1                     Each of these four proceedings raises a question as to the meaning of s 10 of the Navigation Act 1912 (Cth). In particular, the proceedings raise questions as to whether a company that supplies the crew for a ship, in particular circumstances, can be said to be ‘operating’ that ship. The questions arise in the context of determining the jurisdiction under the Administrative Appeals Tribunal Act 1975 (Cth) (‘the AAT Act’) of the Administration Appeals Tribunal (‘the Tribunal’) to review decisions in relation to claims for compensation by seamen under the Seafarers Rehabilitation and Compensation Act 1992 (Cth) (‘the Compensation Act’).

Prior to 1979

14                  Since 1921, at the latest, Part II of the Navigation Act has been entitled ‘Masters and Seamen’. Its provisions are derived ultimately from the Merchant Shipping Act 1894 (UK). Until 1979, s 10 of the Navigation Act provided that the provisions of Part II relating to ships and to their owners, masters and crews were, unless the subject matter required a different application, to apply ‘only to British ships and their owners, masters and crews’. The term ‘British Ship’ was defined in s 6(1) as including a ship registered in a Commonwealth country or a ship recognised by the law of a Commonwealth country as a ship belonging to that country. The term ‘Commonwealth country’ was also defined in s 6(1) as meaning Australia, the United Kingdom, Canada, New Zealand, the Union of South Africa, India, Pakistan, Ceylon, Ghana and Malaysia and any other country declared by the Regulations to be a Commonwealth country. The term also included colonies, overseas territories and protectorates of Commonwealth countries. That definition of British ship appears to have been first inserted in s 6(1) by the Navigation Act 1958 (Cth) (Act No. 36 of 1958).

The 1979 Amendments

15                  In 1979, substantial amendments were made to the Navigation Act by the Navigation Amendment Act 1979 (Cth) (‘the 1979 Amendment Act’) (Act No. 98 of 1979). Apart from technical drafting amendments, no change was made to s 10. However, other amendments made by the 1979 Amendment Act introduced into the Navigation Act the concept of a ship being ‘operated by’ someone other than the owner.

16                  Section 6 was amended by adding s 6(4), to provide that a reference in the Navigation Act to the owner of a ship or vessel was, in the case of a ship or vessel that is ‘operated’ by a person other than the owner, to be read as including a reference to the operator. In addition, provisions were inserted into Part II that were to apply to ships other than British ships, being ships identified by reference to the entity ‘operating’ the ship.

17                  Division 2A, dealing with ‘The Manning of Ships’, was inserted. Division 2A consisted of s 14. Section 14(1) provided that the Minister may require a ship, or each ship included in a class of ships, to carry a qualified master of a specified designation, not less than a specified number of qualified officers of specified designations and not less than a specified number of qualified seamen of specified designations. However, that requirement was not to apply to all British ships.

18                  Section 14(13)(a) provided that, in the preceding provisions of s 14, a reference to a ‘ship’ was to be read as a reference to:

(i) a ship registered in Australia;

(ii) a ship (other than a ship registered in Australia) engaged in the coasting trade; or

(iii) a ship (other than a ship registered in Australia or engaged in the coasting trade) licensed under s 288 to engage in the coasting trade and ‘operated by’ any of the following (whether or not in association with any other person, firm or company, being a person, firm or company of any description), namely:

(A) a person who is a resident of, or has his principal place of business in, Australia,

(B) a firm that has its principal place of business in Australia, or

(C) a company that is incorporated, or has its principal place of business, in Australia.

Section 14(13)(b) provided that a reference to a ship was also to be read as including a reference to a ship that was intended to be constructed or was in the course of construction and, in either case, was intended to become a ship of the kind referred to in pars (i), (ii) or (iii) above. Thus, s 14(13) anticipated to some extent the subsequent structure of s 10, including the reference to an entity operating a ship.

19                  As at 1979, s 7 of the Navigation Act specified the circumstances in which a ship was to be deemed to be engaged in the coasting trade. In addition, s 288(1) provided that, subject to the Navigation Act, a ship was not to engage in the coasting trade unless licensed to do so. Section 288 specified the periods of such licences and the conditions with which a ship and the ship’s master, owner and agent must comply while engaged in the coasting trade. Licences were to be granted by the relevant Minister. However, there does not appear to have been a definition in the Navigation Act as at that time of the term ‘ship registered in Australia’.

20                  The 1979 Amendment Act also repealed Division 3 of Part II of the Navigation Act and substituted a new Division 3, which dealt with ‘Qualifications of Masters, Officers and Seamen’. Division 3 consisted of ss 15 to 19 inclusive. Section 15(1) provided that the Regulations may specify standards of competence to be attained and other conditions to be satisfied, or specify conditions to be satisfied, by a person in order to be a qualified master, officer or seaman of any designation for the purposes of the Navigation Act. Section 16(a) then provided that a person must not serve on a ship as a master, officer or seaman of a particular designation if he was not a qualified master, officer or seaman of that designation. Further, s 18 provided that a proper authority at a port may refuse to permit a person to enter into an agreement to serve on a ship as a master, officer or seaman of a particular designation if the proper authority was not satisfied that the person was a qualified master, officer or seaman of that designation.

