R v AB; R v CD; R v EF

1. [1]

   THE COURT: Following a trial before a judge of the Supreme Court, each of the respondents was acquitted on one count of conspiracy to provide a benefit to another person which was not legitimately due to that person with the intention of influencing a foreign public official of Country A in the exercise of the official’s duties as a foreign public official in order to obtain or retain business contrary to ss 11.5(1) and 70.2(1) of the Criminal Code (Cth).

2. [2]

   The Commonwealth Crown has submitted for the determination of this Court three questions which are said to be questions of law arising at or in connection with that trial. That submission is made pursuant to s 108(2) of the Crimes (Appeal and Review) Act 2001 (NSW).

3. [3]

   That subsection provides:

4. [4]

   Section 108 has the consequence that the names and identities of the persons who were acquitted are not to be disclosed. This subject is dealt with at [9]-[10] below.

Preliminary matters

1. [5]

   This Court has jurisdiction to hear and determine questions of law arising at or in connection with a trial for a federal offence and brought by the Commonwealth Attorney General or Commonwealth Director of Public Prosecutors by reason of s 68 of the Judiciary Act 1903 (Cth). Section 68(2) confers jurisdiction on this Court, as a court exercising jurisdiction to hear and determine appeals arising from any trial on indictment for an offence against a New South Wales law, “like jurisdiction with respect to persons”, such as the respondents, “who are charged with offences against the laws of the Commonwealth” (Alqudsi v The Queen (2016) 258 CLR 203; [2016] HCA 24 at [78], [155]).

2. [6]

   A proceeding under s 108(2) is an “appeal” within the meaning of s 2 of the Judiciary Act because it arises out of the trial of the respondents as a “proceeding to review or call in question the proceedings decision or jurisdiction” of the trial judge on the points of law submitted to this Court.

3. [7]

   That conclusion was reached by the Full Court of the Supreme Court of South Australia in Questions of Law Reserved on Acquittal (No 2 of 1993) (1993) 61 SASR 1 in substantially identical circumstances to those in this appeal. That decision was followed by the Queensland Court of Appeal in R v Cook; ex parte Director of Public Prosecutions (Cth) [1996] 2 Qd R 283. Subsequently, in R v Gee (2003) 212 CLR 230; [2003] HCA 12, the High Court allowed an appeal from the Full Court of the Supreme Court of South Australia in R v Thaller and Gee (Question of Law Reserved) (2001) 79 SASR 295; [2001] SASC 14, Gleeson CJ noting that the result reached in the High Court “had been accepted previously by the Full Court of the Supreme Court of South Australia, and the Court of Appeal in Queensland” (at [8]), citing the first two of these intermediate appellate court decisions.

4. [8]

   In Mellifont v Attorney-General for the State of Queensland (1991) 173 CLR 289; [1991] HCA 53, Brennan J (at 310-320) addressed the reasons why it might be thought that a referral proceeding of the kind before this Court, which does not quell any controversy nor determine the legal rights of any person, should not properly be characterised as an exercise of judicial power, suggesting that a referral under s 108 could not constitute an “appeal” for the purposes of s 68(2). However, Brennan J was in dissent, and the majority in Mellifont (Mason CJ, Deane, Dawson, Gaudron and McHugh JJ) reached a different conclusion on that point and in a statutory context which is relevantly indistinguishable from the provisions at issue in the present case. In so concluding, the majority emphasised (at 306) that in resolving that question no reliance was placed upon the circumstance that Mr Mellifont faced the prospect of a fresh indictment; and observed (at 305):

5. [9]

   These subsections provide:

6. [10]

   As Simpson AJA observed in Attorney-General’s Application pursuant to s 108 Crimes (Appeal and Review) Act 2001 (NSW): Re Robert Burton (a pseudonym) [2021] NSWCCA 87 at [6], “the requirement that the proceedings be held in camera, and the provisions of [s 108(6)]… make it clear that the person charged and acquitted ought not to be further identified”. For that reason, in the present appeal pseudonyms have been used in relation to the three respondents; the name and judgment of the trial judge are not identified in these reasons or in the coversheet to these reasons; and the persons named in the indictment or who were witnesses and the foreign country are not identified in these reasons.

