 Appendix 25 |
 Contents |
 Appendix 27 |
This appendix provides an outline of offences or contraventions against the laws of the Commonwealth and States that may potentially be relevant to the facts as found. Some of the issues that may arise in any criminal or civil proceedings based on those offences or contraventions are also addressed. Findings and recommendations in relation to these offences are made in Volume 4.
The Inquiry has had regard to a large range of offences and contraventions against Commonwealth law and the laws of the various States and Territories. This appendix discusses only those offences that, on close analysis, might be applicable to the facts and the subject of recommendations. The offences addressed in this appendix include:
It is worth noting that the various United Nations Security Council Resolutions that imposed the sanctions and established the Oil-for-Food Programme had no direct effect on Australian domestic law because they were not, in terms, incorporated in Australian domestic law.[263] It follows that there is no offence known to the law in any Australian jurisdiction constituted by the breach of United Nations sanctions or Security Council Resolutions. Domestic effect was given to the Resolutions by various Commonwealth Regulations. The offences created by those Regulations are addressed in this appendix.
The Inquiry's Terms of Reference require the consideration of whether offences might have been committed by various corporate entities; relevantly AWB, Rhine Ruhr, Alkaloids of Australia, BHP and Tigris. For this reason, before addressing specific offences, it is necessary to give some consideration to the principles applicable to corporate criminal liability.
A corporation can only act by the actions of its officers, employees and agents. Likewise, a corporation can only possess knowledge or intention as a result of knowledge or an intention possessed by its officers, employees and agents. In considering the potential criminal liability of AWB, Rhine Ruhr and Alkaloids, it is necessary to consider whether the relevant acts and knowledge of certain of the officers, employees or agents of each company can be attributed to the company.
In the case of State offences and Commonwealth offences (other than offences in the Criminal Code) that were committed prior to 14 December 2001, corporate criminal responsibility is governed by the common law. In the case of offences under the Criminal Code (which commenced operation on 24 May 2001) and other Commonwealth offences committed after 14 December 2001, Part 2.5 of the Criminal Code contains specific provisions dealing with the circumstances in which a company may be found guilty of any offence.
The leading decision on the test of whether the acts and knowledge of a natural person may be attributed to corporation for the purposes of the criminal law is the decision of the House of Lords in Tesco Supermarkets Ltd v Nattrass [1972] AC 153.[264] Lord Reid explained the nature and rationale of corporate criminal liability in the following terms:
Lord Reid then referred to the judgment of Denning LJ in H.L Bolton (Engineering) Co. Limited v T. J. Graham & Sons Limited[266], where Denning LJ stated:
In relation to this dicta, Lord Reid stated in Tesco (at 171):
Lord Morris of Borth-y-Gest (at 180) cited with approval the following test by Viscount Haldane in Lennards Carrying Co Limited v Asiatic Petroleum Co Limited:[269]
Viscount Dilhorne also referred to the tests formulated by Viscount Haldane in Lennard's Carrying v Asiatic Petroleum and Denning LJ in Bolton v Graham and stated (at 187G):
In Lord Diplock's opinion, the starting place to look to discover by what natural persons a corporation's powers are exercisable is in its constitution; its memorandum and articles of association. Lord Diplock then formulated the following test, which is perhaps the most frequently cited test for corporate criminal liability:
The decision in Tesco and the principles enunciated therein have been accepted and applied in Australia. The test expounded by Lord Diplock was applied by the High Court in Nissho Iwai Australia Limited v Malaysian International Shipping Corporation Berhad.[273] That was a civil case and concerned, in general terms, the question whether the lack of reasonable diligence by reason of an act or omission of an employee of a corporation was to be attributed to the company itself. Nevertheless, it demonstrates an acceptance of Tesco and what the commentators have termed the 'identification doctrine.'[274]
In Hamilton v Whitehead[275], the High Court cited with apparent approval the passage of Lord Reid in Tesco and referred to the statement by Denning LJ in Bolton v Graham. The liability imposed by the offence the subject of that case was direct, not vicarious, liability and the High Court held that there could be little doubt that the act of the managing director of the corporation in question was the act of the corporation because 'he was its managing director and his mind was the mind of the company.'[276]
The identification doctrine has been accepted and the tests proposed in Tesco, particularly those of Lord Reid and Lord Diplock, have been cited with approval in a number of other Australian courts, including the Full Federal Court in Universal Telecasters (Qld) Limited v Gutherie.[277]
The various tests enunciated by the Law Lords in Tesco are not identical. The test expounded by Lord Diplock may be a more stringent test to the extent that his Lordship suggests that the only individuals who may be identified with the company are those who are entrusted with the power of the company in either the Memorandum and Articles of Association or as a result of a formal delegation by the board. The other Law Lords, in particular Lord Reid, refer to delegation by the board, but do not insist on formal delegation. The question arises whether Lord Diplock's strict test (if it be such) is the appropriate test or whether it is necessary only to establish that the relevant individual in fact (and irrespective of any formal delegation) had been delegated certain responsibilities and had full discretion to act independently of the board. Further, the question arises whether it is necessary to prove that the relevant individual had delegated to him or her all of the powers of the company, or whether it insufficient to prove that the individual had been delegated responsibility in the particular area in which they committed the alleged criminal act.
In Meridian Global Funds Management Asia Limited v Securities Commission[278], Lord Hoffman, delivering the judgment of the Privy Council, expressed the opinion that the particular rule of attribution to be applied in any given case was a matter of interpretation or construction of the relevant law or 'substantive rule'. His Lordship stated (at 507):
In Meridian, the particular offence provision was a provision which required notice of substantial investments to be given to the company and the stock exchange. Two senior investment managers breached this provision and the question was whether the knowledge of these investment managers could be attributed to the company. It was held that the offence was not one in respect of which vicarious liability was applicable. The special rule of attribution which the Privy Council 'fashioned' for this particular offence focussed on whether the investment managers had authority to acquire the relevant interests which should have been notified. The knowledge of the investment managers had to be attributed to the company otherwise the policy of the statute would be defeated.
