Maritime Safety Authority of New Zealand v Pacifica Shipping (1985) Ltd

IN THE HIGH COURT OF NEW ZEALAND

CHRISTCHURCH REGISTRY

A56/01

BETWEEN MARITIME SAFETY AUTHORITY OF NEW ZEALAND
Appellant

AND PACIFICA SHIPPING (1985) LTD
Respondent

Hearing: 9 October 2001

Appearances: D J White QC and J N Burton for the Appellant
G M Brodie for the Respondent

Judgment: 10 December 2001

RESERVED JUDGMENT OF WILLIAM YOUNG J

Introduction

[1] This is an appeal by way of case stated from a decision given in the District Court at Christchurch on 2 March this year in which the Judge dismissed an information laid by the appellant, the Maritime Safety Authority ("MSA"), against the respondent to the appeal, Pacifica Shipping (1985) Ltd ("Pacifica").

Background

[2] In the early hours of 25 January 2000 the Spirit of Resolution was proceeding out of Otago Harbour. The Master was Captain John Frankland. In the vicinity of Halfway Islands, the vessel struck the bottom.

[3] Section 31, Maritime Transport Act 1994 provides:

(1) The master of-

(a) Any New Zealand ship; or

(b) Any foreign ship in New Zealand waters -

that is involved in a mishap that results in ... an accident, or an incident, shall notify the mishap, accident, or incident to the Authority as soon as practicable.

(2) If, due to injuries or death or for other good reason, the master of a ship referred to in subsection (1) of this section is unable to give the necessary notice under that subsection, the operator of the ship shall provide the necessary notice.

(3) Every person who-

(a) Operates, maintains, or services, or does any other act in respect of any New Zealand ship, any foreign ship in New Zealand waters, or any maritime product; and

(b) Is involved in an accident, incident, or mishap resulting in serious harm, involving a New Zealand ship, or a foreign ship in New Zealand waters-

shall, where required to do so under maritime rules, notify the accident, incident, or mishap to the Authority as soon as practicable.

[4] There is scope for argument as to whether the Spirit of Resolution is a "New Zealand ship" or was, alternatively, a "foreign ship in New Zealand waters". Either way, it was involved in a mishap resulting in "an accident, or an incident". So Captain Frankland had an obligation under s 31(1) to report the events to the MSA.

[5] I have set out s 31(3) for the sake of completeness only. There are no relevant maritime rules and there was thus no direct reporting obligation on Pacifica as the operator.

[6] Captain Frankland complied with Pacifica's own internal procedures as to notification - these procedures being laid down in Pacifica's Quality Assurance Manual. As part of this notification process he filled in a form (MSA12307) provided by the MSA. He faxed this form to Pacifica's Operations Co-ordinator, Ms Anita Gardner, on the afternoon or early evening of 25 January. If she had complied with Pacifica's internal procedures, she would, in due course, have notified the MSA of the accident but only after Pacifica itself had carried out an investigation into the accident.

[7] In fact, Ms Gardner did not notify the MSA of the accident.

[8] The MSA wrote to Ms Gardner on 18 February 2000. This letter referred to a complaint that the Spirit of Resolution had:-

grounded three times whilst leaving Port Chalmers, at 17 knots, on 25 January 2000.

The letter noted that no report from the Master had been received in relation to the incident and sought comments.

[9] Ms Gardner responded by letter of 24 February 2000 which was in these terms:-

We acknowledge receipt of your letter of 18 February 2000... . We can confirm that the vessel did not ground and that 17 knots is well in excess of the vessel's capability (her speed is 14-14.5 knots).

The Master did however report that the vessel appeared to have struck a glancing blow just south of Half Way Islands whilst on the out bound passage from Dunedin that day. A brief summary of what occurred follows:

The Master reported that whilst transiting the passage through Half Way Islands the vessel was set onto the side of the channel by the ebb tide. Inspection revealed no apparent damage to the propeller, rudder or watertight integrity and the vessel proceeded en-route to Lyttelton.

