Union Steamship Co of Australia Ltd v King

In the Court of Appeal, the respondent's certificate of discharge was tendered. It established that he was engaged by the appellant at Sydney on 29 June 1981 to serve on board the "Seaway Princess" as a crew attendant and discharged in Sydney on 27 July 1981.

At the trial it was common ground that the respondent's claim arose out of s. 46 of the State Act. That section provides:

(1) This Act applies in respect of an injury to a worker who is a seaman employed on a New South Wales ship or a ship whose first port of clearance and whose destination are in New South Wales.

(2) In this section the term "New South Wales ship" means any ship which is -

However, in the Court of Appeal a different view was taken. Samuels J.A. (with whom Priestley and McHugh JJ.A. agreed) considered that s. 46 does not provide an exclusive code for the application of the State Act to seamen injured outside the territorial limits of New South Wales and that it was not the only provision of the Act capable of application in respect of injuries to seamen inside the State. His Honour went on to point out that s. 7(1)(a) of the State Act provides that a worker who has received an injury, whether at or away from his place of employment, shall receive compensation from his employer in accordance with that Act. Section 7(1A) provides: Where an employer has a place of employment in New South Wales or is for the time being present in New South Wales and there employs a worker, and such worker whilst outside New South Wales received an injury under circumstances which had the injury been received in New South Wales would entitle him to compensation in accordance with this Act, such worker shall receive compensation in accordance with this Act Section 7(4B)(b)(ii) provides that where a worker was not employed in an employment to the nature of which the injury was due at the time when he gave notice of the injury (which is the case in this instance) the injury shall be deemed to have happened "on the last day on which he was employed in an employment to the nature of which the injury was due before he gave the notice".

Samuels J.A. proceeded on the footing that the appellant had a place of employment in New South Wales and had engaged the respondent in New South Wales. For the purposes of s. 7(4B)(b)(ii) the injury is deemed to have happened on 27 July 1981, the day when the respondent was discharged in Sydney. So, his Honour reasoned, the injury is deemed to have happened in Sydney. This led to the conclusion that the respondent was entitled to recover compensation pursuant to s. 7(1)(a). But his Honour also considered that, if "by some strange stroke the respondent was not in Sydney on the day of his discharge", he would be entitled to compensation pursuant to s. 7(1A). Although this basis for sustaining the Compensation Court's decision was not advanced at first instance no objection was taken in the Court of Appeal to the consideration of the argument in that Court.

In the result the Court of Appeal did not address the issue of invalidity of the State Act, evidently in the belief that the appellant was directing its arguments in support of invalidity to s. 46, not to s. 7. This belief may have been well founded because the respondent's reliance on s. 7 arose towards the end of the argument in the Court of Appeal and it seems that the appellant in reply may not have explicitly redirected its arguments in support of invalidity to s. 7 as well as s. 46. Be that as it may, in this Court the validity of s. 7 as well as s. 46 is at stake.

It is convenient in the first instance to examine the relevant provisions of the State Act. Section 7(1)(a), to which we have referred, confers on a worker who has received an injury at or away from his place of employment a statutory entitlement to compensation from his employer in accordance with the Act.

The effect of s. 7(1A), which we have already quoted, is to extend the entitlement to compensation to certain workers who suffer injury while outside the State. There is a proviso to s. 7(1A), as modified by s. 7(1B), which is designed to ensure that a worker does not receive double compensation under the State Act. Section 7(4) makes provision for compensation for a disease of gradual onset. Section 7(4B) makes provision for compensation for gradual hearing loss and s. 7(4BB) specifically includes boilermaker's deafness.

As we have seen, s. 46 applies the State Act in respect of an injury to a worker who is a seaman employed inter alia on a New South Wales ship, subject to the modifications set out in s. 46(3). The only modification which may be material is contained in par. (h). That paragraph provides:

where a claim is made for compensation under this Act in respect of any injury to a seaman, and it appears that the claimant is or may be entitled to claim compensation in respect of such injury under the Seamen's Compensation Act 1911 of the Commonwealth, or any Act amending it, proceedings for compensation under this Act shall be stayed until the claimant has given to the person from whom he claims such compensation a sufficient undertaking not to institute or continue any proceedings under the said Act or Acts of the Commonwealth.

