FEDERAL COURT OF AUSTRALIA

Livestock Transport & Trading v Australian Maritime Safety Authority (No 2) [2008] FCA 1544

ADMIRALTY – foreign‑flagged vessel was refused permission to load livestock because it did not comply with parts of Marine Orders Pt 43 – whether O 12.2 and s 6.6 of Appendix 4 of the Marine Orders are inconsistent with Div 12C of Pt IV of the Navigation Act 1912 (Cth) to the extent they apply to foreign‑flagged vessels

Navigation Act 1912 (Cth) ss 425(1AA), 425(2), 425(5C), 257, 257(1), Pt IV Div 12C ss 267ZF, 267ZG, 267ZJ, 267ZK, 267ZL, 267ZM, 267ZN, 267ZQ

Protection of the Sea (Prevention of Pollution from Ships) Act 1983 (Cth) Pt IIIB Div 2 ss 26D(3), 26D(6)

International Convention on the Prevention of Pollution from Ships 1973 as modified by the Protocol of 1978 relating thereto (MARPOL 73/78) Annex IV

Marine Orders Pt 43 Cargo & Cargo Handling–Livestock Issue 6

LIVESTOCK TRANSPORT & TRADING v AUSTRALIAN MARITIME SAFETY AUTHORITY

WAD 212 of 2008

SIOPIS J

16 OCTOBER 2008

PERTH

THE COURT ORDERS THAT:

1.                  It is declared that, to the extent that the last sentence of O 12.2 and s 6.6 of Appendix 4 to Marine Orders‑Part 43 Issue 6 (the Marine Orders) made under the Navigation Act 1912 (Cth) (the Act) apply to foreign‑flagged vessels, they are inconsistent with the Act and are of no force and effect.

2.                  The notice issued by the respondent dated 1 October 2008 refusing permission to load the vessel MV “Al Messilah” is set aside.

3.                  The respondent is to pay the applicant’s costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     The applicant is the owner and operator of a Kuwaiti flagged vessel, “Al Messilah”.  The applicant also operates two other Kuwaiti flagged vessels, the “Al Kuwait” and the “Al Shuwaikh”.  These three vessels have been engaged in the business of carriage of livestock between ports in Australia and the Middle East for a number of years.  The “Al Kuwait” has carried out approximately 181 voyages from Australia to the Middle East since 1981 carrying approximately 100,000 sheep on each voyage.  The “Al Shuwaikh” has carried out approximately 69 voyages from Australia to the Middle East since 2002 carrying approximately 78,000 sheep per voyage and the “Al Messilah” has carried out approximately 97 voyages from Australia to the Middle East since 1997 carrying approximately 72,000 sheep per voyage.

2                     On 1 October 2008, the “Al Messilah” was in Fremantle Port on its way to the port of Portland in Victoria to load about 72,000 sheep for the purpose of transporting the sheep to the Middle East.  On that day the respondent’s representative, Mr Sam Lee, issued a notice preventing the vessel from loading livestock.  By this application, the applicant challenges the lawfulness of the notice on the grounds that Mr Lee relied upon the applicant’s non‑compliance with provisions in Marine Orders Pt 43 Cargo & Cargo Handling–Livestock Issue 6 that were invalid because they were inconsistent with the Navigation Act 1912 (Cth) (the Act).  The Marine Orders–Pt 43 is a form of delegated legislation and comprise orders made by the Chief Executive Officer of the respondent under a power contained in s 425(1AA) of the Act.

Background

3                     Australia is a signatory to the International Convention on the Prevention of Pollution from Ships 1973 as modified by the Protocol of 1978 relating thereto (MARPOL 73/78).

4                     Annex IV of MARPOL 73/78 deals with sewage and contains 12 regulations.  Regulations 4, 9 and 10 are particularly relevant.  Regulation 4 deals with the conducting of surveys to ensure that the structure, systems and fittings of ships comply with the requirements of Annex IV.  It provides that the responsibility for ensuring that ships are constructed in accordance with the requirements of the Annex lies with the flag state of the vessel.  Regulation 9 provides that each ship shall contain a sewage system comprising either a treatment plant, a disinfecting system or a holding tank.  Regulation 10 prescribes the dimensions of a discharge connection in relation to the ship’s discharge pipeline.