A company investigation was held and it was determined that as there was no serious harm involved there did not appear to be a requirement under the Maritime Transport Act to report the matter. The Master did however complete MSA 12307 Form as part of standard company procedure and have [sic] enclosed a copy for your records.

We would be happy to answer any further questions that you may have.

[10] The reasons for not notifying the MSA as revealed in this letter of 24 February are not particularly good. In the first place, the explanation appears not to be true. The damage done to the Spirit of Resolution was, in fact, reasonably significant. In any event, even if no serious harm had resulted, there was nonetheless a reporting obligation under s 31(1) of the Act.

[11] These events prompted the MSA to prosecute Pacifica.

The basis of the MSA's case

[12] As I have indicated, there was no direct reporting obligation on Pacifica. So the MSA sought to have Pacifica held vicariously liable for what was said to be an offence committed by Captain Frankland. Accordingly, to succeed in the prosecution, the MSA had to show that Captain Frankland had committed an offence and, as well, that Pacifica was vicariously liable for that offence.

[13] I have set out already s 31(1). There can be no doubt that Captain Frankland was required to notify the incident to the MSA.

[14] Section 71(1), Maritime Transport Act provides:-

Every person commits an offence who, without reasonable excuse, contravenes or fails to comply with any provision of any of sections 20, 21, 22, 23, 25, 30, and 31 of this Act.

Captain Frankland therefore committed an offence by reason of his failure to notify the incident if he acted "without reasonable excuse".

[15] As to the vicarious liability of Pacifica, the MSA relied on s 410(1) which provides:-

Where an offence is committed against this Act by any person acting as the agent or employee of another person, that other person shall, without prejudice to the liability of the first-mentioned person, be liable under this Act in the same manner and to the same extent as if he, she, or it had personally committed the offence.

It is common ground that if Captain Frankland committed an offence then Pacifica is vicariously liable.

[16] The information alleged that Pacifica committed an offence against s 71(1) of the Maritime Transport Act because:

[I]ts employee, John Frankland, without reasonable excuse failed to comply with the provisions of s 31(1) of the Maritime Transport Act 1994 in that, as a Master of a New Zealand ship, namely the MV "Spirit of Resolution", involved in an accident, he failed to notify the accident to the Maritime Safety Authority of New Zealand as soon as practicable.

The information also made reference to s 410 of the Maritime Transport Act.

[17] The information was drafted on the basis that the Spirit of Resolution is a New Zealand ship. There is scope for debate as to whether this is so. But if it is not a New Zealand ship, it was, alternatively, at the relevant time, a "foreign ship in New Zealand waters". Either way there was a reporting obligation under s 31. So I do not see the issue whether the Spirit of Resolution is a New Zealand ship as being of any moment. If necessary the information can be amended.

[18] In those circumstances, the only point which was truly in issue in relation to the prosecution was whether Captain Frankland's failure to comply with the Maritime Transport Act occurred "without reasonable excuse".

Proceedings in the District Court

[19] The prosecution against Pacifica was heard in the District Court at Christchurch on 28 February 2001. The prosecution called as its witnesses, Captain Frankland and Douglas Paul Monks, an accident investigator employed by the MSA. Briefs of evidence of Messrs Anthony Legge, Graeme Forsythe and Adolf Ziegler were read by consent.

[20] For present purposes it is necessary to refer only to the evidence of Captain Frankland. In his brief of evidence he said:-

I did not inform the [MSA] of the accident because I thought that, by following Pacifica Shipping's procedures for accident reporting, I had complied with the accident reporting requirements of the Maritime Transport Act 1994.

It is clear that this belief was based on Pacifica's Quality Assurance Manual with which Captain Frankland complied when he notified Ms Gardner. As I have already indicated, the procedure provided under the manual required Ms Gardner to notify the MSA of the incident. The manual, itself, asserts that the procedure which is laid down in it:-

meets statutory requirements

Having referred to the manual in his brief of evidence, Captain Frankland went on to say:-

I was surprised to learn that I had breached the Maritime Transport Act 1994 as I thought, based on the Quality Assurance Manual, that I had done everything required of me.

