BOAT BOAT GUIDE LEGAL
VESSELS OWNED BY NOT-FOR-PROFITS FRIEND OR FOE? By Ms Claire Strodder, Maritime Lawyer
Photos: Southport Yacht Club
Y
achting and boating clubs are a normal part of the Australian cultural landscape and have been for generations. Like other recreational activities (bowls clubs and sporting clubs spring to mind), boating clubs allow like-minded people to gather together, socialise and enjoy their common aquatic activities in an organised and mutually enjoyable way. Usually, such clubs are organised as ‘not for profit incorporated associations’ (“NFPA’s”) in accordance with the state legislation that governs such matters. They are usually governed by a committee formed of members, have meetings, and sometimes operate club premises and even marinas. Occasionally, a boat club NFPA will operate significant food and drink businesses in their club premises, and offer other activities such as lessons or run large organised events such as regattas or races. But at their heart, boating clubs are organisations that are intended to advance the activity that they are organised around for the benefit of their members. When the definition of a Domestic Commercial Vessel (“DCV”) was under discussion during the development of the Marine Safety (Domestic Commercial Vessel) National Law Act 2012 (Cth) (“the National Law”), it was recognised that the
broad definition of a DCV might capture vessels owned by boating clubs and similar community associations. A DCV is a vessel used in connection with a commercial activity, government activity or a research activity. A NFPA may conduct a variety of business-like activities, and so any vessel owned by the NFPA (or possibly even a vessel owned by one of its members and used in connection with the NFPA) might be caught by the definition and so be considered a DCV. You can imagine the huge number of sailing skiffs, canoes, kayaks, runabouts and so on, owned by sailing and boating clubs across the country suddenly becoming DCVs overnight. The broad definition of a DCV is intended to include vessels bringing in any form of income – this includes hire-and-drives, accommodation hire on the internet, charters, ferry services, and so on. This means that even if the vessel use could be considered for ‘recreation’, if it is used in connection with a commercial activity, such as where money changes hands, the vessel is still a DCV for the purposes of the National Law. Being considered a DCV triggers the need for a number of certificates (certificate of survey and operation) and a safety management system (SMS) to legally operate the
vessel in Australia. Being a DCV also changes the insurance law that applies. This can be a costly and time-consuming exercise. Consequently, the drafters of the National Law included an exemption for NFPAs. That is, a vessel owned by an NFPA is exempt from the National Law and is not to be considered as a DCV. But like all exemptions, it can invite people to explore whether there is a commercial advantage in creating an NFPA that operates cheaper and less regulated recreational vessels. Be very careful of any such operation.
OUR LAWYERS ARE EXPERIENCED MARINERS AND MARINE REGULATORS • Are you buying/selling/chartering a boat or maritime business? • Do you need help with risk assessments, audits, regulatory compliance and licensing and registration advice? • Do you need marine incident & pollution support? • Are you facing maritime commercial or crewing disputes? Capt John Kavanagh AFNI MQLS
1300 797 627
68
www.pacificmaritimelawyers.com.au info@pacificmaritimelawyers.com.au
OCT - DEC 2021
