HKSAR v. Nezhyvenko Oleksiy
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DCCC 260/2012 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CRIMINAL CASE NO 260 OF 2012 ----------------------------
---------------------------- Reasons for Verdict ---------------------------- 1.The defendant faces two charges of theft, contrary to section 9 of the Theft Ordinance, Chapter 210. He has denied these charges. These charges relate to the theft of heavy fuel oil from the vessel the CSCL Sydney, which was chartered by China Shipping Container Lines Company Ltd (CSCL) on two occasions when there were sludge operations when the vessel was in port at Yangshan Port, Shanghai and Xiamen Port at Xiamen, in China on 20 and 23 October 2011 respectively. 2.As the defendant speaks Russian, a Russian interpreter was made available to him throughout the proceedings, which were all translated into Russian for him. 3.There were 7 prosecution witnesses. At the conclusion of the prosecution case, submissions of no case to answer in respect of both charges were made by the defence. After hearing submissions from the defence and the prosecution, I found that there was a case to answer on both charges. Having had his rights explained to him by his counsel, the defendant elected not to give evidence and called no evidence. That was his right and I inferred nothing against him for exercising that right. As the defendant had elected not to give evidence and called no witnesses, Mr Marray, in accordance with accepted practice, made no final submissions. After hearing final submissions from Mr Bullett, I adjourned the matter until today to deliver my verdict. I have carefully considered all the evidence adduced before me as well as the submissions of counsel. I have borne in mind at all times that the burden of proof remains throughout upon the prosecution to prove guilt beyond all reasonable doubt. I have borne in mind too that the defendant has a clear record and have given myself the requisite directions in that regard. 4.At the outset, Mr Bullett argued that there was no jurisdiction for the charges to be heard in Hong Kong. Section 28(4) provides that where an offence against the person or against property is committed, either ashore or afloat, in any place outside Hong Kong by any master, seaman or apprentice who at the time when the offence is committed is, or at any time within the previous three months was, employed in any Hong Kong ship, the matter may be inquired into, and the person by whom the offence was committed may be punished and otherwise dealt with in the same manner as if the offence had been committed in Hong Kong. Mr Bullett for the defendant submitted that the defendant was the chief engineer on the vessel, and was not the master, seaman or apprentice. After hearing submissions from Mr Bullett and Mr Marray, I was satisfied that the defendant was a ‘seaman’ and the charges had been properly brought. 5.Facts admitted by the Prosecution and Defence under section 65C of the Criminal Procedure Ordinance, Cap 221, were produced and marked as Exhibit P33. These disclosed that:-
6.The principal prosecution witnesses on the facts in issue were PWs 1 to 4, the crew members working in the engine room under the defendant as chief engineer. 7.PW1, Sivaraman Santhosh, was the 2nd Engineer on CSCL Sydney. He had joined the ship in Busan, Korea, on 20 August 2011. Sludge is the waste product generated from the heavy fuel oil used to run the machinery and engines on the ship and stored in the sludge tank on the ship. It is discharged to a sludge barge when the ship is in port. He testified that on or about 18 or 19 October 2011, the defendant instructed his subordinates to transfer sludge to the overflow tank. The defendant’s explanation for doing this unusual transfer was so that sludge could be discharged more quickly. However, this plan was cut short because of worry that there might be leakage. The overflow tank is for the storage of heavy fuel oil that overflows from the other oil storage tanks on the ship. PW1 said he had never seen sludge transferred to the overflow tank. 8.At Yangshan, the sludge barge provided two hoses and these were attached to the sludge discharge manifold and the heavy fuel oil manifold, as depicted in photo 1 of Exhibit P2. Normally when sludge was discharged, only one hose was attached from the sludge barge to the sludge discharge manifold. He said the operation lasted some 6 to 7 hours. PW3 and PW5 said he was present throughout the discharge. PW1 said he saw from the control panel in the engine room that the remote valves for the 6P and 6S tanks were open and the suctions pumps as well as the pumps for the sludge tank were on for the whole sludge operation. The defendant was also in the engine room for a part of the time, and the control panel was covered with a book. He had removed the book covering the control panel to see why the pumps were running and saw that the remote valves for 