CSL Pacific Shipping Inc, Ex parte - Re Munro

[2003] HCATrans 683

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry         
Sydney No S391 of 2002

In the matter of -

An application for Writs of Prohibition and Certiorari against THE HONOURABLE JUSTICE PAUL MUNRO, THE HONOURABLE SENIOR DEPUTY PRESIDENT ANNE HARRISON and COMMISSIONER FRANCIS RAFFAELLI, members of the Australian Industrial Relations Commission

First Respondents

THE MARITIME UNION OF AUSTRALIA, THE AUSTRALIAN INSTITUTE OF MARINE & POWER ENGINEERS AND THE AUSTRALIAN MARITIME OFFICERS’ UNION

Second Respondents

Ex parte –

CSL PACIFIC SHIPPING INC

Applicant/Prosecutor

GLEESON CJ
McHUGH J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 6 MAY 2003, AT 10.16 AM

Copyright in the High Court of Australia

__________________

MR C.N. JESSUP, QC:   If the Court pleases, I appear with my learned friends, MR G.J. HATCHER, SC and MR C.S. WARD, on behalf of the prosecutor in the prohibition matter and the applicant in certiorari.  (instructed by Blake Dawson Waldron)

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friend, MR A.S. BELL, for the second respondents.  (instructed by W.G. McNally & Co)

MR D.M.J. BENNETT, QC, Solicitor‑General of the Commonwealth of Australia:   If the Court pleases, I appear with my learned friend, MR R.F. CROW, for the Attorney-General intervening as of right in support of the applicant/prosecutor on the construction question, in support of the second respondent on the constitutional question and making no submissions on the service question or on the application of the law to the facts of the case.  (instructed by the Australian Government Solicitor)

There is an issue between my learned friend, Mr Jackson, and myself as to the order of addresses.  In my submission, it is appropriate that we should go after both counsel.  It is a matter for the Court.

GLEESON CJ:   Thank you, Mr Solicitor.  There is a certificate from the solicitor for the first respondents that the first respondents do not wish any representations to be made on their behalf and they will abide by any order save as to costs of the Court.  Yes, Dr Jessup.

MR JESSUP:   Your Honours, might we deal with a short matter of housekeeping, as it were, at the outset.  We would seek to read two affidavits which have been filed and I believe my learned friend, Mr Jackson, desires to read one affidavit.

GLEESON CJ:   Is there any objection to the contents of any of those affidavits?

MR JESSUP:   No, your Honour

GLEESON CJ:   Yes, we have read those affidavits.  Perhaps if you could just identify, for the purposes of the record, the deponents and the dates.

MR JESSUP:   Yes.  The first is an affidavit by Michael Chee Liang Seck, affirmed on 17 April 2003 in support of a notice of motion to add a new paragraph to the order nisi, to which I will come in due course, and the second is an affidavit of Michael Chee Liang Seck, affirmed on 2 May 2003.

GLEESON CJ:   Thank you.

MR JACKSON:   The affidavit to which we wish to refer is the affidavit of Nathan Marlborough Keats, sworn and filed on 24 April 2003.
Your Honours, in relation to the order of addresses, may I say something at the end of my learned friend’s submissions?

GLEESON CJ:   If necessary.  Yes, Dr Jessup.

MR JESSUP:   Your Honours, we have filed written submissions in accordance with the practice direction.  We have identified the issues in the case and I need not dwell upon them by way of summary.  They will become clear as our submission proceeds.  The facts of the case concern a vessel known as the CSL Pacific.  That ship is a bulk goods carrier registered in the Bahamas and carries the Bahamian flag.  It is owned by our client, a company registered in Barbados, save for the allegations made against us in this case, does not do any business in Australia and has no presence in this country.  In a general sense, it carries on the business of international shipping.

KIRBY J:   In a general sense, in a very general sense, but it is out here in our waters, plying our coast and serving our country.

MR JESSUP:   When I say generally, your Honour, I am talking about otherwise, save for what is put against in this case.

KIRBY J:   It is a big save.  It is the whole point.

MR JESSUP:   If your Honour will just make a note of what we do in terms of our company’s operations, I will, of course, return to the matter to which your Honour adverted and I do not intend to paper over it by making this introductory submission.  Your Honours, the people whom we represent employ the crew on the ship.  That crew are Ukrainian nationals.

GUMMOW J:   By “people”, you mean corporation?

MR JESSUP:   I do, your Honour, yes.

GUMMOW J:   I think you would want to say “corporation”, actually.

MR JESSUP:   I am sorry, I do not follow, your Honour.  That crew are Ukrainian nationals, they signed their ship’s articles in Odessa in the Ukraine.  The ship, complete with that crew, was chartered to another company in the same corporate group as our client, CSL Australia.  CSL Australia uses the ship for the purposes of dry bulk cargo trading, generally speaking, between various places on the Australian coast.  Substantially, those places are in different States, and that is something which may bear upon the question under section 51(i). 

The crew are not members of any of the present respondents’ unions.  Their terms and conditions of employment are regulated by agreements made between our client and the Marine Transport Workers’ Trade Union of Ukraine, and in paragraph 7 of our submissions we have identified examples of the establishment of those terms and conditions of employment by collective agreements.  That union is affiliated with the International Transport Workers’ Federation, to which the present respondent unions are also affiliated.

GLEESON CJ:   Dr Jessup, the Commission has not yet made an award or dealt finally with the application that gives rise to these proceedings, has it?

MR JESSUP:   That is true, your Honour.

GLEESON CJ:   Could I ask a practical question, and it may be a reference that can be given to part of the papers that will answer it.  How, as a matter of practice, does the Commission in a case like this relate the award or the operation of the award to the particular circumstance that, for example, the vessel is for the time being the subject of a time charter, or the vessel is for the time being involved in the Australian coastal trade?

MR JESSUP:   Your Honour asked me that question as though the Commission has a practice in it.  I do not believe that a case of this kind commonly comes before the Commission at all.  In fact, I am not aware of a case in which an overseas‑flagged vessel is bound to the bundle of terms and conditions of employment contained in the conditions award, with the possible exception of the Foster Case itself, which is something we will refer to later.

GLEESON CJ:   We know that right now, as I understand it, the vessel is the subject of a time charter.

MR JESSUP:   Yes.

GLEESON CJ:   And we know that right now the vessel is operating in the Australian coastal trade, but presumably in 12 months time the same vessel with the same crew may be operating in the South American coastal trade.

MR JESSUP:   Yes, it might be, your Honour.

GLEESON CJ:   How does the Commission, in responding to your opponent’s application, deal with that circumstance?  Is it something that is taken into account in framing the award?

MR JESSUP: Well, it certainly should be, your Honour. I should say that our client is presently in the course of prosecuting an application under section 111(1)(g) of the Workplace Relations Act which gives the Commission a discretion to discontinue dealing with the matter in the public interest.  Those sorts of questions are likely to be agitated in that application.  But there really is not a straightforward answer to your Honour’s question and, with respect, your Honour, is one of the things that we would submit is very troubling in this whole thing, because if you look at the award which is in volume 2 of the application book, not unsurprisingly it deals with annual leave and things like that, and the question may arise, how do you calculate and enforce the requirement for this crew to be given holidays in their home port, which is in the Ukraine, against the context of an award which is manifestly designed for Australian seafarers who have an Australian domicile?

KIRBY J:   But you can seek a variation of the award in respect of the particular employment.

MR JESSUP:   That is quite likely, your Honour, yes.

KIRBY J:   That would not be an unusual thing to do.

MR JESSUP:   Variations as such are not unusual, your Honour, but the particular variation would be highly unusual.  In fact, I would venture the suggestion to say that it would be unprecedented for a variation to be sought to handle the specific circumstances of people who have a totally different regime of employment.  I mentioned holidays.  If your Honours are to look at volume 1 of the application book and turn to, I think it is page 137.

