Morrison v Peacock and Anor

[2001] HCATrans 259

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S274 of 2000

B e t w e e n -

ANTHONY MORRISON

Applicant

and

HAROLD ANTHONY PEACOCK

First Respondent

ROSLYNDALE SHIPPING CO PTY LIMITED

Second Respondent

Application for special leave to appeal

GLEESON CJ
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 10 AUGUST 2001, AT 9.52 AM

Copyright in the High Court of Australia

MR R.J. ELLICOTT, QC:  Your Honours, I appear with MR A.R. HILL for the appellant.  I also appear for the State of Queensland that wishes to support this application.  (instructed by the Crown Solicitor for Queensland)

MR C.G. GEE, QC:  May it please the Court, I appear with my learned friend, MR A.J. ABADEE, for the respondents.  (instructed by Norton White)

GLEESON CJ:   Yes, Mr Gee.

MR GEE:   We have had no specific notice of the intention of the State of Queensland to support ‑ ‑ ‑

GLEESON CJ:   No, but there was an affidavit filed which showed that a number of people were expressing concern short of a willingness to participate.

McHUGH J:   It has not been our practice to allow interveners on special leave applications.  Ordinarily, we have said if leave is granted, come along to the appeal.

MR GEE:   Your Honours, I do not want to take up too much time about it, but when we received the affidavit we did write to our learned opponents and ask to be given the letter that had elicited those responses which itself had not been annexed, and that is available here for your Honours to look at should your Honours think that that is helpful.

GLEESON CJ:   Yes, Mr Ellicott.

MR ELLICOTT:   Your Honours, I will not trouble about that question because I think the letters speak for themselves.  Your Honours, the matter is within a narrow compass, the facts are pretty clear.  A hose ruptured ‑ ‑ ‑

GLEESON CJ:   Your mean that if a rotting hulk comes into Sydney Harbour and falls apart as a result of wear and tear and pollutes the harbour, it should not be a defence, that that was the result of damage?

MR ELLICOTT:   That is right.  That is the point, your Honour, and your Honour’s illustration is much more graphic than the one that I was going to give the Court.  The matter is one of obvious public importance, it hardly needs to be said.  The section and the words appear in every statute in the States and in the Commonwealth but the words themselves come out of a very significant Convention.  The Convention itself governs the interpretation in this case of the section, there being no contrary intention, because of section 7 of the Marine Pollution Act.

Being the interpretation of a treaty, there is no need to get into the question whether it is a matter arising under a treaty - it possibly is – but, being a question of the interpretation of a treaty, it is a matter which we would submit this Court, almost as of course, ought to take under advisement because it governs Australia’s relations with other countries.

McHUGH J:   What do you say about the fact that the respondent was acquitted by the trial judge and that acquittal has then been confirmed by the New South Wales Court of Criminal Appeal?

MR ELLICOTT:   Yes.  What we say about that is this, that no acquittal actually took place.

McHUGH J:   Well, no, but the substance of it is.

MR ELLICOTT:   Well, it is fairly important to form that there was an order of acquittal.  There was not any such order.  She stood it over when the Crown, in effect, wanted to raise these issues.  Her Honour stood it over to deal with the question whether these questions should be asked.  The question arose as to whether we were the Crown.  That was decided in our favour but her Honour said that, in any event, in the exercise of her discretion, she would want these questions answered.  Presumably, she did so because she thought they may affect her ultimate decision as to whether she should actually acquit.

GLEESON CJ:   Who is the prosecuting authority here?

MR ELLICOTT:   It is the waterways authority, the Sydney Port Authority but, of course, the delegation ‑ ‑ ‑

McHUGH J:   Mr Morrison seems to have been in a number of other cases ‑ ‑ ‑

MR ELLICOTT:   Yes, by way of delegation.  But we say that there was not an acquittal.  In any event, even if there was, we would submit this is a very special case and, therefore, fits within the requirements that this Court has laid down in those two decisions to which my friend refers.  We say for that reason that the Court will not treat this as a case other than one which should be given special leave to appeal.