21                  Section 19, which has since been repealed, also anticipated the subsequent structure of s 10. Section 19(2) provided that a reference in the new Division 3 to a ship was to be read as a reference to a ship to which Division 3 applies. Section 19(1) also anticipated the subsequent form of s 10, by providing that the provisions of Division 3 were to apply to:

(a) ships registered in Australia,

(b) ships (other than ships registered in Australia) engaged in the coasting trade, and

(c) ships (other than ships registered in Australia or engaged in the coasting trade) licensed under s 288 to engage in the coasting trade and operated by any of the following (whether or not in association with any other person, firm or company, being a person, firm or company), namely –

(i) a person who is a resident of, or has his principal place of business in, Australia,

(ii) a firm that has its principal place of business in Australia, and

(iii) a company that is incorporated, or has its principal place of business, in Australia.

22                  Following the 1979 Amendment Act, Divisions 2A and 3 were to apply to a category of ships different from the category to which the balance of Part II was to apply, as specified in the then s 10.

23                  The concept of a ship or ships being operated by an entity having a connection with Australia was clearly included to ensure that certain ships that were neither registered in Australia nor engaged in the coasting trade, but were licensed to engage in the coasting trade, would be regulated by Divisions 2A and 3. That is to say, even if a ship was not registered in Australia or engaged in the coasting trade, if the ship was being operated by an entity that had a relevant connection with Australia, the provisions of Division 2A and 3 were to apply to it.

24                  The Minister’s speech on the second reading of the Bill for the 1979 Amendment Act included the following:

One important amendment extends the references in the Act to the owner of a ship to include a reference to the operator, except in a few special circumstances. This is to ensure that where a duty or liability is imposed by the Act on the owner, responsibility for ensuring that that duty or liability is discharged is imposed on the person who is directly concerned with the relevant operations, for example, a bareboat charterer, as well as on the owner. Conversely, a benefit conferred on the owner will also, in appropriate cases, be available to the operator. Other amendments empower the Minister to make orders in relation to detailed technical requirements to be applied under the Act, so that such requirements can be quickly implemented, or varied without delay; in the light of ship casualties, equipment failure investigations, or technical developments. There are a number of amendments relating to the engagement and discharge of seamen and certain of the conditions of their employment, mainly to cater for modern developments in the industry. (Australia, House of Representatives, Debates, vol HR116, p 2179)

[Emphasis added.]

25                  The Explanatory Notes on the Bill for the 1979 Amendment Act, circulated by the Minister for Transport, pointed out that the Bill consisted of a series of amendments for a number of different purposes. Two of the main subjects of the amendments were said to be:

• Manning; and

·        Qualifications of seafarers.

26                  The general comments in the Explanatory Notes included the following in relation to those subjects:

Manning

The Bill contains new manning provisions in place of the existing provisions which were designed for the shipping industry of half a century ago. These provisions will come into force in two stages. Initially, action will be taken to remove the outdated schedules and other inflexible provisions of the Act. This will pave the way for the second stage which is to enable the Minister to specify detailed requirements as to the minimum numbers and qualifications of officers and seamen to be carried to the extent that it appears necessary in the interests of safety or protection of the marine environment. These provisions call for the laying down in the regulations of parameters on which the minimum manning will be based and will not come into force before these have been fully developed and included in the regulations.

Qualifications of Seafarers

Here too the Bill repeals outmoded provisions and in their place provides broad enabling powers under which necessary standards of competence will be specified by regulation or order. Training, examination and certificates of competency are covered. There will be a new structure for such certificates which has been developed in conjunction with the industry and which is designed to meet present-day needs.

27                  Section 4 of the 1979 Amendment Act inserted various new and amended definitions, including s 6(4), to which reference has already been made. The Explanatory Notes contain the following in relation to that provision:

The effect of this sub-section is that, where a ship or vessel is being operated by a person other than the owner, provisions in the Act that refer to the owner (except those where a contrary intention appears, e.g. collision loss and damage liability in Division 11 of Part IV, wreck removal in section 329 and salvage matters in Divisions 3 and 4 of Part VII), will apply equally to the operator. In many cases it is more appropriate that the operator rather than the owner should be responsible. It will materially assist in prosecutions in certain circumstances for the company directly responsible for the operating of the ship to be made liable for breaches of the Act, e.g. where the actual owner is not within jurisdiction.

[Emphasis added.]

28                  In relation to the subjects of Manning and Qualifications of Seafarers respectively, the Explanatory Notes contained the following:

‘ THE MANNING OF SHIPS

This clause inserts new provisions for the manning of ships in place of the old detailed and inflexible provisions that were designed for the shipping industry of half a century ago. The new provisions have been the subject of lengthy consultation with the industry and the State Marine Authorities.

