Land and Environment Court of New South Wales CITATION : Webb v Chung & Ors [2002] NSWLEC 135 PROSECUTOR Gary Alan Webb PARTIES : DEFENDANTS Won-Hwa Chung Ki-Bong Seong Vella Shipping S.A. Panama FILE NUMBER(S) : 50132 of 2001; 50133 of 2001; 50134 of 2002 CORAM: Cowdroy J KEY ISSUES: Prosecution :- marine pollution - charges against Owner Master and Chief Engineer - s 10 Crimes (Sentencing Procedure) Act consideration. LEGISLATION CITED: Marine Pollution Act 1987, s 8(1) Crimes (Sentencing Procedure) Act 1999, s 10 Cameron v R [2002] HCA 6; (2002) 187 ALR 65; Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683; 82 LGERA 21; Federal Steam Navigation Co v Department of Trade and Industry [1974] 1 WLR 505; [1974] 2 All ER 97; Filipowski v Fratelli D'Amato S.r.1 and Others (2000) 108 LGERA 88; CASES CITED: Filipowski v Tanner [2002] NSWLEC 95; R v Thomson; R v Houlton (2000) 49 NSWLR 383; Thorneloe v Filipowski (2001) 52 NSWLR 60; Valle v Morrison (60432: unreported CCA judgment 22 November 1995); Veen v The Queen (1987-1988) 164 CLR 465 DATES OF HEARING: 30/7/2002 DATE OF JUDGMENT: 08/22/2002 PROSECUTOR Mr A Hill (Barrister) SOLICITORS Abbott Tout LEGAL REPRESENTATIVES: DEFENDANTS Mr G Nell (Barrister) with Ms F Rogers (Barrister) SOLICITORS Norton White JUDGMENT: IN THE LAND AND MATTER No. 50132-34 of 2001 ENVIRONMENT COURT CORAM: Cowdroy J OF NEW SOUTH WALES DECISION DATE: 22/08/02 Gary Alan Webb Prosecutor v Won-Hwa Chung Ki-Bong Seong Vella Shipping S.A. Panama Defendants JUDGMENT The Charge 1. In each of the above prosecutions the defendants are charged with having committed an offence against s 8(1) of the Marine Pollution Act 1987 ("the offence"). Such section relevantly provides:- 8.(1) Subject to subsections (2) and (4), if any discharge of oil or of an oily mixture occurs from a ship into State waters, the master and the owner of the ship, and any other person whose act caused the discharge, are each guilty of an offence punishable, upon conviction, by a fine not exceeding – (a) if the offender is a natural person – 2 000 penalty units, or (b) if the offender is a body corporate – 10 000 penalty units. … 2. In proceedings No. 50132 of 2001 the defendant Won-Hwa Chung ("the Master") is charged that on 4 January 2001 he was the Master of the K. Pheonix ("the vessel" or "the K. Pheonix") from a which a discharge of oil occurred in State waters being the waters of Newcastle Harbour. 3. In proceedings No. 50133 of 2001 the defendant Ki-Bong Seong ("the Chief Engineer") is charged that at the time of the offence he was the Chief Engineer whose act caused the discharge of oil. 4. In proceedings No. 50134 of 2001 the defendant Vella Shipping S.A. Panama ("the owner") is charged that it was the owner of the K. Pheonix when the offence was committed. 5. Each defendant has pleaded guilty to the charges and accordingly the Court is required to assess penalty in respect of each charge. By agreement the three proceedings are being heard together. The Facts 6. The vessel is a Cape-size bulk carrier of 75,264 gross tonnes. On the 4 January 2001 the vessel was berthed port-side to the wharf at Kooragang No. 6 Berth in the Port of Newcastle where it was loading a cargo of coal. The vessel transports coal between Australia and South Korea and has periodically called at Australian ports. The vessel was constructed in 1996 and is registered with the Korean Register of Shipping. 7. At approximately 10.00am on 4 January 2001 loading operations were in progress when an oil slick ("the discharge") was detected emanating from the stern of the vessel. The evidence from the parties conflicts in relation to the first time that the discharge of oil was observed. For the prosecution Mr Michael James Maloney, a wharf foreman, testified that he first observed the slick and drew it to the attention of the First Mate. As no action was apparently being taken by the crew Mr Maloney notified Mr John MacQueen in the foreman's office by radio and requested him to notify Newcastle Ports Corporation of the discharge. 8. The Master has deposed that the Chief Officer first drew the discharge to his attention following its observation by the Third Officer. Ultimately nothing turns on this discrepancy. Post-Discharge Action 9. It is common ground that the Master acted promptly when the discharge became apparent. He immediately instigated the "Oil Spill Response Team" and directed the person in charge to investigate the source of the leakage. The crew worked rapidly to locate its source. When informed that the bubble of lubricating oil had surfaced slowly near to the ship's rudder post the Master ordered the Chief Engineer to close all valves associated with the engine room and to check each gauge in all lubricating oil tanks. At approximately 10.30am the Master reported the leakage to the vessel's local agent who was asked to report the incident to the Newcastle Port authorities. 