KIRBY J:   Which page, Dr Jessup?

MR JESSUP:   Page 137 of volume 1, your Honour.  Your Honours will see in a box on the right-hand side of the page - this is one of the two collective agreements which applies with the Ukrainian union – the public holidays that are observed in relation to these workers.  They have Christmas Day, for example, on 14 January and a number of other days.  There are nine days there altogether as we read them. 

The Australian award which is contained in volume 2 at page 249 deals with the question of leave.  As I understand the way the award operates, your Honours, leave is an entitlement which arises, as it were, in blocks and takes into account public holidays that might be worked.  If you look over the page at page 250, your Honours will see in clause 33.2 that a leave entitlement gives effect to the public holidays which are worked.  Now, that is just one example.  We do not know how the Commission, if I can respond to your Honour Justice Kirby, would handle this.

KIRBY J:   At this stage the matter has just come up before the Commission.  It came before the President.  It was referred into a Full Bench.  The Full Bench has ruled that it has jurisdiction and so we have not got down to any of these things.

MR JESSUP:   Exactly, your Honour.

KIRBY J:   We are simply at the complete threshold.  That is where we should stay for the time being, except if you can fairly point that once you move into this area you have some problems of reconciling Ukrainian national day with the Queen’s birthday.  They do not celebrate the Queen’s birthday in the Ukraine.

GUMMOW J:   They still celebrate the Bolshevik Revolution.

MR JESSUP:   Well, that might be encouraging, depending on your point of view, your Honour.

GLEESON CJ:   Is there some well-known technique that would enable the Commission to deal with the possibility that in 12 months time this vessel will be engaged in the South American coastal trade?

MR JESSUP:   Your Honour, there is no well-known technique, save to say, as Justice Kirby would probably point out to me, that drafting with imagination and ingenuity might be able to come up with something.  But as I understand your Honour’s question, it was more concerned with, as it were, the tram lines that the Commission had established for dealing with this kind of situation.  I believe that there are no established practices or principles or tram lines which are already there to be followed.

If I could return to your Honour Justice Kirby’s point, your Honour is, with respect, completely right; we are at the jurisdictional stage here and we say there is not jurisdiction to proceed.  If there is jurisdiction to proceed, of course, then what the Commission does and how it handles these prickly questions will be for another day.

KIRBY J:   Do you remember, Dr Jessup, during the pilot strike, for that period the Yugoslav airline sent some planes out to Australia and I think they were simply hired by the airline industry, but, on your theory, if they, during that period, had been permitted to fly from State to State in Australia with occasional side journeys to Honiara or to New Caledonia, with local crew, your theory of the case is that the Commission could not regulate their industrial conditions.

MR JESSUP:   Your Honours, not necessarily ‑ ‑ ‑

KIRBY J:   It would seem a bizarre theory.

MR JESSUP:   ‑ ‑ ‑ because we have not researched, nor can we assist your Honours with respect to, international conventions in the airline industry.  We do know what the position is on the high seas and in the territorial seas and in maritime matters generally.

KIRBY J:   But in a world of globalisation we are going to see more of this interface between international activity and local activity and jurisdiction is not an unimportant assertion of sovereignty.

MR JESSUP:   Your Honour, with respect, is right at the general level, but it is not new.  In fact, shipping is probably the oldest area of international commerce and the area in which the major maritime trading nations have been most insistent that the ports which are visited from time to time by vessels engaging in international trade ought not be able to impose their domestic laws in relation to what is described as the internal economy of a particular vessel.

There is, no doubt, your Honour, that – if we may so submit, with respect – any attempt to resolve this case by recourse to one’s general intuitive notions about this vessel being around Australian waters, visiting Australian ports and the like, will fall down unless it takes into account customary international law with respect to the internal economy of ships and the convention to which Australia is a signatory in matters of the seas.  They are an important part of our case.

Allied to that, of course, is what the Navigation Act says about it.  We would say – as we do say – that the Commission has assumed jurisdiction which is quite at odds with the scheme which is contemplated by the Navigation Act. So the question should not be simply whether you think it right and proper that the Commission should have this jurisdiction, nor is it generally whether one looks at section 5(3)(b) against a blank sheet which is otherwise uninstructed and say, well, do these things relate to Australian commerce? There is a lot of background, there is a lot of context against which this case must, in our submission, be determined.

McHUGH J:   Accepting that, it just seems to me an almost impossible proposition to say, given the agreed statement of facts in paragraph 11, that the Commission did not have jurisdiction.  Here you are trading up and down the coast, carrying cement, slag and other commodities, between ports in Australia.

MR JESSUP:   We are not doing that, your Honour.  Our client is not trading, your Honour.

McHUGH J:   You are the employer?

MR JESSUP:   We are the employer.

McHUGH J:   Well, I will leave out the word.  The fact is that you are operating up and down the coast of Australia, employing people on ships, and you are carrying goods.  It does not matter that it is under a charter.  How can you possibly say it is not within 5(3)(b), as a matter of ordinary principles of statutory construction?

MR JESSUP:   That is the burden which I carry over the next couple of hours, your Honour, in the hope that your Honour keeps an open mind on it.

McHUGH J: I always keep an open mind, but it seems to me, at the moment, it is a section 111 case, that given ‑ ‑ ‑

MR JESSUP:   That is not the anterior question, with respect.

McHUGH J:   I know it is not.

KIRBY J:   I think we have diverted you.  In our enthusiasm for the case, we have diverted you from your course.

MR JESSUP:   Yes, well, your Honours might have.

KIRBY J:   I think you are allowed to move along the coast a few times until we come back.

MR JESSUP:   Your Honour, our client – we chartered this vessel ‑ true, it is, to another company within the same group, but that does not make any difference in point of principle – and they can use that vessel wherever they want to.  We do not shy for a moment that the parties to the charter might have had it in reasonable contemplation that the vessel would be used in some connection with Australian trade, because CSL Australia is an Australian company, but, as far as the relations of the shipowner and the charter are concerned, this vessel could be used anywhere in the world.  As your Honour the Chief Justice points out to me, without varying this charter, it could be used in South America next year, or, for example, elsewhere in the Pacific region. 

On the facts, as agreed, it does engage in trade – not much, so far, it must be admitted, but it does – which is not from port to port in Australia.  Now, my learned friends will say, well, that is the other part of section 51.  It may be the other part of section 51, but it brings you within what we would submit are those limitations recognised in the authorities on what might be taken to be the legislature’s intention by reference to a connection with Australia.

McHUGH J:   There would be much force in that and Foster would help you a lot if you were simply trading between, say, Sydney and Tokyo, but once you are carrying goods between ports in Australia it seems very difficult to say the Commission does not have jurisdiction.  There seem to me to be tremendous problems about framing an award to cover you.  A simple roping‑in award hardly seems sufficient to deal with all the problems and it might be a reason why you would succeed in a 111 application.  I find it hard at the moment to see that insofar as you are operating between ports in Australia that it is not a matter that pertains to the relationship between employers and maritime employees so far as those matters relate to trade and commerce.

MR JESSUP:   Your Honour, that is one of our arguments, but even if the answer to that question is yes, and that is that it does relate, it still might not have the necessary connection with Australia.  If I could anticipate what I am going to say ‑ ‑ ‑

KIRBY J:   When you deal with the internal ‑ ‑ ‑

MR JESSUP:   If I could just anticipate what I am going to say and ask your Honours to turn to Foster 103 CLR 256, which will be much dealt with in these submissions, and without going to any of the facts of the case or the judgment of the case in a general sense could we ask your Honours to turn through to page 310 in the judgment of Justice Windeyer. At the foot of that page, having adverted to a cautionary observation made by the then Chief Justice in an earlier case, his Honour continued:

I say no more than that a law defining the conditions of service of the master and other mariners in a merchant vessel is, in my view, a law with respect to navigation and shipping; and, if the vessel be engaged in regular voyages to and from Australian ports from and to places beyond Australia for the purposes of trade, then such a law is a law with respect to trade and commerce with other countries, and is a valid exercise of the constitutional power under s. 51(i) and s. 98. A merchant vessel coming to Australia with passengers and cargo, or for passengers and cargo, is not, I think, from the point of view of Australia, any the less engaged in trade and commerce with other countries because in the course of her voyage she may also, as ships commonly do, load and discharge cargo and embark and disembark passengers at ports in other countries.