The new section 14 will enable the Minister to specify, by order, detailed requirements as to the numbers and qualifications of masters, officers and seamen to be carried in specified ships or classes of ships, in respect of different voyages, the carriage of different cargoes, and the performance of different operations, and according to whether the ship is in port or at sea. This will allow the obsolete schedules and other inflexible sections of the Act to be repealed almost immediately and then after a prescribed date the Minister is to exercise his powers only to the extent that it appears to him necessary or expedient in the interests of safety or the protection of the marine environment. The criteria to be applied in determining the minimum manning are to be set out in the regulations and pending the determination of these requirements no date of operation for the minimum safety manning provisions will be proclaimed.

The Minister may exempt a ship or ships from the application of a manning order, subject to conditions, and such exemption may be confined to a particular period or to one or more particular voyages or operations. This will provide flexibility in allowing vessels to sail without their full crews in certain circumstances.

Failure to comply with an order or the conditions of an exemption renders the master and owner liable to a fine of not over $1,000.

A ship not carrying a master, officers and seamen as required by an order or the conditions of an exemption may be detained, or specified operations may, by notice, be restricted. Failure to comply with such a notice renders the master and owner liable to a fine of not over $5,000.

…

QUALIFICATIONS OF MASTERS, OFFICERS AND SEAMEN

The Bill repeals and replaces the old outmoded provisions of Division 3 that deal with matters relating to certificates of competency permits to serve, certificates of service and examinations for certificates.

The new section 15 provides broad enabling powers under which standards of competence to be attained and other conditions to be satisfied for a person to become ‘qualified’ for the purposes of the Act will be specified by regulation or by order under the regulations. The things to be so prescribed are set out in proposed sub-section 15(2), and include detailed requirements in respect of instruction, training and the conduct of examinations, the issue of certificates of competency and the recognition of certificates issued by other countries. Under section 25 of the Administrative Appeals Tribunal Act 1975 the regulations will also provide for the review by an appropriately-constituted Administrative Appeals Tribunal of administrative decisions made under those regulations and orders.

Under these provisions there will be a new structure of certificates of competency designed to meet modern shipping needs and derived from a uniform Code prepared by the Department of Transport in conjunction with the State Marine Authorities and in consultation with the maritime industry. The Code is based on international requirements developed through the Inter-Governmental Maritime Consultative Organization (IMCO) which in 1978 were embodied in an international Convention, and are designed to gain maximum advantage from the new Australian Maritime College. Certificates issued under the new provisions will be acceptable to the various Australian Marine Authorities.

The new section 16 replaces present section 25 and makes the necessary provisions to prohibit unqualified masters, officers or seamen from accepting employment to serve on a ship, to prohibit persons from falsely representing themselves as being qualified, and to prohibit persons from falsely representing themselves as being qualified, and to prohibit persons from taking on unqualified masters, officers or seamen. A penalty of $1,000 is provided.

The new section 17 requires a person serving in a ship as a qualified master, officer or seaman, or who has entered or is entering an agreement to so serve, to produce his certificates to the proper authority on demand. There is a penalty of $500 for failure to do so without reasonable excuse. This section replaces present section 58(1), which is being repealed.

The new section 18 authorises a proper authority at a port to refuse to approve the engagement of a master, officer or seaman if he is not satisfied that the person is qualified as required. This section replaces present sections 40 and 58(2).

Thenew section 19 sets out the classes of ships to which (together with their owners, masters and crews) the new Vision 3 applies.

29                  Those contemporaneous secondary materials reveal that a purpose behind the conflation of ‘owner’ and ‘operator’ by s 6(4) was that the Navigation Act should apply to the entity directly and immediately concerned with the manning of a ship and the qualifications of those manning the ship. The amendments contemplate that an entity can be identified who is responsible for determining who will man the ship, both in terms of numbers and of qualifications.

The 1981 Amendments

30                  The relevant provisions of Part II were further amended in 1981 at the same time as the enactment of the Shipping Registration Act 1981 (‘the Registration Act’). Section 10 of the Navigation Act was enacted substantially in its present form by the Navigation Amendment Act 1981 (No. 10 of 1981) (‘the 1981 Amendment Act’). The Registration Act, the 1981 Amendment Act and the Flags Amendment Act 1981 (Cth) were all assented to on 25 March 1981 as cognate Acts.

31                  In his Second Reading Speech on the Bill for the 1981 Amendment Act, the Minister for Transport said:

The principal purpose of the [Bill] is to amend the Navigation Act so as to accord with the proposed Shipping Registration Act …

Many provisions of the Navigation Act refer to British ships…Thesereferences to British ships are being replaced with references to ships registered in Australia under the Shipping Registration Act or otherwise having a close connection with Australia. (Australia, House of Representatives, Debates, vol HR121, 1981, p 253.)

[Emphasis added.]

32                  After the 1981 Amendment Act, the formula previously adopted in ss 14(13) and 19 was used in relation to the whole of Part II and not merely Divisions 2A and 3. There is nothing, however, in the 1981 Amendment Act that reveals an intention to alter the meaning of ‘operate’ and ‘operator’ as those words were used the 1979 Amendment Act.

