FEDERAL COURT OF AUSTRALIA

Samson Maritime Pty Ltd v Aucote [2014] FCAFC 182

ON APPEAL FROM THE ADMINISTRATIVE aPPEALS TRIBUNAL

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The application under s 39B of the Judiciary Act 1903 (Cth) be dismissed.

3.    The applicant pay the respondent’s costs of the appeal and the application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ON APPEAL FROM THE ADMINISTRATIVE aPPEALS TRIBUNAL

REASONS FOR JUDGMENT

1    These proceedings raise the issue of whether the Administrative Appeals Tribunal had jurisdiction to determine an application for compensation made by the respondent, Noel Aucote, under the Seafarers Rehabilitation and Compensation Act 1992 (Cth) (the SRC Act). The applicant in this Court, Samson Maritime Pty Ltd, was Mr Aucote’s employer.

2    On 18 June 2011, Mr Aucote injured his right shoulder whilst working as a deckhand or dogman on board Samson Mariner, a multi-cat dredge helper vessel. The vessel was registered on the Australian Register of Ships (as the register was then known) under the Shipping Registration Act 1981 (Cth). The vessel was being used to assist in the construction of a 1.5 kilometre two sided wharf and associated infrastructure at Port Walcott, in Cape Lambert, in the Pilbara region of Western Australia. The wharf, when completed, would be used for loading bulk carriers with iron ore. The builder, John Holland Pty Ltd, had chartered Samson Mariner on a supply time 2005 form for a minimum of 12 months from February 2011. Rio Tinto Iron Ore had engaged John Holland to construct the wharf and associated port infrastructure so that it would have the capacity to load up to 50 million tonnes of iron ore annually, principally for export to the People’s Republic of China.

3    In essence, Samson contends that in this context Mr Aucote suffered his injury in circumstances that involved wholly intra-State activity and to which the SRC Act did not apply. That was because, Samson argued, s 19, relevantly, limited the application of the SRC Act to matters arising in trade or commerce between Australia and a place outside Australia and that it was not expressed to deal with intra-State trade or commerce because that was a subject matter beyond the Parliament’s power to make laws under s 51(i) of the Constitution.

4    The Tribunal, constituted by its President, rejected Samson’s jurisdictional argument. Samson challenged that decision by filing an appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (which Mr Aucote contended was not competent), and separate proceedings seeking constitutional writ relief.

5    Mr Aucote argued that the appeal was not competent because it related to a separate and preliminary ruling as to jurisdiction and was therefore not an appeal provided for under s 44 of the AAT Act.  This argument was founded on the decision in Director General of Social Security v Chaney [1980] FCA 87; (1980) 47 FLR 80; (per Deane and Fisher JJ, Northrop J dissenting). That decision pre-dated the enactment of s 39B of the Judiciary Act 1903 (Cth). Section 39B now provides an appropriate avenue for such a challenge. Accordingly, it is not necessary to express a view on Mr Aucote’s argument, as Samson appeared to accept its justification by filing the constitutional writ application under s 39B seeking writs of certiorari and mandamus. In any event, in its written submissions, Samson relied upon the same substantive arguments as were advanced in support of the appeal “to the extent the determination of the AAT is not capable of being appealed”. These reasons address those substantive arguments.

The legislative scheme in the SRC Act

6    The long title to the SRC Act stated, among other matters, that it related “to rehabilitation and workers’ compensation for seafarers”. Relevantly, s 3 of the SRC Act provided that, unless the contrary intention appeared:

prescribed ship means a ship to which Part II of the Navigation Act applies but does not include a Government ship.

seafarer means a person employed in any capacity on a prescribed ship, on the business of the ship, other than:

(a)    a pilot; or

(b)    a person temporarily employed on the ship in port; or

(c)    a person included in the class of persons defined as special personnel in section 283 of the Navigation Act.

7    The definition of “prescribed ship” in s 3 of the SRC Act provided that this was a ship to which Pt II of the Navigation Act 1912 (Cth) applied. Relevantly, s 10 of the latter Act, which was in Div 1 of Pt II, provided:

10    Application of Part

Except so far as the contrary intention appears, this Part applies only to:

(a)    a ship registered in Australia;

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

(c)    a ship (other than a ship registered in Australia or engaged in the coasting trade) of which the majority of the crew are residents of Australia and which is 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:

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

(ii)    a firm that has its principal place of business in Australia; or

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

and to the owner, master and crew of such a ship.

8    Next, s 4(1), (2) and (4) of the SRC Act provided:

4    Employees

(1)    In this Act, unless the contrary intention appears:

employee means:

(a)    a seafarer; or

(b)    a trainee; or

(c)    a person (other than a trainee) who, although ordinarily employed or engaged as a seafarer, is not so employed or engaged but is required under an award to attend at a Seafarers Engagement Centre for the purpose of registering availability for employment or engagement on a prescribed ship.

(2)    For the purposes of this Act, an industry trainee or a person mentioned in paragraph (c) of the definition of employee is taken to be employed by the Fund until he or she next becomes a seafarer, and his or her employment is taken to be constituted by his or her attendance:

(a)    in the case of an industry trainee – at an approved industry training course; and

(b)    in the case of a person mentioned in paragraph (c) of the definition of employee – at a Seafarers Engagement Centre for the purpose of registering availability for employment or engagement on a prescribed ship.

