R v Dougas; R v Read; R v Linke (No 9)

Case •

[2022] NSWSC 299

•

21 March 2022

No judgment structure available for this case.

Supreme Court


New South Wales

Medium Neutral Citation: R v Dougas; R v Read; R v Linke (No 9) [2022] NSWSC 299
Hearing dates: 17 March 2022
Date of orders: 17 March 2022
Decision date: 21 March 2022
Jurisdiction:Common Law
Before: Adamson J
Decision:

The applications by the accused Mark Read and the accused Geoffrey Linke for directed verdicts of acquittal are refused.

Catchwords:

CRIMINAL PROCEDURE — Trial — Verdict by direction — ‘no case to answer’ application by accused — where Crown case based on circumstantial evidence — where application dismissed

Legislation Cited:

Criminal Code (Cth), s 70.1

Evidence Act 1995 (NSW), ss 66, 69, 165

Cases Cited:

Ahern v The Queen (1988) 165 CLR 87; [1988] HCA 39

Constantinidis v R; Lazar v R [2022] NSWCCA 4

Doney v The Queen (1990) 171 CLR 207; [1990] HCA 51

Gant v R [2017] VSCA 104

May v O’Sullivan (1955) 92 CLR 654; [1955] HCA 38

Reg v Galbraith [1981] 1 WLR 1039

R v Saffron (No 1) (1988) 17 NSWLR 395

The Queen v LK (2010) 241 CLR 177; [2010] HCA 17

Category:Procedural rulings
Parties:

Proceedings 2018/150442
Regina
Paul Peter Dougas (Accused)

Proceedings 2018/150387
Regina
Mark Andrew Read (Accused)

Proceedings 2018/150400
Regina
Geoffrey Kym Linke (Accused)
Representation:

Counsel:
S Flood / K Heath (Crown)
N Clelland QC / S Pararajasingham (Paul Peter Dougas)
P Boulten SC / J Gullaci (Mark Andrew Read)
I Hill QC / C Morgan (Geoffrey Kym Linke)

Solicitors:
Commonwealth Director of Public Prosecutions (Crown)
Arnold Bloch Leibler (Paul Peter Dougas)
Stary Norton Halphen (Mark Andrew Read)
Colin Biggers & Paisley Lawyers (Geoffrey Kym Linke)
File Number(s): 2018/150442; 2018/150387; 2018/150400

Judgment

Introduction

  1. Each of the three accused, Paul Dougas, Mark Read and Geoffrey Linke, stands charged on indictment for the following offence against s 70.2(1)(a)(i), (b) and (c)(i) of the Criminal Code (Cth) as follows:

“Between about 1 January 2000 and about 30 June 2005 in the Republic of the Philippines, the State of New South Wales, the State of Victoria and elsewhere, did conspire with each other, Lyndsay Gordon Chapple, Mohit Kumar, Angus Brodie, Yolanda Fernandez 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 the Republic of the Philippines in the exercise of the official’s duties as a foreign public official in order to obtain or retain business.”

  1. The offence charged is that of conspiring to provide a benefit to a public official which is not legitimately due to that person with the intention of influencing a public official in the performance of that person’s duties in order to obtain or retain business (as distinct from a business advantage which is not legitimately due to the intended recipient). Bribes paid for a “business advantage” rather than to obtain or retain business relate to a different offence under s 70.2(1)(c)(ii), which has not been charged.

  2. At the conclusion of the Crown case, Mr Read and Mr Linke each applied for a directed acquittal. These applications are to be determined by reference to the test which was articulated by the High Court in May v O’Sullivan (1955) 92 CLR 654 at 658 (Dixon CJ, Webb, Fullagar, Kitto and Taylor JJ); [1955] HCA 38, namely, whether, at the time a no case submission is made, the accused could lawfully be convicted on the evidence as it stood at that time.

  3. It has been subsequently made clear by the High Court, including in Doney v The Queen (1990) 171 CLR 207 at 214-215 (Deane, Dawson, Toohey, Gaudron and McHugh JJ); [1990] HCA 51 (Doney), that the question for me is not whether the quality of the evidence is such that any verdict of guilty in respect of the sole count would be unreasonable since that would be a matter for the Court of Criminal Appeal. These principles will be addressed in more detail below.

  4. Because of the nature of the test to be applied in this application, I do not propose to recount the evidence that favours the accused (except where necessary to explain the submissions) since I am required to determine the application by taking the Crown case at its highest.

The Crown case generally

  1. Sinclair Knight Merz (SKM) was a multinational engineering firm based in Australia. The Crown case is that some of its employees, including the three accused and others named in the indictment, were parties to a conspiracy to bribe public officials in the Philippines within the charge period. It was not in dispute that there was such a conspiracy between at least Yolanda Fernandez, the Business Development Manager at SKM’s Philippines office, and Lyndsay Chapple, SKM’s Philippines Country Manager.

  2. Mr Chapple was the Crown’s principal witness. As Mr Chapple was a person who was criminally involved in the events the subject of the charge, his evidence falls within a category of evidence which “is of a kind which may be unreliable” within the meaning of s 165 of the Evidence Act 1995 (NSW). A warning has already been given to the jury in respect of his evidence, the effect of which will be repeated in the summing up.

  3. The Crown case is that Ms Fernandez told Mr Chapple that SKM would not get contracts for public works funded by aid agencies (loan projects) on merit alone and would need to pay bribes to Filipino public officials in order to be awarded such contracts.

  4. The Crown case is that Mr Dougas, as Chief Executive Officer and Managing Director of SKM, authorised Mr Chapple to arrange for bribes to be paid, in accordance with guidelines which Mr Dougas specified. The Crown relied on Mr Chapple’s evidence of his conversations with Mr Dougas, which he said occurred in 2000, as follows:

“I explained to Mr Dougas that Ms Fernandez had said that we will not have any success on loans projects unless we discuss with the people involved in selecting the consultant, that we understand payments are required to be made and commit to make those payments during the life of the project.

…

[Mr Dougas] said he understood how things worked in Asia and that there were a number of requirements if we were to do this.

… The three requirements were: Make sure it's done through an invoice, so it is an auditable invoice that that will pass through the audits that might be done at a later date; don't pay the money upfront; and don't spread the knowledge of what's going widely, keep the circle of knowledge as small as possible.”

  1. Mr Chapple said that he understood from this conversation that he could:

“go back to Ms Fernandez and advise her that we had the opportunity to make the offer of making payments and then actually make payments during the project implementation, we would have to seek permission each time prior to doing that, prior to making that commitment.”

  1. Mr Chapple also said that Mr Dougas had told him to obtain approval for such payments from Mr Read. The Crown case is that subsequently, in about 2004, Mr Chapple approached Mr Linke for approval to pay bribes and that, accordingly, by 2004, Mr Linke had become a party to the conspiracy.

  2. I understand it to be accepted, at least on behalf of Mr Read (and by implication Mr Dougas, see below), that taking the Crown case at its highest, the evidence of Mr Chapple is that Mr Dougas authorised the payment of bribes and instructed Mr Chapple that he was to seek approval from Mr Read.

