Interstate navigation whether steamers carrying excursion passengers to and from same port on south banK of river murray are engaged in interstate trade or commerce and subject to commonwealth control: trade and commerce power
Constitution covering clause 5, ss 51(i), 92, 98, 109: NEW SOUTH WALES CONSTITUTION ACT 1855 (U.K.) (18 & 19 Vict. c. 54) s 5: Navigation Act 1912: Navigation Act 1901 (NSW): Regulations for Preventing Collisions at Sea 1901 (NSW) art 19
The Secretary, Marine Branch, has forwarded the following memorandum to me for advice:
- Applications were made to this Branch, some short time ago, by the owner of a vessel running passenger excursions on the River Murray, from Mildura, for the survey of the vessel for a Commonwealth Certificate of Survey.
- The view was taken in this Office that as the vessel, on its excursion trips, embarked its passengers at a place in Victoria and after the run brought them back to and landed them at the same place, it was not engaged in any sort of trade or commerce ‘with other countries or among the States’ and came consequently under State and not Federal control. The applicant was consequently referred to the Marine Board of Victoria, as the authority controlling shipping and navigation within State limits.
- The Marine Board took the view, however, that as the waters of the River Murray lie wholly within the limits of New South Wales, responsibility respecting the survey and control of excursion vessels using those waters, but not engaging in interstate traffic (when they would come within Commonwealth jurisdiction) rested upon the New South Wales Authorities. The matter was consequently referred to the Navigation Department of that State.
- The advice of the Crown Solicitor, New South Wales (Mr. J. E. Clark) was then sought. In the course of his Opinion Mr. Clark stated that—‘With regard to vessels of the third class, that is those trading between points on the southern bank of the River Murray, the position may admit of some doubt. However, in Willoughby on the Constitution of the United States 2nd Edn. Vol. 11 at page 1002 it is said “it is well established that commerce carried on between two points within a State, but involving transportation for a part of the way outside the State, is interstate commerce, and therefore, subject to corresponding Federal control, and removal from State control”. The latest authority quoted by Willoughby is Missouri P. R. Co. v. Stroud 267 U.S. 404 in which the Court say “Transportation from Oxley to Saint Louis over the route partly within and partly outside of Missouri is interstate commerce”. Both those places were within Missouri.
- A copy of the full Opinion is attached.
- The Victorian Marine Board, on receipt of copy of the Opinion, through the New South Wales Department of Navigation, referred it to the Crown Solicitor, Victoria (Mr. Frank C. Menzies) for favour of comment. Mr. Menzies made the following minute.
- The matter is one of great importance and is referred for favour of early consideration and advice. Not only does it affect the question of whose responsibility is the survey of the River Murray excursion boats but, if the views of the Crown Solicitors, New South Wales and Victoria are correct, it settles the vexed question of a unified Commonwealth control of sea-going shipping, discussed at a recent Premiers’ Conference.
- Practically every sea-going ship, even if trading only between ports in a single State, proceeds, at some point or other in her voyage, beyond the three-mile limit, and consequently beyond the jurisdiction of the State. According to the views advanced, the carriage of the passengers or cargo on board becomes, by virtue of that fact, an act of interstate trade or commerce, bringing the vessel within the scope of Commonwealth legislation on the subject-matter of shipping and navigation.
- Incidentally, it is suggested that as the laws of a State are effective only within that State’s jurisdiction, certificates of survey and officers’ certificates of competency granted under those laws are invalid when, and so long as, the vessel carrying such a certificate and officers so certificated is outside the three-mile limit.
- Commonwealth certificates, in so far as they relate to coasting vessels, are on the other hand saved from invalidity by virtue of covering clause v of the Constitution which provides, inter alia, that ‘the laws of the Commonwealth shall be in force so all British ships, the Queen’s ships of war excepted, whose first port of clearance and whose part of destination are in the Commonwealth’.
- The necessary implications would appear to be, it is submitted, that for coasting vessels, including vessels plying between ports in a single State, which at any point in their voyages pass outside territorial limits it is necessary that they shall carry certificates of survey, and that the master and officers shall in each instance hold certificates of competency, granted under Federal and not State laws.