10. Although equipment was available to disperse the oil the Master determined it should not be used because the oil film was quickly evaporating and dispersing. Representatives of the Newcastle Ports Corporation thereafter attended upon the vessel and interviewed the Master who co-operated fully with their enquiries. Cause of the Discharge 11. The vessel was equipped with a system designed to lubricate the stern tube and to protect the ingress of seawater through the stern tube seal. Such system is a "closed system" and is operated by a series of valves which are connected to two tanks containing lubricating oil. As the vessel is loaded, its draft increases and greater pressure is required on the stern tube seal from the lubrication system. To achieve such pressure the higher of the two lubricating tanks must be activated by adjusting the valves when the draft of the vessel is at 13.8 metres. 12. During the loading of the vessel the Duty Deck Officer advised the Chief Engineer that the vessel's draft had reached 13.8 metres. Accordingly the Chief Engineer adjusted the valves in accordance with the manufacturer's specifications. Such procedure had been undertaken by the Chief Engineer since he was appointed to that position on 16 February 2000. 13. Shortly after the valves were activated, oil was noticed on the surface of the water near the stern of the ship. The film of oil was estimated to be approximately 300 metres long and 30 metres wide. Samples of the oil revealed that it was comprised of lubricating oil. 14. After all valves were closed following the discharge the Chief Engineer read the level of each of the tanks comprising part of the stern tube lubrication system. At the commencement of his duty on 4 January 2001 the Third Engineer recorded that the lower stern tube gravity tank was holding 89 litres of lubricating oil. The Chief Engineer found that 88 litres of lubricating oil was present in such tank following the discharge. 15. On completion of its voyage the Chief Engineer together with the Marine Superintendent of SK. Shipping Co Limited, the managers of the vessel, and the Master undertook their investigations to trace the source of the discharge. A meeting was held with a specialist engineer from the manufacturer of the lubricating system, namely, Kobelco Marine Engineering Co Limited. As a result Kobelco recommended the installation of an additional tank in the lubricating system described as an "aft stern tube low seal tank." It was estimated that such measure would provide greater control over the pressure on the stern tube. These modifications were carried out during the dry-docking of the vessel between 3 July 2001 to 7 July 2001. 16. The Master has acknowledged that despite such investigations he has not been able to determine conclusively the cause of the discharge. However, in view of the modifications now carried out to the lubricating system he considers that all possible steps have been taken to avoid a repetition. Mitigation 17. The vessel has regularly visited Australian ports and has shipped in excess of 3.5 million tonnes of coal from Australia without any prior incidents. The Master was awarded a plaque to signify such achievement by Abbot Point Bulk Coal Limited in September 2001. 18. SK. Shipping Co Limited have strict requirements relating to the prevention of pollution, training of crew members and the provision of equipment to ensure an effective response in case of accidental escape of oil. The Court accepts that all appropriate measures were taken immediately following the discharge. 19. There is no evidence of any environmental harm being occasioned nor is there any evidence of loss or damage as a consequence of the discharge. The oil film dispersed rapidly by wind and evaporation. The defendants estimate that approximately 1 litre of oil escaped. However lay witnesses called for the Prosecution estimate that approximately 5 to 10 litres of oil had escaped. It is unnecessary for the Court to resolve the difference because it accepts that the quantity of oil which escaped was minimal. 