6P and 6S were opened. The hose connected to the fuel oil manifold was warm and vibrating. Heavy fuel oil was being discharged from the ship. He did not report this to the captain because he thought the captain and the Chief Engineer were close. He also noticed that the gauge showing the level of oil in the two tanks 6P and 6S was dropping. He said he saw a member of the crew from the sludge barge go to the control room, and then go with the defendant to the G deck, where the cabin of the defendant was located. Much the same happened at Xiamen on 23 October 2011 where a sludge operation had also been arranged. The following morning, ie 24 October 2011, the defendant gave him US$200 telling him it was sludge money and he was not to tell anyone else about it. He accepted the money because he had to continue to work with the defendant. He knew it was not normal for such money to be paid to him by the defendant. He said the sounding levels were filled onto the sounding book, OP62, by the 5th Engineer but he would check the entries were correctly filled in. These records were not properly kept – there was no draft, fwd aft and trim recorded for the time when the readings were taken, which is necessary for the calculation of the actual quantity of fuel in each tank at the time the reading were made. He said the defendant as Chief Engineer was responsible for these records and he was not very particular about how these records were kept. Part of this record was actually filled in by the defendant. 9.PW1 was asked to calculate what fuel was in the tanks at the material time when the matter was being investigated by Seaspan, and his calculations appear on Exhibit P10. The trim figure he used in his calculations was an assumed figure, and he agreed that he could not vouch for the accuracy of his calculations. 10.Although in his evidence-in-chief he said he was there throughout the first sludge operation, under cross-examination he agreed he was there at the start but was relieved by the 3rd Engineer. He also said he went off duty at midnight on 20 October 2011, and the sludge operation finished in the early hours of 21 October 2011. In cross-examination, he was shown the deck log, Exhibit D1, for 21 October 2011 which showed the sludge barge came alongside at 0006 hours and the hose was connected at 0029 hours and the sludge discharge commenced at 2430 and finished at 0310 hours on 21 October 2011. PW6, Mr Terzioglu Omur, who was the superintendant of the CSCL Sydney and came on board in November 2011 to investigate the thefts of fuel oil after a receipt of an anonymous e-mail to the company also produced the photocopies of the same log that were made during investigation by Seaspan, and there is no entry in respect of the sludge barge coming alongside on the photocopy of the deck log for both sludge operations. Also, it is clear that the ink used in part of the entries on the original of the deck log are different and the entry is squeezed into the available space. PW1 was also shown the record of his working hours for October 2011, Exhibit D2, which showed he went off duty at midnight on 20 October 2011. In respect of 23 October 2011, Exhibit D2 showed he would not have been on duty at the start of the sludge operation at Xiamen. PW1 then said that as the vessel schedule was so hectic, it was difficult to remember, but he was sure he saw 2 hoses attached. The length of the sludging operation as he recalled it differed from that recorded on the deck log. He also said the work sheets did not properly reflect the hours that he worked, although these were work sheets that he filled in. 11.PW2, Vadali Vishnu, was the 5th Engineer at the material time. He testified that he was instructed by the defendant to transfer sludge to the overflow tank on 18 to 19 October 2011. He had emptied the overflow tank before the transfer and there was no oil in the overflow tank. However, after about 8 to 10 minutes of transfer, the transfer was aborted on instructions from the defendant, and only a small portion of sludge was transferred to the overflow tank. He described being instructed by the defendant at Yangshan to connect two hoses from the sludge barge, one to the sludge manifold and one to the bunker manifold. Both pumps were operating, and the transfers took 6 to 7 hours. He was present throughout and saw the gauge levels for the 6P and 6S storage tanks going down during the transfer, and the valves of these tanks were opened. He also said the 2nd Engineer was present in the engine room during the whole operation on 21 October 2011. His worksheets, Exhibit D4, were shown to him, which showed him being off duty during the time of the first sludge operation – he said these did not show his correct working hours. He also saw a staff from the sludge barge go with the defendant to the G deck. Much the same happened at the sludge operation at Xiamen. He agreed he filled in the sounding levels in the storage tanks on the OP62 sounding book, but did not fill in the trim and other such figures. 