The horses had competed in a tournament and were travelling from Devonport in Tasmania to Melbourne in a converted refrigeration trailer on the night of January 28, 2018.
They were discovered dead when the trailer was opened at Yarra Glen in regional Victoria at about 7.15am the next day. Two horses, named Scarlet and Delilah, survived.
Ferry operator TT-Line was last year found guilty of 29 breaches of the animal welfare act and later fined $75,000.
Magistrate Leanne Topfer ruled the company failed to inspect the trailer to ensure the horses were correctly individually stalled and to ensure ventilation was adequate.
TT-Line has appealed the ruling on several grounds, arguing it wasn't reasonable to expect the shipping company to assess the ventilation of horse trucks.
"All evidence showed the ship's ventilation functioned as it should," TT-Line's lawyer David Neal told the Supreme Court of Tasmania in Hobart on Monday.
"(It was a) clear failure on the ventilation of the truck."
TT-Line had relied solely on a declaration from former Australian polo captain Andrew Williams, who was involved in the horses' transportation, that ventilation was adequate.
Williams was fined $15,000 in March after pleading guilty to animal welfare law breaches.
Dr Neal said it was customary in the industry for the packer of goods to be responsible for ensuring they were packed appropriately and safely.
He said expert evidence at the original hearing showed double stalling did not cause hyperthermia in the animals and inadequate trailer ventilation was the issue.
The trailer had 1.6 square metres per horse, above the legally required 1.2sq m, and there needed to be "some degree of packing" to ensure the animals didn't fall over, he said.
Lawyer for the state Madeleine Wilson said the animals' heat stress was not just because of trailer ventilation but also because of the number of ponies inside.
She cited examples where transport declarations were not fully relied upon.
"For example, customs declarations. We know the government will also have sniffer dogs, they'll do random checks of people to see whether or not the declarations that are made are in fact true," she said.
The 16 horses who died were double-stalled, while the two survivors were single-stalled.
TT-Line, which was fined $75,000 in March, had earlier pleaded not guilty to one charge of using a method of management reasonably likely to result in unreasonable and unjustifiable pain and suffering.
It had also pleaded not guilty to 28 counts of failing to ensure a horse was individually stalled.
A decision on the appeal will be delivered at a later date.
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