33                  While s 19 as introduced by the 1979 Amendment Act, and s 10 after the 1981 Amendment Act, both attract the application of certain provisions of Part II of the Navigation Act to ships operated by an entity having a relevant connection with Australia, those provisions are also applicable to the owner, master and crew of such ships.

34                  In contrast, s 14, in the form in which it was introduced in the 1979 Amendment Act (since amended), applied only to ships through the operation of s 14(13). However, the sanctions in ss 14(8) and 14(11) applied to the master and owner of a ship to which s 14 applied by the operation of s 14(13). In reading those provisions, s 6(4) must be taken to have the effect that the references to the owner are to be taken to be references to the operator.

35                  Part II of the Registration Act established a regime for the registration of ships. Section 12(1) provided that, subject to Part II, every Australian-owned ship must be registered under the Registration Act. Under s 8(1), a reference in the Registration Act to an ‘Australian owned ship’ is to be read as a reference to a ship that:

(a) is owned by an Australian national or Australian nationals and no other person;

(b) is owned (otherwise than as described in paragraph (c) below) by three or more persons as joint owners, where the majority of those persons are Australian nationals; or

(c) is owned by two or more persons as owners in common, where more than half of the shares in the ship are owned by an Australian national or Australian nationals.

36                  However, under s 12(2) of the Registration Act, where an Australian-owned ship is ‘operated by’ a foreign resident under a demise charter, the Minister may exempt the ship during the term of the charter from the requirement to be registered. Further, under s 13, ships less than 24 metres in tonnage length, Government ships, fishing vessels and pleasure craft are exempt from this requirement under s 12 to be registered. Section 14 of the Registration Act provides that, where application is made as provided by the Act, the following ships are also to be registered:

(a) Australian owned ships referred to in s 13;

(b) small craft wholly owned by residents of Australia or by residents of Australia and Australian nationals;

(c) small craft operated solely by residents of Australia or Australian nationals or both;

(d) ships on demise charter to Australian based operators.

37                  There is nothing in the Registration Act that specifies when a ship is to be taken to be ‘operated’ by a particular entity or when a particular entity will be an ‘operator’. However, s 9(1) provides that a reference to a ship on demise charter to an Australian based operator is to be read as a reference to a ship (not being a ship required to be registered or that may be registered by virtue of s 14(a), (b) or (c)) on demise charter to:

‘(a) an Australian national or Australian nationals and to no other person; or

(b) 2 or more persons who include an Australian national or Australian nationals, where the Australian national is, or the Australian nationals are, as the case may be, in a position to control the exercise of the rights and powers of the charterers under the charter party.’

[Emphasis added.]

38                  In addition to substituting a new s 10 in the Navigation Act, the 1981 Amendment Act omitted s 14(13) and substituted a new s 14(13), which in substance re-enacted the previous s 14(13)(b). The new s 14(13) provided that, in s 14, a reference to a ship is to be read as including a reference to a ship that is intended to be constructed or is in the course of construction and, in either case, is intended to become a ship of a kind referred to in the new s 10(a), (b) or (c). Section 19 of the Navigation Act was also repealed. Once s 10 had been enacted to refer to ships operated by Australian entities and to govern the whole of Part II, s 14(13)(a) and s 19 no longer had work to do.

39                  It is to be noted, however, that there was introduced into s 10 a new and different prerequisite in the first limb of paragraph (c): that the majority of the crew of a ship be residents of Australia. Under the old paragraph (c), the prerequisite was that the ship be licensed under s 288 to engage in the coasting trade, being a ship that was not registered in Australia and not in fact engaged in the coasting trade. The prerequisite of the second limb of the new s 10(c) was that which was previously in s 14(13)(a) and s 19, namely that the ship be operated by an Australian entity, whether or not in association with any other entity.

40                  These changes to the Navigation Act between 1979 to 1981 should be understood in the context of the subject matter of the Navigation Act, and the recognition that some provisions of the Navigation Act applied to the limited classes of ships provided for in s 10 and some provisions applied to all ships.

41                  Prior to 1981, several provisions of Part II applied to all ships, whether or not they were British ships. Thus, s 45(1) provided that a member of the crew of a foreign going ship (whether British or foreign) was not to be employed at a port in Australia in handling cargo or ballast in connection with the loading or unloading of a ship. Since the 1981 Amendment Act, s 45(1) has contained a similar prohibition in respect of a ship, ‘whether or not it is a ship to which [Part II] applies’. Before 1981, Section 104(1) provided that no person must secrete himself and go to sea in a ship, including a foreign ship, without the consent of some person entitled to give that consent. Since the 1981 Amendment Act, the prohibition has been in respect of a ship, ‘whether or not it is a ship to which [Part II] applies’. Prior to 1981, Section 145(1) contained a prohibition against any person, unless authorised by law, going on board any ship which is about to arrive, without the permission of the master, or remain on board a ship, including a foreign ship, after being warned to leave by the master. Since the 1981 Amendment Act, s 145 has contained a similar prohibition in respect of any ship, ‘whether or not it is a ship to which [Part II] applies’. Before the 1981 Amendments, Section 147 contained an exemption for masters and seaman of all ships from serving as jurors. Since the 1981 Amendment Act, s 147 has expressly stated that the exemption applies to masters and seaman of all ships, ‘whether or not they are ships to which [Part II] applies’. Finally, s 148A previously contained a prohibition against wrongfully forcing on shore and leaving behind at a place in Australia a seaman or apprentice belonging to a ship, including a foreign ship. Since the 1981 Amendment Act, the prohibition has referred to a seaman belonging to a ship, ‘whether or not it is a ship to which [Part II] applies’.