5                     Division 12C of Pt IV of the Act (Div 12C) gives effect to Annex IV of MARPOL 73/78.

6                     The legislative scheme of Div 12C distinguishes between Australian vessels and foreign‑flagged vessels.  Section 267ZG provides that the respondent is empowered to issue a certificate, known as the International Sewage Pollution Prevention Certificate, in respect of an Australian ship which is constructed in accordance with the relevant regulations of Annex IV of MARPOL 73/78.  Sections 267ZJ, 267ZK, 267ZL, 267ZM and 267ZN are other provisions of Div 12C which together with s 267ZG comprise a statutory regime to enforce the relevant provisions of Annex IV of MARPOL in respect of Australian ships.  Consistent with the provisions of Annex IV, the respondent does not have the same power to enforce compliance with the requirements of Annex IV in respect of foreign‑flagged vessels.  In respect of foreign‑flagged vessels, the International Sewage Pollution Prevention Certificate will be issued by the regulatory authority of the flag state.  However, s 267ZQ deals specifically with the position of a foreign‑flagged vessel which is in Australian waters which, in the opinion of the respondent, is not constructed in accordance with the provisions of Annex IV.  Section 267ZQ of the Act provides:

(1)       Subject to subsection (2), where the Authority is of the opinion that a foreign ship is not constructed in accordance with the provisions of Annex IV (whether or not the ship is required by Annex IV to be so constructed), the Authority may, by notice in writing addressed to the master or the owner of the ship and served in accordance with the regulations, direct:

(a)        that the ship shall not enter any port, or a specified port or specified ports, in Australia; or

(b)        that the ship shall not use any off‑shore terminal, or a specified off‑shore terminal or specified off‑shore terminals in Australia; or

(c)        that the ship comply with specified requirements while it is entering, is in or is leaving any port, or a specified port or specified ports, in Australia; or

(d)        that the ship comply with specified requirements while it is approaching, is using or is leaving any off‑shore terminal, or a specified off‑shore terminal or specified off‑shore terminals, in Australia.

(2)       The Authority shall not exercise its powers under subsection (1) except to the extent that it appears to the Authority necessary or expedient to do so for the protection of the environment.

7                     It is apparent, therefore, that the power of the respondent to deal with a foreign‑flagged vessel in Australian waters which in its opinion, is not constructed in accordance with the provisions of Annex IV, is limited to giving directions in circumstances where the foreign‑flagged vessel poses some risk to the environment.  Further, s 267ZQ of the Act does not provide a power to give directions to change the structure of the vessel so that it complies with the provisions of Annex IV.

8                     Section 267ZF of the Act also provides that regulations may be made to give effect to regs 4, 9 and 10 of Annex IV of MARPOL 73/78.

9                     Further, s 257 of the Act gives the power to make regulations in relation to the loading, stowing or carriage of cargo.

10                  Section 425(1AA) of the Act empowers the respondent to make orders.  It is in the following terms:

The Authority may, by legislative instrument, make orders with respect to any matter in Part II, III, IIIA, IV, V, VA, VB or XA for or in relation to which provision may be made by the regulations, other than matters referred to in paragraph (1)(h).

11                  Section 425(5C) of the Act is to the following effect:

Where a provision of an order is inconsistent with a provision of this Act or the regulations, the latter shall prevail and the former shall, to the extent of the inconsistency, be of no force or effect.

12                  As previously mentioned, the Chief Executive Officer of the respondent has made Marine Orders‑Pt 43.  The current issue of the Marine Orders‑Pt 43 is Issue 6.  The orders were made on 2 November 2006 and came into operation on 1 December 2006.  A relevant provision of the Marine Orders‑Pt 43 for the purposes of this case is O 12, which provides:

12                Livestock services

12.1          A ship permanently equipped for the carriage of livestock must be fitted with systems and equipment that ensure the maintenance of livestock services at a level necessary for the welfare of the livestock.

12.2          Compliance with Appendix 4 will meet this requirement.  However, as an alternative, an operator may demonstrate adequate redundancy in systems and equipment by supplying to the Manager, Ship Inspections, a risk analysis of the systems involved.  A revised risk analysis must be provided whenever the arrangements referred to in that analysis are changed.  An alternative will not be accepted if:

(a)                it is inconsistent with Annex IV of MARPOL 73/78; or

(b)               it does not comply with 6.8 of Appendix 4.

(Footnote omitted.)

13                  Section 6 of Appendix 4 to the Marine Orders‑Pt 43 contains provisions relating to the drainage of vessels carrying livestock, and also includes the following relevant provision:

6.6       For all new ships, and existing ships after 27 September 2008, a holding tank or treatment plant is to be provided, complying with Annex IV of MARPOL 73/78, to treat, store and discharge effluent in accordance with that Annex.  The holding tank is to be of sufficient storage capacity:

(a)                to ensure that effluent is not discharged in contravention with Annex IV of MARPOL 73/78; and

(b)               to retain on board all effluent generated while the ship is in areas for which discharge is prohibited, such as in port and within 12 nautical miles of nearest land.

