Citation: [2013] NSWDC 1
Court: District Court of New South Wales
Date: 18 January 2013
Judge: Judge Haesler SC
Background
A senior executive at a major supermarket chain was convicted by jury, after a three-month trial, of fourteen counts of corruptly receiving benefits totalling approximately $1.395 million and two money-laundering offences. The corrupt payments were made between 1997 and 1998 by a supplier's principal in exchange for favourable treatment in the continuation and implementation of contracts with the employer. The convicted offender was acquitted on the principal conspiracy count and the co-accused were acquitted entirely.
Following conviction, the employer applied under Part 4 Division 2 of the Victims Support and Rehabilitation Act 1990 (NSW) for a direction that the offender pay compensation out of his property. The employer was also pursuing separate civil proceedings for the full extent of its losses, which were considerably larger.
The offender, unrepresented at sentencing and on this application, opposed the order. He maintained his innocence and attributed the proceedings to a malicious conspiracy against him.
Legal Issues
- Whether the employer qualified as an "aggrieved person" entitled to seek compensation for economic loss under section 77B of the Act
- Whether a causal connection between the offences and the claimed loss was established
- What standard of proof applied to the compensation application
- Whether the jurisdictional cap of $750,000 applied to the total compensation or to each offence individually
- Whether relevant discretionary factors, including the offender's asserted impecuniosity and the employer's size and financial capacity, precluded or reduced any order
- The appropriate quantum of compensation within the court's jurisdiction
Decision
Issue 1: Entitlement to compensation and standard of proof
The court held that "loss" under the Act encompasses economic loss, and that a causal connection between the loss and the offending must be established. While the Act is silent on standard of proof, the court considered the civil standard appropriate given the compensatory nature of the orders. In practice, the factual findings flowed substantially from the jury verdict and the court's own findings in the sentencing proceedings, both made to the criminal standard.
Issue 2: Jurisdictional cap
The court determined that the $750,000 jurisdictional ceiling applicable to the District Court's civil jurisdiction applied to the total compensation awarded across all offences forming part of the same general course of conduct, rather than being available afresh for each individual offence. Alternatively, section 77D(c) would allow the jurisdictional limit to be taken into account in determining each sum. The employer sought $750,000; the court ordered the amount restricted to counts that, in aggregate, remained within that ceiling.
Issue 3: Discretionary factors
The court considered three potentially limiting factors and rejected each as a basis for declining or substantially reducing the order. First, the employer's internal governance procedures were imperfect and its staff had placed considerable trust in the offender, but those facts did not disentitle it to compensation. Second, the offender's asserted impecuniosity did not preclude the order, consistent with authority that circumstances may change or impecuniosity may later prove unfounded. Third, the fact that the employer was a large corporation capable of absorbing the financial loss was a relevant factor, but it did not operate to deny proper compensation even where that compensation approached the jurisdictional ceiling.
Issue 4: Quantum
The court directed compensation referable to five of the sixteen counts, selecting those whose individual amounts, in aggregate, totalled $746,806 without exceeding the jurisdictional limit. Orders were declined on the remaining counts solely because including them would breach that ceiling.
Orders Made
- Compensation of $746,806 directed to be paid to the employer out of the offender's property, referable to five specified counts of corruptly receiving a benefit
- No orders made in relation to the remaining counts, as inclusion would exceed the court's jurisdictional limit
- Each party to bear its own costs of the application
Key Takeaways
- Under section 77B of the Victims Support and Rehabilitation Act 1990, a corporate employer whose employee corruptly received benefits from a supplier qualifies as an "aggrieved person" entitled to seek a compensation direction, and "loss" in the Act extends to economic loss.
- A causal connection between the offences and the loss claimed must be established, but where the claim flows directly from a jury conviction, that connection may be readily satisfied.
- The District Court held that the statutory jurisdictional cap on compensation applies to the total amount awarded across all related offences forming a single course of conduct, not separately to each count.
- An offender's asserted impecuniosity is a relevant but ordinarily insufficient reason to decline a compensation direction, as financial circumstances may change or the claim of impecuniosity may later be shown to be false.
- The size and financial resilience of a corporate victim is a relevant discretionary consideration, but does not bar an award approaching the jurisdictional maximum where the loss and causal connection are otherwise established.
Legislation and Cases Referenced
Legislation
- Confiscation of Proceeds of Crime Act 1985
- Crimes Act 1900
- Victims Support and Rehabilitation Act 1990
Cases
- Connor v R [2005] NSWCCA 431; (2005) 158 A Crim R 389
- Fagan v Crime Compensation Tribunal [1982] HCA 49; (1982) 150 CLR 666
- Flynn v R [2010] NSWCCA 171
- R v Skaf [2001] NSWCCA 199