[21] In Captain Frankland's cross-examination there was the following exchange between him and counsel for Pacifica:-

Q. Captain Frankland the company's manual stipulates that upon receiving the MSA form the company will then forward that on to the MSA does it not?

A. Yes.

Q. And you fully expected that by sending the form in this case to Anita Gardiner, it would then immediately be passed on to the MSA didn't you.

A. I did.

Q. Did it ever cross your mind for one moment that it would not be forwarded to the MSA and, in fact, you didn't know until approached by Mr Monk that it had not been forwarded to the MSA.

A. That is correct.

[22] Unclear on this evidence is whether Captain Frankland:-

1. Recognised that he personally had an obligation to notify the MSA but assumed that he was discharging this obligation by reporting the matter to Pacifica on the basis that it would then, as his agent, complete the notification to the MSA or; alternatively

2. Assumed that the obligation to report to the MSA rested with Pacifica.

[23] No evidence was called for Pacifica.

[24] In a reserved judgment delivered on 2 March 2001, the District Court Judge dismissed the information.

Judgment of District Court Judge

[25] In his judgment the learned Judge reviewed the evidence. He noted that Captain Frankland's position was that he had expected the MSA 12307 form to be passed on to the MSA and was not aware that this had not happened. As to this the Judge commented:-

This was accepted by the prosecuting authority who took no action against Captain Frankland personally and the prosecuting authority accepted that the Master thought that he had complied with the necessity to report the accident in the way in which he had done.

The Judge went on a little further to say:-

It is ... significant that the informant has accepted that the Master did report to his employer pursuant to the employer's direction and has resolved not to prosecute the Master under the provisions of s 31.

It follows that the informant has accepted that the Master had good reason for not giving the necessary notice to the informant in its decision not to prosecute but has invoked the provisions of s 410 of the Act and proceeded pursuant to s 31(1).

And further on:-

The informant has ... resolved not to prosecute the Master, accepting that he has done what he believed to be required of him and consequently that he has not committed an offence under the Act and yet in these proceedings the informant argues that the Master did not have a reasonable excuse, that his ignorance of the law is no defence and are endeavouring now, having decided that they had no case against him personally, to hold the employing company vicariously responsible pursuant to s 410 of the Act.

[26] The reasons for the decision of the Judge to dismiss the information lie in the following, reasonably lengthy passage of his judgment which I will now set out:-

Mr Brodie, for the company, submits that this is a criminal prosecution, that each element of the charge must be proved and the elements are: (1) that John Frankland was the master of the ship; (2) that the ship was a New Zealand ship; (3) that it suffered an accident, (4) that the master knew that it had suffered an accident: (5) that the master, Captain Frankland, had himself committed the offence of failing to report the accident as soon as practicable; and (6) that he was an employee of the defendant company.

The defence submits that the informant must prove that Captain Frankland committed a criminal offence and the acts which comprised the offending were committed or omitted "knowingly and intentionally". The defence submits that if the Master made a mistake that is not necessarily a defence, but it would be a defence if he honestly and genuinely believed that he had carried out his obligations under the Act by following the instructions of his employer and his expectation that his employer would then take the further step of notifying the Authority.

The evidence from Captain Frankland was that it did not occur to him that the Authority would not be notified in accordance with the Act. It is submitted in this case by the defence that he does not have the necessary mens rea. This submission is supported by the informant's own decision not to prosecute him personally and so it follows that in order to be successful in this prosecution the informant must establish that Captain Frankland failed to comply with the provisions of the Act and that he knew that he was not so complying.

The evidence, to the contrary, is that he believed that his action in reporting complied with the provisions and that his employer would then pass on the report to the Authority. As I said previously, this view is supported by the informant's own decision not to prosecute him.

In order to be successful and establish that the company is vicariously responsible pursuant to s410 of the Act, the informant must establish that Captain Frankland failed to comply with the provisions of s31(1). It was always open to the informant to charge the company pursuant to s31(3) but it has not done so and has elected to charge the company under the provisions of s31(1) and s410. The informant has not proved beyond reasonable doubt that Captain Frankland committed the offence of failing to comply with the Act. As I said. this view is supported by the informant's own decision not to prosecute him personally.

