Morrison v Peacock & Anor

[2002] HCATrans 108

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S184 of 2001

B e t w e e n -

ANTHONY MORRISON

Appellant

and

HAROLD ANTHONY PEACOCK

First Respondent

ROSLYNDALE SHIPPING CO PTY LIMITED

Second Respondent

GLEESON CJ
McHUGH J
GUMMOW J
KIRBY J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 9 APRIL 2002, AT 10.15 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.  (instructed by Abbott Tout)

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

MR R.J. MEADOWS, QC, Solicitor‑General for the State of Western Australia:  May it please the Court, I appear with my learned friend, MR R.M. MITCHELL on behalf of the Attorney‑General for Western Australia, seeking leave to intervene.  (instructed by the Crown Solicitor for the State of Western Australia)

GLEESON CJ:   What is the attitude of the parties to that application?

MR ELLICOTT:   No objection, your Honour.

MR GEE:   I wish to make two short submissions, your Honour, against it.  Paragraph 10 of the affidavit in support for leave expresses the concern of the deponent about the problems of Western Australian administration, and the grounds for leave are based on the same concern.  What neither the submissions for the appellant nor for the proposed intervener mention is that there has already been legislative change in South Australia to widen the ambit of culpability to include negligence by act or omission.  When one combines that with the fact that the Minister for Transport in New South Wales has already indicated that there will be legislative change to do something, which we cannot know with precision ‑ ‑ ‑

KIRBY J:   Maybe they will not need legislative change, though, if the appeal is successful, and that is the matter to which the Western Australian Attorney‑General wants to add his voice.

MR GEE:   Of course, I do accept that, your Honour.  That is so, but it is a fact that we now have, as the appeal opens, change already in the federal legislation, change in South Australia effected already, and in operation and a proposed changed in New South Wales, so if New South Wales amends the proposition put forward on behalf of the proposed intervener that his position will be affected by New South Wales falls away.  The second thing we wanted to say was this, your Honours – it is not exactly in opposition but we draw attention to the fact that as appears from the grant of leave at appeal book 771 there are special terms as to costs, the appellant is to pay the:

costs of the appeal and this application in any event.

We, of course, would submit that we should not be disadvantaged by any outcome of a grant of leave.

GLEESON CJ:   You have that leave, Mr Solicitor.  Yes, Mr Ellicott.

MR ELLICOTT:   Your Honour, in view of what my friend, Mr Gee, has just said, I do not need to refer, as I was going to, to the fact, as I should, that there have been some legislative changes in the Commonwealth and in Queensland, some possibility of change in New South Wales, no change in Tasmania, Victoria and Western Australia and some change in South Australia, the meaning of which is not clear. 

Your Honours will realise that this is really a short ‑ ‑ ‑

KIRBY J:   The States did not show much confidence in your advocacy, Mr Ellicott.

MR ELLICOTT:   No, I wondered about that, your Honour, but we have great confidence as we appear here today, your Honour, as usual.  This case is within a fairly narrow compass because it involves the meaning of words “damage to a ship or its equipment”.  It involves a question of law which relates to wear and tear but my friends are seeking to raise an issue of fact.  We say that that is irrelevant.  No doubt my friends will raise it and deal with it in due course.

But, your Honours, just to give you a very quick reference to some statements of fact, if I could take your Honours to volume 2 of the appeal book, which is the judgment of Justice Pearlman, at page 696.  Paragraphs 7 and 8 indicate that:

the ship –

the “Sitka” –

was tied up to the jetty at Lord Howe Island . . . a hydraulic hose fitted to the crane ruptured, causing hydraulic oil to discharge under pressure.

8.  An amount of 15 litres of oil escaped –

into the lagoon.

Some of it discharged on to the deck –

I should not have said “into the lagoon” –

about 5 litres of the oil escaped over the ship’s side into the water.

Paragraph 10, her Honour was satisfied “beyond reasonable doubt” on the facts and then if your Honours go to page 701, paragraphs 26 and 27 are parts of the evidence which her Honour appears to have accepted:

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.  In the course of his investigation . . . Mr Williamson was able to observe the crane in a dismantled state.  He noted that the base of the steel sleeve was very heavily corroded and that the radius was very rough.  At the base of the sleeve, according to Mr Williamson, the column of hoses was able to turn in excess of 400 degrees, which resulted in a sawing motion of all the hoses at the point where the sleeve was corroded and rough.  The abrasion and chafing could be seen on the eight hoses at that point when they were inspected after having been removed from the crane casing.

Now, we say that that is classic wear and tear.  My friend may say it is something else.  If the question is answered and the matter goes back to the court at first instance, then, of course, if there is an issue of fact, her Honour will deal with it, but we do not look forward to that prospect.  We say that your Honours answer to the question should surely answer the question fully because it is clearly wear and tear, but, anyhow ‑ ‑ ‑

GLEESON CJ:   Is there a diagram somewhere that illustrates that?

MR ELLICOTT:   That illustrates ‑ ‑ ‑

GLEESON CJ:   Is there a diagram somewhere that illustrates the facts you just read to us?

MR ELLICOTT:   Only in the submissions is there a statement of the facts, your Honour, but those are the basic references and I will just give your Honours a ‑ ‑ ‑

KIRBY J:   Do the photographs on 678 and so on ‑ ‑ ‑

MR ELLICOTT:   Yes, I was just going to refer your Honours to those photographs.

KIRBY J:   There is a diagram at 690 ‑ ‑ ‑

MR ELLICOTT:   The ones that are material are at 680, actually, which show the type of crane in the position where it was, even though on a different ship, and the plinth is the bottom section and the hoses were hydraulic hoses that came down and operated the crane and the oil was passing through hoses which, in effect, chafed as it could go through a 400 degrees angle as the crane was operated and, over time, it ruptured.  We say that is wear and tear.

GUMMOW J:   Where does this expression “wear and tear” come from?

MR ELLICOTT:   I am sorry, your Honour, I will turn back, if your Honour does not mind.  At 690 and 691 there were some rather rough sketches of what took place.

KIRBY J:   I do not quite understand those sketches, myself.  Justice Gummow asked where does the expression “wear and tear” come from?  Is not the issue whether it is damage to the ship or not damage to the ship?  It is not a question of whether it is damage to the ship or wear and tear?

MR ELLICOTT:   No, that was really the point I was making in the first place, that it does not cover this damage.  The damage to the ship does not cover damage of this description if that is to be described as damage.

KIRBY J:   It is ambiguous because on one level you can say that wear and tear involves damage to an item on the ship, so it is a question of finding what “damage to the ship” means in this context.

MR ELLICOTT:   That is right and the context is the Convention and the background to the Convention and it is to that that I propose to take your Honours in support of our argument.

KIRBY J:   Somehow the expression “wear and tear” found its way into the question that the Chief Judge asked.  You will see it at page 733, for example.

MR ELLICOTT:   Yes.

KIRBY J:   That is what the Court of Criminal Appeal did, they answered questions which included this expression “wear and tear”.

MR ELLICOTT:   “Wear and tear” is the effect on equipment through usage over a period of time and on wearing parts.

KIRBY J:   It is just something odd about that question, Mr Ellicott.  Maybe there is a typographical error but just have a look at page 733 at line 15.  Do you see the definite article in the first line of the question?  “As a matter of law can the wear and tear” ‑ ‑ ‑

MR ELLICOTT:   Yes, I think the word “the” is probably inapt.

GLEESON CJ:   Was it in the original question?

MR ELLICOTT:   It was, yes.  There is no doubt that is the question asked.

GLEESON CJ:   Yes.

MR ELLICOTT:   Your Honours will have a copy of the Marine Pollution Act 1987. For material purposes it is sufficient, I think, to refer to the definition section, section 3:

Convention means the 1973 Convention as modified and added to by the 1978 Protocol.

Section 3(3), page 4:

Except in so far as the contrary intention appears, an expression that is used in this Act and in the Convention, otherwise than in an annex to the Convention, (whether or not a particular meaning is assigned to it by the Convention) has, in this Act, the same meaning as in the Convention.

Then we go to section 7, which is dealing with the application to an annex:

Except in so far as the contrary intention appears, an expression that is used in this Part or in Part 6 and in Annex I to the Convention (whether or not a particular meaning is assigned to it by that Annex) has, in this Part and in Part 6, the same meaning as in that Annex.

So we are naturally tied to the Convention, probably tied to it for constitutional purposes as well if we were in the Commonwealth area.

GUMMOW J:   I was going to ask you that, Mr Ellicott.  The definition of “State waters” seems to be important, does it not?

MR ELLICOTT:   Yes.

GUMMOW J:   On one view of it, all that was needed was one federal Act, but some other view seems to have been taken.  It has been cut up into State borders and non‑State borders.

MR ELLICOTT:   Yes, it probably recognises the arrangements that were made in the 1970s about ‑ ‑ ‑

GUMMOW J:   Yes, that is right.

MR ELLICOTT:   But (b):

the sea on the landward side of the territorial sea –

it may be appropriate in this case, as it would be say in Sydney Harbour ‑ ‑ ‑

GUMMOW J:   The mischief that flows from that arrangement is that we are now told that in Australia we are going to have one State saying this, another State saying that and the Commonwealth saying something else.

MR ELLICOTT:   Yes, and that may lead, one might think, to a revision of that if that has to happen.  Never mind, that has happened and we have to live with it for the moment.  Section 8 is the critical provision:

(1) Subject to subsections (2) and (4), if any discharge of oil or of an oily mixture occurs from a ship into State waters, the master and the owner of the ship, and any other person whose act caused the discharge, are each guilty of an offence –

So it is, on the face of it, strict liability if there is a discharge of oil from a ship into State waters.

GLEESON CJ:   Mr Ellicott, Part 2 seems to set up a regime of strict liability subject to certain exceptions, and we are concerned with the meaning of one of those exceptions.

MR ELLICOTT:   Yes, that is right.

GLEESON CJ:   Is there also a regime of fault liability?

MR ELLICOTT:   In what sense, your Honour?

GLEESON CJ:   Suppose that wear and tear which caused a discharge resulted from somebody’s fault.  Is there anything in the legislation that deals with that situation?

MR ELLICOTT:   Your Honour, section 51:

(1) If, because of a discharged prohibited by this Act, a person . . . 

(a) suffers loss of or damage to property, or . . . 

the person may recover from the appropriate person . . . 

(a) in relation to . . . Part 2 or 3 applies – the owner or the master of the ship concerned –

Under that statutory right the effect of my friend’s argument would be that persons could not recover because it has to be “a discharge prohibited by this Act”.  Section 8 of course is subject to subsection (2) and my friend says that that takes out of subsection (1) what is (2)(b) and he says covers what happened in this case.  I do not know whether that completely answers your Honour’s question, but that gives a statutory right to recover damages.  Whether there is at common law a right is another matter, and I do not think I need go into that, but there could well be.

Your Honours will notice that in subsection (1) it refers to “any other person”.  That was an amendment that was made because there was in fact a case where some other ship caused the damage and the Act was amended for that purpose.  It was rather a clumsy amendment, I must say, because it did not follow through, for instance, into section 51, as I have just referred to, nor did it follow through into subsection (2)(b) that we are to deal with.  Be that as it may, there is criminal liability placed on that person.  There may be of course common law liability as well.

Looking at (2)(b):

if the oil or oily mixture . . . escaped from the ship in consequence of damage, other than intentional 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 –

That excludes the operation of subsection (1).  Subsection (3):

For the purposes of subsection (2), damage to a ship or to its equipment shall be taken to be intentional damage if, and only if, the damage arose in circumstances in which the master or owner of the ship:

(a) acted with intent to cause the damage, or

(b) acted recklessly and with knowledge that damage would probably result.

Subsection (6):

In proceedings for an offence . . . it is sufficient for the prosecution to allege and prove that a discharge of oil or of an oily mixture occurred from the ship into State waters, but it is a defence if it is proved that, by virtue of subsection (2) or (4), subsection (1) does not apply in relation to the discharge.

Those are the ‑ ‑ ‑

GLEESON CJ:   Subsection (2)(b) and subsection (3) introduce, for a certain purpose, a certain kind of fault.

MR ELLICOTT:   Yes.

GLEESON CJ:   Are they the only relevant references to fault in the legislation?

MR ELLICOTT:   In Part 3 you will find section 18, which deals with “noxious substances”, that is, “Pollution by noxious substances”.  That is dealt with by Annex II to the Convention and that has a similar regime.  Part 4, which deals with “Pollution relating to transfer operations”, is not there because of anything in the Convention.  It is an additional extra put in by the New South Wales Parliament and it was covered by a previous Act and section 26 and 27 apply, but section 27 does not contain a subsection (2)(b) defence.  On the other hand, I should point out, that under section 26, “Discharges to which Part applies”, it does not apply to a discharge to which Parts 2 or 3 applies, so you do not get to this until you come to Parts 2 or 3.  That is the scope of the Act, as such, in relation to fault, as your Honour has put it to me. 

Our argument is that “damage to the ship or its equipment” means damage to it as a result of the application of some external force to the ship or to its equipment.  For example, the forces which would be applied to a ship in a collision or a stranding or running aground, or, for instance, a ship might be moored at a wharf and there is an explosion in an adjoining building and there is damage to the ship or its equipment, or a master is going through a narrow passage and he does it recklessly and he runs aground, or it may be an aircraft hitting the ship, as can happen these days, or even, say, a seaman who in a fit of drunkenness or something runs wild on the ship with a sledge hammer and damages equipment, or attacks the hoses or the fittings that might have to do with the oil tanks.

GLEESON CJ:   Now, can the force external to the equipment be internal to the ship?

MR ELLICOTT:   That is the reason I gave the last two examples, that it could happen on the ship but it is external to the ship in the sense that it is some force impacting on the ship or its equipment brought to bear by maybe somebody on the ship.

GLEESON CJ:   But if the relevant equipment here was the hose, it was damaged by a force external to the hose, was it not, that is, the corroded sleeve?

