Gross negligence in purchase of Ashika [1]
Friday, January 22, 2010 - 18:47. Updated on Friday, May 9, 2014 - 22:01.
The Company Secretary for the Shipping Corporation of Polynesia Ltd., Lord Dalgety QC, told the Royal Commission of Inquiry into the sinking of the Ashika that the Government of Tonga was negligent by not conducting proper due diligence of the vessel and it was not SCP duty to do so or to interfere.
On his fourth day of evidence on January 22, Lord Dalgety was persistently questioned by the Assisting Counsel Manuel Varitimos and the feisty exchanges continued with the enquiry also questioning Lord Dalgety's role with another board, the Electricity Commission.
Today, Lord Dalgety agreed with the counsel's submission that if proper due diligence was conducted by Government the disaster that cost 74 lives could have been avoided. He also agreed that the vessel was unseaworthy and of no value based on the evidence that has been provided to the inquiry.
The counsel suggested to him that the former Minister of Transport had a duty under the law to ensure that due diligence was carried out to ensure it's seaworthiness prior to purchase. He replied that the Minister had the obligation.
It was also put to Lord Dalgety that it was obvious with the deficiency list signed by the Acting Director of Marine someone high in position that the vessel was clearly unseaworthy. "And in your own terms a rust bucket?" The witness answered, yes on the basis of the evidence.
Deficiency list
Lord Dalgety said that he was never shown the deficiency list issued by the Ministry of Transport and claimed that if he had been made aware of such a list he would not have allowed the vessel proceed to sea.
"Could I suggest that it was completely incomprehensible that with the knowledge of the deficiency list it should not have been allowed to sail?" counsel Varitimos asked.
Lord Dalgety agreed with that and also another submission that every time the Ashika sailed it was seaworthy from the time it arrived in Tonga in July up to August 5 when it sank.
When he was asked by Varitimos if the SCP, nevertheless, had an obligation, as the operator to ensure that the vessel bought was seaworthy and safe, Lord Dalgety disagreed and pointed out that it was the obligation of the purchaser, the Government.
"Are you saying that SCP was not concerned that the vessel it operated was in your own terms a 'rust bucket'," asked Varitimos.
Lord Dalgety replied that Government was to conduct the due diligence and they had the experts to do that.
"Do you consider SCP had any responsibility or duty to ensure that the vessel purchased was seaworthy?" Varitimos asked.
Lord Dalgety answered that there was a positive report provided to them at the time by Jonesse that it was suitable and it was passed on to Government to carry out the normal due diligence process under the proper certification authority.
He agreed that SCP had a duty to the vessel they would operate, but remained firm in his view that it was of the purchaser (Government) to follow proper due diligence.
"But then Government was the sole 100 per cent shareholder of SCP and SCP was acting for Government?", asked counsel.
Lord Dalgety replied that SCP Directors could not interfere and in many past cases they were advised not to. And he admitted never advising the SCP Board that a survey should be conducted of the vessel before being purchased.
The counsel put to him whether he had discussed with the former Minister Karalus, he said he might have. But when asked whether he suggested to the former Minister that a survey be conducted, he answered that he was not going to interfere with the duty of Government.
"It was not my place to go to them they had their own Ministry and had Crown Law and that's what we were instructed they were a separate entity and they purchased the vessel and to carry out due diligence," he added.
Operating unlawfully
The inquiry was then continued to the fact that the Ashika never had any Coastal Trading License to operate commercially on Tongan waters nor was it registered.
The counsel submitted to him that under the Shipping Act the Ashika had been operating unlawfully because it was not issued with a Coastal Trading Licence. He said the Ministry of Transport did not require it as it interpreted this particular clause applied to foreign vessels.
Lord Dalgety agreed that he was specialist in Admiralty Law as he practiced in Scotland.
"And you know the Shipping Company Act, I suggest, so it was unfair for Jonesse who was not a lawyer for you to simply tell him to go away and get a document to allow vessel to operate," asked the counsel.
Lord Dalgety answered this was the interpretation of the regulators that had been consistently used for many years. But agreed that Ashika was operating commercially since it charged fares.
"You were negligent in your conduct as company secretary that you did not get license," said Varitimos
Lord Dalgety disagreed.
The counsel submitted that the Ashika was not registered under the Register of Ships requiring all Tongan ships to be registered under the Act.
Unseaworthy
On being questioned on the state of the vessel in relation to leaking fuel pipes when it arrived in Tonga, Lord Dalgety answered that he was never aware of this nor the SCP Board.
"You were not concerned that proper due diligence was not carried out?" asked Varitimos.
Lord Dalgety said, no, that was not their responsibility.
It was put to him whether he agreed that it was negligent of Government not to conduct a proper due diligence of the vessel prior to being purchased, and he said, yes.
Lord Dalgety also agreed that the Ashika was unseaworthy something he claimed was not apparent to him at the time and that the vessel should not have sailed in Tonga and it was negligent to allow Ashika to sail in Tonga.
"It was clear gross negligence to allow it do sail do you agree?" Varitimos asked, and Lord Dalgety agreed.
"And it was also negligent to certify it to operate in Tonga?"
Lord Dalgety agreed with the counsel submission that it was negligent to allow the vessel to sail in knowledge of its defects.
"Who is responsible for the gross negligence?" asked the counsel.
Lord Dalgety pointed out to those who issued its certification.
"And that is who?" asked the counsel,
"Unfortunately it is someone from the Ministry of Transport," said Lord Dalgety
Lord Dalgety even agreed to the submission that the Ashika was clearly operating unlawfully on Tongan waters considering it was unlicensed and unregistered. And admitted that it was unseaworthy and a rust bucket.
Travelling first class
The witness was also questioned on his position with the Electricity Commission and his overseas travel where he admitted to travelling up to five times a year, financed by the commission.
The evidence turned to the issue of possible misuse of commission funds to finance personal travel of a staff member, namely Mele Folau, an administrator at the office.
Counsel Varitimos read out that an amount over $3,000 pa'anga was paid to PFL for her airfares to the United States.
Lord Dalgety confirmed that he is a signatory to the Electricity Commission's bank accounts at the MBF bank.
His counsel objected to this line of questioning since it was of a separate matter than that of the inquiry.
But the Chairman allowed this line of questioning, after it was explained by the Assisting Counsel that it was appropriate, considering the incompetence of the SCP Board and as Company Secretary he headed another Commission; and to avoid a similar disaster as that of the Ashika, he sought to explore this issue.
He was then asked whether he considered that this particular staff member be suspended like they did Jonesse. He said that matter is being investigated and the Commissioners, namely himself, Tapu Panuve and Kahu Afeaki, would meet and make the appropriate decision.
He was asked why he travelled so much and could he have not just used the phone since he was only a regulator in Tonga. He said they have international meetings that included complicated technology and the phone was unsuitable.
Lord Dalgety affirmed his habit of travelling first class on his overseas trips, saying it is something he has done all his life.