Morrison v Defence Maritime Services Pty Ltd and Coates

KEY ISSUES: Prosecution :- sentence - plea of guilty to a marine pollution charge - extent and cause of discharge of oil - sentencing considerations - result offence - potential for result to occur cannot be taken into account on sentencing but proper to take into account when exercising statutory discretion whether to dismiss proceedings without proceeding to conviction - whether higher penalties ordinarily result where parliament has increased maximum penalty - parity of sentencing

LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 ss 10, 21A(3), 22 Marine Pollution Act 1987 s 8

Barbara Filipowski v Vopak Terminals Sydney Pty Ltd [2006] NSWLEC 104; Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304; Environment Protection Authority v Middle Harbour Constructions Pty Ltd (2002) 119 LGERA 440; Filipowski v Arta Adhisatya Pte Ltd and Sahea [2002] NSWLEC 169; Filipowski v Cadem Shipping Pty Ltd & Anor [2005] NSWLEC 552; Filipowski v Dayton Corporation (2004) 138 LGERA 150; Filipowski v De Ocampo [1998] NSWLEC 119; Filipowski v Fratelli D'Amato S.r.l and Others (2000) 108 LGERA 88; Filipowski v Frey [2005] NSWLEC 661; Filipowski v Island Maritime Ltd; Majgaonkar [2005] NSWLEC 73; Filipowski v Mediterranean Shipping Co SA and Ors [2005] NSWLEC 159; CASES CITED: Filipowski v Schiffsbeteiligungsges m.b.H & Co KG (2004) 134 LGERA 48; Filipowski v Wallenius Lines Singapore Pte Ltd & Anor [2002] NSWLEC 148; Hoogendoorn v MISR Shipping Company and Hassan [2001] NSWLEC 171; Morrison v Che Mat and Others (1997) 95 LGERA 212; Morrison v Peacock and Roslyndale Shipping Company Pty Ltd [2003] NSWLEC 68; Postiglione v The Queen (1997) 189 CLR 295; R v Howard (1992) 29 NSWLR 242; R v Li [2005] NSWCCA 154; R v Slattery (1996) 90 A Crim R 519; R v Thomson; R v Houlton (2000) 49 NSWLR 383; Thorneloe v Filipowski [2001] NSWCCA 213, (2001) 52 NSWLR 60; Webb v Chung & Ors [2002] NSWLEC 135; Weininger v The Queen (2003) 212 CLR 629

DATES OF HEARING: 20 - 22, 27 - 28 February 2007; 11 - 12 April 2007; 4, 24 May 2007

PROSECUTOR: Mr A L Hill SOLICITORS: Dibbs Abbott Stillman LEGAL REPRESENTATIVES: FIRST AND SECOND DEFENDANTS: Mr G J Grogin SOLICITORS: Ebsworth & Ebsworth

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

JUDGMENT 1 HIS HONOUR: In November 2002, the owner, master and chief engineer of the 42.7 metre twin screw vessel "Seahorse Horizon" were, respectively, Defence Maritime Services Pty Ltd, Mr Allen Coates and Mr Danny Mahon. Each has pleaded guilty to a charge of polluting the waters of Sydney Harbour on 5 November 2002. The charges against the owner and master are under s 8 of the Marine Pollution Act 1987. The charge against the chief engineer is under s 8A. This judgment is concerned with penalty in relation to the owner and master only. Penalty in relation to the chief engineer is the subject of a separate judgment. The evidence against each defendant is not identical. For example, the evidence of the chief engineer is not in evidence against the owner and master, and the evidence of the master is not in evidence against the chief engineer. The prosecution's evidence in chief against all three was presented at one hearing, after which the evidence for the owner and master and the evidence for the chief engineer were heard separately. 2 The owner pleaded guilty to a charge that on 5 November 2002 it was the owner, and the master pleaded guilty to a charge that on that day he was the master: …of a ship named Seahorse Horizon from which a discharge of oil occurred into State waters namely the waters of Sydney Harbour, in contravention of Section 8 of the Marine Pollution Act 1987. 3 Section 8(1) of the Marine Pollution Act 1987 provides: (1) Subject to subsections (2) and (4), if any discharge of oil or of an oily mixture occurs from a ship into State waters, the master and the owner of the ship are each guilty of an offence punishable, upon conviction, by a fine not exceeding: (a) if the offender is a natural person - $500 000, or (b) if the offender is a body corporate - $10 000 000. 4 The movement of the vessel on the day in question may be briefly described as follows, although it will be necessary later to go into more detail. At 0845 hours the vessel was un-slipped from Goat Island and various trials were carried out within Sydney Harbour when an overheating problem in the port shaft and a drop in the port header tank were observed. At 1000 hours the vessel was docked at Garden Island where a problem was detected. At 1053 hours the vessel left for Goat Island for the purpose of slipping it there in order to investigate the problem. The vessel stood at the approaches to the slip at Goat Island for a time. However, due to the congestion at the slipway and a falling tide it could not be slipped at that time. The vessel therefore proceeded to the naval establishment HMAS Waterhen at Balls Head Bay, where it was secured at 1140 hours and an oil containment boom was placed around the vessel.