Lord Hoffman, however, emphasised that this particular rule of attribution will not apply in all cases:
An additional point which comes out of Meridian, is that in the inquiry whether the relevant individual is properly to be regarded as the directing mind and will of the company, attention should be focussed on the particular area of responsibility delegated to that individual. It is not necessary to prove that the individual was the directing mind and will for all of the company's activities, only the directing mind and will in the area in which the alleged criminal conduct or knowledge occurred. This is particularly apparent from the New Zealand Court of Appeal decision in Meridian.[281] Hardie Boys J (delivering the judgment of the Court) stated (at 302):
In the Privy Council decision in Meridian, Lord Hoffman cited Admiralty v the Owners of the Steamship Divina (the Truculent)[283] and The Lady Gwendolen.[284] In The Lady Gwendolen, the issue was whether the failure to warn the captain of a ship of certain dangers was an act performed by the owner-corporation. Winn LJ stated (at 355):
Further, Willmer LJ stated (at 343-4):
This point was also made by Estey J, delivering the judgment of the Supreme Court of Canada in Canadian Dredge & Dock Co Limited v The Queen.[287] That case was concerned with allegations of collusive tendering and with the issue whether the acts of various managers of companies could be attributed to the various companies. Estey J conducted a detailed review of the authorities in the United Kingdom, Canada, Australia and the United States of America in relation to corporate criminal responsibility. At 330-331 Estey J stated:
In this passage, Estey J refers to Lord Reid's use of the phrase 'within the scope of delegation'. Lord Reid also stated (at 174-5):
Canadian Dredge and Dock has been cited in a number of Australian cases; including Edward Karwacki Smith & Co Pty Limited v Jacka Nominees Pty Limited (in liq)[290] and Beach Petroleum NL v Johnson.[291] In Beach Petroleum, a civil case in which allegations of fraud were made, von Doussa J cited a portion of the judgment in Canadian Dredge and Dock which dealt with the situation where the directing mind and will acts in fraud of the company (but which included reference to the sphere of operation), and stated that 'this statement of the law in Canada provides compelling guidance to the law which should be applied in this case.'
The other important point to emerge from Canadian Dredge and Dock concerns the issue whether the relevant delegation of power to the individual is required to be express and formal or whether it is sufficient that as a matter of fact the particular individual exercises full responsibility within the relevant sphere assigned to him or her. In Canadian Dredge and Dock, Estey J expressed the identification principle in the following terms (at 323):
Estey J's statement that the individual must represent the corporation's de facto mind may be contrasted with Lord Diplock's formulation in Tesco which on one reading may require de jure control by the individual. The central fact in Canadian Dredge and Dock was: 'Each of the appellants had a manager who conducted the business of the company relating to the submission of bids for tender dredging work.'[293]
Estey J also stated as follows (at 331):
Meridian has been frequently cited with approval in cases in various different contexts.[295] In relation to criminal cases, in Director of Public Prosecutions (Victoria) Reference No. 1 of 1996 (Victorian Court of Appeal, unreported 26/9/97) the Victorian Court of Appeal accepted that 'Lord Hoffman's approach to the problem of corporate liability was correct.' It was also accepted as the applicable law by Bell J in the Victorian Supreme Court in ABC Developmental Learning Centres Pty Limited v Wallace[296], a case concerning a prosecution of a company for an offence under the Children's Services Act 1996 (Vic).
Thus the rule of attribution to be applied in any particular case is to be determined as a matter of interpretation or construction. An offence involving fraud or dishonesty-as opposed to a mere regulatory offence-is likely to be construed such that it will only apply to a company (to use Lord Hoffman's words) 'on the basis of its primary rules of attribution' as expounded in Tesco. It is unlikely to be held to be sufficient for the prosecution to prove merely that the relevant servant or agent had authority to do the relevant act on the company's behalf. Rather, it is necessary to prove that the individual had delegated to him or her full discretion to act independently of the board or any superiors with respect to the subject matter that included the relevant act.
A potentially relevant issue in the context of the knowledge or intention of a company is whether knowledge or intention possessed by a company at one point in time, as a result of the possession of that knowledge or intention by a particular officer or officers, may later be 'forgotten' by the company when that officer or those officers leave the company and are replaced by other officers who do not possess the knowledge. Most of the authorities relating to this point are civil cases.[297]
In the case of a criminal offence, for a corporation to be criminally responsible it must possess the relevant knowledge at the time of the alleged unlawful act. Whether the company possessed information at that particular point in time is ultimately a question of fact. As with the case of knowledge possessed by a natural person defendant, any suggestion by a corporate defendant that it once possessed the knowledge but had forgotten it by the time of the relevant transaction will be closely scrutinised.[298] Much will depend on the 'nature and importance of the information said to be once known and later forgotten,'[299] whether the new officer was under a duty to ascertain the information or knowledge when they took up the office[300], whether the information was recorded in the company's books and records and the nature of the relevant transaction. Ultimately, however, it must be a matter for the prosecution to prove that at the time that the relevant act occurred, a current officer or officers of the company whose knowledge may be imputed to the company possessed the knowledge or information.
There is also authority for the proposition that the knowledge of, or information possessed by, various officers of a company may be aggregated and imputed to the company.[301]
Part 2.5 of the Criminal Code applies to offences under the Criminal Code and other Commonwealth offences committed after 14 December 2001. Sections 12.1 of the code makes it clear that the Code applies to bodies corporate in the same way as it applies to individuals and that a body corporate may be found guilty of any offence, including one punishable by imprisonment.
Part 2.5 contains provisions that deal with the physical elements and the fault elements of an offence insofar as they apply to a corporation. Section 12.2 deals with the physical elements of the offence and provides as follows:
It follows that insofar as the physical act of an offence is concerned, it is necessary only to prove that the employee, agent or officer of the defendant company that carried out the relevant act was acting within his or her actual or apparent authority. If, for example, the relevant act is the submission of the UN Notification form and contract documents to DFAT, it is necessary to prove only that the officer responsible for this communication was acting within his actual or apparent authority. As discussed below it is relevant to note in this regard that the officer of the company who performed the relevant act on behalf of the company need not be the same person who possessed the necessary mental state or fault element.
The rule of attribution in the case of the fault element of an offence is dealt with in section 12.3. Subsections 12.3 (1) to (2) provide as follows:
(1) If intention, knowledge or recklessness is a fault element in relation to a physical element of an offence, that fault element must be attributed to a body corporate that expressly, tacitly or impliedly authorised or permitted the commission of the offence.
(2) the means by which such an authorisation or permission may be established include:
(a) proving that the body corporate's board of directors intentionally, knowingly or recklessly carried out the relevant conduct, or expressly, tacitly or impliedly authorised or permitted the commission of the offence; or
(b) proving that a high managerial agent of the body corporate intentionally, knowingly or recklessly carried out the relevant conduct, or expressly, tacitly or impliedly authorised or permitted the commission of the offence; or
(c) proving that a corporate culture existed within the body corporate that directed, encouraged, tolerated or led to non-compliance with the relevant provision; or
(d) proving that the body corporate failed to create and maintain a corporate culture that required compliance with the relevant provision.
(3) Paragraph (2)(b) does not apply if the body corporate proves that it exercised due diligence to prevent the conduct, or the authorisation or permission.