The sufficiency of such undertaking may be as agreed upon between the parties and, in default of such agreement, it shall be determined by the Court.

In Compagnie des Chargeurs Caledoniens v. Weir [1] the New South Wales Court of Appeal held that s. 46 of the State Act did not provide an exclusive code for the application of that Act to seamen injured outside the territorial limits of the State. In that case the worker to whom compensation was awarded under the State Act was engaged as a seaman on a ship which was not a "New South Wales ship" within the meaning of s. 46(2). His employer did not fall within the terms of s. 46. Nevertheless the award was upheld on the footing that the case fell within s. 7(1A). The correctness of the decision is not challenged.

The present case is very different. As the ship on which the respondent was engaged was a New South Wales ship, this case falls fairly and squarely within the embrace of s. 46 and is governed by its provisions. It is evident from the opening words of s. 46(3) that the provisions of that sub-section were intended to govern all the cases to which it applies, even though the injuries are such that they might otherwise have fallen within the general words of s. 7(1)(a) and s. 7(1A).

The question then is whether s. 46 is a valid exercise of the power of the Parliament of New South Wales to make laws for the peace, welfare and good government of the State. The appellant submits that it is not such a law on the ground that there is no sufficient nexus between the law and the territory of New South Wales. In support of this submission the appellant says that registration may be a mere convenience for foreigners and that there may be many situations in which a ship registered in New South Wales is made the subject of contractual and other arrangements and put to uses which are entirely remote from New South Wales.

The scope and content of the power conferred by s. 5 of the Constitution Act 1902 N.S.W. to make laws "for the peace, welfare, and good government of New South Wales" is still a topic of current debate: see B.L.F. v. Minister for Industrial Relations [2] . This may seem somewhat surprising. The explanation is historical and it is to be found in the evolving relationships between the United Kingdom and its colonies, especially the relationships with the Australian colonies and, after federation, with the Commonwealth of Australia and the Australian States.

The power to make laws "for the peace, welfare, and good government" of a territory is indistinguishable from the power to make laws "for the peace, order and good government" of a territory. Such a power is a plenary power and it was so recognized, even in an era when emphasis was given to the character of colonial legislatures as subordinate law-making bodies. The plenary nature of the power was established in the series of historic Privy Council decisions at the close of the nineteenth century: Reg. v. Burah [3] ; Hodge v. The Queen [4] ; Powell v. Apollo Candle Co. [5] ; Riel v. The Queen [6] . They decided that colonial legislatures were not mere agents or delegates of the Imperial Parliament.

1. (1878) 3 App. Cas. 889. 2. (1883) 9 App. Cas. 117. 3. (1885) 10 App. Cas. 282. 4. (1885) 10 App. Cas. 675.

Lord Selborne, speaking for the Judicial Committee in Burah [7] , said that the Indian legislature "has, and was intended to have, plenary powers of legislation, as large, and of the same nature, as those of Parliament itself". Later, Sir Barnes Peacock in Hodge [8] , speaking for the Judicial Committee, stated that the legislature of Ontario enjoyed by virtue of the British North America Act 1867 Imp.: "authority as plenary and as ample within the limits prescribed by sect. 92 as the Imperial Parliament in the plenitude of its power possessed and could bestow. Within these limits of subjects and area the local legislature is supreme, and has the same authority as the Imperial Parliament " In Riel [9] Lord Halsbury L.C., delivering the opinion of the Judicial Committee, rejected the contention that a statute was invalid if a court concluded that it was not calculated as a matter of fact and policy to secure the peace, order and good government of the territory. His Lordship went on to say that such a power was "apt to authorize the utmost discretion of enactment for the attainment of the objects pointed to" [9] . In Chenard & Co. v. Joachim Arissol [10] , Lord Reid, delivering the opinion of the Judicial Committee, cited Riel and the comments of Lord Halsbury L.C. with evident approval. More recently Viscount Radcliffe, speaking for the Judicial Committee, described a power to make laws for the peace, order and good government of a territory as "connot[ing], in British constitutional language, the widest law-making powers appropriate to a Sovereign": Ibralebbe v. The Queen [11] .