Having come to that conclusion there is no need for me to consider whether or not Captain Frankland was the master of a New Zealand ship because the prosecution falls at the first hurdle, namely that it has failed to prove that Captain Frankland breached the provisions of the Act and without that proof the information must be and is now dismissed.

[27] As will become apparent when I deal with the issues raised on the case stated, there are a number of respects in which the Judge's reasoning is open to criticism. I should, however, at this point note that:-

1. The way in which the judgment is structured makes it not entirely easy to distinguish between the Judge's recital of the defendant's submissions and his own conclusions; and

2. The Judge's comment that "it was always open to the informant to charge the company pursuant to s31(3)" was wrong because there were no relevant maritime rules in place at the time (see paragraph [5] above).

The appeal to this Court

[28] The MSA has now appealed by way of case stated from the dismissal of the information.

[29] Paragraph 7 of the case as stated asks seven questions:-

7.1 Was there any evidence to support the finding that the informant accepted that the Master had not committed an offence when he failed to notify the Maritime Safety Authority of the accident involving the MV "Spirit of Resolution"?

7.2 If there was such evidence, was the informant thereby estopped from proceeding with and succeeding in its prosecution of the defendant?

7.3 Does the phrase "without reasonable excuse" in s 71(l) of the Maritime Transport Act impose an onus of proof on the prosecution to establish beyond reasonable doubt the absence of a "reasonable excuse" or does the provision impose an onus of proof on the defendant to establish on the balance of probabilities the existence of a "reasonable excuse"?

7.4 Was the Master's mistaken reliance on, and compliance with, the notification procedure contained in the defendant's "Quality Assurance Manual", including his belief that his employer would also comply with the manual and would forward a copy of the relevant form to the Maritime Safety Authority, capable of constituting a "reasonable excuse" in this case?

7.5 Is proof of mens rea by the Master under s 31(1) a separate requirement for the prosecution's case in an offence under s 71(l) when the information is laid against the Master's employer on the basis of s410?

7.6 If the answer to question 7.5 is "yes", was the Master's mistaken reliance on, and compliance with, the notification procedure contained in his employer's "Quality Assurance Manual", including his belief that his employer would also comply with the manual and would forward a copy of the relevant form to the Maritime Safety Authority, capable of constituting a reasonable doubt as to his guilty mind?

[30] I will deal with the case by reference, in the first instance anyway, to those questions.

Question 1: Was there any evidence to support the finding that the informant accepted that the Master had not committed an offence when he failed to notify the Maritime Safety Authority of the accident involving the MV "Spirit of Resolution"

[31] The answer to this question is "no" and this was accepted by Mr Brodie for Pacifica.

Question 2: If there was such evidence was the informant thereby estopped from proceeding with and succeeding in its prosecution of the defendant

[32] Given my answer to question 1, there is no need to answer this question.

Question 3 : Does the phrase "without reasonable excuse" in s 71(1) of the Maritime Transport Act impose an onus of proof on the prosecution to establish beyond reasonable doubt the absence of a reasonable excuse or does the provision impose an onus of proof on the defendant to establish on the balance of probabilities the existence of a reasonable excuse

[33] Section 412, Maritime Transport Act 1994 provides:-

Any exception, exemption, proviso, excuse, or qualification in relation to any offence against this Act or any rules or regulations under this Act, whether it does or does not accompany in the same section the description of the offence, may be proved by the defendant, but need not be specified or negatived in any information and, if so specified or negatived, no proof in relation to the matter so specified or negatived shall be required on the part of the informant.

[34] To a similar effect is s 67(8), Summary Proceedings Act 1957 which provides:-

Any exception, exemption, proviso, excuse, or qualification, whether it does or does not accompany the description of the offence in the enactment creating the offence, may be proved by the defendant, but, subject to the provisions of section 17 of this Act, need not be negatived in the information, and, whether or not it is so negatived, no proof in relation to the matter shall be required on the part of the informant.