5 The prosecutor's case is that oil discharged from the vessel at or prior to the time it was at Garden Island. The owner's and master's cases are that the only discharge (at least of which they were aware) occurred after the vessel was boomed at HMAS Waterhen. 6 As to the standard of proof, in Weininger v The Queen (2003) 212 CLR 629 at [18] Gleeson CJ, McHugh, Gummow and Hayne JJ said: In R v Olbrich (1999) 199 CLR 270, the Court examined a number of questions relating to fact finding in sentencing, usually discussed under the rubric of the onus and standard of proof in sentencing. As the joint reasons point out at 281 [25], [r]eferences to onus of proof in the context of sentencing would mislead if they were understood as suggesting that some general issue is joined between prosecution and offender in sentencing proceedings . The Court adopted what was said by the majority in the Court of Appeal of Victoria, in R v Storey [1998] 1 VR 359 at 369, that a sentencing judge: may not take facts into account in a way that is adverse to the interests of the accused unless those facts have been established beyond reasonable doubt. On the other hand, if there are circumstances which the judge proposes to take into account in favour of the accused, it is enough if those circumstances are proved on the balance of probabilities. EVENTS PRIOR TO 5 NOVEMBER 2002 7 The vessel was slipped at the Goat Island slipway in October 2002 for a scheduled refit and overhaul. The overhaul included an examination of the propeller tail shaft bearings located within the stern tubes. The bearings were found to be within acceptable tolerances so the shafts and stern seals were replaced. The vessel was un-slipped and refloated on 18 October 2002. When the vessel was at sea the engines were stopped and the engineers investigated an overheating problem with the starboard stern tube bearing and tail shaft. An oil slick was observed on the port side coming from the vicinity of the propeller shafts. The Master, Allen Coates, recorded that 10 to 15 litres of oil was lost in the ocean. 8 The vessel was re-slipped at Goat Island on 21 October 2002 where it was found that the forward starboard bearing had been damaged. A new bearing was installed, the stern tube was reassembled, refilled, primed with oil and fitted with new seals. The vessel was un-slipped on 29 October 2002.

9 The vessel re-entered service and returned to operate from its base at Jervis Bay. Next day, 30 October 2002, when the vessel was at sea, the shaft temperature alarm activated, and it was discovered that the port shaft system was operating at a high temperature. Mr Coates was the master and Mr Mahon was the chief engineer on that occasion.

10 The vessel returned to Sydney where it was slipped at Goat Island on 1 November 2002. The port shaft was withdrawn and it was found that the forward bearing had sustained similar damage to that which had previously affected the forward bearing in the starboard stern tube. The port forward stern tube bearing was replaced with a new bearing and new forward and aft seals were fitted.

TRIALS ON 5 NOVEMBER 2002 11 The undocking of the vessel from Goat Island commenced at 0745 hours on 5 November 2002. After machinery trials, the vessel left Goat Island at 0845 hours and carried out manoeuvring trials and sea trials. The description "sea" trials is something of a misnomer because they were in fact conducted within Sydney Harbour. The vessel's path took it past Fort Denison to Bradley's Head, Junction Buoy and back.

12 The prosecutor's case of a continuing leak from the time of the sea trials initially received support from the evidence of two expert witnesses called by the prosecutor, Mr Peter Burge and Professor Hans Coster. Their evidence was to the effect that oil escaped because the port stern tube seal garter ring became dislodged from its usual position and lodged between the face of the seal and the face of the seat, forcing the faces apart, thus allowing oil to continuously leak into the water. They did not see the garter ring or the seal in that condition but relied on a report of a Mr Trevor Cosh, who was not called to give evidence. However, it was established through the cross-examination of Mr Burge and analysis of Mr Cosh's report, that they had misinterpreted Mr Cosh's report. Mr Cosh's report in fact indicated that the ring came to be lodged between the face of the propeller and the seal.

13 In my view, the prosecutor has not proved beyond reasonable doubt that there was any discharge of oil prior to the vessel docking at Garden Island. There is no direct evidence of a leak of oil to the sea prior to the arrival of the vessel at Garden Island.

14 The vessel docked at Fleet Base East, Garden Island at 1000 hours. The chief engineer's subsequent undated report of the incident recorded that thereafter: "Informed of oil appearing on Port side aft". The report noted that both main engines were shut down and "investigate oil leak. Appears to be from Port Aft seal. Loss of oil Port Stern Tube Header tank…" A report dated 7 November 2002, by Mr Brett Heath of the Sydney Ports Corporation, recorded that at Garden Island "A very slight leak was detected from the stern shaft seal". Evidence from Mr Paul Sheehan, a cook on the vessel, was that at Garden Island the chief engineer was unhappy with the temperature of the bearings on one of the propeller shafts. Mr Sheehan and crew members Mr Allen Woods and Mr David May were on deck at Garden Island. They gave evidence but did not indicate that they observed any oil in the water. Based on the said two reports, I find that there was a very slight oil leak into the water at Garden Island from the stern port shaft seal.