1. (1878) 3 App. Cas., at p. 904. 2. (1883) 9 App. Cas., at p. 132. 3. (1885) 10 App. Cas., at p. 678. 4. (1885) 10 App. Cas., at p. 678. 5. [1949] A.C. 127, at p. 132. 6. [1964] A.C. 900, at p. 923.

These decisions and statements of high authority demonstrate that, within the limits of the grant, a power to make laws for the peace, order and good government of a territory is as ample and plenary as the power possessed by the Imperial Parliament itself. That is, the words "for the peace, order and good government" are not words of limitation. They did not confer on the courts of a colony, just as they do not confer on the courts of a State, jurisdiction to strike down legislation on the ground that, in the opinion of a court, the legislation does not promote or secure the peace, order and good government of the colony. Just as the courts of the United Kingdom cannot invalidate laws made by the Parliament of the United Kingdom on the ground that they do not secure the welfare and the public interest, so the exercise of its legislative power by the Parliament of New South Wales is not susceptible to judicial review on that score. Whether the exercise of that legislative power is subject to some restraints by reference to rights deeply rooted in our democratic system of government and the common law (see Drivers v. Road Carriers [12] ; Fraser v. State Services Commission [13] ; Taylor v. New Zealand Poultry Board [14] ), a view which Lord Reid firmly rejected in Pickin v. British Railways Board [15] , is another question which we need not explore.

1. [1982] 1 N.Z.L.R. 374, at p. 390. 2. [1984] 1 N.Z.L.R. 116, at p. 121. 3. [1984] 1 N.Z.L.R. 394, at p. 398. 4. [1974] A.C. 765, at p. 782.

But when it came to legislation having an extraterritorial operation, it was thought that colonial legislatures were incompetent to enact such legislation. The passage already quoted from the opinion delivered by Sir Barnes Peacock in Hodge suggests that a power to make laws for the peace, order and good government of a territory was limited to the area of the territory: see also Kielley v. Carson [16] ; Phillips v. Eyre [17] ; Ray v. M'Mackin [18] ; Macleod v. Attorney-General (N.S.W.) [19] ; Ashbury v. Ellis [20] ; Peninsular & Oriental Steam Navigation Co. v. Kingston [21] ; Attorney-General (Canada) v. Cain [22] .

1. (1842) 4 Moo. P.C. 63, at p. 85 [13 E.R. 225, at p. 233]. 2. (1870) L.R. 6 Q.B. 1, at p. 20. 3. (1875) 1 V.L.R. 274, at p. 280. 4. [1891] A.C. 455. 5. [1893] A.C. 339. 6. [1903] A.C. 471. 7. [1906] A.C. 542.

In the context of a grant of legislative power to a legislature in a colony forming part of a far-flung empire, it was natural to conclude, as did the law officers in the nineteenth century, that laws made in the exercise of such a power were binding and valid only within the boundaries of the colony: O'Connell and Riordan, Opinions on Imperial Constitutional Law. The prevailing rule of construction applicable to Imperial statutes was that they had no force beyond the Sovereign's Dominions, not even to bind subjects, unless that application was expressly mentioned or was necessarily implied: Jefferys v. Boosey [23] . Furthermore, there were powerful policy considerations which combined to generate an absolute doctrine of colonial extraterritorial incompetence. The need to protect British maritime and commercial interests from colonial legislation operating outside colonial boundaries and the possibility that colonial laws or acts done under such laws might involve Great Britain in a breach of international law or of an international obligation were prominent factors which contributed to the development of the doctrine.

1. (1854) 4 H.L.C. 815, at p. 939 [10 E.R. 681, at p. 730].