Questions for determination

1. [11]

   The questions of law submitted for determination by this Court are:

   1. (1)

      On its proper construction, is the reference to the ‘intention of influencing a foreign public official (who may be the other person) in the exercise of the official’s duties as a foreign public official in order to obtain or retain business’ in s 70.2(1)(c)(i) of the Criminal Code (Cth) limited to directly obtaining or retaining business?

   2. (2)

      Is an agreement to provide payments ‘for the purpose of ensuring that the tenderer would not be excluded from the tendering process’ incapable of amounting to an agreement to provide a benefit to another person, in order to obtain or retain business for the purposes of ss 11.5(1) and 70.2(1) of the Criminal Code (Cth)?

   3. (3)

      Is an agreement to provide payments ‘for the purpose of ensuring the job runs smoothly’ incapable of amounting to an agreement to provide a benefit to another person, in order to obtain or retain business for the purposes of ss 11.5(1) and 70.2(1) of the Criminal Code (Cth)?

2. [12]

   Before addressing these questions, and whether they raise questions of law which arise in connection with the trial (s 108(2)), it is necessary to set out the provisions of the Criminal Code relating to the charged offence, and a short summary of the Crown case.

3. [13]

   Each of the respondents was charged with the following offence:

4. [14]

   Section 11.5(1) of the Criminal Code provides:

5. [15]

   Section 70.2(1) of the Criminal Code relevantly provided at the time of the events the subject of the indictment:

6. [16]

   The subject matter of this offence is the provision or promised provision of benefits which are not legitimately due with the intention of influencing a foreign public official in the exercise of that official’s duties. The benefit does not have to be provided or offered to the public official intended to be influenced. Addressing the elements of that offence: (1) s 70.2(1)(a) describes four acts, any one of which will satisfy the physical element in that paragraph. The fault element for that physical element is intention (s 5.6(1) of the Criminal Code); (2) s 70.2(1)(b) describes a second physical element, namely a circumstance in which the conduct in par (a) must occur. The fault element for that physical element is recklessness (s 5.6(2)), which can also be satisfied by intention or knowledge (s 5.4(4)); and (3) s 70.2(1)(c) describes a further ‘intention’ fault element which must accompany the conduct in par (a). That element may be satisfied in one of two alternative ways. The first is an intention to influence the public official in the exercise of duties in order to obtain or retain business. The second is an intention to influence that official in the exercise of duties in order to obtain or retain a business advantage (in these reasons, these different purposes are sometimes referred to as the first and second limbs of s 70.2(1)(c)).

7. [17]

   The elements of the offence which it was alleged each respondent conspired with the others to commit are italicised above. They are ss 70.2(1)(a)(i), 70.2(1)(b) and 70.2(1)(c)(i).

8. [18]

   The three respondents were officers or employees of an Australian company engaged in project delivery work in Country A. The work which that company sought included engineering projects undertaken by the government of that country with loan funds provided by a bank such as the World Bank. These were referred to as donor-funded or ‘loan’ projects. The Crown’s principal witness was a Mr X, an employee of the company from early 2000.

9. [19]

   In the Crown’s closing address, its case concerning the satisfaction of s 70.2(1)(c)(i) – that the relevant payments were made with the intention of influencing public officials in Country A in the exercise of their public duties in order to obtain or retain the business of delivering ‘loan project’ consultancy services in that country – was summarised as follows:

10. [20]

    Thus, the Crown case was that payments were made to public officials in respect of various projects which the company tendered for and won, and that the ultimate purpose of those payments was “to influence foreign government officials in order to obtain or retain business”.

11. [21]

    There was evidence as to loan projects in relation to which the company had lodged an expression of interest, been selected to submit a technical and financial proposal, done so, and been selected as successful tenderer and awarded the contract which was thereafter implemented and performed. Mr X’s evidence was that negotiations for the payment of some moneys took place between the call for expressions of interest and review of tender documents, with the negotiations as to the amount and timing of such payments occurring after the awarding of any contract. The payments were then made in the course of the implementation and performance of the contract.

