After celebrating New Year, a young couple vanished without a trace.

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Olivia Hope, 17, was beautiful, intelligent and outgoing, and excited about starting university soon. Ben Smart, 21, was warm, clean-cut and honest.

In the early hours of 1 January 1998, like many young people in their part of New Zealand, the two friends headed to Marlborough Sounds, a popular party spot, to ring in the New Year.

After celebrating at a travellers’ lodge, friends Ben and Olivia returned to a yacht, the Tamarack, which had been chartered by Olivia and her friends.

They’d intended to stay the night there but, on arriving, they discovered 12 people already occupying all the berths.

So Olivia collected her backpack and sleeping bag and, between 4am and 5am, the pair left on a water taxi to find somewhere else to sleep.

But the water-taxi driver was the last person to see them.

Friends grew worried when Olivia didn’t return to the Tamarack later that day. Olivia and Ben’s parents reported them missing.

The water-taxi driver came forward and said the pair had originally asked to be taken ashore, until another ‘scruffy and drunk’ passenger on his taxi offered them a bed on his yacht.

It was one of over 160 vessels moored in the area at the time, and by morning the boat was gone.

Watson's boat (Photo: Fairfax Media NZ)

Watson’s boat (Photo: Fairfax Media NZ)

Who was the stranger? Where was he now? And what had become of Ben and Olivia?

As the days went by, there wasn’t a single sighting.

Both Ben and Olivia were known to be dependable, happy and on good terms with their parents. Their disappearance looked sinister…

Operation Tam soon became one of New Zealand’s biggest ever investigations.

On 12 January, police seized a yacht, Blade, similar to the one they believed had been boarded by Olivia and Ben.

It was forensically examined.

Police quizzed its owner Scott Watson on his whereabouts that night.

He’d been at the New Year celebrations at the lodge, but denied seeing Olivia or Ben there.

Hopes faded of finding the pair alive. Police told their families to expect the worst.

By May, it became a murder investigation, even though no bodies had been found.

A month later, six months after the two friends vanished, Scott Watson, 28, was charged with murder.

In June 1999, he went on trial at the High Court in Wellington.

He denied murdering Ben Smart and Olivia Hope.

Scott Watson (Photo: Fairfax Media NZ)

Scott Watson (Photo: Fairfax Media NZ)

Crown prosecutor Nicola Crutchley opened the case. She said it was the Crown’s case that Olivia Hope was the victim of Watson’s efforts to snare a sexual conquest during New Year’s Eve celebrations.

And Ben was likely killed by necessity because of what happened once they were on the yacht, before their bodies were trussed up in sleeping bags and dumped at sea.

Witnesses had spotted Watson chatting up women at the party, yet his advances were repeatedly shunned.

The water-taxi driver testified that Watson was most likely the stranger he’d seen with Ben and Olivia.

And he said the stranger had first said, ‘She can come, but you can’t,’ when offering Olivia a place to stay.

‘I just had a funny feeling,’ the water-taxi driver said.

The inside of Watson’s yacht had been cleaned extensively – but police found two blonde hairs on a blanket in Watson’s sleeping quarters, which DNA testing matched to Olivia Hope.

Under the hatch cover on Watson’s boat, there were 176 scratch marks scientists said were consistent with fingernails.

And Watson had painted his boat from terracotta to blue – on New Year’s Day.

Watson had also lied to police about what he’d been wearing that night, saying he’d worn a grey jersey with red stripes.

But a photo taken at the party proved he was wearing a blue denim shirt and boots – which were never found.

Plus, witnesses claimed Watson had previously expressed a desire to kill. Yet Watson’s defence said the police had got the wrong man.

He couldn’t be the ‘mystery man’ they were looking for as Watson had left the onshore celebrations around 3.30am, returned to his boat and gone to bed.

Plus the water-taxi driver was adamant Ben, Olivia and the stranger had boarded a two-masted ketch – yet Watson’s boat was a single-masted sloop.

Defence lawyers cast doubt on the evidence, as the two blonde hairs had only been discovered on a second search of the yacht.

They claimed there could’ve been a mix-up at the lab, or they could have somehow got on to Watson’s clothing at the party.

Watson said he’d cleaned his boat after getting tossed around in a storm. Plus a defence witness said Watson had talked about painting his boat’s exterior before the New Year.

With no bodies, the prosecution had to rely on circumstantial evidence… Was that enough to convict Scott Watson of murder?

Scott Watson (Photo: Fairfax Media NZ)

Scott Watson (Photo: Fairfax Media NZ)

The jury found Scott Watson guilty of both counts of murder. He was sentenced to life imprisonment, with a minimum of 17 years before he could be considered for parole.

Justice Heron said no-one knew the circumstances of the couple’s death – and it was too horrible to contemplate.

‘The agony of dying in one case must have been prolonged. To seize upon two young people was a grossly despicable piece of violence, probably sexually motivated, and the community is entitled to be protected.’

Watson appealed but was unsuccessful. He continues to protest his innocence.