How far the doctrine went in inhibiting a colony from enacting a rule of conduct for its subjects or residents outside its boundaries was not altogether clear. In Macleod [24] Lord Halsbury L.C. quoted the remarks of Parke B. in Jefferys v. Boosey [25] :

[T]he Legislature has no power over any persons except its own subjects, that is, persons natural-born subjects, or resident, or whilst they are within the limits of the Kingdom. The Legislature can impose no duties except on them; and when legislating for the benefit of persons, must, prima facie, be considered to mean the benefit of those who owe obedience to our laws, and whose interests the Legislature is under a correlative obligation to protect. In Delaney v. Great Western Milling Co. Ltd. [26] , Griffith C.J. quoted and applied those remarks. 1. [1891] A.C., at p. 458. 2. (1854) 4 H.L.C., at p. 926 [10 E.R., at p. 725]. 3. (1916) 22 C.L.R. 150, at pp. 161-162.

However, in Croft v. Dunphy [27] the Judicial Committee, in upholding Canadian hovering legislation which was designed to operate beyond territorial waters, observed that there was "no reason to restrict the permitted scope of such legislation by any other consideration than is applicable to the legislation of a fully Sovereign State". The decision must be taken as rejecting the doctrine of extraterritorial incompetence as having an application to a Dominion. The decision was not based on s. 3 of the Statute of Westminster 1931 Imp. which abolished the doctrine so far as the Dominions were concerned. No doubt with Croft v. Dunphy in mind, Viscount Sankey L.C. in British Coal Corporation v. The King [28] referred to the doctrine as "a doctrine of somewhat obscure extent".

1. [1933] A.C. 156, at p. 163. 2. [1935] A.C. 500, at p. 520.

It might have been possible to confine the authority of Croft v. Dunphy to the legislatures of the Dominions as distinct from those of the colonies and States, on the footing that, following the Balfour Declaration of 1929, self-governing Dominions had achieved fully independent and sovereign status. But that is not how things have turned out. It is now accepted beyond any question that colonial legislatures had power to make laws which operate extraterritorially: Bonser v. La Macchia [29] ; Reg. v. Bull [30] ; New South Wales v. The Commonwealth ("the Seas and Submerged Lands Case") [31] ; Pearce v. Florenca [32] .

1. (1969) 122 C.L.R. 177, at pp. 189, 224-225. 2. (1974) 131 C.L.R. 203, at pp. 263, 270-271, 280-282. 3. (1975) 135 C.L.R. 337, at pp. 468-469, 494-495. 4. (1976) 135 C.L.R. 507, at pp. 514-520, 522.

The same comment applies with equal force to the Parliaments of the Australian States. Immediately following Croft v. Dunphy, Evatt J. in Trustees Executors & Agency Co. Ltd. v. Federal Commissioner of Taxation [33] stated that the supposed territorial restrictions on State Parliaments were confined to "a very small compass indeed". It has been said that the words "peace, order and good government" are now the source of whatever territorial limitations exist in relation to the Parliaments of the States: Reg. v. Foster; Ex parte Eastern & Australian Steamship Co. Ltd. [34] ; Johnson v. Commissioner of Stamp Duties (N.S.W.) [35] . As Windeyer J. noted in Foster [36] , the words simply express the fact that in "a general and remote sense the purpose and design of every law is to promote the welfare of the community", to use the words of Professor W. Harrison Moore in Commonwealth of Australia, 2nd ed. (1910), pp. 274-275.

1. (1933) 49 C.L.R. 220, at p. 235. 2. (1959) 103 C.L.R. 256, at p. 307. 3. [1956] A.C. 331. 4. (1959) 103 C.L.R., at p. 308.