…

(4)    If a provision of this Act applies to an employee after an employer has incurred a liability in relation to the employee under this Act, then, unless the contrary intention appears, a reference in that provision to an employee includes a reference to that person even after he or she ceases to be an employee.

9    The Fund to which s 4(2) referred was a trading corporation that the Minister had approved for the purposes of the SRC Act under s 96. There were two categories of “trainee” in the definition of that expression in s 3 of the SRC Act, namely a company trainee and an industry trainee, which were also defined in s 3 as follows:

company trainee means a person (other than an industry trainee) who:

(a)    although ordinarily employed or engaged as a seafarer, is not so employed or engaged but is undergoing a training course as required by his or her employer; or

(b)    is undergoing a training course as required by his or her employer before becoming a seafarer.

industry trainee means a person (other than a company trainee) who:

(a)    although ordinarily employed or engaged as a seafarer, is not so employed or engaged but is undergoing an approved industry training course; or

(b)    is undergoing an approved industry training course before becoming a seafarer.

10    Without being exhaustive, s 9 dealt with injuries to employees that could be treated as having arisen out of their employment for the purposes of the SRC Act. It deemed that, among other circumstances, such injuries included those that had happened while the employee was travelling between his or her place of residence and a place of work (s 9(2)(e)(i)) or a Seafarers Engagement Centre for the purpose of registering availability for employment or engagement on a prescribed ship (s 9(2)(e)(iii)), or was travelling between either a place where a required course of training was being conducted (s 9(2)(e)(v)) or a place for the purpose of obtaining a medical certificate for the purposes of the SRC Act, receiving medical treatment for an injury (s 9(2)(e)(vi)(A), (B)) or receiving money due that, under the terms of his or her employment agreement or arrangements with the employer, was available or reasonably could be expected to be available for collection at that place (s 9(2)(e)(vi)(F)).

11    The SRC Act extended to all places outside Australia, including external Territories (s 18). Importantly, for present purposes, s 19 provided:

19    Application of Act

(1)    This Act applies to the employment of employees on a prescribed ship that is engaged in trade or commerce:

(a)    between Australia and places outside Australia; or

(aa)    between 2 places outside Australia; or

(b)    among the States; or

(c)    within a Territory, between a State and a Territory or between 2 Territories.

(1A)    In addition, this Act applies to the employment of employees on any prescribed ship that is:

(a)    an off-shore industry vessel in relation to which a declaration under subsection 8A(2) of the Navigation Act is in force; or

(b)    a trading ship in relation to which a declaration under subsection 8AA(2) of that Act is in force.

(2)    This Act also has the effect it would have if:

(a)    a reference to an employer were limited to a reference to a trading corporation formed within the limits of the Commonwealth; and

(b)    a reference to an employee were limited to a reference to an employee employed by a trading corporation formed within the limits of the Commonwealth.

(3)    This Act also has the effect it would have if:

(a)    a reference to an employer were limited to a reference to a financial corporation formed within the limits of the Commonwealth; and

(b)    a reference to an employee were limited to a reference to an employee employed by a financial corporation formed within the limits of the Commonwealth.

(4)    This Act also has the effect it would have if:

(a)    a reference to an employer were limited to a reference to a foreign corporation; and

(b)    a reference to an employee were limited to a reference to an employee employed by a foreign corporation.

(5)    Subsection (3) does not have the effect of applying this Act with respect to:

(a)    State banking that does not extend beyond the limits of the State concerned; or

(b)    State insurance that does not so extend.

(emphasis added)

12    However, the SRC Act did not apply to any person who was an employee within the meaning of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (s 20). Critically, s 26(1) provided that if an employee suffered an injury that resulted in his or her death, incapacity for work or impairment, compensation was payable for that injury. Also, where an injury to an employee resulted in a permanent impairment, he or she was entitled to be paid compensation (s 39(1)) and was entitled to interim compensation under s 40, as well as to additional compensation, if certain conditions were satisfied, under s 41. If an employer would have been liable in an action for damages in respect of an injury sustained by an employee, s 54(1) of the SRC Act denied the right of the employee to sue for those damages except in the circumstances specified in s 55, namely:

55    Actions for damages—election by employees

(1)    If:

(a)    compensation is payable under section 39, 40 or 41 in respect of an injury to an employee; and

(b)    the employee’s employer or another employee would, apart from subsection 54(1), be liable for damages for any non-economic loss suffered by the employee because of the injury;

the employee may make an election in accordance with subsection (2) to institute an action or proceeding against the employer or other employee for damages for that non-economic loss.

(2)    An election:

(a)    must be made before an amount of compensation is paid to an employee under section 39, 40 or 41 in respect of the injury; and

(b)    must be given to the employer in respect of the injury; and

(c)    must be in writing.

(3)    An election is irrevocable.

(4)    If an employee makes an election:

(a)    subsection 54(1) does not apply in relation to an action or other proceeding subsequently instituted by the employee against the employer or another employee for damages for the non-economic loss to which the election relates; and

(b)    compensation is not payable after the date of the election under section 39, 40 or 41 in respect of the injury.

13    Additionally, compensation was not payable to a person under the SRC Act unless a claim for compensation was made by him or her or on his or her behalf under s 63. An employer had to have a policy of insurance or indemnity from an authorised insurer or be a member of an approved employers’ mutual indemnity association or an approved protection and indemnity club (or association) so that the employer was insured or indemnified for the full amount of the employer’s liability under the SRC Act in respect of all of his, her or its employees (s 93(1)). Further, s 97 required the Fund to have a similar policy of insurance or indemnity.