It is, however, one thing to say that the Commonwealth Parliament has a constitutional power to make a law having a wide extra‑territorial operation.  It is quite another thing to say that it has confided the exercise of such a power to a subordinate law‑making authority.

GUMMOW J:   All of this is before the development of the constitutional power with respect to external affairs too.

MR JESSUP:   Yes, that would be relevant, your Honour, but that is not what is picked up by section 5(3)(b). At the foot of the page his Honour said:

The case seems to me very different from some of those imagined in argument concerning affairs aboard foreign ships and the labour conditions of foreign crews having no real or substantial connexion with Australia beyond the fact that the vessels in which they serve from time to time come into Australian ports.  Some of the imagined circumstances might well be within the constitutional power of the Parliament under s.51(i), however inappropriate it might seem to be for it to legislate in respect of them; but they would not fall within the powers Parliament has confided to the Arbitration Commission on the proper construction of its statute.

His Honour there is dealing with a case in which you might well have a sufficient relation to pick up the legislative power under section 51(i) but you might still not have a legislative intention evinced by the statute made under that section, or under that placitum, to cover vessels and their crew which have no real and substantial connection with Australia.  An example might be if an international cruise liner called at Sydney and Melbourne and various other places and then went on its way.  I am thinking now of a case where there is no question of a wet charter and the person that actually does the trade from port to port is the person employing the crew.  It might be possible to say on the authorities that the terms and conditions of service of that crew do have a relation with overseas trade and commerce and yet the question is, has the legislature in the Workplace Relations Act simply by extending its jurisdiction under section 5(3)(b) shown an intention to give the Parliament jurisdiction over, for example, people who work on the QEII?

McHUGH J:   You mean the commission?

MR JESSUP:   Yes, given the Commission power to exercise jurisdiction over the people who work on the QEII.  If the answer to that is, well, probably not ‑ ‑ ‑

KIRBY J:   This submission is really going back to my point about the growth of globalisation.  In a sense your submission is saying that if we assert our constitutional power or statutory power over every vessel that just comes in and goes out, then that really is an intrusion and international trade would replace the chaos if every country with such slim connection were to enforce its sovereignty and its industrial relations on the internal economy of the ship.  I understand that, but a point must surely be reached where, if there is regular trade from port to port within the place, both the constitutional and the statutory power will be engaged and the question is how one draws the line.

MR JESSUP:   Your Honour, it is a question of how one draws the line.  That really is the burden of what we are here to put to the Court.  We submit that the line needs to be drawn as a matter of principle so that once drawn it can guide other cases, not simply intuitively.  It really it not just a matter in this instance of leaving it up to an industrial tribunal with experience in industrial affairs and all the things the court might sometimes say to have a kind of a “seat of the pants” feeling about whether this really does affect Australian affairs.

McHUGH J:   I appreciate the force of this insofar as you are talking about overseas ships just coming into Australian ports, but why does it not relate to the trade and commerce between the States?  That is sufficient to give them jurisdiction.  When these vessels are carrying cement from Adelaide to Brighton in South Australia to Brisbane and coming back, the trade and commerce there is the trade and commerce of Adelaide/Brighton and its purchasers.

What I am putting to you is that, whatever force your argument might have relying on Foster and general principles in terms of a voyage from Sydney to Tokyo or to Noumea, when you talk about these voyages under the single voyage permit and the continuing voyage permits you are right in the heart of trade and commerce between the States.

MR JESSUP:   Your Honour, with respect, that is one of the submissions we have but it is not the end of the matter by any means.  If that is the view your Honour takes as to whether the power falls within the constitutional mandate ‑ ‑ ‑

McHUGH J:   No, not the constitutional power, within the statute itself.

MR JESSUP:   Yes.

McHUGH J:   All the Commission has to do is to have some jurisdiction.  Now, it may step outside its jurisdiction if, for instance, it was to make an award, accepting your argument about trips between Sydney and Noumea or Newcastle and Noumea.  But insofar as the vessel is carrying cargo between Australian ports, why does it not relate to trade and commerce between the States?

MR JESSUP:   Your Honour, as I said, that is something we will turn to but the first proposition we want to advance is that, even if it does so relate, there is not a sufficient connection with Australia to justify the conclusion that the legislature intended to give the Commission power to regulate a foreign crew on a foreign‑flagged vessel.

McHUGH J:   That is a large proposition to say that a vessel carrying cargo on behalf of one Australian manufacturer to a purchaser in another Australian State does not have a substantial Australian connection.

MR JESSUP:   It is not, your Honour, because we are substantially assisted by the scheme which the Navigation Act has adopted.  I do not know whether your Honour ‑ ‑ ‑

McHUGH J:   Yes, I have looked at 286 and 289 and that, but 286 says that you are not deemed to be in the coasting trade.

MR JESSUP:   The Navigation Act produces this concept of the coasting trade.  That in itself is our legislative expression of jurisdiction over what might be called local shipping, harmonious with international conventions and with customary international law.  Now, when the legislature comes to draw the line it says, “Well, this is what we define as a ship in the coasting trade.  The present ship is outside it.  If you are in the coasting trade, then you are required to abide by Australian wages.”  That is what the Navigation Act says in one of those 280 sections.

McHUGH J:   Yes, 286.

MR JESSUP:   I think it might be 290.  The production of an Australian award which would apply to seafarers under section 292 is evidence of what Australian conditions are.  So, in effect, the legislature has said that if foreign ships come with their foreign crew and do what your Honour describes, port to port, carrying cement and what have you, then first of all they cannot do that unless they are licensed, and if they are licensed ‑ ‑ ‑

McHUGH J:   But this is a case of permits, not licence.

MR JESSUP: Licence. They cannot do it unless they are licensed, and then they are in the coasting trade and they have to pay Australian wages and they have to abide by Australian awards. Now, that is as clear a regime as you could want, and it deals with people under the trade and commerce power, supported by section 98, and it is no defence to say you are a foreign‑flagged vessel or you are a foreign company or you have a foreign crew, because - and we will refer your Honours to some of the international writings in this respect - by coming to the Australian environment you are subjecting yourself to Australian law and you are hoping to get the protection of the Australian sovereign power. However, in a particular case the Minister may give an unlicensed ship a permit to operate from port to port along the Australian coast. Once a permit is granted, then the vessel is deemed not to be in the coasting trade.

McHUGH J:   I understand that fully and it seems to me a powerful argument for saying that your 111 application should succeed, because of the ad hoc nature of these permits.  But that is a different thing altogether from saying that 5(3)(b) in its terms does not apply, as a matter of jurisdiction.

MR JESSUP:   Your Honour, it is not, because, although section 5(3)(b) used to be in the Navigation Act itself, it was originally in 1952 introduced as section 405(d), I think, of the Navigation Act, and this is in our submissions. The Commission was given a jurisdiction, very substantially, although not identically, in the terms of the present one under section 5(3)(b) – the drafting technique has changed over the years. So there was, we would submit, your Honour, a need at that time to create harmony between the jurisdiction which the Commission has and the exclusion, by that same Act, of the need to apply Australian awards and what have you.

