Filipowski v Hemina Holdings SA; Filipowski v Rajagopalan (No 2) - [2009] NSWLEC 104

Land and Environment Court

of New South Wales

CITATION: Filipowski v Hemina Holdings S.A.; Filipowski v Rajagopalan (No 2) [2009] NSWLEC 104

PARTIES: PROSECUTOR
Barbara Filipowski
DEFENDANTS
Hemina Holdings S.A. (08/50059)
Swaminathan Rajagopalan (08/50060)

FILE NUMBER(S): 50059 of 2008; 50060 of 2008

CORAM: Pain J

KEY ISSUES: ENVIRONMENTAL OFFENCES :- Marine Pollution Act s 8 - discharge of oil from ship at Port Botany - plea of guilty by owner and master - dispute as to extent of oil spilled - whether defendants took all necessary measures to prevent, abate and mitigate extent of the oil spill - whether defendants acted in breach of ship's oil pollution emergency plan (SOPEP) - whether ship adequately maintained - potential for serious environmental harm - application of s 10 of the Crimes (Sentencing Procedure) Act to discharge master with good behaviour bond - mitigating factors in favour of owner - whether utilitarian value in early guilty plea reduced where contested sentence hearing

LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 s 3A, 10, 17, 21A
Marine Pollution Act 1987 s 8
Marine Legislation Amendment (Marine Pollution) Act 2002 (repealed)

CASES CITED: Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304
Camilleri’s Stock Feeds Pty Ltd v Environment Protectection Authority (1993) 32 NSWLR 683
Environmental Protection Authority v Timber Industries Ltd [2001] NSWLEC 25
Filipowski v Cadem Shipping Pty Limited [2005] NSWLEC 552
Filipowski v Fratelli D’Amato (2000) 108 LGERA 88
Filipowski v Hemina Holdings S.A; Filipowski v Rajagopalan [2009] NSWLEC 78
Filipowski v Island Maritime Ltd (2006) 153 LGERA 1
Filipowski v Magnavia Schiffahrtsgesellschaft MBH & Co Kommanditgesellschaft, Pablo Dion and Suzanic Branco [2007] NSWLEC 404
Filipowski v Mediterranean Shipping Company SA [2005] NSWLEC 159
Filipowski v Vopak Terminals Sydney Pty Ltd [2006] NSWLEC 104
Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189
Markarian v R (2005) 228 CLR 357
Morrison v Ausmarine Fisheries (1995) 88 LGERA 442
Morrison v Che Mat (1997) 95 LGERA 212
Morrison v Defence Maritime Services Pty Ltd [2007] NSWLEC 421
Morrison v Peacock and Roslyndale Shipping Company Pty Ltd [2003] NSWLEC 68
R v Borkowski [2009] NSWCCA 102
R v O’Neill [1979] 2 NSWLR 582
R v Olbrich (1999) 199 CLR 270
R v Slattery (1996) 90 A Crim R 519
R v Thomson; R v Houlton (2000) 49 NSWLR 383
SZ v The Queen (2007) 168 A Crim R 249
Thorneloe v Filipowski (2001) 52 NSWLR 60
Valle v Morrison (New South Wales Court of Criminal Appeal, Gleeson CJ, Allen and Sully JJ, 22 November 1995, unreported)

TEXTS CITED: New South Wales Legislative Council, Parliamentary Debates (Hansard), 24 September 2002 at 5128 (Ian Macdonald, Parliamentary Secretary)

DATES OF HEARING: 25 May 2009
26 May 2009
27 May 2009
28 May 2009
3 June 2009
4 June 2009

DATE OF JUDGMENT:
1 September 2009

LEGAL REPRESENTATIVES: PROSECUTOR
Mr R Dick
SOLICITORS
Dibbs Barker
DEFENDANT
Mr E Cox
SOLICITORS
HWL Ebsworth Lawyers

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Pain J

1 September 2009

50059 of 2008 Filipowski v Hemina Holdings SA (No 2)
50060 of 2008 Filipowski v Rajagopalan (No 2)
JUDGMENT

1 Her Honour: In proceedings 50059 of 2008 Hemina Holdings S.A. (the owner) is charged as the owner of the MSC “Carla” (the Carla) from which a discharge of oil occurred into State waters, namely the waters of Brotherson Dock, Botany Bay, in contravention of s 8 of the Marine Pollution Act 1987. In 50060 of 2008 the same charge is made against the Master of the Carla, Captain Rajagopalan (the Master).

2 Section 8 of the Marine Pollution Act relevantly provides:

8 Prohibition of discharge of oil or oily mixtures into State waters

(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 are each guilty of an offence punishable, upon conviction, by a fine not exceeding:

(a) if the offender is a natural person—$500 000, or

(b) if the offender is a body corporate—$10 000 000.

(2) Subsection (1) does not apply to the discharge of oil or of an oily mixture from a ship:

(a) for the purpose of securing the safety of a ship or saving life at sea,

(b) if the oil or oily mixture, as the case may be, escaped from the ship in consequence of damage to the ship or its equipment, and all reasonable precautions were taken after the occurrence of the damage or the discovery of the discharge for the purpose of preventing or minimising the escape of oil or oily mixture, as the case may be,

(c) in the case of an oily mixture, if the discharge was for the purpose of combating specific pollution incidents in order to minimise the damage from pollution and was approved by a prescribed officer, or

(d) if the discharge was authorised by the Minister for training purposes.

3 The offence under s 8 is a strict liability offence. Both Defendants have pleaded guilty to the charge and it is necessary to sentence them. Each guilty plea amounts to an admission of liability in respect of the offence charged and in respect of all the essential elements of the offence: R v O’Neill [1979] 2 NSWLR 582 at 588 and 596; Filipowski v Island Maritime Ltd (2006) 153 LGERA 1 at [33].

4 The guilty plea by Hemina Holdings S.A. is an admission that:

(a) on 10 and 11 January 2006 it was the owner of the Carla;

(b) on 10 and 11 January 2006 there was a discharge of oil from the Carla into State waters, namely the waters of Brotherson Dock, Port Botany;

5 In the case of the Master, the plea of guilty involves an admission by him that:

(a) on 10 and 11 January 2006, he was the Master of the Carla;

(b) on 10 and 11 January 2006 there was a discharge of oil from the Carla into State waters, namely the waters of Brotherson Dock, Port Botany;

6 It is common ground that the cause of the oil discharge was a fatigue crack in the hull plating in the No 4 starboard fuel oil tank of the Carla. The appropriate level of penalty in each matter must be determined.

7 The owner was represented in these proceedings by its agent, MSC Ship Management (Hong Kong) Ltd. As no issue about this was raised by either party I infer that any finding of liability as against the agent applies to the owner.

Purposes of sentencing

8 Section 3A of the Crimes (Sentencing Procedure) Act 1999 (the CSP Act) sets out the purposes of sentencing. Section 3A provides:

The purposes for which a court may impose a sentence on an offender are as follows:

(a) to ensure that the offender is adequately punished for the offence,

(b) to prevent crime by deterring the offender and other persons from committing similar offences,

(c) to protect the community from the offender,

(d) to promote the rehabilitation of the offender,

(e) to make the offender accountable for his or her actions,

(f) to denounce the conduct of the offender,

(g) to recognise the harm done to the victim of the crime and the community.

9 As set out below at par 15, penalties for marine pollution offences were increased in 2002. The seriousness with which Parliament considers offences against the Act is reflected in the Second Reading Speech of the Marine Legislation Amendment (Marine Pollution) Bill 2002 delivered by the Parliamentary Secretary on 24 September 2002:

Oil pollution incidents represent a serious threat to the quality of New South Wales waters...The environmental, commercial and public use significance of Sydney Harbour and other New South Wales coastal estuaries along with coastline and coastal waters requires owners and masters of vessels using these waters to exercise extreme care in full knowledge that failure to do so could have severe consequences on their operations.

Relevant Facts

10 The parties relied on numerous affidavits as set out in the table:

Party	Name	Date sworn
Prosecutor	Patrick John Maloney	Unsworn (evidence read as if sworn without global objection from Defendants)
Prosecutor	Adrian Murray Hawes	7 July 2008
Prosecutor	Peter Joseph Bagnell	11 July 2008
Prosecutor	David Rees	8 July 2008
Prosecutor	James Van Leeuwen	15 July 2008
Prosecutor	Brett Antony Heath	16 July 2008 4 March 2009
Prosecutor	Craig David Watson	8 July 2008
Prosecutor	Terry Burns	8 July 2008
Prosecutor	Warren Patrick Keane	11 July 2008
Prosecutor	Philip Christopher Azzopardi	10 July 2008
Prosecutor	Matthew Kidd	14 July 2008
Prosecutor	Brian King	3 September 2008 21 January 2009 2 March 2009
Prosecutor	Peter Burge	30 September 2008 26 March 2009
Prosecutor	Dr Lincoln Smith	21 January 2009
Defendant	Abhay Bonge	4 February 2009
Defendant	Swaminathan Rajagopalan	21 January 2009

11 There was extensive cross-examination of Mr Maloney, Mr Hawes, Mr Heath and Dr King by the Defendants’ counsel. Mr Bhonge, currently technical manager of the owner’s agent, and the Carla’s Master at the time of the offence were also cross-examined by the Prosecutor. The owner’s agent is representing the owner in the hearing.

Chronology

12 The parties provided a chronology of events based on the affidavit evidence. Those parts in bold type are disputed and will be further considered. Because of the extensive and largely agreed chronology it is unnecessary to further set out the contents of affidavits concerning events which are contained in the chronology.