GLEESON CJ:   I gather there was a conflict between two judgments of the Land and Environment Court.  What precisely is the point at issue?  Is it whether the word “damage” in this context is limited to trauma or whether, as your opponents say, it can be the consequence of ordinary wear and tear or a state of disrepair?

MR ELLICOTT:   It gets down to that.  It depends what your Honour means by “trauma”, but we would say that the relevant words being “damage to a ship” - and we emphasise “to a ship” – “or to its equipment” in the context, envisages damage as the result of some external force impacting on the ship or its equipment, that wear and tear is not such a force, that wear and tear is the gradual erosion of some part over a period of time and if there is, for instance, an oil tank within a ship and it gradually erodes and rusts over a period of time and then it ruptures and there is an oil spill, that is not damage to the ship in the relevant sense, and that is the issue.

The question of fair wear and tear is clear.  The hose in question ruptured.  The oil spilled into the lagoon at Lord Howe Island, with which your Honour the Chief Justice would be very familiar, and this, of course, could happen in Sydney Harbour.  It was only a small spill, but that is not the question.  It could happen in the Barrier Reef.  It can happen anywhere else in the world.  The matter has never been tested, as we understand it, in any other country or in any other court and this would be the first time that the matter would be considered by any court in the world.  It is not as if that is strange.

On one view, maybe, there are decisions hidden here and there that we have not gotten to, but the Convention is one that is in daily use.  It is not one that just comes up now and again.  Every day, and perhaps every minute of the year, it hangs there to apply to pollution of the harbours and the seas.  So those are the reasons why we would submit the Court should grant special leave.  We would submit that in this case the Chief Justice who delivered the judgment, although he was well aware of the interpretational approach to treaties, that is to say, you look at the text in its context and you look at the object and purpose of the Act, his Honour seemed to concentrate on the word “damage” and we say that he failed to give full effect to the words “damage, to the ship or its equipment” in the section.

GLEESON CJ:   What was the evidence as to how this damage issue came about?

MR ELLICOTT:   Your Honour, there is a passage here at page 10, paragraph 26.  I think this is my friend’s witness:

Mr Williamson’s opinion was that the hose failed because of abrasion and chafing at the base of the steel sleeve in the crane column near the point where the crane sat at the top of the plinth.

So there is a crane that lifts the cargo off the ship and there is a hose that works to the top of the crane but it is at the bottom close to the deck, and with the constant movement of the crane it has worn thin and ruptured.  It actually was moving across a part which itself was rough and so that, eventually, it ruptured and out came the oil, et cetera.

GLEESON CJ:   Then the question that arose when they were prosecuted for prosecution was whether the oil spill was the result of damage to the ship.

MR ELLICOTT:   Yes, that is right, and we said that is wear and tear and that that is not damage to the ship.  The objects of the Convention are reasonably clear and they are stated in one of the preamble provisions:

DESIRING to achieve the complete elimination of ‑ ‑ ‑

GLEESON CJ:   Is this the Marine Pollution Act you are now reading?

MR ELLICOTT:   Yes, I am looking at Schedule 1.  Is your Honour looking at the Act or at that ‑ ‑ ‑

GLEESON CJ:   Yes, well, I am looking at your authorities.

MR ELLICOTT:   If your Honour pleases.

GLEESON CJ:   It is page 17, I think.

MR ELLICOTT:   First of all:

RECOGNIZING that deliberate, negligent or accidental release of oil and other harmful substances from ships constitutes a serious source of pollution,

RECOGNIZING ALSO the importance of the International Convention . . . 

DESIRING to achieve the complete elimination of intentional pollution of the marine environment by oil and other harmful substances and the minimization of accidental discharge.

Now, your Honours will notice in the section that “intentional pollution” is eliminated in the sense that if it is intentional, you do not get the defence.  It is minimised, we say, also, for instance, if there has been a discharge and it is not intentional, you have to act quickly if you want to get the benefit of the defence, so there is a minimisation provision in the particular section and in the particular regulation.

But we say that when you are looking at the object and purposes, that you construe the relevant section, section 8, or the regulation which is regulation 11 of Annex 1, you construe that in the context of achieving those objects.  That is to say - that is at page 23 - one is to achieve the elimination of pollution.  I have explained how it does that.  The other is to minimise accidental pollution.  Now, your Honours, wear and tear is not accidental pollution.

