JUDGMENT

Viscount Dilhorne (delivering majority judgment of the Board):

Under the Merchant Shipping Ordinance, 1952, the Pilot Board of Port Swettenham were in control and had supervision of all pilots on their register. They were given power to grant, to withdraw and to endorse pilotage licenses (s. 410). The Pilot Board fixed the number of pilots to whom licences might be granted and that number having been fixed, no new licence could be granted so long as the number of pilots so fixed were present at or near the port in the execution of their duties (s. 411). Licences were granted after examinations and sight tests had been passed (ss. 417 and 418); they might be either permanent or temporary (s. 420) but licence holders might be required once a year and had once in every five years to submit to sight tests and, if owing to changed conditions or for any other reason the Pilot Board considered it necessary, to pass a further examination (s. 419). The pilotage dues were prescribed by the High Commissioner and were charged by the pilots for their services (s. 428).

The Port Authorities Act, 1963, was passed to provide for the establishment of Port Authorities. Section 2(1) enacted that there should be established in respect of every port specified in the First Schedule a Port Authority. The only port specified in that Schedule was Port Swettenham, but the Act was clearly designed to apply to a number of ports.

Section 3 stated that the function of the Port Authority was to operate and maintain the port and gave it the powers necessary for that purpose. One of the duties imposed on the authority was:

to maintain, or provide for the maintenance of, adequate and efficient port services and facilities (including ferry services) at reasonable charges for all users of the port, consistent with the best public interest.

The Act did not specifically refer to pilotage services.

On 12 September 1969 six licensed pilots entered into a partnership agreement to carry on the business of pilotage under the name of "The Selangor Pilot Association (1946). Clause 8 of this agreement provided that:

The proceeds of all Pilots' dues shall be pooled together with all other moneys received on account of the partnership.

The only income received by the Association consisted of pilotage dues earned by the licensed pilots who were partners and by the licensed pilots who were employed by the Association.

The Port Authorities Act, 1963, was amended by the Port Authorities (Amendment) Act, 1972. It added to the duties imposed by that Act on a Port Authority, the duty of providing pilotage services within the limits of the port and the approaches to the port. This Act also amended the 1963 Act so as to give Port Authorities power to prescribe pilotage dues and provided for the insertion in that Act of a number of new sections dealing with pilotage and pilots. Those relevant to this case are the following:

Section 29A(1) The authority may from time to time by notification in the Gazette declare any area in the port or the approaches to the port to be a pilotage district. ....

Section 29D The authority with the approval of the Minister shall appoint a Pilotage Committee for the purpose of -

(a) holding examinations and issuing, on behalf of the authority, licences to act as an authority pilot.

....

Section 29(H) The Pilotage Committee shall examine candidates for employment by the authority as pilots and on being satisfied as to a candidate's general fitness and competency, including physical fitness to act as an authority pilot,

may, on behalf of the authority, issue to him a license to act as such, and such licence may contain such conditions as the Pilotage Committee may deem fit.(2) Subject to the provisions of this Part, every pilot holding immediately prior to the coming into operation of the said Part, a licence issued under the Merchant Shipping Ordinance, 1952 to act as a pilot in the Port Swettenham pilotage district, shall be deemed