Earlier in Broken Hill South Ltd. v. Commissioner of Taxation (N.S.W.) [37] Dixon J. had given more precise expression to the limitations which arise from the terms of the grant of the power so far as those limitations might affect laws having an operation outside the territory. His Honour said:

it is within the competence of the State legislature to make any fact, circumstance, occurrence or thing in or connected with the territory the occasion of the imposition upon any person concerned therein of a liability to taxation or of any other liability. It is also within the competence of the legislature to base the imposition of liability on no more than the relation of the person to the territory. The relation may consist in presence within the territory, residence, domicil, carrying on business there, or even remoter connections. If a connection exists, it is for the legislature to decide how far it should go in the exercise of its powers. As in other matters of jurisdiction or authority courts must be exact in distinguishing between ascertaining that the circumstances over which the power extends exist and examining the mode in which the power has been exercised. No doubt there must be some relevance to the circumstances in the exercise of the power. But it is of no importance upon the question of validity that the liability imposed is, or may be, altogether disproportionate to the territorial connection or that it includes many cases that cannot have been foreseen. 1. (1937) 56 C.L.R. 337, at p. 375.

See also Johnson [38] ; Thompson v. Commissioner of Stamp Duties (N.S.W.). [39] .

1. [1956] A.C., at p. 353. 2. [1969] 1 A.C. 320, at pp. 335-336.

The Solicitor-General for New South Wales, appearing for the Attorney-General for that State as intervener, submitted that even the statement of Dixon J. is too restrictive an interpretation of the Parliament's legislative authority. The nineteenth century Privy Council decisions, he submitted, recognize that the grant of power is as large and ample as that enjoyed by the Imperial Parliament itself. As that Parliament is not subject to any territorial restraint, so the Parliament of New South Wales is likewise free from such a restraint. The short answer to this contention is that the nineteenth century decisions, in comparing the scope and extent of the grant of legislative power to colonial legislatures with the power of the Imperial Parliament, explicitly qualified that comparison by reference to the limits of the grant itself: see, e.g., the passage already quoted from the opinion in Hodge [40] . Accordingly, the nineteenth century decisions do not deny that the words "peace, order and good government" may be a source of territorial limitation, however slight that limitation may be. And, as each State Parliament in the Australian federation has power to enact laws for its State, it is appropriate to maintain the need for some territorial limitation in conformity with the terms of the grant, notwithstanding the recent recognition in the constitutional rearrangements for Australia made in 1986 that State Parliaments have power to enact laws having an extraterritorial operation: see Australia Act 1986 Cth, s. 2(1); Australia Act 1986 U.K., s. 2(1). That new dispensation is, of course, subject to the provisions of the Constitution (see s. 5(a) of each Act) and cannot affect territorial limitations of State legislative powers inter se which are expressed or implied in the Constitution. That being so, the new dispensation may do no more than recognize what has already been achieved in the course of judicial decisions. Be this as it may, it is sufficient for present purposes to express our agreement with the comments of Gibbs J. in Pearce [41] where his Honour stated that the requirement for a relevant connexion between the circumstances on which the legislation operates and the State should be liberally applied and that even a remote and general connexion between the subject-matter of the legislation and the State will suffice.

1. (1883) 9 App. Cas., at p. 132. 2. (1976) 135 C.L.R., at p. 518.

Once this position is reached, the rejection of the appellant's submission that s. 46 is ultra vires becomes inevitable. The fact that the ship is registered in New South Wales is a sufficient connexion with the State to enable the Parliament to apply its laws to the ship and to justify the application to seamen employed on that ship of a statute entitling them as against their employer to workers' compensation benefits. As a matter of international law the country which offers its flag to a ship has authority to regulate the conditions upon which the ship may sail under it: see O'Connell, International Law of the Sea (1984), vol. 2, p. 752. Generally speaking the law of the flag is the law of the place of registration, though this is not an absolute rule: O'Connell, p. 753. As registration of the ship was a sufficient connexion with the State, it was for the legislature to decide how far it would go, as Dixon J. pointed out in Broken Hill South [42] .