It would have, as we have pointed out in our submissions in one point, your Honour, the strange result that although the Navigation Act says that you do not have to apply all the Australian awards, at the same time the Workplace Relations Act gives the Commission a jurisdiction to make that very same award applicable in toto. It is no answer, with respect, to say, “Well, under section 111, or somewhere else, the Commission might exercise its discretion not to do so”. Where the legislature has drawn the lines between what will be inside and what will be outside a relevant area, is it likely, we ask rhetorically, that it would have left it up to the Commission to overstep those lines?

McHUGH J:   Yes, but you have to find some principal of statutory construction that would cut down 5(3)(b).  Now, in the case of foreign trade, to use that expression, you can rely on a well‑known principle of statutory construction, namely, that legislation is not intended to operate extraterritorially, and that is what was applied in Foster.  But when you get to a case where the operation of the Act is internally in Australia, trade between the States, it seems to me you are in a different category.  You have to be able to find some principle of statutory construction which will cut down 5(3)(b).

MR JESSUP:   Your Honour, for more than half of the time spent sailing, outside Australia’s territory – that is the thrust of one of the two affidavits that I read this morning.  About 57 or something per cent of the time, this vessel is outside the 12 mile limit.

McHUGH J:   Yes.

MR JESSUP:   It may be it was going to one Australian port to another, and, of course, extraterritoriality per se does not provide an answer, or at least not a very satisfactory answer, to the questions which arise in this case – and it never has provided an answer in the case of the internal economy of a vessel.  That is why vessels are required under international law to have flags, and a State by flagging a vessel assumes responsibility with things which occur on that vessel, even when it is in the territorial waters of another State.  Now, is it to be assumed that that other State would, by legislation expressed in perfectly general terms, seek to exercise dominion over those internal affairs?  We would say not, and we would say there is a general principle which says that it is not.  It is really a matter for the respondents to this application to point to any exceptional circumstance which would bring it within.

HAYNE J:   Can I interrupt you and ask you what is the principle, or what are the principles, which you say are engaged in aid of the reading you were to have us make of 5(3)(b)?  At the moment there seem to be at least three which have been put in play:  one, relevant international obligations are said, perhaps, to lead to this conclusion; two, notions of extraterritoriality are said to be engaged; third, there seems to be some reference to let us harmonise the statute book between the Navigation Act and the Workplace Relations Act.  Are all of those principles said to be in play?

MR JESSUP:   Yes, your Honour, but not in a series of descending or cascading alternatives, but rather – I do not want to turn this case into spin, your Honour – they harmonise, as it were, into a single coherent proposition which is that ‑ ‑ ‑

HAYNE J:   That seems a restatement in other words of the proposition that you “Throw ‘em all into the mash and out comes a solution”, Dr Jessup.  What I am suggesting to you is that we may need to distinguish with some care between the application of each of these three distinct principles upon which you seek to rely and that you cannot just move seamlessly one to another.

MR JESSUP:   Your Honour, the principle of extraterritoriality, or should I say the assumption that the legislation will not apply extraterritorially, is a very old one and it is referred to in paragraph 15 of our submissions.

HAYNE J:   It is what Justice Windeyer was referring to at page 306 of Foster with his reference to the Keith edition of Dicey “Conflict of Laws”, I think, is it not?

MR JESSUP:   Yes, your Honour.  However, extraterritoriality, if I can use that expression broadly, does not operate simply geographically.  An Australian subject will be subject to Australian law wherever that person is and on a ship people who are on an Australian flagship are subject to Australian law wherever the ship is.  The proposition which we have referred to in paragraph 15 is that legislation is intended to regulate, and to provide benefits for, subjects of the sovereign power legislating, who by subjecting themselves to that power also enjoy its protection.  So that if non‑subjects come within the territory of a particular power, then by going there they expect the protection of that power and in return for that, of course, they subject themselves to the authority of the legislature of that power.

HAYNE J:   But at root that is a proposition, is it not, about what effect will be given by a court in a particular jurisdiction to a rule which finds its root in the legislative Act of another jurisdiction?  Is that not so?  That is, it is an appeal to notions of conflicts of law, is it not?

MR JESSUP:   No, your Honour.

HAYNE J:   No?

MR JESSUP:   No, there are two separate things here.  One is the choice of law principles arising under private international law and the other is the assumed construction of the legislation or the commands of a sovereign power as to the area within which and the people to whom which those commands are addressed.

GUMMOW J:   The question is, which sovereign power?  The sovereign power of which the relevant forum is part, or the sovereign power of some other nation, where the activities, legislatively, of that nation are said to be the governing law in the forum?

MR JESSUP:   No, your Honour, it is not so much a question of whether the law of the Bahamas is the governing law in relation to the ship, although undoubtedly for most parts it would be ‑ ‑ ‑

GUMMOW J:   We do not know anything about the law of the Bahamas.

MR JESSUP:   I beg your pardon, your Honour?

GUMMOW J:   We have no evidence as to the attitude of the law of the Bahamas to these ‑ ‑ ‑

MR JESSUP:   No, no evidence at all about it, save that it is a Bahamian flag, so Bahamian law would apply on the ship.  The question really is only concerned ‑ ‑ ‑

HAYNE J:   The question for an Australian court is:  what effect is to be given to an Australian Act?  You say that that Australian Act is to be construed in a particular way.  Now, what is the principle which you engage in aid of that construction?  Is it whether, for example, the courts of the Ukraine or the Bahamas would pay any attention to what the Commission had done in pursuance of this statute?

MR JESSUP:   No, with respect, your Honour, we are not concerned to inquire as to what a court in another country would say or do about the present circumstances.  We start from the proposition as to territoriality.  We then move to the application of that proposition in a maritime setting, and we doubt that we can put it – if your Honour is looking for a principle ‑ better than Chief Justice Dixon did, in the passage we have referred to paragraph 16 of our outline, and that is that there is a presumption which:

“assumes that the legislature is expressing itself only with respect to things which internationally considered are subject to its own sovereign powers.”

KIRBY J:   Justice Hayne is digging into what lies at the heart of your theory and I was surprised to hear you say, “We are not concerned about what other countries would do”, because I would have thought that at least possibly at the heart of your theory is reciprocity in international relations, that we do not interfere in the internal economy of their ships under their flag, because that is a principle of international dealings and we expect the same reciprocity in respect of our ships, if they happen to touch a port – I am not sure that you can touch a port in Ukraine, but touch may be on the Black Sea – I am not sure about that – but a port of other countries.  That at the heart of it is an international comity, reinforced perhaps by international law, that we respect each other’s right to govern the internal economy of their ships.

MR JESSUP:   That is so, your Honour.  I was not ‑ ‑ ‑

KIRBY J:   That is something you seem to be throwing away.

MR JESSUP:   I was not intending to submit otherwise.  I was only intending to say that it is no part of our case to embark upon an inquiry as to the practice of a court in the Ukraine or a court in the Bahamas or anywhere else, but it is part of our case to contend for an international principle which is reciprocal and universal.

KIRBY J:   It is a matter of identifying what the principle is.  I saw the case you relied on in New York, and I can understand the principle on touching the coast, or even the QEII picking up some passengers in Melbourne, and going on to Sydney and maybe to Cairns, but not being under our law as to their internal matters in the ship, as in a plane.  But when they start to engage in coastal trade, then you seem to see a different sort of problem.

MR JESSUP:   Your Honour, the facts in the American cases, to which we will come presently, was not perhaps coastal trade in the same way that this is, but it was regular trade to and from New York and other places in the United States from equatorial destinations, either in South America or in the West Indies or places in that region.  There was a very substantial connection with the United States, and those cases were decided not by trying to toss around the extent to which the actual trade was to and from the United States, or even within, but rather by fundamental concepts of where is the ship registered, where were the crew engaged?  Those, essentially, your Honour, are the two significant factors.