14    If a State or Territory law provided for payment of compensation, other than workers’ compensation, and the Minister declared that law to be a specified law for the purposes of s 139 of the SRC Act and compensation was paid to, or for the benefit of, any employee in respect of an injury suffered, s 139 prescribed a formula to reduce the amount of compensation payable under the SRC Act. And, s 139A provided:

139A    Exclusion of State laws relating to workers’ compensation

This Act excludes the operation of any law of a State or Territory relating to workers’ compensation in so far as that law purports to apply in relation to death of, or an injury suffered by, or loss of, or damage to, property used by, an employee if the death or injury, or the loss or damage, happens after the commencement of this section.

Background

15    The parties helpfully agreed the facts with one minor exception that the Tribunal resolved. Essentially, Samson Mariner worked in close co-operation with and towed two jack-up barges, Eunsung 1200 and Phoenix. Eunsung 1200 had been entered on the Australian Register of Ships from 2007 and was owned by Fugro Seacorp Australia Pty Ltd, whose registered address was in Western Australia. Phoenix had never been entered on the Australian Register of Ships and the Tribunal found that she was owned by a Korean company, Eunsung O & C.

16    The jack-up barges were used as working platforms for the construction of the wharf. Samson Mariner would tow and relocate the jack-up barges so that the construction continued to progress. Samson Mariner engaged in that activity very frequently, sometimes several times each day, and on other occasions less often.

17    All of the materials used to construct the wharf, including steel pilings and prefabricated steel sections, came into port on two heavy lift vessels that were Chinese registered. Once those materials had been discharged at the then existing wharf, Samson Mariner loaded them and took them to the jack-up barges. Samson Mariner also carried diesel fuel to the two jack-up barges from Samson’s base at John’s Creek, Point Samson. During the cyclone season from January to March, Samson Mariner would tow Eunsung 1200, Phoenix and other working barges, when necessary, to safe anchorages outside of Cape Lambert, sometimes as far away as 80 nautical miles. From time to time, Samson Mariner also sailed out to sea, beyond both the 12 nautical mile limit and the coastal sea of Australia, but within the exclusive economic zone (as defined in the Seas and Submerged Lands Act 1973 (Cth) and s 15B of the Acts Interpretation Act 1901 (Cth)) to dump its sewage, in accordance with environmental regulations.

18    On 18 June 2011, Mr Aucote was working on board Samson Mariner at Cape Lambert. She was making preparations to reposition Phoenix when he threw a heaving line, that was attached to the tow line, to a crewman on the jack-up barge. In doing so, Mr Aucote suffered injury to his right shoulder.

19    The jurisdictional issue is whether Mr Aucote had any right to claim compensation in respect of that injury under the SRC Act.

The Tribunal’s reasons

20    The Tribunal examined the legislative history of the SRC Act and its predecessors against the background of the decision of the High Court in The Owners of the SS Kalibia v Wilson [1910] HCA 77; (1910) 11 CLR 689 that had held the Seamen’s Compensation Act 1909 (Cth) to have been invalid. It found that Samson Mariner was engaged in international trade so as to attract the operation of s 19(1)(a) of the SRC Act. That was because it found that Rio Tinto was committed to exporting iron ore from the wharf once its construction was completed. It found that the construction work was engagement in the trade and commerce of the envisaged long term exportation of iron ore, applying what Knox CJ, Isaacs and Starke JJ had said in W & A McArthur Ltd v Queensland [1920] HCA 77; (1920) 28 CLR 530 at 546-547. It also found that, although John Holland was incorporated in Victoria and Samson Mariner was operating in Western Australia, viewed in isolation from Rio Tinto’s plans and business, for the purposes of s 19(1)(b) of the SRC Act, the substantial nature of the trade and commerce in which Samson Mariner was engaged was intra-State.

21    The Tribunal raised with the parties the question of whether s 19(2) of the SRC Act gave it jurisdiction. After considering their submissions, the Tribunal found that the provisions of s 19(2) did apply because that subsection was intended to extend the operation of the SRC Act beyond what s 19(1) provided.

Samson’s argument

22    Samson argued that the Tribunal erred in construing s 19(1)(a) of the SRC Act as extending that Act’s application to a prescribed ship that is engaged “in activities with respect to” trade and commerce between Australia and places outside Australia. Samson contended that it was not open to construe the italicised words as part of what the statutory language conveyed when all that was stated in s 19(1)(a) was “a prescribed ship that is engaged in trade or commerce between Australia and places outside Australia”. It submitted that the words of s 19(1)(a) focused solely on the purely physical activities of the prescribed ship alone and were divorced from any purpose of the employer, or any other person such as Rio Tinto, in constructing the wharf.