No.	Date	Event	Evidence
1.	9/12/05 0200 Hrs	Master joins the Vessel MSC Carla (“Carla”).	Paragraph 15, Master’s Affidavit (Ex 5)
2.	4/1/06	Carla performs soundings on bunker tanks whilst in Fremantle.	Paragraph 16, Master’s Affidavit
2A	10/1/06 1200 hrs	The Carla arrives at Botany Bay.	Paragraph 17, Master’s Affidavit
2B	10/1/06 1235 hrs	Pilot boards the Carla.	Paragraph 17, Master’s Affidavit
3.	10/1/06	As the Carla approaches the berth at Brotherson Dock, Port Botany, Master noted two small patches of rainbow coloured oil sheen measuring two to three square metres near the berth.	Paragraph 18, Master’s Affidavit; T280-T281 (Master)
4.	10/1/06 1245 hrs	Carla completed berthing in Sydney around 12.54 hrs. Master informs Agent of oil patches observed by Master.	Paragraph 19, Master’s Affidavit
5.	10/1/06 1430 hrs	Cargo discharge operations commence.	Paragraph 19, Master’s Affidavit
6.	10/1/06 1435-1445 hrs	Pilot/Agent informs SPC of oil sheen observed by Master. SPC investigates and does not find any sheen.	Paragraphs 3-5, Keane Affidavit (Ex K); T289.45 (Master)
7.	10/1/06 1945 hrs	Report of an oil slick from around the midships of the Carla by Michael Upcroft of Patrick Corp (“Patricks”) to Patrick Maloney of Patricks.	Paragraph 4, Maloney Affidavit (Ex A)
8.	10/1/06 1950 hrs (approx)	Patrick Maloney boards Mi Yun He and from aft end observes large oil slick spreading along the length of the Carla, to a point ahead of the bow of the Mi Yun He. Maloney observes the oil slick in the area between the Carla and Mi Yun He past the bow of the Mi Yun He towards the entrance of Botany Harbour which he estimates as one and one half times the length of the Mi Yun He, being approximately 274 metres.	Paragraph 6, Maloney Affidavit; Lloyd’s Ship Register for Mi Yun He referred to in King Report, 13/1/09 (Ex N) at p 6
9.	10/1/06 1955 hrs (approx)	Maloney leaves Mi Yun He and walks along wharf alongside the Carla. Maloney observes oil in water down to approximately midships of Carla. Maloney again observes oil spreading forwards towards bow of Carla and beyond, past bow of Mi Yun He and out towards Botany Harbour entrance.	Paragraph 7, Maloney Affidavit
10.	10/1/06 1955 hrs (approx)	Maloney observes continuous stream of oil bubbles coming up from below the Carla at midships.	Paragraph 8, Maloney Affidavit
11.	10/1/06 1958 hrs	Maloney reports to Harbour Control/SPC large oil slick around the Carla.	Paragraph 9, Maloney Affidavit; SPC Navigation Incident Form, Ex T
12.	10/1/06 1959 hrs	Bagnell informed by SPC Harbour Control of large oil slick around the Carla.	Paragraph 3, Bagnell Affidavit.
13.	10/1/06 2000 hrs	Master is informed that oil is leaking out of the Carla.	Paragraph 10, Maloney Affidavit; Paragraph 20, Master Affidavit; T292.35-T293.5 (Master)
14.	10/1/06 2000 hrs	Master, Chief Officer Sony and Maloney observe black oil slick being heavy fuel oil between starboard side of the Carla and pier. Master observes slick [and sheen] extending from midships of Carla at about 600 metre mark extending to forward part of the Carla and beyond at least to the 470 metre mark.	Paragraph 11, Maloney Affidavit; Master’s report and sketch in annex B to Heath Affidavit, 16/7/08 (Ex F); T293.45 (Master); T295.35 (Master); T298.30 (Master); T299 (Master); T318, T320.12-15 (Master)
15.	10/1/06 2000 hrs	Maloney informs Master that he should pump oil from starboard tanks to port tanks and Master said this is a good idea.	Paragraph 10, Maloney Affidavit; T295.1-.14 (Master)
16.	10/1/06 2000 hrs	Maloney observes a continuous stream of oil bubbles coming up to surface from below water line of the Carla at a point approximating midships (600-603 metre mark). Master [did not observe] bubbles.	Paragraph 11, Maloney Affidavit; T38.4 (Maloney); T300 (Master)
16A	10/1/06 2005 hrs	Master ordered the crew to be mustered.	Paragraph 21, Master’s Affidavit
17.	10/1/06 2010 hrs	Crew deploy absorbent pads and aluminium poles in relation to oil observed by Master.	Paragraph 22 and 25, Master’s Affidavit
17A	10/1/06 2010 hrs	The Master informed agent, the Ship’s Technical Managers and requested Mr Maloney inform SPC on his behalf of the spill.	Paragraph 21, Master’s Affidavit
18.	10/1/06 2010 hrs	Master instructs First Officer and Chief Engineer to start sounding for double bottom tanks including fuel and ballast tanks.	Paragraph 25, Master’s Affidavit
19.	10/1/06 2010 hrs	SPC personnel comprising Bagnell, Sheard, Rees and Van Leeuwen proceed to the Carla in SPC vessel the “FRV1”.	Paragraph 4, Bagnell Affidavit (Ex C)
20.	10/1/06 2015 hrs (approx)	Mr Bagnell observes heavy black oil in the water with a continuous coverage [which was approximately 2 metres wide] stretching from the 460 metre mark to the 600 metre mark which oil was being pushed out by the tide. [Bagnell’s width measurement is based on observation of oil between the caisson of wharf and hull of Carla.]	Paragraph 5, Bagnell Affidavit; Annex “PB1”; T125-T127, T128.30-T130.5; Paragraph 3, Hawes Affidavit (Ex B)
21.	10/1/06 2015 hrs (approx)	Mr Rees observes heavy black oil on the starboard side of the Carla stretching from the 460 metre mark to 600 metre mark which was continuous approximately just over 2 metres wide. Rees also observes that the heavy black oil is being pulled into Port Botany due to tide action.	Paragraph 4, Rees Affidavit
22.	10/1/06 2015 hrs (approx)	Mr Van Leeuwen observes heavy black oil in the water adjacent to the Carla on the starboard side. He recalls a large number of pads were put into the water in an attempt to soak up the heavy black oil.	Paragraphs 4 & 5, Van Leeuwen Affidavit (Ex E)
23.	10/1/06 2020-2045 hrs (approx)	SPC crew deploy GP 750 boom at the 460 mark on the wharf, ahead of the ship’s bow and attach boom to the ship’s port shoulder. SPC crew then deploy further sausage boom and GP 750 boom around the ship and insert 300 absorbent pads into the boomed area.	Paragraphs 6 and 9, Bagnell Affidavit; Paragraph 5, Rees and Leeuwen Affidavits
24.	10/1/06 2045 hrs (approx)	Hawes arrives at the Carla. He observes booming operations conducted by SPC personnel. Hawes also observes heavy oil was bubbling up through the water column from the ship’s hull to the wharf face at approximately the 600 metre mark on the wharf and that the flow was continual and constant	Paragraph 5 & 6 Hawes Affidavit; T77.40-T78.15 (Hawes)
25.	10/1/06 2045 hrs (approx)	Hawes is informed by Maloney that at about 8.00 pm the tide was going out and the majority of oil which ran along the length of the Carla from about the 460 to the 600 metre mark was taken out by outgoing tide and has been replaced with further heavy black oil from the Carla.	Paragraph 7, Hawes Affidavit
26.	10/1/06 2010-2045 hrs	Master conducts soundings of fuel oil and ballast tanks and stability calculations for the transfer of 100 cubic tonnes of heavy fuel oil and determines to transfer oil from No 4 starboard fuel oil tank to No 4 port fuel oil tank.	Paragraphs 25-26 and 28, Master’s Affidavit; T304-T306, T313-T318; T320, T324 (Master)
27.	10/1/06 2050 hrs (approx)	Master has telephone conversation with Captain Malhotra [in which he informs Malhotra the oil appears to be coming from No 4 starboard wing tank, No 4 port tank is empty and has sufficient capacity and he intends to transfer the oil from No 4 starboard wing tank to the empty No 4 port tank. Captain Malhotra informs Master that he can go ahead with the transfer.]	Paragraph 29, Master’s Affidavit
28.	10/1/06 2050 hrs	Transfer operations commence transferring oil from No 4 starboard fuel oil tank to No 4 port fuel oil tank. Approximately 3.5 cubic tonnes of fuel oil was transferred.	Paragraph 30, Master’s Affidavit; Master’s report in annex B, Heath Affidavit
29.	10/1/06 2050-2120 hrs (approx)	Oil transfer operations continue.	Paragraphs 30 and 31, Master’s Affidavit; T322.35 (Master); Master’s report in annex B, Heath Affidavit
30.	10/1/06 2100 hrs (approx)	Mr Hawes boards the Carla. Mr Hawes informs Master there is a strong likelihood that the heavy black fuel oil is coming from the Carla and he considers as a precautionary measure the Carla should rectify its healing incline and transfer the contents of No 4 starboard fuel tank to No 4 port fuel tank, and Master agrees.	Paragraph 8, Hawes Affidavit; T321.35-T322.25
31.	10/1/06 2105 hrs (approx)	Master has further conversation with Captain Malhotra, following which he orders Chief Engineer to stop transfer and oil transfer operations cease at approximately 2120 hrs.	Master’s Affidavit, paragraph 31
32.	10/1/06 2112 hrs	Cargo discharge operations cease	Paragraph 32, Master’s Affidavit; Master’s report in annex B, Heath Affidavit
33.	10/1/06 2123 hrs	Mr Hawes informs Mr Heath that oil appears to be bubbling up from the Carla’s midships, starboard side into the waters of Brotherson Dock.	Paragraph 10, Hawes Affidavit
34.	10/1/06 2140 hrs	Mr Hawes observes the Carla’s crew was deploying sausage boom and pads into the water to soak up heavy fuel oil which was still escaping from the ship.	Paragraph 11, Hawes Affidavit
[34A	10/1/06 2130-2220 hrs	Bagnell observes no new oil bubbling up or leaking near the 600m mark.	T128]
35.	10/1/06 2210 hrs	Mr Van Leeuwen takes photographs of oil in water.	Paragraph 6, Van Leeuwen Affidavit and Ex “JVL1” (photos)
36.	10/1/06 2210- 2227 hrs	Mr Hawes informs Mr Heath that fuel is being transferred from No 4 starboard fuel tank to No 4 port fuel tank on the Carla.	Paragraph 13, Hawes Affidavit; Paragraph 8, Heath Affidavit (16/7/08)
37.	10/1/06 2215 hrs	Master observes no new oil bubbling up. Master restarts cargo operations. Master speaks to Mr Castellino about arranging for a diver to attend. The dive company spoken to, Commercial Diving Services Pty Ltd informs Mr Castellino the earliest they could attend was 0800 hrs on 11 January 2006.	Paragraph 34, Master’s Affidavit; T332 and T334 (Master)
38.	10/1/06 2247 hrs	Hawes telephones Heath and informs Heath of containment measures undertaken and that there still appears to be oil escaping from the Carla’s hull into the water at the 603 metre mark on the wharf.	Paragraph 14, Hawes Affidavit; Paragraph 9, Heath Affidavit (16/7/08)
38A	10/1/06 2215-2400 hrs	The Master checked that the 30 minute interval sounding of all tanks was being performed and noted that there was no change in the readings.	Paragraph 35, Master’s evidence
39.	10/1/06 2300 hrs	Mr Rees observed that the majority of the oil along the starboard side of the Carla had been taken out by tide action and had been partially replaced by further black oil along the side of the Carla. Rees also observed the black oil continuing to spread across the water again from about the 460 metre to 600 metre mark.	Paragraph 8, Rees Affidavit
40.	10/1/06 2300 hrs	A number of absorbent pads had become completely saturated with oil. Further pads inserted.	Paragraph 10 and 12, Bagnell Affidavit; Paragraph 10, Rees Affidavit
41.	11/1/06 0045 hrs	Mr Hawes observes oil still bubbling up from around mid-ship of the Carla. He observes one bubble approximately every 5 seconds compared with the continuous bubbling he observed at 2045 hrs.	Paragraph 19, Hawes Affidavit
41A	11/1/06 0330 hrs	SPC approve a diver engaged by the vessel to commence diving after 0800 hrs.	Exhibit 3
42.	11/1/06 0045 hrs	Mr Hawes informed by Master that he stopped transferring fuel from No 4 starboard tank to No 4 port tank at about 2125 hrs on 10 January by a third party. Hawes informs Master that more oil is still coming out and Master says “Yes I know”.	Paragraph 19, Hawes Affidavit; T331.45-T333.4
42A	11/1/06 0530 hrs	The Master conducted an inspection and noted that there was no further oil in the water adjacent to the vessel.	Paragraph 40, Master’s Affidavit
42B	11/1/06 0645 hrs	Commercial Dive Services commenced preparations to dive the vessel at 0800 hr.	Exhibit 3
43.	11/1/06 0815 hrs	Mr Heath in the SPC vessel, the “Response 2” observes oil in the water from the 600 metre mark to the 505 metre mark approximately 1 ¼ metres wide with continuous coverage of heavy black oil. He also observes large patches of oil at the stern of the ship and the bow of the ship, and a thick oil mark on the Carla’s hull between the 560 metre and the 603 metre mark near the No 4 fuel tank on the Carla’s starboard side. Heath draws a diagram of the oil coverage.	Paragraph 13, 14, 15, 16 and 20 of Heath Affidavit (13/7/08) and Annexure ‘A’
44.	11/1/06 0845 hrs (approx)	Mr Heath instructs Craig Watson to take photographs of the location where oil is bubbling up and the area between the Carla and the wharf and also the thick oil mark on the Carla’s hull.
45.	11/1/06 0845 hrs (approx)	Mr Watson observes oil coming up from the hull of the Carla, coming out in bubbles and then drifting towards the bow. Watson takes photographs as requested by Mr Heath.	Paragraph 5 and Ex “CDW1”, Watson Affidavit (Ex H)
46.	11/1/06 0910 hrs	Mr Heath boards the Carla to interview the Master.	Paragraph 23, Heath Affidavit (23/4/08)
47.	11/1/06 0925- 1212 hrs	Heath interviews the Master.	Paragraphs 24-25, Heath Affidavit and annex C; Master’s Affidavit, annex “L”
48.	11/1/06 1115 hrs	Gray Diving Services engaged by SPC arrive to inspect the hull. Mr Heath informs Mr Kidd (diver) that from the look of where the oil is bubbling up from, it appears that the oil is coming from tank 4 on the starboard side.	Paragraph 27, Heath Affidavit
49.	11/1/06 1200 hrs	Heath instructs Terry Burns of SPC to deploy a further 9 metres of absorbent sausage boom within the boomed area	Paragraph 28, Heath Affidavit; Paragraph 10, Burns Affidavit (Ex I)
50.	11/1/06 1320 hrs	Divers from Gray Diving enter the water and Gray Diving sets up a video monitor in their truck.	Paragraph 29, Heath Affidavit
51.	11/1/06 1340 hrs	Master and Mr Heath observe oil continuing to leak from a fracture in No 4 starboard fuel tank. Leak rate was about one drop every 5-10 seconds (Master) or one drop every 15-20 seconds (Heath). Thickness of the oil was between 3-5 mm in diameter.	Paragraph 31, Heath Affidavit; Paragraph 45, Master’s Affidavit; T334.5-.9 (Master)
52.	11/1/06 1330-1430 hrs	Mr Austin (diver) reports one main crack and 7 to 8 arms off the main crack each about 1mm wide in the hull where No 4 starboard fuel oil tank is located.	Paragraph 7, Kidd Affidavit
53.	11/1/06 1330- 1430 hrs	Mr Kidd observes on the video screen oil bubbling up approximately every 3 to 5 seconds. The bubbles were about 5 millimetres in diameter. Mr Kidd observes this for 1 hour period between 1330 and 1430 hrs and the frequency did not change.	Paragraph 12 and 13. Kidd Affidavit
54.	11/1/06 1600 hrs	The ship’s classification surveyor arrives.	Paragraph 47, Master’s Affidavit
55.	11/1/06 1600 hrs (approx)	Oil transferred from No 4 starboard tank to No 4 port tank and temporary magnetic plate applied to tank.	Paragraph 47, Master’s Affidavit; T331 (Master); Letter from MSC to AMSA, Ex AB-1 (Ex 2) at pp 3-4

Objective seriousness of the offences

13 Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 per Kirby P identifies at 698 the general principles of sentencing for environmental offences. This requires the assessment of the relative seriousness of the defendant’s particular offence in relation to a worst case for which the maximum penalty provides and considering both factors which establish the seriousness of the offence and those which tend to mitigate the seriousness or exculpate the offender.

Maximum penalty

14 The maximum penalty reflects the “public expression” by Parliament of the seriousness of the offence (Camilleri’s Stock Feeds Pty Ltd per Kirby P at 698 and should be given careful attention by the Court when imposing a sentence or penalty (Markarian v R (2005) 228 CLR 357 per Gleeson CJ, Gummow, Hayne and Callinan JJ at [30]-[31]).

15 Under s 8 of the Marine Pollution Act the maximum penalty is $500,000 for the Master and $10 million for the owner, here a corporate body. The present maximum penalties were introduced into the Marine Pollution Act by the Marine Legislation Amendment (Marine Pollution) Act 2002 which came into force on 1 November 2002. The amendment substantially increased the maximum penalties for individuals from 2000 penalty units ($220,000) and for corporations from 10,000 penalty units ($1.1 million). One penalty unit is $110 pursuant to s 17 of the CSP Act.