42                  Divisions 2A and 3 of Part II, in relation to which the concept of the ‘operation’ of a ship was introduced into the Navigation Act, are concerned with the manning of ships. Thus, under s 14(1) the Minister may, by order, require a ship or each ship included in a class of ships to carry a qualified master of a specified designation and to carry not less than a specified number of qualified officers of specified designations and a specified number of qualified seamen of specified designations. Under s 14(8), if such an order is contravened or not complied with in relation to a ship, the master and the owner of the ship are guilty of an offence. Further, under s 14(9), where a ship does not carry a master of such designation and such officers and seamen as it is required to carry by virtue of such an order, the Minister may cause the ship to be detained for the purpose of preventing from going to sea or may require that a specified operation by or in relation to the ship shall not commence. Such a requirement is to be given by notice in writing addressed to the master or owner of the ship. Under s 14(11), if such a notice is contravened or not complied with in relation to a ship, the master and owner of the ship are each guilty of a further offence. In the context of those provisions, s 6(4) would operate to treat the reference to owner as including a reference to the operator of a ship.

43                  The new s 15(1), in Division 3, provides that the Regulations may specify standards of competence to be attained and other conditions to be satisfied by a person in order to be a qualified master, officer or seaman of any designation for the purposes of the Navigation Act. Section 16 then provided that a person must not serve on a ship as a master, officer or seaman of a particular designation if he is not a qualified master, officer or seaman of that designation. Further, s 16 also provides that a person must not take into employment as a qualified master, officer or seaman of a particular designation a person who is not a qualified master, officer or seaman of that designation. A penalty is imposed for contravention.

44                  Under s 17, a person who is serving on a ship as a qualified master, officer or seaman of any designation must not, without reasonable excuse, fail to produce, on demand, his certificates to a proper authority. Under s 18, a proper authority at a port may refuse to permit a person to enter into an agreement to serve on a ship as a master, officer or seaman of a particular designation if the proper authority is not satisfied that the person is a qualified master, officer or seaman of that designation.

45                  The subject matter dealt with by the whole of Part II is amenable to being applied to a ship whose master and crew is employed and directed by an Australian entity. Part II is concerned with the day to day regulation of the work and conditions of seafarers. To the extent that the phrase ‘operated by’ is apt to identify the party in control of and managing the master and crew (even though acting in the capacity of an agent) that is conformable with the objects of Part II.

46                  Other parts of the Navigation Act are not as limited in their application as Part II. For example, Part IV deals with all ships. A number of provisions providing for the responsibility of the owner (and so, operator: s 6(4)) were said by counsel not to be apt to apply to parties such as the applicants managing and controlling only the master and crew: see for example s 193 (the requirements for regular survey), s 211(2) (the cost of detention of substandard ships), s 227A (the prohibition on the master or owner - and so operator: s 6(4) - proceeding to sea without a relevant loadline certificate), s 227D (offences of the master or owner - and so, operator; s 6(4) - with respect to load line markings), s 307 (the recovery of expenses by any receiver in respect of a wreck from the owner - and so, operator: s 6(4) - and s 314A (the power in AMSA to require the owner - and so, operator: s 6(4) - to remove a wreck). We will return to this argument in due course.

THE CLAIMS FOR COMPENSATION

47                  The proceedings before the Court involve two separate claims for compensation, one by Mr Gert Bergvall and the other by Mr Shane Anthony Kelk. It is necessary to say something about each.

89                  The task of construction and interpretation of s 10 is directed to the Navigation Act, not the Compensation Act. Section 10 of the former is picked up by its adoption in the definition of ‘prescribed ship’ in the latter. There can be no meaning given to s 10 for the purposes of its incorporation into the Compensation Act different from its meaning for all other purposes relevant to the operation of the Navigation Act itself. To the extent that the submissions put on behalf of Mr Bergvall and Mr Kelk were to the contrary, we reject them.

90                  The task in construing s 10 is to assess whether, in any given circumstances, a given entity having the relevant connection with Australia has sufficient management and control of a ship, as a chattel and as an operating enterprise, such that it can be said that the ship is operated by that entity, albeit in association with any other party. It is important to recognise that an affirmative answer to the question as to whether a ship is operated by an entity in association with another is not provided by a conclusion that the entity merely assists in the operation of the ship by another. The ship must be ‘operated by’ the entity for the purposes of s 10.