  3. Mr Chapple explained in his evidence that the process of negotiating bribes occurred in the following context. If SKM, having submitted an Expression of Interest for a loan project, was invited by a government instrumentality to submit a proposal, Ms Fernandez would approach relevant public officials to negotiate a bribe. On the Crown case, Mr Read stipulated a limit for bribes of 5% of the contract price (the total amount which SKM would be paid for performing the contract). In her negotiations, Ms Fernandez would endeavour to defer payments throughout the life of the contract to provide the public officials with an incentive to make timely progress payments to SKM in accordance with the client’s contractual obligations. Ms Fernandez reported to Mr Chapple on her negotiations. He would then, on his evidence, approach Mr Read for approval.

  4. SKM did not submit its proposal until, first, agreement had been reached as to the quantum of the bribe and the timing of payments, which were only to be made after the award of a contract; and, second, Mr Chapple had obtained approval from Mr Read (up until 2004) or Mr Linke (from 2004 onwards) to pay the bribe.

  5. Mr Chapple accepted that Mr Dougas required him to travel to Sydney in July 2001 at which time Mr Dougas directed him not to pay any bribes. The Crown case is that this conversation arose because Mr Dougas became concerned about the potential harm to SKM’s reputation which had been occasioned when Mr Chapple disclosed to employees of Gregory Asia that SKM paid bribes to Filipino public officials to get work (as evidenced by emails sent and received in May 2001: tab 1 of Exhibit A). Gregory Asia was a building services business conducted out of Hong Kong and Manila which was subsequently acquired by SKM. The Crown case is that, once Mr Dougas’ concern about the disclosure of information to Gregory Asia had abated, the practice of bribing public officials in the Philippines resumed and continued throughout the charge period.

  6. The Crown case is that, initially, Ms Fernandez arranged for her associates to issue invoices to SKM for monies which were intended to be paid as bribes to foreign public officials. However, in about 2003, at Mr Chapple’s suggestion, Intelmar Enterprises (Intelmar) was set up by Ms Fernandez as the vehicle which would be responsible for issuing invoices to SKM for expenses described as related to “external marketing”. SKM would pay the invoices by cheque or bank transfer into Intelmar’s bank account. Intelmar would then provide cash to Ms Fernandez who would pay the public officials. This mechanism was adopted in order to distance SKM from the payments to public officials as well as to create an apparently legitimate audit trail to prevent the bribery being detected by SKM’s accountants, auditors or other employees who were not parties to the conspiracy.

  7. The Crown relied substantially on the oral evidence of Mr Chapple and emails within the charge period to establish that each of the three accused was a party to the conspiracy. Because of the different roles played by each accused in the operations of SKM, it is necessary to address the Crown case against each accused separately. However, in addressing the applications, the evidence as a whole is relevant since the evidence referred to below has been admitted without restriction and can therefore be used in support of the Crown case against each of the accused. A single document in the trial is not admissible against Mr Read but this is not germane to this application.

The Crown case against Mr Dougas

  1. No application for a directed verdict has been made on behalf of Mr Dougas. It is, accordingly, unnecessary to address the case against Mr Dougas in any detail, except in so far as it is apparent from the description of the Crown case set out above.

The Crown case against Mr Read

The oral evidence

Stephen Dorian

  1. Stephen Dorian, SKM’s Human Resources Manager from May 2005 (close to the end of the charge period), gave evidence that until about August or September 2001, Mr Read was the Chief Operating Officer (COO) for Australasia, a position which covered Australia, New Zealand and Fiji. This position did not confer any official responsibilities on him for the Philippines or other countries in the Asian region. He had held that position since about 20 November 2020 and prior to that he had been SKM’s Regional Manager for South East Australia (Exhibit 2D1). In about September 2001, Mr Read was appointed as the COO of SKM for the Asia Pacific region and remained in that position until February 2004. As the COO of the Asia Pacific region, Mr Read was responsible for leading SKM's business operationally within the Asia Pacific region. He reported directly to Mr Dougas.

Mr Chapple

  1. The Crown relied on Mr Chapple’s evidence that Mr Dougas told Mr Chapple in 2000 to obtain approval for bribe payments from Mr Read (in the conversation referred to above) and that Mr Read had, in fact, approved the payment of bribes. The Crown contended that an inference was available from this evidence that Mr Dougas in fact recruited Mr Read into the conspiracy to perform the role which he had assigned to him.

  2. Mr Chapple also gave evidence that Mr Read told him that there was a benchmark figure for marketing expenses of 5% (of the contract price). The Crown case is that the 5% benchmark related to bribes to be paid to public officials. Mr Chapple was unable to say when the conversation with Mr Read took place or whether it was in person or over the phone.

  3. Mr Chapple also gave evidence that he had a telephone conversation with Mr Read in which Mr Read had given approval regarding a proposal which was due to be submitted by SKM the following Monday (the night-time conversation). Mr Chapple could not recall when the conversation occurred or to which proposal it related. He said that it was a weekend and he was in his bedroom in Manila and that it was about 8, 9 or 10pm at night. Mr Chapple said that Mr Read, who was in Australia, initiated the phone call and that, following the conversation, either that night or the following morning, Mr Chapple contacted Ms Fernandez to say that he had obtained Mr Read’s approval to submit the proposal with the marketing cost (that is, the bribe) included. The Crown contended that this evidence, when considered with the email of 10 October 2003 (set out below), could be used as the basis for an inference that the night-time conversation occurred in April 2001, two and a half years prior to 10 October 2003 and that, having regard to what occurred after the conversation, Mr Read had approved the payment of a bribe with respect to the Manila Air project, which was a loan project.

  4. Mr Chapple gave other non-specific conclusionary evidence that Mr Read had approved the payment of bribes.

Documentary evidence

Documentary evidence relating to Mr Read’s understanding of the nature of SKM’s business in the Philippines

  1. The Crown relied on the following documents in support of the submission that the inference was available that Mr Read knew about the nature of SKM’s business in the Philippines and that it included loan projects:

  1. on 27 September 2001, Angus Brodie, who was then the COO Asia, sent an email to Mr Read about the imminent Asia Pacific Management Executive Committee meeting, which said that the manager of SKM’s Philippines office would make a presentation about the office’s business plan (Exhibit 2D2);

  2. on 30 January 2002, Mr Read sent an email to Terence Petersen setting out comments about budgets in East Asia, including the Philippines (Exhibit 2D6); and

  3. on 29 August 2003, Michael Brown, SKM’s auditor, sent an email to recipients who included Mr Read with a report attached (Exhibit 1D12). The report referred to “ADB [Asian Development Bank] projects”.

The complaint regarding Mr Chapple and Ms Fernandez in September 2003

  1. The Crown relied on documents tendered on behalf of Mr Dougas (Exhibits 1D9, 1D10 and 1D14) which showed that, in July 2003, an employee of SKM’s Philippines office had made a complaint to Mr Dougas about Mr Chapple and Ms Fernandez, alleging that they were guilty of corrupt conduct. The allegations included that “$20,000 [had been released] for the Governor of Davao for the DAVAO Water project … we doubt that the full money goes to the governor” (referred to in a further email sent by the employee in September 2003). Mr Dougas forwarded the complaint to Binu Katari (SKM’s Chief Financial Officer), Mr Read and others.

  2. The Crown submitted that the inference was available that, as Mr Read was aware of the allegation of corrupt conduct at the Manila office of SKM in the months preceding the email Mr Chapple sent to him on 10 October 2003 (referred to below), Mr Read would not have read Mr Chapple’s email as being concerned with legitimate external marketing costs, but rather as relating to bribes to Filipino public officials.