MR ELLICOTT:   No, in this case what happened was that the hoses chafed over time and that resulted in what is called “a rupture” in the evidence but it is really a hole and the oil leaked through the hole.  Now, we say that is not damage to the equipment within the meaning of these words.  That is what occurs as a result of, we call it, wear and tear over a period or, put it another way, in a negative way, it is the result of lack of maintenance.  In other words, this Convention, as implemented by this statute, is in the context of masters and owners having due regard to the maintenance of their ships.  It does not permit an owner to neglect the maintenance of the ship.

KIRBY J:   Is there anything in the Act about inspections that bears out that proposition?

MR ELLICOTT:   I do not know whether it directly bears it out, but section 48 says:

(1)  Without limiting the generality of section 46 and 47, where:

(b)  the Minister is of the opinion that there is a probability of such a discharge occurring –

he can give a –

notice in writing –

and requiring action.  Subsection (2) says:

The action that the Minister may require to be taken under this section may include:

(a)  action to prevent a discharge from occurring (including maintenance, repair, replacement or reconstruction) –

Now, these people ‑ ‑ ‑

KIRBY J:   What was that last section?

MR ELLICOTT:   Section 48(1) and (2).  So it contemplates a supervision by the relevant Minister of what is going on on some ships, obviously not on all ships.  But the fact is that, we would submit, if an owner, as in this case, acquires a fitting such as a crane and that crane has hydraulic hoses, then it is the owner’s or, through him, the master’s obligation to know that equipment and know how it works and know what its moving parts are.  It is not as if it is an unusual event.  Anybody used to machinery knows that it has wearing parts and the obligation to know your machinery and equipment, we say this Act imposes on the master and the owner absolutely.  You cannot recover ‑ you cannot avoid, in other words, a claim for pollution if you fail to maintain, but my friend’s argument means, of course, that a master or owner can fail to maintain the ship and provided it is not done – I will just use the word “wilfully” to cover everything that is in subsection (3) – wilfully, which may be an easy defence to establish on the balance of probabilities, then he can neglect to maintain his ship, either owner or master, as much as he likes and it will not be an offence. 

That, we say, is not only not common sense if you are going to sit down and draw an appropriate convention to prevent the pollution of oil, but it is not a result which is intended by the words “damage to the ship or its equipment” and, of course, it is those words that are critical.

KIRBY J:   Is there any clue ‑ is there a genus in the exceptions from the liability in section 8(2) that tends to support your proposition?  Can one infer from (a), (c), (d) the ‑ ‑ ‑

MR ELLICOTT:   Your Honours, there is nothing in (a), (c) or (d), but there are words in (b) which do, we say, point in the direction of our construction.  Now, we know that with wear and tear, if I can ‑ ‑ ‑

KIRBY J:   Maybe in (a) it may be an argument that it is giving a clue to the type of exception.  They are very ‑ if I can put it this way ‑ exceptional exceptions.

MR ELLICOTT:   Certainly (a).

KIRBY J:   Paragraph (a) is “safety of a ship or saving life at sea”.

MR ELLICOTT:   They are exceptional in that sense, yes, your Honour.  One gets that from those subsections.  I was thinking more of the wording as distinct from the object of them when I answered your Honour, but certainly in so far as the object of them is concerned they are very limited and, of course, they come out of the Convention itself.  They are the conclusions the nations came to.  If you look at (b), when you get to the third line and towards the end of it, it says:

and all reasonable precautions were taken after the occurrence of the damage –

Now, that is appropriate, we say, to a situation where there is an accident, there is a collision, there is a stranding, or somebody strikes something ‑ the damage occurs.  In terms of wear and tear, you are not necessarily going to be there or know about it.  It is going to happen.  That is to say, the hose is going to burst, if that is what is happening, or the flange is going to fly off, if that is what is happening, because of a defective bolt or something of that description ‑ ‑ ‑

HAYNE J:   That is the essence of the contrast you seek to draw, is it not, a contrast between “damage to” and “defect in”?

MR ELLICOTT:   That is right, your Honour, yes, and the word “to” has, we say, some significance.  You cannot just look at the word “damage”.  You have to look at the phrase “damage to the equipment”.  The word “to” does imply in meaning something that happens against something, something external, but ‑ ‑ ‑

GUMMOW J:   Rather than be a deterioration?

MR ELLICOTT:   Yes, that is right.  So it is:

all reasonable precautions were taken after the occurrence of the damage or the discovery of the discharge –

The occurrence of the damage is known in a collision case.  It would not necessarily be known with wear and tear or deterioration in equipment or the discovery of the discharge.  The accident has happened but you are supposed to have systems in place to see whether there are any discharges caused by the accident, by the damage.  Those notions of occurrence of the damage or discovery of the discharge, they fit in, we say, with a meaning which is clearly related to the type of events that are, in a sense, as I have explained it, external to the ship.

HAYNE J:   The kind of difficulty to which you seem to be pointing as lying within the opposing construction may be identified by considering the case where a wrong rated hose is fitted to a hydraulic system on the ship.  The hose may be perfectly good for the functions for which it is designed.  But apply the wrong rated hose, then apply pressure to it and the hose fails, is that damage to the ship or its equipment?

MR ELLICOTT:   We would say clearly not.

HAYNE J:   What is the distinction between that and the hose which loses its rating over time as it chafes?

MR ELLICOTT:   No distinction at all.  It is important to also comprehend that under this exception, whatever it means, if somebody negligently leaves a cock open or they put a flange, for instance, in some cases, over the end of a pipe to put bolts in to screw it up and the flange has a sleeve between it and the pipe, if that was left in a state where it was, for instance, loose or the bolts had not been tightened properly or the bolts were burred, et cetera, in that sort of case we would say clearly there is no defence under (2)(b) in any event.  It is just a negligent act on part the of a seaman or somebody on the ship and therefore the strict liability applies.

So that there are areas where there is no such defence, areas of negligence where it is not damage to the ship or its equipment.  The equipment might be quite good and effective but there is some action on the part of somebody on the ship that causes a discharge, and strict liability applies.  It is very odd that if my friend was right, that they do not wrestle with these problems and say, “Well, if we’re going to try and be fair to the poor old master and the owner, if they’re not doing things with intent, why shouldn’t we apply that to their negligence, or the negligence of a seaman or the like”.  Those are factors which lead one away from the meaning which was given by the court below and by her Honour.

KIRBY J:   Can I ask, does “act” in subsection 8(1) including omission?  It says:

and any other person whose act caused the discharge -

now, does that include an omission causing the discharge?  Is that picked up by the Acts Interpretation Act or does it have to be a positive act?

MR ELLICOTT:   Your Honour, it might be.  I submit in the context of this particular legislation, as it came into force, it was designed to cover the position of an actual positive act but, no doubt, there could be facts where somebody, who is involved in the operation, omits to do something that causes a discharge.  So that it could be an omission as well, but it is a third person.  It is not the owner or the master.  It is some other ship perhaps or some operator onshore, if it is a discharge which is coming from the ship and that person causes that discharge by an act or omission.

GUMMOW J:   Now, there is a definition of “master”, which means any person having “command or charge”, “other than a pilot”.  There is no definition of “owner”, is there?

MR ELLICOTT:   I do not think so, your Honour.

GUMMOW J:   “Owner” can be a tricky idea with ships.

MR ELLICOTT:   Yes, it probably can, but all this legislation blithely
picks up the word “owner”.  I do not know of any specific reference to “owner”.

HAYNE J:   Is an answer that can be made to the argument you have just advanced that questions of the maintenance of the vessel are to be regarded as wholly dealt with under Part 5, in particular the provisions of section 38 about periodic surveys?  That that is the statutory response to the problem of the hulk or the vessel that is insufficiently maintained if it is carrying oil, or using oil and that it is, therefore, unnecessary to treat damage as being somehow contrasted with defect in the vessel.

MR ELLICOTT:   Your Honours, what the Convention is designed to do is to prevent pollution.  Part of the action was to put, we say, a strict liability on the owner and the master but also to require ships to be regulated in their construction and in their maintenance.  That does not mean that necessarily those things are going to be done by the master or the owner.  In other words, we would submit that Part 5 is not an answer at all.  It is simply another way in which the objectives of this Convention are carried into the fact.

KIRBY J:   Is there anything left in the principle that if you are construing a statute which imposes a criminal liability on persons, that the statute is strictly construed?  I know what is strictly construing and we have competing principles here about construing an international convention to give effect to the purposes of the Convention, but is there anything left in that rule that used to be a rule for tax statutes and criminal statutes or has it gone out the window?

MR ELLICOTT:   Your Honour, my recent reading leads me to the view that there is not much left, but I do not think ‑ ‑ ‑

KIRBY J:   We have an ambiguity here.  Therefore, we have to see what the purpose of Parliament is.  Its overriding purpose is to give effect to the Convention, one would think.

MR ELLICOTT:   But here the Parliament has said it means what it means in the Convention, and that throws one back on the principles of interpretation of treaties, the Vienna Convention, et cetera.

KIRBY J:   But we are told in the written submissions that there is no interpretation of the Convention by other courts of other final countries that have adopted – final courts that have adopted ‑ ‑ ‑

MR ELLICOTT:   That is correct, and this is the first time and that is why this is an important case, but it does not require the application of any strict principle of interpretation.  What it requires is the application of those principles which had been expressed in cases such as A v Minister for Immigration, the judgment of Justice McHugh and of other members of the Court, which apply and indicate what those principles are.

GLEESON CJ:   This Convention and the statutes that implement it fall a long way short of covering the consequences of oil pollution, do they not?  For example, unless you could bring it within the concept of intentional damage, this Convention would not cover the “Exxon Valdez”.  That, as I would understand it, would have been damage to the ship.  That incident was just left untouched by this Convention, was it?

MR ELLICOTT:   Yes.

GUMMOW J:   There have been other conventions since, have there not?

MR ELLICOTT:   That would follow from an application of (2)(b).  Without knowing fully the facts – I know the incident, your Honour – it may well be that that could be the result because it was not intentional on the part of the owner or the master.  On the other hand, examination of the facts may well reveal that it was reckless, et cetera.

McHUGH J:   Mr Ellicott, your approach to the application of the principle to which Justice Kirby referred may depend upon whether subsection (2) is part of the statement of the offence or a justification or excuse, as the principles are expounded by this Court in Vines v Djordjevitch and Dowling v Bowie and they used to have 145A in the Justices Act which referred to what was a defence or excuse.  It may be that if it is part of the offence, then it has to be strictly construed.  If, on the other hand, it is merely a defence or ‑ ‑ ‑

MR ELLICOTT:   Subsection (6):

it is a defence if it is proved -

et cetera, which must mean proved by the defendant –

that . . . subsection (1) does not apply –

It rather puts it into a different category.

McHUGH J:   So the statement of the offence does not, on your view, have to negative subsection (2).

MR ELLICOTT:   No, it is a matter for the defendant to establish it as a defence and the words “does not apply to” is a broad way of providing a defence as distinct from carving something out of the offence, so that a prosecutor has to prove the intent, as it were, if the facts otherwise fit the offence.  Now, if I could take your Honours to the Convention itself.  It may assist to answer some of the issues that your Honour the Chief Justice was just putting to me as to what is the object of this.  It is at page 63, if your Honours have the same copy:

BEING CONSCIOUS of the need to preserve the human environment in general and the marine environment in particular,

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 for the Prevention of Pollution of the Sea by Oil –

Now, I am reading this because I will take your Honours to this.  This Convention, what we will call MARPOL, did in fact replace, as your Honours no doubt know, OILPOL which is the one that is in that third recital.

DESIRING to achieve the complete elimination of  intentional pollution of the marine environment by oil and other harmful substances –

and just stopping there, that no doubt is in part covered by the offence of strict liability because intent, in some instances, will not come into it at all, whether it is intended or not.  Specifically, it is covered by subsection (2)(b) in so far as it says “other than intentional damage”, and subsection (3) which defines it, but then it goes on:

and the minimization of accidental discharge of such substances.

Now, it is important that they recognised “deliberate” – that is intentional, one would think – “negligent or accidental release” were a serious source of pollution.  Negligent acts, basically, we say are covered by section 8(1), that is to say, there is strict liability, you do not avoid negligence – your own negligence in relation to a discharge if you are the owner or the master.  The only way in which you can avoid it is through (2)(b) but that, we say, is only in the limited case, the limited case where there is a collision or a stranding, et cetera, and the master may be negligent but the damage was not with intent, so that negligence is covered, we say very broadly, by subsection (1) of the offence.

Now, “accidental release”, something that happens that is unexpected.  That is, in a sense, dealt with by (2)(b) in the words “damage to the ship”.  If it is unintentional, then, to that extent, it is minimised.  Apparently, they decided where in a particular case, which was damage to the ship or equipment, the master or the owner should not be expected to be guilty of an offence and that was minimising accidental discharge because, in bringing this Convention together, they thought that masters or owners should not be blameworthy in those circumstances for a criminal offence, whatever the law of negligence might say.

KIRBY J:   You keep saying “damage to the ship” which has an image of the ship there and something is coming in from outside.

MR ELLICOTT:   Yes.

KIRBY J:   But Mr Gee, in the special leave application, as I remember it, embraced the notion that what we were talking about in this case was damage to the ship’s equipment.  Therefore, it is a rather more focused proposition.  It is a question of whether erosion can be damage to the ship’s equipment.

MR ELLICOTT:   I understand that argument, your Honour, but there can be somebody on the ship who impacts on the equipment in the way I suggested earlier, a seaman running wild with a sledgehammer or whatever, but when you come to the chaffing or the wearing of some other part, or the burring of a bolt or whatever it may be, these are things that are happening and they are happening gradually, and you cannot describe it as some external act, it is going on within the equipment.  It may be because ‑ ‑ ‑

KIRBY J:   But it is external, it is chaffing, it is ‑ ‑ ‑

MR ELLICOTT:   I beg your Honour’s pardon?

KIRBY J:   It is external, it is chaffing, it is wearing, wearing, wearing and wearing and then, ultimately, it is just the last drop.

MR ELLICOTT:   It is not external in the sense that it is external to the equipment.  That is how the equipment operates.  It operates like that.  It is chaffing every day.  If your Honour has had experience with machinery, there are parts that are wearing all the time and all of a sudden they break and you have to rush in and get them fixed. 