- As, pending advice in the matter, no steps are being taken to carry out surveys of the River Murray passenger excursion vessels referred to above, it is requested that the matter be treated as urgent and advice furnished as early as possible.
I think that following these American authorities, vessels of the third class would be held to be engaged in interstate commerce’.
27.11.35—I have read the opinion of the Crown Solicitor of New South Wales and agree with his statement of the position.
Adopting the American view referred to in Willoughby on the Constitution of the United States, 2nd Edition, Volume 2 and p. 1002, he advises that vessels trading from place to place on the southern bank of the Murray, that is, between Victorian towns, are engaged in interstate trade and commerce. I did not refer in my advising of the 21st June last to American sources. In view of the authorities quoted I amend my opinion to agree with that given by Mr Clark.
The opinion of the Crown Solicitor for New South Wales, referred to in the Secretary’s memorandum, is as follows:
It is stated that vessels on the River Murray may be placed in three classes:
- Vessels trading from place to place on the northern bank within New South Wales;
- Vessels trading from bank to bank;
- Vessels trading from place to place on the southern bank.
Section 5 of the Constitution Statute (18 and 19 Vic. Ch. 54) enacted that the whole watercourse of the River Murray from its source to the eastern boundary of South Australia was and should be within the territory of New South Wales. Provided nevertheless that it should be lawful for the Legislatures of both the colonies of New South Wales and Victoria to make regulations (inter alia) for the regulation of the navigation of the said river by vessels belonging to the said two colonies respectively.
In my opinion this grant of power to regulate the navigation must now be taken subject to section 92 of the Commonwealth Constitution.
One would think that vessels of the first class, that is those trading from place to place on the northern bank of the river would be subject to the jurisdiction of New South Wales. This is of course in the absence of anything to show that their transactions or movements are such as to attract the legislative power of the Commonwealth as to interstate trade, and navigation in relation thereto.
With regard to vessels of the second class, that is those trading from one bank of the Murray to the other, one would naturally conclude that they are engaged in trade between the two States.
In Newcastle and Hunter River Steamship Co. Ltd. v Attorney-General for the Commonwealth 29 C.L.R. 357, the High Court held that the Commonwealth Constitution does not endow the Commonwealth Parliament with a substantive power to deal with navigation and shipping at large, but only with power to deal with that subject in so far as it is relevant to interstate and foreign trade and commerce. It was therefore held in the words of the head note that the provisions of the Commonwealth Navigation Act 1912–1920 and the Schedules thereto and of the regulations made 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.
In the King v Turner 39 C.L.R. 411 the above case was followed and it was held in the words of the head note that a Court of Marine Inquiry established under that Commonwealth Act had no jurisdiction to inquire into a collision between two vessels not engaged in interstate or foreign trade or commerce which took place outside the course ordinarily used by ships engaged in interstate trade or commerce. The ground of the majority of the Court was that the above facts did not indicate any relation between the casualty and foreign or interstate trade or commerce.
In Hume v Palmer 38 C.L.R. 441 it was held that the Navigation Act 1901 of this State and Article 19 of its Regulations for Preventing Collisions at Sea so far as they related to a steamship engaged in interstate trade failing to obey that Article in Port Jackson were inconsistent with the Commonwealth Navigation Act 1912–1920 and invalid; the objection was that the prosecution should have been taken under the Commonwealth Act.
State laws relating to shipping are therefore when inconsistent with valid Commonwealth legislation invalid to the extent of the inconsistency. In considering this question regard has to be had to the particular matter in question; thus while there is no relevance between the manning rules applicable to an interstate ship and those applicable to an intrastate ship there is relevance between the manoeuvring of an interstate ship in connection with an intrastate ship so that the code of law that binds the former in that regard would bind the latter unless the confusion of having each vessel manoeuvring to different rules is to apply.
If Commonwealth legislation relating to ships engaged in interstate or foreign commerce exhibits an intention to provide a code of law for the matter in question it can be taken that the state legislation on that matter concerning such ships is superseded.