For the purposes of paragraph 12.3(2)(b), 'high managerial agent' is defined in subsection (6) as meaning 'an employee, agent or officer of the body corporate with duties of such responsibility that his or her conduct may fairly be assumed to represent the body corporate's policy.'
Paragraphs (c) and (d) significantly expand the scope of the attribution rule from the position at common law. They provide, in substance, the fault element of the offence may be proved on the basis of a 'corporate culture' that led to the commission of the offence, as opposed to the requirement to prove actual knowledge or intention on the part of the directors or other senior management. 'Corporate culture' is defined in subsection 12.3(6) as meaning 'an attitude, policy, rule, course of conduct or practice existing within the body corporate generally or in the part of the body corporate in which the relevant activities takes place.' Subsection 12.3(4) specifies some factors relevant to ascertaining whether such a corporate culture exists:
(4) Factors relevant to the application of paragraph (2)(c) or (d) include:
(a) whether authority to commit an offence of the same or a similar character had been given by a high managerial agent of the body corporate; and
(b) whether the employee, agent or officer of the body corporate who committed the offence believed on reasonable grounds, or entertained a reasonable expectation, that a high managerial agent of the body corporate would have authorised or permitted the commission of the offence.
Section 12.3(4) does not purport to be an exhaustive statement of the factors that would make out a corporate culture. Paragraph (b), however, is of particular potential significance. The effect of it is that it may be possible to prove the existence of the relevant culture by proving that the relevant officer who did commit the offence, who might not himself or herself be a 'high managerial agent,' believed on reasonable grounds that a high managerial agent would have authorised the commission of the offence. It is not necessary to prove that the high managerial agent in fact possessed the relevant intention or knowledge. In the case of AWB, to make out the relevant fault element against AWB in respect of an offence relating to the misleading of DFAT, or the concealing of facts from DFAT, it would be sufficient to prove that the relevant officer or officers who may have been responsible for the dealings with DFAT believed on reasonable grounds that a director of manager, who was a high managerial agent, would have authorised or permitted the misleading of, or concealment of facts from, DFAT.
The Criminal Code provisions dealing with attribution are potentially narrower than the common law rules of attribution in at least one respect. That is that, by reason of subsection 12.3(3), where the relevant knowledge or intention is possessed by a high managerial agent (as opposed to the board of directors), the company has an available defence if it had itself exercised due diligence to prevent the conduct that constituted the offence. The establishment of some form of internal audit or corporate risk committee may, in some circumstances, amount to due diligence.
The various criminal statutes of the Commonwealth and each of the potentially relevant States contain a series of cognate offences that have as elements or ingredients the obtaining of benefits by deception, or the making false or misleading statements, or other conduct involving dishonesty or fraud. The Commonwealth provisions will apply where the benefit was obtained from, or the false statements or the dishonesty or fraud was practised upon, the Commonwealth. State provisions will apply where the benefit was obtained from, or the false statements or the dishonesty or fraud was practised upon, some other person or entity. In the case of state offences, it is also necessary to find some jurisdictional nexus with the State.
In relation to any conduct that occurred prior to 24 May 2001, the relevant offences are contained in the Crimes Act 1914. The relevant offence provisions in the Crimes Act were repealed[302] and replaced by offences in the Criminal Code from 24 May 2001.
As discussed in Chapter 12, the Australian companies who participated in the Oil-for-Food Programme interacted with DFAT at a number of levels. Most significantly, they:
(a) submitted documents-a United Nations form entitled 'Notification or Request to Ship Goods to Iraq,' together with copies of documents recording the contractual arrangements between the company and the relevant Iraqi person or entity-to DFAT on the basis that DFAT would, upon satisfying itself of certain matters, submit the documents to the United Nations;
(b) applied to DFAT for a permission to export the goods pursuant to the Customs (Prohibited Exports) Regulations 1958.
For its part, DFAT responded or acted upon the documentation submitted to it, or the application for permission to export, by, in summary:
(a) considering whether the Notification form was properly completed and that the transaction reported in the Notification form and the accompanying contractual documents did not appear to infringe the United Nations sanctions against Iraq. If so satisfied, DFAT would certify and submit the documents to the United Nations via Australia's permanent mission to the United Nations in New York;[303]
(b) in the case of permissions to export, if DFAT received notification from the United Nations that a particular contract had been approved for payment under the Oil-for-Food Programme, together with a request for permission to export by the company, DFAT would arrange for a permission to export to be signed by a delegate of the Minister for the purposes of the Customs (Prohibited Exports) Regulations.[304]
If the available evidence was capable of establishing the following matters, a number of provisions of the Crimes Act 1914 could potentially be relevant in the case of conduct occurring before 24 May 2001;
(a) the Notification form or any of the accompanying documentation submitted to DFAT contained a materially false or misleading statement; or materially false or misleading information; or
(b) the Notification form or any of the accompanying documentation submitted to DFAT omitted information that rendered the information in the documentation misleading in a material respect; and
(c) by reason of the false or misleading documentation submitted to it, DFAT conferred a benefit upon the company-either by submitting the documentation to the United Nations or by causing a permission to export to be granted; or
(d) the purpose, object or intention of the company in submitting the false or misleading documentation to DFAT was to obtain a benefit from DFAT, or was otherwise to deceive an officer of DFAT into doing something that the officer would not otherwise have done.
The potentially relevant offence provisions are sections 29A, 29B and 29D of the Crimes Act of these provisions. Section 29D is the most general and, for a number of reasons, may be the most apposite. It is accordingly dealt with first.
Prior to its repeal effective 24 May 2001, section 29D of the Crimes Act provided as follows:
The elements of this offence are undefined except by common law concepts of fraud. In general terms, to defraud means to use dishonest means to deprive a person of money or property, or to put the person's money or property at risk or to prejudicially affect that person in relation to some lawful right, interest, opportunity or advantage knowing that they have no right to deprive that person of that money or property or to prejudice that person's interests.[305] The two key elements, therefore, are first, the use of 'dishonest means' and second, an element of deprivation.
To prove dishonest means it is usually necessary to prove that the defendant made or took advantage of representations which they knew to be false, or promises that they knew would not be carried out, or concealed facts which they had a duty to disclose, or engaged in conduct which they had no right to engage in and which they knew they had no right to engage in.[306] The latter case will include conduct that involves a breach of duty, trust or confidence, or by which an unconscionable advantage is to be taken of another.[307]
The element of deprivation usually involves making use of, or prejudicing, another person's economic right or interest, or inducing another person to refrain from acting to his or her economic disadvantage. However, the element of deprivation may also be made out if dishonest means are employed to deceive public officers into committing a breach of duty, or if a person responsible for a public duty is intentionally deceived into doing something that he or she would not have done but for the deceit, or if the due performance of a public duty by an officer is otherwise interfered with.[308] It is not a necessary element of the offence that the defendant actually obtained a benefit or advantage corresponding in some way with deprivation or loss to the Commonwealth.[309]
The mental element of an offence involving fraud is intention: that is, the defendant intended to deprive or prejudice the interests of a third person by the use of means that are dishonest.