91                  The legislative history of the wording of s 10 makes clear that the concept of a ship being ‘operated by’ an Australian entity, whether or not in association with another entity is designed to require an Australian nexus. However, it is not sufficient that the crew has a very strong association with Australia. Even if 100 percent of the crew were resident in Australia, that would not be sufficient. There must be an aspect, in addition to residence of the crew, that has a connection with Australia. The task for the Court is to determine the rationale behind the second limb of s 10(c), to explain how the nexus as to ‘operating’ is to operate.

92                  It is necessary to understand the maritime context. The phrase ‘a ship … which is operated by’ and the word ‘operator’ of a ship do not carry a precise content from maritime law or history. Brodie’s Dictionary of Shipping Terms (4^th Ed) defines the phrase ‘to operate a ship’ as follows:

To run a ship. There are two principal aspects of operating a ship: technical and commercial. Technical operation includes crewing and supplying the ship, keeping her machinery and equipment in working order and stowing cargoes safely and efficiently. Commercial operation is concerned more with booking cargoes, negotiating freight rates and bunker prices and appointing ship’s agents at the ports of call.

93                  Sullivan’s Marine Encyclopaedic Dictionary (6^th Ed) does not define ‘operator’ or ‘to operate’. Interestingly, however, the second edition of Sullivan’s Marine Encyclopaedic Dictionary (Lloyds of London 1988) defined the phrase ‘to operate a ship’ as follows:

‘To run a ship. There are two principal aspects of operating a ship:

Technical and commercial. Technical operation includes crewing and supplying the ship, keeping her machinery and equipment in working order and stowing cargoes safely and efficiently. Commercial operation is concerned more with booking cargoes, negotiating freight rates and bunker prices and appointing ships’ agents at the ports of call.’

94                  The words ‘operator’ and ‘to operate’ can be used at several levels of abstraction. Much depends on context. Here it is the ship which is to be operated by an Australian person, firm or company whether alone or in association with others. Whilst one may speak of a machine being operated by a person who physically attends to its working, the level of abstraction required by the phrase in s10 ‘a ship which is operated by a person, firm or company’ assists one to conclude that it is not the master and crew individually and in association with one another who are operating the ship. They can certainly be seen to be working the ship, but the context here requires the notion of management and control of the ship.

95                  In many cases, there will be one operator in whom there reside important, perhaps all the important, elements of physical and commercial dominion over a large trading and operating asset such as a ship. That is illustrated by the phrase used in ss 3, and 9 and 14 of the Registration Act:‘ship on demise charter to an Australian-based operator’. There, for the purpose of registration, it is posited that an Australian-based operator is the demise charterer of the ship. Thus, a ship so chartered could be registered as long as the demise charter is to an Australian-based operator. A demise (or bareboat) charter is, of course, the equivalent of a chattel lease in which transfer is made of the possession, command and control of the vessel: Colvin v Newberry (1832) 1 Cl & F 283; 6 ER 923; Baumwoll Manufactur Von Scheibler v Christopher Furness [1893] AC 8; Sandeman v Scurr (1866) LR 2 QB 86; Australasian United Steamship Navigation Co Ltd v Shipping Control Board (1945) 71 CLR 508, 521; United States v Shea 152 US 178 (1894); United States v Cornell Steamboat Co 267 US 281 (1925); and The ‘Guiseppe Vittorio’ [1998] 1 Lloyd’s Rep 136.

96                  As the Tribunal noted, the Registration Actwas introduced into Parliament at the same time that s 10 in its, relevantly, current form was inserted into the Navigation Act. Sections 3, 9 and 14 of the Registration Actin that respect do not govern s 10(c) of the Navigation Act. They do, however, assist with a conclusion that, to the extent that the noun form (operator) and the verb form (to operate) can be seen to have the same essential meaning, they carry a notion of management and control. This assists in understanding that ‘operated by’ is not a reference merely to the physical working of the parts of the ship, but to the management and control of the ship. That is, to an extent, reinforced by s 6(4) of the Navigation Act.

97                  The effect of s 23 of the Acts Interpretation Act 1901 (Cth) is that the singular use of the words ‘owner’ and ‘operator’ includes the plurals of those words. To a degree, the conflation of owner and operator in s 6(4) of the Navigation Act points to the conclusion that the word ‘operator’ is being used in a sense beyond merely working the mechanical parts of the ship and in a sense importing the notions of control and management of and dominion over the ship that one would associate with ownership.