The email from Mr Chapple to Mr Read dated 10 October 2003 (Tab 19 of Exhibit A)

  1. The email from Mr Chapple to Mr Read dated 10 October 2003 is admissible not only to prove the terms of the communication but also to prove the truth of its contents. No limitation on its use has been ordered. Further, s 66 of the Evidence Act applies, since its maker, Mr Chapple, was called to give evidence. The email is also admissible for a hearsay purpose pursuant to the business records exception in s 69 of the Evidence Act.

  2. On 10 October 2003 Mr Chapple sent an email to Mr Read as follows:

“Hi Mark

Long time, no pester!!

We last spoke about 2.5 years ago on the external marketing costs for the Manila Air project. Time flies.

Anyway the project has finally cleared some obstacles at the ADB, and we have been negotiating for a few months (literally) to get to the final financial contract. We are expecting to get the draft contract in a day or two for review, as will Helen or her nominee of course.

The scope has been cut back drastically over the intervening 30 months, and it is now only (!) USD1.2m. However the recent long negotiations were about getting the 'contact' to agree to sticking with a percentage basis for marketing costs and not an absolute based on the larger initial contract amount. He has finally relented and we will have a figure of P3M or less than 5% of the final contract amount.

You had suggested originally that 5% would be OK, but I think that Yolly [Ms Fernandez] started to enjoy the negotiations too much and got him down a bit under this in the end.

Anyway you asked me to inform you of the final outcome, hence this email.

I also should inform you that we are starting 2 other projects this month which also need some marketing costs.

The Manila Sewerage project has just started 2 weeks ago with Chris Pulbrook on board, and we have an obligation to 3 helpers for P300k each or P900k on a P22m project. Less than 4% this time.

Lastly the Mindanao Basic Urban Services project has just commenced (yet to even open the job number on this one) and we need to assist one person with P500k on this P18M project, or less than 3%.

So no need to discuss this horrid topic with you for over 2 years, then 3 long awaited projects all start within one month of one another. Would like a few more months like this to be honest!!

As a matter of interest, the other teams on MMair (there are 3 components) have paid 11% or more we understand, so we are doing very well in a strange way.

Finally, we have agreed on 2 stages of payment for MMair and I would like to ask your approval for the two cheques required, as a way of keeping the circle of folk involved to a minimum. The amounts exceed my local approval authority for cheques, and I see no need to get Joe Alban and the GM’s involved in this issue unless you so wish.

Finally, and more importantly, I hope you keeping are [sic] well.

Cheers

Lyndsay"

[Emphasis added to indicate the aspects of the email on which the Crown particularly relies to support the inference that Mr Chapple was communicating with Mr Read as someone who was within the circle of knowledge, being the conspiracy, and could be expected to understand the significance of the highlighted portions.]

  1. At some time on or prior to 31 October 2003, Mr Read (then COO of Asia Pacific) forwarded this email to Joe Alban, who from 24 May 2002 was SKM’s Regional Manager for West Asia (which did not include the Philippines), Mr Dougas (by blind copy) and Mr Katari. He did not, however, forward the email to Mr Petersen, who was the Regional Manager for East Asia (which included the Philippines), who was not alleged to be party to the conspiracy.

  1. In his email to Mr Alban, Mr Read wrote:

“Joe

Can we also discuss this please

Mark”

  1. Mr Dougas responded to the forwarded email by sending an email to Mr Read on 31 October 2003:

“Thanks Mark , please ensure we [are] invoiced fee for services provided in doing the project here …………..”

  1. The Crown relied on Mr Read’s act of forwarding the email of 10 October 2003 by blind copy to Mr Dougas and Mr Dougas’ response on 31 October 2003 as supporting the following inferences:

  1. Mr Read received and read Mr Chapple’s email of 10 October 2003;

  2. Mr Read had previously communicated with Mr Dougas about being the person who had Mr Dougas’ authority to approve the payment of bribes;

  3. Mr Dougas read and understood the email from Mr Chapple to Mr Read;

  4. Mr Dougas’ response to Mr Read constituted his permission to approve the payment of a bribe, subject to the requirement he had earlier outlined in his conversation with Mr Chapple in 2000, that there be an invoice to support the payment; and

  5. Mr Read’s understanding of Mr Dougas’ response accorded with Mr Dougas’ intention referred to in (4) above.

  1. The Crown relied on the evidence of payments proximate in time and corresponding in amount to those referred to in the 10 October 2003 email to support an inference that Mr Read had approved the payments and that they were made. The financial documents relating to those payments are Tabs 20, 23 and 25 of Exhibit A.

  2. In this context, the Crown relied on Mr Chapple’s evidence that he did not have authority to pay the invoice issued by Intelmar on 17 November 2003 in the amount of PhP1,662,049.86 because it was beyond his delegation (his evidence was supported by Exhibit 1D15 which recorded that a payment of PhP1,481,040 exceeded Mr Chapple’s delegation and required Regional Manager approval). The Crown also relied on Mr Chapple’s evidence that if he purported to approve a payment by signing a cheque request which exceeded his delegation, the Accounts Department in SKM’s Philippines office would submit the request to the person whose delegation was sufficient to make the payment and obtain approval from that person.

  3. The Crown submitted that, in these circumstances (and having regard to Mr Chapple’s evidence about the lack of communication between Mr Chapple and others between the time of the email and the date of payment), the inference was available that Mr Read approved the payments referred to in the email.

The Crown case against Mr Linke

The Crown case as opened

  1. The Crown opened that, sometime between 21 March 2004 and 2 April 2004, Mr Linke had travelled to Manila and discussed the payment of bribes with Mr Chapple. The Crown identified as particularly significant the email sent from Mr Chapple to Mr Linke on 6 August 2004 (referred to below) and said that its case is that the email, coupled with the earlier conversation between Mr Chapple and Mr Linke, showed Mr Linke’s direct knowledge of the scheme.

  2. The evidence of Mr Petersen is also relevant, as is the circumstance that the Crown did not allege that Mr Petersen was party to the conspiracy.

The evidence in the Crown case

The oral evidence

The evidence of Mr Chapple

  1. Mr Chapple did not give evidence that he discussed with Mr Linke the payment of bribes to Filipino public officials or the payment of bribes generally. Indeed, Mr Chapple accepted that he had no memory of ever having a conversation with Mr Linke regarding “loan projects” or the payment of “external marketing costs”. These terms, as Mr Chapple explained in his evidence, were euphemisms for payments of bribes to “Government officials” and were used to disguise the true nature of the payments from those who were not party to the conspiracy. Mr Chapple accepted that the term “external marketing costs” had a legitimate meaning and that it had been chosen as a euphemism for this very reason. Mr Chapple also accepted in cross-examination that he has never named Mr Linke as being knowingly involved in the payment of bribes to public officials in the Philippines, including in his police statement signed on 26 March 2014.

  2. Further, the Crown adduced no direct evidence that Mr Chapple and Mr Linke ever met in Manila, or elsewhere, after 2002. Mr Chapple’s evidence was that Mr Linke had visited the Manila office for its opening in August 2002. Mr Chapple said that he thought Mr Linke had also come to Manila at some time between August 2002 and 6 August 2004 but that he was not sure. Mr Chapple’s recollection was corroborated by Mr Linke’s travel records (Exhibit C), referred to below.