15 The master testified that he had the following conversation with the chief engineer at approximately 1020 hours: Mahon: There is a problem with the temperature of the port shaft

Mahon: The port shaft was hotter than normal and I suspect the cause of the overheating is an airlock in the system. The port header tank has dropped slightly more than likely because there is air in the system which takes up oil as the air moves out of the system. I will call Mike Milton (DMS' National Engineering Manager) and Sydney Ship Repair (SSR) to discuss the problem 16 The chief engineer then moved to the back of the bridge to make his calls to Mr Milton (with whom the master had no direct contact with on that day) and Sydney Ship Repair on his mobile phone. The chief engineer and Mr Coates then had a further conversation: Mahon: Mike Milton has recommended an immediate return to SSR Slipway at Goat Island. I have also spoken to SSR and the slipway is being prepared.

Mahon: SSR are happy with the tide to reslip the vessel 17 The master thereupon entered in the vessel's log book for 1020 hours "Problems identified with Port Shaft".

18 Mr Milton's evidence, which I accept, was that the chief engineer told him that the port shaft was getting hot; that they probably needed to take the vessel back to the slip; and that the gauge level had dropped about half an inch but the chief engineer did not think they had lost any oil, rather he thought air had got in again. Mr Milton told the chief engineer that he would see if the slip at Goat Island was available and not to drive on the port shaft but only to use the starboard. In cross examination, Mr Milton accepted that if the bearing was running hot, there was a slight drop in the sight glass and that some ten days earlier there had been a similar bearing running hot which had resulted in an oil spill, that would alert him to something going wrong and the possibility of an oil spill. He accepted that in those circumstances he would find out what was going on, and if he did not know what was going on, boom the vessel.

19 The master's evidence was that he was not told at Garden Island that there was a leak to the sea. A report prepared by the master late on the afternoon of 5 November 2002 recorded: On completion of the trials at 1000h the vessel was made fast STBD side to FBE No 2 berth. The port shaft temperature was reported at an unsatisfactory level (58C compared to the STBD shaft 40C) the C/eng reported air in the oil cooling system and the level in the port header tank had dropped indicating a leak to the sea. 20 The words "indicating a leak to the sea", the master testified, were not intended as a statement that the vessel was leaking, but rather was an inexact way of conveying that in hindsight a drop in the header tank can be suggestive of an oil discharge from the system which warranted precautionary steps being taken. The prosecutor submitted that I should reject that testimony as a recent invention. In support of that conclusion the prosecutor referred to the report of the incident dated 7 November 2002 by Mr Brett Heath of the Sydney Ports Corporation that (at Garden Island) "a very slight leak was detected from the stern shaft seal". The report does not identify the source of that information. The prosecutor submitted that it should be inferred that the master had told Mr Heath this, given that Mr Heath formally interviewed the master on 5 November 2002 after the incident. However, the master denied doing so and no such statement by the master appeared in Mr Heath's record of the master's interview. Mr Heath's report stated that he boarded the ship to conduct a record of interview with the master and the chief engineer. This raises the possibility that the latter may have been the source of the said statement in the report. In cross examination Mr Heath agreed with a question that this statement was what he "deemed" to have happened. It was submitted for the defendants that this evidences that it was merely his perception. I do not accept that submission; the question did not go so far and left the issue hanging.

21 I am prepared to accept the master's evidence that: (a) he did not make any such statement to Mr Heath; and (b) that he was not informed of a leak at Garden Island or of any leak before the vessel was boomed at HMAS Waterhen.

22 I also accept the master's explanation that the words "indicating a leak to the sea" was an inexact way of conveying that a drop in the header tank can be suggestive of an oil discharge from the system which warranted precautionary steps to be taken. However, I do not accept his evidence that this was "hindsight". Rather, I consider that this was apparent to him at Garden Island. This conclusion is based mainly on his own testimony as to what he was told by the chief engineer at Garden Island, his experience with the similar over-heating on 18 October 2002 which was associated with leakage, and his admissions in cross examination. The master acknowledged in cross examination that at Garden Island the chief engineer told him that the port shaft bearing temperature was high, that there was a drop in the sight glass and that the level in the port header tank had dropped. He admitted that he knew those matters were indicative of a leak to the sea; that the measure that should have been taken at Garden Island was to isolate the vessel by placing a boom around it; and that if there was a leak it could have continued when they left Garden Island.

23 I accept the prosecutor's submission, which was supported by evidence, that the prudent course of action at Garden Island would have been to boom the vessel, isolate the header tank from the stern port system, drain and secure the stern tube and investigate the problem, before moving the vessel to Goat Island. If such precautionary action had been taken, the further oil discharge which I find below occurred at Garden Island would have been avoided.

BETWEEN GARDEN ISLAND AND HMAS WATERHEN 24 At approximately 1053 hours the vessel departed from Garden Island for the Goat Island slipway. On arrival at the Goat Island slipway, the slip was not immediately available for the vessel to enter. From about 1108 to 1123 hours the vessel stood at the approaches to the Goat Island slip waiting for the slip to become available. During that period there was no record of any oil leak being observed and there was no report of any further change in the level of oil in the port header tank sight glass. No oil leakage was reported to the master nor did he observe any oil in the water from the bridge from which he had an unimpeded view of the stern. These observations are particularly significant because if the vessel was leaking oil between Garden Island and HMAS Waterhen, it should have been readily observable while the vessel was stationary off Goat Island.