[35] It was contended by Mr White QC for the MSA that the onus of proof in relation to thedefence that Captain Frankland had a reasonable excuse for his failure to notify the MSA was on Pacifica. This was accepted by Mr Brodie.

[36] Accordingly, the answer to this question is that the onus of proof, in this case, was on Pacifica to establish, on the balance of probabilities, the existence of a reasonable excuse.

Question 4: Was the Master's mistaken reliance on, and compliance with, the notification procedure contained in the defendant's Quality Assurance Manual, including his belief that his employer would also comply with the manual and would forward a copy of the relevant form to the Maritime Safety Authority, capable of constituting a reasonable excuse in this case?

[37] This is the key issue in the case.

[38] It is perhaps implicit in the Judge's reasoning that the prosecution failed because, inter alia, it had not proved that Captain Frankland's failure to notify was "without reasonable excuse". But this was far from clear. I am left withthe view that the Judge did not square up directly to this question. This was, in part, because of the Judge's assessment of the significance of the MSA's decision not to prosecute Captain Frankland, in part, because he did not approach the issue in terms of the correct onus of proof and, in part, because he saw this as a mens rea offence.

[39] Because the issue was not squarely addressed in the District Court there are real difficulties for me in determining it one way or another on appeal. It is, however, appropriate at this point in the judgment, for me to review the competing arguments and to express some views as to their merits.

[40] The argument for the MSA was, broadly, as follows.

[41] The issue whether a particular excuse is, or is not, "reasonable" must be determined objectively, see A v Police [1999] 2 NZLR 501.

[42] Captain Frankland's fundamental problem was that he did not realise that he had a personal obligation to notify and this was, in essence, a mistake of law on his part. Mr White's contention was that a Master could not excuse his non-notification of an accident by proving that it resulted from his ignorance of the law. The cases he cited in support of this proposition, Reid [1973] 3 All ER 1020, Jones [1995] 3 All ER 139 and Foox [2000] 1 NZLR 641 deal with situations well removed from the present. But, obviously, there is scope for argument that the Master of an ocean going vessel should be familiar with the relevant legal environment and act accordingly.

[43] The obligation on the Master is to notify "as soon as possible". In Mr White's submissions s 31(2) provides an example of the sort of situation which might be regarded as being a "reasonable excuse" (ie physical inability perhaps due to the accident which requires notification). He claimed that the scheme and purpose of the Act as a whole points to a need for prompt notification. He referred in particular to s 57 (which makes provision for investigation), s 60 (which requires notification to the Transport Accident Investigation Commission) and the possibility (which will often be present where there has been a maritime mishap) of marine pollution.

[44] The arguments for Pacifica, as advanced by Mr Brodie, were along the following lines.

[45] Mr Brodie noted that in any case where notification was otherwise than by personal attendance at the MSA office or by telephone there was necessary reliance on some other agency. He claimed that where notification had not been perfected by that agency but that it had nonetheless been reasonable for the Master to rely on that agency, such reliance constituted a "reasonable excuse". So his argument, in essence, was that Captain Frankland's reliance on Pacifica to complete the notification process was reasonable and that such reliance was therefore a "reasonable excuse" for his failure to notify.

[46] Whether Captain Frankland's excuse for non-notification should be regarded as being "reasonable" is a matter of evaluation upon which there is scope for legitimate difference of opinion. Because it is a matter of evaluation I would, in normal circumstances, defer to the opinion of the District Court Judge. In this case, however, as I have indicated, the learned District Court Judge did not directly and unequivocally square up to this issue.

[47] My provisional view is that the defence was not made out. The reasons for this provisional view are:-

1. The onus of proof was on Pacifica.

2. As well, the key facts were far more closely associated with Pacifica than the MSA and Captain Frankland, although a prosecution witness, was at all material times an employee of Pacifica.

3. In that context, I would be disinclined to accept that Captain Frankland's excuse was reasonable without knowing far more as to his involvement in subsequent processes within the company, his expectations as to whether he would have received feedback from the MSA in relation to notification and whether he made inquiry as to whether notification had been given.

4. On the evidence, as given, it is not clear whether Captain Frankland recognised that he personally had an obligation to notify the MSA. If he was not aware of a personal obligation, then I have some difficulty with the view that this amounted to a reasonable excuse.