12. [22]

    Mr X’s evidence was that there were two purposes behind the initial negotiations for payment of the alleged bribes. They were, as the trial judge said in the summing up:

13. [23]

    Addressing the making of those payments during the period for the implementation and performance of the contract, the Crown submitted in final address:

14. [24]

    At the conclusion of the Crown case, the respondents made applications for a directed acquittal, which were rejected. In the argument of those applications, questions were raised as to the proper construction of the first limb of s 70.2(1)(c), which in turn required consideration of the meaning and application of the second. The trial judge then received submissions from the parties as to what directions should be given to the jury concerning the alleged agreement to provide a benefit for the purpose of obtaining or retaining business within the meaning of the first limb.

15. [25]

    In its written submissions, the Crown described the construction advanced on behalf of the respondents:

16. [26]

    The Crown did not accept that construction. Whilst acknowledging that “obtain or retain business” carried a meaning different from “obtain or retain a business advantage”, the Crown submitted that there was no need to read down or limit the ordinary meaning of the words in the first limb, “obtain or retain business”. It submitted that “Parliament, in giving effect to Article 1 of the Convention on Combating Bribery of Foreign Public Officials in International Transactions, chose to prohibit all forms of bribery in order to obtain or retain business”.

17. [27]

    The first respondent sought the following direction, the giving of which was opposed by the Crown:

18. [28]

    Having heard oral argument on the day before final addresses were to commence, the trial judge delivered an ex tempore judgment ruling in favour of giving the jury the direction sought by the first respondent. That direction was preceded by the following observations:

19. [29]

    MFI 2 was provided to the jury towards the end of the trial judge’s opening remarks. It described the elements of the charged offence and included dictionary definitions of some words and expressions, including the word “business”. Those definitions were provided to the jury “by way of explanation to you. They are directions to you about what these words mean in this context”.

20. [30]

    The direction continued:

Question 1

1. [31]

   The first question submitted for the Court’s determination is:

2. [32]

   The proper construction of s 70.2(1)(c) is a question of law. At the conclusion of oral argument concerning the direction to be made, the trial judge gave the Crown the opportunity to respond to the trial judge’s “present view” that a distinction be drawn between the two limbs of s 70.2(1)(c) by requiring a “direct connection in [the first limb] between the benefit to be provided and the obtaining or retaining [of] business [whereas] for [the second limb] an indirect benefit would be sufficient”. In this sentence, and unlike the language of s 70.2(1), the reference to an “indirect benefit” must be understood as to a business advantage which is the outcome of the payment of a bribe, and not to the bribe.

3. [33]

   Having submitted that there was no reason to narrow the application of the words “obtain or retain business” to allow for the separate application of the second limb of s 70.2(1)(c), the Crown indicated that it would “proceed on the basis that [this] is the way your Honour is going to move forward”. As counsel for the Crown submits, this was not a concession; although the submission did not provide the trial judge with a clear indication that the Crown took the view that the direction was erroneous in law.

4. [34]

   The trial judge’s reasons for this ruling included:

5. [35]

   In construing the two limbs of s 70.2(1)(c), the trial judge started from the premise that, if one gives the language of these limbs its ordinary meaning, then, although the limbs describe different purposes, each purpose is capable of being satisfied in circumstances where obtaining or retaining a business advantage is believed to lead to the obtaining or retaining of business. To avoid that possible outcome, the trial judge considered that the legal meaning of the first limb should be confined to accommodate the application of the second limb in such circumstances. The trial judge did so by construing the first limb as limited to a purpose of “directly obtaining or retaining business” and the second limb as including “business advantages which might indirectly lead to obtaining or retaining business” (emphasis in original), as well as business advantages that might not lead to that outcome. The trial judge’s reasons acknowledge that doing so narrows the plain meaning of the purpose in the first limb.

