Filipowski v Dayton Corporation; Sang-Tae

JUDGMENT: IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 50107 of 2003

25 June 2004 Barbara Filipowski Prosecutor v Dayton Corporation Defendant 50082 of 2003 Barbara Filipowski Prosecutor v Kim Sang-Tae Defendant Judgment Introduction

1. These proceedings involve two prosecutions that relate to an incident on 6 February 2001 when a discharge of oil occurred at the Shell Terminal from the vessel Golden Lucy 1 ("the vessel") into the waters of Gore Cove, Sydney Harbour.

2. The owner of the vessel, Dayton Corporation, has been charged with an offence under s 8(1) of the Marine Pollution Act 1987 ("the Marine Pollution Act"), as has the master of the vessel, Captain Kim Sang-Tae.
3. Section 8(1) of the Marine Pollution Act provides as follows:- (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 cause the discharge, are each guilty of an offence punishable, upon conviction, by a fine not exceeding: (a) if the offender is a natural person - 2 000 penalty units, or

(b) if the offender is a body corporate - 10 000 penalty units

The defendants have respectively entered pleas of guilty. Both charges have been heard together as the facts relating to this strict liability offence are identical. The Incident

The vessel was purpose built as a chemical tanker in 1987. As at 6 February 2001 the vessel was owned by Dayton Corporation and demise-chartered to Lucy Shipping S.A. The vessel was then time-chartered by Lucy Shipping S.A to Dorval Kaiun. The vessel was time-chartered by Dorval Kaiun to Shell Australia.

On 6 February 2001 the vessel was berthed at the No. 2 Berth at the Shell Oil Terminal at Gore Cove. The vessel was discharging bitumen feed stock. After the discharge had been completed the vessel received compressed air. This air is sent from the shore to the vessel through the unloading hose connection for the purpose of clearing any cargo residue from the loading arm and cargo line back into the vessel's tanks. According to the evidence in a Statement of Agreed Facts, it is common industry practice to blow compressed air along the cargo hose from the shore to the vessel's manifold to ensure the line is clear.

After the Ship's Officer reported over the radio that the line "is clear" at approximately 11.05am, Robert Francis Newton and Arnoldus Hendirkus Peterus Niessen, Operators for Shell Refining, proceeded to disconnect the wharf-loading arm from the vessel's manifold. On the previous day Mr Niessen had connected the wharf-loading arm to the manifold of the vessel. The wharf-loading arm is connected to a manifold flange by cam locks.

Mr Newton and Mr Niessen observed that a pressure gauge had been connected to the manifold on the vessel's side of the manifold. This pressure gauge had not been in this position the day before. The gauge indicated that there was no pressure in the line.

Mr Niessen attempted unsuccessfully to undo the bottom cam locks connecting the wharf-loading arm to the vessel's manifold flange. Mr Niessen requested that a crewman on the gantry remove the pressure gauge to facilitate access to the cam locks. The crewman said "No you do it". Mr Niessen began to loosen the gauge with a spanner, with the assistance of Mr Newton. As Mr Niessen was loosening the gauge, it blew out of his hand. A large geyser of bitumen feed stock "spewed forth" from the gauge up into the air and covered Mr Niessen and Mr Newton. Pressure in the line caused the eruption and discharge of oil.

The crewman on the gantry ran away when the geyser erupted. Shortly after this, the flow of bitumen feed stock and the height of the geyser were reduced. According to Mr Newton, the geyser lasted for approximately one minute.

At approximately 11.25am, Michael Sullivan, a Port Officer of Sydney Ports Corporation ("SPC"), approached the vessel and saw oil on the vessel's manifold, deck and down her port side and oil in the water along her port side waterline. Mr Sullivan observed that the oil along the vessel's waterline stretched 25 to 30 metres in length. He estimated that there was between 10 and 20 litres of oil in the water.

William Michael West, a SPC Shift Master, and Adrian Murray Hawes, a Port Officer of SPC, went to the Shell Terminal and observed black oil down the vessel's port side and in the water. Mr West estimates that there was 30 to 40 litres of oil in the water. Mr Hawes reported that, in his opinion, there was only 10 litres.

