Summary of orders Offence found proved beyond reasonable doubt against both defendants. Second defendant discharged under s.556A Crimes Act, 1900. Case against first defendant stood over to consider appropriate orders.

By consent these Class 5 matters were heard together. In each case the owner and the master are charged with breaches of marine pollution laws. The Prosecutor at relevant times was an officer of the Maritime Services Board of New South Wales. The defendant Corporation, the owner of the ship "MV Palmgracht" ("Palmgracht"), is charged with discharging oil into State waters in breach of s.8 of the Marine Pollution Act, 1987 ("the Act"). The defendant Captain de Jong, the Master of the ship Palmgracht, is charged with the same offence.

The alleged offences occurred on 19 December 1991 when an oily discharge was observed coming down the side of the Palmgracht into the waters of Darling Harbour, part of Port Jackson. It is agreed that the amount of the discharge was small. Nevertheless the two Wagon Mound cases [1961] UKPC 1; [1961] AC 388 (negligence) and [1966] UKPC 1; [1967] 1 AC 617 (nuisance) illustrate the danger that can be caused by oil spills in a large commercial harbour. Fortunately in this case there was no damage and no clean up operation was necessary.

The defendants contest that the discharge of oil occurred, and also rely upon the defence provided by s.8(2)(b) of the Act. While the offence is one of absolute liability, the defence, the onus of proving which lies upon the defendants, is one where the standard of proof is the civil standard R v Carr-Briamt (1943) 1 KB 607. The Act does not define "damage". A surmise is made that the oil leak commenced when the ship's hatches were closed in Brisbane, but no-one can be certain of this. Captain de Jong joined the vessel as Master at Brisbane only two days before the spillage at the wharf in Sydney. It was apparent that he knew little or nothing about the condition of the ship's hatch machinery.

" 8. (1) Subject to subsections (2) and (4), if any discharge of oil or of an oily mixture occurs from a ship into State waters, the master and the owner of the ship, and any other person whose act caused the discharge, are each guilty of an offence punishable, upon conviction, by a fine not exceeding-

(a) if the offender is a natural person-500 penalty units; or

(b) if the offender is a body corporate-2 500 penalty units.

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

(b) if the oil or oily mixture, as the case may be, 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;

(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-

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

(6) In proceedings for an offence against subsection (1) in relation to a ship, 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."

There was nothing in the evidence to suggest that s.8(3) or (4) had any application to the present circumstances.

The Act is intended to enforce the International Convention for the Prevention of Pollution from Ships and its Protocols, 1973 (Schedule 1 of the Act), and s.3(3) provides:

"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."

This statutory recognition of the principles expounded by the High Court in Chu Kheng Lim and Ors v The Minister for Immigration, Local Government and Ethnic Affairs and Anor (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 as to its meaning, although s.8 appears to adopt the language of Regulation 11 in Annex 1 to the Convention, a provision falling strictly outside the terms of s.3(3) of the Act because it is in an annexure.

The signatories would have included civil law countries which distinguish between "injury" and "damage" Crofter Hand Woven Harris Tweed Company, Limited and Ors v Veitch and Anor [1941] UKHL 2; [1942] AC 435 at 442; Darrell Lea Chocolate Shops Pty Ltd v Spanish-Polish Shipping Co Inc (1990) 25 NSWLR 568 at 576. 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 Rural District Council v Guardians of the Poor of the Poplar Poor Law Union and Keeling (1911) 2 KB 801 at 813. See also Nagrint v The Ship Regis, formerly the Ship Rodney [1939] HCA 6; (1939) 61 CLR 688 at 699; Union Steamship Company of New Zealand Limited v Ferguson (1969)119 CLR 191 at 202, 212; Prus-Grzybowski v Everingham and Ors [1986] NTSC 67; (1983) 45 ALR 468 at 472 and Flaherty v Girgis (1985) 4 NSWLR 248 at 266.

The defendants allege that the oil leak discovered in Sydney must have occurred when the hatches of the ship were closed in Brisbane two days earlier. The hatches are operated by hydraulic rams actuated by oil and directed by deck hands or by mates on the ship. The hypothesis advanced was that some foreign substance must have adhered to the chrome plated piston rod of a cylinder and that this jammed in the rubber or plastic seal of the ram, causing oil to escape either from cylinder No.9 or No.10. The ship then voyaged approximated 400 land miles to Sydney, where the slight movement of the vessel at its moorings caused the escaped oil to leave the well in the deck under the cylinders and to slurp over the side. The well is 1 metre x 1.5 metres x 0.5 metres deep (Report by Mr K. Highfield, Exhibit 14). Mr Highfield stated "The routine inspection at sea would discover the incipient signs of any leakage from the cylinders.". If such inspection occurred on the voyage from Brisbane to Sydney it appears to have overlooked the alleged oil in the well.