16 Where Parliament has increased the maximum penalty for an offence, higher penalties will ordinarily result for that offence: R v Slattery (1996) 90 A Crim R 519 per Hunt CJ at CL at 524. It is not the case that for every offence committed after the penalty was increased, the increase in penalty will be by the same multiple applied to increase the maximum penalty: Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304 per Giles JA at 312; Morrison v Defence Maritime Services Pty Ltd [2007] NSWLEC 421 per Biscoe J at [60]. The relative criminality must be considered in relation to the worst case for which the maximum penalty is provided; Environmental Protection Authority v Timber Industries Ltd [2001] NSWLEC 25 per Pearlman J at [33] approved in Cabonne Shire Council at 312.

Disputed issues concerning circumstance of the offence

17 The following matters are relevant to the penalty to be imposed by the Court as they concern the objective seriousness of the circumstances giving rise to the two offences. The issues in dispute are also relevant to the assessment of the culpability of the Defendants. The Prosecutor bears the onus of establishing those matters on which it intends to rely beyond reasonable doubt. The Defendants bear the onus of proof on the balance of probabilities of those matters they rely on (R v Olbrich (1999) 199 CLR 270 per Gleeson CJ, Gaudron, Hayne and Callinan JJ at [27]. The matters in dispute are:

(a) the extent of the oil spill (issue 1);

(b) whether the Master and the owner took all necessary measures to prevent, or in the alternative, abate or mitigate the extent of the oil spill, both on 10 and 11 January 2006 (issue 2); and

These matters are addressed in turn.

Issue 1 - Extent of oil spill

18 Evidence of observations of oil in the water on 10 January 2006 and 11 January 2006 was given by the Master (chronology items 3, 14, 37, 42A and 51), Mr Maloney (8, 9, 10, 14 and 16), Mr Bagnell (20 and 34A), Mr Rees (21 and 39), Mr Van Leeuwen (22 and 35), Hawes (24, 34 and 41), Mr Heath (43 and 51), Mr Watson (45) and Mr Kidd (53).

Expert evidence of Prosecutor - Dr King

19 Dr King, senior oceanographer and managing director of Asia-Pacific ASA, swore three affidavits relied on by the Prosecutor dated 2 September 2008, 21 January 2009 and 2 March 2009 each annexing a report prepared by him dated 2 September 2008 (first report), 13 January 2009 (second report) and 2 March 2009 (third report) respectively.

20 Dr King’s evidence addressed, inter alia, the volume of oil discharged from the Carla based on the observations made by the Prosecutor’s witnesses on 10 January 2008 when applied in OILMAP, a computer program used to create and study oil spill simulations.

First report

21 In the first report Dr King estimated the surface area of the oil slick as at 2000hrs to 2045hrs on 10 January 2006 based on observations recorded in the affidavits of Mr Bagnell and Mr Rees. Dr King relied on the descriptions provided in the affidavits of Mr Bagnell and Mr Rees of “heavy black oil” of a width of 2m for a distance of 140m. Dr King estimates the oil slick surface area at this time as at least 280m2. Dr King was unable in this report to quantify the proportion of this oil not captured by the boom. In estimating the thickness of the slick, Dr King applied the Bonn Agreement Oil Appearance Code (the Bonn Agreement), which provides a guide to estimating oil thickness based on its appearance. Dr King considered a thickness estimate of at least 0.20mm appropriate. Additionally Dr King stated that the affidavit of Mr Kidd (the diving supervisor), who observed bubbles of about 5mm in diameter from a video screen during the dive inspection on 11 January 2006 at approximately 1330hrs, allows for a more accurate quantification of thickness using OILMAP. This method estimated an average thickness of at least 0.37mm if at the time of observation the oil had been on the surface for two hours. If the oil had been on the surface for seven hours at the time of the observation, a thickness of 0.44 mm would be applicable. Overall Dr King estimated the volume of oil present in the slick between the 460m and 600m marks on the dock prior to 2045hrs as between 103.6 L and 123.2 L.

22 Dr King also considered the observation of Mr Hawes as to the bubbling he observed at 2045hrs on 10 January 2006 and at 0045hrs on 11 January 2006. The observations made by Mr Hawes implied that the leak rate of the oil had slowed considerably between these two periods. As a consequence Dr King stated in oral evidence that he had to abandon any method to compare the OILMAP results with a calculation of oil spilt based on the rate at which oil was leaking from the ship because this method required a constant leakage rate (T198.20-25). Dr King stated in his report that the change in leak rate suggests that the transfer of fuel oil from the leaking tank changed the leak rate sometime after the transfer commenced at 2050hrs (see chronology item 28). After considering the winds recorded from 1500hrs on 10 January 2006 through to midnight on 12 January 2006, a map was produced by Dr King using OILMAP that shows the movement of oil which was observed by the witnesses as being consistent with the prevailing weather conditions. Dr King referred in his report to the Master’s estimate in the record of interview on 11 January 2006 that not more than 20L had been spilt. Dr King stated in the report that this estimation did not consider any reliable spill thickness measure and should not be relied upon. Mr Heath estimated sighting 20L of oil in the water when he visited the site at 0850hrs on 11 January 2006. Dr King states that this was after the clean up undertaken throughout the night and should not be considered an estimate of the total oil spilt.

Evidence of the Master - oil observed in water

23 The Defendants relied on the observations of the Master in relation to the volume of oil. At par 18 of his affidavit the Master stated that whilst the Carla was about 50m to 60m out from the dock he observed two small patches of rainbow coloured oil sheen in the water measuring around 2m2 to 3m2 near the berth. He clarified his evidence that he saw the oil when the ship was about 100m to 150m away from the dock and the oil was about 15m from the dock. He stated that he reported the observation of oil to the pilot when the Carla was about 50m to 60m from the dock.

24 He was cross-examined about the events of 10 January 2006. He confirmed that he saw oil sheen on the water in the dock and told the pilot. He told the ship’s agent on arrival into the dock. He agreed that the sighting raised some concerns and he formed the view at that time (about 1254hrs on 10 January 2006) that the slick was not coming from the Carla. He did cause monitoring by the crew to take place around the vessel at that time. The usual arrival soundings were taken and compared with the soundings taken the day before. The crew on cargo watch also kept watch for oil in the vicinity of the vessel. He did not receive any report of oil being observed on the water. He gave evidence that there was a sighting of oil at 2000 hrs near the Carla. He considered that it was a possibility that the oil came from the Carla but not a reasonable suspicion.

25 At par 20 of his affidavit he stated that at 2000hrs his chief officer told him there was oil adjacent to the Carla and he should have a look. He walked to the midships of the Carla. He did not have a flashlight at that time. In cross-examination he agreed he saw black oil which was heavy fuel oil. He agreed that meant it was likely that it came from a fuel oil tank in the vicinity of midships. It could have come from the No 4 starboard fuel oil tank and it could have come from other tanks as well. He stated that there were patches of oil and patches of sheen at the Carla’s midships. He did not agree that he referred to oil sheen only in his affidavit at par 20 in order to minimise the seriousness of what had occurred. He agreed that in the diagram prepared by him on the morning of 11 January 2006 (attached to his affidavit and the affidavit of Mr Healy) he identified in a shaded area the oil spill/sheen from the 600m – 603m mark on the wharf extending beyond the 470m mark. He stated that he saw black oil slick and sheen mixed together in patches. He did not appreciate when he was speaking to the ship superintendent (Mr Maloney) that the oil was coming from the Carla. He stated he did not see any bubbles coming up from below the water line at that time (see chronology item 16).

Prosecutor’s submissions

26 The Prosecutor submits that the amount of leaking oil was substantial and focussed on three different times at which oil in the water which escaped from the Carla can be measured with varying degrees of accuracy. The evidence supports the following findings with respect to the extent of the oil spill on 10 and 11 January 2006:

(i) First period

(a) the oil slick observed by Mr Maloney at approximately 1950 hrs on 10 January 2006 can be quantified at approximately 100L, all of which oil was heavy fuel oil discharged from the Carla;

(b) in the alternative to (a), the oil observed by Mr Maloney at approximately 1950hrs on 10 January 2006 can be quantified as being approximately 134m in length, which oil was lost to Botany Bay, having been taken out of the waters of Brotherson Dock by prevailing tide and wind action;

(ii) Second period

(c) the oil slick observed by each of Mr Maloney, Mr Bagnell, Mr Rees, Mr Van Leeuwen and Mr Hawes, in the period 2015-2045 hrs on 10 January 2006 can be quantified as having a volume between 103 L and 123 L, all of which discharged from the Carla during that period. The observations of these persons in relation to the oil slick are consistent with the Master’s contemporaneous observations in his report (annexed to the affidavit of Mr Heath) and diagram (annexed to the affidavit of Mr Heath and the Master’s affidavit.

(d) the oil referred to in (a) and (b) is a separate and distinct quantity of oil to that referred to in (c). The common feature with respect to all of the oil is that it discharged from the Carla at the times stated;

(iii) Third period

(e) heavy fuel oil continued to discharge from the No 4 starboard fuel oil tank of the Carla continuously from at least 1945 hrs on 10 January 2006 until about 1600 hrs or some later time on 11 January 2006, when oil was transferred from No 4 starboard fuel oil tank to No 4 port tank and a temporary magnetic plate was applied to the No 4 starboard fuel oil tank. See items 10, 16, 24, 33, 42, 51 and 53 of the chronology, none of which evidence was challenged in cross- examination. See also the Master’s admissions that oil was continuing to leak at 0045 hrs on 11 January at T332 and at 1340 hrs on 11 January at T334;

(f) during the period from about 1950 hrs to 2045 hrs on 10 January 2006, the oil was discharging from the No 4 starboard fuel oil tank on the Carla at a frequent and constant rate as evidenced by the continuous stream of oil bubbles observed by both Mr Maloney and Mr Hawes at the location on the Carla approximating the 600m mark where the No 4 starboard fuel oil tank was also located which observations occurred at 1955 hrs and 2000 hrs (Maloney) and 2045 hrs (Hawes). See items 10, 16 and 24 of the chronology. Mr Hawes confirmed in cross-examination that the oil flow was a “continual flow out” (at T77.45), “coming up from the water column” (T78.1-4);

(g) the transfer of oil from the No 4 starboard fuel oil tank at 2050 hrs on 10 January 2006 which continued until approximately 2120 hrs had the effect of reducing the head pressure within the No 4 starboard fuel oil tank, and the leak rate eventually slowed as observed by Mr Hawes at 0045 hrs on 11 January 2006 even after oil transfer operations ceased at 2120 hrs on 10 January 2006 (see King Report 2 September 2008 at p10);

(h) the deployment by Sydney Ports Corporation (SPC) at approximately 2045 hrs on 10 January 2006 of booms and the insertion of absorbent pads within the boomed area achieved the containment, within the boomed area, of the oil discharging after that time from the Carla. However, oil continued to discharge from the No 4 starboard fuel oil tank of the Carla into the boomed area, albeit at a reduced rate after the transfer operations referred to in (g) above, until at least 1600 hrs on 11 January 2006.

(iv) Evidence supporting first period (par 29(a)-(b) of the Prosecutor’s submissions)

27 The findings as to the oil which discharged from the Carla at approximately 1950 hrs on 10 January 2006 are supported by the unchallenged evidence of Mr Maloney in par 6-8 of Mr Maloney’s affidavit. Mr Maloney observed, from the vantage point of the Mi Yun He which vessel was berthed in the neighbouring dock to the Carla at Brotherson wharf, the oil slick extending along the length of the Carla to a point ahead of the bow of the Mi Yun He. Mr Maloney further observed that the oil slick was spread across the water in the vicinity of the Carla, all the way past the bow of the Mi Yun He, and that the oil was moving past the Mi Yun He towards the entrance of Botany Harbour. Mr Maloney estimated the size of the oil slick as being one and one-half times the length of the Mi Yun He. Mr Maloney’s evidence as to the observed width of that oil slick has been excluded by the Court in its ruling on 18 May 2009. However, the evidence does enable the Court to make a finding as to the volume of this oil as follows:

(a) the Lloyd’s Ship Register for the Mi Yun He confirms its length as 182.87m. Based on Mr Maloney’s unchallenged evidence in par 6 of his affidavit, the length of the slick observed by him was approximately 274m. See King report 13 January 2009, p 6;

(b) the observations of Mr Maloney (at 1955 hrs on 10 January 2006) and the Master (at 2000 hrs on 10 January 2006) were that the oil was observed at about the 600m mark of the Carla. Based on a 274m slick, the oil slick extended from the 600m mark to the 326m mark on the wharf;

(c) arguably, none of the oil observed by Mr Maloney at 1959 hrs was contained by the boom erected at the 460m mark at approximately 2045 hrs having regard to the contemporaneous observations of Mr Maloney, all relevant SPC officers, and the Master that the wind and tide were moving the oil out into Port Botany. See in particular the unchallenged evidence of both Mr Maloney in par 13 of his affidavit and Mr Hawes in par 7 of his affidavit. See also Mr Bagnell at T123.50 (cross-examination). However, on the criminal standard of proof, even if the highly conservative assumption is made that 140m of the 274m slick observed by Mr Maloney was boomed before escaping to Botany Bay, this leaves a remaining 134m of oil slick;

(d) the analysis referred to in (a)-(c) is contained in Dr King’s second report and was not challenged in cross-examination;

(e) there is substantial evidence that the oil observed as extending from the 600m mark to the 460m mark on the starboard side of the Carla in the period 2015-2045 hrs on 10 January 2006 was 2m in width (see items 20 and 21 of the chronology). The Prosecutor’s evidence was strengthened through the evidence in cross-examination of Mr Bagnell (at T124-125 and T128) and the evidence in re-examination of Mr Heath (at T65-66). Based on Mr Maloney’s evidence in par 6 and 7 of his affidavit that he observed the oil slick first at 1950 hrs (from the Mi Yun He) and then again at approximately 1955 hrs as being located in the same area as that observed by others (Messrs Bagnell, Rees, Van Leeuwen and Hawes) in the period 2015-2045 hrs on 10 January 2006, the Court should conclude that the oil observed by Mr Maloney at 1950 hrs on 10 January 2006 was also 2m in width. This conclusion is bolstered by the Master’s evidence in cross-examination that the black oil slick observed by him “could be 2 metres in width” (T320.10). Further, the Master in cross-examination did not dispute that there was oil in the areas described by Maloney. The Master’s evidence was simply that he did not see such oil, his focus being how to properly respond under the SOPEP to the oil he had observed (T319-320);

(f) the same conclusions of Dr King as to the thickness of the oil observed by Mr Maloney should apply as for the oil observed in the period 2015 hrs to 2045 hrs, namely, a thickness of 0.37mm which is very conservative;

(g) Dr King has quantified the volume of oil observed between 2015 hrs and 2045 hrs on 10 January 2006 as being between 103L and 123L. This is based on the oil being approximately 140m in length (extending from the 600m mark to the 460m mark), 2m in width and 0.37mm in thickness. The matters referred to in (a)-(f) above support a volume finding at least at the low end of that volume (100L) with respect to the oil observed by Mr Maloney at 1950 hrs on 10 January 2006 on the basis of a black oil slick of 134m in length, 2m in width and 0.37mm thickness.

