R v AB; R v CD; R v EF

[2023] NSWCCA 168

Court of Criminal Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

R v AB; R v CD; R v EF [2023] NSWCCA 168

Hearing dates:

12 September 2022

Date of orders:

30 June 2023

Decision date:

30 June 2023

Before:

Meagher JA; Harrison J; Hamill J

Decision:

Answers to the questions submitted are:

Question 1: No

Question 2: No

Question 3: No

Catchwords:

CRIME — federal offences — bribing a foreign public official — elements of offence — “obtain or retain business” — whether limited to directly obtaining or retaining business — where alternative purpose element of offence is “obtain or retain a business advantage” — whether meaning of “obtain or retain business” should be narrowed beyond ordinary meaning to allow effective application of “obtain or retain a business advantage”

Legislation Cited:

Criminal Code (Cth), ss 5.4(1), (4), 5.6(1), (2), 11.5(1), 70.2(1)

Crimes (Appeal and Review) Act 2001 (NSW), s 108(2), (5), (6)

Judiciary Act 1903 (Cth), s 68

Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, Article 1, paragraphs 1 and 3

Cases Cited:

Alqudsi v The Queen (2016) 258 CLR 203; [2016] HCA 24

Attorney-General’s Application pursuant to s 108 Crimes (Appeal and Review) Act 2001 (NSW): Re Robert Burton (a pseudonym) [2021] NSWCCA 87

Commissioner of Taxation of the Commonwealth of Australia v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55

Fothergill v Monarch Airlines [1981] AC 251

Mellifont v Attorney-General for the State of Queensland (1991) 173 CLR 289; [1991] HCA 53

Questions of Law Reserved on Acquittal (No 2 of 1993) (1993) 61 SASR 1

R v Cook; ex parte Director of Public Prosecutions (Cth) [1996] 2 Qd R 283

R v Gee (2003) 212 CLR 230; [2003] HCA 12

R v Thaller and Gee (Question of Law Reserved) (2001) 79 SASR 295; [2001] SASC 14

Re Australian Industrial Relations Commission; Ex parte Australian Transport Officers Federation (1990) 171 CLR 216; [1990] HCA 52

Romeyko v Samuels (1972) 2 SASR 529

SZTAL v Minister for Immigration and Boarder Protection (2017) 262 CLR 362; [2017] HCA 34

Texts Cited:

Explanatory Memorandum, Criminal Code Amendment (Bribery of Foreign Public Officials) Bill 1999 (Cth)

Commentaries on the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions

Category:

Principal judgment

Parties:

Rex (Applicant)
AB (Respondent in the first proceeding below)
CD (Respondent in the second proceeding below)
EF (Respondent in the third proceeding below)

Representation:

Counsel:

P Herzfeld SC with C Tran and K Heath (Crown)
S Pararajasingham with E Beljic (Contradictor)

Solicitors:

Commonwealth Director of Public Prosecutions (Crown)
Arnold Bloch Liebler (Contradictor)

File Number(s):

Restricted

Publication restriction:

Refer to Crimes (Appeal and Review) Act 2001 (NSW), s 108(6)

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Criminal

Citation:

Restricted

Date of Decision:

Restricted

Before:

Restricted

File Number(s):

Restricted

Judgment

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. 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. That subsection provides:

108 Appeals not affecting existing acquittal

…

(2) The Attorney General or the Director of Public Prosecutions may submit for determination by the Court of Criminal Appeal any question of law arising at or in connection with the trial (together with a statement of the circumstances out of which the question arose). The Court is to hear and determine any such question.

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

Jurisdiction of this Court

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]).

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.

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.