(Footnote omitted.)

14                  The Marine Orders–Pt 43 also provides for the issue by the respondent to owners of the vessels engaged in the transport of livestock of an Australian Certificate for the Carriage of Livestock (ACCL).  On 13 November 2007, the respondent issued an ACCL in respect of the “Al Messilah”.  The certificate stated that the vessel fully complied with the Marine Orders except in respect of, relevantly, s 6.6 of Appendix 4 and that the vessel was to comply with s. 6.6 by no later than 26 September 2008.

15                  During September 2008, there was correspondence between Mr David Anderson, Principle Marine Surveyor of the respondent, from Canberra, and Mr JK Iyer of the applicant, in relation to the requirement of the respondent that the construction of the vessel be modified to include a holding tank or treatment plant of the nature referred to in s 6.6 of the Marine Orders–Pt 43.

16                  In his email of 26 September 2008, which was part of the correspondence, Mr Anderson said:

Livestock carriers to which Marine Orders Part 43 applies must comply with MARPOL Annex IV or the ACCL may be considered to be invalid.

17                  Mr Anderson then set out in his email the provisions of s 6.6 of Marine Orders‑Pt 43 referred to at [13] above.

18                  Later in the same email, Mr Anderson also said:

Any vessel that does not comply with MARPOL Annex IV at any time may be subject to PSC measures to assist compliance.  If any livestock vessel does not comply with MARPOL Annex IV at any time MO43 provides that the ACCL is likely to be considered invalid.

19                  As previously stated, on 1 October 2008, Mr Lee issued a notice preventing the loading of livestock onto the “Al Messilah”.  Relevantly, the notice stated:

Further to correspondence between AMSA Canberra and ship’s management regarding livestock effluent drainage issue and MARPOL Annex IV matters vessel will not be allowed to load in Australia until these issues are resolved.

20                  Order 7.3 of Marine Orders–Pt 43 provides as follows:

7.3       Prohibition on loading

7.3.1    If a surveyor is of the opinion that the provisions of this Part are not being complied with, the surveyor may order that:

(a)        the loading of livestock must not be commenced or continued until such time as a surveyor is satisfied that compliance with the provisions of this Part has been achieved and the order revoked; or

(b)        spaces nominated in the order must not be used for the carriage of livestock until such time as a surveyor is satisfied that compliance with the provisions of this Part has been achieved in respect of those spaces and the order revoked.

7.3.2    A person must not act in contravention of a surveyor’s order under 7.3.1.

This is a penal provision.

21                  The respondent led no evidence and the notice issued by Mr Lee does not identify the statutory power pursuant to which the notice was issued.  However, I will proceed on the basis that the notice was issued pursuant to the power set out in O 7.3.1 of the Marine Orders.  Because Mr Lee did not give evidence, he did not identify the correspondence to which he referred in his notice.  However, the email correspondence to which I referred at [15] above between Mr David Anderson of the respondent in Canberra and a representative of the applicant, relates to the question of livestock effluent drainage and Annex IV of MARPOL.  I will, therefore, proceed on the basis that this is the correspondence to which Mr Lee referred in the notice.  In any event, it was accepted in argument that the notice was issued because the “Al Messilah” was not constructed in accordance with O 12.2 and s 6.6 of Annexure 4 of the Marine Orders in that it did not have a treatment system or holding tank of the kind specified in s 6.6 of Appendix 4 of the Marine Orders.

22                  The applicant seeks:

A declaration that, to the extent that Order 12 of and section 6.6 of Appendix 4 to the Marine Orders Part 43 (Issue 6) made under the Navigation Act 1912 (Cth) purport to:

(a)        make compliance with Annex IV of MARPOL 73/78 a condition precedent to the grant of an Australian Certificate for the Carriage of Livestock (“ACCL”) to foreign‑flagged vessels; and/or

(b)       make compliance with Annex IV of MARPOL 73/78 a condition precedent to the grant of permission to load livestock [on] board a foreign‑flagged vessel for the purpose of the livestock export trade; and/or

(c)        make it compulsory for foreign‑flagged vessels engaged in the livestock export trade that are not equipped [with a sewage] treatment plant sufficient to deal with animal effluent to be equipped with a holding tank for sewage as specified in Order 12 of and section 6.6 of Appendix 4 to the Marine Orders Part 43 (Issue 6);

they are inconsistent with and repugnant to the Navigation Act 1912 and invalid.