23    Samson argued that it followed that Samson Mariner was engaged in activities that were wholly intra-State, being self-contained in and near Cape Lambert in Western Australia. Samson contended that nothing in the legislative context displaced its suggested construction of s 19(1)(a). It relied on the legislative history, having regard to the early decision in The ‘Kalibia’ 11 CLR 689. Samson contended that, in enacting the SRC Act, the Parliament deliberately framed s 19(1)(a) as having a specific and narrow field of operation that could not extend to activities of others, or the trade or commerce in which those others engaged, when the ship remained and worked in the waters of or adjacent to a single State of the Commonwealth. Samson argued that the Tribunal erred in referring to or relying on the Parliamentary debates, and what the then Minister, Senator MacGregor, had said in introducing a redrafted provision in the Bill for what became the Seaman’s Compensation Act 1911 (Cth) that sought to respond to the difficulties created by the decision in The ‘Kalibia’ 11 CLR 689.

24    Next, Samson argued that the Tribunal erred in construing s 19(2) as independently supporting its jurisdiction to determine Mr Samson’s claim for compensation under the SRC Act. Samson contended that s 19(2) was governed by, and did not operate outside the scope, or independently, of s 19(1) and (1A). It submitted that because the SRC Act dealt with persons employed on prescribed ships who were seafarers, s 19(2) could not be read as applying to all employees of an Australian trading corporation who also happened to be seafarers. Rather, Samson submitted, s 19(2) limited the operation of s 19(1) and (1A) to a person who was an employee of a trading corporation on a vessel that was engaged in, among other activities, international or inter-State trade and commerce.

Consideration – principles of statutory construction

25    The SRC Act must be construed as a whole in order to ascertain whether the Tribunal had jurisdiction to review Samson’s rejection of Mr Aucote’s claim for compensation. In Alphapharm Pty Ltd v H Lundbeck A/S [2014] HCA 42; (2014) 314 ALR 182 at 193 [42], Crennan, Bell and Gagelar JJ said:

The pre-existing law and the legislative history should not deflect the Court from its duty to resolve an issue of statutory construction, which is a text-based activity (See Northern Territory v Collins (2008) 235 CLR 619 at 623 [16] per Gummow ACJ and Kirby J; [2008] HCA 49. See also Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46-47 [47]). However, both parties recognised that the task of statutory construction in this case required some appreciation of the pre-existing law and the legislative history of relevant provisions. Undoubtedly, questions of policy can inform the Court's task of statutory construction (See Thomas v Mowbray (2007) 233 CLR 307 at 348-351 [80]-[93] per Gummow and Crennan JJ; [2007] HCA 33. See also Zheng v Cai (2009) 239 CLR 446 at 453 [18], 455-456 [28]; [2009] HCA 52; Assistant Commissioner Condon v Pompano Pty Ltd (2013) 87 ALJR 458 at 467 [23]-[24] per French CJ; 295 ALR 638 at 646; [2013] HCA 7).

26    Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ said in Australian Securities and Investments Commission v DB Management Pty Ltd (2000) 199 CLR 321 at 338 [34]-[35]:

In Project Blue Sky Inc v Australian Broadcasting Authority ((1998) 194 CLR 355 at 384, per McHugh, Gummow, Kirby and Hayne JJ), after pointing out that the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have, the majority said:

“Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.”

It may be added that, if a party contends that a provision, by reason of such considerations, should not be given its literal meaning, then such a contention may lack force unless accompanied by some plausible formulation of an alternative legal meaning.

27    The various subsections in s 19 must be read having regard to the principles of statutory construction explained by McHugh, Gummow, Kirby and Hayne JJ in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at 381-382 [69]-[71]. Their Honours emphasised that the context of the provision being construed must be examined, and applied what Dixon CJ had said in Commissioner for Railways (NSW) v Agalianos [1955] HCA 27; (1955) 92 CLR 390 at 397, namely that “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed”. They also explained that a legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. They said (198 CLR at 382 [70]-[71]):

Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions (See Australian Alliance Assurance Co Ltd v Attorney-General (Q) [1916] St R Qd 135 at 161, per Cooper CJ; Minister for Resources v Dover Fisheries Pty Ltd (1993) 43 FCR 565 at 574, per Gummow J). Reconciling conflicting provisions will often require the court “to determine which is the leading provision and which the subordinate provision, and which must give way to the other” (Institute of Patent Agents v Lockwood [1894] AC 347 at 360, per Lord Herschell LC). Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.

Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision (The Commonwealth v Baume (1905) 2 CLR 405 at 414, per Griffith CJ; at 419, per O'Connor J; Chu Kheng Lim v Minister for Immigration Local Government & Ethnic Affairs (1992) 176 CLR 1 at 12-13, per Mason CJ). In The Commonwealth v Baume ((1905) 2 CLR 405 at 414) Griffith CJ cited R v Berchet ((1688) 1 Show KB 106 [89 ER 480]) to support the proposition that it was “a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent”.

28    And, as French CJ, Hayne, Crennan, Bell and Gageler JJ said in Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503 at 519 [39]:

“This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text” (Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46 [47]). So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text. Nor is their examination an end in itself.