  3. Mr Chapple’s evidence relating to the emails is referred to in the context of the emails referred to below.

The evidence of Mr Petersen

  1. As referred to above, it was not alleged that Mr Petersen was party to the conspiracy. Relevantly, in April 2002, Mr Petersen replaced Mr Linke as Regional Manager for Queensland and was also appointed Regional Manager for East Asia, which included the Philippines. The latter role required him to look after the Gregory Asia business which SKM had acquired. This was the only client-service aspect of the role. Mr Petersen had no responsibility for the loan projects work performed by SKM in the Philippines, although he was responsible for office infrastructure in East Asia.

  2. In about April 2002, SKM changed its management structure to a so-called matrix system, the effect of which was to change the reporting lines, which had previously been arranged by reference to geographical area, and institute a system of reporting along global subject matter lines. When the matrix system was instituted, Mr Linke was appointed General Manager Water and Environment. At that time, Mr Read was COO Asia Pacific. Mr Chapple reported to Mr Read about project work and client services and to Mr Petersen about matters concerning office infrastructure and the like.

  3. Mr Petersen had a substantial involvement with Mr Chapple and the workings of the Philippines office (as referred to below). Mr Petersen’s unchallenged evidence was that he was entirely unaware of any bribes being paid.

The documentary evidence

Email chain between 10 and 12 July 2002 (Tab 6 of Exhibit A)

  1. Mr Linke was not a party to the emails in this chain, which began with an email dated 10 July 2002 from Mr Chapple to Mr Petersen, asking for cash to pay for various items relating to office infrastructure. Mr Petersen explained that this fell within his role as Regional Manager, East Asia, because it related to office infrastructure, the cost of which could not be met by SKM’s Philippines cost centre as SKM had not been paid for local contracts. He also explained that the general policy of SKM was that individual cost centres ought be self-funding and cashflow-positive. In other words, Mr Chapple would generally have been expected to pay for office fit-out from cash generated from contracts in the Philippines.

  2. Later that day, Mr Petersen sent an email to Mr Katari which forwarded Mr Chapple’s email. Mr Petersen asked Mr Katari to transfer AUD200,000 to “Lyndsay’s PHIL HSBC Manila bank account”. Mr Petersen then forwarded both emails to Mr Dougas, asking for his approval to forward the amount requested from the Sydney office of SKM.

  3. Mr Dougas, who was on holidays at the time, responded to Mr Petersen and Mr Katari on 12 July 2002, in part as follows:

“Can we defer expenditure until we get the cash locally? Or better still defer payment as seems to be the local style?”

  1. This email was relied on by Mr Hill QC, who appeared with Mr Morgan for Mr Linke, to show that, notwithstanding Mr Petersen’s close involvement with the workings of the Philippines office (which exceeded that of Mr Linke), it was not suggested that Mr Petersen was party to the conspiracy.

Emails relating to the work of SKM’s Philippines office

  1. The Crown relied on emails dated 14 March 2003 (Exhibit 1D8) and 20 October 2003 (1D16), which were tendered on behalf of Mr Dougas, to establish Mr Linke’s knowledge of the involvement of the SKM’s Philippines office in loan project work for Filipino Government instrumentalities. It also relied on Mr Linke’s receipt of an email sent to him and others on 30 January 2004 from SKM’s auditor, Mr Brown. (Ex 1D15), to show that Mr Linke was aware that there was a concern that cash payments were being made by SKM’s Philippines office to consultants, rather than, as SKM required, by cheque or bank transfer.

Email dated 6 August 2004 (Tab 31 of Exhibit A)

  1. The following email, dated 6 August 2004, from Mr Chapple to Mr Linke, forms an important part of the Crown case against Mr Linke:

“Hi Geoff [Linke]

I don't send you an email for weeks, then about 20 in 2 days. Sorry for the load.

When you were last in Manila we explained how that on loan projects we have to pay for external marketing costs. The previous agreement with Mark Read (when COO) was we could go up to 5% and then advise Mark when payment was being made. For over 5%, prior approval was required before agreeing with the external marketers.

We now urgently need to pay these costs for the Dept of Agrarian Reform project we are now just starting. We have signed the contract and the Notice to Proceed is due any day. Our consultants (all locals) have already started as the project has been much delayed. We have delayed paying the external marketers as their demands have been too high. The original price we bid was P14m and now, after negotiations, it has been hacked in scope and price to just P7.3m. The external marketers were still expecting a payment related to the original bid price, and they have just today agreed to P350,000 or a bit under the target 5%. These same people are involved in a Technical Working Group that assesses many proposals, and we need to keep them happy with the MWSS assessments starting any day.

Could you please confirm that this is OK. The usual method would be used. This involves a genuine tax approved invoice will be received from a locally registered company with whom we have great relationship; they will be paid by cheque with all local taxes also paid, and take out their handling fee, and then this other company delivers the payment in cash to the external marketers.

Last time we did this was about a year ago … late last year I think under Mark when there were 3 at once.

A quick approval would be great while our external marketers are still happy with their reduced payments, and prior to the MWSS proposal review starting.

Thanks Geoff.

A phone call response will be fine if you wish to avoid too much detail in emails.

Lyndsay Chapple

Country Manager, Philippines"

[Emphasis added to indicate the passages on which the Crown principally relies.]

  1. Although Mr Chapple did not give evidence of an antecedent conversation with Mr Linke, he said that his purpose in sending this email was to request Mr Linke’s approval for the payment of bribes to public officials in the Philippines.

  2. There is no evidence that there was any response to this email and Mr Chapple does not recall any response. Mr Chapple’s evidence was that he did not recall the conversation referred to in the second paragraph of the email.

Travel records (Exhibit C)

  1. To support the inference that the trip referred to in the second paragraph (“when you were last in Manila”) was a reference to Mr Linke’s trip to the Philippines in April 2004, the Crown relied on Mr Linke’s travel records, which showed that Mr Linke returned to Australia from the Philippines on 2 April 2004.

Invoices and other financial documents (tab 32 of Exhibit A)

  1. While the Crown accepted that there was some doubt about the project to which the following financial documents related, it sought to link an invoice issued by Intelmar dated 2 August 2004 in the sum of PhP367,500, the payment of which was approved by Mr Chapple on 9 August 2004 and received by Intelmar on 10 August 2004, to the email of 6 August 2004. Mr Chapple’s evidence did not support the connection as he said that the documents behind tab 32 related to a different project.

  2. Notwithstanding Mr Chapple’s evidence, the Crown relied on the temporal proximity between the request on 6 August 2004 and the payment shortly afterwards and the similarity of the amount sought (PhP350,000) and the amount paid (PhP367,500). It contended that the disparity between the amounts could be accounted for by an allowance for Intelmar’s commission.

Email from Mr Linke to Mr Dougas (Exhibit 1D17)

  1. The Crown relied on an email which Mr Linke sent to Mr Dougas on 5 November 2004 in connection with the possibility that Ms Fernandez would be awarded the CEO Medal. Mr Linke’s email was in response to an email from Mr Dougas in which Mr Dougas raised concerns about Ms Fernandez’s past “business practices”. Mr Linke said in the email:

“My understanding is some misunderstandings 5 ? yrs ago, but Yolly [Ms Fernandez] is very effective and professional, and communicates processes and issues upline when complexities arise in her business development/project winning role.

would support nomination.”

  1. The Crown relied on this email to support the inference that Mr Linke was, as at the date of the email, aware of the detail of the projects that SKM’s Philippines office was seeking to be awarded.