GLEESON CJ:   It may depend on the level of generality at which you identify the equipment.

MR ELLICOTT:   Yes.

GLEESON CJ:   If you identify the equipment as the crane, one result may follow; if you identify the equipment as the piece of hose that is part of it, a different result may follow.

MR ELLICOTT:   This equipment is operating as a crane for hydraulic purposes and there is a constant chaffing as it swings around.  We are not dealing with an operation even on a farm.  We are dealing with something that is happening at sea, with all the corrosion and all of the forces of the ocean around and it is not only this case we are talking about, there are other cases where because of the battering of the sea the plates of the ship may be affected or by corrosion they may rust and they may rust through.  Now, masters and owners should be involved in a proper, due inspection of those things.  They have technical equipment to determine whether it is rusted through.  Some of them prefer ‑ ‑ ‑

McHUGH J:   Your opponent’s argument seemed to suggest that there is no damage for the purpose of subsection (2)(b) until it finally broke through or broke away.  The obligation is to take all reasonable precautions after the occurrence of the damage.

MR ELLICOTT:   Of the damage, yes.

McHUGH J:   So if the equipment is being continually damaged in a sense, there was an obligation to take reasonable precautions right from the moment the damage commenced.  So the argument against you must be that the damage in this case is when it finally broke away.

MR ELLICOTT:   But that is a very, with respect, inept description of the damage because it is not happening that way, it is a gradual effect and that is how it happens.  If, as I say, it is some other wearing part due to corrosion, for instance, if one of the plates in the tank bursts and oil escapes, that is extremely serious.  Are people to be let off because there is damage to the ship when there are plates there that could be inspected by, no doubt, some form of electronic equipment to see whether they are rusting through?  These tanks are emptied from time to time.  I am only using that example to indicate that we must not get, with respect, tied down to what is happening with this crane, although it is very important; but our explanation of the crane is that you look at the crane, it is a crane that operates that way, that is how that equipment operates.  A hose is part of that equipment; a hose chafes, a hose finally ruptures and there is a leakage and that leakage causes a discharge of oil over the side of the ship because the scuppers or whatever it is are not closed.  So that, we say, is the sense in which the Convention is dealing with it.  Article 1 imposes an obligation under the Convention.

McHUGH J:   The reason I mentioned this question of when did the damage occur is that I just have real difficulty in understanding what “fair wear and tear” has to do with it in the case or how it is a relevant concept, really.  The real issue is whether or not there is damage by the sudden breaking away of this.  Is not that the real issue?

MR ELLICOTT:   The real issue is the meaning of the words “damage to the ship” and whether that can then encompass that final act of rupture and we say it cannot.

GLEESON CJ:   As I understand it, the framing of the questions by the Chief Judge was influenced by an earlier conflict of authority that had existed in the Land and Environment Court.

MR ELLICOTT:   Yes.

GLEESON CJ:   And that original difference of opinion in the Land of Environment Court may be the original of this concept of “wear and tear” or “fair wear and tear”.

MR ELLICOTT:   Yes.  There were two cases, decisions by Justice Bignold, that said it was damage and we refer to them in our submissions and there was the case before Justice Bannon who said that it did not include wear and tear.  That conflict, no doubt, led to these ‑ ‑ ‑

KIRBY J:   Do we have both of those decisions?

MR ELLICOTT:   You have those three decisions, yes.  I think your Honour, with respect, is quite correct, that would have been how this distinction arose but ‑ ‑ ‑

McHUGH J:   If you opponent’s argument is correct, then so far as the other eight hoses were concerned which were abraded and chafed, then there was no obligation to take reasonable precautions even when that was known because at that stage there was no damage.  The obligation to take reasonable precautions only arises after the rupture.

MR ELLICOTT:   Yes, and we say there is an obligation, of course.  That is why, being an obligation, it is not exempted from the offence.  That is to say, if you do not maintain your ship, you have an obligation to do it, if you do not act reasonably in relation to the maintenance of your ship, then not subsection (2)(b) applies but it is an absolute liability that descends on you as a master or an owner.

KIRBY J:   Do we have the travaux preparatoires here?  When we looked at the Refugees Convention about particular social group, that had a very long and very detailed consideration in the committee that was establishing the convention and we have gone to that in the refugee cases.  Has anybody looked to see what the history of this – the drafts?

MR ELLICOTT:   Your Honour, my understanding is we have looked to see that and we have not discovered anything that we thought might, I am sure my friend has ‑ ‑ ‑

KIRBY J:   They must exist somewhere.  There must be a record of the drafts as they were being developed and of the discussion in the committee.

MR ELLICOTT:   There is such document.

KIRBY J:   I would like to look at it because it is legitimate under the Vienna Convention to look at the travaux, and it is often very illuminating.

MR ELLICOTT:   Most certainly, if your Honour wanted to look at.  Yes, we did not get any illumination out if it, apparently, but that does not mean that your Honour will not, obviously.

KIRBY J:   If you have it I would like to have a copy of it.

MR ELLICOTT:   If your Honour pleases.  We may not have it here but we will certainly take steps to have your Honour have it.

“Discharge” is defined in the Convention, page 64, in 3(a):

“Discharge”, in relation to harmful substances or effluents containing such substances, means any release howsoever caused from a ship and includes any escape, disposal, spilling, leaking, pumping, emitting or emptying;

It does not include certain other things.  It is necessary to go to Annex I, which your Honours will find at page 79, because, indeed, that is what this Act is implementing.  Annex I in regulation 9 at page 86 provides:

Subject to the provisions of Regulations 10 and 11 of this Annex and paragraph (2) of this Regulation, any discharge into the sea of oil or oily mixtures from ships to which this Annex applies shall be prohibited –

and then there are certain exceptions.  Those exceptions are taken account of in the Act, but for the present purposes Regulation 10 does not have any relevance but Regulation 11 at page 91 does:

Regulations 9 and 10 of this Annex shall not apply to:

(a)  the discharge into the sea of oil or oily mixture necessary for the purpose of securing the safety of a ship or saving life at sea; or

(b)  the discharge into the sea of oil or oily mixture resulting from damage to a ship or its equipment:

(i)  provided that all reasonable precautions have been taken after the occurrence of the damage or discovery of the discharge for the purpose of preventing or minimizing the discharge –

I emphasise again that it picks on a moment of time, we say, “after the occurrence of the damage”, and that is appropriate to what we say is the external force.

KIRBY J:   What was that that you were reading then?  I have lost you, I am sorry.

MR ELLICOTT:   Regulation 11, page 91, (b):

(i)  provided that all reasonable precautions have been taken after the occurrence of the damage or discovery of the discharge –

and we say that, as we submitted before in relation to this section, that it is simply picking on a moment of time when the damage occurred.  We would say in relation to wear and tear it does not occur in that way.  It occurs over a period of time, if you are going to call it damage, but that is not the sort of damage that this is referring to.  Then:

except if the owner or the Master acted either with intent to cause damage, or recklessly and with knowledge that damage would probably result –

I only point out that, according to the decisions, they are all subjective matters.  Again, I make the point that on the balance of probabilities it is not a difficult defence to establish, one would think, in most cases unless there were obvious facts which showed that the master or the owner was reckless.

Now, because it uses the words, I should refer your Honours to page 75 which is called “Protocol I”.  It requires certain reports to be made.  Article III:

The report should be made whenever an incident involves:

(a)  a discharge other than as permitted under the present Convention; or

(b)  a discharge permitted under the present Convention by virtue of the fact that:

. . . 

(ii)  it results from damage to the ship or its equipment –

So those words “other than as permitted” we say would pick up the damage which occurred, as it would appear in the facts of this case, but certainly in the case of the gradual corrosion or failure of pieces of equipment or equipment.  On the other hand, “a discharge permitted under the Convention”, those words could cover the intentional damage, or the unintentional damage.  In other words it – I am sorry, those words would cover unintentional damage under (2)(b)(ii), because that is permitted under the Convention, one assumes.

Schedule 2 is at page 156.  There is an issue as to whether or not the MARPOL Convention was designed to tighten things up.  We submit that it is clear that it was.  His Honour the Chief Justice below was not inclined to agree with that, but this schedule says in the second recital:

RECOGNIZING ALSO the need to improve further the prevention and control of marine pollution from ships, particularly oil tankers.

KIRBY J:   Would you explain to me the international organisation which has developed these Conventions?

MR ELLICOTT:   Your Honour, it is the International Maritime Organisation.  IMO it is called.

KIRBY J:   Is that a United Nations agency?

MR ELLICOTT:   It took over from the United Nations, I think, at some stage.

KIRBY J:   Or is it an organisation of shipowners?  So it is an inter‑governmental organisation?

MR ELLICOTT:   It is a UN organisation but it took over, I think, from some other body within the United Nations.  It has its location in London and it has operated there, I think, from the late sixties or early seventies.  I will give your Honour a reference in a moment to that.  Our reference to Schedule 2 was simply to stress the fact that MARPOL, after the “Torrey Canyon” disaster, was actually intended to tighten things up, and it did in effect tighten things up.  His Honour’s expression of view, which is at paragraph 40 of his judgment, I think, at page 753:

Mr Ellicott submitted that it was not the intention of the nations developing the 1973 Convention, nor of the legislatures in Australia in adopting it, to broaden the scope of protection.  Accordingly, the scope of the word “damage” should be read down so as not to encompass matters internal to the ship or equipment.  This submission was made by way of assertion.  No information of any character concerning the process by which the 1973 Convention was developed was presented to the Court.

We would submit that certainly the Protocol of 1978 reveals an intention to tighten up or to improve further and the expression of view in the recitals at page 63, which I have already referred to, which clearly show a desire to achieve the complete elimination of pollution where it is intentional and its minimisation when it is accidental.

KIRBY J:   Is there an international textbook that explains the history of this?  There were probably League of Nations Treaties on the Law of the Sea that were relevant to pollution, but there must be a text that collects the history and ‑ ‑ ‑

MR ELLICOTT:   There is a well‑known text.  I do not know whether your Honour recalls Nagendra Singh who was the ‑ ‑ ‑

KIRBY J:   Yes, he was a President of the International Court.

MR ELLICOTT:   He was a very learned maritime lawyer but he also became a member of the International Court of Justice.  He was the President of UNCITRAL for some years.  But he has written a book, which I think goes into five volumes, and we do have some excerpts which I think are with your Honours’ associates.  I will take your Honours to a particular excerpt shortly.

In the case of Applicant A v Minister for Immigration 190 CLR 225, your Honours will find discussed by the members of this Court the principles to apply. If I can give your Honours the references. I suspect your Honours are very familiar with these principles but I will give your Honours the references: Chief Justice Brennan at 230, 231; Justice Dawson at 239 and 240; Justice McHugh at 251 to 256; Justice Gummow at 277; and Justice Kirby at 294. I think it is reasonable to say that your Honour Justice McHugh’s judgment was adopted either expressly or impliedly by other members of the Court. It does at some length – and I do not mean undue length – discuss the principles. I think if one goes to page 254 at the bottom where your Honour has already discussed the holistic approach, in the middle of that page:

Thus Judge Zekia emphasised an ordered yet holistic approach, Primacy is to be given to the written text of the Convention but the context, object and purpose of the treaty must also be considered.

Your Honours, one can struggle with the notion that primacy must be given to the text but, really, at the end of the day, all it means is that if those words that are used are incapable of any other meaning, then it may not matter what the purpose of the Convention is or what the context is.  In other words, you cannot allow the purpose or the context to drive words into meanings which they will not bear but, obviously, subject to that, yes, the text has primary place because that is what you are construing but you construe it in a holistic way against “the context, object and purpose of the treaty”.

Then there are some five principles which your Honour then discusses at pages 255 to 257.  They all, we would submit, endorse the approach that we are making here.  One thing that I am now proposing to do, your Honours, is to take your Honours to the background to MARPOL, that is to say the OILPOL Convention, because it was one which came into force as a result of a report in the United Kingdom called the Faulkner Report.  It came into operation in the 1950s and it was, indeed, replaced and it ceased to have effect as a result of this Convention.

I have handed up, I think maybe only this morning – I do not know whether your Honours have it – it is a text and I apologise that we did not put Singh at the top and put the front page.  It is taken from Singh, International Maritime Law Conventions, volume 3, British Shipping Laws, and it is page 2233.

KIRBY J:   What is year of publication?

MR ELLICOTT:   The year of publication is 1983.  About halfway down:

The “Torrey Canyon” disaster in 1967 alerted the world to the catastrophic effect of oil pollution fully and gave encouragement to international efforts under the auspices of IMCO to protect the marine environment.

As far as prevention of pollution of the sea by oil is concerned, the lead was taken by England when on September 24, 1952, the United Kingdom Minister for Transport appointed a Committee to consider measures which could be taken to prevent the pollution of British coastal waters by oil.  The Committee reported on July 17, 1953, and made several recommendations.  It came to the conclusion that pollution of the sea by oil was “fairly general” around the coasts of England and Wales and occurred in certain Scottish coastal areas . . . The Committee was of the opinion that the only real remedy was an international agreement on a “Code of conduct” to avoid oil pollution.  It called on the Government of the United Kingdom to seek the agreement of other maritime countries to the fixing of a date, after which the discharge into the sea of oils by ships of any nationality would be prohibited . . . 

1954 Conference

The Co-ordinating Advisory Committee set up in 1952 after holding several meetings decided, towards the end of July 1953, to organise an International Conference which ultimately met in London from April 26 to May 12, 1954.

He goes on to deal with that.  I will not read that but there were eight resolutions adopted and a Convention was adopted.  That Convention appears at page 2242 in the text that your Honours will have there.  Article I provides:

‘Discharge’ in relation to oil or to oily mixture means any discharge or escape howsoever caused –

Article III

Subject to the provisions of Articles IV and V:
(a) the discharge from a ship to which the present Convention applies, other than a tanker, of oil or oily mixture shall be prohibited except when the following conditions are all satisfied –

and that then provides, as I think the other convention provides, for certain exceptional circumstances.