(v) Evidence supporting second period (par 29(c) of the Prosecutor’s submissions)

28 Dr King calculated the volume of oil which discharged from the Carla during the period 2015-2045 hrs on 10 January 2006, as between 103L and 123L: see par 21. In performing this calculation, Dr King has had regard to contemporaneous estimates of the volume of the spill including that of the Master (see at pp 13-14 of Dr King’s third report). Dr King has properly rejected those volume estimates because, inter alia, they do not purport to measure the thickness of the discharged oil. The Master confirmed in cross-examination that he did not undertake any thickness or width calculation (T323), so that his volume estimate was wholly unreliable.

29 Dr King’s reasoning in support of the volume of oil quantified by him (103L to 123L) with respect to the period 2015-2045 hrs on 10 January 2006 can be summarised as follows:

(a) heavy black oil was observed in the water extending from the 460m mark to the 600m mark on the wharf being 140m in length: see items 14, 20-22 and 24-26 on the chronology;

(b) the oil slick was continuous and approximately 2m wide resulting in a surface area of at least 280m2: see items 14, 20-22 and 24-26 in the chronology. The contrary suggestion by the Master that the oil observed by him at about 2000 hrs on 10 January at points along the slick contained sheen prior to the extremities of the slick at the 460m mark, should be rejected. It is inconsistent with the contemporaneous observations of the SPC officers in the references noted above, the contemporaneous report and diagram of the Master (annexure B, Heath 16 July 2008), and with the observations of Mr Maloney who had no interest to advance in the litigation. See further the evidence in cross-examination of Mr Bagnell at T126-127 as to the consistency of the black oil observed by him in the period 2015-2045 hrs on 10 January. See also the evidence in cross-examination of Dr King at T186-189 explaining why the heavy fuel oil admitted by the Master to be the oil in question (Master’s affidavit at [28] and at T293) is inherently continuous with very little sheen except at the extremities of the slick;

(c) by reason that the observed oil was “continuous true oil colour”, this supports a minimum thickness, based on the Bonn Agreement (exhibit S at pp 10 and 12) of 0.20mm: King at T186.48, T187;

(d) there was additional unchallenged evidence as to the thickness of the oil on 11 January, some 17 hours after the discharge was first observed. This evidence comprised the affidavit evidence of the diver, Mr Kidd, who observed during the period 1330-1430 hrs on 11 January 2006 that the size of bubbles escaping from the No 4 starboard fuel oil tank of the Carla were approximately 5mm in diameter during that period (item 53 on the chronology). See also the unchallenged evidence of Mr Heath of SPC at [31] of his affidavit sworn 16 July 2008 (exhibit F) which is to the same effect. The Master in cross-examination at T334.9 also accepted (“Yes. Possible”) that the oil leaking out of No 4 starboard fuel oil tank at about 1340 hrs on 11 January 2006 was about 3-5mm in diameter;

(e) based on (c) and (d), as was identified by Dr King, the oil slick thickness had a range of thicknesses between 0.2 mm and 5mm;

(f) Dr King was able to more accurately quantify the thickness using the OILMAP model as set out in his first report (dated 2 September 2008) as supplemented by his affidavit sworn 2 March 2009 (T175). Using the OILMAP model and in particular conservatively assuming a fuel oil type which produced the least thickness, and also assuming the oil had been present in the water for seven hours at the relevant time, Dr King calculated the thickness of the oil at 0.37 mm. On the assumption which is more consistent with all the evidence, including that of the Master (T290-292) that the oil had been present in the water for two hours at 0815-0845 hrs, the oil thickness as calculated using OILMAP is 0.44mm (see first report of Dr King 2 September 2009 at p 8);

(g) the factual matters as applied by the expert opinion of Dr King using the OILMAP model support a volume of oil being 103.6L (280m2 x 0.37mm) to 123.2L (280m2 x 0.44mm).

(vi) Evidence supporting third period (par 29(c)-(h) of the Prosecutor’s submissions)

30 The evidence relied on by the Prosecutor to support a finding that oil continued to discharge from the Carla continuously over a lengthy period is set out above in par 29 (e)-(h).

Defendants’ submissions

31 The Prosecutor bears the onus of establishing beyond reasonable doubt the substantial amount of oil it says was discharged. There is no direct evidence as to the amount of oil that was discharged from the vessel into the water. Nor is there any evidence of any direct observation of the amount or the thickness of the oil on 10 January 2006.

32 The Prosecutor relies upon the evidence of Dr King, which is not based on his observations or personal knowledge of the discharge or amount of oil discharged or his estimate of that amount based on his observations or personal knowledge. Rather Dr King’s estimate is a mathematical calculation and unexpressed assumption on the behaviour of a particular heavy fuel oil in his mathematical model.

(i) First period

33 Mr Maloney’s evidence of oil in the water extending 1.5 lengths of the Mi Yun He is too vague to enable an estimate of the amount of oil beyond reasonable doubt. Nor did he make any observation of width.

(ii) Second period

34 Dr King’s report applying OILMAP should be disregarded. He did not properly disclose all the assumptions that he made and as an expert witness he is required to do so. It is not possible to conclude beyond reasonable doubt that the quantity of oil discharged from the vessel was in the range of amounts referred to in Dr King’s affidavits of between 100 and 123L. That estimate relied on a series of mathematical calculations where the assumptions made in the model are not explained (T195.24, 195.34, 196.10, 198.43-199,.15, 199.25) and no error has been allowed for inputed measurements. Dr King accepted taking into account error is necessary (T193.1-10), but he did not calculate any error. Contrary to this assertion at T193 he did not underestimate any inputs (T194.20-195.10), he used the largest area observations and ignored any smaller ones. Further and significantly, no allowance is made for the wide variation in heavy fuel oil viscosity (T196.30). Dr King’s approach is to calculate the highest possible spill volume as if acting as an advocate for the Prosecutor and not as an impartial witness endeavouring to assist the Court to arrive at a volume calculation beyond a reasonable doubt. He did not finish his calculation of volume by bubble size frequency because the volume calculated would be too low: T197.40-198.14. Certainly his answers in cross-examination were rarely responsive, for example T196.48-197.10.

35 When Mr Bagnell, Mr Maloney and Mr Hawes arrived at the ship at 2000 hrs on 10 January 2006 they observed oil between the 600m and the 460m mark on the wharf. They saw thick black oil which equates to 0.20mm applying the Bonn Agreement It is submitted that at 2000 hrs on 10 January 2006 the only area which one could be satisfied beyond a reasonable doubt contained thick heavy fuel oil is 140m x 0.5m, with three areas extending towards the wall observed by Mr Bagnell. This is likely to be an area slightly greater than 70m2. The Bonn Agreement should be applied so that the maximum assumed thickness is 0.20mm.

36 As to length and width, the observations of Mr Hawes and Mr Bagnell on which Dr King relied are not reliable either. The estimate of a 2m slick width is speculative. Neither of them actually saw oil on the water of 2m in width. The estimates vary. One is 0.5m, the width of a fender between the wharf and the side of the ship moored against it. Only Mr Bagnell says he looked below the fenders which he did in three locations and observed a width of oil at these points of 2m. Mr Heath estimated a width of 1.25m (on 11 January 2006). It was not possible to observe a rectangle of oil with an area of 280m2 as Dr King assumed in the OILMAP model. The Prosecutor must prove this fact beyond reasonable doubt and has failed to do so.

(iii) Third period

37 The Prosecutor has not proved that there was a continuous discharge of oil from 1945 hrs on 10 January 2006 until 1600 hrs or later on 11 January 2006 (when the oil transfer was completed). The Master’s evidence is that he did not see oil next to the ship at the 600m mark at 0530 hrs on 11 January 2006. That evidence confirms there were periods when oil was not escaping.

38 On the morning of 11 January 2006 Mr Heath observed three pockets of oil and new bubbles coming out near the 600m mark. The portions towards the bow and stern of the Carla were contained within the GP 750 boom and the absorbent boom from the night before, and were the remnants of the clean-up operation on the previous night (T54.48-55-6, 63.25). The middle portion which appears to be new has been precisely described by Mr Heath and is capable of quantification under the Bonn Code at between 9.5L and 2L depending on the width observed. The remnants are also capable of quantification.

39 On 11 January 2006 there is no evidence of any observation being made under the wharf: T54.30-36, 63.43, 64.15-25. Absent any observation under the wharf the only approach can be to use the width of 0.5m which equates to 9.5L.

40 The Defendant also relies on the oral evidence of Mr Bagnell that he observed that no new oil was bubbling up or leaking near the 600m mark (this evidence is disputed in the chronology at item 34A) because the Prosecutor maintains that this absence of sighting is taken out of context because he was not specifically looking at the water all the time as he was engaged in other duties.

41 The conclusion that the head pressure of the oil had reduced as a result of the transfer of the oil to the No 4 port fuel oil tank and that the reduced flow rate was observed by Mr Hawes was disputed by the Defendants. Dr King’s conclusions in his second report that the transfer led to a reduced leak rate are assumptions only and not evidence based on Dr King’s expertise (TS 456, 118). The only evidence is that Mr Hawes observed a change in the rate of bubbles. Dr King relied on this observation to assume that the leak rate had slowed and that this was a result of a reduced head pressure. There is no, and cannot be, any opinion expressed on whether the removal of the 3500L of fuel oil in the initial transfer had any effect. All that is known is that the rate of bubbles slowed. No evidence connects the two.

Finding on volume of oil (issue 1)

42 As submitted by the Defendants, where there is no concrete measurement of the volume of oil involved, they are entitled to have the benefit of the lower range of the estimates identified in the evidence (Filipowski v Island Maritime Ltd per Talbot J at [28]; Filipowski v Cadem Shipping Pty Limited [2005] NSWLEC 552 per Talbot J at [31]). The Prosecutor bears the onus of establishing beyond reasonable doubt the volumes of oil it argues escaped from the Carla.

(i) First period

43 In relation to the oil seen by Mr Maloney at about 1950 hrs on 10 January 2006, there was no challenge in cross-examination to the sightings by Mr Maloney of the continuous heavy fuel oil he saw in the water from the Mi Yun He. The length of the Mi Yun He has been established as 182.87m. As identified in the Prosecutor’s detailed submissions Mr Maloney provided unchallenged evidence that the extent of the oil that he saw was approximately 274m. Mr Maloney was cross-examined as to his recollection of some events on 10 January 2006 but not in relation to his observations of oil beyond the Carla extending into Brotherson Dock which evidence was unchallenged and I accept. This sighting of continuous heavy fuel oil in the water, as opposed to sheen and oil as seen by the Master, at 2000 hrs (chronology item 14) is corroborated by Mr Bagnell’s evidence.

44 Applying the conservative assumption that 140m of the 274m was contained in the boom put in place at 2020 to 2045 hrs (chronology item 23) the Prosecutor has established beyond reasonable doubt that there was oil of the distance of 134m in the water which was seen by Mr Maloney and which was not captured by the boom.

45 Another essential component of calculating the volume of oil is thickness. The Prosecutor’s submissions set out at par 29(f) is that the thickness applied by Dr King of between 0.37mm and 0.44mm should be applied based on the appearance of the oil seen by several witnesses. The Defendants argue the Bonn Agreement thickness of 0.20mm should apply. Dr King’s reasoning in applying the thickness of 0.37mm is accepted for the reasons I give below at par 56-58 and because I accept the appearance of the oil based on the Prosecutor’s witnesses.

46 The one outstanding issue in relation to the volume of oil calculated by Dr King using OILMAP is the width of the oil. On 18 May 2009 I did not allow in additional evidence of Mr Maloney in relation to the width of the oil he saw in this period for the reasons stated in Filipowski v Hemina Holdings S.A; Filipowski v Rajagopalan [2009] NSWLEC 78.