The historical context

29    The historical context of the SRC Act includes the decision in The ‘Kalibia’ 11 CLR 689. That decision is of Constitutional significance for Australian maritime law. The Seamen’s Compensation Act 1909, the subject of consideration by the Court in The ‘Kalibia’, was passed by the Parliament for the provision of workmen’s compensation benefits to seamen in the coasting trade (whether undertaken by way of intra- or inter-state voyages). As argument for the Commonwealth reflected (11 CLR at 693) one asserted Constitutional foundation of the legislation was s 76(iii) of the Constitution: the Admiralty and maritime jurisdiction. The wording of s 76(iii) was substantially identical to Art III Sec 2 of the United States Constitution. The current orthodoxy as at the time of argument of The ‘Kalibia’ (December 1910) as expressed by the Court (Griffith CJ, Barton and O’Connor JJ) in D’Emden v Pedder [1904] HCA 1; 1 CLR 91 at 113 was that, by reason of the close familiarity of the framers of the Constitution with the United States Constitution, when one found embodied in the Australian Constitution:

“provisions indistinguishable in substance, though varied in form, from provisions of the Constitution of the United States which had long been judicially interpreted by the Supreme Court of that Republic, it is not an unreasonable inference that its framers intended that like provisions should receive like interpretation”.

30    The early United States cases (prior to 1851) tended to found Congressional legislative authority over maritime matters on the commerce power: eg Gibbons v Ogden 22 US 1 (1824); The ‘Thomas Jefferson’ 23 US 428 (1825). In 1851, however, in The ‘Genesee Chief’ 53 US 443 (1851), the Supreme Court founded the validity of an amendment to the Judiciary Act extending federal admiralty jurisdiction to lakes and river waterways on the admiralty and maritime clause in Art III Sec 2, not on the commerce power. This view was repeated and entrenched by an important series of cases on the nature of maritime law, maritime jurisdiction and Congressional authority: see, in particular, The ‘Lottawanna’ 88 US 558 (1874); Butler v Boston and Savannah Steam-Ship Co 130 US 527 (1889); and Ex parte Garnett 141 US 1 (1891). These cases were not based on some idiosyncratic meaning of the word “jurisdiction”. Rather, they depended upon the recognition of a distinct branch of the law, being the general maritime law; and upon the recognition that conferral of jurisdiction was not a matter of mere procedure, but was the conferral of a species of governmental power (national governmental power) to quell controversies, and in doing so, to ascertain, declare and develop the law (the general maritime law). It was thought unlikely in the extreme that this conferral would be made to federal courts without the coterminous authority of Congress to legislate for the same subject matter. That is, the national legislature had authority to make laws over a subject matter which was the responsibility of the national courts to decide, and upon which the national courts had a responsibility to ascertain and declare the law.

31    Though later than The ‘Kalibia’, the position in the United States was made clear in cases such as Southern Pacific Co v Jensen 244 US 205 (1917); Panama Railroad Co v Johnson 264 US 375 (1924); and The ‘Thomas Barlum’ 293 US 21 (1934). The essence of the judgments of the Supreme Court before 1910 can be seen in what was said by McReynolds J in Southern Pacific v Jensen 244 US at 214-215 and by Van Devanter J in Panama Railroad 264 US at 385-386. These expressions of opinion and the cases before 1910 made plain the importance of uniformity and clarity in dealing with maritime affairs and commerce as a national imperative, without the confusion and difficulty of discriminating functionally and geographically in respect of what people or vessels were doing in trade and commerce, and without the complexity of legislation from individual states of the United States. A national United States imperative was recognised in aligning the contours of subject matter of judicial and legislative power by a construction of the Constitution which involved the imperatives of national power and the role of the “necessary and proper” clause in the text, context and structure of the Constitution leading to an implication of national legislative authority.

32    It is also to be appreciated that, in the United States jurisprudence, although the admiralty grant had, by 1851, replaced the commerce power as the direct source of authority for admiralty and maritime legislation, a residual relationship between the two can be seen in the enunciation of the admiralty grant. One can see in that enunciation (see Gilmore and Black The Law of Admiralty (2nd Ed 1977, The Foundation Press, Inc: Mineola, New York) at 31-32; and see Hare American Constitutional Law Vol II (1889, Little, Brown & Co: Boston) at 1009, quoted in Harrison Moore The Constitution of the Commonwealth of Australia (2nd Ed 1910; reprinted 1997, Sweet & Maxwell Ltd: London) at 561-562; The ‘Daniel Ball’ 77 US 557 (1870); In re Boyer 109 US 629 (1884) and The ‘Robert W Parsons’ 191 US 17 (1903)) the residual role of the commerce power in the identification of the water as capable of carrying interstate or overseas sea trade and not the identification of what the ship was in fact doing. Gilmore and Black said (ibid):

“[The admiralty and maritime grant] extends to all waters…which are in fact navigable interstate or foreign water commerce, whether or not the body of water is wholly within a state and whether or not the occurrence or transaction that is the subject-matter of the suit is confined to one state”.

33    The argument was recognised by the contemporary Australian constitutional scholar, Sir W Harrison Moore, who, in 1910, in his work The Constitution of the Commonwealth of Australia, after describing the implication of Congressional power by the United States Supreme Court, expressed the view (at 562) that a similar implication would be drawn in Australia.

34    In The ‘Kalibia’ 11 CLR 689, the brutal despatch of the argument of the Commonwealth based on the American cases by the Court (“untenable”: Griffith CJ at 699, without further discussion; and see also Barton J at 703-704 involving the implicit influence of Imperial authority; and Isaacs J at 715 who saw no justification for applying the same rule) left the legacy that the Commonwealth Parliament did not have power to alter maritime law or to deal with maritime affairs other than by reliance upon the heads of power in s 51, importantly (but not solely) the trade and commerce power.