Article IV

Article III shall not apply to:
(a) the discharge of oil or of oily mixture from a ship for the purpose of securing the safety of a ship –

so that is the origin of that provision –

(b) the escape of oil or of oily mixture resulting from damage to a ship or unavoidable leakage, if all reasonable precautions have been taken after the occurrence of the damage or discovery of the leakage for the purpose of preventing or minimising the escape.

Now, your Honours, that Convention, as the text I have handed up indicates, does find some of its origin in what is called the Faulkner Report and your Honours will have an annexure to accompany the appellant’s submission and the Faulkner Report is Annexure H.  Now, I obviously do not have the time nor the intention of reading this, except to indicate that it does what Nagendra Singh suggested, but it does describe the “Sources of pollution” and in paragraph 44, your Honours will find:

In later paragraphs of this report we deal in some detail with the various ways in which waste oil may be discharged from ships, but it is convenient to enumerate them in general terms at this stage.

Down the bottom:

(c) Miscellaneous sources of discharge from ships –

and you will see under (c)(v):

Leakage through structural defects.

(vi) Accidental discharges through stranding, collision, etc.

(vii) The discharge of oil at sea for salvage or life‑saving purposes.

So, again, the origin of some of the wording in these conventions.  Clearly enough, this report was before those who prepared MARPOL.

Now, at paragraph 131:

Spillage When Bunkering Or Transferring Oil –

and I am referring to this because I want to pick it up in a State statute, a New South Wales State statute which implemented this Convention, OILPOL:

131.    The avoidance of spillage during bunkering operations, when loading or discharging oil cargo, or when transferring oil within the ship from bunkers to settling tanks, is largely a matter for car on the part of the ship’s personnel and other persons engaged in the operations.

This is a major cause of oil spillage –

There are, however, a number of safety precautions and certain devices which can reduce the possibility of pollution from such sources to a minimum. 

Thus, one might think, “taking reasonable precautions”, as the words are used in both the statute and the MARPOL Convention.

Such precautions could appropriately be included in a code of conduct of a general character, applicable to tankers and other ships which use oil for fuel.  At our suggestion the Department, in consultation with technical representatives of the shipping industry have been considering recommendations on this subject –

Then:

Leakages and Accidental Discharges

132.    The extent to which leakages from structural defects in the ship and accidental discharge as a result of collisions, etc., contribute to oil pollution is probably very small, and in any case, no specific precautions are possible.  We do not consider it either necessary or possible, therefore, to make recommendations on this subject.

Then 133 deals with the “DISCHARGE OF OIL FOR SALVAGE OR LIFE-SAVING PURPOSES AT SEA”.  I refer your Honours to that because it clearly is part of the history and the context and your Honours should be aware of it.  I am not seeking to get more than, other than perhaps a distinction between what emerges as damage to the ship, that is accidental discharge, and leakage, because in Article IV of OILPOL at 2243 in that text, at the bottom:

the escape of oil or of oily mixture from damage to a ship or unavoidable leakage –

Two distinctions.  The distinction is drawn between those two.

Could I take your Honours ‑ it is in I think the same set of papers ‑ to the Prevention of Oil Pollution of Navigable Waters Act 1960. It is at page 88 of that bundle that has been prepared for the Court. It is annexure F. This refers to the Convention in section 4, page 403 at the top. “The Convention” means, in effect, OILPOL, “and includes that Convention as amended . . . accepted by Australia”. There does not appear to be any interpretational provision such as in section 7 of the Marine Pollution Act, but it is clear that sections 6 and 7 are designed to be the method for implementing OILPOL.  There is a reference to the Convention, which is not very relevant, in section 17.  There may be others but I have not been able to find them.  It is important to see how section 6 dealt with the matter:

If any discharge of oil, or of any mixture containing oil, into any waters within the jurisdiction occurs from any ship, or from any place on land, or from any apparatus used for transferring oil from or to any ship . . . then subject to the provisions of this Act‑

(a) if the discharge is from a ship, both the owner and the master of the ship, ‑

et cetera:

shall be guilty of an offence . . . and shall be liable to a penalty –

So there is strict liability there but your Honours will notice that it has wrapped up, in effect, what are now section 8 and section 27 of the Marine Pollution Act.  In other words, it deals not only with discharge from a ship as such but it deals with the transportation or the transferring of oil from a ship to land or from land to ship and it makes certain people liable, depending on the case.

HAYNE J:   If you read that in light of what was said in the Faulkner Report, does one then read section 7 of the Prevention of Oil Pollution of Navigable Waters Act as directed, essentially, to identifying the kinds of discharge with which the Act is concerned, that is, discharge by conscious act, discharge by pumping your bilge tanks out when you are at sea, and the like?

MR ELLICOTT:   Yes, except that it does it by, we say, two concepts.  One is by a discharge in consequence of damage to the ship – it does not use the words “or its equipment” – on the one hand, and in consequence of leakage on the other.

HAYNE J:   The amplitude of the definition of “discharge” unqualified would cover anything.

MR ELLICOTT:   “Discharge” is defined, and it says:

any discharge or escape, howsoever caused.

HAYNE J:   Just so.  So it would cover every case in which oil which was on a ship ended in the sea.

MR ELLICOTT:   Yes.

HAYNE J:   No matter how.

MR ELLICOTT:   That is right.  These are the defences, and only in these cases will there be a defence.

HAYNE J:   But if, contrary to what we now know to be the position, you approached it from the standpoint of the Faulkner Committee, that leakages and accidental discharges, whether by structural defect, collision or the like, is really not the focus with which we are concerned.  Does that not then suggest that the defence of damage to the ship would encompass the defect in the ship, as well as stranding, collision and the like?

MR ELLICOTT:   No, because we say that, looking at section 7, (b)(i) and (b)(ii), we say they are clearly mutually exclusive and they are dealing with different circumstances.  Looking at leakage – “leakage” itself is a very wide word – your Honours might in considering it gain some assistance – I had not intended to give your Honours other than a reference to the judgment of Justice Yeldham in Glover v MacDougall (1976) 2 NSWLR 359.

There is a discussion of leakage, and “leakage” is a very wide term but it has a narrowing meaning and that is that one looks for some hole or aperture from where there is a leak.  It does not apply, for instance, if there is a gush of air and forces oil out of a pipe.  That is not a leakage.  But that is a definitional matter.  It may have some technical aspects to it.  But the word “leakage” would cover this case, we would say, that is, “in consequence of leakage which could not have been avoided”, would not be satisfied in this case because it could have been avoided, or it could have been foreseen or anticipated because it is leakage due, we would say, to wear and tear, as we have explained it.  Any form of leakage which could “have been avoided, foreseen or anticipated” is a matter of strict liability, but damage to the ship we say is an attempt to encapsulate in the legislation, as indeed it was in the Convention itself – to encapsulate the notion of accidental damage, that is, damage due to collision, stranding, et cetera.

HAYNE J:   Thus the negligent stranding of the vessel, the master plainly negligent, as a result of which the whole cargo is tipped out into the sea, is not caught.

MR ELLICOTT:   It was not an OILPOL; there is no doubt about that.  That is the “Torrey Canyon” problem.  The notion of intentional pollution was introduced under MARPOL and that was a big change and you could not get away with it if it was intentional but, if you were negligent, you could get away with it under MARPOL as long as it was not intentional.  Under this you got away with it whether it was intentional or negligent.

HAYNE J:   But why, under the Act with which we are now concerned, should the master who negligently strands the vessel escape liability, but the master who does not routinely maintain the vessel and its equipment be caught by it?

MR ELLICOTT:   Because apparently – and this is one of those cases where one goes back to Applicant A v Minister for some guidance – in such cases of Conventions no doubt compromises are made and views are expressed and finally they come up with a text.  Apparently they thought that whereas under OILPOL you could get away with it even if it was intentional, they should restrict that and that intentional damage to the ship or its equipment was not excusable.  But that is not a reason, as your Honour suggests, we would submit, for expanding.  That is a reason for contracting it.  That is a reason why common sense dictates that if you are going to have a convention which is to prevent oil pollution and there is an area where somebody has a defence where otherwise common sense might say “Why shouldn’t they be liable?”, you would give that a narrower meaning.

That is one reason why the words “damage to the ship or its equipment” should be given a narrower meaning.  Our point here is that if 7(b)(i) and (ii) are read, they are dealing with different situations and clearly, we would submit, that the words “in consequence of damage to the ship” are intended to be dealing with cases which are not leakage cases ‑ are in another area.  It does not mean that (i) and (ii) cover everything.  For instance, if it is not leakage, there may nevertheless be no damage to the ship, but there will be strict liability if it is not leakage and it is not damage to the ship.  Within those two areas of defence or exclusion, the words “damage to the ship” are outside leakage and they are appropriate, we say, to cover the case of what we might describe as accidental damage or damage due to collision stranding or some external force.

GLEESON CJ:   Mr Ellicott, there is one difference ‑ I do not know whether it has any significance for present purposes ‑ between the Prevention of Oil Pollution of Navigable Waters Act and the Marine Pollution Act and that is that the latter deals only with pollution by ships, whereas the former did not.  The 1960 Act dealt with pollution of navigable waters by oil whether from ships or from other sources.  There is, for example, an oil pipeline that runs under Botany Bay and that is constantly being ruptured by dredges and giving rise to new law on economic loss.  That subject just is not dealt with by the Marine Pollution Act at all, is it?

MR ELLICOTT:   Your Honour, I think it is dealt with by section 26.  Sections 6 and 7 of the 1960 Act wrapped up these things in the one section, whereas section 26(b):

from any apparatus or purpose‑built pipeline used in or in connection with a transfer operation, whether or not it is being so used –

and:

transfer operation means any operation that is involved in the preparation for, or in the commencement, carrying on or termination of, a transfer of oil or of an oily mixture ‑ ‑ ‑

KIRBY J:   This is the part you told us is added to the New South Wales statute and is not part of the Convention?

MR ELLICOTT:   Yes, not part of MARPOL but it had a ‑ ‑ ‑

GLEESON CJ:   But that is narrower than section 6 of the 1960 Act which dealt with the:

discharge of oil . . . into any waters . . . from any ship, or from any place on land, or from any apparatus used for transferring oil from or to any ship ‑ ‑ ‑

MR ELLICOTT:   Yes.  If you go to section 3(5), there is a definition of discharge of oil or a mixture – not a definition, it describes what can be a discharge:

A discharge of oil or of an oily mixture or of a liquid substance or a mixture containing a liquid substance onto or into any land or waters, or any structure or thing, having the result that the whole or any part of the oil or oily mixture or liquid substance or mixture containing a liquid substance eventually enters any State waters, is for the purposes of this Act deemed to be a discharge into those State waters of the oil or oily mixture –

I think that is a deeming provision in a sense.

GLEESON CJ:   Yes, but if you look at section 8(1), it is a discharge from a ship.

MR ELLICOTT:   Yes, I understand that, your Honour, and the transfer operation, 26(b) means involved in the preparation or transfer of oil pertaining to or from a ship or a “place on land”, so that it can cover – I do not know whether it is the JUHI that your Honour is thinking of or whatever it is ‑ ‑ ‑

GLEESON CJ:   Or oil from a factory.  What if oil enters the water from a factory?

MR ELLICOTT:   Yes, but it may come under section 3(5) if the facts fitted it or there are other provisions, I understand, in the Clean Waters Act which may cover it, but it is no part of our argument to disagree with your Honour.  I just wanted to ‑ ‑ ‑

GLEESON CJ:   No, but as I understand the way you used the 1960 Act, you say there is a clear distinction between damage to a ship and leakage.

MR ELLICOTT:   Yes.

GLEESON CJ:   And you want us to read the 1987 Act with that kind of a distinction in mind.

MR ELLICOTT:   Exactly, and having in mind – and this is the simple point – that part of the context is the fact that MARPOL did, indeed, provide – and I should give your Honours the reference – that it would replace OILPOL, as did the 1987 Act repeal the 1960 Act.  I will give your Honours that reference. 

Your Honours, in addition there are, of course, the parliamentary debates and those are before the Court.  There is very little in it except some political statements, that is, in the 1987 legislation, where certainly the second reading speech indicated an intention to tighten up and it was, of course, implemented in MARPOL and it was imposing heavier penalties and the Minister, Mr Brereton, makes reference to those matters which I do not think ‑ ‑ ‑

GLEESON CJ:   It has probably been a long time since there was a political speech announcing an intention to relax the laws relating to oil pollution.

MR ELLICOTT:   That would be right, your Honour, and therefore I do not seek to gain a great deal out of it, but your Honours are entitled to and maybe need to refer to it as, indeed, we are entitled to refer to it.  Your Honours, I think I have covered – anything else that I would want to say would be repetitious.  I have not referred to the decision in Spliethoffs’ Case.

Article 9(1) at page 68 is the reference I had in mind, in Schedule 1 to the Marine Pollution Act.  It says:

Upon its entry into force, the present Convention supersedes the International Convention for the Prevention of Pollution of the Sea by Oil, 1954, as amended, as between Parties to that Convention.

So, it is obviously part of the context.  In Spliethoffs (1996) 91 LGERA 318 Justice Bannon at page 320:

The Act is intended to enforce the International Convention for the Prevention of Pollution from Ships . . . provides . . . 

This statutory recognition of the principles expounded by the High Court in Chu Kheng Lim v Minister for Immigration, Local Government & Ethnic Affairs (1992) 176 CLR 1 at 38 caused me to inquire of counsel if the term “damage” in s 8 had been the subject of interpretation in decisions given in the great maritime nations, but I was assured that a search of international material had failed to produce any decision . . .

The signatories would have included civil law countries which distinguished between “injury” and “damage” –

and that is a helpful comment.  One might think that what is happening to that what is happening to that pipe is it is gradually being injured –

Notwithstanding the wide meaning of “damage” adopted by Carruthers J in the latter case, I am of the view that when s 8(2) speaks of the “occurrence of the damage” it is not including “fair wear and tear” within the concept of damage, and I adopt the observations of Fletcher Moulton LJ, as he then was, in Billericay.