SPC Port Officers, Kevin James Rosser and Desmond Patrick Spurrier, were directed to lay an oil containment boom. Mr Spurrier estimates that there was 30 to 40 litres of oil on the water's surface, covering an area of approximately 30 to 40 metres in length. 14. In a record of interview between John Allan, a Marine Supervisor, and Captain Kim Sang-Tae, Captain Sang-Tae said that 20 litres of oil went on the deck and one litre escaped into the water. He also said that the discharge occurred as a result of the shore fitter undoing the vessel's pressure gauge without permission of the vessel's crew. Accordingly, he attributes the discharge to the shore fitter's failure to communicate with each other.

On the next day, namely 7 February 2001 a small amount of oil was seen on the water's surface, but only inside the boomed area.

Dr Brian King, a Chief Scientist of Asia-Pacific ASA Pty Ltd, was engaged as an expert to assess the quantum of the spill. Dr King calculated that the volume of oil recovered from the slick was potentially 43 litres. He did not observe the incident.

There is no evidence of any actual harm to the environment as a result of the spill. The Master

The master faces a maximum penalty of $220,000. Mr Nell, who appears on behalf of both the master and the corporation, suggested that the Court should apply s 10 of the Crimes (Sentencing Procedure) Act 1999 ("the Crimes (Sentencing Procedure) Act") and not proceed to conviction in the master's case.

Relevant parts of s 10 of the Crimes (Sentencing Procedure) Act provide as follows:- (1) Without proceeding to conviction, a court that finds a person guilty of an offence may make any one of the following orders:

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

(3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors:

(a) the person's character, antecedents, age, health and mental condition,

(c) the extenuating circumstances in which the offence was committed,

(d) any other matter that the court thinks proper to consider.

Captain Sang-Tae is aged 61 years and has been in command of ships as master for 13 years. He has been the master on the Golden Lucy 1 since 27 September 2000. Mr Nell submits that while not seeking to trivialise the matter, it was a relatively minor spill and was cleaned up quickly. Mr Nell points out that there was no direct culpability, as Captain Sang-Tae was not supervising the crew or shore personnel at the time of the spill.

Mr Nell directs the Court to the decision of Morrison v Peers; Hull 1048 Leasing Pty Limited (1995) 87 LGERA 39 where Bignold J took into account the mitigating factors, the conviction and the fine imposed on the ship owner for the same offence as proper matters to be considered in the exercise of the discretion of s 556A of the Crimes Act 1900, which applied at that time. His Honour went on to say that to go further and punish the master would be excessive. Bignold J found that the spill did not occur as a result of defective equipment, inefficient cargo handling procedures, negligence or carelessness on the part of the ship's master or crew.

A similar finding was made in Morrison v Dillman Navigating Co Pty Ltd; Turner (1995) 87 LGERA 257 where Bignold J granted a s 556A to the master on the basis of his character and antecedents and the extenuating circumstances.

In Thornloe v Filipowksi (2001) 52 NSWLR 60 the Court of Criminal Appeal reversed my decision at first instance in respect of the penalty imposed on the master and applied the provisions of s 10 of the Crimes (Sentencing Procedure) Act. The Court of Criminal Appeal had regard to what little, if anything, the master could have done to prevent the discharge as a ground for the exercise of the power not to record a conviction under s 10(1).

In making my decision, I take into account the master's co-operation with the relevant authorities. He has an impeccable record at sea and has never been involved in any type of pollution incident, accident or grounding anywhere in the world prior to this incident. The relatively minor nature of the spill is a factor also taken into account. There has been a general lack of evidence that explains the reason why the incident occurred and what could have been done to prevent it. In his evidence Captain Sang-Tae says as follows:- During disconnection the shore fitter attempted to disconnect the pressure gauge located on the ship's manifold 3G as the pressure gauge was slowing disconnection. This resulted in the remaining Bitumen Feed Stock leaking from the shoreline through the pressure gauge.

The prosecutor did not adduce any evidence to establish that the master could have taken steps to avert the spill. The gauge indicated that there was zero pressure in the line and so it was assumed that the gauge could be removed. Given this extenuating circumstance and the defendant's good record, together with his lack of direct involvement in the incident, it is my opinion, based on the Court of Criminal Appeal decision in Thornloe, that this is a case where it is appropriate for the Court to exercise its statutory discretion under s 10 of the Crimes (Sentencing Procedure) Act. Dayton Corporation

Dayton Corporation, the owner of the vessel, faces a maximum penalty of $1,100,000.

