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Supreme Court 9 June 2021

R v Jacobs Group (Australia) Pty Ltd

[2021] NSWSC 657

Fraud & dishonesty

Citation: R v Jacobs Group (Australia) Pty Ltd [2021] NSWSC 657
Court: Supreme Court of New South Wales
Date: 9 June 2021
Judge(s): Adamson J

Background

The defendant company, formerly known as Sinclair Knight Merz Pty Ltd and later acquired by a US-listed engineering group, was sentenced on three charges of conspiracy to cause an offer of a bribe to a foreign official, contrary to ss 11.5(1) and 70.2(1)(a)(iv) of the Criminal Code Act 1995 (Cth). The charges arose from two separate bribery conspiracies: one involving the Philippines between 2000 and 2005, and one involving Vietnam between 2006 and 2012. The company had provided consulting, engineering and project delivery services across those jurisdictions during the relevant periods.

Vietnam was charged as two separate sequences because a legislative amendment in February 2010 materially increased the maximum penalty for the offence. The company had pleaded guilty in the Local Court on 3 September 2020, and the matter was committed to the Supreme Court for sentencing.

Critically, the company had self-reported the conduct to the Australian Federal Police (AFP), conducted its own thorough internal investigation through its solicitors, provided the results to the AFP, assisted the Crown in its prosecution, and gave an undertaking to provide future assistance in proceedings against implicated individuals.

  • How objectively serious was the offending, and where did it fall within the range of such offences?
  • What weight should be given to the company's self-reporting, past cooperation with the AFP, and undertaking to provide future assistance?
  • What is the meaning of "benefit" in s 70.2(5)(b) of the Criminal Code for the purpose of calculating the maximum penalty applicable to a body corporate for sequence 3?
  • What discounts applied for the guilty plea, past assistance, and the undertaking to provide future assistance under s 16AC of the Crimes Act 1914 (Cth)?

Decision

Objective seriousness: Adamson J found the offending was objectively serious and fell within the mid-range. The corruption of foreign public officials causes real harm to the communities in those countries, distorts markets, and undermines the rule of law. The company's own compliance manuals had explicitly prohibited such conduct, meaning the offending was deliberate and in clear breach of stated internal standards. Delay in prosecuting the matter was noted but did not diminish the seriousness of the conduct.

Self-reporting and assistance: The court treated the company's self-reporting and sustained cooperation as among the most important factors in sentencing. Adamson J reasoned that general deterrence in the foreign bribery context is served not only by punishing wrongdoing but also by creating incentives for companies to detect, disclose and assist in the prosecution of such conduct. The company's response to the offending was also taken to reflect genuine remorse, contrition, and a commitment to rehabilitation.

Maximum penalty for sequence 3 and the meaning of "benefit": A significant legal question arose as to how the maximum fine for a body corporate under s 70.2(5)(b) should be calculated, specifically whether "benefit" meant gross benefit or net benefit. Adamson J held, consistently with legislative intention, that "benefit" in s 70.2(5)(b) means net benefit, not gross revenue. This interpretation materially affected the maximum penalty available for sequence 3, which was determined to be $11 million (100,000 penalty units at $110 each, the applicable unit value at the relevant time). The maximum penalties for sequences 1 and 2 were $330,000 each.

Discounts: The court applied a 25% discount for the guilty plea across all sequences. A further 30% discount was applied for past assistance provided to investigating and prosecuting authorities, and an additional 10% discount was applied for the undertaking to provide future assistance under s 16AC of the Crimes Act 1914 (Cth). These discounts were applied sequentially, following the methodology endorsed in R v NP [2003] NSWCCA 195.

Orders Made

  • Jacobs Group (Australia) Pty Ltd was convicted of sequences 1, 2, and 3 on the further amended Court Attendance Notice.
  • Sequence 1: fine of $67,500 imposed.
  • Sequence 2: fine of $54,000 imposed.
  • Sequence 3: fine of $1,350,000 imposed.

Key Takeaways

  • Under s 70.2(5)(b) of the Criminal Code Act 1995 (Cth), "benefit" for the purpose of calculating a body corporate's maximum penalty for a foreign bribery offence means net benefit, not gross revenue or gross benefit received.

  • A company that self-reports foreign bribery to the AFP, conducts and discloses a thorough internal investigation, and undertakes to provide future assistance may receive substantial sentencing discounts totalling 40% on top of a 25% guilty plea discount, applied sequentially.

  • General deterrence in foreign bribery cases does not operate only through punitive fines. The Supreme Court confirmed that rewarding genuine self-reporting and cooperation serves the broader deterrence objective by incentivising disclosure over concealment.

  • Charging a continuous offence as two separate sequences to account for a mid-period change in maximum penalty is an approach authorised by the High Court in Agius v The Queen (2013) 248 CLR 601, and was applied here to separate the Vietnam conduct at the date the higher maximum came into force.

  • Despite the existence of compliance manuals expressly prohibiting corrupt practices, the company's employees engaged in bribery across two countries over extended periods, a circumstance the court treated as relevant to objective seriousness rather than as a mitigating factor.

Legislation and Cases Referenced

Legislation:
- Criminal Code Act 1995 (Cth), ss 11.5, 12.3, 70.1, 70.2
- Crimes Act 1914 (Cth), ss 16A, 16AC
- Crimes Legislation Amendment (Serious and Organised Crime) Act (No 2) 2010 (Cth), Schedule 8
- Criminal Code Amendment (Bribery of Foreign Officials) Act 1999 (Cth)
- Acts Interpretation Act 1901 (Cth), s 15AB
- Evidence Act 1995 (NSW), s 191
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 23
- Bribery Act 2010 (UK)

Key Cases:
- Agius v The Queen (2013) 248 CLR 601; [2013] HCA 27
- Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25
- Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39
- Elias v The Queen (2013) 248 CLR 483; [2013] HCA 31
- Maxwell v The Queen (1996) 184 CLR 501; [1996] HCA 46
- R v Ellis (1986) 6 NSWLR 603
- Director of Serious Fraud Office v Airbus SE [2021] Lloyd's Rep FC 159
- Ahmad v R [2021] NSWCCA 30
- CMB v Attorney General for New South Wales (2015) 256 CLR 346; [2015] HCA 9