In the present context, the offence of defrauding the Commonwealth contrary to section 29D of the Crimes Act will be made out if the defendant (AWB, Rhine Ruhr or Alkaloids or the relevant officers involved in the conduct[310]), used dishonest means to deceive an officer of DFAT into doing something in the course of their duty that they would not have done but for the deceit. For practical purposes, the offence would be made out if the available evidence was capable of proving that:
(a) the Notification form or any of the accompanying documentation submitted to DFAT to the knowledge of the defendant either contained a materially false or misleading statement or statements or omitted from it a matter or thing that rendered the information in the documentation misleading in a material respect; or
(b) the defendant intentionally concealed facts that it had a duty to disclose or that it knew would be relevant to the actions of DFAT referred to in (c); or
(c) the conduct in either (a) or (b) deceived an officer of DFAT into either forwarding documents to the United Nations or causing a delegate of the Minister to sign a Permission to Export in circumstances where, but for the deceit, the officer would not have taken that action;
(d) the defendant intended to use the means in (a), (b) or (c) to deceive the officer of DFAT into taking the action or actions referred to in (d).
A factor to be noted in relation to 29D of the Crimes Act in the present context is that if the dishonest conduct and deception of DFAT was ongoing, sustained and systematic, a single count of defrauding the Commonwealth during the period of the conduct could be charged and would not be duplicitous.[311]
Prior to its repeal effective 24 May 2001, section 29A of the Crimes Act provided as follows:
(1) Any person who, with intent to defraud, by any false pretence obtains from the Commonwealth, or from any public authority under the Commonwealth any chattel, money, valuable security or benefit, shall be guilty of an offence.
(2) Any person who, with intent to defraud, by any false pretence, causes or procures any money to be paid, or any chattel, valuable security or benefit to be delivered or given, by the Commonwealth or by any public authority under the Commonwealth to any person, shall be guilty of an offence.
The elements of the offence created by subsection 29A(1), relevant to the matter at hand, are as follows:
(1) the defendant;
(2) with intent to defraud;
(3) by any false pretence;
(4) obtains a benefit from the Commonwealth.
The offence created by subsection 29A(2) covers the situation where the actions of the defendant result in the Commonwealth conferring a benefit on some other person. The first three elements are the same as the subsection 29A(1) offence. Element (4) is, relevantly:
(4) causes or procures a benefit to be delivered or given by the Commonwealth to any person.
There is considerable overlap between section 29D and section 29A to the extent that, in most cases where the elements of the offence under section 29A are made out, an offence under section 29D would also be made out. The reverse, however, is not always the case because the dishonest means that may constitute the fraud under section 29D may not involve a false pretence. Section 29D also does not have as an element the obtaining of a benefit. The other significant difference between section 29A and section 29D is that section 29A employs words of singularity, meaning that a separate offence must be pleaded in relation to each false pretence that results in a benefit being obtained.[312]
The element of intent to defraud has been considered above in the context of section 29D. Suffice it to say that an intention to defraud will be found where the defendant intends, by dishonest means, to deceive a public official into doing or not doing something that they would, or would not have done, but for the deceit.
A false pretence is essentially the same as an untrue representation. It may be a representation by words, writing or conduct or a combination of these[313], and may be implied from conduct.[314] In certain circumstances a false pretence or representation may be made by silence[315], however ordinarily silence will only amount to a representation if there is a duty to disclose.[316] The false representation must generally be in relation to a material existing fact, rather than a statement of opinion or intention about future conduct.[317]
The false representation need not be made directly to the Commonwealth. The offence may be made out if the defendant makes a false representation to an innocent agent who then communicates the information to the Commonwealth.[318] In those circumstances it would be necessary to prove that the defendant knew that the agent would convey the representation to the Commonwealth.
The use of the word 'by' in element (3) imports an element of causation. It must be proved that the officers of the Commonwealth responsible for conferring the benefit were influenced by the false pretence.[319] If they were influenced, it matters not that they may also have been influenced by other matters[320], or that they had the means of finding out whether the pretence was true or false, or that they ought reasonably to have known that the information was misleading.[321] The relevant false pretence must not, however, be too remote from the obtaining of the benefit.[322]
It is an element of the offence that the defendant actually obtained a benefit. The meaning of 'benefit' is not defined in the Crimes Act. The correct approach to construing the words in section 29A, having regard to their context in the Crimes Act, is to give them their ordinary meaning and not limit the ambit of the operation of the section by reference either to the common law offence of false pretences or to decisions on other statutes differently worded.[323] The language of the section was 'no doubt occasioned by the legislature's appreciation of the expansive range of financial and other benefits provided by the Commonwealth and its instrumentalities.'[324] The word 'benefit' should accordingly be given a wide meaning not limited to property or financial benefits.
There is at least one potential limitation on the construction of 'benefit.' That limitation flows from the use of the word 'obtain' in the section. In his dissenting judgment in Bacon v Salamane[325], which concerned the meaning of 'benefit' in the context of section 29B of the Crimes Act, Taylor J said:
The majority in Bacon v Salamane did not embrace Taylor J's construction of 'benefit' and held that obtaining employment with the Commonwealth was a benefit within the meaning of the section. The majority judgments turned, however, on whether earlier authority, which was concerned with different legislation and with the question whether a contract could be a benefit, ought to dictate the construction of section 29B. The issue is whether an intangible advantage that is not in a form that is capable of being 'obtained' can be a 'benefit' within the meaning of section 29A (and section 29B). In this context, it may be questionable that the benefit of having DFAT certify documents and submit them to the United Nations is a benefit that is capable of being obtained.
Ultimately the question whether a benefit has been conferred by the Commonwealth is question of fact. Putting aside the issue arising from the dissenting judgment of Taylor J in Bacon v Salamane, there would appear to be no reason in principle why it would not be a benefit to have DFAT certify convey to the United Nations a company's Notification form and contractual documents. This is so particularly having regard to DFAT's role in the Oil-for-Food Programme and the fact that the United Nations only accepted documentation certified and submitted by Missions of member countries.[326] The obtaining of permission to export under the Customs (Prohibited Exports) Regulations is a clearer case of a benefit. There is no reason in principle why the obtaining of such a permission would not be regarded as a benefit in circumstances where the relevant company would not otherwise be permitted to lawfully export goods to Iraq.