I give your Honours the reference to Billericay. It is [1911] 2 KB 801 at 813. Admittedly, it is not dealing with this type of case, it is about a road, but it was a question of whether extraordinary expenses had been incurred by an authority in repairing the highway by reason of the damage caused by excessive weight, and his Lordship says:

I do not think “damage” means fair wear and tear.  I think “damage” means that the road has been injured because I associate with the terms “excessive weight” and “extraordinary traffic” the idea of something more than the road was intended normally to bear.

But I do not think his Honour was saying that it was on all fours but the notion he was adopting and the notion of wear and tear as distinct from damage to the ship we would say is equally apposite in considering the matter and therefore Justice Bannon was correct. 

I think in what I have said – and I should perhaps identify the passages.  I have indicated that we submit that his Honour the Chief Justice was particularly incorrect in the passages from 751 onwards in paragraphs 35 through to 44 of his judgment which was concurred in.  He says at 751, paragraph 35, line 40:

Nothing in the text, context or purpose suggests that a test of “external” cause is more appropriate or adapted to achieve the object or purpose, than a variety of other possible expressions of causal mechanisms that may be understood by some to reflect blameworthiness.

We, with respect, would submit that his Honour was in error there because there is a dichotomy there and, as we have pointed out, particularly by the use of phrases such as “after the occurrence of the damage” as distinct from, when you look at leakage, for instance, in the 1960 Act, “all reasonable steps were taken for prompt discovery of the leakage”.  That rather suggests that you should have a procedure to look for and after such discovery “for stopping or reducing the escape” but you do not find that in relation to what is damage to the ship or its equipment.

Those words, “after the occurrence of the damage”, rather suggest that the damage is something positive and definite that occurs and then you take steps “for stopping or reducing”.  You do not go looking for damage, it occurs and you know about it.  There is that notion in section 7(1)(b)(i) as there is in section 8(2)(b)(ii), and to that extent and in that way, and disregarding the effect of OILPOL and the previous legislation, his Honour, we submit, has fallen into error.

I have already dealt with paragraph 40.  Paragraph 43:

It appears that the omission of those words did, on any view, narrow the scope of protection –

this the words, “unavoidable leakage” –

by removing the protection in the case of discharge which was unavoidable, but not occasioned by damage.  If, as part of that process, protection was extended to leakage caused by damage to equipment which may hitherto have been regarded as “avoidable”, that may well have been part of the process of adjustment –

With very great respect, we would submit that when you look at (b)(ii) and ask the question, what is the legislature saying:

in consequence of leakage which could not have been avoided, foreseen or anticipated –

surely it is saying that it did not intend that leakage which could have been “avoided, foreseen or anticipated” would be treated as in any way outside the area of strict liability and we would say that what his Honour said in that passage is, with very great respect, clearly incorrect.  For those reasons we would ask that your Honours answer the questions no.

GLEESON CJ:   Now, before you leave, Mr Ellicott, on page 754, the Chief Justice declined to answer question 1(b) apparently on the ground that he took the view that it was not a question of law.  Are we concerned with that and are we concerned with the other questions that were before the ‑ ‑ ‑

MR ELLICOTT:   Your Honour, my recollection is that your Honours only gave leave in respect of 1(a).

GLEESON CJ:   Yes.

GUMMOW J:   That appears in 773.

MR ELLICOTT:   Yes.

KIRBY J:   The grounds of appeal are broad enough to cover the other issues, but we are to read them as limited to the (i)(a) point.

MR ELLICOTT:   Yes.

KIRBY J:   In fact, when you look at the opening paragraph, paragraph 1, it says:

pursuant to . . . the answer given to question 1(a) of the judgment –

so they would be read as relevant only to that question.

MR ELLICOTT:   Yes, and there is obviously a question of fact lingering there, but we have to submit, as we have, it is not a matter upon which I suspect your Honours are going to find positively because it is not a question your Honours are asked, that it was clearly wear and tear and that it does not come within the word “damage” factually.  In other words, if you would – but ‑ ‑ ‑

McHUGH J:   I have real problems about that.  In fact, I am not sure I can answer this question. 

MR ELLICOTT:   Which question, your Honour?

McHUGH J:   Question (i)(a), it just seems to me a meaningless question.  I do not think it is a relevant question.  I mean the real issue in this case is whether damage to the ship or its equipment includes the rupture of a hose brought about by abrading and chaffing.  There is no finding about wear and tear.  It seems to be the appellant’s gloss on the cases, no doubt taken from what Justice Bannon said, but I really have a problem with it.  It is not to say I am against your primary argument or your basic argument, it is just the way the question is framed, Mr Ellicott.

MR ELLICOTT:   Your Honour, I understand that, if I may put it as an intellectual approach to it, with respect I submit – well, it is the question first of all.  Secondly, when you consider the background, Justice Bannon and Justice Bignold and the Chief Judge, and the inclination to describe what happened is a matter of common sense as wear and tear.  That explains how the question is actually framed in that way.  If one is being intellectually precise, no doubt one is going to say, as your Honour says, is describing what the particular event is, is that damage to the ship – I understand that, your Honour.  The question is really an elliptical way of asking that question.  That is why we explained what happened.

GUMMOW J:   It may require an elliptical answer.

MR ELLICOTT:   We hope not, your Honour.  We ask the Court to look at this way, that the judge has asked the question, after considerable thought, and the matter would go back to her with that answer.  She could then look at the facts and she could say, “Well, in the light of what the High Court has said, is this truly wear and tear?  Or, guided by their Honours’ findings and observations, does it fall outside wear and tear, but nevertheless does not fall within damage to the ship?”.

McHUGH J:   You argue for detriment caused by external force.  Supposing, by reason of a latent defect, something just broken away, why would that not constitute damage?  Is not the true issue here whether or not “damage” really means detriment to the ship or its equipment as the result of a sudden event and not by a process?  Is that not really what you are seeking to ‑ ‑ ‑

MR ELLICOTT:   That is one way of putting it, but I am just troubled by the example that your Honour gave.  The piece of equipment which may be defective.  If equipment is defective we would say then this legislation is saying the master is liable.  He is bound to have effective equipment.  He should be testing it.  I mean take for instance a defective gauge, which tells you how much is in a tank, and it tells you that you can put another two tons in and you can only put half a ton in.  Two tons go in and they spill over the side.  That, we would say, is clearly a matter of strict liability.  It is not damage to the ship or its equipment.  That is just a failure to ensure that the ship is properly fitted out.

McHUGH J:   Apart from the word “occurrence” which I think supports your argument to some extent, or your general argument, I do not see why damage is not wide enough to carry that the reasoning the Court of Criminal Appeal seems to have taken.  If I have a bad knee which suddenly, because of arthritis and old age, gives away and I fall over, you would say that my fall was the result of some damage to my knee.

MR ELLICOTT:   Yes, your Honour, but if you are interpreting – it may well affect your Honour’s knee and your Honour might say, “I have a damaged knee, and it has been damaged by my youth and all sorts of things, and it’s all come to fruition”  You could also say it is wear and tear.  But when you are analysing a phrase like, “damage to a ship” and followed by the word “occurrence” ‑ and it has to be seen in that context ‑ then it clearly, we would submit, has a narrower meaning.  Yes, the word “damage” can ‑ ‑ ‑

KIRBY J:   Damage to the ship or its equipment?  You keep dropping off the “equipment”.  It is damage to the ship or its equipment.

MR ELLICOTT:   Yes, but ‑ ‑ ‑

KIRBY J:   You can have damage by way of erosion, by way of sea, salt air.  You say if you leave your car in Rose Bay it gets very damaged, the underbody and everything.  You would say, yes, that is damage by the sea air.  It is still damage.

MR ELLICOTT:   In common parlance, yes, but we are looking at a statute which is designed to prevent pollution and, in that context, it is first of all not a sensible, we would submit, conclusion to come to that these nations of the world are sitting down around the table and they are going to allow persons, unless they use clear language, to escape liability where they fail to maintain their ship in accordance with ordinary practice.

KIRBY J:   Are you not pitching your argument a bit high to say it is not sensible?  We have got Justice Bignold, Justice Pearlman and three judges of the Court of Criminal Appeal in New South Wales.  It is not, perhaps, in your submission, the preferable interpretation given the context, but it is a sensible interpretation.

MR ELLICOTT:   That is our submission, that it is not sensible.  It is not a reasonable conclusion to come to, with respect.

McHUGH J:   But why do you say that?  It does not use, for instance, the term “accidental damage”, a term which occurs again and again in insurance policies and which usually requires something to be unforeseen.  It uses the very general term “damage”, no qualification to it, except there is an exception “other than intentional damage”, and so it would seem to, at first blush, to cover every kind of damage, accidental or otherwise, other than intentional damage.

MR ELLICOTT:   We say that, as a first proposition, it is certainly not a reasonable conclusion that you would come to if you are considering the object of purpose of preventing pollution of the seas.

GLEESON CJ:   “Accidental damage” was the expression used by the Minister in his second reading speech, was it not?  I think I picked that up from one of the judgments ‑ ‑ ‑

MR ELLICOTT:   Also, it was used in the Faulkner Report and that is why I referred to it because it is the genesis, we say, of damage to the ship.

HAYNE J:   Do you say, therefore, that we can assume or should assume in construing this Act, that it was informed by identical ideas to those that appear in the Faulkner Report?

MR ELLICOTT:   Certainly, yes, and that those notions ‑ ‑ ‑

HAYNE J:   It seems to me to cut directly against your argument, Mr Ellicott.

MR ELLICOTT:   Those notions of leakage and damage to the ship, they are supportive of an argument which we put that damage to the ship in that context clearly meant, we would say, damage which was of an accidental nature in the way in which I put it, and that it is quite unlikely that MARPOL, in using the same phrase, would have intended to do other than adopt the same meaning.  The fact that they do not use the concept of leakage is not to the point.  All that that means is that they have absorbed leakage into the strict liability area and to that extent, your Honour, I would submit it is not against our argument.  It supports it.

HAYNE J:   The reason I suggest it is, so that you may deal with it, is that Faulkner does not begin from the premise, “Let us prevent pollution generally”.  Faulkner seems to begin from the premise, “Let us prevent some kinds or some sources of pollution”.

MR ELLICOTT:   Yes, that is right.  It was early days, obviously.

McHUGH J:   Just so.

MR ELLICOTT:   And they were looking at the effect of oil in the sea, put into the sea off the coast of the United Kingdom, and they did, in fact, say that oil from accidental causes was not very great.  But obviously, we would submit, when it comes to the actual Convention when other countries sit down around the table they pick up these notions of damage to the ship and leakages and they give embodiment to the distinction that is in the report between leakage and accidental damage.

We say that that is a logical progression right through this and that MARPOL could not possibly, we would submit, unless there is clear language to that effect, have intended to broaden the concept of damage to the ship particularly when they used that phrase “after the occurrence of the damage”.  But whether, to deal with what your Honour put to me completely, whether we be correct about that submission or not, coming back to MARPOL and coming back to the Marine Pollution Act itself and seeing those together and not taking into account to any great extent OILPOL, you nevertheless, we would submit, come to the same conclusion.

KIRBY J:   Can I just ask:  we have three decisions in New South Wales, Australia.  I find it hard to believe in this day and age that we do not have any decisions of any other court of any country on this.

MR ELLICOTT:   I have to say our researches, which have included not just going through digests but, as I understand it, actually talking to other members of IMO, have led to the conclusion that there are no such decisions.  The matter was even the subject of a visit to London to find out.

HAYNE J:   Extended research.

GLEESON CJ:   Yes, Mr Solicitor.

MR MEADOWS:   May it please the Court.  Might I say to begin with that our research has come up with a similar outcome and that we are unable to find any authority anywhere in the world which would assist the Court.

We would adopt our learned friend’s arguments and we have only one or two short points to make.  If I could come to the point which your Honour Justice McHugh was making a short time ago, if the approach which your Honour was suggesting were to be taken, the result would be that whenever you had a failure of the equipment on a vessel, the master would be able to escape liability because in almost every conceivable instance you would be able to say that there was some element of damage involved in the failure of the equipment.  Your Honour referred to the latent defect, that being, I suppose, the most obvious example, but it could be said that the equipment failed because it was damaged through having a latent defect.  So the result of that would be that the legislation would virtually have no effect whatever in the case of equipment failure.

McHUGH J:   Not necessarily.  It may well cover this case.  Why can you not interpret damage, having regard to its context and particularly the use of the word “occurrence” and the issue of reasonable precautions, as referring to a detriment to the ship or its equipment by a sudden event and not by a process?

MR MEADOWS:   The sudden event ‑ ‑ ‑

McHUGH J:   Of course it would cover damage from a latent defect, but perhaps why should it not?  If there is something that cannot really be seen or found, why should there be a criminal liability for that?  It is contrary to basic principles of criminal law.

MR MEADOWS:   I see what your Honour is saying, but the point of this particular legislation is to impose strict liability.  That is specifically provided for in the first part of the section.  It is only when you come to section 8(2)(b) that this issue of damage becomes of consequence.

HAYNE J:   Or is this simply a drafting device to really deal with the difficulties of proof?  That is that the focus of the offence remains on the intentional pumping out of the bilges at sea, but the prosecution gets home by simply saying, “There was the oil, it was on board your ship.  Now you prove how it got there.”

MR MEADOWS:   With respect, your Honour, that fails to appreciate the context of section 8(2)(b) where the only requirement in terms of taking reasonable steps is once the discharge has occurred.

HAYNE J:   Just so.

MR MEADOWS:   What that implies to us is that even if you could demonstrate that you had taken reasonable steps to maintain the vessel, you do not escape liability in the event of a discharge.

HAYNE J:   You see, it seems to me there are, no doubt, an infinite variety of circumstances that could be considered but they include, for example, the vessel that breaks its back by being negligently sailed into unduly heavy weather, the vessel that breaks its back at sea because she has not been maintained properly, the vessel that is grounded negligently, the vessel that collides with a wharf through the negligence of the master and a piece of equipment is struck from the deck of the vessel leading to the hydraulic oil escaping.

Now, all of those have a common thread of the negligent navigation of the vessel or the negligent maintenance of the vessel and yet, on the construction now put forward, it seems we have to divide the outcomes.  Now, where is the common thread?