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):

True it is that the purpose of seeking and obtaining a review of the trial judge's ruling was to secure a correct statement of the law so that it would be applied correctly in future cases. However, in our view, in the context of the criminal law, that does not stamp the procedure for which [the Queensland equivalent of s 108(2)] provides as something which is academic or hypothetical so as to deny that it is an exercise of judicial power… The fundamental point, as it seems to us, is that [the Queensland equivalent of s 108(2)] enables the Court of Criminal Appeal to correct an error of law at the trial. It is that characteristic of the proceedings that stamps them as an exercise of judicial power and the decision as a judgment or order within the meaning of s. 73 [of the Commonwealth Constitution].

Use of pseudonyms and ss 108(5) and (6)

9. These subsections provide:

108 Appeals not affecting existing acquittal

…

(5) The hearing and determination of any question under this section is to be held in camera.

(6) The following is not to be published—

(a) any report of a submission made under subsection (2),

(b) any report of proceedings under this section that discloses the identity of the person charged at the trial or affected by the decision given at the trial.

Any such publication is punishable as a contempt of the Supreme Court.

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

Questions of law for determination under s 108(2)

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

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. 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. 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)?

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.

The conspiracy offence charged

13. Each of the respondents was charged with the following offence:

Between [certain dates] in [Country A], the State of New South Wales, the State of Victoria and elsewhere, [AB, CD and EF] did conspire with each other, [four named persons] and divers others to provide a benefit to another person, such benefit being not legitimately due to the other person, with the intention of influencing a foreign public official in [Country A] in the exercise of the official’s duties as a foreign public official in order to obtain or retain business.

Contrary to sections 11.5(1) and 70.2(1) of the Criminal Code (Cth).

14. Section 11.5(1) of the Criminal Code provides:

11.5 Conspiracy

(1) A person who conspires with another person to commit an offence punishable by imprisonment for more than 12 months, or by a fine of 200 penalty units or more, commits the offence of conspiracy to commit that offence and is punishable as if the offence to which the conspiracy relates had been committed.

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

70.2 Bribing a foreign public official

(1) A person is guilty of an offence if:

(a) the person:

(i) provides a benefit to another person; or

(ii) causes a benefit to be provided to another person; or

(iii) offers to provide, or promises to provide, a benefit to another person; or

(iv) causes an offer of the provision of a benefit, or a promise of the provision of a benefit, to be made to another person; and

(b) the benefit is not legitimately due to the other person; and

(c) the first-mentioned person does so with 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:

(i) obtain or retain business; or

(ii) obtain or retain a business advantage that is not legitimately due to the recipient, or intended recipient, of the business advantage (who may be the first-mentioned person).

(Emphasis added.)

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)).

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).

The Crown case

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.

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:

… the Crown case is that in agreeing that a foreign public official would be bribed the intention of the conspirators was to ensure that [the company] would be considered for and, therefore, be able to win and successfully implement loan project work in [Country A] on an ongoing basis, that is the business that the conspirators intended would be obtained or retained by bribes to foreign public officials, that is that the business was the business of delivery of loan project consultancy services in [Country A].

Following through on the agreement and paying the bribe kept [the company] in good standing with the foreign public officials and meant [the company] could build its cashflows, experience, reputation and continue to engage in that market. In other words, to retain a presence in this market for profit on a continuous or repetitive basis. The Crown case is that the intention of the parties was, and the evidence shows this was what occurred, that a bribe was paid if the contract was awarded; it was not the party's intention to offer a bribe and not pay it; the intention to bribe when the contract was awarded was what was agreed; it was not an agreement to offer a bribe for the mere consideration of the tender proposals; and the bribe was paid when the contract was awarded in order to obtain and retain business.

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”.

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.

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:

First, it let the people assessing the proposals know that there would be payments so they would at least consider the proposal and, secondly, to provide a time-line within which those payments were to be made. [Mr X] also said that winning work was important because it would give [the company] in [Country A] a greater capacity to propose more projects.

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

So the payment serves two purposes: Meeting the commitment and influencing the next proposal. So having taken you to that evidence the Crown submission is that you would be satisfied that the ultimate intention in relation to providing the benefit was to influence foreign government officials in order to obtain or retain business,… as I have described.