25 Due to congestion at Goat Island and a falling tide, the vessel could not be slipped at that time. Instead, at approximately 1123 hours, it proceeded to the naval establishment HMAS Waterhen in Balls Head Bay, to await the next high tide that evening. There was no oil observed in the water where the vessel was waiting nor when it manoeuvred toward HMAS Waterhen.

26 There is an issue as to whether oil was discharged between Garden Island and HMAS Waterhen, which I address below.

27 The vessel berthed at HMAS Waterhen at 1140 hours. The master felt it prudent to boom the vessel because of the chief engineer's report to him at Garden Island, even though there was no report to him of an oil leak. A containment boom was in place at 1150 hours. An inspection of the area at that time demonstrated that no oil was on the surface of the water in the vicinity of the vessel.

28 The master then spoke by telephone to Mr Neil Peterson, the Assistant National Operations Manager of the owner, and said that the vessel was alongside HMAS Waterhen and, as a precaution against any oil spillage, he had ordered a containment boom to be placed around the vessel. Mr Peterson said he would contact Sydney Ports and let them know what had happened and what the master was doing.

29 By about 1210 hours oil was observed within the boomed area. The vessel's log entry at 1210 hours was "Boom position checked. Secure. Very slight oil film inside boom". Crew members, Allen Woods and David May, saw oil on the water after the boom had been placed and seem to have been the first to have seen the oil. The master mustered the crew and instructed them to watch carefully for any further appearance of oil. At 1340 hours he rang the Sydney Ports Authority Duty Officer and reported that there had been an accidental loss of oil, which he estimated at approximately 5 to 10 litres, and that the vessel was fully boomed and the oil contained.

30 In the meantime, at approximately 1212 hours Ms Carmen Rennie, an officer of the Sydney Ports Corporation, received a telephone call from Mr Peterson. Her testimony as to this conversation was admitted into evidence against the owner but not against the master (or chief engineer). Her written record made that day states: "Mr Peterson advised the Seahorse Horizon lost approximately 15 litres of oil whilst proceeding from FB east to Waterhen. The vessel took on board fuel at FB east and has placed a boom around the vessel at Waterhen whilst investigating the source of the leak." Her affidavit evidence as to Mr Peterson's information was substantially the same except that it omitted reference to taking on board fuel at Garden Island. In cross examination she disclosed that she received the information from Mr Peterson in two telephone discussions rather than one. I accept that her written record is reliable as to the information given to her by Mr Peterson.

31 The prosecutor submitted that I should find that the master provided Mr Peterson with the information which Ms Rennie recorded, given that the master had spoken to Mr Peterson earlier. The master denied telling Mr Peterson that the vessel had lost 15 litres of oil whilst proceeding from Garden Island, because as far as he was aware oil had not leaked from the vessel into the Harbour until after it was boomed at HMAS Waterhen. He also testified that the statement attributed to Mr Peterson in Ms Rennie's report that the vessel took on fuel at Garden Island was incorrect. I am prepared to accept the master's evidence in those two respects.

32 Ms Rennie's evidence is the only direct evidence of a discharge of oil between Garden Island and HMAS Waterhen. Its weight has to be assessed and measured against the competing evidence. Ms Rennie's evidence is hearsay on hearsay. That is because she records information given to her by Mr Peterson, which he could only have obtained from someone else since he was not on the vessel. I have said that I am prepared to accept the master's evidence that he was not the source of Mr Peterson's information, notwithstanding that the master spoke with Mr Peterson earlier in the day. As the source has not been established and as neither Mr Peterson nor his source have given evidence, the reliability of his information to Ms Rennie is untested. On the other hand, the master gave evidence that he made observations between Garden Island and HMAS Waterhen and that there was no discharge of oil, even when the vessel was standing to off Goat Island. Nor was the master notified of any discharge of oil between those two places. The master was well tested in cross examination and my impression was that he appeared credible. Other members of the crew gave evidence yet none testified that there was any oil discharge between Garden Island and HMAS Waterhen. The expert evidence, of itself, does not satisfy me that there was any discharge other than at those two places. The vessel's log indicated that the first sighting of oil in the water at HMAS Waterhen was at 1210 hours, inside the boom. On balance, I am left with a reasonable doubt as to whether there was any discharge of oil between Garden Island and HMAS Waterhen.

33 A note in the chief engineer's subsequent written report recorded that the vessel berthed at HMAS Waterhen at 1140 hours. The next entry is "Oil still discharging from Port shaft." The prosecutor emphasised the word "still", submitting that it suggested a continuous leak between Garden Island and HMAS Waterhen. The entry evidences knowledge by the chief engineer of an oil discharge on at least one earlier occasion. Two earlier occasions are mentioned in his report, both of which I have mentioned previously. The first was the incident on 18 October 2002. The second was at Garden Island. I am not satisfied that the word "still" should be interpreted in the way proposed by the prosecution.