The mental element of the offence under section 29A is intention to defraud, discussed above, and knowledge that the relevant representation was false.
In the present context, the offence of obtaining a benefit from the Commonwealth by false pretence contrary to section 29A of the Crimes Act may be made out if the evidence is capable of demonstrating the following:
(a) the defendant (either one of the relevant companies or their officers) intended by dishonest means to deceive an officer or officers of DFAT; and
(b) the Notification form and contractual documents submitted by the company to DFAT contained, to the knowledge of the defendant, a false representation, or had omitted from them information that rendered the documentation misleading in a material particular; or
(c) the conduct of the company in submitting the document to DFAT together with its failure to disclose to DFAT other material facts (for example other collateral arrangements with Iraq relating to the payment of inland transportation or after-sales-service fees and the incorporation of such fees in the contract price) amounted to a representation (namely a representation that the Notification form and contractual documentation disclosed all material terms upon which the goods were being exported to Iraq) which was false to the knowledge of the defendant; and
(d) DFAT was deceived by the false pretence in either (b) or (c) and was influenced thereby to confer a benefit on the defendant-the benefit comprising either or both the certification and submission of the documents to the United Nations and the giving of permission to export the relevant goods to Iraq.
Prior to its repeal effective 24 May 2001, section 29B of the Crimes Act provided as follows:
The elements of the offence created by subsection 29B(1), relevant to the matter at hand, are as follows:
(1) the defendant;
(2) imposes (or endeavours to impose) upon the Commonwealth;
(3) by any untrue representation;
(4) with a view to obtaining a benefit.
The mental element of the offence is that the defendant knew that the representation was untrue and that the representation was made with the object or purpose of obtaining the benefit.
In Bacon v Salamane[327], Owen J spelt out the elements of the offence in the following terms:
There is a considerable overlap between section 29B and section 29A of the Crimes Act. The principal differences are that in the case of section 29B it is not necessary to prove an intention to defraud[328] or that the defendant obtained anything, though the fact that the defendant achieved his aim may be relevant in establishing that the Commonwealth was imposed upon.[329]
To 'impose upon' means to cheat or wilfully deceive[330] or to 'deceive or get the better of.'[331] It follows that it is an element of the offence that the Commonwealth was misled or deceived by the untrue representation[332], though it is not necessary to prove that the Commonwealth acted in reliance on the representation.[333] A charge of endeavouring to impose may cover the case where the Commonwealth was not misled or deceived by the untrue representation.[334] The element of 'endeavour' is similar to an attempt.[335]
The element requiring proof of an untrue representation has been addressed above in the context of the false pretence element in section 29A. The meaning of 'benefit' has also been addressed above in the context of section 29A.
The circumstances in which a company may be criminally liable is addressed in detail below. In a case where a company is charged with an offence under section 29B, it is necessary to impute to the company knowledge, possessed by one of its officers, that the relevant representation was untrue. It is not necessary to prove, however, that the officer who in fact conveyed the representation to the Commonwealth possessed this knowledge. This is illustrated by the decision in Lamb v Toledo-Berkel Pty Ltd.[336] The facts of that case were that a company secretary, on behalf of the company, applied to the Decimal Currency Board for compensation for the conversion of certain weighing machines. The foreman of the company (Jackson) responsible for the conversions had wilfully failed to carry out the conversions claimed. The secretary and directors of the company were unaware that the conversions claimed had not been carried out. On appeal, the conviction of the company secretary for an offence under section 29B was quashed and it was held, in the circumstances, that the guilty knowledge of the foreman could not be imputed to the company. Starke J stated:
The circumstances in which knowledge can be imputed to a company are addressed below.
In the present context, the offence of imposing or endeavouring to impose upon the Commonwealth contrary to section 29B of the Crimes Act may be made out if the evidence is capable of demonstrating the following:
(a) the Notification form and contractual documents submitted by the company to DFAT contained, to the knowledge of the defendant, an untrue representation; or
(b) the conduct of the company in submitting the document to DFAT together with its failure to disclose to DFAT other material facts (for example other collateral arrangements with Iraq relating to the payment of inland transportation or after-sales-service fees and the incorporation of such fees in the contract price) amounted to a representation (namely a representation that the Notification form and contractual documentation disclosed all material terms upon which the goods were being exported to Iraq) which was untrue to the knowledge of the defendant; and
(c) the untrue representation constituted by either (a) or (b) was made by the defendant (either one of the relevant companies or their officers) with the object or for the purpose of obtaining a benefit from DFAT-the benefit comprising either or both the certification and submission of the documents to the United Nations and the giving of permission to export the relevant goods to Iraq.
If the defendant was charged with imposing on the Commonwealth, it would also be necessary to prove that the Commonwealth was deceived by the untrue representation in either (a) or (b). This would not be necessary if the defendant was charged only with endeavouring to impose on the Commonwealth.
Subsection 5(1) of the Crimes Act provides as follows:
Section 5(1) does not create a separate offence. Rather a defendant who aids, abets, counsels or procures or is knowingly concerned in the commission of an offence by another person is deemed to have committed the substantive offence.[338] The penalty applicable for the substantive offence accordingly is applicable.
The words 'aids, abets, counsels or procures' are descriptive of a single concept that involves the 'general idea, that the person charged as a principal in the second degree is in some way linked in purpose with the person actually committing the crime and is by his words or conduct doing something to bring about, or rendering more likely, such commission.'[339] The definition of 'knowingly concerned' raises the question 'whether on the facts it can reasonably be said that the act or omission shown to have been done or neglected to be done by the defendant does in truth implicate or involve him in the offence, whether it does show a practical connection between him and the offence.'[340] A person does not become criminally involved in an unlawful act by means of knowledge only; some act or conduct on his part is necessary. An accessory must be 'concerned in' and not merely 'concerned about' the offence.[341] The necessary knowledge that must be proved is knowledge of all of the essential elements of the principal offence.[342]
In order to establish that a person is an accessory to the commission of an offence by another person (the principal offender) it must be established that
Of potential relevance to the present circumstances is that, where a company is alleged to be the principal offender, an officer of the company can be convicted of aiding and abetting or being knowingly concerned in the commission of the company's offence even when it is the acts of the officer which are the basis of the criminal liability of the company.[343] It follows that if an officer of one of the relevant companies was responsible for misleading or deceiving the Commonwealth in any of the ways covered by sections 29A, 29B or 29D of the Crimes Act, so long as that officer's actions and knowledge can be imputed to the company (as to which see further below), the company can be charged as principal offender and the officer as an accessory.