Email chain behind tab 37 of Exhibit A (February and March 2005)

  1. The Crown also relied on a series of emails in February and March 2005 between Mr Chapple, Mr Linke and Mohit Kumar. At that time, Mr Kumar, a senior environmental engineer, was the Operations Centre Manager for SKM’s Philippines business, having been appointed to that position on 1 September 2004.

  2. In the first email in the sequence, dated 15 February 2005, Mr Kumar emailed Mr Linke (copied to Mr Chapple), forwarded Mr Chapple’s email to Mr Linke dated 6 August 2004 (referred to above), and said:

“We have a signed contract and notice to proceed on the MWSS project. The team has mobilized and all looks well.

In line with Lyndsay’s email below (for another project) [the email of 6 August 2004], we are now required to meet our commitments on MWSS. The total payment is w/n [within] 5% of the project budget (PhP54.6MPeso). Kindly let me know if you have any objections to this, we will proceed to make the payments by end of the week.

The same group would be assessing our next big proposal on ‘Laiban Dam FS’ (~1MUSD). The process/paperwork for doing this is as outlined in Lyndsay’s email below. Thanks for your support.

Rgds

Mohit”

[Emphasis added].

  1. The Crown case is that the expression “meet our commitments” in this email, in the context of Mr Chapple’s earlier email of 6 August 2004, was a reference to paying the agreed bribe for the project and that the reference to 5% was a reference to the benchmark figure provided to Mr Chapple by Mr Read. Further, it relied on the highlighted part of the last paragraph in support of the inference that the payment was to be made to public officials who had assessed the Metropolitan Waterworks and Sewerage System (MWSS) project and would be assessing another large project relating to the Laiban Dam (which served metropolitan Manila’s water supply) for which SKM intended to submit a proposal.

  2. On the same day, 15 February 2005, Mr Linke responded to Mr Kumar (copied to Mr Chapple):

“Ok proceed, under the guidelines Lyndsay outlines below – re payment for services under invoice received

(assume you mean <5% of PhP54M peso, and not PhP54 mill pesos!)

  1. Mr Kumar’s response to Mr Linke, which was copied to Mr Chapple, sent on 15 February 2005, was as follows:

“Yes Geoff, will follow the procedure and yes w/n [within] 5% of project budget of 54.6MPeso.”

  1. Mr Kumar sent a further response to Mr Linke on 16 February 2005 in which he said:

“As discussed below, we’ve proceeded to make the payment. However, if you agree, I would like to understand/explore this payment process a bit better, how it was set-up, its mechanics etc.”

  1. Mr Linke responded on 17 February 2005 by suggesting that they discuss it in March in Melbourne. On 19 March 2005, Mr Kumar sent Mr Linke an email in which he said:

“Melbourne was so rushed that we did not get an opportunity to discuss this issue. Maybe when you have a moment, pls let me know and I can call you to talk about this.”

  1. The Crown case is that these emails demonstrate that Mr Linke was aware of the limit on the amount that could be paid as a bribe, being 5% of the contract price and that he was party to the conspiracy.

Email sent by Mr Kumar to Mr Linke dated 20 May 2005 (Tab 39 of Exhibit A)

  1. The Crown also relied on the following email sent by Mr Kumar to Mr Linke on 20 May 2005 in support of its case that Mr Linke was aware of how the bribe payments were to be disguised (through being described as marketing fees in invoices issued by Intelmar) and paid (through cheques paid to Intelmar which were then paid in cash to the public officials):

“Hi Geoff [Linke]

Paul [Dougas] brought up the issue of marketing fees on projects in Philippines and SKM’s policy in that regard during my meeting with him and Mark [Read] last Friday in KL.

To be certain, I returned to Manila and discussed with Yolanda in detail (who returned from her maternity leave last Monday) to understand how the practice has been established in PHIL.  Geoff, as you are aware I wanted to check this in detail anyway for the MWSS project (the last project to incur this cost) but was waiting for Yolanda to return from leave.  My understanding is as follows:

1  A company by the name of ‘Intelmar’ has been utilized for this purpose (a single person outfit) a Philippine BIR registered company with a TIN No etc.

2  Invoice for the appropriate marketing services (incl a 5% handling charge) is received from Intelmar.

3  Payment is made to Intelmar by check after deduction of the appropriate WHT.

4  On receipt of payment in the account, the funds are provided to Yolanda.

5  Yolanda then delivers the payment in person to the concerned parties.

During the process of my review of this, I learnt that Yolanda was a co-signatory to the account of Intelmar.  I have instructed Yolanda to withdraw her name from the account.  She has agreed, however paperwork on this is still to be concluded.  She also insists that payments eventually will still have to be delivered by her due to the sensitive nature of the transaction and the refusal of the parties concerned to entertain any third person for possibility of breach of trust.

Please let me know if you have any questions in this regard

Regards

Mohit”

[Emphasis added to indicate the portions of the email particularly relied upon by the Crown.]

  1. The Crown has not adduced any evidence of any response by Mr Linke or any action taken by him. Peter Dwyer, the Federal Agent, who was in charge of the investigation from early 2014 had access to Mr Linke’s entire electronic mailbox, including sent and received emails.

Consideration

The relevant principles

  1. The question for present purposes is whether there is some evidence capable of supporting each essential ingredient of the offence charged in respect of each accused. The term “elements” is used in the authorities as indicating those matters which must be proved beyond reasonable doubt. However, because of the analysis in The Queen v LK (2010) 241 CLR 177; [2010] HCA 17, which uses the term “elements” as including but not exclusively comprising the matters which must be proved beyond reasonable doubt, I shall not use the term, but rather “essential ingredients” to describe the matters which the Crown is obliged to prove beyond reasonable doubt.

  2. This question is to be distinguished from the question whether the whole of the evidence is capable of excluding, in respect of each accused, a reasonable hypothesis consistent with innocence. The latter question arises on an appeal against conviction on a ground that the verdict was unreasonable.

  3. The test for an application such as the present was authoritatively stated in Doney at 214-215 (Deane, Dawson, Toohey, Gaudron and McHugh JJ):

“…if there is evidence (even if tenuous or inherently weak or vague) which can be taken into account by the jury in its deliberations and that evidence is capable of supporting a verdict of guilty, the matter must be left to the jury for its decision. Or, to put the matter in more usual terms, a verdict of not guilty may be directed only if there is a defect in the evidence such that, taken at its highest, it will not sustain a verdict of guilty.”

  1. Their Honours continued:

“It is necessary only to observe that neither the power of a court of criminal appeal to set aside a verdict that is unsafe or unsatisfactory … nor the inherent power of a court to prevent an abuse of process … provides any basis for enlarging the powers of a trial judge at the expense of the traditional jury function. The power of a court of criminal appeal to set aside a verdict on the ground that it is unsafe or unsatisfactory, like other appellate powers, is supervisory in nature. Its application to the factfinding function of a jury does not involve an interference with the traditional division of functions between judge and jury in a criminal trial. Nor does the existence in a trial judge or a court of powers to stay process or delay proceedings where the circumstances are such that the trial would be an abuse of process.”

  1. In Doney, the Court, at 214, expressly acknowledged the correctness of the following proposition from Reg v Galbraith [1981] 1 WLR 1039 at 1042:

“Where however the prosecution evidence is such that its strength or weakness depends on the view to be taken of a witness's reliability, or other matters which are generally speaking within the province of the jury and where on one possible view of the facts there is evidence upon which a jury could properly come to the conclusion that the defendant is guilty, then the judge should allow the matter to be tried by the jury.”