34 Later that afternoon there was noticeably more oil on the surface inside the boom and it appeared to be spilling from the vessel's port side. The master instructed the crew to deploy an oil soaker boom and pads within the containment area to remove the oil and instructed the engineering staff to find the source of the leak and stop it. The chief engineer later told the master that he had noticed a "very slight drop" in the level of oil in the sight glass of the oil header tank and as a precaution against further leakage he had arranged for the remainder of the oil in the source tank to be drained away. Within an hour the oil in the containment boom had been cleaned up and, he says, none had escaped outside the boom.

35 Mr Peter Booker, a marine engineer and expert witness called by the defendants, on the assumption that this "very slight drop" was less than twenty five millimetres, expressed the view that it represented a loss of oil of less than three litres. He also expressed an opinion as to the total amount of oil lost but I do not attach significance to it because it was based in part on assumptions or material that was not proved.

36 Sydney Ports Corporation officers gave evidence of their attendance at various times on the afternoon of 5 November 2002 at HMAS Waterhen while the oil clean up was still underway. Messrs Frederick Tagoe and Peter Smith estimated that the volume of oil in the water was approximately 15 litres. Mr Brett Heath's estimate was 10 to 15 litres. He observed a light sheen and some streaks of oil around the stern inside the boomed area after the clean-up operation had begun. He testified that had he seen oil outside the boomed area he would have noted it in his affidavit. Mr Adrian Hawes estimated that there was between 5 and 10 litres of oil in the water along the port stern side of the vessel. He also observed a light sheen on the water surface outside the boomed area: I accept that evidence and conclude that during the course of the afternoon a small proportion of the oil escaped outside the boom.

37 If any finding is to be made as to the quantity of oil discharged, it must be found beyond reasonable doubt. Where there is no precise or accurate measurement of the quantity, the defendant is entitled to have it assessed on the basis of the lower range of the estimates given: Filipowski v Island Maritime Ltd; Majgaonkar [2005] NSWLEC 73 at [28]; Filipowski v Cadem Shipping Pty Ltd & Anor [2005] NSWLEC 552 at [31]. When determining the appropriate sentence, the Court may not take into account the potential for there to have been a larger discharge than the one that actually occurred, because to do so would be to punish the defendant for an act with which he is not charged: Thorneloe v Filipowski (2001) 52 NSWLR 60 at [146] per Spigelman CJ. 38 I find that between about 5 and 15 litres of oil discharged into the water at HMAS Waterhen after it was boomed, of which a small proportion escaped outside the boomed area.

SENTENCING 39 The objective seriousness of the offence is reflected in the maximum penalty and in the increase in the maximum penalty when s 8 of the Marine Pollution Act 1987 was amended in November 2002. The maximum penalty for acts causing a discharge contrary to s 8 is $500,000 for individuals and $10 million for corporations. Prior to the amendment of s 8 by the Marine Legislation Amendment (Marine Pollution) Act 2002, the maximum penalty was $220,000 for individuals and $1.1 million for corporations. It was said in the Second Reading Speech for the Bill that: The purpose of the Bill is to further protect New South Wales waters from the effects of oil pollution from vessels by providing stronger incentives for owners, masters and crew of vessels to comply with the Marine Pollution Act … 40 The offence for which s 8 provides is a strict liability "result" offence. The result of the discharge of oil or oily mixture is the focal point of the legislature's concern with the conduct in question. A sentence for a result offence "may not take into account the potential for the result to occur, the actual occurrence of which is an essential ingredient of the offence. To take potential for harm into account would be to punish the offender for conduct which would constitute a different offence for sentencing purposes, that is, a larger discharge'": Thorneloe v Filipowski (2001) 52 NSWLR 60 at [146]. However, such potential is a risk to society and is a "proper" matter to be considered under s 10(3)(d) of the Crimes (Sentencing Procedure) Act 1999 when exercising the discretion whether to dismiss proceedings without proceeding to conviction: Thorneloe at [156].