35    This is not the place to essay the potential crimping of a coherent national maritime law because of the approach in The ‘Kalibia’, and the modern doubts raised about it: Empire Shipping Company Inc v Owners of the Ship ‘Shin Kobe Maru’ [1991] FCA 499; (1991) 32 FCR 78 at 86-87 (Gummow J). Rather, what is important for this appeal is the well-understood recognition of the limitations placed on a coherent national maritime law during the 20th Century to the extent that Commonwealth legislative authority rested on the trade and commerce power in s 51(i). See the discussion in the Australian Law Reform Commission Report on Civil Admiralty Jurisdiction (Rep No 33) at Ch 5, especially [74]-[82].

36    In that context, in particular when dealing with seafarers’ compensation, it would be altogether surprising if the Commonwealth Parliament was not intending more solidly and simply to found legislation of such an important social character on a basis, if available, in addition to the trade and commerce power, rather than within it as a narrowing consideration. The limitations of the trade and commerce power, as the foundation for Commonwealth legislation in maritime affairs as interpreted since 1910, were well-known.

Did s 19(2) apply?

37    The SRC Act creates a right in s 26(1) for an employee, as defined, who suffers an injury that has one of three particular results to be paid compensation. That provision operates of its own force on all persons who meet the statutory criteria of being such an employee who suffers an injury.

38    The definition in s 4(1) stated that, in the SRC Act, unless the contrary intention appeared, “employee” meant a seafarer, as defined in s 3 (again subject to any contrary intention), a trainee who was, or would become, a seafarer or another class of person who, under an award, had to attend at a Seafarers Engagement Centre for the purpose of registering availability for employment or engagement on a prescribed ship.

39    The definition of “seafarer” in s 3 provided that, relevantly, such a person had to be employed on a prescribed ship and on the business of the ship. Thus, in substance, the definition of “employee” in s 4 applied to a person who was employed on a prescribed ship, on her business, and to persons training to be so employed or to others who were seeking to be employed on a prescribed ship.

40    Under s 10 of the Navigation Act, such a ship had to be registered in Australia or engaged in the coasting trade or both have a majority of Australian residents in her crew and be operated by an Australian resident, or a person, firm or company that had his, her or its principal place of business in Australia.

41    Notably, s 19(1) applied to a limited class of the persons referred to in the definition of “employee” in s 4(1), namely to the employment of an employee on a prescribed ship. If read literally, that class could not include a trainee who was undergoing a training course, either required by an employer or industry approved, “before becoming a seafarer” referred to as the second alternative category in the respective definitions of company trainee and industry trainee in s 3 of the SRC Act.

42    Moreover, the third category of person included in the definition of “employee” in s 4(1) was a person who was not presently employed as such, but was, in fact, a seafarer who was required to register his or her availability for employment or engagement on a prescribed ship. Once again, if s 19(1) were read literally, it could not apply to the latter category of person within the definition of “employee”. That is why s 4(2) provided for those persons to be deemed to be employees of the Fund. And, s 96 provided that the Fund had to be a trading corporation.

43    If the Parliament had intended s 19(1) to exclude either of those two categories of persons, which it had included in the definition of “employee” in s 4 of the SRC Act, from any benefits under the statute, there would have been no reason for that definition to be so deliberately and broadly expressed: see DB Management 199 CLR at 338 [34]-[35]. An employee, as defined, had a right to compensation under s 26(1) of the SRC Act if he or she suffered an injury, as defined. If Samson’s construction giving primacy to s 19(1) were correct, only seafarers actually employed on a prescribed ship that was then engaged in trade or commerce between Australia and places outside Australia (or another permutation of s 19(1)) could recover compensation. Acceptance of Samson’s argument would also mean that the provisions in the SRC Act for other persons who fell within the definition of “employee” and those relating to journeys to or from work or for medical reasons or to collect pay would be otiose. That would be because if, for example, the prescribed ship on which the person was employed happened to be in port between two short intra-State voyages, the employee could not satisfy any posited requirement of s 19(1). Such a result does not appear to reflect the intended beneficial purpose of the SRC Act.

44    Samson’s argument that s 19(2)-(4) only limited the reach of s 19(1) and (1A) must be rejected. Each subsection of s 19, except s 19(5), had an independent operation. The purpose of each of those subsections was to rely upon different heads of the legislative power of the Parliament under s 51 of the Constitution that supported the operative provisions of the SRC Act that conferred rights to workers’ compensation to, or in respect of, employees (as defined) and their dependants and rehabilitation for employees (as defined).

45    The evident purpose of s 19(2)-(4) is to extend the application of the SRC Act beyond regulating activities, relationships and persons in reliance on the commerce power in s 51(i) of the Constitution, as s 19(1) and (1A) do, by using the nexus in the corporations power in s 51(xx). This is a familiar legislative resource that has been adopted by the Parliament in a variety of contexts where issues as to the constitutional validity of legislation might arise: see eg Re Maritime Union of Australia; Ex parte CSL Pacific Shipping Inc [2002] HCA 43; (2003) 214 CLR 397 at 409 [20]. There Gleeson CJ, McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ applied what Mason J (with whom Barwick CJ, Gibbs, Stephen, Jacobs and Murphy JJ agreed) had said in The Queen v Australian Industrial Court; Ex parte CLM Holdings Pty Ltd [1977] HCA 6; (1977) 136 CLR 235 at 243-244 as to similar provisions in s 6 of the Trade Practices Act 1974 (Cth). Mason J explained that the approach to the construction of a section such as s 19 of the SRC Act requires an appreciation of what the provision seeks to achieve, having regard to the constitutional basis on which the operative sections of the registration were principally based. He said (136 CLR at 244):

Section 6 (1) recognizes that the Act will in the first instance have a direct operation according to its terms and at the same time provides that in addition to this operation the Act shall have a further operation in accordance with the provisions of s. 6 (2) and (3).