  1. The distinction between the powers of a trial judge on an application for a directed verdict and the power of the Court of Criminal Appeal to set aside a conviction on the ground that it is unreasonable is demonstrated by the recent decision of the Court of Criminal Appeal in Constantinidis v R; Lazar v R [2022] NSWCCA 4 (Constantinidis). In Constantinidis, the appellant appealed against his conviction, following a trial by judge alone, for doing an act with the intention of perverting the course of justice. His grounds of appeal included that the trial judge had failed to direct a verdict of acquittal and that the verdict was unreasonable. The former ground was found not to have been made out and the latter ground was upheld, which led to the conviction being quashed and the entry of a finding of not guilty.

  2. The Court (Gleeson JA, Fagan and Lonergan JJ) gave reasons for rejecting the challenge to the trial judge’s refusal to direct a verdict, as follows at [146]:

“Taking that evidence at its highest, as required upon consideration of an application for a directed verdict (see Doney v The Queen [1990] HCA 51; (1990) 171 CLR 207 at [17]), the acts of each appellant in furtherance of this joint criminal enterprise would be attributed to the other. That would include attribution to Lazar of Constantinidis’ alleged instruction to Witness B at Windsor. It would also include attribution to Constantinidis of Lazar’s alleged payment of money to Witness B. The Crown case thus included some evidence capable of supporting each element of the offence charged. The deficiency of the Crown case was of a different kind, namely, weakness and lack of credibility of the critical witness coupled with incapacity of the whole of the circumstances proved by the Crown to exclude a reasonable hypothesis consistent with innocence.”

  1. For these reasons, it is immaterial to the present applications that Mr Chapple’s evidence was, at times, internally inconsistent or that he had made several prior inconsistent statements. Nor is it relevant that Mr Chapple was not challenged by the officer in charge of the investigation to resolve the inconsistencies between his versions or explore the reasons for them. It is also immaterial that his evidence is of a kind which may be unreliable or that he had a substantial interest in implicating the three accused in order to increase the value of his induced statements with a view to obtaining an indemnity from prosecution for his own criminal conduct.

  2. It is also important to note that, in a criminal trial, the Crown does not, subject to considerations of fairness to the accused, need to prove the version of the facts for which it contends. In the context of an application for a directed verdict, the Crown does not need to identify evidence to support the precise version of the facts on which it opened its case. It is sufficient if it can point to evidence, however unreliable, of each essential ingredient of the offence charged.

The essential ingredients of the charged offence

  1. It was common ground, and I accept, that the Crown must prove the following in respect of each accused:

  1. the accused entered into an agreement with one or more other persons:

  1. to provide a benefit to another person that was not legitimately due to the other person;

  2. intending the benefit would influence a foreign public official in that official’s duties; and

  3. in order to obtain or retain business.

  1. the accused intended that the offence of foreign bribery would be committed pursuant to the agreement. This means that the Crown must prove beyond reasonable doubt that the accused and at least one other party to the agreement:

  1. intended that a benefit would be provided pursuant to the agreement;

  2. knew or believed that the benefit would not be legitimately due to the other person; and

  3. intended that the benefit would influence a foreign public official in the exercise of that official’s duties in order to obtain or retain business.

Note: It is not sufficient for the Crown to prove that the accused realised that the probable consequence of the agreed conduct might result in the offence of foreign bribery being committed.

  1. the accused or at least one other party to the agreement committed an overt act pursuant to that agreement.

Mr Read’s application

  1. Mr Boulten SC, who appeared with Mr Gullaci on behalf of Mr Read, contended that there was no direct evidence of Mr Read’s guilt. Thus, he submitted that the capacity of the conversations between Mr Dougas and Mr Chapple referred to above to incriminate Mr Read depended on the drawing of inferences from other evidence, which made the case against Mr Read a circumstantial one. He relied on the lack of direct evidence that Mr Dougas appointed Mr Read as the person from whom Mr Chapple ought seek approval for the payment of bribes.

  2. Mr Boulten argued that, taking Mr Chapple’s evidence at its highest, Mr Dougas’ instruction to Mr Chapple in 2000 that Mr Chapple obtain approval from Mr Read could not implicate Mr Read, who was not a party to the discussion. He submitted there was no direct evidence of any relevant discussion between Mr Dougas and Mr Read and relied on the circumstance that, in 2000, Mr Read had no responsibilities in Asia (or, specifically, the Philippines) and was not COO until after 27 August 2001, and probably on about 27 September 2001. Further, he relied on the evidence of Mr Chapple that, in July 2001, at a meeting in Sydney, Mr Dougas had expressly directed him not to pay bribes (referred to above). Mr Boulten submitted that there was no basis on which Mr Read could otherwise be implicated in the conspiracy.

  3. Mr Boulten further argued that the email sent by Mr Chapple to Mr Read in October 2003 did not amount to evidence that there was a conversation between Mr Chapple and Mr Read in April 2001 (being two and a half years prior to the date of the email). Again, he relied on the circumstance that Mr Read had no responsibilities for Asia in April 2001.

  4. Mr Boulten submitted on the basis of the submissions summarised above, that the “prosecution are trying to force a timeline that bears no correlation to the reality of the role the relevant people had at the time.”

  5. Further, Mr Boulten contended that Mr Chapple’s oral evidence did not provide any detail about the conversation which is alleged in the email in October 2003 to have occurred “2.5 years ago”. He also argued that the reference to “horrid topic” in the email of 10 October 2003 was confined to that time, and was insufficient to cover the conversation between them two and a half years previously. I reject this submission for the reasons given below.

  6. Mr Boulten also relied on the evidence of Robert McGinn, SKM’s Accounts Payable Manager. Mr McGinn’s evidence was to the effect that each of the payments which the Crown contended constituted payments by cheque or bank transfer of invoices issued by Intelmar (the proceeds of which were intended to be paid in cash to public officials) was processed in the Philippines after having been approved by Mr Chapple. Mr Boulten submitted that this evidence supports a hypothesis consistent with innocence, that is, that Mr Read played no role in approving such payments. For the reasons given above, that hypothesis need not be excluded by the Crown in an application such as the present.

  7. Mr Boulten further contended that the Crown case, as opened, was incapable of proof by the evidence which has been adduced and relied on Gant v R [2017] VSCA 104 at [59] (Weinberg, Priest and McLeish JJA). He also submitted that the Crown ought not be allowed to close its case contrary to Mr Chapple’s evidence. I do not regard this submission as bearing on the present question and accept that it may not have been made for that purpose but rather by way of warning to the Crown in advance of the Crown’s closing address.

  8. Finally, Mr Boulten argued that the particulars provided by the Crown requires it to prove that Mr Read intended that bribes would be paid as and when required to influence public officials. He submitted that, even if the Crown could establish that Mr Read had approved a single payment, this would not suffice, since the charge required conspiracy which had as its purpose an ongoing process of payments of bribes. In response, the Crown relied on R v Saffron (No 1) (1988) 17 NSWLR 395 (Saffron) at 400, 402 and 418-427 (Hope JA, Clarke JA and Hunt AJA agreeing) in support of the proposition that the Crown need only prove a conspiracy that is substantially the same as the conspiracy alleged.