Now, Foster, we would make so bold as to submit, would never have been decided the way it was were it not for the fact that you had Australian seafarers, members of Australian unions, engaged in Sydney.  Justice Windeyer made it quite clear that these people had contracts of employment governed by the law of New South Wales because that is where they were engaged and that is where they were dropped off. 

Now, it is true they signed their articles in Hong Kong in terms of actually signing the articles, but there was a strong employment connection with Australia.  Absent that factor, Foster would not have been decided the same way.  We know, your Honour, that in this case there is an element which was absent in Foster, that the actual passage of the ship is from port to port in Australia to a substantial extent.

McHUGH J:   But is that not your problem?  You cannot say – or maybe you do – that sections 288 to 292 of the Navigation Act are in breach of international law or Australia’s obligations.  There the Parliament has said, “If you are a foreign ship and you are licensed for our coasting trade, then you have to pay award wages and no agreement that you have made is of any force or effect.”

MR JESSUP:   Your Honour, it might be possible to say that they are in breach of international law, but it does not matter.

McHUGH J: It does matter, because it shows that the Parliament, in the case of a ship that is licensed, requires them to pay wages. Now, the only question then is in some way, it seems to me, can you get out of section 286 of the Act some legislative indication that section 5(3)(b) is not to apply to these.

MR JESSUP: That is a question, your Honour, but if the Parliament had made its intention clear, then of course we would not be here today. We are not suggesting for a moment Parliament cannot legislate in these areas, but section 5(3)(b) is a general provision which has to deal with everything and it is expressed in very general terms. It is the classic case for saying, “Well, hang on. Did the legislature really mean to cover this sort of case?” We accept that it did not intend to cover the QEII type of situation, then the next point - and I think your Honour Justice Hayne is saying, what is the principle by reference to which it did not cover that situation, and does that principle apply here?

HAYNE J:   What I am asking you is why, in a provision which deals not simply with interstate trade but with overseas trade, do you engage a principle which you describe as a principle of extraterritoriality.  The whole subject matter necessarily has at least some aspect which looks beyond the territory of Australia.  Perhaps that is not an exhaustive definition of the subject, but it has an important, indeed critical, aspect which looks beyond the territory.

MR JESSUP:   I accept that, your Honour, and in Foster’s Case it did look beyond the territory.  In Foster’s Case there was an earlier case decided by the Court, the Merchant Service Guild Case, or one of the Merchant Service Guild Cases, which had held in effect that the industrial dispute had to relate to work which was done in Australia before the jurisdiction under 51(xxxv) could be enlivened.  That was overruled in Foster.  That was overruled with respect to 51(xxxv), even without going to 51(i).  But, yes, your Honour, we accept that there is some extraterritorial potential in 5(3)(b) but that would apply if you had an Australian company with Australian seafarers using an Australian‑flagged ship to go between Australia and other places.  In such a case you would have to have a legislative mechanism for regulation that did not rely upon the existence of an interstate industrial dispute.

GUMMOW J:   Are you pressing your notice of motion seeking to add ground 5?

MR JESSUP:   Yes, your Honour.

GLEESON CJ:   Is that opposed, Mr Jackson?

MR JACKSON:   No, your Honour.

GLEESON CJ:   You have that leave.

MR JESSUP:   Thank you, your Honour.

GUMMOW J:   Now, that raises a question of validity, does it not?

MR JESSUP:   Yes, it does, but we would ‑ ‑ ‑

GUMMOW J:   I thought you were not arguing validity and unless I get that clear in my mind, I do not start to advance anywhere.

MR JESSUP:   No, we are arguing validity in the 15AB sense, if I can put it that way, your Honour. We accept that the legislature in section 5(3)(b) probably intended to stay within the constitutional power ‑ ‑ ‑

GUMMOW J:   We cannot say “probably”.

MR JESSUP:   Well, all right, we say that they did.  But the point is 5(3)(b), we accept, would need to be construed so as to remain within 51(i) but if ‑ ‑ ‑

GUMMOW J:   Well, by what criteria?  If there is a reading down, by what criterion do we read it down, other than repeating 51(i)?

MR JESSUP:   That is a pretty good criterion, your Honour.

GUMMOW J:   It is no criterion really, relevantly in terms of reading down.

MR JESSUP:   Your Honour, I do intend to come to that and ‑ ‑ ‑

GUMMOW J:   It seems to me that is where you have to start off, but anyhow.  You are seeking to have us construe this provision 5(3)(b) against some measure which you do not delineate.

MR JESSUP:   We do, your Honour, with respect. What we have said about the constitutional limitations of section 5(3)(b) is that – I cannot touch the subject, your Honour, without in effect making the submission, and I would prefer not to make it out of order, but where you have ‑ ‑ ‑

GUMMOW J:   Let me explain it to you.  You refer to the United States cases.  They are all cases on construction.

MR JESSUP:   Yes, we do not refer to them ‑ ‑ ‑

GUMMOW J:   It was readily conceded, I think, by everybody in the United States cases that the Commonwealth had the power.

MR JESSUP:   Yes, we do not refer to them under the Constitution at all, your Honour.

GUMMOW J:   Well, what is the point?

MR JESSUP:   Because we refer to them on the question of whether there is a sufficient connection with Australia.  We should say that ‑ ‑ ‑

GUMMOW J:   Well, what is the criterion for sufficiency?

MR JESSUP:   That there must be, your Honour, either an Australian registration of the ship or Australian seafarers engaged in Australia on the ship.

GUMMOW J:   Nothing else will do?

MR JESSUP:   Nothing that could be relevant to this case, your Honour.

GLEESON CJ:   Is it not sufficient that the vessel is engaged currently in the Australian coastal trade?

MR JESSUP:   No, your Honour.

GLEESON CJ:   Why not?

MR JESSUP:   No, not in our submission.

GLEESON CJ:   What is the reason for that?

MR JESSUP:   Your Honour, I would prefer to answer that by, in effect, making the submissions which we wish to make and which are dealt with in our written outline.  I do not for a moment want to dodge the question, but it is a long answer, if I can put it that way, and it really is why we are here.

KIRBY J:   Yes, I am beginning to get a little lost in the theory of your case. At least, as I can see, that there are three levels to the answer to the problem your client brings to the Court. The first is a constitutional power, though you put that second. The second is the statutory interpretation point. The third is the answer that section 111 or other sections of the Act provide. You do not want those. You want to knock it out at 1 or 2. But, for my own part, I would like to get back on the rails or on the journey of this particular ship and see where it leads us.

MR JESSUP:   Your Honour, the levels at which our case proceeds are set out at paragraph 2 of our written submissions, namely ‑ ‑ ‑

KIRBY J:   Yes, I noticed that ‑ ‑ ‑

MR JESSUP:   ‑ ‑ ‑ whether the matter was sufficiently connected with Australia so as to be comprehended by the legislative provisions under question; whether the terms and conditions related to trade and commerce; if they did, whether the law as so construed went outside the legislative power in section 51; then whether our client is amenable to extraterritorial service and whether the terms and conditions pertained to the relationship between our client and the Australian unions.  So those are the propositions and those are the orders in which we propose to develop them.

KIRBY J:   But if you think of it conceptually it is a question of constitutional power, unless you have that you do not go to square two. Normally one starts with the Constitution. You do not want to do that.

MR JESSUP:   No, your Honour.

KIRBY J:   Which rather suggests you do not have much faith in your constitutional argument.  Then secondly, you go to the statute and see whether within its four walls, having regard to the counter propositions, the apparently broad language is to be construed as applying.  Then thirdly, if you get through those, then you have the powers of the Commission to give you relief against the exercise of its jurisdiction.

MR JESSUP:   That does not arise, your Honour.

KIRBY J:   It does not arise here, but it is something which we have to keep in mind as an answer to the problem you present to the Court.