GLEESON CJ:   It is regulation 11(b) with which we are concerned, is that right?

MR ELLICOTT:   That is right.  But you will notice that:

(a) the discharge into the sea -

et cetera, that is a discharge caused by somebody doing something, not intentionally, that is, to the equipment to allow oil to discharge for the purposes of safety, and likewise (c).  In other words, it is an external act which impacts on the equipment.  We say (b) is similar in substance because what it has in mind is some external act or force which impacts.  It may be a collision; it may be the master running into a pier ‑ ‑ ‑

GLEESON CJ:   Mr Ellicott, what about the proviso in subparagraph (i)?  That qualifies the defence given by (b) and the qualification is:

that all reasonable precautions have been taken after the occurrence of the damage -

How was that decided in the present case?  Did the trial judge decide that all reasonable precautions had been taken?

MR ELLICOTT:   Yes.  I think it was an issue but it was decided in the defendant’s favour and it is not in issue here, but the proviso is there to minimise accidental pollution.  That is why it is there.  Wear and tear is not accidental pollution.  It is not - the damage, if you call it damage, or wear and tear - what is happening is not something that is occurring at a particular point of time.  It is going on and suddenly there is a rupture.

GLEESON CJ:   I suppose that word “damage” is not defined?

MR ELLICOTT:   It is not defined, no, and it is important to keep in mind that it is “damage to”.  If you took a tyre to a tyre repairer and said, “There has been some damage to my tyre”, what the repairer would do, he would go and look for some cut or split.  If a tyre was worn out, you would not normally say that there had been some damage to it.  It is not the ordinary use of language.  You would say it is worn out.  If shoes are worn and worn and worn, they are worn out.

McHUGH J:   But in this case, the notion of wear and tear seems a little odd also though, does it not, because, in effect, this hose ruptured because the column of the hose was able to turn in excess of 400 degrees which resulted in a sawing motion of all the hoses at a point where the sleeve was corroded and, ultimately, it gave way, and apparently this had taken place over some months.  Supposing a hose had burst as a result of one sawing motion, the initial sawing motion, would your argument still be the same?  Would you say that was as a result of wear and tear?

MR ELLICOTT:   Your Honour, it may be a question of degree.  I would submit you might conclude - it depends on the facts - that it was faulty equipment, but it would not be damage to equipment, it would be the equipment just flew apart, as it were, if the clamp, for instance, just was not tight.

McHUGH J:   I know, but, as it happens, the crane in this case was part of the ship, but supposing it was a stevedore’s crane that in some way cut a hose on the ship.

MR ELLICOTT:   That would not, we would submit, come within this exemption.  All discharges, of course, prima facie, are offensive and are prohibited.  If, for instance, there was a crane on a wharf and the hook, in the course of operation, struck an oil pipe and the pipe burst, there is nothing wrong with the equipment, on one view, but there is damage to the equipment.  Now, that would mean that there was an accident and something untoward had happened.  That would be covered by this exemption unless it was deliberate.  If it was not deliberate, merely negligent, apparently they have formed the view that that should be still within the exception for that purpose.

But wear and tear is not accidental.  Wear and tear is something, obviously, which is anticipated because people do things to deal with wear and tear, and that is a well-known proposition.  Also, it would not come within the notion of accidental pollution.  But, clearly enough, we would submit this is clearly arguable and we would say, of course, that the Court of Appeal was wrong, that we do not have to establish that here ‑ ‑ ‑

GLEESON CJ:   Is one of the arguments that you would call in aid in relation to that proviso that it directs attention to precautions taken after the occurrence of the damage as distinct from precautions to prevent the occurrence of the damage?

MR ELLICOTT:   Yes.  It is pointing to, and we would say, in a sense, an isolated event.  Something happens and it is the result of, necessarily, an external force, not something that is going on inside the ship.

GLEESON CJ:   When that proviso was applied in the present case, what was regarded as the time of the occurrence of the damage?

MR ELLICOTT:   I think, your Honour, it was when the hose burst but, of course, sometimes it takes a while to discover it and that is actually what happened here.

GLEESON CJ:   So the damage was treated in the present case as the rupture of the hose, not the condition of the vessel that gave rise to the rupture of the hose?

MR ELLICOTT:   What was regarded as the damage was certainly the rupture of the hose.  It was not damage, we say, to the hose, because it was not the result of bringing to bear some external force upon it.  It was the result of something happening within the hose itself as it worked across some other part which chafed and caused it to burst.

GLEESON CJ:   So when they came to look at the issue of reasonable precautions, they looked at the question of whether reasonable precautions were taken after the rupture of the hose, not whether reasonable precautions were taken to prevent the rupture of the hose?

MR ELLICOTT:   No, that is right.  That, we would submit is - that appears at page 16:

The crew took three steps after the discovery of the discharge.

And they go on to deal with it.  Your Honours, there was one other reference in the argument that we put it and that was to the Oilpol Convention which was the basis of the previous Act, and it spoke about unavoidable leakages, damage to the ship and unavoidable leakages.  Now, unavoidable leakages would not include, obviously, we would say, wear and tear, because it is avoidable.  It is something, a known phenomenon, for which precautions can be taken and, therefore, under the old provision under the old Act, wear and tear was not within the exception.  It would be very odd indeed, we say, if the new Act in 1987 had given protection to ship owners in relation to wear and tear.  So, your Honours, we would submit that it is a case which is properly suited for special leave to appeal.

GLEESON CJ:   Thank you, Mr Ellicott.  Yes, Mr Gee.

MR GEE:   Your Honours, first of all there is what I will term briefly the justice issue.  The respondents have since 6 August 1999 been entitled to acquittal as things presently stand.  That leads to the submission which appeared in our supplementary note that this is effectively an application by the Crown for special leave and, therefore, the utterances of the Court in Reg v Glennon about the exceptional character of the circumstances needed before that leave would be granted are, in our submission, applicable.

GLEESON CJ:   This vessel was a freighter that carried cargo from the mainland to Lord Howe Island.

MR GEE:   Yes, a small freighter, your Honour.  It just had the one crane on it, I believe, and your Honours have been given the facts as to how the actual rupture occurred.  Now, the use of the term “wear and tear”, in our submission - we are really picking up something that fell from your Honour Justice McHugh - tends to distract really a bit from the true inquiry, we submit, which is:  what is the meaning of the word “damage”?  That is precisely what their Honours below dealt with and we submit, with respect ‑ ‑ ‑

GLEESON CJ:   More accurately, what is the meaning of the expression “damage to a ship or its equipment”?

MR GEE:   “Or its equipment”, and we do, a little, emphasise that phrase, “or its equipment”, your Honours, because in this case, on the facts, you can simply take the position that here was a set of hoses which would have had an ordinary service life.  Eventually, through what you might call wear and tear, they would have come to a point where they would need to be replaced, perhaps because you do after a certain period or something like that, but that is not what happened.  They were subjected to a form of damage, namely, being sawed.

GLEESON CJ:   Because of the condition of the ‑ ‑ ‑

MR GEE:   Because of the condition of the sleeve through which they ran.  So there came a moment which, I suppose, loosely, wear and tear, but more accurately, a damaging sawing process led to the outcome, namely, a spillage.  Now, we put the matter briefly this way, your Honours.  First of all, there was an external force on this equipment, ie, the ship’s hydraulic hoses, and the external force was the one that has been described.  So that even adopting the sort of test, which we do not ask the Court to embrace, that is put forward, we would pass it anyway for damage.

GLEESON CJ:   Well, suppose a dirty British coaster with a salt‑caked smokestack steamed into Sydney Harbour and its bilge tanks were in such a state of rusting and decay that upon entry into the harbour, they just ruptured and the harbour was polluted.  Would that be damage to the ship or its equipment?

MR GEE:   Well, it may or may not be, your Honour, but you would not have to worry about whether it was, with respect, because for the defence to succeed on the defence there have to be two elements shown.  One is that the cause was damage - let that be granted against me for one second on your Honour’s example, although we would not accept it de facto.  But the other element is that there has to be an absence of intentional damage.  That term itself is defined and, therefore, you have to have an absence of damage which is the product of recklessness.

Now, the master of that dirty British tramp who had not even got the salt off his smokestacks would certainly be guilty of recklessness because he had not engaged in proper ordinary routine inspection and maintenance of those selfsame bilge tanks.  Here, contra, it was expressly found that the master could not reasonably have expected the chafing and the outcome that occurred in this particular case.

GLEESON CJ:   But the issue of reasonable precautions as applied in the present case, was that directed toward reasonable precautions to prevent the rupture of the ‑ ‑ ‑

MR GEE:   Not in specific terms, your Honours.  There is a little overlap.  The findings of fact were that after the discharge commenced, as a result of the rupture, the crew and the master took all reasonable precautions, after they discovered it, to prevent discharge beyond the minimum.  But there was a bit of overlap because her Honour also found that, in terms of reasonable precautions to prevent damage, this was not reasonably anticipatable ‑ ‑ ‑

GLEESON CJ:   Was this a case of damage to the ship or damage to its equipment?

MR GEE:   Well, probably equipment, although there was no specific finding of that precise point, your Honour, but it would be equipment.

GLEESON CJ:   This was a case where the damage to the equipment resulted from the condition of the ship?

MR GEE:   Another part of the ship, yes, but that is just a statement as to the actual cause.  Could we put it this way, your Honours.  The prescription in section 8, which is conveniently found in the application book commencing at the bottom of page 29, tells us that section 8(1) applies itself to “any discharge”, no matter what its cause.  That is the first step in the process.  Your Honours will recall that the Convention sets out to prevent intentional damage absolutely and to minimise accidental.  So, having set up a regime of criminal conduct for a discharge, the Act then decriminalises in one circumstance that is relevant to this case, namely, that the escape is the consequence of damage and another set of conditions is also met, the reasonable precautions after discovery of the discharge.

If those two conditions are met, then the discharge is decriminalised, but from that there is then carved out one exception, and one only, which appears in subsection (3) and, incidentally, the words “if, and only if” are a little different from the regulation that your Honours looked at a moment ago.  The corresponding regulation can be seen a few pages on at page 33.  Now, from that decriminalised area is carved out something called “intentional damage”, and that is either truly intentional, mens rea, or recklessness, as defined.

As his Honour the Chief Justice pointed out, you have the overriding notion of damage as the decriminalising element.  I put to one side, as if I had said it every time, the second element of requiring reasonable precautions after discovery.  So you have the decriminalisation in the case of damage to the ship or its equipment and then a carving out from that.  Now, in this case, your Honours, with respect, we fit that exactly.

GLEESON CJ:   Where does the scheme leave a failure to take reasonable precautions to prevent a deterioration in the condition of the equipment?

MR GEE:   That would leave it to be judged by reference to the question of whether - sorry, two things.  First of all, if there was a failure to take some reasonable precautions, there would be the anterior question of whether those precautions themselves would have prevented the damage, or would have prevented the discharge, more precisely.  So you would have that anterior question.  Assuming you answered that to the effect that the precautions would have done so, then you would apply to the issue of those precautions the intentional damage approach.

McHUGH J:   That is subsection (3).

MR GEE:   That is your subsection (3).  So that then you would ask questions about those reasonable precautions.  Who should have taken them?  If they were not taken, did the person act recklessly, et cetera?  So that to pick up my learned friend’s example of the rusting oil tanks, you would say of a master who had failed to do anything about seeing whether his tanks were in shape, you would be asking questions about whether that was reckless, and it would not be hard to get there if there were procedures laid down, for example ‑ ‑ ‑

GLEESON CJ:   That seems to produce the result that unless you get to such a high degree of carelessness that it can be described as intentional damage, failure to take reasonable precautions to prevent deterioration in the condition of the ship or its equipment does not deny you the excuse provided by paragraph (b).

MR GEE:   Your Honour, let me grasp that nettle and assume against myself for a moment that that is so.  We are still dealing, are we not, with respect, with the language of the provisions under which we were charged?  That language does not address itself to reasonable precautions in the sense that your Honour the Chief Justice has just adverted to.  It addresses itself to the cause of the discharge.  Was it damage to the ship or its equipment?  If, yes, were the post‑discharge reasonable precautions taken?  If, yes, the defendant ticks the second box.  Has the defendant also discharged the burden falling on him to tick the third box, the subsection (3) box?  Answer, yes.  All those boxes were ticked in the respondent’s favour in this case.  With respect, end of inquiry.

GLEESON CJ:   These problems only arise if, at the outset, you include within the concept of “damage to the ship or its equipment” defective condition of the ship or its equipment resulting, for example, from wear and tear.

MR GEE:   But, your Honour, that is where, if I may say so, the inappropriateness of this case as a vehicle to consider that point becomes very marked.  These hoses were damaged in a way that did cause the discharge and they were damaged by something other than what we might call routine wear and tear, and that damage certainly did not result, on her Honour’s express finding below, from a failure to take reasonable precautions.  That is to be found, your Honours, at, I think, 12, where her Honour addressed herself to that very point - paragraph 34, for example, on page 12 of the application book.

McHUGH J:   Do you concede that to constitute damage there must be an application of force, external or internal, so far as the ship is concerned?

MR GEE:   That is, with all respect, your Honour, a big concession to be asked to make.  Damage has to result from something, but the ‑ ‑ ‑

McHUGH J:   In the circumstances of this case, you might be able to survive that test.

MR GEE:   Your Honour, with all respect, we do, and that is why I was saying a moment ago, with respect, that that makes it as a vehicle not wonderful for ‑ ‑ ‑

McHUGH J:   I mean, if a boiler exploded, and as a result oil was discharged in some other part of the ship because of the explosion, one would have thought arguably that there had been damage to the ship even though it resulted from the internal ‑ ‑ ‑

MR GEE:   Something that happened inside.

McHUGH J:   Yes.

MR GEE:   Now, your Honour, once you grant that, with respect, then you do not have any trouble applying exactly the same kind of reasoning to hoses that ought to have gone much longer than they did, but did not because of the damage that was occasioned to them.  They are not worn out.  I pick up my learned friend’s phrase.  We could argue about what ‑ ‑ ‑

GLEESON CJ:   That finding you drew attention to is a finding that the defendants did not have actual knowledge that the hose would probably rupture.

MR GEE:   Well, with respect, your Honour, it goes a bit further than that at line 41:

It was reasonable in those circumstances for both the defendants to believe that the crane and its components would operate without mishap.

Her Honour was expressly negating a failure to take reasonable precautions, to pick up your Honour the Chief Justice’s concern about this aspect of the matter, and so on she went as to the facts that supported that conclusion.

GLEESON CJ:   Where does she deal with that conflict of authority in the court?  Paragraph 18?

MR GEE:   Yes, I think so, your Honours.  Yes, page 7.  We do emphasise, with respect, your Honours, when we are considering the matter in point of a leave application, that the unanimous decision below resolves this conflict.

GLEESON CJ:   Now, can I direct your attention to the concluding sentence at paragraph 18:

I approach these proceedings upon the basis that the word “damage” in s 8 of the Act includes fair wear and tear.

MR GEE:   Well, that is an approach that she enunciated, your Honour, but that is not how the case was, in fact, decided.

GLEESON CJ:   That is what I am interested in.  I understood you to say that proposition is irrelevant.  What is she doing deciding it?

MR GEE:   Well, she did not decide it, with respect, your Honour.  She included that form of words but, when she actually came to decide the matter, she decided that there was damage and that it passed the other tests from the defendant’s point of view.  Her actual ‑ ‑ ‑

GLEESON CJ:   If she approached the proceedings on the basis that damage includes fair wear and tear, how did that approach reflect itself in the judgment?

MR GEE:   It reflected itself, your Honour, in the finding, first of all, the precise finding, as it was picked up by their Honours in the Court of Criminal Appeal, the precise finding that the damage to be considered was the rupture which itself, on the facts, was found to be the result of the forces that we spoke of.

GLEESON CJ:   What did the Court of Criminal Appeal do about that approach of damage including fair wear and tear?

MR GEE:   They dealt with it, your Honours, from paragraph 22 on page 39 of the application book.  What I will be putting, your Honours, is that whatever she might have meant by those words that your Honour the Chief Justice picked up, that is not how the matter was dealt with in the court immediately below.

GLEESON CJ:   Then the court refers to the difference of opinion about “fair wear and tear”.  Do they resolve that?

MR GEE:   Yes.  It was discussed, your Honours, in paragraphs 26 and 27 as a preliminary and then later made it clear that the approach taken, which did not recommend itself to our learned friends, was not to be taken.  I am just looking for the final ‑ ‑ ‑

GLEESON CJ:   Well, they recite the argument that was put in paragraph 28.  Where do they deal with that argument?

McHUGH J:   They do not really, do they?  But, at least implicitly, they seem to accept the notion that fair wear and tear can cause damage.  If you look at page 43, paragraph 35, they say:

Whether or not “damage” has caused discharge of oil is a matter capable of ready ascertainment.  No inquiry into the cause of such damage is called for, save in the one category . . . intent or recklessness.

At the top of page 44:

There is no warrant for excluding any other causal mechanism by restricting the ordinary meaning of the word “damage”.

So, given what the judge had said at first instance and what is said in those paragraphs, it seems at least implicit that their Honours were accepting that damage could be the product of fair wear and tear.

MR GEE:   Well, as against that, your Honours, with respect, his Honour the Chief Justice pointed out in his discussion of the ordinary meaning of the language, particularly at paragraph 29, page 41:

nothing in the text to be construed suggests that the word “damage” in Regulation 11 should be read down by reference to the different causes of a physical effect that can be described as “damage”.

With respect that the Chief Justice was directing himself to the precise issue -

On the contrary, Regulation 11(b)(ii) excepts from the scope of the word “damage” a specific causal mechanism -

so there is one only mechanism excluded from the decriminalisation -

namely intent or recklessness.

McHUGH J:   But that seems to avoid the critical question, does it not?  That is to say whether or not damage, for the purpose of the section, requires the application of force, internal or external.

MR GEE:   Well, your Honour, whether it does or not, with respect, in this case we know that we are not really dealing with the distracting possibility of ordinary wear and tear, the kind of wear and tear that happens to the soles of one’s shoes when one walks around.  Eventually you get to the point where the shoes cannot be worn any longer, true.  You would not ordinarily describe that as damage to the shoes; you would tend to call them worn out.  But if somebody comes along and takes a knife to your shoes, or something like that, then your shoes have been damaged.  The inquiry is into the appropriate meaning of the word.  There is no reason to read it down.  The facts of the case fit us within any view, with respect, of the word “damage”.

GLEESON CJ:   Thank you, Mr Gee. Mr Ellicott.

MR ELLICOTT:   Your Honours, it has to be borne in mind that what happened in this case was that questions of law were asked and they were asked by her Honour partly because she felt, in her discretion, she would have ordered them even though she was required to direct them.  Those questions were, one:

Wear and Tear

(a) As a matter of law can the wear and tear in consequence of which oil escapes come within the word ‘damage’ -

So the issue of wear and tear being within damage ‑ ‑ ‑

GLEESON CJ:   Where are the questions?

MR ELLICOTT:   At page 29.  Then:

Can the particular wear and tear in the circumstances of this case -

So she is asking the questions in the context of a view which fits in with what she said at the end of that earlier part to which your Honour the Chief Justice referred.  It fits into a notion that what she was dealing with was wear and tear.  There is no doubt that their Honours below in the Court of Appeal did not come to grips with that and thought it was unnecessary to answer but ‑ ‑ ‑

McHUGH J:   But they answered the first question unfavourably to you, at 60, question (i)(a) was answered, “Yes”.

MR ELLICOTT:   Unfavourably, yes.

McHUGH J:   So they said:

As a matter of law, can the wear and tear in consequence . . . come within the word ‘damage’?

MR ELLICOTT:   Answer, “No”.