With regard to vessels of the third class, that is those trading between points on the southern bank of the River Murray the position may admit of some doubt. However in Willoughby on the Constitution of the United States 2nd Edn. Vol. II at page 1002, it is said ‘It is well established that commerce carried on between two points within a State, but involving transportation for a part of the way outside the State, is interstate commerce, and, therefore, subject to corresponding Federal control, and removal from State control.’ The latest authority quoted by Willoughby is Missouri P.R. Co. v. Stroud 267 U.S. 404 in which the Court say ‘Transportation from Oxly to Saint Louis over the route partly within and partly outside of Missouri is interstate commerce.’(1) Both those places were within Missouri.
I think that following these American authorities vessels of the third class would be held to be engaged in interstate commerce.
If this view is right, then vessels in the second and third classes would be subject to any relevant Commonwealth legislation as to navigation and shipping or trade and commerce.
The Navigation Act was enacted under the power given by section 51(i) of the Constitution ‘to make laws with respect to trade and commerce with other countries and among the States’ and by section 98 of the Constitution it was declared that this power extends to ‘navigation and shipping’.
In the Solicitor-General’s Opinion dated 31st August 1921,(2) it was stated that:
It is impossible to deduce from the judgment of the Court (in the case of the Newcastle and Hunter River ss. Co. v. The Attorney-General(3)) any set of rules as to the facts and circumstances which constitute, in the case of an intrastate ship, engaging in trade with other countries or among the States. Such rules may be tentatively formulated on the bases 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.
The later cases of King v. Turner(4) and Hume v. Palmer(5) do not assist in determining the matter. In the former case, the ships concerned were intrastate ships and the collision took place outside the course ordinarily used by ships engaged in trade and commerce with other countries or among the States, though the ships had, a short time before the collision, been within waters ordinarily used by interstate and foreign ships. In Hume v. Palmer one of the ships concerned was engaged in trade and commerce among the States.
It is useful in this connexion to consider the power of Congress in the United States. Under the United States Constitution, the Congress has power ‘to regulate commerce with foreign countries and among the several States’. As early as 1824 it was laid down by Chief Justice Marshall in Gibbons v. Ogden(6) that the power to regulate navigation was as expressly granted to Congress as if the word had been added to the word ‘commerce’.
In the United States, Congress has power to regulate river navigation.
Rivers are a means alike of internal, interstate and foreign commerce and may consequently be regulated both by the State and by the general government, subject, nevertheless, to the general principle that a State may not adopt any course which is at variance with the laws made by Congress and that will injuriously affect trade with her sister States or foreign nations (Hare, American Constitution p. 459).
The American cases clearly establish the principle that the power of Congress may be exercised within the boundaries of the State when such action is requisite for the attainment of the object. The authority of Congress is not limited to marine navigation but includes all the waters of the United States through which intercourse takes place among the States and with other nations. Only the exclusive internal commerce of the States is reserved for the States.
Fuller in Interstate Commerce (p. 71) says:
Traffic to be intrastate must not only originate and also terminate within the State, but it must be at all times, during its shipment between those two points, within the State and under the jurisdiction of the State. For example, where commerce shipped from one point within the same State must go outside the State in order to reach the point designated, it loses its character as intrastate traffic and by virtue of crossing the limits of the State becomes interstate traffic. In order that traffic may be within the control of a State, as intrastate or domestic traffic, the subject transported must be under the exclusive jurisdiction of the State throughout the entire voyage.
In Hanley v. Kansas City S. R. Co. 187 U.S. 617, at p. 620, the Supreme Court said ‘it is decided that navigation on the High Seas between ports of the same State is subject to regulation by Congress (Lord v. Steamship Co. 102 U.S. 541) and is not subject to regulation by the State (Pacific Coast Steamship Co. v. Railroad Commissioners 9 Sawyer 253).
In the Minnesota Rate Case (230 U.S. 352, at p. 399), Mr. Justice Hughes said that:
The authority of Congress extends to every part of interstate commerce and to every instrumentality or agency by which it is carried out and the full control by Congress of the subjects committed to its regulation is not to be denied or thwarted by the commingling of interstate and intrastate operations. This is not to say that the nation may deal with the internal concerns of the State, as such, but that the execution by Congress of its constitutional power to regulate interstate commerce is not limited by the fact that intrastate transactions may have become so interwoven therewith that the effective government of the former incidentally controls the latter.