41 Section 21A(3) of the Crimes (Sentencing Procedure) Act 1999 prescribes mitigating factors which the Court must take into account when determining penalty. The following are relevant: · the damage caused by the offence was not substantial; · the offence was not part of a planned or organised criminal activity; · the offender does not have any record (or any significant record) of previous convictions; · the offender was a person of good character; · the offender is unlikely to re-offend; · the offender has good prospects of rehabilitation; · the offender has shown remorse for the offence; · the offender pleaded guilty (as provided by s 22); and · assistance by the offender to law enforcement authorities (as provided by s 23). Damage caused by the offence 42 The damage caused by the offence is to be assessed by reference to the quantity of oil discharged. A very slight amount of oil was noticed at Garden Island by the chief engineer. About 5 to 15 litres were discharged at HMAS Waterhen, of which a small proportion escaped outside the boomed area. Prior to the discharge of oil at HMAS Waterhen, an oil containment boom was deployed around the vessel and after the discharge occurred the clean-up commenced promptly with absorbent pads. On the findings that I have made, only minor environmental harm was caused. Offence not part of a planned or organised criminal activity 43 There is no suggestion that the offence was part of a planned or organised criminal activity. Record and good character 44 The master and the owner have no prior convictions. They are of good character. The master has a long and respectable employment history. Unlikely to re-offend 45 In my opinion, the master is unlikely to re-offend. He has learned from this experience. The master is still employed by the owner. It follows that the owner is also unlikely to re-offend as a consequence of any conduct of the master. Although it is difficult to say more than that about a corporation with many employees in relation to strict liability pollution offences, the prior unblemished record of the owner is supportive of the conclusion that it is unlikely to re-offend. Remorse and assistance to law enforcement or regulatory authorities 46 The master and owner cooperated with the Sydney Ports Corporation in respect of the clean-up operation: Filipowski v Cadem Shipping Pty Ltd & Anor [2005] NSWLEC 552 at [62], R v Thomson; R v Houlton (2000) 49 NSWLR 383. The master has indicated his contrition and remorse. The owner has indicated regret and contrition and that it is committed to taking whatever steps are necessary to ensure that there will be no recurrence of the incident. I accept that their evidence is genuine. Mr Heath of the Sydney Ports Corporation reported to his supervisor that the master (and chief engineer) had shown genuine concern for the situation and had followed the required steps as laid down by the Sydney Ports Corporation for such incidents. Mr Hawes, of the Sydney Ports Corporation in a report concerning the incident, stated that at all times the master and crew acted professionally and assisted and followed all Sydney Ports Corporation requests, and that the clean up was carried out swiftly and effectively. Plea of guilty 47 Section 22 of the Crimes (Sentencing Procedure) Act 1999 provides that in passing sentence for an offence on an offender who has pleaded guilty to the offence, a court must taken into account, first, the fact that the offender has pleaded guilty and, secondly, when the offender pleaded guilty or indicated an intention to plead guilty, and may accordingly impose a lesser penalty than it would otherwise have imposed. The maximum discount on penalty for the utilitarian value of an early plea of guilty is twenty five percent: R v Thomson; R v Houlton (2000) 49 NSWLR 383. In the present case, the summonses were filed on 10 October 2005 and were returnable on 2 December 2005. Guilty pleas were entered on 24 March 2006. There were earlier appearances before the Court on 4 January and 20 February 2006. The prosecutor submitted that the defendants are not entitled to any discount from the penalty because of the delay in the entry of pleas of guilty. I disagree. There should be taken into consideration that the incident was some three years old before the prosecution commenced proceedings and that there was a Christmas holiday period not long after the return of the summonses. Although the defendants did not plead guilty at the earliest possible opportunity, in the circumstances they were not particularly tardy. Their guilty pleas have served a substantial utilitarian purpose. I propose to allow a discount of twenty percent on penalty. Precautionary steps 48 The defendants referred to the evidence of the master that he relied on the professional ability of the chief engineer within his domain and pointed out that the malfunction lay within the chief engineer's domain. I accept that submission. Nevertheless the master has overall responsibility for the vessel. The object of making a master personally liable is to ensure that he will do everything he can to avoid pollution. The object of making an owner liable is to discourage the owner from taking a tolerant attitude towards officers or crew who cause pollution: Thorneloe v Filipowski (2001) 52 NSWLR 60 (CA) at [161] - [162].

49 The defendants submitted that there was nothing more that they could have done to prevent spillage and that they were personally unaware of the malfunction. I reject that submission. According to the evidence of both the master and the owner's employee, Mr Milton, they were informed of a problem while the vessel was berthed at Garden Island of the same nature as the problem in October which had led to an oil discharge at sea. They should have known, and in my view did know, at Garden Island that there was a real risk of an oil discharge if they moved the vessel from Garden Island without taking precautionary steps. I have earlier indicated at [23] the precautionary steps that should have been taken at Garden Island. While they cannot be punished for the potential of a larger discharge than has been proved to have actually occurred, if those precautionary steps had been taken then the second discharge at HMAS Waterhen would not have occurred. If similar precautionary steps had been taken at HMAS Waterhen, additional to the booming of the vessel, that too would have prevented the second discharge. The master, as the person in overall charge of the ship's operation, bears responsibility for the vessel being moved from Garden Island without precautionary steps being taken. The owner bears more than usual responsibility for that conduct because the owner through its employee Mr Milton directly participated in the decision to move the vessel from Garden Island without taking precautions.

50 The owner and master both apply to be dealt with by an order under s 10 of the Crimes (Sentencing Procedure) Act 1999 without proceeding to a conviction. Section 10 relevantly provides:

1. Without proceeding to conviction, a court that finds a person guilty of an offence may make any one of the following orders: (a) an order directing that the relevant charge be dismissed, (b) an order discharging the person on condition that the person enter into a good behaviour bond for a term not exceeding 2 years, (c) an order discharging the person on condition that the person enter into an agreement to participate in an intervention program and to comply with any intervention plan arising out of the program. (2) An order referred to in subsection (1) (b) may be made if the court is satisfied: (a) that it is inexpedient to inflict any punishment (other than nominal punishment) on the person, or (b) that it is expedient to release the person on a good behaviour bond. … 3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors: (a) the person's character, antecedents, age, health and mental condition, (b) the trivial nature of the offence, (c) the extenuating circumstances in which the offence was committed, (d) any other matter that the court thinks proper to consider. …

51 The following principles relating to s 10 were identified by the Court of Criminal Appeal in the marine pollution case of Thorneloe v Filipowski (2001) 52 NSWLR 60 per Spigelman CJ (with whom Hulme and Howie JJ agreed):