23                  As already mentioned, the applicant also seeks an order setting aside the decision of Mr Lee to issue the notice on the grounds that Mr Lee relied upon invalid provisions of the Marine Orders–Pt 43, and an injunction.

the invalidity contention

24                  The issue is whether O 12.2 and s 6.6 of Appendix 4 are inconsistent with a provision of the Act and, therefore, invalid, on the basis that they seek to enforce the provisions of Annex IV of MARPOL 73/78 against foreign‑flagged vessels by requiring that they are constructed in accordance with the provisions of Annex IV.

25                  The respondent contended that O 12.2 and s 6.6 of Appendix 4 of Marine Orders‑Pt 43 were not inconsistent with the Act.  The respondent contended that s 425(2) of the Act contemplated that regulations and orders could be made to regulate matters already covered elsewhere in the Act or the regulations.  The respondent contended that s 257(1) of the Act provided for the making of regulations in relation to the “loading, stowing or carriage of cargo in ships or the unloading of cargo from ships”.

26                  The respondent contended that O 12.2 and s 6.6 of Annexure 4 were orders made by reference to the regulation making powers provided for in s 257(1).  These orders were, said the respondent, orders which went to the welfare of the livestock and did not “give effect to Annex IV of MARPOL”.  The respondent contended that the impugned orders “applies a standard which reflects Annex IV requirements, and which is relevant to the loading, stowage and carriage of livestock”.  This meant that the impugned orders were not inconsistent with the Act.

27                  In my view, the distinction sought to be drawn by the respondent is a distinction without a relevant difference.  By adopting in the impugned orders a regime applicable to foreign‑flagged vessels which incorporates a standard that the vessel must contain structures or systems “complying with Annex IV of MARPOL 73/78, to treat, store and discharge effluent in accordance with that Annex” the impugned orders by their terms amount to the enforcement by the respondent of the requirements of Annex IV of MARPOL 73/78 in respect of foreign‑flagged vessels.

28                  The fact that the impugned orders enforce the provisions of MARPOL 73/78 in respect of foreign‑flagged vessels is also recognised by Mr David Anderson in his email of 26 September 2008 referred to in [16] above.

29                  The fact that the respondent may have relied upon a regulatory source other than Div 12C of the Act to make orders which require compliance by foreign‑flagged vessels with the provisions of Annex IV is irrelevant to the question in issue.  This is because, in requiring that the orders not be inconsistent with “a provision of the Act”, s 425(5C) does not distinguish between the regulatory source of the orders made.  In other words, no matter what the regulatory source relied upon for making an order under s 425(1AA), the order must not be inconsistent with a provision of the Act.  In this case, the impugned orders are inconsistent with the legislative scheme in Div 12C of the Act, to the extent that they enforce compliance with the provisions of Annex IV on foreign‑flagged vessels.

30                  In my view, therefore, O 12.2 and s 6.6 of Annexure 4 of the Marine Orders‑Pt 43 are invalid and are of no force and effect to the extent that they apply to foreign‑flagged vessels.

31                  The respondent also contended that it was “proper” and “made good sense” for the respondent to adopt Annex IV standards in relation to the storage capacity of, and discharge from, the holding tank because that standard was consistent with and promoted compliance with another statute, namely, the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 (Cth) (the POTS Act).  The object of Div 2 of Pt IIIB of the POTS Act is to give effect to Annex IV of MARPOL 73/78.  In general terms, s 26D(3) of Div 2 of the POTS Act makes it an offence to discharge sewage from a ship into the sea.  However, in broad terms s 26D(6) provides that it is not an offence if untreated sewage is discharged at least 12 nautical miles from the nearest coastline, or beyond a three mile limit if the sewage is treated using an Annex IV approved system or, if the vessel has a holding tank, it is discharged at a prescribed rate.

32                  In my view, this contention does not assist the respondent.  Whether the adoption of the Annex IV standard in orders made under the Act was “proper” or “made good sense” or was compatible with the POTS Act, is not to the point.  The question is whether the impugned orders are within power and that requires that those orders not be inconsistent with a provision of the Act.  As I have already stated, the impugned orders are inconsistent with the legislative scheme of Div 12C of the Act to the extent to which they apply to foreign‑flagged vessels.

33                  Accordingly, I will grant the substance of the relief claimed by the applicant. I will hear the parties on the terms of any further orders.

Associate:

Dated:         16 October 2008