The first additional operation given to the Act is that given by s. 6 (2). It extends the application of the principal provisions of the Act to persons not being corporations, as well as to corporations, whilst they are engaged in interstate or overseas trade or commerce, trade or commerce between territories or with a territory or in the supply of goods or services to the Commonwealth or an authority or instrumentality of the Commonwealth.

The sub-section achieves this operation in the main by providing that the Act shall have the effect it would if references to “trade or commerce” were confined to trade or commerce in the aspects already mentioned (s. 6 (2) (a)), if certain sections (s. 46, Pt V (other than s. 55) and Pt VIII) were confined in their operation to engaging in conduct to the extent to which such conduct takes place in the course of, or in relation to, those limited aspects of trade or commerce so mentioned (s. 6(2)(b)) and, subject to certain qualifications, if the word “corporation” included a reference to a person not being a corporation (s. 6(2)(h)). There are other alterations for which sub-s. (2) makes provision but they need not be mentioned. Thus it appears that sub-s. (2) is designed to give the provisions of the Act an operation which can be supported not merely by reference to the corporations power but by reference also to the powers contained in ss. 51 (i.) and 122 together with the implied power to regulate the supply of goods or services to the Commonwealth, its authorities and instrumentalities.

(emphasis added)

46    Mason J illustrated how the various subsections gave the legislation additional operation. He concluded that the Parliament had used a complicated section, being s 6, because of an earlier decision of the High Court, but that its meaning was reasonably clear. He held that each of the three subsections gave the legislation three different applications, the first according to its terms, and each of the second and third an operation in the more limited, or confined, terms of the relevant subsection (136 CLR at 245); see too Seamen’s Union of Australia v Utah Development Co [1978] HCA 46; (1978) 144 CLR 120 at 136-137 per Gibbs J, 151 per Mason J.

47    Therefore, it can be seen that the overall purpose of s 19 of the SRC Act was to provide a secure constitutional foundation so that the Parliament could ensure that injured seafarers and others within the definition of “employee” in s 4 and their dependants who had one or more nexuses to a constitutional head of power would receive compensation in accordance with the Act. Thus, when s 19 specified the statutory scenarios to which the Act applied or in which it had effect, it operated in respect of an employee as defined and created a series of constitutional nexuses, one or more of which could apply to the employment of a particular person.

48    First, s 19(1) commenced with the statement that the Act applied “to the employment of employees”. By reason of the definition in s 4(1), the employment of the employees already had a necessary connection to a prescribed ship as an incident of their employment. Thus, the words “on a prescribed ship that is engaged in trade or commerce” in the chapeau of s 19(1), and the various permutations following them, were references to particular activities of a ship in trade or commerce with a particular connection to Australia reflective of the scope of the legislative power in s 51(i) of the Constitution. Likewise, the two variations given in the paragraphs following the chapeau in s 19(1A) referred to other possible locations, activities or relationships, of particular types of ship. The criteria for application of the SRC Act in each of s 19(1) and (1A), thus, were the employment of employees on a ship that fell within a particular identified description.

49    Secondly, in contrast to s 19(1) and (1A), each of s 19(2), (3) and (4) reflected a connection between the employment of an employee and a corporation in respect of which the Constitution conferred legislative power on the Parliament to make laws under s 51(xx) as qualified by s 51(xiii) and (xiv). As explained above, the definition of “employee” in s 4(1) of the SRC Act was wider than, and could not apply to, some of the circumstances to which s 19(1) applied because some of the second and all of the third categories of persons in that definition would not be in employment on a prescribed ship or employed at all. Persons in those two categories were deemed by s 4(2) to be employees of the Fund, being a trading corporation that the Minister had approved under s 96 of the SRC Act. Under the SRC Act, the Fund did not operate any ships and so could never be a deemed employer of anyone to whom s 19(1) could apply. Thus, if the Parliament had intended s 19(1) and (1A) to be the controlling provisions and the other subsections of s 19 to be further limitations of it, there would have been no point in enacting ss 4(2), 96 or 97 and in its deeming persons not employed on a prescribed ship to be employees who had rights to compensation under the SRC Act.

50    It follows that when each of s 19(2)(b), 3(b) and 4(b) provided that the SRC Act have the effect it would have if “a reference to an employee” were “limited to a reference to an employee employed by” a constitutional corporation (ie one within the meaning of s 51(xx)), the Parliament intended to extend its effect to beyond, or operate independently of, the qualifications of “the employment of employees” in s 19(1) and (1A) of the application of the SRC Act by substituting the identity of a constitutional corporation as the employer: Ex parte CLM Holdings 136 CLR at 244-245; Ex parte CSL Shipping 214 CLR at 409 [20].