The trial judge’s direction concerning the meaning of s 70.2(1)(c)(i)

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.

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

In written submissions dated 27 February 2022, counsel for [AB] submit that “obtain or retain business” in s 70(1)(c)(i) requires an “identifiable and tangible outcome”, whereas the concept of a “business advantage” [in] s 70(1)(c)(ii) captures more nebulous or protean conduct, including conduct occurring before and after the award of a contract. The Crown understands the other accused to adopt this approach.

On this basis, the accused submit that an intention to make an illegitimate payment to influence the “mere consideration of a proposal” or to keep a project “running smoothly” would not amount to a bribe paid “to obtain or retain business”. The implication is that, unless the intention to pay the bribe is to guarantee that a particular contract will be awarded to [the company], it would not fall within s 70(1)(c)(i).

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”.

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

2. … the Crown case is that the agreement was to provide a benefit ‘in order to obtain or retain business’. You must be satisfied beyond reasonable doubt that was the purpose of the agreement. The following would not amount to an agreement to provide a benefit in order to obtain or retain business.

(i)    Payments for the purpose of ensuring that [the company] would not be excluded from the tendering process.

(ii)    Payments for the purpose of implementing a project.

(iii)    Payments for the purpose of ensuring the job runs smoothly.

(iv)    Payments for the purpose of ensuring the client makes milestone payments.

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:

When you come to the question: “what was the alleged purpose of the payment of the benefit?”, you will see in the indictment that it was “in order to obtain or retain business”. So you must be satisfied, before you convict, that that was the purpose of the agreement.

As you can see in MFI 2 under the “DEFINITIONS”, the words “obtain or retain”, and the heading is at the bottom of page 3 and the balance is at the top of page 4. The words “obtain or retain” are ordinary English words, and that is how you should understand them.

The word “business” is also defined in MFI 2, as meaning “activities engaged in for the purpose of profit on a continuous or repetitive basis”.

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”.

30. The direction continued:

In order to be satisfied of the element “to obtain or retain business”, you must be satisfied that there was a direct connection between the provision of the benefit and the purpose of obtaining or retaining business. In other words, you must be satisfied that it was to obtain business directly and not just to obtain a business advantage.

The following examples would not amount to an agreement to provide a benefit in order to obtain or retain business:

(1) payments for the purpose of ensuring that the tenderer would not be excluded from the tendering process;

(2) payments for the purpose of ensuring the job runs smoothly; or

(3) payments for, for example, a visa or tax concession which might help the business and give the business and business advantage but would not be directly for obtaining or retaining business.

While the payments in these three examples I have given you might have an indirect connection with the obtaining or retaining of business, this is not enough for the charge that has been alleged against each of the accused; there must be a direct connection.

(Emphasis added.)

Question 1

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

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? (Italics in original)

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.

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.

34. The trial judge’s reasons for this ruling included:

[11] Turning now to paragraph 2 of MFI 24, I am satisfied that having regard to the context in which the words “obtain or retain business” appear in s 70.2, it is necessary to distinguish the concept of obtaining or retaining “business” in s 70.2(1)(c)(i) from the concept of “obtain or retain a business advantage”, which is referred to in s 70.2(1)(c)(ii). The Commonwealth Parliament has made a choice to legislate separately in relation to “business advantage” and has thereby, in my view, narrowed the plain meaning of the words “obtain or retain business”, which might otherwise, but for the context provided by s 70.2(1)(c)(ii), have been thought to encompass concepts of indirectly obtaining or retaining business as well as directly obtaining or retaining business. I note that the Crown accepts that s 70.2(1)(c)(i) is mutually exclusive from s 70.2(1)(c)(ii).