At all relevant times up to the time of its repeal on 24 May 2001, subsection 86(1) of the Crimes Act provided as follows:
The elements of the offence of conspiracy to commit a Commonwealth offence, as set out in subsection 86(3), are that:
(1) the defendant entered into an agreement with one or more other persons; and
(2) the defendant and at least one other party to the agreement must have intended that an offence would be committed pursuant to the agreement; and
(3) the defendant and at least one other party to the agreement must have committed an overt act (an act in furtherance of the conspiracy) pursuant to the agreement.
Of potential importance to the present circumstances is that subsection 86(4) provides that a person may be found guilty of a conspiracy even if the only other party to the agreement is a body corporate. It follows that if an officer of one of the relevant companies that entered into an agreement with the company to, say, defraud the Commonwealth by misleading an officer of DFAT and cause them to do something they otherwise would not have done (for example, certify and submit the company's documents to the United Nations), both the officer and the company may be convicted of conspiracy to commit the offence of defrauding the Commonwealth contrary to section 29D of the Crimes Act.
Effective 24 May 2001, each of the foregoing offences of fraud or deceit was repealed and replaced by a number of cognate offences in Parts 7.3 and 7.4 of the Criminal Code. The offences in these Parts cover a broad range of conduct involving fraudulent conduct towards the Commonwealth, obtaining property or financial benefits from the Commonwealth by deception, the making of false or misleading statements in applications to the Commonwealth and the provision of false or misleading information or documents to the Commonwealth in certain circumstances.
Not all of the offences created by Parts 7.3 and 7.4 are applicable or apposite to the present facts. A number of the offence provisions contain elements that, on any view of the facts, are unlikely to be established.
The offence of obtaining property belonging to the Commonwealth by deception in section 134.1 is not apposite because the benefits or advantages obtained from the Commonwealth by the relevant companies (the certification and submission of their documents to the United Nations and the granting of permission to export under the Customs (Prohibited Exports) Regulations) could not readily be regarded as 'property' as defined in section 130.1 of the Criminal Code, despite the fact that the definition includes 'a thing in action or other intangible property.' The definition of 'property' in the criminal code is not sufficiently broad as to encompass the sort of 'benefits' that were previously covered by section 29B of the Crimes Act. The same problem arises in relation to the general dishonesty offence in section 135.1, which requires proof that the defendant intended dishonestly to obtain a 'gain' from the Commonwealth. That is because 'gain' is defined in section 130.1 as meaning a gain in property or a gain by way of the supply of services; the problem again being that the relevant benefits intended to be gained were not gains in relation to properly as defined.
Nor could the benefits obtained from DFAT readily be regarded as constituting a 'financial advantage' for the purpose of the offence of obtaining a financial benefit by deception created by section 134.2, or the offence of obtaining a financial advantage created by section 135.2 of the Criminal Code. The phrase 'financial advantage' is not defined in the Criminal Code. Whilst it has been held, in the context of cognate State offence provisions, that the words 'financial advantage' should be given their plain meaning and not be narrowly construed, it is difficult to see how the intangible benefits obtained by the companies from DFAT could be considered to constitute a financial advantage. Whilst ultimately the companies no doubt benefited financially from being able to export the goods, that financial advantage is quite remote from the immediate benefits obtained from DFAT. The difficulty again is that the phrase 'financial advantage' is not as broad as the word 'benefit' that was previously used in section 29B of the Crimes Act to cover non-financial benefits or advantages.
Consideration has also been given to the offences created by sections 137.1 and 137.2. The difficulty with the offence in section 137.1(1) is that, whilst by reason of subparagraph (c)(i) it covers the provision of information to a Commonwealth entity that is false or misleading or misleading by omission, the offence is not made out if, before the information was given by a person to the Commonwealth entity, the Commonwealth entity did not take reasonable steps to inform the person of the existence of the offence.[344] Subsection 137.1(6) provides that it is sufficient for the purpose of subsection 137.1(4) for the words 'giving of false information is a serious offence' to be used. As discussed in Chapter 12, DFAT did not require the relevant companies to fill out any form, let alone a form that included the words specified in subsection 137.1(6). Nor is there any evidence to suggest that DFAT took any other steps to advise the companies of the existence of the offence in section 137.1(1). The same difficulty applies in relation to the offence under section 137.1(1) that applies by reason of subparagraph (1)(c)(ii). The offence in section 137.1 that applies by reason of subparagraph (1)(c)(iii) does not apply because the information was not given in compliance or purported compliance with a law of the Commonwealth.[345] The same difficulty renders the offence in section 137.2 inapplicable.
The offences in Parts 7.3 and 7.4 of the Criminal Code that potentially apply to the fact situation and that are most apposite are the offences in subsection 135.1(7), 135.4(7) and subsections 136.1(1) and (4).
Subsections 135.1(7) and (8) of the Criminal Codes provides as follows:
This offence is similar to the species of fraud that involves deceiving a public official into doing something that the official would not otherwise have done (considered above in the context of section 29D of the Crimes Act). The elements of the offence are:
(1) the person does anything;
(2) with the intention of dishonestly influencing;
(3) a Commonwealth public official
(4) in the exercise of the official's duties as a Commonwealth public official.
The first element is extremely broad. It comprises the 'physical element' of the offence[346] and would appear to cover virtually any conduct-feasance or non-feasance.[347] Relevantly it would cover the failure to disclose information that was material, or potentially material to a Commonwealth public official's duties, or the provision of information that was materially misleading by reason of the omission to refer to other information.
In relation to the second element, 'dishonest' is defined in section 130.3 of the Criminal Code to mean dishonest according to the standards of ordinary people and known by the defendant to be dishonest according to the standards of ordinary honest people. The reference to 'intention' in this element means that, by reason of section 5.2 of the Criminal Code, this element constitutes the 'fault element' of the offence. Subsection 5.2(1) provides that a person has intention with respect to conduct if he or she means to engage in that conduct. Accordingly, it is necessary to prove that the defendant by his conduct meant dishonestly to influence. It is not an element of the offence that the Commonwealth officer was in fact influenced.
'Commonwealth public official' is defined in the Dictionary in the Criminal Code and includes, relevantly, an Australian Public Service employee or any other individual employed by the Commonwealth. 'Duty' is defined in section 130.1 as meaning, in relation to a person who is a Commonwealth public official, any authority, duty, function or power that is conferred on the person as a Commonwealth public official, or the person holds himself or herself out as having as a Commonwealth public official.