The ship had regular maintenance schedules or monthly check lists (Exhibit 2). These do not refer to the hydraulic rams. The care of the hydraulic apparatus was not a matter for the Captain but for the engine room crew or deck crew, although, of course, he had overall responsibility. Referring to a video showing the Palmgracht (Exhibit 10), Captain de Jong at p 80 of the unofficial transcript used by the parties, said he saw signs of corrosion around the top of a piston rod. Later it was suggested that this was oil or paint. In his Report (Exhibit 14) Mr Highfield, who is a Marine Surveyor, referred at p 5 to the possibility of a leak being caused by wear and tear where the seal of the piston is damaged by chrome coming away from the ram or by largish debris adhering to the piston. If the former occurred, I would not consider it to be damage within the meaning of s.8(2) of the Act, but rather a matter of wear and tear. Another expert witness, I think it was Mr J. Hocking, a Marine Engineer, whose Report became Exhibit D, stated that corrosive or flaking material could be removed by "stoning" the piston rod, and this would cause oil leaks to cease. It is true, as Mr Sexton, of Counsel for the Defendants submitted, that Captain de Jong was not cross-examined as to whether or not this had been done when the vessel was en route from Brisbane to Sydney. However, maintenance was not his prime area and I do not think that the lack of questioning the two day old Captain on this issue removes the possibility that any leak which occurred in Brisbane was due to corrosion or wear and tear, rather than to stray foreign debris.

The important fact about the case is that neither the engineer nor his subordinates, nor the deckhands, were called as witnesses to state what they observed, if at all, about the condition of the hydraulic cylinders, the piston rods, the seals or the oil wells under the rams.

In a case where the hypothesis advanced is not supported by direct observation of the alleged debris on the piston rod, then it appears to me that the onus of negativing competing hypotheses so as to render the hypothesis advanced, more probable than not, lay on the defendants.

Captain de Jong stated the vessel left Sydney after closing its hatches and proceeded to Melbourne. By this time he was carefully watching the operation of the hatches and he said no oil leaks occurred from any hydraulic cylinder. The ship proceeded on its way around the world.

Captain D.F.M. Tack, who had also served on the Palmgracht, but not at the time in question, gave evidence. He was in command of the vessel when it went to Naples in November 1992, when seven out of the sixteen ram rod cylinders which had been installed in 1985 were replaced upon a routine overhaul. These included Cylinder No.10, but not No.9 (Transcript p 86). This excites a suspicion that the leakage in Sydney in November 1991 was due to wear and tear, but the case cannot be determined on a mere suspicion.

Mr Hocking in his Report (Exhibit D, p 3) said as follows:

"In the writer's experience the possibility of any material sufficiently adhesive to attach to an oil bright chromium plated slow moving vertical piston rod, penetrate the external rod wiper seal, move the piston lip seal (against a minimum internal oil pressure of 10 kg/cm") [142 pounds per square inch] sufficiently away from the cylinder bore to create an external oil leak and subsequently disappear without permanent damage to said piston lip seal and external wiper seal is so remote as to be negligible."

Mr Hocking is highly experienced as a Marine Engineer (see his C.V. Exhibit C). I accept his opinion.

My overall conclusion is that on the balance of probabilities, the defendants have not made out the defence given by s.8(2)(b) of the Act. I am not satisfied the discharge was in consequence of "damage" within the meaning of the subsection, nor am I satisfied that all reasonable precautions were taken after the occurrence of any damage or after the discovery of the discharge as the case may be. Although Mr Sexton made a valiant and thoughtful case for his clients, he was hampered by lack of relevant witnesses.

The other question on which the defendants relied was a submission that there was no evidence that there was any discharge of oil or of an oily mixture from the ship into State waters. At the close of the case for the Prosecutor, I ruled that there was a case to answer (Transcript pp 34 to 38). There was evidence that the oil in the hydraulic cylinder well matched the oil on the side of the ship (about 15 feet above the water). There was an oil slick in the water, and although it could not be matched by chemical analysis to the oil on the side of the ship this did not prove that part of the oil in the water did not come from the ship's side. Mr C. Hansen, an inspector employed by the Maritime Services Board deposed:

"Whilst on the dock at No.4 berth, I observed a constant light flow of water and oily substance discharging from a scupper outlet about midships on the port side of the 'MV Palmgracht'. The discharge was running from the scupper outlet down the hull of the vessel and into the water."

I accept his evidence. In addition, Captain de Jong admitted that he went with the inspector on the occasion in question. There were drops of oily water below the vessel and the side of the vessel was wet. He told Mr Hansen he thought the liquid came from the exit pipe connected to the valve from Nos.9 and 10. I am satisfied beyond reasonable doubt that a discharge of oil or of an oily mixture occurred from the ship "MV Palmgracht" into State waters at Darling Harbour as charged, in contravention of s.8(1) of the Act. There was no evidence of intentional damage within the meaning of s.8(3) of the Act.

I find the offence proved beyond reasonable doubt in each case against the owner and the Master. I was informed that neither has any prior conviction. As I indicated, the Captain's responsibility was minimal. He is now retired and in his case, without proceeding to conviction, I find the offence proved and dismiss the charge under s.556A of the Crimes Act, 1900. There will be no order for costs against Captain de Jong. The Prosecutor concurred in this course.

With respect to the owner, the matter is stood over to a date to be fixed by the Registrar to consider the order that should be made and the question of costs.

I HEREBY CERTIFY THAT THIS AND THE PRECEDING EIGHT PAGES ARE A TRUE AND ACCURATE COPY OF THE REASONS FOR JUDGMENT HEREIN OF THE HONOURABLE MR JUSTICE BANNON.