This brings us to the issue of inconsistency. The State Act, it will be recalled, contains provisions that contemplate that an applicant may be entitled to obtain workers' compensation under the State Act and the Commonwealth Act. These provisions are designed to ensure that there is no entitlement to double compensation: see ss. 7(1A), 46(3)(h). Likewise, the Commonwealth Act contemplates that an applicant for compensation under that Act may be entitled to recover compensation otherwise than under that Act.

The Commonwealth Act applies in relation to the employment of seamen on a ship registered in Australia that is engaged in overseas or interstate trade and commerce or between a State or a Territory and a Territory or that is within the territorial waters of a Territory, or whose first port of clearance and whose port of destination are in such a Territory: s. 4(1)(a). An employer is liable to pay compensation in accordance with Sched. 1 of the Commonwealth Act if personal injury by accident arising out of or in the course of the employment is caused to a seaman: s. 5(1). However, s. 5(2)(e) contains a proviso in these terms:

(e) if it appears that the claimant has a claim for compensation for the injury under any law of the United Kingdom or of any other part of the King's Dominions or of any foreign country, compensation under this Act shall only be allowed upon the claimant undertaking not to claim compensation for the injury under any such law.

Section 10A deals with the liability of an employer independently of the Commonwealth Act. The section provides:

(1) Except as provided by this Act, a seaman shall not be entitled, in respect of personal injury by accident arising out of or in the course of his employment, to receive compensation or any payment by way of compensation from the employer both independently of and also under this Act.

(3) A seaman who recovers damages from an employer in respect of an injury shall not be entitled to compensation or any payment under this Act in respect of the same injury and any sum received by him under this Act in respect of that injury prior to the award of the damages shall be deducted from the amount of the damages recoverable from the employer.

In both ss. 5(2)(e) and 10A the word "compensation" is apt to embrace both common law damages and statutory compensation in the nature of workers' compensation. In Joyce v. Australasian United Steam Navigation Co. Ltd. [43] this Court held that the word "compensation" in s. 5(2)(b) of the Commonwealth Act as it stood in 1937 included damages recoverable at common law. Section 5(2)(b) was then expressed in terms similar to s. 10A. It then provided that:

A seaman shall not be entitled to recover compensation both independently of and also under this Act; but subject to this paragraph this Act shall not affect any civil liability of an employer under any other law. In holding that "compensation" extended to common law damages, the Court rejected the contention that the word was confined to compensation in the sense of workers' compensation, whilst clearly recognizing that the word covered workers' compensation [44] . In reaching this conclusion, Starke J. relied on s. 5(2)(e), a provision which has not changed since that case was decided. 1. (1939) 62 C.L.R. 160. 2. (1939) 62 C.L.R., at pp. 164-166, 170, 175, 177.

Evatt J. answered the appellant's claims in Joyce [45] by saying that the Commonwealth Act was a code dealing with compensation to seamen injured in the course of employment on vessels engaged in interstate or overseas trade and commerce. But his Honour pointed out that it was not an exclusive code. Parliament did not deprive a seaman of his right to bring proceedings under State law in respect of an injury; Parliament merely insisted that a seaman who pursued his Commonwealth remedy and did so successfully could not recover twice over by invoking the laws of the States. This view, which recognizes the mutual co-existence of the State Act and the Commonwealth Act, underlies the judgments in Joyce. It is a view which is plainly correct and it has not been eroded by the later amendments made to the Commonwealth Act. Accordingly, we would reject the argument that the Commonwealth Act manifests an intention to cover the field to the exclusion of State law.

It is not strictly necessary to decide one question which was argued: whether the reference in s. 5(2)(e) to "any other part of the King's Dominions" extends to a part of Australia. The words "any other part" obviously refer back to the immediate antecedent "the United Kingdom". Considered in this light the reference must be understood as including a part of Australia, in common with other parts of the Sovereign's Dominions, the word "Dominions" being used in its traditional sense rather than as a reference to those colonies which achieved the status of Dominions.

The provisions in the Commonwealth Act, and for that matter those in the State Act, which provide for their mutual co-existence, preclude the existence of a direct conflict or collision between the two statutes. Accordingly, there is no inconsistency between them.