98                  A ship is, of course, a chattel: Behnke v Bede Shipping Co Ltd [1927] 1 KB 649, 659. Nevertheless, as Turner LJ said in McLellan v Gumm (1866-67) LR 2 Ch App 290, a ship is unlike an ordinary personal chattel. It is also a working commercial enterprise, often both the home and workplace, for long periods, to the ship’s complement. The ship is engaged in activity that has inherent danger to those on board, and is a potential source of environmental and other danger to her physical and human surroundings. For those reasons, those having the management and control of the ship have responsibilities concerning the commercial deployment of the ship, the technical safety and adequacy of the ship as a complex integrated working entity, and of the choice, supervision, care and discipline of the master and crew on board the ship. All these activities, indeed operational responsibilities, have a relationship with one another. The commercial enterprise undertaken (the types of cargoes lifted, the ports visited and the routes taken on voyages) is not unrelated to the maintenance of an appropriate standard of technical adequacy of the ship for the tasks involved in carrying out that enterprise. The skill and competence of the chief engineer and those under him or her will be vital in the assessment of the day to day adequacy of performance of the ship from a commercial and technical point of view. The skill, competence, discipline and working conditions of the crew will also, in a real and practical way, be related to the efficient and safe working of the ship, productively from a commercial point of view and efficiently from the perspective of human and environmental safety. This tripartite division (commercial, technical and crewing) of what are practical operating responsibilities can be seen in the industry standard form agreement: BIMCO Shipman 98.

99                  Subject to the context which dictated the enquiry, given the intensely practical nature of the operation of a ship one would not readily limit the use of the words ‘operator of a ship’ or ‘to operate a ship’ only to the legal entity or entities (human or corporate) which had ultimate and final decision-making power over how the ship was to be commercially deployed or run, or to those final decision-making activities. Whilst the words in the present context carry with them notions of management and control, they also carry with them the notions of the practical working of, and responsibility for, the ship – both as a chattel and an enterprise and - having regard to the legislative history and secondary material - the notion of the direct responsibility therefor.

100               Context is, of course, vital to answering questions such as: Who is or are the operator or operators of the ship, or by whom is the ship operated? It was pressed before us by the Employers that the nomination of Mobil UK as ‘the Company’ for the purposes of the ISM Code was of critical importance. The ISM Code deals with the operation of ships and their safe management. Its purpose was expressed in paragraph 1 of its preamble:

To provide an international standard for the safe management and operation of ships and for pollution prevention.

Throughout the ISM Code there are responsibilities placed on ‘the Company’. Those responsibilities include the development, implementation and maintenance of a safety-management system including instructions and procedures (section 1.4), the establishment, implementation and maintenance of a safety and environmental-protection policy (section 1.5), the ensuring of the proper manning of the ship, including establishing and maintaining relevant training (section 6), and the establishment and maintenance of procedures for the maintenance of the ship and her equipment (section 10). That Mobil UK has been nominated as the Company for the purposes of section 1.1.2 of the ISM Code reflects the need in the ISM Code for one entity to have, in effect, ultimate responsibility for the carrying out of these most important responsibilities. Section 1.1.2 is in the following terms:

Company means the owner of the ship or any other organisation or person such as the manager, or the bareboat charterer, who has assumed the responsibility for operation of the ship from the shipowner and who, on assuming such responsibility, has agreed to take over all duties and responsibility imposed by the Code.

101               This requirement for one nominated entity to be responsible for all the matters in the ISM Code has led one commentator, Mr Philip Anderson in ISM Code: A Practical Guide to the Legal and Insurance Implications (London, Lloyd’s 1998), to say at p 60 of that work:

If the shipowner has told the relevant Administration that some other party is to be responsible for the operation of the ship then a rather unsatisfactory situation may arise. It may be that an owner has appointed a ship manager to operate the ship, or maybe the ship is subject to a bareboat charter. In the latter case it may not necessarily pose a problem for the bareboat charterer would appoint his own master and crew and maintain and trade the ship as though it were his own. However, it is not unusual for a shipowner to contract out only part or certain parts of the operation of the ship to ship managers, retaining certain parts of the operation to himself. For example, he may contract out the technical management and the crewing – possibly even to different managers – keeping the commercial trading side of the operation under his own roof. The Code does not appear to provide for the division of operating responsibilities.

[Emphasis added.]

102               The ISM Code, introduced as it was after 1981, is not a tool for interpreting the Navigation Act. It does however, illuminate the important practical inter-relationship in the safe management and operation of a ship between the establishing of proper procedures and their day-to-day maintenance and the implementation thereof, and the importance not only of the choice of qualified master and crew, but also of the quality of the discharge by them of their duties on a day-to-day basis and the supervision thereof.

103               The Employers emphasised the importance of the commercial operation of the ship to the notion of ‘operation’. The commercial operation of a working merchant ship may be considered in different contexts. The choice of cargoes, ports and commercial method is a sophisticated and complex part of the operation of the ship. It may be undertaken by a so-called ship manager or operator on behalf of an owner or demise charterer. It may be undertaken in conjunction with the technical and crewing responsibilities. But the commercial control of the use of the vessel does not, of itself, lead to the conclusion that the party having commercial control would be called a ship operator for all purposes. For example, a time charterer of a working merchant ship is normally considered to have the ship at its commercial disposition (subject to the terms of the arrangement, including limits of trading). Indeed, such a charterer is often called the ‘disponent owner’. In a time charter, the person who stands as owner will agree to provide the services of the ship and crew and to place them at the commercial disposition of the time charterer: see The ‘Peonia’ [1991] 1 Lloyd’s Rep 100, 107; The ‘Berge Tasta’ [1975] 1 Lloyd’s Rep 422, 424; The ‘Gregos’ [1993] 2 Lloyd’s Rep 335, 337 and [1995] 1 Lloyd’s Rep 1; and The ‘Hill Harmony’ [2001] 1 AC 638. One would not, however, ordinarily describe the time charterer as the operator of the ship, unless the context was such that the relevant designation was by reference only to the control of the commercial disposition of the ship: cf the definition of ‘disponent owner’ in Sullivan’s Marine Encyclopaedic Dictionary (6^th Ed) p 135.