6. [36]

   The Crown contends that the trial judge erred in construing the first limb as only describing a purpose of “directly obtaining or retaining business”. It submits that there is no warrant for doing so in the statutory language, nor support for that construction in the extrinsic materials, which include the Explanatory Memorandum, Criminal Code Amendment (Bribery of Foreign Public Officials) Bill 1999 (Cth), the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the OECD Convention) and the Commentaries on that convention (the Commentaries). It also submits that it is not necessary to read down the unqualified language of the first limb in order to permit the broad application of the second in circumstances where the first is also capable of being engaged. In addition, it is said that the introduced concept of directness is uncertain and vague, and invokes notions of cause and consequence in circumstances where the inquiry is as to the “first-mentioned” person’s intention in influencing the public official and irrespective of the immediacy with which or how it is contemplated that intended outcome will be achieved.

7. [37]

   Counsel for the contradictor submit that the trial judge did not err in construing the first limb by adopting the words “directly” and “indirectly” as a “convenient shorthand to demonstrate the distinction” between the two limbs. The trial judge’s doing so was said to involve “an implication that is congruent with the language that is in fact used by the legislature” which finds support in the explanatory material and its purpose.

8. [38]

   There is no issue as to the principles to be applied in resolving this narrow question of construction. That task must start and end with a consideration of the text of the statute in its context, which includes the legislative history and extrinsic materials (Commissioner of Taxation of the Commonwealth of Australia v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55 at [39] (French CJ, Hayne, Crennan, Bell and Gageler JJ)). As was observed in SZTAL v Minister for Immigration and Boarder Protection (2017) 262 CLR 362; [2017] HCA 34 at [14] (per Kiefel CJ, Nettle and Gordon JJ):

9. [39]

   The provisions in Div 70 of Ch 4 of the Criminal Code (Cth) were inserted to “ensure Australia complies with the key feature of the [OECD Convention]” (Explanatory Memorandum at 2-3).

10. [40]

    Article 1, paragraph 1 of the OECD Convention provides:

11. [41]

    The Commentaries include in relation to that paragraph of Article 1:

12. [42]

    To construe the expression “to obtain or retain business” as if it read “to directly obtain or retain” is to depart from the “elements” of the offence described in paragraph 1 of Article 1 of the Convention, and thereby not to act in accordance with paragraph 3 of the Commentaries. It also departs from the language of s 70.2(1)(c)(i).

13. [43]

    The OECD Convention and the Commentaries do not define what is meant by “business”, a word “notorious for taking its colour and its content from its surroundings” and accordingly a word the meaning of which “depends upon its context” (Re Australian Industrial Relations Commission; Ex parte Australian Transport Officers Federation (1990) 171 CLR 216 at 226 (Gleeson CJ, Gaudron and McHugh JJ); [1990] HCA 52).

14. [44]

    However, the OECD Convention, as its name, the first clause in its Preamble and paragraph 1 of Article 1 confirm, is addressed to “the conduct of international business” and “international business transactions”, including but not limited to those involving “trade and investment”; “trade” describing transactions involving the manufacture, purchase, sale or movement of goods and services. In this context, the expression “obtain or retain business” is concerned with the winning or awarding of international transactions or engagements (see paragraph 4 of the Commentaries); whereas the expression “other improper advantage in the conduct of international business” describes something to which the company or entity concerned was not entitled which constitutes an “advantage” in the conduct of the international transaction or activity in which it is engaged.

15. [45]

    The language used in the OECD Convention to describe the purpose elements of the offence has been substantially adopted in Div 70 of Ch 4 of the Criminal Code. That language as used in the domestic law creating the offence of “bribery of a foreign public official” (as required by Article 1, paragraph 1 of the OECD Convention) should where possible be construed as having the same meaning as it has in the convention, which is turn is to be construed by reference to the ordinary meaning of that language understood in the light of the convention’s object and purpose (per Lord Diplock in Fothergill v Monarch Airlines [1981] AC 251 at 281-282).

16. [46]

    Reference to the Explanatory Memorandum confirms that the word “business” is used in these different senses in the two limbs of s 70.2(1)(c). It also assumes that the first limb is capable of applying in circumstances where the second limb applies. Finally, it points out that the first draft of the Convention did not include the second limb, which was added to expand the scope of the offence beyond the application of the first limb and not to narrow its application.