[12] Having regard to the legislative context in which these provisions operate, I consider that s 70.2(1)(c)(i) ought be construed as covering, and limited to, directly obtaining or retaining business; whereas s 70.2(1)(c)(ii), dealing as it does with “business advantage”, would cover business advantages which might indirectly lead to obtaining or retaining business. Paying a bribe to be awarded a contract would amount, in this context, to obtaining or retaining business, whereas paying a bribe to have one’s tender considered with others would not, although it would amount to a business advantage (albeit one to which the payer of the bribe would be entitled on submission of a compliant tender).

[13] I am persuaded by Mr Pararajasingham that it is appropriate to draw that distinction in a direction to the jury which makes a reference to directly obtaining or retaining business and the indirect concept of obtaining or retaining a business advantage.

(Emphasis added.)

Disposition

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.

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.

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.

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):

Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected.

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).

40. Article 1, paragraph 1 of the OECD Convention provides:

Each Party shall take such measures as may be necessary to establish that it is a criminal offence under its law for any person intentionally to offer, promise or give any undue pecuniary or other advantage, whether directly or through intermediaries, to a foreign public official, for that official or for a third party, in order that the official act or refrain from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of international business.

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

3. … A Party may use various approaches to fulfil its obligations, provided that conviction of a person for the offence does not require proof of elements beyond those which would be required to be proved if the offence were defined as in this paragraph…

4. It is an offence within the meaning of paragraph 1 to bribe to obtain or retain business or other improper advantages whether or not the company concerned was the best qualified bidder or was otherwise a company which could properly have been awarded the business.

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).

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).

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.

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).

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.

47. Paragraphs 28 to 30 of the Explanatory Memorandum explain:

28. The first limb (subparagraph 70.2(1)(c)(i)) covers the situation where the intention to influence the official was in order to obtain or retain business. The focus is firmly on benefits significant enough to influence trade and its scope is such that on its own it would not include smaller “facilitation” benefits (for example, a manager in Australia authorises the payment of $100.00 to a foreign official to expedite the connection of a single telephone in an office that already has 50 telephones). In those circumstances it may be difficult to prove the connection of one telephone was “in order to obtain or retain business.” In May 1997 the OECD considered that this should be the only provision concerning this aspect of the offence. However the December 1997 OECD Convention added a second limb (detailed in subparagraph 70.2(1)(c)(ii) of the Bill) which expands the scope of the offence (see Article 1 of the OECD Convention and paragraphs 4 and 5 of the Commentaries on the OECD Convention).

29. The second limb, subparagraph 70.2(1)(c)(ii), covers the situation where the intention to influence the official was in order to obtain or retain a business advantage that is not legitimately due to the recipient or intended recipient. This is far less specific and, without the defence at clause 70.4, is more likely to catch smaller “facilitation” benefits such as the one described in the example. Assuming it is illegal to make the payment in the country where the example occurs, it is more likely that it could be proven that it was intended to influence the official to obtain a business advantage that was not legitimately due to the person than it could be proven that it was intended to obtain or retain business.

30. Subparagraph 70.2(1)(c)(ii) is aimed at the situation where the benefit is intended to cover a bribe in order to obtain or retain a business advantage to which the person was clearly not entitled. This is demonstrated by the example given at paragraphs 4 and 5 of the Commentaries to the OECD Convention: a bribe paid in order to receive an operating permit for a factory where the person has failed to satisfy the statutory requirements for issue of such a permit. The OECD Convention authors make it clear that they intend that sort of benefit to be covered by countries in their implementing legislation.

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.

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.

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.

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.

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).

48. 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.

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

Question 2

55. The second question for the Court’s determination is:

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)?

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.

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.

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

Question 3

59. Question 3 is:

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)?

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

61. The questions submitted for determination should be answered as follows:

Question 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?

Answer:   No.

Question 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)?

Answer:    No.

Question 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)?

Answer:   No.

**********

Amendments

03 July 2023 - Appeal book reference removed

Decision last updated: 03 July 2023