  9. The circumstance that in 2000, at the time of the alleged conversations between Mr Dougas and Mr Chapple, Mr Read had neither responsibility nor involvement in SKM’s business in the Philippines can be put to one side in an application such as the present. It would be open to the jury to infer that Mr Dougas did not choose members of the inner circle from Mr Chapple’s usual reporting lines. Even though Mr Read was appointed the COO Asia Pacific in about September 2001, Mr Chapple did not thereafter report directly to him about orthodox matters. Further, for legitimate payments, Mr Chapple would have no cause to approach Mr Read for approval of any payment less than $500,000 since there were several levels of delegation between Mr Chapple (whose authority was limited to the tens of thousands) and Mr Read who could approve payments in excess of $500,000.

  10. In certain circumstances, the acts and declarations of co-conspirators are admissible against other alleged co-conspirators. In Ahern v The Queen (1988) 165 CLR 87; [1988] HCA 39, the Court (Mason CJ, Wilson, Deane, Dawson and Toohey JJ) said at 100:

“Where an accused is charged with conspiracy, evidence in the form of acts done or words uttered outside his presence by a person alleged to be a co-conspirator will only be admissible to prove the participation of the accused in the conspiracy where it is established that there was a combination of the type alleged, that the acts were done or the words uttered by a participant in furtherance of its common purpose and there is reasonable evidence, apart from the acts or words, that the accused was also a participant.”

  1. The inference is available from the evidence of communications with Mr Read set out above that Mr Read, by the time he received the email of 10 October 2003, was aware that SKM’s business in the Philippines included loan project work (and what it entailed) and that a complaint had been made in that context that employees of the Manila office had bribed a public official in the Philippines.

  2. Taking the evidence in the email of 10 October 2003 (which is, as referred to above, admissible not only to prove the terms of the communication but also to prove the truth of its contents) at its highest, the following inferences are available:

  1. Mr Read was already aware of several loan projects in the Philippines in respect of which SKM had been awarded contracts (Manila Sewerage Project, Manila Air and Mindanao Basic Urban Services Project);

  2. on 10 October 2003, Mr Chapple was seeking Mr Read’s approval for the payment of bribes;

  3. there had been a conversation between Mr Chapple and Mr Read in about April 2001, about two and a half years before 10 October 2003, in which Mr Chapple spoke to Mr Read about “this horrid topic”, being the payment of bribes and Mr Read gave his approval to the payment of a bribe in 2001 (these inferences arise from the words: “so no need to discuss this horrid topic with you for over 2 years”);

  4. the benchmark of 5% of contract price which Mr Read had suggested ”originally” to Mr Chapple, related to the payment of bribes; and

  5. the conversation in April 2001 (being two and a half years prior to October 2003) may have been the same conversation as the night-time conversation.

  1. Further, the email sent by Mr Chapple to Mr Linke on 6 August 2004 (set out with respect to the Crown case against Mr Linke), which is admissible for a hearsay purpose, supports the proposition that Mr Read approved payments in 2003. The email includes the statement, “Last time we did this was about a year ago … late last year I think under Mark [Read] when there were 3 at once.” The inference is available that Mr Chapple was referring to his request for Mr Read’s approval in late 2003 (10 October 2003), which was granted. This email is admissible against Mr Read as evidence of his participation in the conspiracy before 6 August 2004.

  2. Mr Chapple’s evidence (referred to above) was that negotiations about bribes occurred in the period between the invitation to SKM to submit a proposal (following an Expression of Interest) and assessment of the proposal but that bribes were not paid until the contract was awarded to SKM. The inference is available that the intention of the conspirators, including Mr Read, was that the promise to pay the bribe was to obtain work and the payment of the bribe was both to retain work (the contract which had just been awarded to SKM) and to obtain further work (because those public officials who had been paid would be reassured that SKM was a company which fulfilled its promises to pay bribes after contracts had been awarded). The Crown has adduced evidence which, taken at its highest, could found an inference that the purpose of the conspiracy was to pay bribes to obtain and retain business as distinct from a business advantage.

  3. I note for completeness that I have not heard full argument on the construction of Division 70 and, in particular, the relationship between obtaining or retaining business in s 70.2(1)(c)(i) of the Criminal Code and obtaining a business advantage in s 70.2(1)(c)(ii). I ought not be taken in these reasons to be deciding the question whether “business” and “business advantage” are mutually exclusive (as contended on behalf of Mr Dougas) or overlapping.(as contended by the Crown).

  4. The inference is available that Mr Read’s intention was to approve the payment of bribes in 2001 and 2003 (being the times at which approval for such payments was required by Mr Chapple). This is capable of corresponding with the conspiracy alleged in the indictment. In these circumstances, it is not necessary to consider the effect of Saffron for the purposes of the present application.

  5. For the reasons given above, I consider that there is evidence, taking the Crown case at its highest, of each the essential ingredients of the offence charged against Mr Read outlined above.

Mr Linke’s application

  1. Mr Hill argued that, contrary to the Crown case as opened, there was no direct evidence that Mr Chapple and Mr Linke had ever discussed the payment of bribes to Filipino public officials or to anyone else. He relied on the absence of direct evidence that Mr Chapple and Mr Linke had met at any time after 2002. He also relied on Mr Chapple’s evidence that he had no memory of ever having a conversation with Mr Linke about loan projects or the payment of “external marketing costs”. He emphasised the deficiency referred to above between the Crown case as opened (that in March or April 2004 Mr Linke travelled to the Philippines and discussed how bribes were to be paid on loan projects there) and the evidence of Mr Chapple (which did not include evidence of such a trip of evidence of any conversations). On these bases, Mr Hill contended that there was no direct evidence of Mr Linke’s knowledge of the scheme.

  2. Mr Hill argued that Mr Linke’s involvement with Mr Chapple was significantly less than that of Mr Petersen, whom the Crown accepted was not a party to the conspiracy. Further, he relied on Mr Petersen’s evidence of his ignorance of anything untoward or illegal in the concept of “external marketing fees” to demonstrate that those outside the inner circle of the conspiracy could be duped by the euphemism adopted by those inside the circle. Mr Hill also relied on the lack of evidence that Mr Linke had approved any invoice for payment, notwithstanding that the Crown opened that he had.

  3. Mr Hill contended that the Crown case against Mr Linke depended solely on the email sent to him by Mr Chapple on 6 August 2004. He argued that since there was no direct evidence of Mr Linke’s actual knowledge of the conspiracy, the Crown case depends on how Mr Linke understood the email and that there was no evidence of this, given the lack of response.

  4. In summary, Mr Hill contended that, as a result of the following, an acquittal ought be directed in respect of Mr Linke:

  1. at least in October 2003, as is evident from the text of the email of 10 October 2003 (“no need to involve the GMs”), the conspirators intended that the scheme would be kept from the General Managers, who included Mr Linke, as the General Manager Water and Environment;

  2. Mr Chapple did not name Mr Linke as someone who was involved in the conspiracy when he gave his police statement on 26 March 2014, although he had a clear interest in implicating Mr Linke since this would have added to the value of Mr Chapple’s induced statement and enhanced the prospects of his obtaining an immunity from prosecution;

  3. Mr Chapple did not name Mr Linke in his evidence as someone with whom he had agreed to pay bribes; and

  4. the term “external marketing costs” (or similar) had both a legitimate meaning (its natural meaning) and an illegitimate one (as a euphemism for bribes) and, accordingly, no inference could be drawn that it was being used in its illegitimate way in the email of 6 August 2004.