12.PW3, Tarafadar Shaikh Zahiruddin, was the Electrical Officer – he testified to seeing the levels on the monitor he was looking at suddenly go down on 23 November 2011 and he went outside the control room and saw the panel was open and the defendant was standing in front of the open panel. The 3rd Engineer and another junior engineer were present. During sludging operations, his job was to ensure that there was communication in place between the ship and the sludge barge. 13.PW4, Rodgrigo Sampath, was the engine cadet. He had assisted to transfer sludge to the overflow tank but the operation was aborted because of a leak. He estimated that 10 tons of sludge had been transferred. 14.PW6 was the superintendant sent from Seaspan to investigate the anonymous e-mail the company had received about the discharge of oil at Yangshan and Xiamen. He produced the photocopies of the deck log that were made during his investigation with the original deck log Exhibit D1 produced in Court, which clearly had been altered since the photocopy had been made. There are discrepancies in the figures of oil as recorded on the engine log book and the OP62 sounding book, both of which were the responsibility of the defendant, and in PW6’s view some of the mistakes of recording must have been deliberate. PW6 prepared a calculation of what he estimated the fuel should have been, Exhibit P36, and calculated that 287.1 metric tones went missing at Yangshan and 304.46 tons at Xiamen. But all his calculations are based on assumed figures of trim etc which is required for a proper calculation. He was shown Exhibit D5, a survey of the fuel before and after bunkering at Bushan in Korea, but he doubted the accuracy of this report. He produced Exhibit P43, a calculation of fuel consumption as reflected in the OP62 sounding records for 20 to 24 October 2011, and said the entries were accurate for this period. In my view, his job was a difficult one in light of the poor record keeping. 15.PW7, Zhang Chun, was the prosecution expert. His testimony really did not further the Prosecution case. 16.The burden of proof throughout is upon the Prosecution to prove guilt beyond all reasonable doubt. There were discrepancies between the testimony of PWs 1 and 2, who were the principal witnesses of fact for the Prosecution – they were the ones who testified as to the defendant’s instructions to transfer sludge from the sludge tank to the overflow tank prior to the two sludge operations. PW1 said the overflow tank still contained oil, while PW2 said it did not. PW1 said the defendant was not present when this was done, whilst PW2 said he was. PW1 said he instructed to abort the operation, whilst PW2 said the defendant did. Even their evidence as to how long the sludge transfer lasted before the transfer was aborted differed. In so far as the two sludge operations were concerned, work sheets for both PW1 and PW2 show they were off duty at the time of the first sludge operation. Both said the records were inaccurate, but these were records that were kept by PW1. He could not explain why he would keep such inaccurate records. In fact all the records that were produced, official records of the ship, were littered with errors, as pointed out by PW6. It is clear that the deck log itself has been tampered with, and its accuracy is called into question. It is also extremely suspicious that it should have been tampered with. It is clear that something was going on on the vessel, and probably involved senior management on the ship, perhaps even the defendant – there can be no other explanation for the poor record keeping and inaccuracies in so many of the ship’s records. It is clear that supervison of the ship by the ship owners was quite lax. In my view, both the ship owner and the charterer should be more vigilant in their overseeing of the records of the ship in particular the records relating to the heavy fuel oil on the vessel and its consumption. Clearly fuel oil is an expensive commodity, and it is difficult to keep exact records, therefore all the more reason why accurate records should be kept. The defendant was found with an extremely large sum of money when he was arrested in December 2011. Again, although that in itself is suspicious, in view of what his monthly income is, one cannot draw an irrefutable inference that these funds were the result of the proceeds from the sale of stolen fuel. This was almost two months after the alleged thefts, and he was arrested when he was returning to Hong Kong. As I have said, the burden of proof is a heavy one of proof beyond reasonable doubt. Although the circumstances are extremely suspicious I find that I cannot be satisfied to the requisite standard that there had indeed been a theft of fuel from the vessel in Yangshan and Xiamen at the material times. The defendant is acquitted of the charges.
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