20. The Court finds that the operations which were carried out by the Chief Engineer complied with the operating instructions for the stern tube lubricating system of the vessel. Accordingly, neither the Master nor the crew negligently caused the oil discharge. Rather the discharge resulted from a latent defect in the equipment of the vessel. The Court accepts that measures have now been taken which should eliminate the risk of a further occurrence. 21. The Court notes that each of the defendants have pleaded guilty and have assisted the prosecution in the investigation into the discharge of oil from the vessel. In accordance with the principles referred to by Kirby P in Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683; 82 LGERA 21; R v Thomson; R v Houlton (2000) 49 NSWLR 383; and Cameron v R [2002] HCA 6; (2002) 187 ALR 65, the Court will reflect the contrition displayed by such plea in the assessment of penalty. Penalty 22. The maximum fines applicable for the offence are $220,000 for a natural person, and $1.1 million for a corporation. In Veen v The Queen (1987-1988) 164 CLR 465 at 478 the majority judgment of the High Court of Australia made the observation that the maximum penalty prescribed for an offence is intended only for cases falling within the worst category of cases. The Court does not consider that this offence could be so categorised. Indeed the extent of the discharge indicates that the offence is in the lower range of severity. 23. In assessing penalty the Court also observes that the charges pursuant to s 8(1) of the Marine Pollution Act 1987 attract strict liability in respect of the master and owner of a vessel. In Federal Steam Navigation Co v Department of Trade and Industry [1974] 1 WLR 505; [1974] 2 All ER 97 Lord Wilberforce, referring to virtually identical legislation observed that in many cases it was impossible to ascertain who was responsible for a discharge of oil. His Lordship said at 521 (at 111 All ER):- There is absolute liability, subject only to certain statutory defences. So liability cannot depend on responsibility. 24. Consistent with the observation of Lord Wilberforce, the New South Wales Court of Criminal Appeal in Valle v Morrison (60432: unreported CCA judgment 22 November 1995), in responding to a submission that the master should not be penalised in the absence of any fault on his part, said (per Allen J):- That submission, understandable though it is in human terms, is clearly contrary to the purpose of s 8 of the Act. It is a matter of notoriety that all too often it is not possible to sheet home to any individual responsibility for a spillage in the sense of establishing that it was his act or omission which caused it. The purpose of s 8 in imposing strict liability upon the owner and upon the master, as well as upon any individual found to be responsible, is to deal with this potential disaster of oil spillage by making the owner and the master responsible without personal fault. In those circumstances an argument that no punishment should be visited on a master, unless personal fault is established, is clearly untenable . 25. More recently the Court of Criminal Appeal has adopted a less stringent application of strict liability. In Thorneloe v Filipowski (2001) 52 NSWLR 60, Spigelman CJ at 74 said:- Even in the case of an offence of strict liability, no public purpose is served by recording a conviction or imposing a penalty in circumstances where the relevant accused could not, as a matter of practical reality, have done anything to ensure that the offence or, in the case of a result offence, the adverse consequences of the conduct, did not occur. 26. The Court finds that the owner of the vessel was not aware of any defect in the stern tube lubricating system. However, the owner is responsible for its ship. Since work has been carried out to the vessel by the installation of an additional tank the Court infers that the existing lubricating system for the stern tube was inadequate. The owner of the ship is entirely responsible for its state and condition, even though defects in design may not have been its original responsibility. 