Mr Nell submits that the spill was caused by a problem with the gauge or a problem with the pressurisation on either the vessel or the shoreline. Mr Nell contends that the spill is not indicative of a systemic problem. The defendant corporation acted promptly to prevent further discharge and assisted in the clean up of the spill. The spill was confined to an area between the vessel and the wharf. The defendant, through its officers, co-operated with the relevant authorities. The defendant entered a plea of guilty on the third return date. In an undated letter the defendant has expressed regret that the incident occurred. Dayton Corporation points out that as the vessel is demise-chartered to Lucy Shipping S.A, it does not have any control over the commercial or technical operation of the vessel. The defendant has no previous record.

In determining an appropriate penalty, Mr Nell directs the Court to a number of cases.

In Filipowski v Esar Bunkering Pty Ltd and Another (Lloyd J, NSWLEC, 17 November 1998, unreported), Lloyd J imposed a penalty of $50,000 on the company for a spill which covered less than 100m2. In determining the penalty, the Court considered the prior conviction of the company for a similar offence, the plea of guilty and steps that had been taken to prevent a recurrence.

In Filipowski v Thornloe and Another (2000) 112 LGERA 184, the Court imposed a penalty of $38,000 on the owner for a spill of up to 30 litres of unleaded petrol caused by a faulty gauge and operational error and carelessness on the part of the ship's crew.

In Filipowski v De Ocampo and Others (Lloyd J, NSWLEC, 9 June 1998, unreported), the Court imposed a penalty of $30,000 on the company for an oil spill of 20 to 30 litres caused by the crew's failure to monitor the rising level of fuel in the receiving tank and failure to notify the shore based loading personnel in sufficient time to avoid the spillage occurring.

In Filipowski v Arta Adhisatya Pte Ltd and Sahea [2002] NSWLEC 169, unreported, the Court imposed a penalty of $25,000 on the owner for a spill of between 40 and 50 litres of vegetable oil into the water. Pearlman J took into account the nature of the pollutant and its level of toxicity, early pleas of guilty and no previous convictions.

In Hoogendoorn v MISR Shipping Company and Hassan [2001] NSWLEC 171, unreported, the Court imposed a penalty of $50,000 on the company for an oil spill of approximately 150 to 200 litres. The Court had little evidence before it in relation to mitigation.

In Filipowski v Wallenius Lines Shipping Singapore Pte Limited & Another [2002] NSWLEC 148, unreported, the Court imposed a penalty of $40,000 on the company for an oil spill of approximately 500 litres. 35. There is evidence to suggest that Lucy Shipping S.A, as the long-term charter party, will accept any liability that may arise as a consequence of the spill. This factor is not a matter that should be taken into account. However, there is evidence that Dorval Kaiun, as operator of the vessel through Lucy Shipping S.A, is responsible for implementation of a safety and environmental policy for the crew. The SPC incurred costs of $2,035 (inclusive of GST) in the clean up of the oil spill. These costs have been paid on behalf of the owner.

36. In my opinion, the appropriate penalty is in the range of $35,000, before taking account of any mitigating factors. Taking account of the defendant's record, its early plea of guilty, the nature of the occurrence that led to the charge and the remote involvement of the defendant with the vessel's operation, the proper fine is $25,000. Costs

37. There has been no agreement on the quantum of costs but both defendants agree that they should be ordered to pay the prosecutor's costs. Orders
38. The formal orders of the Court are as follows:- (1) In matter No. 50107 of 2003 the defendant is guilty and convicted of the charge in the summons.

(2) In matter No. 50107 of 2003 the defendant is ordered to pay a penalty by way of a fine in the sum of $25,000.

(3) In matter No. 50082 of 2003 the Court finds the offence proved but, without proceeding to conviction, dismisses the charge pursuant to s 10 of the Crimes (Sentencing Procedure) Act.

(4) In matter No. 50107 of 2003 and matter No. 50082 of 2003 the defendants are ordered to pay the prosecutor's costs.

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