47 The Prosecutor seeks to establish beyond reasonable doubt that on the available evidence the width of that oil seen by Mr Maloney was 2m. That evidence, identified in par 27(e) above, is essentially that because the distance of the oil was identified positively as 2m shortly afterwards at 20.15 hrs to 20.45 hrs by several witnesses and the Master agreed that such a distance was possible that is sufficient to prove that the oil slick seen earlier by Mr Maloney was also 2m. As the Prosecutor must establish such matters beyond reasonable doubt, reliance on a presumption that the width of the oil earlier was the same in the first period as seen later in the second period is not sufficient. The gap in the evidence of Mr Maloney in relation to his observations of the width of the oil slick he saw from the Mi Yun He and the dock cannot be filled by that assumption in sentencing proceedings which require the Prosecutor to prove matters beyond reasonable doubt.

(ii) Second period

48 Whether Mr Bagnell did observe oil in the water next to the Carla and the wharf that was 2m in width is one of the areas of dispute in the chronology (item 20) which relates to the quantification of oil in the second period. Mr Bagnell attests to observing at approximately 2010 hrs heavy black oil in the water stretching from the 460m mark to the 600m mark. The oil was continuous and approximately 2m wide. Annexed to Mr Bagnell’s affidavit was a diagram which he created at approximately 0630 hrs on 11 January 2006 showing the location of the oil between 2015 hrs and 2045 hrs on 10 January 2006. This diagram shows oil between the ship and the wharf stretching from the 600 m mark to the 460m mark where the absorbent boom was erected.

49 In cross-examination, Mr Bagnell described the ship as being hard up against the fenders which extend approximately half a metre off the concrete wharf. Mr Bagnell observed oil in the water between the fenders as he walked along the wharf. He also climbed down onto three of the fenders in order to look underneath the wharf. Although Mr Bagnell could not take any measurements as to how far the oil extended under the wharf, he stated that it is a known distance between the edge of the wharf and where the wharf extends back to the caissons. Mr Bagnell did not observe that the oil thinned at any points between the 600 m mark and the 460m mark, and the oil appeared to be the same colour at each fender he climbed down onto. At these points the oil had a constant width and was up against both the hull of the ship and the caisson of the wharf. Mr Bagnell estimated this distance between the ship and the caisson as approximately 2m based upon his 20 years of experience at the dock. Mr Bagnell was asked in re-examination to mark-up a diagram attached to his affidavit in order to show the caisson line in relation to the wharf and the ship (exhibit Q). In re-examination Mr Bagnell described the caisson as concrete sheets erected vertically to shore up sand placed behind that point in construction from the wharf and from where the lip of the wharf extends.

50 Mr Rees was in the SPC vessel with Mr Bagnell, Mr Van Leeuwen and Mr Sheard which proceeded to the Carla at 2010 hrs (chronology item 19). He states in his affidavit that from the vessel he observed at 2010 hrs heavy black oil in the water stretching from the 460m mark to the 600m mark which was continuous and approximately just over 2m wide.

51 His evidence of a width of oil of 2m is further supported by the evidence of Mr Bagnell in drawing the line of the caisson under the deck of the wharf on the diagram attached to his affidavit of 11 July 2008. He was very familiar with the dock having worked there for 20 years. His diagram of where the oil was located is also similar to the diagram prepared by the Master on the morning of 11 January 2006 (annexed to the Master’s affidavit and the affidavit of Mr Heath) of where oil was located.

52 The Defendants relied on the observation of Mr Heath on 11 January 2006 at 0815 hrs that he observed oil trapped between the ship and the wharf between the 600m mark and the 505m mark and was approximately 1.25m wide (chronology item 43). That evidence does not ameliorate the strength of Mr Bagnell’s evidence which is corroborated by that of Mr Rees. Mr Maloney was shown a photograph annexed to Mr Watson’s affidavit of the ship docked at the wharf and pulled up hard alongside the rubber fenders. Mr Maloney estimated that the fenders extended half a metre out from the wharf. He stated that between each of the fenders he observed on the water a continuous stream of oil. While this evidence does not assist in determining the width of 2m referred to by Mr Bagnell, his evidence does support the strong likelihood that oil was continuous along the side of the ship from the 600m mark to the 460m mark.

53 The Prosecutor has established beyond reasonable doubt that the oil seen by Mr Bagnell was 2m in width. Consequently that distance can be used in Dr King’s analysis in OILMAP to establish the volume of oil in the second period.

54 In relation to the thickness of the oil, I have already accepted that the appearance of the oil in the water was continuous heavy fuel oil which Dr King used as the basis for his calculations of oil thickness as being 0.37mm. This conclusion also means that I will not accept the Defendants’ submission that the Bonn Agreement measurement of 0.20mm should be applied.

55 The Defendants challenged the evidence of Dr King concerning the amount of oil in the water between 2015 hrs and 2045 hrs on 10 January 2006 on two bases. Firstly, Dr King’s expert opinion was challenged on the basis that he did not disclose the necessary assumptions he is required to as an expert and assumed the case least favourable to the Defendants. Secondly, the observations on which he based his calculations in OILMAP, in particular that the oil in the water was 2m in width, were not proven beyond reasonable doubt.

56 I do not agree with the Defendants’ counsel’s submissions that Dr King was a partisan witness who favoured the Prosecutor’s case. He appeared to give his evidence fairly and impartially. He states that he erred on the cautious side by overestimating the time of the oil on the surface water of seven hours which was prior to the ship being in that position, for the purpose of calculating oil thickness. That results in underestimation of the thickness. When asked if he had made any underestimation in the dimensions of the slick he said he had simply applied what Mr Bagnell and other witnesses had seen. In relation to viscosity, he stated that he selected an oil of .37mm thickness which was the minimum thickness calculated for any fuel oil. It was likely that the viscosity of the fuel oil was the minimum of all the selected fuel oils in the OILMAP system and he selected that from the variety of fuel oils in the OILMAP system. Dr King considered that there was a margin of error of up 50 per cent underestimation. While the Defendants’ counsel asked a number of questions during cross-examination concerning viscosity and the assumption in OILMAP and submitted that Dr King’s answers were not responsive, I do not agree. If anything the assumptions as to the relevance of several of the questions asked in cross-examination were not clear to me.

57 The Defendants argued that their criticism of Dr King was supported by the decision of Talbot J in Filipowski v Magnavia Schiffahrtsgesellschaft MBH & Co Kommanditgesellschaft, Pablo Dion and Suzanic Branco [2007] NSWLEC 404 at [97] and [98]. Talbot J did not adopt the evidence of Dr King because the assumptions he applied in the OILMAP model were based on observations of third parties and the observations were not established beyond reasonable doubt. That decision did not find any fundamental difficulty in applying OILMAP to calculate volume of oil in water or with Dr King as an expert witness. The decision does not therefore support the Defendants’ criticism of Dr King.

58 Dr King’s evidence concerning the application of OILMAP can be accepted. For the reasons given above and as articulated extensively in the Prosecutor’s submissions set out at par 29(a) – (g) the volume of the oil seen on 10 January 2006 between 2015 hrs and 2045 hrs of 103L to 123L has been established beyond reasonable doubt.

(iii) Third period

Is there evidence of continuous discharge of oil?

59 The Prosecutor argues that for the period 2045 hrs on 10 January 2006 to about 1600 hrs on 11 January 2006 there was a continuous discharge of oil from the Carla. The following list of relevant evidence drawn largely from the chronology in par 12 sets out the evidence of sightings of oil on the water between the ship and the dock after 2045 hrs on 10 January 2006:

10 January 2006

i. Mr Hawes made an observation of a continual and constant flow of oil at 2045 hrs at the 600m mark. The oil was bubbling up through the water column from under the ship’s hull to the wharf face (chronology item 24).

ii. At 2123 hrs Mr Hawes and Mr Heath had a conversation in which Mr Hawes told Mr Heath that oil was bubbling up from the Carla’s mid-ships on the starboard side, the content of which conversation was attested to in the affidavit of Mr Hawes (item 33).

iii. Mr Bagnell said in cross-examination that he did not see new oil bubbling up in the water near the 600m mark between 2130 hrs and 2220 hrs. The Prosecutor submits that this should not be taken as evidence that there was no oil discharging because Mr Bagnell was not at the 600m mark at this time or trying to observe any new discharge of oil as he was occupied with other activities.

iv. At 2215 hrs the Master did not see any new oil bubbling up next to the ship after inspecting the area between the ship and the dock. As a consequence the Master informed the terminal that it was safe to resume cargo operations (item 37).

v. At 2220 hrs Mr Van Leeuwen took photographs of oil on the water during the course of the clean-up operations from an SPC boat (item 35).

vi. Between 2224 hrs and 2246 hrs Mr Rees took samples of oil in the water at the 575, 490 and 460m marks from the SPC boat.

vii. Mr Hawes spoke with Mr Heath at 2247 hrs to report on the clean-up operations and stated that there appeared to be oil continuing to escape from the ship’s hull into the water at the 603m mark, which conversation was attested to in the affidavits of Mr Hawes and Mr Heath (item 38). The Defendants argue that this should not be taken as evidence that oil was in fact bubbling up at this time because Mr Hawes does not say when he made this observation.

viii. At 2300 hrs Mr Rees observed from the wharf that the majority of oil that had been in the water had been partially replaced by further black oil along the side of the ship. This oil was continuing to spread across the water between the 460m and 600m mark (item 39).

11 January 2006

ix. At 0045 hrs on 11 January 2006 Mr Hawes saw oil bubbling up at the Carla’s midships, observing one bubble approximately every 5 seconds (item 41). Mr Hawes reported this observation to the Master at 0045 hrs and the Master stated that he was aware that oil was still coming out of the ship (item 42). The Defendants argue this does not make clear as to when the Master was aware before this time of when oil was bubbling up from the ship.

x. At 0530 hrs the Master inspected the water adjacent to the Carla and did not see any more oil in the water (item 42A).

xi. At 0815 hrs Mr Heath reported seeing three patches of oil in the water (item 43). At the stern of the ship there was a patch approximately 10m x 3m comprising one-third heavy black oil. At the bow of the ship was a patch approximately 12m x 10m comprising approximately 10 per cent heavy black oil. The third patch was in the area between the ship and the wharf from the 600m mark to the 505 m mark and was all heavy black oil.

xii. Mr Craig Watson from the SPC observed from the wharf oil bubbling up at 0845 hrs and took photographs of this (item 45).

xiii. Mr Austin, the contract diver for the SPC, found a fracture in the hull from which oil was escaping at approximately 1330 hrs. This was about 4m below the water line in the centre of the No 4 starboard fuel oil tank (item 52).

xiv. The Master and Mr Heath observed this on a video screen at 1340 hrs and the Master estimated the leakage as about one drop every 5-10 seconds and Mr Heath estimated it at one drop every 10-15 seconds. The drops were recorded as being between 3mm and 5mm in diameter (item 51).

xv. Mr Kidd observed the video screen between 1330 hrs and 1430 hrs and saw oil bubbling up at a constant rate of every 3 to 5 seconds, the bubbles being about 5mm in diameter (item 53).

60 The Defendants submit that the evidence establishes that at some stage after 1425 hrs on 10 January 2006 and prior to 2000 hrs droplets of oil approximately 3 to 5mm in diameter commenced escaping from the No 4 starboard fuel oil tank on the Carla every 10 to 20 seconds. In relation to the observation of Mr Heath on the morning of 11 January 2006, the patches of oil at the bow and stern of the shop were submitted by the Defendants to be remnants from the clean-up operation the previous night. Relying on the Bonn agreement and a dimension of 95m x 0.5m the Defendants submitted there was 9.5L of new oil (up to 24 L relying on a width of 1.25m rather than 0.5m).

61 The evidence does not establish there was continuous discharge of oil from 2045 hrs 10 to 11 January 2006 when the transfer of oil from the No 4 starboard fuel oil tank was completed at about 1600 hrs. There is no direct evidence of oil being discharged between 0045 hrs and 0815 hrs on 11 January 2006, the Master giving evidence that he did not see any oil in the water at 0530 hrs.

62 There is evidence some oil leaked from the Carla in the third period. Whether it is quantifiable needs to be considered. In the Defendants’ submissions the oil is quantified as between 9.5L and 24L based on the observations of Mr Heath on the morning of 11 January 2006 and applying the 0.5m width of the fender as the width of the oil slick. There is no evidence of observation of the width of the oil slick made under the wharf on 11 January 2006 so that the width of 0.5m, the distance from the fender to the Carla, should be applied. The small amount of oil identified in the Defendants’ submissions is the only quantifiable amount able to be determined with certainty on the evidence.

Summary of findings on volume of oil leaked

63 The specific volume of oil which the Prosecutor has proved beyond reasonable doubt leaked from the Carla is that identified in relation to the second period (2015 hrs to 2045 hrs on 10 January 2006), being a discharge of between 103 L to 124 L. While an amount of oil escaped from the Carla which was not contained within the boom erected around the Carla at about 2020 hrs to 2045 hrs (the first period) as seen by Mr Maloney at approximately 1950 hrs there is insufficient evidence available to quantify the amount of oil with certainty. I infer however that a reasonable amount did escape in that period given the length of the oil of 134m and an assumed thickness of 0.37mm. In relation to the third period contended for by the Prosecutor an amount of oil continued to leak intermittently from the Carla on 10 January 2006 until the transfer of all the oil from the No 4 starboard fuel oil tank on 11 January 2006 at about 1600 hrs. That amount was also unquantifiable but was a minimum of 9.5L to 24L.

Issue 2 - whether owner (via agent) and the Master took all necessary measures to prevent oil leaking from the Carla

64 The Prosecutor seeks to establish that the owner and the Master failed to implement all necessary measures to prevent or abate or mitigate the extent of the oil spill on 10 and 11 January 2006. Mr Bhonge attached to his affidavit the Shipboard Oil Pollution Emergency Plan (SOPEP) which applied on the Carla and which was referred to extensively in the evidence of several witnesses. In particular s 3.1.5 of the SOPEP provides that:

HULL LEAKAGE

If oil is noticed on the water near the vessel during bunkering operations and cannot be accounted for, the possibility of hull leakage should be suspected.