MR MEADOWS:   That is where the section points you.  It points you to the damage rather than to the cause of it, the nature of the damage, and so that is why we would support our learned friend’s argument that it must be damage caused from a source external to the vessel.

KIRBY J:   This is a sort of a metaphor for the debate the Court has had in cases of injury:  is a heart attack an injury or is it simply the result of a long process of coronary difficulties?

MR MEADOWS:   Yes.  I understand what your Honour says, but coming to the question which is being asked of the Court, our submission is that whatever reasonable conception you would have of the term “wear and tear”, then it would fit within my learned friend’s ‑ ‑ ‑

KIRBY J:   But I have Justice McHugh’s problem about this.  This is a phrase of the parties which the judges accepted, whereas the phrase of the statute and the Convention is “damage to a ship”, and to the extent that judges take their eye off the phrase in the statute and the Convention, they run into problems of glossing the statute and the Convention and really missing the issue in the case.

MR MEADOWS:   That is why I make the point that the effect of the respondent’s argument is that any failure of the ship would result in the master or owner being exonerated, any failure of the ship or its equipment.  Now, we would say a failure through wear and tear would fit.

KIRBY J:   But it is difficult to say that wear and tear cannot, at least at a certain point, amount to damage.  It is like the heart attack, the end product is the damage.  It is the occlusion.

MR MEADOWS:   In one sense of the word, your Honour is right, but when you look at the object and purposes of the Convention which is ‑ ‑ ‑

KIRBY J:   Well, that has to be the main argument.

MR MEADOWS:   Quite so, your Honour.

KIRBY J:   In abstract it is broad enough to include erosion and so on, but in the context and for the purposes it does not go that far.

MR MEADOWS:   Yes.  If it please the Court they are our submissions.

GLEESON CJ:   Yes, Mr Gee.

MR GEE:   Your Honours, may we just start by first of all reminding the Court of the fact that this is a Convention being brought into local law.  Some of the difficulties are posed by that very fact.  In Applicant A there appeared possibly the most succinct statement that we have about the problems posed by that and, in particular, a warning against assumptions about what framers of Conventions, collectively, may or may not have intended, and then transferring it to our own preconceptions; where Justice Gummow said at page 275 of that report:

The text of the international instrument may lack precision and clarity and may have been expressed in attractive but loose terms with a view to attracting the maximum number of ratifications.

So, applying that to this case, the phrases chosen in the MARPOL Convention, which find their way into the local statute, may have those characteristics  So that, for instance, that the parties started with the notion that an escape due to damage would be decriminalised, and some said, “Well, we’ll only let that happen if it’s not intentional” and others might have said, “We want culpability to include negligence”.  There are all sorts of possibilities about which we ‑ ‑ ‑

GUMMOW J:   We have to look at Article I, do we not?

MR GEE:   Yes, your Honour, and I would, with respect, pray that in aid, because it does distinguish, especially after the preamble, between prevention, so to speak, absolutely, of intentional pollution and minimisation, a different notion, of accidental with the result that the Convention framers started from damage as being the - excepting the decriminalising common point if you like and then ‑ ‑ ‑

GUMMOW J:   Article I does not say by what means the parties are to give effect, does it?  It does not require criminalisation, does it?

MR GEE:   I use the term, your Honour, because ‑ ‑ ‑

GUMMOW J:   I am not putting it against you.  I am just trying to work out what it means.

MR GEE:   No, I appreciate that with respect, your Honour.  We would put that the approach to the section thus:  “any discharge, however caused, that gets oil on to the waters” – this has already been said – “is prima facie caught”.  Any discharge.  It happens that the conventions were principally aimed at carriage of oil by tankers and use of oil as a fuel by ships, and this does not happen to fall in that category but, beyond pointing it out, we do not make any particular use of it.

That is visited with penalty, ie it is criminalised, the “escape by any means”.  The decriminalisation, as I have called it, occurs if and only if the relevant persons can go through quite a number of hoops.  Hoop one is that it has to be damage to the ship or its equipment.  So that any negligence that does not involve that damage simply does not trigger the defence at all.

Hoop two is that the damage must not have been intentional.  Hoop three is that if those two conditions are met, even then, what I will call the reasonable response to the spill event has to be established.  Now, what is sought to be done here against us, with respect, your Honours, is to take that first hoop, the occurrence of damage, and say somehow you must read that down.  With respect, your Honours, just as their Honours below concluded that there was no basis for reading it down, so here.

So that first hoop is, therefore, a problem of characterisation.  There will be some cases in which you will be able to see quite clearly that there is damage.  This is one:  there was damage to the equipment.  At the other end, there might well be cases where that characterisation will be borderline and there will be cases in which it is plain that there is no damage, the obvious case of some sort of cock being left open or valve not screwed home when it ought to be or something like that.

Now, in this case – and it will be true of many – there was damage.  I do in fact respectfully remind the Court of what appeared at appeal book 754 - it was touched on in an earlier exchange - where the court noted at paragraph 46 that:

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” –

Now, I have included in that the reading of “caused by wear and tear”, but I respectfully submit for the respondents that that is indeed a red herring, that it is an artificial introduction and a distracting notion.  We have ‑ ‑ ‑

KIRBY J:   Did you have a say in the wording of the questions reserved, or were you asked to make submissions on it?

GUMMOW J:   Neither you nor Mr Ellicott were there.

MR GEE:   It is never easy to put that tactfully, your Honour, but I would not like to say that there was no opportunity.

KIRBY J:   It just seems to have gone ‑ ‑ ‑

MR GEE:   But that having been said, we have always put the proposition, or certainly in the court below and on the special leave application and respectfully advance it again, that section 8 does not make any inquiry into damage, the cause of damage, from the point of view of what got the oil into the water.  It just does not make any inquiry at all.  It asks a question about characterisation but it does not make an inquiry about cause.  The inquiry about cause arises only after and if one has applied the characterisation of damage.  Then you start to ask some questions about how it happened from the point of view of determining whether it was intentional, including reckless, but, with respect, only then.

GLEESON CJ:   Mr Gee, coming back to paragraph 46, I would have read paragraph 46 in the light of everything that had gone before and that what Chief Justice Spigelman was there saying was that on the assumption that damage can include wear and tear, there was no submission that this particular wear and tear was not capable of being damage, that is all.

MR GEE:   Well, your Honour, I respectfully submit that he went further, but it is not necessary to my argument to really resolve that.  Could I move from that, your Honours.  The damage must be present to trigger the defence; that is accepted.  Now, a question was posed by your Honour the Chief Justice as to whether something might turn upon whether in a case where there is damage to the equipment you are looking at the equipment taken as a functional object, in this case a crane, or whether you are looking at the particular damaged part, in this case the hoses.  I respectfully submit that it is not necessary to make that distinction.  You can ‑ ‑ ‑

GLEESON CJ:   On your argument it is not necessary.  On Mr Ellicott’s argument it is necessary because he keeps talking about damage from a course external to the equipment, so you have to ask yourself:  external to what?

MR GEE:   That is true, your Honour, but I would sidestep even that in this way, that you have damage to equipment in any ordinary sense of the term where you can establish, as happened here and will usually be the case, what component of the equipment has suffered the damage.  That enables you to ask the question, “Can we use the crane today?”  “No”.  “Why not?”  “It’s damaged”.  That does not mean that every part of it has suffered some ‑ ‑ ‑

GLEESON CJ:   Your argument, as I would understand it, would be that if this crane were sold the day before or the day after this incident, unless it were sold as damaged goods, there would probably be some breach of warranty or contravention of some statute.

MR GEE:   It is possible, your Honour, but I have to be a bit careful about embracing that, with respect, because there is a textual problem posed by section 8 as to whether the expression “escaped from the ship in consequence of damage” means that you look any further than the actual escape‑producer – in this case rupture – or whether you go back into what your Honour Justice McHugh called the process.  In my submission, textually it is pretty clear.  You ask what caused the escape.  In this case the escape was caused because a certain oil escaped from its normal container, which was a hose under pressure.  We would submit you just do not need to go any further, provided you have been able to characterise the state of the hose or equipment as damaged.

So, picking up your Honour Justice Hayne’s illustration of the wrongly rated hose, that is damaged by pressuring beyond its designed capacity.  It would be getting on for an abuse of language to describe it as anything else but damaged by pressure beyond its designed capacity. 

McHUGH J:   Can I tell you what seems to me the most powerful point against your argument, and it is that although you have this continuous eroding of the equipment itself, even though there is damage being caused to the equipment day by day, week by week, you can come within the defence even though you have done nothing to take precautions or to minimise or reduce that risk.

MR GEE:   Your Honour, could I pick that up in two ways.  First of all, I pick up an observation that fell from your Honour, indeed, on the special leave application, would my friend’s argument be the same if it had happened in one action?  Clearly, he would not be able to advance the proposition he puts if it was one action so I put on for the respondents what is really the difference between one sawing motion and ten sawing motions if they produce the necessary character of damage.

The second way I would approach it is to attack, with all due respect, of course, the way in which he goes about the argument based on lack of maintenance which, in our submission, has very much introduced a distracting factor. 

Now, it is easy to postulate and get a sort of emotive start to the case: the captain who is negligent in his maintenance and so forth.  Your Honour the Chief Justice’s dirty British steamer with the salt‑caked smokestack that briefly troubled us on the special leave application.  But, really, when one thinks about maintenance, maintenance must always involve some element of anticipation.  Maintenance can take a lot of forms.  It might be truly preventative in the sense that you change the air cleaner in your car to stop dirty air getting in and wearing the engine too quickly or it might be replacement maintenance, tyres that have worn too far or ‑ ‑ ‑

KIRBY J:   But you are not answering Justice McHugh’s question because your theory of the meaning of the subsection is that you can just do nothing and walk out with this defence, do no maintenance and that is not accident minimisation.  That is just accident ignoring.

MR GEE:   No, no.  I am taking too long to do it, your Honour, but I am, with respect, answering his question by suggesting that maintenance, in the concept that is trying to be put forward against us, is itself a distraction because it, itself, does not capture what happened here, namely that an unexpected, unanticipated, untoward event occurred.  Even maintenance in the form of inspection has to have some rational anticipation, whether it is inspection of every part of an aircraft to see if anything is going wrong or whether it is a very cursory inspection to the most vulnerable parts of a car or a ship.  But they all involve some element of rational anticipation.  That is the very thing that is not involved here.

HAYNE J:   Does your argument about damage and the expression “in consequence of damage” or “escaping consequence of damage” then read “damage” as limited to the perforation, or do you include within “damage” that which preceded perforation?

MR GEE:   We submit that textually you look at the perforation.

HAYNE J:   But the damage therefore spoken of in the “all reasonable precautions” element of the paragraph is precautions after the occurrence of the damage, damage being perforation.  Is that way you seek to read it?

MR GEE:   That is the primary way we put it.

McHUGH J:   You have to.  That is the only way you can put it, is it not, because “damage” must surely mean the same in both lines.

MR GEE:   Yes, probably, your Honour, but let me assume that for the moment for the purposes of submission.  The damage is the rupture, as found by her Honour at first instance.  It happens that we know what caused it.  We will not always but we happen to in this case.  Now, in consequence of that the oil escaped.  The moment before the rupture the oil was contained within the vessel, in this case a pipe, in which it was intended to be contained.

Now, the next provision, what I call the third hoop, the reasonable response provision, requires that after the occurrence of the damage, the rupture, or the discovery of the discharge, which is put there because people may not have been able to ascertain the fact of rupture for some time, then you have to prevent or minimise the escape of oil, et cetera.  In my respectful submission, they are a perfectly consistent use of ‑ ‑ ‑

HAYNE J:   These hoses were encased in an outer casing, were they not?

MR GEE:   They were certainly running up as a bunch, so to speak, through this sleeve that was doing its work on the outer surfaces and eventually – we do not even know that the rusty sleeve actually finished up cutting through the hose.  All we know is that at a certain point of pressure induced in the pipe, it ruptured and out came the oil.

McHUGH J:   But does not your argument lead to this, that if the hose had ruptured but there was no oil it, it had been hanging there for weeks, you would still have the benefit of the defence provided you had taken all reasonable precautions after the discovery of the discharge oil.

MR GEE:   Yes, your Honour, but I cannot have understood, I think your Honour’s question.

McHUGH J:   The rupture may have taken place.  Let us assume that somehow or other there is a rupture of equipment but no oil is lost there and then.  Now, a week or a fortnight later, the equipment is used and oil is discharged.  Now, even though it was unreasonable for you not to have taken precautions about the damage, can you not succeed under this defence, on your theory, provided you take reasonable precautions immediately you discover the discharge?

MR GEE:   Yes, but you can also do it provided – the damage has to produce a discharge.  If, on your Honour’s hypothesis, there is a rupture that does not do so, then the intervening time until it occurs is, with respect, irrelevant.  There is a non‑event.

McHUGH J:   In one sense that is true, but it does not make much sense in this context.  You can hardly think that the legislature was going to give you an offence even though there was every opportunity for you to have taken reasonable precautions to prevent the occurrence of the damage.  That rather points to the fact that the damage is not harm or impairment of the use or function of equipment from a repetitive process, but that damage is referring to harm or impairment of use or function by a sudden event and not by a process.

MR GEE:   But, your Honour, that, with the utmost respect, reads an awful lot into the language that is not there.  Let me illustrate the point in a different way.  Supposing a seaman is determined to get the master into trouble and he comes up with his seaman’s knife and he puts a little cut into the side of the hose in the hope that it will burst and a crane is used, but he has not cut it enough, and the crane goes along, no oil escapes, everything is fine.  So the next night he comes along and does a bit more, and he still does not succeed, and finally he manages to do it.  Now, that is a repetitive process, your Honour, but surely the end point is damage, that is, the rupture that causes the oil to escape.

McHUGH J:   Yes, but there it is.