MR JESSUP:   It is not, with respect, an answer at all, your Honour.

KIRBY J:   There is a very large power to decline jurisdiction.

MR JESSUP:   If we draw attention to a problem and if our submissions are sound in that respect, then the Commission does not have jurisdiction to exercise whatever powers it might have.  Your Honour, we do not put the constitutional point first, not because we lack faith in it, but because it is put as it were in aid to the constructional point under section 15AB of the Acts Interpretation Act and it would really be artificial to deal with it without dealing conjointly or at least contiguously with the relation point.  Your Honours, we have not dealt with paragraph 14.  The Wanganui‑Rangitikei Case is interesting for two reasons.  The first is it draws attention ‑ ‑ ‑

GUMMOW J:   It bears out what Justice Hayne was putting to you, I think, about conflict of laws.

MR JESSUP:   Exactly, your Honour.  That case involved two questions.  First of all, what was the proper law of the obligation under which a New Zealand statutory authority or public utility had borrowed money from an Australian lender and had to make repayments in Sydney.  Secondly, even if the proper law of the obligation was not New South Wales, whether of its own force the statute in question applied to the obligation to make repayments and the case does make a distinction, we submit, between private international law with which this case is not, at least in its core concerned, and the question of the operation of legislation with which this case is concerned.

GUMMOW J:   Yes, but look at the relevant statute set out in the footnote to 583 of the report in 50 CLR, it is entirely silent as to any territorial connection.

MR JESSUP:   Yes, it is, your Honour.

GUMMOW J:   Very different law from 5(3)(b).

MR JESSUP:   That may be so, your Honour, but the case makes the distinction between private and public international law, if you can put it that way.  If you would turn to page 599, Justice Dixon, at the end of the first incomplete paragraph on that page, concluded his judgment with the words:

It follows that the law of New South Wales is not the proper law of the obligation to pay interest.

Then he goes on:

The appellant Board nevertheless seeks the benefit of the Interest Reduction Act . . . on the ground that the statute includes every payment of interest required, according to the tenor of any obligation, to be paid in New South Wales –

and on the next page ‑ ‑ ‑

GUMMOW J:   At the bottom of 599, there is the consideration Justice Hayne was putting to you.

MR JESSUP:   Yes.

GUMMOW J:   In other words, what are they going to say in New Zealand?

MR JESSUP:   So there were two issues in this and the point which touches a tangent with the present case is not the conflicts of laws point and the choice of law point, but the point concerning construction of the legislation.  There is a reference to the Acts Interpretation Act of New South Wales, in which a provision corresponding to section 21 of the Commonwealth Acts Interpretation Act was relied upon.  That provision was that references to “matters” in legislation shall be taken as references to “matters and things” in and of New South Wales, and that is the indication of statutory intention in section 21B of the Commonwealth Acts Interpretation Act, which tells us that section 5(3)(b), amongst other provisions, is a reference to a matter in and of the Commonwealth.

HAYNE J:   That is cast at a very high level of generality, Dr Jessup.  What words in 5(3)(b) are to be understood in this way?  It is no good just saying 5(3)(b), 21, the two are connected.  Where is the connection?

MR JESSUP:   No, “matter”, your Honour.  Section 21 refers to “matter” and so does 5(3)(b).

HAYNE J:   And how is that to be given operation when 5(3)(b) refers to overseas trade?

MR JESSUP:   The matter has to be in and of – it may well be overseas trade, but the matter which pertains to the relationship of employers and employees has to be a matter in and of the Commonwealth.  So it may be that someone is engaged in overseas trade, by all means, but if the terms and conditions of employment are not in and of the Commonwealth, then the Act is not talking about them.

HAYNE J:   So, reading it out, you say matters in and of Australia:

pertaining to the relationship . . . so far as those matters relate to trade or commerce:

(i) between Australia and a place outside Australia ‑ ‑ ‑

MR JESSUP:   Yes.  There would be many such matters which related only to intrastate trade and which would not come under the constitutional power of section 51(i).  Your Honour, with respect, this is at a high level of generality, but one starts somewhere.  If we are looking at what is the legislature’s intention, there really is not much wrong with starting with the Acts Interpretation Act.

HAYNE J:   Not much wrong starting with the words either, Dr Jessup.

MR JESSUP:   We do not shy from them for a moment, your Honour.  What Justice Dixon said, at the foot of page 600 of the report, was that:

the question remains:  When is it a matter or thing in and of New South Wales?  It appears to me that it is necessary in such a case to rely upon the ordinary rules of the common law for a rule of interpretation which will supply the restriction subject to which the words will be read.  The case is one for applying what I believe to be the well settled rule of construction.  The rule is that an enactment describing acts, matters or things in general words, so that, if restrained by no consideration lying outside its expressed meaning, its intended application would be universal, is to be read as confined to what, according to the rules of international law administered or recognized in our Courts, it is within the province of our law to affect or control. 

HAYNE J:   Go on, read the next sentence, Dr Jessup because that is ‑ ‑ ‑

MR JESSUP:   I will:

The rule is one of construction only, and it may have little or no place where some other restriction is supplied by context or subject matter.

Your Honour, there is nothing in the context or subject matter of the present case which excludes the rule to which his Honour refers.

HAYNE J:   Do you accept that the reference to international law is, as the sentence immediately next following reveals, the references to “rules of private international law”?

MR JESSUP:   No, your Honour, we do not accept that it is confined to that at all, and there is no reason why it should be.  The only other passage in this case, to which we wish to refer, is that of Justice McTiernan at the foot of page 612 where his Honour said:

The phrase “in and of” imports both situation and a close identification of the matter or thing with New South Wales.

Now, we want to go from there – we have dealt with paragraph 15.  We want to take your Honours to Foster.  Foster concerned both the dispute‑settling power in a conventional sense, and the power which then existed in the Conciliation and Arbitration Act, which corresponds with section 5(3)(b) of the Workplace Relations Act, and four of the justices in that case held that section ‑ ‑ ‑

GUMMOW J:   Section 72, is that the section you are referring to?

MR JESSUP:   Yes, your Honour.

GUMMOW J:   It is not drafted in the same way as 5(3)(b)?

MR JESSUP:   No, it is not, your Honour.

GUMMOW J: Section 5(3)(b) is drafted, having taken on board Foster, I would have thought?  Some of the criticisms of 72 are sought to be met rather than 5(3)(b).

MR JESSUP:   With respect, your Honour, we would submit, with one possible exception, it is a 15AC point, that is to say, it is simply a mechanism ‑ a more simple drafting mechanism ‑ for extending the jurisdiction of the Act to these sorts of things.  The drafting change occurred not, in any sense, recently after Foster, your Honour.  The drafting change did not occur until 1988 when the Industrial Relations Act was enacted.

GUMMOW J:   Yes, I appreciate that, but Foster is part of a lingua franca of time, surely?

MR JESSUP:   Yes, your Honour, no question about that.  Chief Justice Dixon said:

It may well be correct that par. (b) ought not to be interpreted as extending to ships which are governed entirely by the laws of other countries and bring themselves into relation with Australia only as carriers of goods or passengers which are shipped or unshipped at our ports.

The wide general language used by the legislature was not intended to refer to the shipping of other countries possessing no distinct industrial connection with Australia.  At page 275 in Foster his Honour the Chief Justice said:

The words of par. (b) – 

and that is the words which correspond with the present provision – 

are both wide and vague and probably they should be subjected to what may be called a restrictive construction.

Then the other member of the court, who dealt with this matter in any analytical detail, was Justice Windeyer, and the point that he emphasised was that it is not likely to be assumed that the legislature would have invested what he described as a subordinate rule‑making authority with the power to decide whether or not to step over the line which is drawn by reference to customary international law and international comity, and we have set out the passages upon which we rely in that respect.