104               Both parties pressed upon us the history of the use of the word ‘operator’ in limitation conventions and statutes. The history of limitation in England and of the attempts at international harmonisation was helpfully set out by David Steel J in CMA CGM SA v Classica Shipping Co Ltd [2003] 2 Lloyd’s Rep 50 at [14] to [27]. That history reveals an expansion of the categories of persons entitled to limit their liability. See also McDermid v Nash Dredging Ltd [1986] 1 QB 965, 980-82. The extension of limitation to operators appeared first in the 1924 Convention for the Unification of Certain Rules relating to the Limitation of Liability of Owners of Seagoing Vessels. It was repeated in the 1957 International Convention relating to the Limitation of the Liability of Owners of Seagoing Ships and the 1976 Limitation of Liability for Maritime Claims Convention in slightly varying terms. It is to be noted that no particular technical meaning was ascribed to the word in those Conventions. Rather, its ordinary meaning in the context of the use of a ship appears to have been intended. The decision of the Court of Appeal in CMA CGM v Classica [2004] 1 Lloyd’s Rep 460 made clear that the ordinary meaning was to be given to the words of the 1976 Convention in the designation of the parties entitled to limitation, without infusing them with qualifying notions based on ownership.

105               These considerations suggest that no special or particular meaning of the words is likely to come from the maritime context. Rather, an ordinary English meaning is to be expected, influenced by the maritime context of the intensely practical inter-related responsibilities involved in the management and control of a ship. The legislative history and relevant secondary material make clear, however, that the meaning of ‘operated by’ in s 10 involves direct responsibility for the management and control of the ship, and that it is significantly directed to the crew, their choice, qualifications, conditions, control and discipline.

106               We therefore reject the contention that the word ‘operator’ or the phrase ‘to operate’, and the relevant parts of speech taken therefrom, relate only to the entity that has the commercial disposition of the ship or who has the final authority on operational matters. The person or entity who has the commercial disposition of a ship, or who has the final authority on operational matters, as commercial common sense dictates, may be entirely divorced from the practical day-to-day activities of the ship and is likely to be identified by reference to legal form, not practical affairs. Nor, in this context, are the words limited to the party who has the final legal say about how the physical activities on board the ship are to be conducted. Nor is the question to be approached, as we take the Tribunal to have done, by only asking whether operations are physical or commercial, as reflected by the seventh or eighth definitions referred to by the Tribunal. Rather, the question is whether, as a matter of English, in a recognised maritime context, the respective ships were operated by the Employers in association with others, having regard to the directness of the actual management and control by the Employers of the operation of the ships. The phrase ‘operated by’ in s 10 encompasses the notions of a real, substantial and direct role in the management and control of the commercial, technical and crewing operations of the ship. Care must be taken not to replace the ordinary English words chosen by Parliament with some other phrase. The ‘commercial’, ‘technical’ and ‘crewing’ aspects of a ship’s operations are identified, not because they form an inflexible taxonomy within the Navigation Act, but because, in the maritime context, they appear to be the major inter-related groups of tasks or responsibilities in the control and management of a ship. The history of the relevant amendments to the Navigation Act, the secondary material connected therewith and the subject matter of the Navigation Act permit one to conclude that the party who has the direct responsibility for the management and control of the ship in connection with the manning and qualifications of the master and crew, the conduct of their duties on board the ship and the conduct of the working of the ship may well be the operator of the ship, albeit in association with another or others.

107               It is the direct responsibility for the management and control of the ship in the above sense that is important although, as s 10 makes clear, this responsibility can be shared. Undoubtedly such sharing can be between or among entities all of whom report individually to the owner or a supervising controller. The existence of the owner or supervising controller would not preclude an affirmative answer to the question whether an agent for some aspects of the control and management of the ship was in fact the ‘operator’ in association with others.

108               A perceived difficulty pointed to by the Employers is that the effect of the conclusion that there could be a crewing operator who would or could be liable (because of s 6(4)) for matters beyond its operational responsibilities. That difficulty is, however, more apparent than real. It is solved by reading each provision to which s 6(4) applies as referring to the relevant operator. That is permissible if one recognises the background and purpose of the Navigation Act and one also recognises that maritime practice before and after the 1981 Amendment Act would admit of the possibility of there being more than one entity undertaking operational responsibilities.