In Missouri Pacific Company v. Stroud (267 U.S. 404 at p. 408), referred to by Willoughby on the Constitution p. 1003, the Court said:
It is elementary and well settled that there can be no divided authority over interstate commerce and that the acts of Congress on that subject are supreme and exclusive. Transportation from Oxley to St. Louis over the route partly within and partly outside of Missouri is interstate commerce.
Consideration may now be given to the extent to which the principles laid down in the American cases apply to the trade carried on by the River Murray Steamers.
The power of the Commonwealth to legislate in respect of interstate trade is not the same as that of the central United States legislature. Congress has, it has been held, exclusive power in respect of interstate trade. In its judgment in the recent case of James v. the Commonwealth, the Privy Council said:
Thus the powers of the States were left unaffected by the Constitution except in so far as the contrary was expressly provided; subject to that each State remained sovereign within its own sphere. The powers of the State within those limits are as plenary as are the powers of the Commonwealth. Thus the State has the same power as the Commonwealth to legislate for the peace, order and good government of the State with respect to interstate trade, commerce and intercourse subject to the limitations of its territorial sovereignty and so far as section 109, which provides that in the event of inconsistency between the law of the Commonwealth and of a State, the former shall prevail, does not apply. (55 C.L.R. at p. 41.)
It is clear from the foregoing that the Commonwealth’s power to legislate in respect of interstate trade is not exclusive.
The Navigation Act is expressed not to apply in relation to any coastal or river and bay ship or her master and crew unless the ship:
- is engaged in interstate or external trade; or
- is on the high seas or in waters which are used by ships engaged in interstate or external trade; or
- is in the territorial waters of any Territory which is part of the Commonwealth.
According to the New South Wales Crown Solicitor, there are three classes of vessels concerned:
- Those trading from place to place on the northern bank;
- Those trading from bank to bank; and
- Those trading from place to place on the southern bank.
As to (a), the vessel is in New South Wales territory during its trips and does not proceed outside the State. Prima facie, it is not engaged in interstate trade but it may, during a trip, be in waters used by other ships engaged in interstate trade. Isaacs J. in King v. Turner (39 C.L.R. at p. 444) stated:
The framers of the Act intended, rightly or wrongly, that the Federal Court of Marine Inquiry should have power to inquire into collisions that occur in rivers or bays that are used for interstate or foreign trade. So far as the Act is concerned, however, they must be actually so used in practice; it is not sufficient that they are merely capable of being so used. In other words, the Act is based on the theory that whatever tends to aid or hinder vessels in bodies of water which are in use for interstate or foreign trade is a Federal concern and a fit subject for Federal inquiry.
Further, it was pointed out in the judgment of the High Court in Newcastle and Hunter River Steamship Company v. Attorney-General (29 C.L.R. 357 at p. 366) that:
An intrastate vessel may be used for the purpose of interstate or foreign trade, although it may carry goods only between ports in the same State. For instance, goods sold in Sydney for delivery in Queensland may be sent by an intrastate vessel to Byron Bay and then sent to Queensland by railroad.
If in actual practice the ships plying between ports on the northern bank of the River Murray use waters that are used by interstate river steamers, it would appear that the Navigation Act would apply to them.
It would also apply to vessels plying solely between ports which are both in the same State if the vessel carried between those ports goods consigned to another State.
As to (b) there is no doubt that these ships are engaged in interstate trade.
As to (c) I think that, following the American decisions, these ships are engaged in interstate trade. My remarks as to the use, by ships of class (a) supra, of waters used by ships engaged in interstate trade, are equally applicable to this class of ships.
[Vol. 29, p. 337A]
(1) 267 US 404 at 404 (1924).
(2) Opinion No. 1122.
(3) (1921) 29 CLR 357.
(4) (1927) 39 CLR 411.
(5) (1926) 38 CLR 441.
(6) 22 US 1 (1824).