Opinion Number. 1924

Subject

SHIPPINGCOMMONWEALTH POWER TO LEGISLATE WITH RESPECT TO COMPENSATION FOR PLUNDER OF WRECKS: SCOPE OF INTERSTATE AND OVERSEAS TRADE AND COMMERCE POWER

Key Legislation

CONSTITUTION ss 51(i), 81, 98: NAVIGATION ACT 1912 ss 2(2), 329: MERCHANT SHIPPING ACT 1894 (UK) s 515

Date
Client
The Secretary, Department of Fuel, Shipping and Transport

The Secretary, Department of Fuel, Shipping and Transport, has forwarded for advice the following memorandum:

On 21/10/32 Mr. A.D. Warden, acting for the Marine Underwriters’ Association of Victoria, wrote to the then Attorney-General asking, inter alia, that the Navigation Act be amended by the insertion of a section corresponding to Section 515 of the Imperial Merchant Shipping Act. Copy of the letter and of the Private Secretary’s reply were sent to the Department of Commerce by memorandum 32/1581 of 15/11/32. Apparently no special consideration was given to the request at that time.

The Marine Underwriters’ Association have again approached this Department and asked that provision be made for compensation to the owners of ship’s cargo or apparel ‘plundered, damaged or destroyed under riotous behaviour’. Enquiries have been made and it has been ascertained that none of the States has legislation corresponding to Section 515 mentioned above.

In Opinion No. 21 of 22/1/23 the Solicitor-General advised that the terms of sections 294–314 of the Navigation Act were sufficiently wide to cover, so far as the Commonwealth was concerned, the whole field of legislation relating to wrecks.1 The Commonwealth Act was, therefore, impliedly inconsistent with any State Act covering the same subject, and must prevail.

Possibly the Commonwealth Parliament could make a valid law providing for compensation for plunder, etc, to be paid from revenue, but it would seem doubtful whether legislation similar to section 515 could be enacted. Your advice would be appreciated.

(2)  Section 515 of the Merchant Shipping Act provides that compensation shall be paid to the owner of a wrecked vessel or its cargo where the vessel or its cargo is plundered, damaged or destroyed by any persons riotously and tumultuously assembled together. The compensation is to be paid from rates levied within the police district where the plundering, etc, took place, or the nearest police district.

(3)  I think that the Commonwealth Parliament could, under the ‘trade and commerce’ power as extended to navigation and shipping (section 51(i) and 98 of the Constitution), insert a section in the Navigation Act to provide for compensation in the circumstances contemplated, and could, under the ‘appropriation’ power (section 81 of the Constitution), appropriate moneys from Consolidated Revenue to pay the compensation.

(4)  Section 51(i) and 98 of the Constitution, in combination, enable the Commonwealth Parliament to deal with navigation and shipping only by making laws which are ancillary or relevant to trade or commerce with other countries or among the States, but do not, it seems, enable legislation as to navigation or as to ships as such, unless, at the same time, it is legislation ‘with respect to’ interstate or overseas trade and commerce.

(5)  The right of the Commonwealth to pass section 329 of the Navigation Act (power to remove wrecks) was assumed, and not decided adversely to the Commonwealth, in Victoria v. The Commonwealth ((1937) 58 C.L.R. 618), and I think that a provision that compensation be paid to the owner of a wrecked ship or its cargo which has been plundered would be a law with respect to, i.e., ancillary or relevant to, trade and commerce, and, if included in the Navigation Act, would, by virtue of section 2(2) of the Act, be read down so as not to exceed the legislative power of the Commonwealth; in other words, the provision would have to be read as not applying to a wrecked ship which had been engaged in intra-state trade only.

(6)  It would not be a good objection to the legislation that it applied to ships as integers of transport rather than of trade and commerce, for it seems that interstate transportation is included within the category of interstate trade and commerce.

(7)  I assume that the suggestion of the Marine Underwriters’ Association does not extend to the inclusion of a provision that the compensation is to be paid from rates levied upon some specified persons. This provision in the Imperial Act is probably based on historical considerations which do not apply in Australia. If it is proposed that particular persons or particular funds are to bear the compensation, the matter would have to be referred back to me for further consideration according to the exact details of the proposal, which might amount to a suggestion for a taxing measure.

[Vol. 39, p. 431]

1 Opinion No. 1305.