27. The Court finds that the discharge took place in circumstances which could not have been anticipated by either the Master or by the Chief Engineer. The lubricating system was sealed and there was no occasion for any member of the crew to have grounds for believing that it might leak. In these circumstances in respect of the Master and the Chief Engineer the Court prefers to adopt the approach of Spigelman CJ in Thorneloe and that of Talbot J in Filipowski v Fratelli D'Amato S.r.1 and Others (2000) 108 LGERA 88 at 101 (cited with approval by Spigelman CJ in Thorneloe at p 66) where His Honour said:- However, the Captain of the ship is properly to be regarded as the direct and immediate representative of the owner while the ship is under his command. To punish the Master or Captain of the ship personally for an occurrence over which he has no personal control, except in a detached overall sense where the owner had already been punished on the basis of its vicarious responsibility and the person directly responsible will also be punished, would, in my opinion be an excessive and unreasonable punishment. Section 10 Crimes (Sentencing Procedure) Act 1999 28. An application is made for an order under s 10(1) of the Crimes (Sentencing Procedure) Act 1999 ("the Act") in respect of the Master and the Chief Engineer. Section 10 of such Act allows a court to make orders dismissing charges against a person who has been found guilty of an offence or an order requiring such a person to enter a good behaviour bond. Such an order may be made where a court is satisfied that it is inexpedient to inflict any punishment on the offender. 29. Section 10(3) of such Act stipulates several considerations to which a court will pay regard in determining whether to afford the offender the benefit of such provision as follows:- (3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors: (a) the person's character, antecedents, age, health and mental condition, (b) the trivial nature of the offence, (c) the extenuating circumstances in which the offence was committed, (d) any other matter that the court thinks proper to consider. 30. The Master has not been involved in any environmental incidents in Australia. In his defence evidence has been tendered demonstrating that he is a man of good standing and character. He graduated from the Merchant Marine Junior College annexed to the Korea Maritime University on 25 February 1978 and has mastered the vessel competently since 27 January 1999. The Master's response to the discharge and his prompt reporting to the authorities demonstrates his competence and high degree of responsibility. There is no evidence before the Court which suggests that the discharge resulted from any lack of maintenance or care on the part of the Master. 31. The Chief Engineer graduated from the Korean Maritime University in 1970 and has held a First Class Engineer Officer's Certificate since December 1984. He has held positions as an engineer on various vessels since that date before he joined the K. Pheonix. The changeover of the valves was carried out in accordance with accepted practice and there is nothing to suggest there is any negligent or careless act on the Chief Engineer's part which caused or contributed to the discharge. 32. The Court is satisfied that the Master and the Chief Engineer could not personally have done any more than they did to avoid the offence or the extent of the discharge. With regards to this consideration Spigelman CJ said in Thorneloe at 76:- It is, in my opinion, relevant to the exercise of the discretion under s10 of the Sentencing Act, in the context of a strict liability offence, to consider what the applicant for the benefit of s10 could have done to avert the event that has occurred. While questions of weight are always for the sentencing judge, it is unlikely that this consideration will be given determinative weight in the case of a serious offence or a repeat offender. Where, as here, there was a comparatively minor pollution by a first offender, this consideration is entitled to weight. 33. The Court has already found that the extent of the spill was minimal and that no permanent environmental damage was occasioned by it. In light of the above considerations the benefit of s 10 of the Act will be afforded to both the Master and the Chief Engineer. Orders 34. The Court orders in respect of Proceedings No. 50132 of 2001, namely, Gary Alan Webb v Won-Hwa Chung as follows: 1. Pursuant to s 10(1) of the Crimes (Sentencing Procedure) Act 1999 without proceeding to a conviction the charge is dismissed. 2. The defendant to pay the prosecutor's costs. 35. In respect of Proceedings No. 50133 of 2001, namely, Gary Alan Webb v Ki-Bong Seong the Court orders: 1. Pursuant to s 10(1) of the Crimes (Sentencing Procedure) Act 1999 without proceeding to a conviction the charge is dismissed. 2. The defendant to pay the prosecutor's costs. 36. In respect of Proceedings No. 50134 of 2001, namely, Gary Alan Webb v Vella Shipping S.A. Panama the Court orders: 1. The defendant is convicted of the offence as charged. 2. The defendant is fined the sum of $35,000.00 to be paid to the Registrar of the Court within one month of this date. 3. 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