Citation: R v Jacobs Group (Australia) Pty Ltd [2022] NSWCCA 152
Court: NSW Court of Criminal Appeal
Date: 11 July 2022
Judges: Bell CJ, Walton J, Davies J
Background
The respondent company, formerly known as Sinclair Knight Merz Pty Ltd (SKM), was an Australian engineering and infrastructure consultancy. Between 2000 and 2012, employees and senior executives at SKM, including at one point its CEO, paid monetary bribes to foreign public officials in the Philippines and Vietnam to secure infrastructure contracts. The bribes were funnelled through fictitious invoices issued by third-party companies. The offending was confined to a small part of the business and was unknown to the board.
After the misconduct came to the board's attention, SKM self-reported to the Australian Federal Police and provided substantial assistance to investigating and prosecuting authorities. In December 2013, SKM was acquired by the respondent company. On 3 September 2020, the respondent pleaded guilty to three counts of conspiring to cause a bribe to be offered to a foreign public official, contrary to ss 11.5(1) and 70.2(1)(a)(iv) of the Criminal Code Act 1995 (Cth).
At sentence in the NSW Supreme Court in June 2021, the primary judge imposed fines of $67,500, $54,000 and $1,350,000 respectively across the three counts. The Crown appealed under s 5D of the Criminal Appeal Act 1912 (NSW), arguing the sentences were inadequate on several grounds. The Court of Criminal Appeal dismissed the appeal.
Legal Issues
- Whether the sentencing judge correctly interpreted "benefit" in s 70.2(5)(b) of the Criminal Code as meaning net income (profit from the contracts), rather than gross income (total contract value), for the purpose of calculating the maximum penalty
- Whether the sentencing judge erred by failing to expressly consider that the fine imposed for the third count was less than the net benefit derived from that offending
- Whether the sentencing judge constructively failed to give adequate weight to general deterrence by factoring the desirability of self-reporting into both the sentencing discounts and the notional starting points
- Whether, if error was established, the Court should exercise its discretion to resentence the respondent under s 5D of the Criminal Appeal Act 1912 (NSW)
Decision
On the meaning of "benefit" in s 70.2(5)(b): The Court upheld the sentencing judge's construction. The word "benefit" in s 70.2(5)(b), which sets the formula for the maximum penalty, means net benefit, not gross contract value. The Explanatory Memorandum to the amending legislation supported this interpretation: the value of winning a contract lies in the opportunity for monetary gain from its performance, not in the face value of the contract itself. The Court acknowledged that this gives "benefit" a different meaning in s 70.2(5) from its use in s 70.2(1)(a)-(b), but affirmed that statutory context can require the same term to carry different meanings within the same provision. The maximum penalty for the third count was therefore $11,000,000, not $30,391,062.
On whether the fine was less than the benefit obtained: The Court found no error. Although the final fine for the third count was less than the agreed net benefit after discounts were applied, the sentencing judge had fixed a notional starting point that exceeded the net benefit before discounts. There was no basis to conclude the judge was unaware of the benefit derived from the offending.
On general deterrence: The Court found error here. The sentencing judge had taken into account the desirability of encouraging self-reporting of corporate misconduct both when setting the notional starting points and when allowing sentencing discounts. Using self-reporting as a reason to moderate the starting points effectively double-counted a mitigating factor. The final fine of $1,350,000 against a maximum of $11,000,000 indicated that general deterrence had been given effect in name only, or that the sentencing discretion had otherwise miscarried.
On whether to resentence: Despite finding error on the general deterrence ground, the Court declined to exercise its discretion to resentence. Under established Crown appeal principles, identifying error does not automatically justify imposing a new sentence. The case was highly fact-specific, offered little precedential value, and the Crown's own submissions on appeal were described as "refinements" of the arguments put at first instance. Embarking on a resentencing exercise in those circumstances would amount to mere correction of error, which is not the purpose of s 5D of the Criminal Appeal Act.
Orders Made
• The appeal should be dismissed.
Key Takeaways
- Under s 70.2(5)(b) of the Criminal Code Act 1995 (Cth), "benefit" for the purpose of calculating the maximum penalty for a foreign bribery offence means net benefit (profit from performance of the contract), not the gross value of the contract awarded.
- Statutory context can require the same word to carry different meanings within a single provision; consistency of meaning is not an absolute interpretive rule.
- A sentencing court errs when it uses the desirability of encouraging corporate self-reporting to reduce both the notional starting point for a penalty and the applicable discounts, as this treats one mitigating factor twice.
- In dismissing the appeal despite finding error on the general deterrence ground, the Court of Criminal Appeal confirmed that Crown appeals under s 5D of the Criminal Appeal Act 1912 (NSW) are not a vehicle for mere correction of error; resentencing requires more than a demonstrated flaw in the original reasoning.
- The fact that a case is highly fact-specific and that appellate arguments are only refinements of those put below are legitimate reasons for a court to decline to exercise its resentencing discretion on a Crown appeal.
Legislation and Cases Referenced
Legislation:
- Criminal Code Act 1995 (Cth), ss 11.5(1), 12.2, 12.3, 70.1, 70.2(1), 70.2(5)
- Criminal Appeal Act 1912 (NSW), s 5D
- Crimes Act 1914 (Cth), ss 16A(1), 16A(2)(j)-(ja), 16AC
- Crimes Legislation Amendment (Serious and Organised Crime) Act (No 2) 2010 (Cth), Schedule 8
- Competition and Consumer Act 2010 (Cth), ss 76(1A), 45AF(3), 45AG(3)
Key Cases:
- Tabcorp Holdings Ltd v Victoria [2016] HCA 4; (2016) 328 ALR 375
- Selig v Wealthsure Pty Ltd (2015) 255 CLR 661; [2015] HCA 18
- Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2020] HCA 29; (2020) 381 ALR 601
- Kline v Official Secretary to the Governor-General (2013) 249 CLR 645; [2013] HCA 52
- Registrar of Titles (WA) v Franzon (1975) 132 CLR 611; [1975] HCA 41
- CMB v Attorney-General for New South Wales (2015) 256 CLR 346; [2015] HCA 9
- Green v The Queen (2010) 244 CLR 462; [2011] HCA 49
- Lacey v Attorney-General of Queensland (2011) 242 CLR 573; [2011] HCA 10
- Director of Public Prosecutions (Cth) v Gregory (2011) 34 VR 1; [2011] VSCA 145
- R v Ellis (1986) 6 NSWLR 603
- R v Hernando (2002) 136 A Crim R 451; [2002] NSWCCA 489
- Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249; [2012] FCAFC 20
- Griffiths v The Queen (1977) 137 CLR 293; [1