In the present context, the offence of influencing a Commonwealth public official contrary to subsection 135.1(7) of the Criminal Code will be made out if the defendant (AWB, Rhine Ruhr or Alkaloids or the relevant officers involved in the conduct[348]), did anything with the intention of dishonestly influencing an officer of DFAT in the course of that officers duties as a Commonwealth public official. For practical purposes, the offence would be made out if the available evidence was capable of proving that:
(a) the Notification form or any of the accompanying documentation submitted to DFAT contained, to the knowledge of the defendant, either a materially false or misleading statement or statements or omitted from it a matter or thing that rendered the information in the documentation misleading in a material respect; or
(b) the defendant failed to disclose or concealed from DFAT facts that were or may have been material to the duty being performed by the DFAT officer (for example, that the relevant arrangements with the Iraqi entity included a collateral arrangement to pay an inland transport fee or after-sales-service fee which fee was incorporated in the contract price); and
(c) in engaging in the conduct in either (a) or (b), the defendant intended to dishonestly influence the DFAT officer into either forwarding documents to the United Nations or causing a delegate of the Minister to sign a Permission to Export in circumstances where, but for the deceit, the officer would not have taken that action.
Subsection 135.4(7) of the Criminal Code in effect creates an offence of conspiring to commit the offence of influencing a Commonwealth public official that has just been discussed. Subsection 135.4(7) provides as follows:
It is unnecessary spell out the elements of this offence, which are effectively the same as the offence under subsection 135.4(7) except that the physical element of the offence is conspiring with another person rather than 'does anything'. The requirements of the conspiracy element are set out in subsections 135.4(9) to (13) in terms similar to section 86 of the Crimes Act and include:
(a) the defendant entered into an agreement with one or more other persons; and
(b) the defendant and at least one other party to the agreement must have intended to do 'the thing' pursuant to the agreement; and
(c) the defendant and at least one other party to the agreement must have committed an overt act (an act in furtherance of the conspiracy) pursuant to the agreement; and
(d) a person may be found guilty of a conspiracy even if the only other party to the agreement is a body corporate.
Section 136.1 of the Criminal Code creates two offences relating to the making of false statements to the Commonwealth in applications: an offence requiring proof of knowledge in subsection 136.1(1) and an offence requiring only proof of recklessness in subsection 136.1(4).
Subsection 136.1(1) provides as follows:
Subsection 136.1(1A)[349] provides that absolute liability applies to each of subparagraphs (1)(d)(i), (ii) and (iii), meaning that it is unnecessary to prove that the defendant knew any of the matters in those paragraphs. Subsections 136.1(2) and (3) provide, in effect (and in combination with section 13.3), that it is a defence if the defendant adduces (or is able to point to) evidence that suggests a reasonable possibility that the statement was not false or misleading in a material particular, or that the statement did not omit a matter or thing without which the statement was misleading, as the case may be.
The elements of the offence created by subsection 136.1, relevant to the matter at hand, are as follows:
In relation to element (1), it is clear from the words of the section that the statement may be made in any way. This encompasses not only written or oral statements, but also statements that are implied from conduct, including in some circumstances silence, or from a combination of writing and conduct.[350] In the present matter, the submission to DFAT of a Notification form and accompanying contractual documents is, in all the circumstances, capable of being construed as an implied statement that the documentation disclosed all relevant terms of the arrangements between the relevant company and the Iraqi entity and that there were no collateral or associated arrangements.
Element (2) is the fault element of the offence. Section 5.3 of the Criminal Code provides, in relation to a fault element that consists of knowledge, that a person has knowledge of a circumstance or result if he or she is aware that it exists or will exist in the ordinary course of events.
Element (3) requires proof that the statement was made in connection with, relevantly, a permit or authority. Proof that the relevant statement was made in connection with a permission to export under the Customs (Prohibited Exports) Regulations would satisfy this element. In the circumstances of this matter, an issue arises whether the submission of the Notification form and accompanying contractual documents to DFAT, for the purpose of having DFAT certify the Notification form and submit the documents to the United Nations was done 'in connection with' an application for permission to export. The words 'in connection with' mean a relation between one thing and another[351] and generally have a very wide operation.[352] Chapter 12 discusses DFAT's role in the Oil-for-Food Programme, the procedures that DFAT adopted and the connection between the submission by a company of a Notification form and contractual documents, United Nations approval of payment under the Programme and the signing of Permission to Export. Suffice it to say that the procedure was such that it is open to conclude that the submission of the Notification form and contractual documents to DFAT by a company was (and was known to be) in connection with the granting of permission to export.
As for element (4), 'Commonwealth entity' is defined in the Dictionary to the Criminal Code as comprising the Commonwealth or a Commonwealth authority, and 'Commonwealth authority is defined as meaning a body established under the law of the Commonwealth'[353], but not including some bodies that are not presently relevant. Element (4) of the offence would be made out on the basis that DFAT is a Commonwealth entity as defined.
In the present context, the offence of making a false or misleading statement in an application contrary to subsection 136.1(1) of the Criminal Code will be made out if the evidence is capable of demonstrating the following:
(a) the Notification form and contractual documents submitted by the company to DFAT contained, to the knowledge of the defendant (the company or its officers), a statement that was false or misleading, or had omitted from it a matter or thing that rendered the statement misleading; or
(b) the conduct of the company in submitting the document to DFAT together with its failure to disclose to DFAT other material facts (for example other collateral arrangements with Iraq relating to the payment of inland transportation or after-sales-service fees and the incorporation of such fees in the contract price) amounted to a statement (for example an implied statement that the Notification form and contractual documentation disclosed all material terms upon which the goods were being exported to Iraq) which was false or misleading to the knowledge of the defendant; and
(c) the statement in (a) or (b) (the submission of the documents to DFAT) was made in connection with a permission to export the goods the subject of the contract pursuant to the Customs (Prohibited Exports) Regulations;
Subsection 136.1(4) creates a similar offence, but with the lesser 'fault' element of recklessness. It provides as follows:
Subsections 136.1(4A), (5) and (6) are relevantly in the same terms as subsections 136.1(1A), (2) and (3) considered above.[354]
As stated, the only difference between this offence and the offence in subsection (1) is that, instead of proving that the defendant knew that the relevant statement was false or misleading, it is necessary to prove only that the defendant was reckless as to whether or not that was the case. Recklessness in relation to a circumstance-here that the relevant statement was false or misleading-is defined in section 5.4 of the Criminal Code in the following terms:
In the present case it would be necessary to prove that the defendant:
(a) knew there was a substantial risk either that the Notification form or contractual documents submitted to DFAT contained a false or misleading statement (or a statement that was misleading by omission) or that the implied statement made as a result of the submission of the documents (that the documents set out the entirety of the arrangements between the company and Iraq) was false or misleading; and
(b) having regard to the circumstances known to the defendant, it was unjustifiable to make the relevant statement.
