I am in receipt of your minute of 11 March 1920, forwarding for revision certain draft instructions proposed to be issued to officers in relation to the construction of section 7 of the Navigation Act.

Section 7 does not in a strict sense define 'engagement in the coasting trade'. That section declares that certain acts constitute, so far as the vessel participating therein is concerned, engaging in the coasting trade.

The acts referred to are the taking on board of passengers or cargo at a port in a State or Territory under the authority of the Commonwealth to be carried to, and landed at, any other port in the same, or any other, State or Territory. By the first proviso to section 7 the carriage of passengers holding through tickets to or from a port beyond Australia and the Territories, and the taking on board of cargo consigned on a through bill of lading to or from a port beyond Australia and the Territories, are exempt from the operations of the section, but cargo so consigned must not be trans-shipped to or from a ship trading exclusively in Australian waters and which is not licensed under the Act.

It will be seen that the test provided in section 7 is based on the taking on board at certain ports for carriage to certain other ports. The exemption, contained in the first proviso, refers only to the circumstances of carriage.

On a strict reading of the whole section, it appears that the purpose of the proviso is to make it clear that the carriage of passengers holding through tickets or of cargo on through bills of lading will not bring a vessel within the coasting trade provisions of the Act (if the passengers or cargo have been taken on board outside Australia or are to be landed outside Australia) while proceeding between her first port of call in Australia and her final port of departure or the port at which the passenger or cargo is to be landed, as the case may be.

The construction results in the application of the exemption only to vessels carrying passengers or cargo taken on board outside Australia and carried on that ship through coast trade limits to its port of destination which may be either within or outside such limits, and to vessels taking on board passengers or cargo in Australia for carriage through coast trade limits for ultimate landing outside Australia.

In these circumstances the taking on board at an Australian port of passengers holding through tickets or of cargo on through bills of lading for carriage to some other port in the Commonwealth would render the ship liable to compliance with the coasting trade provisions of the Act⁽¹⁾

[Vol. 16, p. 471]

(1)Upon receipt of this opinion the Comptroller-General of Customs requested Sir Robert Oarran to 609 reconsider the question, citing in support the intention of the framers of section 7. This intention apparently was that the trans-shipment at Australian ports of passengers or cargo on through tickets or bills of lading, for carriage through coasting trade limits, should not render the vesseh, to which the passengers or cargo were trans-shipped, liable to compliance with the coasting trade provisions of the Act

On 6 October 1920 [V0]. 17, p. 99], in response to the Comptroller-General's request, Sir Robert Garran advised as follows:

‘The exception in favour of passengers holding through tickets and cargo on through bills of lading is contained in a proviso to section 7 and must therefore be construed as qualifying the test contained in the main portion of the section.

Although the matter is not free from doubt I am of opinion, upon reconsidering the whole section, that the construction submitted in the Comptroller-General’s minute of 1 July 1920 can be supported, and that a vessel which takes on board at an Australian port for carriage to another Australian port passengers holding through tickets or goods on through bills of lading does not by reason of that circumstance become subject to the coasting trade provisions of the Act’.