5. I have difficulty in seeing how a notification made second-hand (ie via Pacifica) could be said to be as soon as practicable given that it would have been as easy for Captain Frankland to fax the MSA 12307 form direct to the MSA as it was for him to fax it to Pacifica. My impression of the evidence as a whole is that in practice, Pacifica would not necessarily send on a notification to the MSA until it had itself carried out an internal investigation with the result that a delay of a few days or perhaps a week might result.

6. So there is a broad industry context which is relevant. The Courts should be chary of allowing ship owners to override the Maritime Transport Act by requiring masters to report incidents to them and not the MSA and then exercising a discretion whether and when such reports should be passed on to the MSA.

[48] These are provisional views. I note that it is possible, depending upon further argument to be heard, that the case will be remitted to the District Court for re-hearing. The evidence given at the hearing in the District Court earlier this year on the issue of reasonable excuse was, in fact, exiguous and it is reasonably apparent that counsel did not, in their submissions to the Judge, advert to the correct position as to the onus of proof. If there is a re-hearing then it is, of course, possible that there will be more evidence available on the reasonable excuse issue.

Question 5: Is proof of mens rea by the Master under s 31(1) a separate requirement for the prosecution's case in an offence under s 71(l) when the information is laid against the Master's employer on the basis of s 410?

[49] The law as to the circumstances in which offences should be regarded as including a mens rea component is reviewed in the Court of Appeal decision Millar v Ministry of Transport [1986] 1 NZLR 660.

[50] It seems to me to be clear that liability for the offence in question here is absolute (ie does not depend upon proof of mens rea), but is subject to a reasonable excuse defence. The case concerns a regulatory offence punishable only by way of fine. The underlying obligation is cast on a limited class of people (masters of vessels) who could be expected to know of it. Most importantly the wording of s 71(1) (with its built in reasonable excuse exception in respect of which the onus of proof is on the defendant) points away from there being any requirement to establish mens rea.

[51] I might add that I have difficulty in understanding why mens rea was seen as relevant. It could not be said that Captain Frankland was unaware of the facts giving rise to the obligation to report. Captain Frankland was plainly aware of the accident. He may not have been aware that this entailed a personal obligation to report the accident to the MSA. But if so, his mistake was one of law and thus irrelevant for mens rea purposes.

Question 6: If the answer to question 7.5 is "yes" was the Master's mistaken reliance on, and compliance with, the notification procedure contained in his employer's Quality Assurance Manual including his belief that his employer would also comply with the Manual and would forward a copy of the relevant form to the Maritime Safety Authority, capable of constituting a reasonable doubt as to his guilty mind

[52] Given my answer to question 5, this issue does not arise.

Disposition of the appeal

[53] Section 112 Summary Proceedings Act 1957 provides:

The High Court shall hear and determine the question or questions of law arising on any case transmitted to it as aforesaid, and shall thereupon do any one or more of the following things:

(a) Reverse, confirm, or amend the determination in respect of which the case has been stated; or

(b) Remit the matter to the District Court with the opinion of the High Court thereon; or

(c) Exercise any power conferred by section 201 of this Act; or

(d) Make such other order in relation to the matter as it thinks fit.

[54] I have expressed my views as to the merits of the case on a provisional basis. I recognise that the case was presented to me rather more fully than it was in the District Court. I also recognise, however, that the evidence in the District Court addressed to the reasonable excuse issue was exiguous. Because issues associated with onus of proof were overlooked, I have at least some reservations as to whether it is appropriate for me to enter a conviction at this point given the possibility that more extensive evidence would have been adduced if the true position as to the onus of proof had been recognised by Pacifica.

[55] In those circumstances, I am prepared to hear counsel as to what, if any, further orders should be made. To this end there is to be a telephone conference at 9.00 am on Monday, 17 December at which time I will hear counsel and then decide what the ultimate outcome of the appeal should be.

Solicitors:
Izard Weston, Wellington for the Appellant
Anthony Harper, Christchurch for the Respondent