The connection with Australia which was presented by Foster related to the crew.  It was an overseas company, but the overseas company was registered in Australia as a foreign company, so it had a presence here.  It engaged the seamen in Sydney and they were Australian residents, members of the relevant unions.  None of those circumstances is present in the case now before your Honours.

Could we take your Honours then to paragraph 21 of the submissions.  We will not, unless your Honours would wish it, spend a lot of time on the general propositions in paragraph 21 because we do not understand that at that level there is any dispute about it.  General words in the statute we submit are to be construed as not being inconsistent with the comity of nations or with the established rules of international law.  Although not quoted in terms, those are actually the words of Justice O’Connor in Jumbunna.  Much the same thing was held in Polites, and we have given your Honours the references there to Chief Justice Latham and Justice Dixon.

We then refer to the general principle of construction of a statute in a way which accords with Australia’s obligations under international treaty.  We say that if the language of a statute is susceptible of a construction which is consistent with the terms of the international instrument and the obligations to impose it on Australia, then such a construction should be preferred.

Now, section 5(3)(b) is a general provision and it ought to be construed, we submit, in a way which is in harmony with international law. Could we take your Honour next to the convention on the law of the sea ‑ ‑ ‑

GLEESON CJ:   Have you left Foster?

MR JESSUP:   Yes, your Honour.

GLEESON CJ:   I wonder if I could invite your comment on the argument put by counsel for the respondent in Foster 103 CLR at the top of page 264, where he says:

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 employment relate to commerce.

MR JESSUP:   Yes, your Honour.  In our submission that is too sweeping a proposition.

GUMMOW J:   Well, Sir Garfield referred to Malcolm in the course of that submission.

MR JESSUP:   Yes.  Your Honour, we have dealt with this in pages 13 and following of our submission, where we deal with whether there is a relation between the trade and commerce and the terms and conditions of employment of people on the vessel in question.  We deal with Malcolm.  What we say so far as it relates to the present case, your Honour, is that whatever may be the case where the person who is trading employs the people on the ship, the terms and conditions of people who are employed by a company which does not engage in trade and commerce do not come within those general words, that is to say they do not relate to the trade and commerce.

They may relate, of course, your Honour.  They may be employed specifically to engage in Australian trade and commerce, or there may be something about their terms and conditions of service which bring in such a velation.  But simply the fact that they happen to be the arms and legs operating a vessel, which is used by someone else, not their employer, is not sufficient, we say, to warrant the conclusion that their terms and conditions of employment relate to trade and commerce.

“It says in effect that the power to make laws with respect to trade and commerce shall include a power to make laws with respect to navigation and shipping as ancillary to such trade and commerce.  It authorizes Parliament to make laws with respect to shipping, and the conduct and management of ships as instrumentalities of trade and commerce, and to regulate the relations and reciprocal rights and obligations of those conducting the navigation of ships in the course of such commerce, both among themselves and in relation to their employers on whose behalf the navigation is conducted.”

That indicates, in our submission, that the “so far as” words following it are to indicate that it is to bring it within power, as distinct from requiring that there be some further connection.  Your Honours, we would want to refer also, if we may, to The Queen v Flight Crew Officers’ Industrial Tribunal; Ex parte Australian Federation of Air Pilots (1971) 127 CLR 1. If one goes to page 21, we had said in our written submissions that if one goes about halfway down the page, his Honour said:

Of course an application to vary an award raises an industrial question.

This is in the flight crew context.  Our learned friend said, well, that is not what, in the end, was decided.  What your Honours will see is that what his Honour was saying was that an application to vary an award in a case like this will ordinarily raise an industrial question, but, in the particular case with which he was dealing, the application to vary the award was not sought as a substantive application; rather, it was made only in the event of the success of something else, which was held not to be within jurisdiction.

The issue is a little muddied by the fact that at the same page, about point 7, he went on to say that the Tribunal rightly dealt with the matter on the basis that its jurisdiction should not be exercised, rather than on the basis that it had not been invoked – that goes down to the bottom of the page.  We would refer also to page 22, about the top of the page.

Now, your Honours, the views of the other members of the Court do suggest that in circumstances like this an application to vary an award does give rise to an industrial question.  Can I refer your Honours to Justice McTiernan at page 24, about point 2, Justice Menzies at page 29, about point 1 and Justice Windeyer at page 31, about point 5.  Your Honours, may I move on to another matter now, and that is ‑ ‑ ‑

McHUGH J:   The theory of the Commission having jurisdiction in relation to the variation was that it was regarded as incidental to the settlement of the dispute.  It was all explained in Galvin’s Case, I think, in ‑ ‑ ‑

MR JACKSON:   The Flight Crew Officers’ Tribunal Case was not an industrial dispute case.

McHUGH J:   I know it is not.  No, it relies on the commerce power.

MR JACKSON:   Yes.  One has to have something to vary in the other cases, and the continuing dispute, in effect, yes.  Your Honour, if one had a situation where there was an award in being and then in an endeavour to vary it by adding people to it and all these sorts of things ‑ ‑ ‑

McHUGH J:   But you were talking about it being an industrial question and I am not sure that ‑ ‑ ‑

MR JACKSON:   Industrial question was defined in a way somewhat similar to industrial issue.  They are a different term, that is all.  Your Honours, could I come for a moment to the question of the actual activities in which the vessel was engaged on.  Here, it was engaged, in our submission, in two things:  principally trade and commerce among the States, secondly, trade and commerce between Australia and the places outside Australia.

That is part of the shipping referred to in section 98. The prosecutor was the employer of the crew of the ship during the time it is engaged in that trade. Your Honours, in those circumstances, why is the prosecutor itself not engaging in that trade? Why does it matter if the prosecutor is not? Its employees, the crew, are. We have referred your Honours in our written submissions to the terms of the time charter, which is exhibit D to Mr Keats’ affidavit and your Honours will see in relation to that paragraphs 1, 21 and, I think, 5. One simply has a situation, your Honours, where the prosecutor says to its related company “We will provide the ship and the crew, you get the cargoes” and they are both engaged in interstate trade and commerce.

Reference was made by our learned friends to the percentages of time involved on the journeys – to the statistics.  Could we refer to Mr Seck’s later affidavit, the one of 2 May, where you will see paragraph 4 where he has:

undertaken a calculation of the percentage of the time spent and the distance travelled by the CSL Pacific outside the territorial sea –

Then the answers are set out in exhibit 3.  Could we say two things about the actual exhibits, the last document attached to the affidavit.  The first is that it is speaking about voyage times.  It says nothing about the times spent in ports, and if one is speaking about interstate trade, particularly, then no doubt there is time taken in Australian ports – maybe, some time.

The second feature, your Honours, is that you will see that it involves three, I think, trips from Newcastle to Noumea and, no doubt, once they are trade and commerce between Australia and a place outside Australia, they somewhat eschew the matter from the point of view of interstate trade.

Your Honours, I mentioned a moment ago the movement of cargo.  That is something which, in our submission, lies at the heart of trade and commerce.  That was referred to by Justice Mason in Murphyores 136 CLR 1 at 8 to 19, the bottom of the page. He said:

The power conferred by section 51(i) enables the Parliament to prohibit, regulate and control the importation and exportation of goods, matters which lie at the heart of trade and commerce with other countries.

We would refer also, your Honours, to W. & A. McArthur Ltd v Queensland 28 CLR 530 at the bottom of page 546, the last three lines, Chief Justice Knox and Justices Isaacs and Starke, and going over to about eight lines down page 547. Page 549 the first new paragraph deals with the same topic.