17. [47]

    Paragraphs 28 to 30 of the Explanatory Memorandum explain:

18. [48]

    In the first limb, “business” in the expression “obtain or retain business” includes a transaction or engagement, or transactions or engagements more generally, as the references in these extrinsic materials to the influencing of “trade and its scope” and to the awarding of business suggest. The word “business” is used in the same sense as “work” or “custom” are used in expressions such as “tout for work” or “drum up custom”. Thus, an intention to influence in order “to obtain” business may describe a intention directed to the award of or entry into a particular transaction or engagement or relationship; or a broader intention which is directed to increasing the volume or scale of existing transactions, engagements or relationships.

19. [49]

    As paragraph 28 informs, the OECD’s first proposed elements of the “bribery of a foreign public officer” offence included only included only the first limb, being an intention to obtain or retain business. The second limb was added by the OECD Convention in December 1997 to expand the scope of the offence. Its reason for doing so is explained by the example of the payment made to expedite the connection of a single telephone, which acknowledges the likely difficulties in proving that such a payment, to achieve an immediate advantage in the conduct of business, was made in order to obtain or retain business.

20. [50]

    This example assumes the application of the first limb in circumstances where a bribe is paid for the immediate purpose of obtaining or retaining a business advantage, with its ultimate purpose being that of obtaining or retaining business. That application of the first limb is constrained only by difficulties of proof and whether the evidence justifies a finding to the criminal standard that the intention in making the payment was to influence the official in order to obtain or retain business, notwithstanding that it was believed that outcome would be achieved by the obtaining of a business advantage.

21. [51]

    Finally, paragraphs 29 and 30 describe the purpose of the second limb as being to catch “facilitation benefits” intended to influence the public official in order to obtain a business advantage. So understood, there is no reason to read the first limb down in order to allow the effective application of the second limb.

22. [52]

    There is nothing in the text or context of s 70.2(1) to justify a departure from the ordinary meaning of the statutory language. Indeed, to do so would be to narrow one of the elements of the offence with the result that the domestic law would not fulfil Australia’s obligation under Article 1, paragraph 1 of the OECD Convention to establish the offence of “bribery of a foreign public official” as there described. The Explanatory Memorandum confirms that the language of the first and second limbs is to be given its ordinary meaning, and that meaning gives effect to the statutory purpose for the introduction of Div 70 of Ch 4 being to criminalise the bribing of a foreign official in a business context, and to do so by capturing the full spectrum of bribes which might be made in a business context. That purpose is best given effect by a broad construction of each of the limbs of s 70.2(1)(c).

23. [53]

    The essence of the offence under s 70.2(1) is the provision of benefits which are not legitimately due with the intention of influencing a foreign public official in the exercise of that official’s duties. The fault element in s 70.2(1)(c) may be satisfied in one of two alternative ways. The possibility that in a particular case each of those alternatives might otherwise be engaged is not surprising and is recognised in the Explanatory Memorandum. That possibility falls to be addressed in the framing of the charge. In the proceeding which has given rise to this ‘appeal’, the indictment charges only the first of those alternatives.

24. [54]

    In the result, the answer to Question 1 is “No”.

Question 2

1. [55]

   The second question for the Court’s determination is:

2. [56]

   This question is also a question of law and is directed, in the context of a charge of conspiracy, to whether an agreement in the terms charged is not capable of satisfying the fault element applying s 70.2(1)(c)(i). As the trial judge directed the jury that payments made for the purpose of ensuring that the tenderer would not be excluded from the tendering process would not amount to an agreement to provide a benefit in order to obtain or retain business, this question arose at or in connection with the trial.

3. [57]

   There is, however, a difficulty with the form of this question, which is resolved by understanding it as asking whether the agreement is incapable of satisfying this element of the offence in any circumstances, including where there was evidence capable of supporting a finding that the purpose of the agreement was to provide payments in order to obtain or retain business. That reading of the question treats it as raising the same issue of law dealt with by Question 1.

4. [58]

   So understood, for the reasons already given, Question 2 should be answered “No”.

Question 3

1. [59]

   Question 3 is:

2. [60]

   This question, as with Question 2, involves a question of law, and for the reasons given in relation to Questions 2 and understood in the same way as Question 2, the answer to this question is “No”.

Conclusion

1. [61]

   The questions submitted for determination should be answered as follows: