Morgan v Babcock & Wilcox Ltd

The case of *Morgan v Babcock & Wilcox Ltd* involved an appeal to the High Court of Australia from a decision of the Supreme Court of New South Wales. The appellant, William Morgan, a detective sergeant, had prosecuted Babcock & Wilcox Ltd. (the respondent company) for corruptly giving a sum of £10,600 to Silas Young Maling, an agent of the Municipal Council of Sydney. The alleged offence was that the payment was a reward for Maling recommending the company's tender for the Bunnerong Power Station plant. The prosecution was initiated on 11th July 1928, and the company was convicted by a magistrate. However, the Supreme Court of New South Wales subsequently made absolute a rule nisi for a writ of prohibition, quashing the conviction.

The legal issues before the High Court included whether secondary evidence of a confidential letter from the company's Australian attorney and general manager, Arnot, to the company's managing director in London, Sir James Kemnal, was admissible. The court also had to determine if there was sufficient evidence to establish that the offence was committed within the jurisdiction of New South Wales, and whether the prosecution had been commenced within the time limits prescribed by the *Secret Commissions Prohibition Act 1919* (N.S.W.). A further issue was whether the company was criminally responsible for the actions of its managing director in authorising or causing the payment of the bribe.

The High Court, by a majority (Knox C.J., Isaacs and Dixon JJ., with Starke J. dissenting), held that the conviction should be upheld. The majority reasoned that secondary evidence of Arnot's letter was rightly admitted because the letter, though confidential, was sent to the managing director in his capacity as the appropriate recipient for such communications on behalf of the company, and therefore the company had a right to call for it. The circumstances, including the timing and amount of the payment into a nominated Sydney bank account, provided prima facie evidence that the money had been paid by the company to Maling. The court found that the offence was completed within the jurisdiction when the money was credited to the Sydney bank account, even though the instruction to pay may have originated in London. Regarding the statutory limitations, the majority interpreted section 14(3) of the *Secret Commissions Prohibition Act 1919* to mean that the burden of proving the prosecution was not commenced within six months of the offence's discovery lay with the defendant.

Consequently, the High Court allowed the appeal, discharged the rule nisi granted by the Supreme Court, and restored the conviction of Babcock & Wilcox Ltd. The majority found that the evidence, including the admitted secondary evidence of the letter and the circumstantial evidence surrounding the payment, was sufficient to support the conviction. Starke J., in dissent, expressed the view that the case relied heavily on Maling's credibility and that corroboration would have been prudent, suggesting a preference for upholding the Supreme Court's reversal of the conviction.