McHUGH J:   Then in respect of the next one, they declined to answer it, whether “the particular wear and tear in the circumstances of this case” comes.

MR ELLICOTT:   Yes.  So there is no doubt that that is what the case is about.  It is also important on ‑ ‑ ‑

GLEESON CJ:   Now, just pausing there, if the matter had gone back to the Chief Judge with a different answer, if they had answered question (i)(a), “No”, what would have happened then?

MR ELLICOTT:   She would then have had to further consider her reasons and whether or not she should acquit.  We, of course, would be saying, “You can’t acquit because this is wear and tear and, indeed, you have so found”.  My friend might want to put some arguments that it was not wear and tear, or some of the arguments he is seeking to put now, but those are not arguments which are open to him in this proceeding.

McHUGH J:   Why did the court decline to answer question (i)(b)?

MR ELLICOTT:   That escapes me, with respect.  It says at page 46:

Although there was some ambiguity by reason of the use of the word “can” as the introductory word of this purported question of law, nothing in the submissions made suggested that, in fact, a question of law arose under question (i)(b).  Specifically there was no submission of the nature that the rupture to the hoses, caused by wear and tear, was not, as a matter of law, capable of answering the description of “damage” -

I mean, that sentence really to me, with very great respect, does not make sense in the light of the earlier parts of the reasons, because the whole of the argument on the first part of the question was directed to the issue whether or not wear and tear fell within the concept of “damage”.

GLEESON CJ:   Yes, thank you, Mr Ellicott.  In this matter, there will be a grant of special leave to appeal.

MR GEE:   Your Honours will have seen in our outline application a prayer for a special order for costs to be considered at page 83 of the application book, or a term to be applied, I should have said, more accurately in the special circumstances of the case, and may we dare say that the ‑ ‑ ‑

GLEESON CJ:   What do you say about that, Mr Ellicott?  This is a test case, as you began by telling us.  There are governments all around the country wringing their hands about this decision.

MR ELLICOTT:   Your Honour, I would ask that that question be left until the hearing of the appeal.  Special considerations may apply as to what orders your Honours think appropriate.  I can understand the force of what

your Honour is putting to me, with respect, but I would submit it is more properly a matter to determine on the hearing of the appeal.

McHUGH J:   But these days, again and again, we require the Commissioner of Taxation to pay the costs ‑ ‑ ‑

MR ELLICOTT:   I understand that, your Honour.  My only submission can be that you should leave it until ‑ ‑ ‑

GLEESON CJ:   What happened to costs in the Court of Criminal Appeal?  Did they make an order for costs?

MR ELLICOTT:   Yes.

GLEESON CJ:   The grant of special leave will be on condition that the applicant will pay the costs of the appeal and this application in any event and will not seek to disturb the orders for costs made in the courts below.

MR ELLICOTT:   May it please the Court.

GLEESON CJ:   On that condition, there will be a grant of special leave to appeal.

AT 10.39 AM THE MATTER WAS CONCLUDED

UPON RESUMING AT 10.58 AM:

GLEESON CJ:   Mr Ellicott and Mr Gee, you wanted to mention your matter? 

MR GEE:   We are obliged to the Court, and to the other parties in the part‑heard matter.  Your Honours, when your Honour the Chief Justice imposed the term about costs in matter No 2, it was believed all round that there had been a costs order in favour of the present respondents in the Court of Criminal Appeal ‑ ‑ ‑

GLEESON CJ:   Well, I asked the question. 

MR GEE:   Yes, and a mistake was made in the answer, your Honour, and I did not correct it.  The matter can be dealt with in this way.  I am instructed that it has been agreed that the costs of the present respondents in the Court of Criminal Appeal, although not the subject of any order, will be paid by the applicant in any event, and otherwise your Honour’s term as to costs of the application and the appeal itself need not be disturbed. 

GLEESON CJ:   Thank you.  Are you happy with that, Mr Ellicott? 

MR ELLICOTT:   That is so, your Honour. 

GLEESON CJ:   Thank you. 

MR GEE:   I am obliged to your Honour. 

AT 10.59 AM THE MATTER WAS ADJOURNED