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

[158] In my opinion, when Talbot J referred to, and took into account, the potentiality for harm, he was having regard to a consideration which it was open to him to regard as proper to consider … …

[171] Even in the case of an offence of strict liability, no public purpose is served by recording a conviction or imposing a penalty in circumstances where the relevant accused could not, as a matter of practical reality, have done anything to ensure that the offence or, in the case of a result offence, the adverse consequences of the conduct, did not occur. …

[178] It is, in my opinion, relevant to the exercise of the discretion under s 10 of the Sentencing Act , in the context of a strict liability offence, to consider what the applicant for the benefit of s 10 could have done to avert the event that has occurred. While questions of weight are always for the sentencing judge, it is unlikely that this consideration will be given determinative weight in the case of a serious offence or a repeat offender. Where, as here, there was a comparatively minor pollution by a first offender, this consideration is entitled to weight. …

[182] His Honour appears to have applied a practice that has developed in the Land and Environment Court to hold the master responsible for discharges occasioned by some defect in operations, save where the senior officer directly responsible is convicted. That will be an appropriate outcome in many, if not most cases. The approach is not applicable in all cases. …

[191] …It was submitted that the public policy underlying the enactment of the Marine Pollution Act was adequately met by conviction of the owner. As outlined above, the master has distinctive obligations. Indeed, these are emphasised by the statutory scheme which separately refers to owners and masters. 52 Paragraphs 52 to 122 of the judgment of Spigelman CJ in Thorneloe v Filipowski have not been reported in the New South Wales Law Reports. The following principles may be noted in the unreported judgment [2001] NSWCCA 213: [113] My review of the authorities indicates that the Court has consistently stated that there is no practice for a "blameless" Master to be discharged without conviction, whenever the company is convicted ( Morrison v Dilmun at 260; Morrison v Ausmarine at 447; Valle v Morrison at 11). Each case requires the exercise of a discretion on the basis of the whole of the circumstances. …

[115] The authorities indicate that the Master is not discharged under s10 in cases where the discharge has been caused by a failure in the operations on board, save where another senior employee with direct responsibility has been convicted. 53 In Morrison v Peacock and Roslyndale Shipping Company Pty Ltd [2003] NSWLEC 68 Pearlman J said: [24] Mr Hill also submitted that the offence under s 8(1) of the Marine Pollution Act is an offence of strict liability and in such a case the master, Captain Peacock, and the owner bear a responsibility. The legislative intention is that there shall be no environmental damage as a consequence of discharge into water which is why this offence is one of strict liability. Mr Hill drew my attention to a passage from the decision of the Court of Criminal Appeal in Valle v Morrison (Gleeson CJ, Allen and Sully JJ, NSWCCA, 22 November 1995, unreported). Allen J, with whom the other members of the Court agreed, said as follows: The submissions put to us by Mr Sexton in his able argument carried with them a suggestion that it would be inappropriate to impose a penalty upon a master in any case where it was not some personal want of care or skill on his part which caused the spillage. That submission, understandable though it is in human terms, is clearly contrary to the purpose of s 8 of the Act. It is a matter of notoriety that all too often it is not possible to sheet home to any individual responsibility for a spillage in the sense of establishing that it was his act or omission which caused it. The purpose of s 8 in imposing strict liability upon the owner and upon the master, as well as upon any individual found to be responsible, is to deal with this potential disaster of oil spillage by making the owner and the master responsible without personal fault.

[25] That is correct, in my respectful opinion, but that does not mean that there can never be an appropriate application of s 10 in cases of strict liability.

[26] As Mr Gee pointed out, s 10 is not qualified. It applies to any circumstances in which a court finds a person guilty of an offence. The offences under s 8 of the Marine Pollution Act is an offence to which s 10 applies. I note in this connection a passage from the judgment of Spigelman CJ in Thornloe v Filipowski (2001) 52 NSWLR 60 at 76 as follows: It is, in my opinion, relevant to the exercise of the discretion under s 10 of the Sentencing Act, in the context of a strict liability offence, to consider what the applicant for the benefit of s 10 could have done to avert the event that has occurred. 54 Webb v Chung & Ors [2002] NSWLEC 135 is an example of a marine pollution case in which the charge against the master and chief engineer were dismissed pursuant to s 10. The owner was fined $35,000. Cowdroy J held that "the owner of the vessel was not aware of any defect in the stern tube lubricating system" of the vessel; "that the discharge took place in circumstances which could not have been anticipated by either the Master or the Chief Engineer"; and that "the Master and the Chief Engineer could not personally have done any more than they did to avoid the offence or the extent of the discharge" :at [26], [27] and [32]. 55 The defendants submitted that having regard to the relevant factors contained in s 21A of the Crimes (Sentencing Procedure) Act 1999, the Court would be satisfied that the factors in s 10(3)(a) and (c) are favourable to the exercise of the discretion. I accept that the defendants' character and antecedents weigh in their favour. They submitted that in light of the resultant circumstances following the spill and the nature of the unforeseen causes of the spill, there were exceptional circumstances surrounding the spill that can properly be considered under s 10(3)(d). My findings concerning the circumstances have been set out earlier and it is proper to take them into consideration. 56 The defendants submitted that the prosecution had not adduced any evidence to establish that they could have taken any additional steps to prevent the spill. I disagree. I have earlier referred to the precautionary steps that should have been taken at Garden Island. Those steps would have avoided subsequent risk of spillage and the actual spill that occurred at HMAS Waterhen.