Measures to be taken immediately

· Stop all bunkering operations, and close manifold valves.

· Sound the emergency alarm, and initiate emergency response procedures.

· Inform terminal/bunkering personnel, as applicable, about the incident.

Further measures

· Use the Oil Pollution Team in an attempt to locate the source of leakage.

· Identify leaking tank by checking hull at water line or by considering diver if necessary.

When the source of leakage is identified

· Reduce the head of bunker oil by dropping or internal transfer into an empty or slack tank. If internal transfer of oil is not possible, take into account ship to ship transfer or discharge to tanks ashore.

· Consider possibility of pumping water into the leaking tank to create a water cushion to prevent further oil loss.

· If the leakage is located below the waterline, call in divers for further investigation.

If it is not possible specifically to identify the tank

· The level of oil in the tanks in the vicinity of the suspected area should be reduced, taking into account the effect on hull stress and stability of the vessel.

· Should a fracture in the bottom or lower shell plating be suspected, the level of the tank should be reduced, if full, and prevent further outflow by forming a water cushion in the damaged tank.

65 Submissions focussed on whether necessary measures under the SOPEP were taken by the Master and the owner through its agent. The Prosecutor argues that the transfer of oil from the No 4 starboard fuel oil tank to the No 4 port fuel oil tank commenced by the Master should have continued on 10 January 2006.

Evidence of Defendants - the Master

66 The Master’s affidavit identifies his decision to commence the transfer of oil from the No 4 starboard fuel oil tank at 2050 hrs on 10 January 2006. Approximately 3,500L of fuel oil was transferred until 2120 hrs. Before commencing the transfer the Master ordered appropriate soundings of fuel oil and ballast tanks and stability calculations for the transfer of 100,000 L of heavy fuel oil to the No 4 port fuel oil tank. The Master spoke by telephone to Captain Malhotra, part of the technical team at MSC Ship Management, at 2050 hrs and told him that he intended to transfer oil from the No 4 starboard fuel oil tank to the empty No 4 port fuel oil tank. Captain Malhotra said he could go ahead with that transfer (item 27 of the chronology). Item 27 is disputed by the Defendants because it requires further context to properly reflect the Master’s evidence.

67 In oral evidence the Master stated that at 2000 hrs it was a reasonable possibility that the oil could have been discharged from somewhere other than the No 4 starboard fuel oil tank. He considered that after 2000 hrs and after commencing the transfer from the No 4 starboard fuel oil tank to the No 4 port fuel oil tank that it was reasonably likely that the source of the leak was from a tank other than the starboard fuel oil tank because later on at 2015 hrs he did not see more oil bubbling up. In cross-examination the Master considered that what he did after observing the oil was in compliance with SOPEP. He agreed that under SOPEP he was required to suspect the possibility of hull leakage when he saw the oil in the water at 2000 hrs. One of the possibilities was the No 4 starboard fuel oil tank. He sounded the emergency alarm and initiated the emergency response procedures and informed relevant personnel on dock via Mr Maloney. He then attempted to locate the source of the leak which was yet to be ascertained by employing the whole crew. As identified in SOPEP when the source of the leakage is identified, he started transfer operations to the No 4 port fuel oil tank. He conducted soundings to ensure that the transfer was safe and he ascertained that No 4 port fuel oil tank was empty. Also soundings of ballast were taken and calculations made on the ship’s computer some time before 2050 hrs when he told the ship’s engineer to commence the transfer of oil. He agreed that he had formed the suspicion that the oil was coming from the No 4 starboard fuel oil tank. His note on the SOPEP extract attached to his affidavit stated that at that point “4S-4P internal transfer carried out”. He considered at 2050 hrs it was a possibility at that time that the leak was coming from the No 4 starboard fuel oil tank and that it was appropriate to commence the transfer. The decision to transfer was his initial action before he considered whether a diver was necessary. He determined that he should get a diver at 2215 hrs.

68 The Master stated that it was his responsibility to comply with SOPEP and the decision to transfer the oil was his. When asked why the transfer operation on 10 January 2006 ceased, the Master said that the transfer should not take place until the precise source of the leak had been located. The stress calculations for the transfer of the oil had to be performed once the precise location of the oil had been located. The soundings and stress calculations conducted on 10 January 2006 between 2000 hrs and 2100 hrs required an assumption that there was no problem with the hull. The SOPEP states that the impact on the hull stresses have to be taken into account. The calculation that was done was initially only for loading of the tank for about 100,000L of oil. He did not agree that he did all the appropriate soundings and calculations for the transfer of all the oil in the No 4 starboard fuel oil tank.

Mr Bhonge

69 Mr Bhonge, technical manager for Fleet A for MSC Ship Management (Hong Kong) Ltd and at the time of the oil spill superintendent of a number of ships in Fleet A not including the Carla, swore an affidavit dated 4 February 2009. At par 4 he stated:

I recall that I was in the MSC Ship Management (Hong Kong) Ltd office at Hong Kong on the day the Master of the MSC Carla telephoned to report the oil seepage on her starboard side, which I understand was 10 January 2006. I do not now recall the precise discussion with the master, but I generally remember a discussion with the master together with other technical staff within MSC Ship Management (Hong Kong) Ltd. I do recall that the precise location of the crack in the hull was not then known and a decision was made not to transfer any fuel until the source of the seepage had been located. In my opinion it would not be prudent to transfer any fuel until the location of the leak had been determined because transferring fuel to the leaking tank (as leaking tank was not known) would increase the amount of fuel escaping and any redistribution of fuel would first require stress calculations. MSC Ship Management (Hong Kong) Ltd did not retain as part of its records any notes of that telephone conversation.

70 Mr Bhonge was cross-examined about his understanding of the role of the Master and the technical manager under SOPEP. He agreed that SOPEP’s primary purpose was to provide a detailed set of procedures to stop or minimise the discharge of oil or to mitigate the effects of the discharge.

71 Mr Bhonge stated that he had no involvement directly in the decision to stop the transfer of oil on 10 January 2006. That decision was taken by a group he identified as Captain Malhotra and Mr Prayad Jha who were both in the agent’s Hong Kong office. Mr Jha was the technical manager on 10 January 2006 for Fleet A (Mr Bhonge’s current position). Mr Bhonge identified Mr Jha as the decision-maker in respect of the response to the oil leak. He understood in a conversation with Mr Jha after Mr Jha had spoken with the Master and Captain Malhotra at 2050 hrs that at the time it was suspected that the No 4 starboard fuel oil tank was the source of the leak. He agreed that based on SOPEP the proper decision-maker in relation to that matter was the Master but it was appropriate for him to discuss his decisions with the technical office. Any immediate action must be by the Master but he would be guided by the technical office. He agreed it is the Master’s responsibility to make the decision whether an internal transfer is the appropriate way to respond to an oil leak which includes identifying the source of the leak before proceeding with the transfer of oil. He considered that no transfer of oil should occur until the location of the leak is identified, taking into account s 3.1.5 of SOPEP. If the precise source of the oil leak is not located it would not be appropriate to do any transfer operations. In par 4 of his affidavit he considered that it would not be prudent to transfer any oil until the location of the leak had been determined. He was familiar with the incident because he became involved with the risk assessment on 11 January 2006, referred to in par 6 of his affidavit.

72 In cross-examination Mr Bhonge clarified that when he expressed an opinion in his affidavit about what had happened on 10 January 2006 that was based on his understanding as a result of overhearing on that day that there was a minor oilspill in the vicinity of the Carla’s No 4 starboard fuel oil tank. This information was then relayed to him by Mr Jha. When asked if it was imprudent to commence the transfer of oil at 2050 hrs on 10 January 2006 he considered that it was as the source of the leak had not been identified. His opinion would not change if the Master had a suspicion that the bubbles seen by others were in the area of the No 4 starboard fuel oil tank or if the Master had suspicions that tank was the source of the oil leak. It was unavoidable to allow oil to continue to discharge until the source had been precisely identified. The Master had to immediately obtain a diver to find precisely where the leak was from and he did that via the agent. The oil had to continue to discharge in the meantime.

73 When the Master observed oil patches as the vessel was berthing at about 1254 hrs on 10 January 2006 Mr Bhonge did not consider that this should give rise to a suspicion that there was an oil leak from the vessel as that oil observed by the Master appeared as an oil sheen already existing in the port. It was however something the Master should taken into account and he took the correct action by informing the pilot and the port authorities. When shown the report of the Master to Captain Malhotra on 11 January 2006 in which the Master describes seeing oil at 2000 hrs (annexed to Mr Heath’s affidavit) and the diagram he prepared (annexed to Mr Heath’s affidavit and the Master’s affidavit) he did not agree that at that time the most likely source of the oil leak was the No 4 starboard fuel oil tank. There were other tanks in his view which could give rise to the suspicion that the leak came from them. There was no basis to even suspect that the bubbles were coming from No 4 starboard fuel oil tank. In any event there was nothing the Master could do without identifying the source of the leak precisely, taking into account s 3.1.5 of SOPEP where it considers that it is not possible to identify the tank. It is the Master’s decision to transfer the oil but if the source of the leak has not been identified then it is better not to transfer the oil. There was a possibility of leakage from No 4 starboard fuel oil tank but the source could not be identified. He did not consider his opinion was contrary to what SOPEP instructed the Master to do. SOPEP refers to the need to take into account hull stress and stability which is another factor the Master must take into account.

74 He agreed that the Master had to take soundings to identify the contents of the tanks. He did not agree that if it was safe to engage in a transfer from the No 4 starboard fuel oil tank to the No 4 port fuel oil tank and that this was consistent with SOPEP. He did not consider the transfer was appropriate as it could have aggravated the leak further. The only factors considered in the decision to stop the transfer was the potential hull stresses and the risk of further aggravation of the leak.

75 Mr Bhonge agreed there was no problem with transferring the oil on 11 January 2006 after identifying the source of the leak. The only additional calculations that were undertaken were some further soundings which were exactly the same type as were undertaken on 10 January 2006. He considered that the transfer on 11 January 2006 was appropriate. There were measures in place such as the boom and the clean up operation to prevent oil escaping further although no further transfer of oil could take place until the source of the oil leak was located. He considered it was prudent of the Master in consultation with Mr Jha, Mr Sharma (another officer of the agent) and Captain Malhotra to stop the transfer that was occurring. He did not consider his opinion was inconsistent with SOPEP.

125 That the cause of the leak was a failure to maintain the ship was also identified in the report of the Master shortly after the incident (exhibit T). In that report the Master ticked a box on an incident form prepared for the ship’s agent, MSC Ship Management, that attributed the basic causes of loss to “inadequate adjustment/repair/maintenance”. In cross-examination the Master stated that the cause of the oil leakage was structural failure on the vessel caused by inadequate repairs or maintenance (T338). The Master’s attempt to explain away his conclusions in his report and earlier answers at T340 was unconvincing and should not be accepted.

Defendant’s submissions

126 It is common ground that the cause of the oil discharge was a fatigue crack in the hull plating in the No 4 fuel oil tank. The only question is whether that fatigue crack could have been foreseen or prevented through ordinary maintenance by the owner. Mr Bhonge’s evidence was that the owner had obtained a survey report from DNV together with the DNV classification certificate and had done everything sufficient to ensure the seaworthiness of the Carla, including with respect to the integrity of the fuel tanks. The Defendants contend that the fatigue crack which caused the leak and subsequent discharge on 10 and 11 January 2006 from the No 4 starboard fuel oil tank, was not foreseeable and could not have been prevented.

127 The Carla was in class with no relevant conditions placed on her operation by DNV. She had had dry docks and inspections in accordance with the DNV recommendations, and Mr Burge accepts that an owner is entitled to rely on those recommendations unless a specific incident raises new concerns: T149.40, 150.10, 150.25, 152.1-7. The hull shell thickness measurements taken in 2003 and 2004 were under the supervision of DNV and no recommendation was made at that time for modifications. Repairs following those measurements were completed and approved by DNV and no further thickness measurements or repairs were considered necessary by class: T268.30-292.2. There can be no realistic suggestion that the owners could or should have done any more than they did to prevent the discharge of oil in the present case. The development of this particular hole in an unusual fatigue failure could not have been reasonably foreseen by the owner.

128 After the spill the owner undertook repairs of the ship in order to rectify the fatigue crack and the owner’s agent undertook modifications to two of the ship’s sister ships in order to ensure no similar spill would occur.

Finding on maintenance (issue 3)

129 The Prosecutor must establish beyond reasonable doubt those matters on which it wishes to rely to demonstrate the seriousness of the offence. It relies on the expert opinion of Mr Burge that more should have been done by the owners to maintain the Carla, an old ship that had been in continuous service as a cargo ship for 20 years.

130 This evidence is to be weighed against the evidence of Mr Bhonge the current technical manager of the Carla. His evidence is that it was sufficient to comply with the class requirements in relation to dry dock inspections and in relation to maintenance and this has been done. The necessary certificate of satisfaction of class was held and was current at the time of the offence in 2006, the class repair requirements identified in the dry dock survey report, which was completed in January 2004, had been complied with and there was no evidence of any incident on the Carla to suggest that additional maintenance was warranted.

131 As identified by the Defendants, Mr Burge is not engaged and has never been engaged in the management of a large commercial shipping business so that his evidence of what is proper practice is argued not to be informed by relevant experience. He does have extensive experience as a marine engineer and has undertaken survey work for class. He gave fulsome written evidence and I found him to be a frank and compelling witness when he gave oral evidence. I consider his evidence identified the standard of maintenance which is necessary for a prudent owner to adopt.

132 Mr Bhonge has held the position of technical manager with the owner’s agent since October 2008. Prior to this and at the time of the incident he was superintendent with the agent for a fleet of ships not including the Carla. He states that the approach of the agent is to rely on the class surveys conducted at regular intervals. His written evidence was somewhat sparse and consisted of attaching the DNV class survey report completed in 2004, the report of thickness measurements taken in August 2003, a risk assessment report of the Carla after the oil spill and various reports concerning repairs to the Carla which were undertaken after the oil spill. His affidavit provided no explanation as to the meaning or effect of the survey report. Nor did it detail what maintenance inspections were otherwise undertaken. He gave oral evidence that additional maintenance was undertaken but without much detail. He is not an independent witness given that he works for the owner’s agent, here representing the owner.

133 The Master’s report in which he suggested a cause for the leak was tendered by the Prosecutor (exhibit T) and was relied on as a concession by the Master that the ship was not properly maintained. The Master ticked a box titled “inadequate adjustment, repair and maintenance”. In re-examination the Master stated that the inadequacy he was referring to was the existence of material fatigue, not maintenance failure. This material fatigue was the cause of the failure and represented a defective hull or structural condition (TS342). This evidence is not conclusive that the Defendants failed to undertake adequate maintenance.

134 There is difficulty in achieving the objective of preventing oil pollution from hull fractures in older ships if Mr Bhonge’s evidence of the adequacy of dry dock inspections for class is accepted. These inspections are undertaken for the purposes of obtaining registration (per Mr Burge’s evidence at par 114) and for obtaining insurance, I was informed by counsel. While clearly relevant to monitoring the condition of a ship, that additional maintenance is necessary for older ships is demonstrated by the hull fracture on the Carla. Relying on the absence of an incident to suggest that there is no problem with the hull is not sufficiently preventative for a prudent owner. The potential for hull stress in and around fuel tanks as identified by Mr Burge’s evidence means that class surveys which provide for a dry dock inspection every five years are not necessarily sufficient. A prudent owner needs to deal with hull maintenance more proactively.

135 Further, as identified in Mr Burge’s evidence, the class inspection does not include the testing of hull thickness of every tank and fuel tanks are not subject to an ultrasound test. I accept Mr Burge’s evidence that a prudent owner would have implemented more regular maintenance inspections of the hull in order to prevent the occurrence of hull fractures. Hull inspections below the waterline would be informed by the class survey which identified areas of hull thickness where there might be an area of potential problems in the future. The owner should have undertaken more maintenance to check hull thickness around fuel tanks such as the No 4 starboard fuel oil tank, given the Carla’s age and length of service.

136 I note that the circumstances in this matter are not as serious as those in Filipowski v Mediterranean Shipping Company SA [2005] NSWLEC 159 where Bignold J found there was a history of poor maintenance based in part on the evidence of Mr Burge. This opinion was informed by several instances of inspections by the Australian Maritime Safety Authority some of which had resulted in the ship’s detention in port. That history reflected its advanced age and the owner’s failure to maintain it in a sound condition. There is no similar history in this matter.

Environmental harm

137 In addition to the three issues in dispute relating to the objective seriousness of the offence, the extent to which there has been environmental harm is also relevant to the objective seriousness of the offences.

138 In Dr King’s second report dated 13 January 2009 Dr King was asked to determine the quantum and potential fate of oil which was not recovered by the clean-up operations. This extra oil was based on the observations of Mr Maloney at 2000 hrs on 10 January 2006 that the oil stretched from the 600m mark to the 326m mark (chronology item 8) and the observations of Mr Bagnell in his affidavit which indicates that potentially 140m of the 274m length slick escaped containment (see the summary of this evidence in the Prosecutor’s submissions set out above at par 27 and chronology item 8). I have held above at par 44 that this amount of oil was not captured by the boom erected to contain the oil leaking from the ship. Dr King used OILMAP, based on the wind and tide action prevailing at the time, to model the dispersal of that oil. The slick which escaped was ultimately predicted to move onto the shorelines of the Sydney Airport Runway and Foreshore Beach. A quantum estimate of this oil is not given.

139 Dr Lincoln Smith, aquatic ecologist and director of Cardno Ecology, swore an affidavit dated 21 January 2009. Annexed to the affidavit was his report dated 16 January 2009 in which he provided an opinion on the ecological consequences of the oil which escaped based upon the fate of the spill modelled by Dr King using OILMAP. A diagram of the trajectory of the escaped oil which appears in Dr King’s report dated 21 January 2009, his second report, is replicated in Dr Smith’s report. Dr Smith’s opinion is based upon his knowledge of the water conditions and aquatic ecology of Botany Bay. In terms of the oil that was not captured by the boom, there was a small likelihood of the oil reaching Towra Point (based on OILMAP) and if this had eventuated there would have been very significant ecological consequences. Oil impinging on the airport runway could have affected intertidal organisms. These impacts were not observed. The report states that the area within the containment boom was unlikely to have contained protected species and more sensitive organisms that live in the lower intertidal zone would not have been coated. Some mortality to intertidal organisms, particularly to algae or soft-bodied organisms without protective shells, was likely. The slick would have potentially affected plankton occurring at the surface of the water. Dr Smith concludes that it is likely that the impact of the oil contained within the boom on aquatic ecosystems, aquatic biological resources and protected species would have been very small.

140 The parties agree that any environmental damage was not substantial or significant.

Overall finding regarding objective seriousness of the offence

141 The objective circumstances of the offence as found above suggest that a reasonably substantial amount of oil leaked from the ship and that the failure to adequately maintain an old ship in operation for over 20 years contributed to the occurrence of the hull fracture so that the culpability of the owner is greater due to this failure. The objective seriousness of the offence is in the low to medium range.

Application of s 10 Crimes Sentencing Procedure Act to the Master

142 Section 10 of the CSP Act relevantly provides:

(1) Without proceeding to conviction, a court that finds a person guilty of an offence may make any one of the following orders:

(a) an order directing that the relevant charge be dismissed,

(b) an order discharging the person on condition that the person enter into a good behaviour bond for a term not exceeding 2 years,

(c) an order discharging the person on condition that the person enter into an agreement to participate in an intervention program and to comply with any intervention plan arising out of the program.

(2) An order referred to in subsection (1) (b) may be made if the court is satisfied:

(a) that it is inexpedient to inflict any punishment (other than nominal punishment) on the person, or

(b) that it is expedient to release the person on a good behaviour bond.

…

(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.

…

(5) A person with respect to whom an order under this section is made has the same right to appeal on the ground that the person is not guilty of the offence as the person would have had if the person had been convicted of the offence.

143 It is submitted by counsel for the Master that an order under s 10(1) of the CSP Act should be made dismissing the offence to which the Master has pleaded guilty. Such an order is appropriate given the similar circumstances of Thorneloe v Filipowski (2001) 52 NSWLR 60 where a s 10 order was made. There is no public purpose to be served by recording a conviction because the Master could not have done anything to ensure that the offence did not occur. A penalty imposed against the owner would constitute sufficient admonition in relation to the spill if it were required. Although s 10 is only applied rarely in environmental offences the section should be applied when the circumstances warrant it (Thorneloe v Filipowski per Spigelman CJ at [170] and [184]).

144 In terms of the Master’s personal circumstances, his counsel submitted that his current employment as trade manager with MSC Agency (India) Pty Ltd is a job requiring considerable travel and any conviction may have an impact on his current and future employment. The Master gave oral evidence about his belief about the impact a record of conviction could have on his current employment due to his international travel obligations and also for future employment. He referred to his concerns about applying for a visa and having to disclose on application forms that he has a criminal conviction (TS 287,288).

145 In terms of extenuating circumstances, counsel for the Master submitted that although the offence is one of strict liability, the Master could not have foreseen the fatigue crack or resulting oil spill. The Master cooperated fully with SPC personnel. He responded immediately when the oil spill was brought to his attention by acting in compliance with the SOPEP and this was done in order to ensure any environmental harm was minimised. Although the decision to stop the transfer was in retrospect the wrong one, the Master made the best decision he could at the time in the particular factual circumstances. In terms of the clean-up operations the Master acted immediately and there was no delay in a diver being called. The resulting environmental damage was minor.

146 The Prosecutor disputes that the environmental damage was minor and submitted that there was potential for serious environmental consequences had the boom not been erected by SPC officers around the Carla promptly. The Prosecutor argues that the Master did not act reasonably in failing to implement the procedures required by the SOPEP and should be held culpable for the offence.

147 In Morrison v Peacock and Roslyndale Shipping Company Pty Ltd [2003] NSWLEC 68 at [24], when considering whether to make an order under s 10 of the CSP Act, Pearlman J referred to the Court of Criminal Appeal decision of Valle v Morrison (New South Wales Court of Criminal Appeal, Gleeson CJ, Allen and Sully JJ, 22 November 1995, unreported). In Valle Allen J (Gleeson AJ, Sully J concurring) stated that:

The submissions put to us by Mr Sexton in his able argument carried with them a suggestion that it would be inappropriate to impose a penalty upon a master in any case where it was not some personal want of care or skill on his part which caused the spillage. 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.

148 The following principles relating to s 10 were identified by Spigelman CJ (with whom Hulme and Howie JJ concurred) in Thorneloe v Filipowski:

[156] The risk to which society was subject is, in my opinion, a relevant and, accordingly, a

consideration to be taken into account in deciding whether to dismiss proceedings without proceeding to a conviction. This is so even in the context of a strict liability result offence like s 27.

…

[171] 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.

…

[178] It is, in my opinion, relevant to the exercise of the discretion under s 10 of the

, in the context of a strict liability offence, to consider what the applicant for the benefit of s 10 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.

149 The decision to make an order applying s 10 of the CSP Act is discretionary. Thorneloe has been considered on many occasions since in this Court when s 10 is being considered. The question posed by the judicial officer is whether a defendant could have done anything to avert the leak that occurred. In determining if there are any extenuating circumstances (s 10(3)(c)), the Master could not have averted the occurrence of the hull fracture which resulted in the leak. Given the issues raised in the Prosecutor’s case, the issue is whether the Master could have done more to reduce the amount of oil that leaked into Brotherson Dock from the Carla, in particular by not completing the transfer of all oil on 10 January 2006. The answer to that question lies in my finding above at par 110 that the Master did not act recklessly or negligently on 10 January 2006 but rather mistakenly, so that there is no greater culpability contributing to the seriousness of the offence arising from that part of the Prosecutor’s case.

150 Considering the Master’s personal circumstances (s 10(3)(a)) he is concerned about the impact a criminal conviction could have on his current employment and future employment as that involves a great deal of international travel. If convicted he will have to disclose that conviction on the application for a visa to other countries which may inhibit his ability to obtain one. This is his first offence.

151 An order under s 10 can be made even if the offence is not trivial, see for example Filipowski v Fratelli D’Amato (2000) 108 LGERA 88 in which 294,000L of oil was spilt and Talbot J declined to record a conviction against the master of the ship. Whether the offence is trivial is a matter for consideration (s 10(3)(b)) but is not a threshold requirement for an application of s 10. One relevant issue is whether there was potential for environmental harm given the reasonably large amount of oil spilt. Spigelman CJ in Thorneloe v Filipowski at [123]-[158] (Hulme and Howie JJ concurring) considered at [146] that as marine pollution from oil (then under s 27 of the Marine Pollution Act) was a result offence, meaning the offence results from the actual discharge of oil into waters, that a sentence for an offence under s 27 may not take into account the potential for the result to occur where the actual occurrence is an essential ingredient of the offence. To do so would punish the offender for conduct which would constitute a different offence for sentencing purposes because it would be for, effectively, a larger discharge of oil. In relation to the application of s 10 however, his Honour held at [154]-[156] that the potential for harm could be considered because of the scope and purpose of that section. At [156] he held:

The risk to which society was subject is, in my opinion, a relevant and, accordingly, a "proper" consideration to be taken into account in deciding whether to dismiss proceedings without proceeding to a conviction. This is so even in the context of a strict liability result offence like s 27.

152 In this case it is probably unnecessary to make the distinction identified by the Spigelman CJ between sentencing and the application of s 10 as there was potential for serious environmental damage resulting from the actual oil which has been proved to have leaked from the Carla. The potential for environmental harm had that oil not been largely contained in the boom erected by the SPC was substantial. The offence was not trivial given these circumstances.

153 Taking into account all these matters, and s 10(2) of the CSP Act, I exercise my discretion not to proceed to a conviction and make an order under s 10(1)(b) so that the Master is discharged on the basis that he enter into a good behaviour bond of two years.

Mitigating factors in relation to the owner

154 A number of mitigating factors should be taken into account to reduce any penalty imposed on the Defendant owner, as provided for in s 21A(3) of the CSP Act.

Absence of substantial damage (s 21A(3)(a) CSP Act)

155 Counsel for the owner submitted that there was no substantial damage resulting from the offence. No environmental damage resulted. The owner’s crew promptly assisted in cleaning up the discharge in order to minimise any environmental harm. The amount of oil discharged was in the low range.

156 The Prosecutor relies on the findings of Dr Smith that there was some, albeit limited, adverse effect on the environment as a consequence of the oil spill and that serious environmental consequences would have ensued if the spill had not been contained by the boom erected by SPC officers.

157 As I have held that a reasonably large amount of oil leaked into the dock there was potential for serious environmental harm.

No previous convictions (s 21A(3)(e) CSP Act)

158 The owner has not been previously convicted of any offence.

159 Counsel for the Defendants submitted that the owner was of good character. No evidence is submitted to take into account in this regard.

