owner of the goods.

I see no reason for holding that the goods are, by reason of the conditions of, and circumstances surrounding, their carriage, excluded from the application of the word cargo in section 7.

I am accordingly of opinion that the carriage of the goods between Australian ports constitutes engaging in the coasting trade unless such carriage is covered by the exceptions mentioned in section seven.

[Vol. 19, p. 108]

(1) Opinionn No. 1100.

(2) Owners of S.S. Kalibia v. Wilson.