Your Honours, we have referred in our written submissions to a substantial body of authority which supports the notion that trade and commerce in section 51(i) and 98 includes the terms of employment of crews and, in particular, we would refer to Australian Steamships Ltd v Malcolm 19 CLR 298, the decision which upheld the validity of the Seamen’s Compensation Act 1911 supported that notion. We have quoted the passages in paragraphs 21 and 22 of our written submissions. May I add just one reference and that is to Justice Isaacs at 19 CLR 329.

GLEESON CJ:   What paragraph of your written submissions?

MR JACKSON: It is at paragraphs 21 and 22 of our written submissions, your Honours. The passage I wanted to refer to was the paragraph commencing at the bottom of page 329 and going to the top of page 330. Could I come back then to the section 286 of the Navigation Act. If I could deal briefly with the relationship between section 286 and the Workplace Relations Act. By section 286(2), a vessel operating under a permit granted under section 286(1) is deemed not to be engaged in the coasting trade. Absent such a permit ‑ ‑ ‑

GUMMOW J:   It does not say that.  It says “shall not be deemed engaging”.

MR JACKSON:   I am sorry, your Honour.  We had noted the oddness of the words.

GUMMOW J:   It is odd.

MR JACKSON:   Very odd.

GUMMOW J:   It is unusual.

MR JACKSON:   Yes.  It is difficult to see that it means more than “shall be deemed not to be”, but it is certainly a curious way of expressing it.  May I say, in relation to it, that absent such a permit, the owner would be obliged to pay at Australian rates.  That is because of section 289(1).  That would apply, as your Honours will see from section 291(1), that that would be the case wherever the seamen had been engaged.

Your Honours, a relationship between the Navigation Act and the Workplace Relations Act is demonstrated by the fact that one sees the award evidence provision in section 292.  Your Honours, the award referred to there may have been made under the dispute provisions of the Workplace Relations Act, or may have been made under the provisions applicable by virtue of section 5(3)(b). But, your Honours, there is no provision of the Navigation Act which says that the operation of the Workplace Relations Act is excluded in the case of ships which have a permit.  The grant of the certificate simply means that the Australian conditions do not apply automatically – no more but no less.

Your Honours, there seems to have been a little movement I would say in relation to the Commonwealth’s position in this regard, a little movement from the position that was set out in paragraph 2.11 of their written submissions, particularly the concluding words.

Your Honours, could I just say also that there has been reference made to the proper law of the contract but, of course, award provisions are not part of a contract.  Award provisions, or provisions made in the exercise of powers under the Workplace Relations Act, operate whatever a contract may say, whatever may be the proper law of the contract.

Could I refer in that regard, your Honours, to Byrne v Australian Airlines Ltd 185 CLR 410. Your Honours will see the relevant passages at page 419 – perhaps I could just give your Honours the passages, pages 419, 420, 421, 425, 426 and 453. The submissions I propose to make now I will endeavour to do so briefly but may I do so by taking your Honours to our written submissions and indicating some aspects of them with which I have not, I do not think, yet dealt.

Your Honours, we have two sets of submissions.  One set is headed “Second respondent’s submissions” and the other set is the set which is in response to the Attorney‑General’s submissions.  May I deal with the former first.  I have, I think, given references to various parts of everything that is dealt with up to the bottom of page 5 of those submissions, that is, paragraph 15.   We would invite your Honours to read them, of course, but may I just elaborate on a few points.

GLEESON CJ:   You would expect to finish by 4.30?

MR JACKSON:   I am going to endeavour to do so, your Honour, yes.

GLEESON CJ:   We will be adjourning at 4.30 anyway.

MR JACKSON:   Your Honour, I put it this way.  If I had the choice in the matter, I would probably spend some time orally on some of the other issues.  If I were to do that, I would probably take another 25 minutes or half an hour.  If that time is not available, well, then, so be it.  May I assume, your Honour, that I am to finish completely by half‑past?

GLEESON CJ:   We want to hear you on service outside the jurisdiction.  If you do not finish by half‑past, we will have to hear what extra you say tomorrow morning.  We have some other business to attend to at 4.30.

MR JACKSON:   I appreciate that, your Honour.  Your Honours, could I, in relation to that, simply seek to say, first, if one looks at page 6 of our written submissions, your Honours will see a rather fuller discussion about the actual activities carried on by the other side.  It takes your Honours up to paragraph 19, and the point we seek to make in paragraph 19 is that what sections 5(2) and 5(3)(b) are concerned with are the matters the subject of the application to the Commission, what should be the terms of employment of the crew, at least, while it is engaged in that trade and commerce.

Your Honours, we would also seek to make the point, in dealing with validity, commencing at paragraph 20, that there is not any reason why ‑ and this is the second sentence – a law which says that the terms to be fixed by a person or body forming part of the executive government of the Commonwealth is outside power.  We note in paragraphs 21 and 22 through to 24 the ambit of, in effect, trade and commerce.  We would refer particularly to what is in paragraph 25, where, in the Seamen’s Union Case, in the reasons of Justice Mason – with which, as your Honours will see at footnote 39, the other members of the Court agreed – it was described as correctly made, a concession that activities in which the plaintiffs were engaged – they were berthing vessels – that they formed part of that trade and commerce.

Your Honours, if I could move then to paragraph 27, in the passage which goes through paragraphs 27 and 28.  We submit that there is no basis for the adoption of the sufficiency of connection test, but we submit in the alternative that there is a sufficient connection.

GUMMOW J:   In a way what the prosecutor has done is fix on that passage in Foster from Justice Windeyer.

MR JACKSON:   Yes, it is.  That is so, your Honour, and what it does in a sense is to move from the words of the statute as being the test and instead use some observations of the court as providing the relevant test.  The better starting point, with respect, is the statute itself in its current form.

Your Honours, I have made the point which is set out in paragraph 28 and I think I have also dealt with all the matters in paragraphs 29 through to 33.  The gloss I just referred to is adverted to in paragraph 34 of our written submissions.  Could I come from that to paragraph 36 and invite your Honours to note that they have been regularly engaged in interstate trade and commerce.  The prosecutor has earned higher from the time charterer by the engagement in such trade and commerce.

Your Honours, could I move then to paragraph 38 and the UNCLOS and the customary international law, and if I could take your Honours to Article 18 in volume 5.  Your Honours will see Article 18 in volume 5 page 800 deals with the meaning of “passage” and it said in the opening words:

Passage means navigation through the territorial sea for the purpose of:

Your Honours, one looks at the words of paragraph (a):

traversing that sea without entering internal waters or calling at a roadstead or port facility outside internal waters;

So that deals with circumstances where one is traversing the territorial sea without entering internal waters or calling at a roadstead or port facility outside internal waters.  Now, one sees then in paragraph (b), again prefaced by the words, “Passage means navigation through the territorial sea for the purpose of”:

(b)  proceeding to or from internal waters or –

and if I could add the words “for the purpose of proceeding to or from” –

a call at such roadstead or port facility –

which is a roadstead or port facility outside internal waters.  Your Honours, it is a possible, but, in our submission, not the better, view of the provision and of those parts of it saying “proceeding to or from internal waters” to say that it is referring to voyages to or from the country as distinct from voyages to or from places in the same country as part of a coasting trade, because one is speaking of navigation through the territorial sea and, your Honours, that is what we seek to say in paragraph 38.

GUMMOW J:   Is there anything on the travaux which would throw light on that?  Perhaps if it has not been looked at, it ‑ ‑ ‑

MR JACKSON:   We will endeavour to tell, your Honour.  Your Honour, I see the time.

GLEESON CJ:   All right.  We will adjourn now and you can deal tomorrow morning with the service ‑ ‑ ‑

MR JACKSON:   The service question and, your Honours, there are a couple of other things I want to mention, if I may, in passing.

GLEESON CJ:   Yes.  We will adjourn now and resume at 10.15 am tomorrow morning.

AT 4.31 PM THE MATTER WAS ADJOURNED
UNTIL WEDNESDAY, 7 MAY 2003