Unlikely to reoffend (s 21A(3)(g) CSP Act)

160 Counsel for the Defendants submitted that the owner was unlikely to reoffend.

Guilty plea (s 21A(3)(k), s 22 CSP Act)

161 The Prosecutor submitted that the owner entered an early guilty plea justifying some discount in penalty but argued that any discount must consider the contested nature of the proceedings. The owner raised a number of objections to lay and expert evidence relied on by the Prosecutor and the trial was prolonged as a consequence. In addition, the Defendants took substantial issue with many aspects of the Prosecutor’s case and evidence. In oral submissions (TS483) the Prosecutor submitted that the Defendants were aware at the time they entered pleas that further evidence in reply was going to be served. The utilitarian nature of the guilty plea was diluted by the extent to which facts were contested by the Defendants and there was a minimal cost saving as a result of the guilty pleas.

162 According to the court file, both Defendants entered a guilty plea at a directions hearing on 10 October 2008. Counsel for the Defendants stated that the early guilty plea was entered before Mr Burge’s second affidavit had been served. He submitted this second affidavit raised the issue of inadequate maintenance of the ship for the first time which the Defendants were entitled to dispute. Counsel for the Defendants recognised that there were many issues in this sentencing matter strongly contested by the Defendants, however he argued that this should not be taken to affect the Court’s assessment of whether there was a utilitarian aspect to the early guilty plea of the ship’s owner. The length of the hearing was in part a result of counsel for the Prosecutor conducting lengthy cross-examination of two witnesses.

163 The Prosecutor’s counsel did not refer to any authorities to support his submission that there should be a reduction of the discount for the early guilty plea because of the extended contested hearing that has occurred. The Prosecutor accepts that the plea of guilty was entered early and I agree that is the case given that the plea was entered before all the Prosecutor’s evidence had been filed at an early stage of the proceedings. It is therefore unnecessary to consider the issue of timing of the plea of guilty as has been referred to in Environment Protection Authority v Werris Creek Coal Pty Ltd [2009] NSWLEC 124 per Lloyd J and Gosford City Council v Australian Panel Products Pty Ltd [2009] NSWLEC 77 per Biscoe J, both considering the recent Court of Criminal Appeal decision of R v Borkowski [2009] NSWCCA 102 per Howie J at [32].

164 The Court has not been able to find any authority which has directly considered this issue in this Court or the Court of Criminal Appeal in any detail. It may be that the nature of strict liability offences coming before this Court, which does result in a high rate of guilty pleas also results in there being potential for greater factual disputes between a prosecutor and a defendant on matters relevant to sentencing than in other criminal courts. There was no statement of agreed facts in this matter. The parties did agree the majority of factual matters based on the affidavit evidence, as contained in the chronology included in this judgment. Three substantive issues in dispute remained (as considered in this judgment) and occupied the lengthy hearing time of six days. The matter was set down for three days of hearing.

165 Authorities which have considered the issue of the appropriate discount for early pleas of guilty such as R v Thomson; R v Houlton (2000) 49 NSWLR 383 and R vBorkowski [emphasise that the discount is in recognition of the utilitarian value of the plea, meaning the saving of court time and costs as the parties do not have to deal with a contested not guilty hearing. In R v Thomson; R v Houlton the appropriate range for the discount was identified as 10 to 25 percent.

166 In this case despite the guilty plea there has been a protracted hearing on contested factual issues which has not resulted in a substantially reduced hearing time from that I surmise would have been necessary for a plea of not guilty. The dispute over the volume of oil in particular meant that much of the evidence had to be thoroughly examined in lengthy cross-examination by both parties. The principles in R v Thomson; R v Houlton and Borkowski emphasise that the reason for the discount is to reflect the utilitarian value of the guilty plea and to reward early pleas of guilty for that reason. As stated in Borkowski at [32] some allowance may be made in determining the discount where the trial would be particularly complicated or lengthy citing, R v Thomson; R v Houlton at [154]. These authorities suggest that the conduct of the hearing following the guilty plea can be considered to determine if there was in fact a saving of court time commensurate with the utilitarian benefit being rewarded by a discount. In this case that has not occurred and there should be a reduction of the discount to 20 per cent to reflect this. This is not to punish the Defendant for the conduct of its case as it is entitled to challenge those matters it considers it should. That conduct does however result in a reduced utilitarian value of the plea and that should be taken into account in the circumstances of this case.

Assistance to law enforcement authorities (s 21A(3)(m), s 23 CSP Act)

167 I should note for completeness that the Defendants relied on s 23 of the CSP Act in relation to the assistance to law enforcement authorities. It was submitted that the owner provided assistance to law enforcement authorities in their investigations and throughout the proceedings. No specific submission was made that there should be a reduction for that assistance in addition to the reduction for the utilitarian value referred to in R v Thomson; R v Houlton along the lines canvassed by the Court of Criminal Appeal in SZ v The Queen (2007) 168 A Crim R 249 per Howie J at [4]-[11]. This is an observation not a criticism simply to draw out the distinction drawn in SZ between the discount of penalty on a guilty plea which can be accorded for assistance to authorities in addition to the utilitarian value of a plea. The assistance considered in SZ was of an order of magnitude greater than in this matter. In any event s 10 of the Marine Pollution Act imposes a duty to notify of an oil spill on a master of a ship so that reporting the incident to the SPC is simply complying with the statutory requirement to do so.

168 There is no evidence of expression of contrition or remorse from the Defendant owner before me which I can take into account as a matter in mitigation of sentence.

Evenhandedness

169 The amount of penalty for the owner must be determined. The principle of evenhandedness requires that the Court consider if there is any sentencing pattern for like offences in order to determine a consistent approach to penalty. This principle must always be applied subject to the particular circumstances of the case before the Court. As identified above at par 9 the maximum penalty for the offence under s 8 was increased significantly in 2002. Since the increase in penalty, three cases have considered the appropriate penalty in circumstances where the amount of oil discharged was less than 50L which is a lesser amount than was discharged in this matter. In Filipowski v Magnavia Schiffahrtsgellschaft the amount of oil discharged was 30-40L. A penalty of $25,000, reduced from $40,000 in light of mitigating circumstances, was imposed. In Filipowski v Vopak Terminals Sydney Pty Ltd [2006] NSWLEC 104 a penalty of $60,000 was imposed against the ship’s owner. Bignold J considered the offence as the lowest end of the spectrum of overall potential gravity for the particular offence after 40L of oil was spilled into the water. In Morrison v Defence Maritime Services Pty Ltd 5L to 15L of oil was spilt, a small quantity of which was not retained by a boom. Biscoe J imposed a penalty of $35,000 on the owner, taking into account mitigating factors, and a penalty of $30,000 was imposed on the master.

170 There are three cases decided before the 2002 penalty increase which are useful to consider. In Filipowski v Mediterranean Shipping Company SA (referred to at par 136). Bignold J imposed a penalty of $150,000 on the ship’s owner, $25,000 on the ship’s captain and $15,000 on a crew member whose act caused the discharge. The maximum penalties at the time of the offences were $1.1 million for corporations and $220,000 for individuals. The amount of oil spilled into waters where the ship was docked was between 180L and 273L and was discharged during ballasting operations from a heeling tank. Fuel oil leaked through a corroded seam into ballast water in the heeling tanks system. His Honour found the ship was very old and had a history of adverse inspection reports leading to Port State Control detentions in Australia, based on the evidence of Mr Burge to that effect. This history meant that greater vigilance and care in the ordinary operation of the ship was required than would ordinarily be the case. Further, there had been a failure to monitor the contents of the fuel and ballast tanks as required for a prudent ship owner. The heeling tanks had been assessed as being in “fair” condition prior to the oil spill and this should have alerted the owner to the physical possibility of fuel contamination of the ballast tank. Mitigating factors in favour of the defendant owner were that there was an early plea of guilty, the expression of contrition and remorse, that no previous offences had been recorded and the owner’s exemplary seafaring record. As noted above, the failure to maintain the ship by the owner was more serious than in this matter.

171 In Morrison v Che Mat (1997) 95 LGERA 212 an oil spill resulted from water in the ship’s hold bilges being pumped overboard. Oil had leaked from the engine room bilges into the hold bilges as a result of a failure of a manhole seal. After the smell of oil was noticed, the chief officer assured the master that there was no possibility that oil from the engine room bilges were being pumped out along with the water from the hold bilges. 150L of oil was discharged of which 6L was recovered. No actual environmental harm resulted from the spill. The failure of the manhole seal was held not to have been reasonably foreseeable as there had been a recent drydock inspection. Although it was against company policy for bilge tanks to be pumped in port, this policy was not known of by the chief officer who was in effective command of the ship at the time. The ship’s owner and master had failed to publicise the policy. The offence was described as being in the upper medium range. After considering mitigating factors, Sheahan J imposed a penalty of $50,000 in respect of the company, $10,000 in respect of the master and $1,000 in respect of the chief officer. The maximum penalties at the time of the offence were $1 million for corporations and $200,000 for individuals.

172 In Morrison v Ausmarine Fisheries (1995) 88 LGERA 442 an oil spill occurred during bunkering operations. A valve on a fuel oil tank had been left open and an overflow resulted. More than 200L of oil escaped onto the decks of the vessel and a somewhat smaller amount spilt into the water. The ship was considered to be manifestly inadequate in terms of fuel holding and loading equipment. The operating procedures were also held to have been inadequate in ensuring reliable compliance with the duties imposed by the relevant legislation. After mitigation Bignold J imposed a fine of $80,000 as against the owner and $40,000 as against the chief engineer (also the ship’s master). The maximum penalty at the time the offences were committed was $200,000 for an individual and $1 million for a corporation. A greater amount of oil escaped than in this case.

Appropriate penalty

173 It is necessary to determine the appropriate penalty for the owner in light of the objective and subjective factors outlined above taking into account factors such as the maximum penalty. I consider an amount of $150,000 is appropriate.

Costs

174 There has been no agreement reached on costs by the parties. The Defendants wish to make submissions on costs once the judgment on sentence has been delivered. I will discuss with the parties whether final orders should await any decision on costs.

CITATION:	Filipowski v Hemina Holdings S.A.; Filipowski v Rajagopalan (No 2) [2009] NSWLEC 104
PARTIES:	PROSECUTOR Barbara Filipowski DEFENDANTS Hemina Holdings S.A. (08/50059) Swaminathan Rajagopalan (08/50060)
FILE NUMBER(S):	50059 of 2008; 50060 of 2008
CORAM:	Pain J
KEY ISSUES:	ENVIRONMENTAL OFFENCES :- Marine Pollution Act s 8 - discharge of oil from ship at Port Botany - plea of guilty by owner and master - dispute as to extent of oil spilled - whether defendants took all necessary measures to prevent, abate and mitigate extent of the oil spill - whether defendants acted in breach of ship's oil pollution emergency plan (SOPEP) - whether ship adequately maintained - potential for serious environmental harm - application of s 10 of the Crimes (Sentencing Procedure) Act to discharge master with good behaviour bond - mitigating factors in favour of owner - whether utilitarian value in early guilty plea reduced where contested sentence hearing
LEGISLATION CITED:	Crimes (Sentencing Procedure) Act 1999 s 3A, 10, 17, 21A Marine Pollution Act 1987 s 8 Marine Legislation Amendment (Marine Pollution) Act 2002 (repealed)
CASES CITED:	Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304 Camilleri’s Stock Feeds Pty Ltd v Environment Protectection Authority (1993) 32 NSWLR 683 Environmental Protection Authority v Timber Industries Ltd [2001] NSWLEC 25 Filipowski v Cadem Shipping Pty Limited [2005] NSWLEC 552 Filipowski v Fratelli D’Amato (2000) 108 LGERA 88 Filipowski v Hemina Holdings S.A; Filipowski v Rajagopalan [2009] NSWLEC 78 Filipowski v Island Maritime Ltd (2006) 153 LGERA 1 Filipowski v Magnavia Schiffahrtsgesellschaft MBH & Co Kommanditgesellschaft, Pablo Dion and Suzanic Branco [2007] NSWLEC 404 Filipowski v Mediterranean Shipping Company SA [2005] NSWLEC 159 Filipowski v Vopak Terminals Sydney Pty Ltd [2006] NSWLEC 104 Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189 Markarian v R (2005) 228 CLR 357 Morrison v Ausmarine Fisheries (1995) 88 LGERA 442 Morrison v Che Mat (1997) 95 LGERA 212 Morrison v Defence Maritime Services Pty Ltd [2007] NSWLEC 421 Morrison v Peacock and Roslyndale Shipping Company Pty Ltd [2003] NSWLEC 68 R v Borkowski [2009] NSWCCA 102 R v O’Neill [1979] 2 NSWLR 582 R v Olbrich (1999) 199 CLR 270 R v Slattery (1996) 90 A Crim R 519 R v Thomson; R v Houlton (2000) 49 NSWLR 383 SZ v The Queen (2007) 168 A Crim R 249 Thorneloe v Filipowski (2001) 52 NSWLR 60 Valle v Morrison (New South Wales Court of Criminal Appeal, Gleeson CJ, Allen and Sully JJ, 22 November 1995, unreported)
TEXTS CITED:	New South Wales Legislative Council, Parliamentary Debates (Hansard), 24 September 2002 at 5128 (Ian Macdonald, Parliamentary Secretary)
DATES OF HEARING:	25 May 2009 26 May 2009 27 May 2009 28 May 2009 3 June 2009 4 June 2009
DATE OF JUDGMENT:	1 September 2009
LEGAL REPRESENTATIVES:	PROSECUTOR Mr R Dick SOLICITORS Dibbs Barker DEFENDANT Mr E Cox SOLICITORS HWL Ebsworth Lawyers