MR GEE:   I have one other thing to put, if I may respectfully interrupt your Honour.  That is that your Honour’s hypothesis seems to be that, as a starting point, somehow given that the damage has occurred – given that the process has occurred, there is an opportunity in the master to do something about it.  Now, if the master observed the chafing, et cetera, which was concealed up within the sleeve, and did nothing about it, it would be impossible to think that he would be able to slip past without falling foul of the recklessness provision.

McHUGH J:   That may be but if through negligence he fails to discover it, on your argument he has a defence provided he takes reasonable precautions after he discovers the discharge, no matter how negligent he is, no matter how long the damage had been there.

MR GEE:   But, your Honour, I have to put this with the utmost respect, as your Honour knows I do, but that is restating the submission for our learned friends which is assuming what you set out to prove, namely, that you can read the word “damage” as meaning something other than damage.

McHUGH J:   No, it is, as I have said many times in judgments, the grammatical meaning of a statutory proposition does not always accord with its legal meaning.  What one always is trying to do is to get the legal meaning of a statutory test and frequently or usually it will accord with the grammatical meaning.  But that is why you take into account purpose and matters of that nature in construing legislation and that may finally give you a construction which is different from a purely grammatical one.

MR GEE:   I wanted to put something about that, your Honours.  I notice the time.  I do not know whether it will be a convenient moment.

GLEESON CJ:   We will adjourn now until 2.15 pm.

MR GEE:   If your Honour pleases.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.16 PM:

GLEESON CJ:   Yes, Mr Gee.

MR GEE:   Your Honours, perhaps I should just return for a moment to the illustration that concerned Justice McHugh before the adjournment of the rupture before ‑ say a fortnight before the discharge actually occurs and, indeed, my saboteur might produce the same result, that he does it a fortnight before the crane has occasion to be used.  It does fit, your Honour, but, in my submission, you have to subdivide cases a little.  There is the case in which the master does in fact know that there is a rupture and does not do anything about it.  The Convention clearly deals with that with the recklessness provision.

There is the case in which the master neither knows nor should reasonably know that it has occurred – that is the rupture.  That is equally dealt with by the Convention in the sense that it is not intentional damage, on any view.  That leaves an area of a situation in which the master perhaps should know but does not in fact.  That is dealt with in part by the Convention, namely, in all those cases were, on the facts, the absence of knowledge shades into recklessness.

McHUGH J:   Is that not a problem because ‑ ‑ ‑

MR GEE:   Probably including “blind eye” negligence.

McHUGH J:   But, of course, it talks about “intentional damage” and surely that does not apply because the hypothesis is that damage is being done, on your argument, and it is not an intentional discharge that the section talks about, it is “intentional damage”.

MR GEE:   Yes, I accept that, your Honour.

GUMMOW J:   That is right.

MR GEE:   At least that is probably so and I will assume it against myself for present purposes.  I say it is probably so because it could be a situation in which damage in that definition of “intentional” might have a shift ‑ ‑ ‑

McHUGH J:   But how can there be intentional damage?  If the damage has been done; the captain knows that it has been done but does nothing?  That is not intentional damage?

MR GEE:   No, but then it is a question of whether on the facts reasonable precautions have been taken.

McHUGH J:   Yes.

MR GEE:   That depends on analysis of the facts in a given case to determine whether, for example, the master did or should have known that the event, the rupture, the damage event, had occurred.

McHUGH J:   The point I was putting to you is that in that situation the master could say, “There was no intentional damage and, although I did not take reasonable precautions after I was aware of the damage or after its occurrence, nevertheless, I took reasonable precautions after the discovery of discharge”.

MR GEE:   Yes.

McHUGH J:   Those two things are put in the alternative, not cumulatively and ‑ ‑ ‑

MR GEE:   They are, your Honour, but we are talking about an unusual situation.  Textually, that fits the Convention.  If he knew it was there, the rupture that is to say, which had, let us assume, not been caused by his intentional conduct but he just knew it was there and ignored it, then he could not possibly pass the “reasonable precautions” test, so he could not get through the third hoop.

McHUGH J:   Why not?  Why can he not say, “I knew there was damage, but I didn’t think anything would happen, but the moment I discovered there had been a discharge I took reasonable precautions to do something then”?  Why has he not a defence within ‑ ‑ ‑

MR GEE:   He has.  I think we have closed the circle, your Honour, I hope in my favour.

McHUGH J:   It seems absurd that he has an offence in those circumstances.

MR GEE:   It depends on the precise hypothesis.  Your Honour introduced just a moment ago the notion of the master saying, let us assume for a moment is accepted in saying, “I didn’t think anything bad would happen”.  It is very sensitive to the exact hypothesis, with respect, but there is no reason why the situation has to be characterised as absurd.

KIRBY J:   You have to say that it is not absurd if you take into account that this is not a convention that deals with every aspect of pollution, that when you look at its history and look at what it actually deals with, it is not covering the entire field.  It is just dealing with a number of egregious circumstances.

MR GEE:   I add something to that too, your Honour, which is that the framers of the Convention could have, but did not, widen the exception beyond intentional damage.

McHUGH J:   You mean the exception to the exception.

MR GEE:   The exception to the exception is consciously narrowed to intentional damage.  It is at that moment, your Honours, that I respectfully put the submission that “primacy of the text” means primacy of the text.  What our learned friends want to do is to take a supposed purpose and promote it to have an overriding action, namely, to change the meaning of an ordinary word.

GLEESON CJ:   It is clear, is it not, that damage of the kind that Mr Ellicott acknowledges as damage, such as damage resulting from the ship running against rocks, is covered by subsection (2)(b) even if the damage resulted from negligence on the part of the master of the vessel unless the negligence was to such a degree as brought it within the concept of intentional damage?

MR GEE:   That, I believe, is, with respect, the situation, your Honour.  The framers did not – wisely or unwisely is not for us to say – extend that exception to the exception to cover negligence.  Hence my citation, with respect, of Justice Gummow’s remark in the Applicant A that ‑ ‑ ‑

GUMMOW J:   They did set up a survey system though, did they not, Regulation 4, periodic survey?

MR GEE:   Well, yes and no, your Honour, that ‑ ‑ ‑

GUMMOW J:   Admittedly, only for oil tankers.

MR GEE:   I was just going to make that point, with respect, your Honour.  Even then only where there is a certificate in force under section 36, which is not necessarily automatic even in the case of oil tankers.

So if I could just offer a final respectful submission to Justice McHugh.  Your Honour’s concerns would not lead your Honour to engage in rewriting the Convention.  It might leave, perhaps, a little question mark or a little cloud hanging above your Honour’s thinking about the case, but not to rewrite the Convention or to fail to give primacy to what we respectfully submit are plain words.

Now, there are just a few matters and then I have concluded my submissions, your Honours.  My learned friend, Mr Ellicott, in speaking about the question of wear and tear said that people know that something has wearing parts and they need to do something about them.  That conceals the implication that you have to have a reason to believe that parts are wearing and that you have to do something about it and there is an attempt on the part of both the appellants and the intervener, with respect to them, to take this notion of what we might call routine maintenance as if it were somehow provided for in a convention which is silent on the subject.

Their written submissions, may we respectfully point out, have to search around for what they hope are synonyms for the word “damage”.  They use words like “failure” and “deterioration” and so forth, but that sidesteps the problem that the Convention is plain.

GUMMOW J:   The reasonable precautions taken after the occurrence of the damage assume that the existence of the damage is patent, do they not?

MR GEE:   That part of it, yes, your Honour.  You could not take reasonable precautions against something of which you are ignorant.

GUMMOW J:   No.  It suggests, perhaps, that the damage is something of an apparent catastrophe, as it were.

MR GEE:   We would put that in aid of our submissions, your Honour.

GUMMOW J:   I am not sure it helps you.  That supports what Justice McHugh has been putting to you.

MR GEE:   He would have to say, your Honour, that the master, on that view of it, would need to know that the rupture had occurred.  Once you get to that, then he is going to have tremendous trouble getting past a “reasonable precautions” requirement anyway.  We wanted to say two other things, your Honours.  First, in the written submissions for the appellant when dealing with the Faulkner Report – and I will not read paragraphs but in paragraphs 44 and 132 of their submissions, they put the work of the Faulkner Report far higher than my learned friend, Mr Ellicott, put it today.  In particular, they did not in the submissions draw attention to that paragraph 132 in which Faulkner indicates that strandings, collisions and unavoidable leakage were regarded as being very small contributors.  My friend has done that today ‑ ‑ ‑

HAYNE J:   But at the time soon after World War II where a lot of vessels filled with oil had been sunk.

MR GEE:   Of course.  One of the great concerns of the Faulkner Report was whether anything could be done about the fact that the ocean floor had a lot of such vessels ‑ ‑ ‑

HAYNE J:   Faulkner refers to the fact that as much as 5,500 tons of heavy oil was discharged in non‑territorial waters near New York Bay from ballast water alone.  Certainly the primary focus of Faulkner seems to be on ballast water, washing tanks and the like.

MR GEE:   And wrecks, your Honour.

HAYNE J:   Wrecks, I would have thought - see paragraph 42: 

It seems unlikely that wrecks are responsible for more than a small part of the oil which is now being washed up on our beaches ‑ ‑ ‑

MR GEE:   We withdraw the last submission, your Honour.  The only point I wanted to make for present purposes is should your Honours be revisiting the written submissions in relation to that they have been departed from, to some extent, in what has been put orally.

GLEESON CJ:   Mr Gee, it seems that from the very first time this matter was the subject of argument in the Land and Environment Court, going back to a judgment of Justice Bignold, it has been evident to everybody that the potential reductio ad absurdum of your argument is the rusty rotting hulk that steams into Sydney Harbour and then disintegrates.  Justice Bignold thought that the answer to that argument was that such a case would almost certainly fall within subsection (3).

MR GEE:   Yes, he did say that.

GLEESON CJ:   I would just like to test that proposition a little.  The concept of intentional damage as described in subsection (3) seems to involve somebody doing something to the vessel.  It talks about damages arising:

in circumstances in which the master or owner of the ship:

(a) acted with intent to cause the damage –

now, that would not cover the rotting hulk case ‑

or ‑ ‑ ‑

MR GEE:   Well, it could, your Honour, with great respect.

GLEESON CJ:   Leave aside a scuttling.  Let us leave aside the vessel being scuttled.

MR GEE:   Yes.  All right.

GLEESON CJ:  

or

(b) acted recklessly and with knowledge that damage would probably result.

Now, result from what in the case of the extreme example that was being considered by Justice Bignold?

MR GEE:   He perhaps presupposed that acted recklessly included recklessly omitted to do things.

HAYNE J:   Why not recklessly by sailing the vessel in circumstances where the vessel was not seaworthy?

MR GEE:   I do have a slightly different submission to put about that.

GLEESON CJ:   What would be the damage that would result?  What would be the resulting damage spoken of in para (b)?

MR GEE:   That the master of the hypothetical vessel which is not at all being looked after knows that some of the damage that is occurring by neglect will ultimately allow oil to escape his vessel.

GLEESON CJ:   Now, the damage that is being spoken of in paragraph (b) is not oil pollution.  The damage that is being spoken of in paragraph (3) is the damage to the ship which is causing or permitting the oil pollution.

MR GEE:   Yes.  Your Honour, I put my response too elliptically, that he would be aware that this neglect brings about a state of damage which, in turn, allows the escape of oil, such as, to take an obvious case, the simple rusting through of an oil containing vessel.  Now, that would fit.

GLEESON CJ:   So paragraph (b) would cover a case in which there was a reckless failure to maintain the vessel with knowledge that unseaworthiness would probably result?

MR GEE:   Well, it does not say that but then unseaworthiness may or may not produce an oil discharge.  We are only concerned with damage that produces one thing, not unseaworthiness but oil on the water, which indeed incidentally leads me to the other submission that I wanted to put in answer to Justice Hayne which is that our learned friends have called in aid that SOLAS Convention which imposes a general obligation on masters to ensure that their vessels are seaworthy in the more general sense.  That is the real answer, that they have a separate obligation not to be found in the MARPOL Convention to have their ship seaworthy.

HAYNE J:   But we are familiar with cases of old tankers at sea simply breaking their back and sinking with great discharge of oil.  How do you say such a case is dealt with, if at all, by subsection (3)?

MR GEE:   Your Honour, the answer is going to appear to beg the question, namely, that if it can be shown that the damage, that is, the back breaking, is the result of recklessness or intent, then the Convention operates and otherwise it does not.

HAYNE J:   I do not see why you do not answer that sailing the vessel, knowing it to be unseaworthy to the point where it may break its back, is itself the act of recklessness which causes the damage because putting it to sea, the vessel breaks its back.  But twice you seem to have spurned the answer, and there we are.

MR GEE:   No, your Honour, I am not intending to exclude that.  I had thought I had given ‑ ‑ ‑

HAYNE J:   That is faintest embrace, I think, that has been given for a long time, Mr Gee.

MR GEE:   If to set out was itself recklessness because it could be seen that the back would break, then the Convention would operate.

GUMMOW J:   Yes, but many of these catastrophes at one stage in the 1980s were Korean‑built vessels and there were design faults.  It was a sudden and unexpected catastrophe in 12 or 15 of them, I think.

MR GEE:   Yes, the Convention does not appear to have operated in those cases, whereas if you shift the facts to Justice Hayne’s example of a person being reckless even in setting sail, then the Convention would operate.  That, I think, interrupted your Honour the Chief Justice’s testing of Justice Bignold’s proposition that cases would normally be caught by the recklessness provision where they were the rusty British tram.  I am not sure that your Honour had ‑ ‑ ‑

GLEESON CJ:   That seems to amount to cases, if there has been a total loss, where the ship has been either scuttled or the conduct amounts in practice to scuttling, knowing that that damage would probably result, which is not an unusual meaning of the expression “intentional damage”.

MR GEE:   Yes, certainly, but it could also go a bit further and still be consistent with the submission that we are seeking to put, namely that the captain could make his rounds every day and see an ever-increasing rust patch on a critical area of the tank and do nothing about it.  Now, he would be caught by the recklessness provision and that is presumably the sort of thing that Justice Bignold had in mind.  Maintenance, to pick up a point we were making earlier, has to be maintenance of a kind that is recognised as necessary and that can take a great variety of forms. 