57 Dr Marcus Lincoln-Smith, an aquatic ecologist gave evidence for the prosecution as to the likely effects on the marine environment of an assumed oil leakage. His evidence is only relevant to the s 10 application. He assumed likely oil leakage from the time of the vessel's initial passage to Garden Island to after it was secured at HMAS Waterhen. He concluded, on that assumption, that there would be a high likelihood of the oil coating intertidal habitats and associated flora and fauna. However, I have found that, on the evidence, the only discharges were at Garden Island and HMAS Waterhen after booming. The evidence of Dr Lincoln-Smith therefore does not assume much significance in the case.

58 In my view, in the circumstances, the owner and master should not be afforded the benefit of s 10.

Comparable sentences 59 Although each case turns on its own facts, I have had regard to sentences in other marine pollution cases, in most of which the offences occurred before the legislature increased the penalties: Morrison v Che Mat and Others (1997) 95 LGERA 212; Filipowski v De Ocampo [1998] NSWLEC 119; Filipowski v Fratelli D'Amato S.r.l and Others (2000) 108 LGERA 88; Hoogendoorn v MISR Shipping Company and Hassan [2001] NSWLEC 171; Thorneloe v Filipowski [2001] NSWCCA 213, (2001) 52 NSWLR 60; Webb v Chung & Ors [2002] NSWLEC 135; Filipowski v Arta Adhisatya Pte Ltd and Sahea [2002] NSWLEC 169; Filipowski v Wallenius Lines Singapore Pte Ltd & Anor [2002] NSWLEC 148; Morrison v Peacock and Roslyndale Shipping Co Pty Limited [2003] NSWLEC 68; Filipowski v Dayton Corporation (2004) 138 LGERA 150; Filipowski v Schiffsbeteiligungsges m.b.H & Co KG (2004) 134 LGERA 48; Filipowski v Mediterranean Shipping Co SA and Ors [2005] NSWLEC 159; Filipowski v Frey [2005] NSWLEC 661; Filipowski v Cadem Shipping Pty Limited & Anor [2005] NSWLEC 552; Barbara Filipowski v Vopak Terminals Sydney Pty Ltd [2006] NSWLEC 104; Filipowski v Island Maritime Ltd; Majgaonkar [2006] NSWLEC 750. 60 Where parliament has increased the maximum penalty for an offence, higher penalties will ordinarily result for that offence: R v Slattery (1996) 90 A Crim R 519 at 524. However, it does not follow that, for every offence committed after the penalty has been increased, the increase in penalty will be by the same multiple applied to increase the maximum penalty: Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304 at 312; Environment Protection Authority v Middle Harbour Constructions Pty Ltd (2002) 119 LGERA 440 at 444; Barbara Filipowski v Vopak Terminals Sydney Pty Ltd [2006] NSWLEC 104 at [124].

PARITY 61 There should be due proportion between the sentences passed on the owner and master and the sentence passed on the chief engineer, which is the subject of my separate judgment. That should be after making due allowance for the fact that the evidence against each was different as were the charges: Postiglione v The Queen (1997) 189 CLR 295 at 301, R v Li [2005] NSWCCA 154 at [40], R v Howard (1992) 29 NSWLR 242. I consider that the culpability of the chief engineer is somewhat greater than that of the owner and that the culpability of the owner is somewhat greater than that of the master. The chief engineer was the officer with direct responsibility and who was directly involved. The owner through Mr Milton was directly involved in the decision to move the vessel from Garden Island without taking precautions but was not directly involved in the chief engineer's conduct at HMAS Waterhen. However, the discount for an early plea is somewhat greater in the case of the chief engineer than in the case of the owner and master, as indicated in my other judgment. Overall, the penalty for the chief engineer and the owner should be the same and the penalty for the master should be somewhat lower. CONCLUSION 62 Taking into account all relevant circumstances I propose to impose a fine of $35,000 on the owner and a fine of $30,000 on the master. 63 I make the following orders in these two proceedings: Anthony Morrison v Defence Maritime Services Pty Ltd No 50049 of 2005 1. The defendant is found guilty and convicted of the charge in the summons. 2. A penalty of a fine in the sum of $35,000 is imposed. 3. Costs are reserved. 4. The exhibits may be returned 5. The parties are to approach the registrar within two working days to obtain a date for the hearing of any argument as to costs. Written submissions as to costs are to be served and delivered to my associate by 4 pm two working days before the hearing.

Anthony Morrison v Allen Coates No 50048 of 2005 1. The defendant is found guilty and convicted of the charge in the summons. 2. A penalty of a fine in the sum of $30,000 is imposed. 3. Costs are reserved. 4. The exhibits may be returned 5. The parties are to approach the registrar within two working days to obtain a date for the hearing of any argument as to costs. Written submissions as to costs are to be served and delivered to my associate by 4 pm two working days before the hearing.

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