51    Importantly, s 51(xx) is a power to legislate with respect to particular persons rather than functions, activities or relationships, as Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ explained in New South Wales v Commonwealth (Work Choices Case) [2006] HCA 52; (2006) 229 CLR 1 at 116 [183]. They went on to say (229 CLR at 121-122 [198]):

A law which prescribes norms regulating the relationship between constitutional corporations and their employees, or affecting constitutional corporations in the manner considered and upheld in Fontana Films or, as Gaudron J said in Re Pacific Coal [Ex parte Construction, Forestry, Mining and Energy Union] (2000) 203 CLR 346 at 375 [83]), “laws prescribing the industrial rights and obligations of [constitutional] corporations and their employees and the means by which they are to conduct their industrial relations” are laws with respect to constitutional corporations.

52    Here, the SRC Act regulated the rights of employees and others to payment of workers’ compensation and the obligations of their employers by reference, through s 19(2), (3) and (4), to an employment relationship with a constitutional corporation. The effect of the limitations in s 19(2)(b), for example, looked not to s 19(1) or (1A), but to the other ways in which an employee could exercise rights under the SRC Act. The limitation confined the employee to the exercise of the rights that he or she had by reason of his or her employer being a constitutional corporation. That operation of the SRC Act was different to and independent of its operation by force of s 19(1). If s 19(1) applied, the employee could exercise rights by reason of the activities of the prescribed ship being of a particular nature, regardless of the identity of the employer, except in cases to which s 10(c) of the Navigation Act applied.

53    Although when enacting s 19 in 1992, the Parliament may have had one eye on the inhibiting decision in The ‘Kalibia’ 11 CLR 689, it would also have been conscious of the significant expansion by the High Court of its legislative power under s 51(xx) since Huddart, Parker & Co Pty Ltd v Moorehead [1909] HCA 36; (1909) 8 CLR 330 in cases such as Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd [1982] HCA 23; (1982) 150 CLR 169 and New South Wales v Commonwealth (Incorporation Case) [1990] HCA 2; (1990) 169 CLR 482. Indeed, the Explanatory Memorandum for the Bill that became the SRC Act explained that cl 19 ensured that the proposed Act would be within the Parliament’s legislative power, saying:

The primary, although not exclusive, bases of power are the trade and commerce power, and the Commonwealth’s powers to make laws with respect to foreign corporations and trading and financial corporations (Clauses 51(i) and 51(xx) of the Constitution respectively).

54    The Work Choices Case 229 CLR 1 has now established that the nexus created by s 19(2), (3) and (4), as qualified by s 19(5) of the SRC Act, is sufficient to support that Act’s regulation per se of the employment relationship of persons within the defined class of employees whose employer is a constitutional corporation. Thus, the Tribunal was correct to conclude that it had jurisdiction by force of s 19(2) of the SRC Act because Mr Aucote was a seafarer employed on a ship registered in Australia (s 10(a) of the Navigation Act) by an Australian trading corporation.

Did s 19(1) of the SRC Act also apply?

55    In light of this conclusion, it is not necessary to decide whether the Tribunal was also correct to characterise the trade and commerce in which Samson Mariner was engaged as being between Australia and places outside Australia within the meaning of s 19(1)(a) of the SRC Act. Such a characterisation would require the consideration and application of principles of constitutional law in the interpretation of the commerce power in s 51(i).

56    In Ex parte CSL Pacific Shipping 214 CLR at 413 [36] and 414 [37], Gleeson CJ, McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ said in respect of the commerce power in s 51(i):

A ship journeying for reward is in commerce; those who co-operate in the journeying of the ship are in commerce and the wages of those persons and the conditions of their employment are in commerce … the commerce power is attracted by the engagement of the employees in interstate and overseas trade.

57    The Court affirmed the principle of constitutional law that, where a connection that is not insubstantial, tenuous or distant exists between a law in question and a head of legislative power then the connection will not be displaced by lack of some further or additional connection (214 CLR at 414 [39]). The same considerations would be apposite in evaluating whether the relevant activity, relationship, status or other subject matter relied on is sufficiently connected to the attempt by the Parliament to regulate it in a law enacted under the relevant head or heads of power. This was recognised long ago by Knox CJ, Isaacs and Starke JJ in W & A McArthur Ltd 28 CLR at 549, with whom Rich J agreed at 569, where they discussed the need to look at the substantial nature of a particular transaction or dealing in order to characterise whether it was or was not wholly intra-State so as to fall within the commerce power in s 51(i).

58    The complexities of the possible application of s 19(1)(a) to a seafarer that were discussed in argument before the Tribunal and the Full Court largely result from the decision in The ‘Kalibia’ 11 CLR 689 that ss 51(i), 98 and 76(iii) of the Constitution did not permit the Parliament to make a law of general application for the payment of workers’ compensation to seafarers. It would be productive of unfortunate complexity if an injured seafarer had to prove the nature of his or her employer’s business dealings in order to establish whether a particular course of events or transactions attracted the operation of the SRC Act or a State or Territory law with respect to a claim for workers’ compensation.

59    However, most employees, within the meaning of the definition in s 4 of the SRC Act, will be employed by a trading or foreign corporation. Accordingly, it is not necessary to pursue the questions arising under s 19(1)(a) here since 19(2) extended the SRC Act to operate in respect of the injury suffered by Mr Aucote because he was employed by Samson, which was a trading corporation.

Conclusion

60    For these reasons, the appeal and application for constitutional writ relief must be dismissed with costs.

Associate:

Dated:    22 December 2014