Finally, your Honours, on that question of determinations in the courts below which have partly given rise to the present problem in the Spliethoffs Case 91 LGERA 321, there has been a tendency to read Justice Bannon as if he were deciding that damage includes wear and tear, but, with respect, he was not deciding any such thing. He was engaging in the characterisation process that I started my submissions before the court and saying, “I don’t characterise the facts before me as damage”. That is, with respect, all he was saying. He also happened to put another label on it; he called it “wear and tear”.

GLEESON CJ:   No, he did not actually.  I thought he called it something a little more favourable to you.  He called it “fair wear and tear”.  You will find that in the middle of page 320.

MR GEE:   It is, with great respect, there, your Honour, but later on he does not seem to have maintained consistent usage of that expression.

GLEESON CJ:   What I wanted to ask you was whether the word “fair” in the expression “fair wear and tear” excludes negligent absence of maintenance.

MR GEE:   Your Honour, I am hesitating because I suspect that the expression really does not direct itself to issues of maintenance at all.  It directs itself to processes, wearing and tearing, and you then ask yourself whether you can apply the epithet “fair” to what is happening.

GLEESON CJ:   I may be imagining this but I thought I had first come across that concept in the context of landlord and tenant.

MR GEE:   Yes, exactly.  If you lease the premises with the carpet and the tenants do not do anything except walk on the carpet, it will eventually suffer from what is colloquially called “fair wear and tear”.  Then, your Honours, interestingly, it is not damaged, it is worn out.  It is like the shoes I am wearing.  I walk around and they suffer from “fair” wear and tear and when we get to a certain point they are worn out.  The Convention talks about something else, and that was what we had here.

GLEESON CJ:   I am having a little trouble relating that concept of “fair wear and tear” to the actual facts of the case that Justice Bannon had before him, but that is probably because I do not understand enough about the mechanics of the situation he described.

MR GEE:   Yes, your Honour.  To the extent that he gave us the facts at 321, it is, with the utmost respect to his Honour, a little difficult to see how he came to the conclusion that it was not damaged, but we just do not know enough about it. 

Your Honour Justice Kirby asked a question about texts.  There are some, your Honour, the two we have with us, but we do not suggest they are the only ones.  Both go back to about the mid 1980s.  There is the second edition of a text called “Oil Pollution from Ships”, Abecassis and Jarashow, and there is a sort of standard handbook called “United Kingdom Marine Pollution Law” by a Mr Bates, the same era, your Honour.  They are of interest in that, for example, in Bates at page 3 you get a thumbnail sketch of the IMO and how it developed and its history, but beyond that we have not ourselves found anything in the texts that will elucidate the present problem.

KIRBY J:   There is no handbook put out by IMO which is a sort of commentary on the words of the Convention?

MR GEE:   We know of none, your Honour.  Thank you.

GLEESON CJ:   Yes, Mr Ellicott.

MR GEE: Your Honours, there was one other thing, I am reminded of it. We were asked early in our submissions whether we had any opportunity in relation to the formulation of the question and I am obliged to – I said that I could not put that we had not opportunity. I will not give your Honours the case in copy form but in 110 A Crim R 454 at 463, there is reported her Honour Justice Pearlman’s decision on the debate as to the questions and, yes, we had an opportunity to put some matters which are shown at 463, but what she essentially did was adopt the prosecutor’s form of questions and send them up to the Court of Criminal Appeal.

KIRBY J:   Yes, I do not think it should really count against you in this case.  We have to pass beyond it, but we do have to answer the question.  In a sense I feel that there is comfort that Justice McHugh revealed earlier in what seems to be the assumption in the question, which is that fair wear and tear are somehow going to take somebody into or out of “damage to the

ship or its equipment”.  It may be the answer can be expressed in terms that, as it were, does not necessarily accept the question.

MR GEE:   Especially, with respect to your Honour, if your Honours would embrace our submission that once you have been able to characterise the facts as damage, all else follows easily.

KIRBY J:   Have you dealt in your oral submissions with all of those cases that Justice Hayne went through?  He listed about seven cases.  Speaking for myself, it would be helpful, perhaps now notice has been given, if a note could be sent in which deals with each of those and says how each of them enliven or do not enliven the statute because, in a sense, from your point of view, if some of them fall outside the statute, well, so be it.  It merely demonstrates one of your propositions, that the statute and the Convention do not pretend to cover the field.

MR GEE:   That will be done, your Honour.

GLEESON CJ:   Yes, Mr Ellicott.

MR ELLICOTT:   Your Honours, Justice Bannon seems to have proceeded, at 320 and 321, on a suggestion that the cause of this may have been the adherence of something to a piston which caused it not to operate.  Then he proceeds to deal with the question of whether it could have been wear and tear and he was not satisfied because of the failure to call evidence that it was not wear and tear and he had already said he did not think that damage included wear and tear.  I think that is the way in which his reasoning proceeded.  It was a matter of not being satisfied.

GLEESON CJ:   But not all defective machinery is the consequence of wear and tear or fair wear and tear.

MR ELLICOTT:   Not all?

GLEESON CJ:   Not all defects in machinery are the consequence of fair wear and tear, are they?

MR ELLICOTT:   No.  Take the case of a defective gauge, it can be important, that tells you how much is left in the tank to fill it with oil.  That defect may have been in the gauge when it was acquired and therefore no damage has occurred to the equipment.  It is just defective in the sense in which damage to the equipment is used.  The use of that gauge, in consequence of which there was an overflow or a discharge, would not advantage either the captain or the owner.  That would come under subsection (1).

It is suggested that if for some reason it was good at the start and it became defective and that was not within the notion of intentional action on the part of the owner or the master, then somehow neither of them would be liable because that was damage to the equipment.  If we are thinking of a gauge, how did it become damaged?  Did somebody hit it?  If it was struck a blow by somebody and that caused it to be defective, then it may be damage to the equipment.

If on the other hand it is the result of some, I will call it wear and tear operation of the gauge over time which causes the needle to stick, as sometimes can happen with gauges, then that is obviously a failure to test the gauge.  According to our argument, we would say that is covered by subsection (1).  That is not damage to the equipment.  Nothing has happened to it as such except that it has been used and it has become defective and the master or the owner, as the case may be, are at fault because they fail to adopt proper procedures:  the maintenance.

In relation to the words which are found in subsection (2)(b) – and my friend was addressing some comments to questions from Justice McHugh about “all reasonable precautions were taken after the occurrence of the damage” – if your Honours go back to section 7(2) of the Prevention of Oil Pollution Act in relation to leakage, leakage which could cover in a sense the facts of this case, one could say, it is quite possible that what happened here would come within the technical meaning of “leakage”:

which could not have been avoided, foreseen or anticipated –

that apart, and it added:

and that all reasonable steps were taken for prompt discovery of the –

leakage.  That phrase is antecedent to the discharge ‑ in other words, antecedent, as my friend would put it, to the damage.  In other words, it anticipates, as Justice McHugh was saying could be absurd, that a person could fail to take all reasonable steps, which we would say included a proper maintenance procedure, to be able to discern whether leakage was going to occur.  It would be odd if that was left out as it was and still intended to deal with a mere case of leakage as distinct from a case of damage to the ship.

Now, that is because, we say, and we say it is justified on the text, that damage to the ship in section 7 of the 1960 Act and leakage were two distinct things and that clearly under that Act the type of damage alleged, allegedly damage which occurred here, would have come under leakage as distinct from damage to the ship.

My friend’s argument, in our submission, does not deal, although in answer to your Honour the Chief Justice he referred to in the rust bucket case that your Honour put to him – although he referred to recklessness, it does not overcome the fact that that will depend on circumstances.  The master may have been a new master.  For instance, that was a circumstance in the Spliethoffs Case that Justice Bannon refers to.  The new master may know nothing about that which causes it to be a hazard in the sense that it could just sink.  He may know nothing about that.  There must be many ships that have been painted many times.  It would be very serious to take the paint off because it would probably fall apart, but a new master may well be unaware and have a defence of non‑intentional damage. 

The other one who was reckless and had been with the ship for 20 years and knew all the circumstances, it might be said that he was reckless, but those are different circumstances which should not depend on who the person is to determine whether or not the damage alleged is only within the first subsection or whether it is subject to the defence.

We would submit that it is unthinkable that in those cases, unthinkable in the sense that it is not reasonable, a master or an owner can escape if they have a ship which has not been properly maintained and which is likely to go to the bottom ‑ ‑ ‑

McHUGH J:   I know but it is the wording of (2)(b) that seems to be very, very odd.  Let us take the hypothesis that you put forward that damage is referring to damage caused externally.  The ship is run into and there is damage to its equipment or to the ship itself.  The master is aware of it, does nothing, yet it would appear that provided he takes all reasonable precautions to prevent the escape after he discovers a discharge of the oil, he is immune from action.

MR ELLICOTT:   Your Honour can feel that that is strange but that is not a reason for saying that everything else is damaged, that my friend wants to.  That is a reason actually for limiting it.

McHUGH J:   I know but it does seem ‑ ‑ ‑

MR ELLICOTT:   And saying that that is really one of those compromises that has apparently been made along the path in the Convention in the case of accidents because under the OILPOL it did not matter whether it was intentional, you got out of it if it was damage to the ship and you took reasonable steps.  MARPOL was an advance on that.  It said you only got that defence if it was unintentional.  That is really a reason why one says, all right, they made that compromise but they certainly did not intend to take this notion of leakage and put it into damage to the ship.  They intended to leave it as a matter of strict liability.

GLEESON CJ:   What if the damage results from a fire in the engine room which leads to a chain of events or circumstances on the ship resulting, finally, in oil pollution?

MR ELLICOTT:   Yes, that could be an external event, your Honour, I think, depending on the circumstance it could be.  It depends ‑ if it is a fire in the engine room and it is one – it depends on the cause of the fire.  If was a mad seaman starting the fire, clearly not.

GLEESON CJ:   No, suppose the failure of electrical equipment?

MR ELLICOTT:   If it is electrical equipment and that is the cause of the damage then, in our submission, that damage would come under subsection (1) and not be defensible under subsection(2)(b).

GLEESON CJ:   Because it is not external to the ship or its ‑ ‑ ‑

MR ELLICOTT:   It is not external to the ship in the sense that we put it because it is the result of defective maintenance of electrical equipment.  If there is a storm, as sometimes happens, and there is a lightning strike it may be different.

KIRBY J:   But given that we are looking at this for the purpose of ensuring that the Convention works as best it can for the purpose of the statute to prevent reprehensible pollution, to use it that way, is the externality of the cause such an important criterion?  I mean, taking those two cases that you have just illustrated, lightning from outside, yes, but imperfect equipment, no.  It does not seem to be a self‑evidently rational discrimen for the operation of the Convention.

MR ELLICOTT:   To repeat it, it depends on what “damage to a ship” means and if you take a broad brush to the word “damage” then you can describe the equipment, in the case of wear and tear or fair wear and tear, whatever you describe it as, as damaged.  You can say it is damaged.  That is not in the context of a convention that is designed, whatever my friend says, to prevent pollution.  Article 1 of the Convention makes it clear that the nations involved have agreed to implement the Convention to prevent pollution in that context.

One is going to look for a test which will not do damage to the words that are used, that is “damage to a ship”, but will, at the same time, if those words are open to the meaning, give them a meaning which limits the defences to the imperative in section 8(1) that any discharge from a ship is prohibited, subject to those defences.  It really is a matter of discerning a meaning which is consistent with that.

Our way of doing it is, we submit, the appropriate way given the history and, in other words, subsection (2)(b) is more appropriately related by using damage to the ship to the notion of accidental damage as distinct from the notion if I call it, of leakage, or some other form of discharge.

GLEESON CJ:   What we were told about the Commonwealth legislation is that it excludes damage resulting from wear and tear.  Is that right?  I just wanted to ask you that because if that is right the Commonwealth legislation would not exclude the fire in the engine room example that I put to you.

MR ELLICOTT:   I think what it says is:

For the purposes of this Section, ‘Damage’ to a ship or its equipment does not include:-

(a) Deterioration resulting from failure to maintain the ship or its equipment –

Now, maybe that would be wide enough to cover it or –

Defects that develop during the normal operation of the ship or its equipment.

That is how they have dealt with it and that could be wide enough to cover it.

KIRBY J:   Could you identify that statute for the record?

MR ELLICOTT:   That is the International Maritime Conventions Legislation Amendment Act 2001. I do not have the number.

McHUGH J:   It is referred to in your written submissions, Mr Ellicott.

MR ELLICOTT:   Yes.  I thought there was in the submissions a document which contained a reference to each of the Acts of the State and the amendments.

GLEESON CJ:   There was certainly a reference in that Act.

MR ELLICOTT:   Yes, and your Honour will find it in those.  Your Honours, that is all I wanted to say in reply.

GLEESON CJ:   Thank you, Mr Ellicott.  We will reserve our decision in this matter and we will adjourn – sorry.

MR GEE:   I was going to say, your Honours, that we have some copies of the documents that have been referred to in written submissions but not yet provided with such as the definitions of “to” from the OED.  We took issue with the way our friends had used that definition.

GLEESON CJ:   Could you say that into the microphone?

MR GEE:   I am sorry, your Honour.  We have copy documents if they would be handy of the South Australian amendment that showed how negligence has been brought in as a further area of criminalisation and the OED definitions of “damage” and the word “to” should they be needed.

GLEESON CJ:   You could provide those then, perhaps, to the associate.

MR GEE:   If your Honour pleases.

MR ELLICOTT:   I did promise that we would get the travaux preparatoire.  That is a bit of an effort.  I do not mean that that is not something that is a hardship but it will take a little time to get them all together.

KIRBY J:   It is very useful in the Refugees Convention.

MR ELLICOTT:   We will deliver it to the Court.

KIRBY J:   Yes.  If Mr Gee sends in a note about Justice Hayne’s six illustrations, it would be helpful to me if you could deal with that too, Mr Ellicott.

GLEESON CJ:   We will adjourn until 10.15 tomorrow morning.

AT 3.01 PM THE MATTER WAS ADJOURNED