  1. The email of 6 August 2004 is capable of being read consistently with Mr Linke’s innocence: that is, that Mr Chapple had a criminal motive in sending it but that Mr Linke did not appreciate the code that Mr Chapple was using and therefore did not regard the reference to “external marketing costs” as being a reference to bribes, although Mr Chapple did. On this analysis, Mr Linke was merely being asked to approve a payment for legitimate marketing fees which fell within the 5% limit which had been adopted by SKM as a general benchmark limit for such fees. On this reading of the email, the reference to “genuine invoice” is not nefarious; rather it was a reflection of SKM’s concern that consultants not be paid in cash, but be paid by cheque in response to an invoice, in circumstances where consultants in the Philippines had a strong preference to be paid in cash.

  1. On this hypothesis, Mr Chapple’s email to Mr Linke of 6 August 2004 may have been an attempt by Mr Chapple to protect his own employment by seeking to implicate innocent persons above him in the corporate hierarchy. The lack of response is, on the defence case, consistent with the proposition that Mr Linke did not know what was going on and had no idea what “this horrid topic” meant.

  2. It may be that, on an analysis of the whole of the Crown case, the Crown cannot exclude a reasonable hypothesis consistent with innocence (such as the one postulated above). However, as Doney and Constantinidis make clear, this is not a proper basis for directing a verdict of acquittal. The jury is the exclusive arbiter of the resolution of competing inferences, a role which a trial judge has no entitlement to usurp.

  3. For the reasons given above, the email of 6 August 2004 is admissible not only to prove the terms of the communication but also for the hearsay purpose of proving the truth of its contents. Thus, although Mr Chapple did not give oral evidence of conversations with Mr Linke, the email of 6 August 2004 provides some evidence that such conversations occurred when Mr Linke was “last in Manila”. The travel records can found an inference that reference in the email was a reference to Mr Linke’s visit to Manila in April 2004.

  4. For the following reasons, the inference is available from the email of 6 August 2004, taken at its highest, that Mr Linke was a party to the conspiracy alleged in the indictment and provides evidence, taken with the other evidence in the Crown case referred to above, of each of the essential ingredients of the charge (as set out above).

  5. First, the inference is available that the reference in the email to a discussion about having to pay external marketing costs on loan projects that there was something particular about loan projects which required the payment of external marketing costs, thereby distinguishing the external marketing costs which were to be paid on loan projects from the (legitimate) generic external marketing costs which might be incurred on any other aspect of SKM’s business. The email is capable of being used for the hearsay purpose of proving that there were such discussions between Mr Chapple and Mr Linke even though Mr Chapple did not give evidence of any such discussions. The travel records support an inference, together with the email of 6 August 2004, that the discussions occurred in Manila in April 2004.

  6. Second, even had the amount of the payment exceeded Mr Chapple’s authority (and there was evidence to establish that it was within Mr Chapple’s authority), he need not have asked Mr Linke for approval had the payment been orthodox. This is because Mr Linke’s delegation was well above the figure and there were several people between Mr Chapple and Mr Linke who could have been approached for approval of the amount, if it had been required. Thus, Mr Chapple’s request for Mr Linke’s approval was consistent with the Crown case that, as at 2004, Mr Linke had replaced Mr Read, whom Mr Dougas had, in 2000, nominated as the person from whom Mr Chapple was to obtain approval for bribe payments.

  7. Third, the description of the method of making the payment accorded with the evidence of Mr Chapple regarding the method which had been settled on in discussions between him and Mr Dougas (that the bribe be paid only after the contract had been signed and that it be paid only after receipt of an auditable invoice and that knowledge of the true character of the payment be kept to a minimum circle of people) and Mr Chapple’s evidence that Mr Read had told him that external marketing fees (on the Crown case, bribes) could not exceed 5% of the contract price.

  8. Fourth, the inference is available that the payment of PhP350,000 (approximately AUD8,750) relates to a loan project, that is, a Government contract since there is a reference to the project being one for the “Dept of Agrarian Reform”. Further, the so-called “external marketers” are said to be “involved in a Technical Working Group that assesses many proposals, and we need to keep them happy with the MWSS assessments starting any day.” Because external marketers are said to be assessing proposals for a Government client, it would be open to the jury to infer that the external marketers referred to are public officials within the meaning of s 70.1 of the Criminal Code since they perform “work for a foreign government body under contract”. In this context, it would be open to the jury to infer that the expressions “external marketing” and “external marketing costs” do not bear their innocent meaning. The inference is available that they relate to payments to public officials with the intention of influencing them to award the relevant contract to SKM. Thus, the payments are to be made to obtain business for SKM, that is, to be awarded the contract.

  9. Fifth, the reference to having done the same “late last year I think under Mark” is capable of supporting the inference that this was a reference to the email of 10 October 2003 (which is considered above in respect of Mr Read’s application) in which approval for three payments was sought.

  10. Sixth, the inference is available that the suggestion of a “phone call response … to avoid too much detail in emails” was made because the transaction was illegitimate and intended to be neither transparent nor traceable.

  11. The documentary evidence shows that a payment of PhP367,500 was made by SKM to Intelmar on 9 August 2004. Although Mr Chapple said that this payment was for a different project, it would be open to the jury to reject Mr Chapple’s evidence (on the basis that he was mistaken as a result of the passage of time) and, instead, infer from the proximity, in time and amount, between the email and the financial documentation that the amount was paid as a consequence of a response to Mr Chapple’s email to Mr Linke of 6 August 2004. This inference is available if the Crown’s evidence is taken at its highest (the email and the financial documents) and evidence supportive of the accused is disregarded (Mr Chapple’s evidence that the payment did not relate to the request for approval).

  12. Similar inferences, taking the Crown case at its highest, arise from the emails in February 2005 between Mr Kumar to Mr Linke.

  13. The sending by Mr Kumar of the email of 20 May 2005 to Mr Linke is also, taken at its highest, probative of Mr Linke’s position within the inner circle of knowledge. In that email Mr Kumar disclosed that “payments eventually will still have to be delivered by [Ms Fernandez] due to the sensitive nature of the transaction”. It would be open to the jury to infer that, had Mr Linke been a well-meaning, innocent, colleague who had no idea that the term “external marketing costs” bore any meaning other than its natural one (as Mr Petersen was accepted to be), it would be unlikely that Mr Kumar would send him an email in such explicit terms. Further, the reference to the “sensitive nature of the transaction” could be read by the jury as supporting the inference that these payments of cash were not merely payments to orthodox consultants who preferred to be paid that way, but rather payments to public officials, which amounted to bribes.

  14. In these circumstances, I consider that there is evidence, taking the Crown case at its highest, of each of the essential ingredients (set out above) of the offence charged against Mr Linke.

Order

  1. The reasons set out above are my reasons for making the following order on 17 March 2022:

  1. The applications by the accused Mark Read and the accused Geoffrey Linke for directed verdicts of acquittal are refused.

**********

Decision last updated: 20 April 2022

Most Recent Citation
Cases Citing This Decision

1

R v Dougas; R v Read; R v Linke (No 10) [2022] NSWSC 306
Cases Cited

8

Statutory Material Cited

2

Ahern v The Queen [1988] HCA 39
Ahern v The Queen [1988] HCA 39
Ahern v The Queen [1988] HCA 39