Complicity or accessorial liability under the Criminal Code is dealt with in section 11.2. It is in similar terms to section 5 of the Crimes Act, however it does not include 'knowingly concerned' as a basis for accessorial liability. It provides as follows:
The requirements of proof of accessorial liability are set out in subsection 11.2(3) and (4), which provide that a person cannot be guilty unless the following matters are established:
(a) the person's conduct in fact aided, abetted, counselled or procured the commission of the offence by the other person; and
(b) the offence was committed by the other person; and
(c) the defendant intended that their conduct would aid, abet, counsel or procure the commission of any offence (including its fault elements) of the type the other person committed; or
(d) the defendant intended that their conduct would aid, abet, counsel or procure the commission of an offence and was reckless about the commission of the offence (including its fault elements) that the other person in fact committed.
There is also a general conspiracy provision in section 11.5 of the Criminal Code. Section 11.2 of the Criminal Code creates the offence of attempting to commit an offence.
If any of the actions of the relevant companies (AWB, Rhine Ruhr or Alkaloids) amounted to fraud, deceit or dishonestly towards a person or entity other than the Commonwealth, the relevant offence provisions are to be found in State legislation. The only relevant non-Commonwealth victim or object of any alleged fraudulent activity by any of the companies was the United Nations.
Various State offences would potentially be relevant if the available evidence was capable of establishing that:
(a) the documents that the relevant companies caused DFAT to submit to the United Nations deceived the United Nations because, for example, they did not disclose the existence of collateral arrangements between the company and Iraq to the effect that the company would pay Iraq inland transportation or after-sales-service fees that were incorporated in the contract price; and
(b) as a result of that deception, the United Nations approved the contract for payment and in due course authorised payment out of the United Nations controlled escrow account;
In relation to the recoupment of the Tigris debt Chapter 27, state offences may be relevant if the available be evidence was capable of establishing that:
(a) the Notification and contract documents that AWB caused DFAT to submit to the United Nations in relation to contracts 1670 and 1680 did not disclose that the contract price had been inflated to provide for the payment of a past debt by Iraq (since assigned to Tigris);
(b) as a result, the United Nations was deceived and approved the contract and authorised payment out of the United Nations controlled escrow account.
The various State Crimes Acts and Codes all contain offences which may be described shortly as obtaining property or financial advantages by deception.[355] An offence will only be committed under a particular State Act, however, where there can be shown to be a local feature or relevant link between the State and the commission of the offence. At common law the nature of the required link depended on whether the offence in question was a 'conduct' crime or a 'result' crime.[356] The offence of obtaining property or financial advantages by false pretences or deception is a result crime and the offence is committed and triable in the place where the obtaining occurred, rather than the place where the deception or false pretence was practised.[357] However, a number of State Acts provide for extra-territoriality in relation to offences of fraud or dishonesty.
Because AWB's offices were in Victoria, any benefit from any deceptive or fraudulent act is likely to have been received, directly or indirectly, in Victoria. If relevant, any act of fraud or deceit practised by its officers is also likely to have been communicated from Victoria. That is likely to provide a sufficient jurisdictional nexus for the application of the Crimes Act 1958 (Vic). The same applies to Rhine Ruhr, whereas the offices of the agent of Alkaloids who was primarily responsible for matters associated with the Iraqi contract were in Sydney. Because of the likely applicability of the Victorian provisions in most relevant cases, the relevant provisions of the Victorian Crimes Act will be considered. There are cognate provisions in the other States.[358]
Section 82(1) of the Victorian Crimes Act at the relevant time provided as follows:
The elements of this offence are:
'Deception' is defined in subsection 81(4) as including any deception (whether deliberate or reckless) by words or conduct as to fact or as to law, including a deception as to the present intentions of the person using the deception or any other person. A deception almost invariably involves a false or misleading representation that, as discussed above in the context of section 29A of the Commonwealth Crimes Act, may be made in writing, by words or by conduct or by a combination of those matters, and may be implied. The definition of deception in subsection 81(4) expands the common law concept of false pretences in that it covers representations about the law and the intentions of the person using the deception.
In relation to element (2), the question whether a particular act of deception is dishonest depends on the knowledge, belief and intent of the defendant and is to be determined by the standards of ordinary decent people.[359]
The element of 'obtaining' and the resulting requirement that the relevant deception caused or led to the obtaining has been considered above in the context of section 29A of the Commonwealth Crimes Act. The expression 'financial advantage' is not defined in the Victorian Crimes Act, though it would plainly include money or a credit to a bank account.
Section 323 of the Victorian Crimes Act provides that a person who aids, abets, counsels or procures the commission of an indictable offence may be tried, indicted or presented and punished as a principal offender. This section operates in the same way as section 5 of the Commonwealth Crimes Act as discussed above, though there is no provision for a person to be an accessory by being 'knowingly concerned'.
Section 84 of the Victorian Crimes Act provides that where a body corporate has committed an offence under sections 81, 82 or 83, a 'director, manager, secretary or other similar officer' of the body corporate will also be liable if that person is proved to have consented or connived in the commission of the offence by the body corporate.
Section 80A of the Victorian Crimes Act provides for the extra territorial operation of a number of offence provisions, including section 82. It provides as follows:
In the case of AWB and Rhine Ruhr, the relevant question is whether a significant part of any deception practised by them occurred in Victoria. To answer that question, it would be necessary to consider each act that constituted each alleged deception and then consider whether a significant part of that conduct occurred in Victoria. In the case of a deception arising from the forwarding of a Notification form and contractual documentation to DFAT (and as a result of the fact that those documents omitted to inform DFAT that there were collateral arrangements relating to the payment of inland transportation and after-sales-service fees and that those fees had been incorporated in the contract price), if those documents were forwarded from AWB's or Rhine Ruhr's Victorian offices, it is open to conclude that a significant part of the relevant conduct occurred in Victoria.
A significant issue likely to arise in relation to any alleged offence that contains as an element a deception or false pretence practised on the United Nations is that the relevant companies did not communicate directly with the United Nations. All documentation and other material communications between the companies and the United Nations occurred through DFAT. An offence involving a deception or false representation can, however, be made out in circumstances where the false representation or deception is communicated to the victim through an innocent agent. In White v Ridley[360], Gibbs J said:
As discussed in Chapter 36, DFAT did not know that there was anything false or misleading about the documentation that it forwarded to the United Nations in respect of AWB's wheat contracts, or that the documentation had omitted from it material facts relating to the arrangements between AWB and the Iraqis. There is evidence that demonstrates that relevant officers of AWB knew that DFAT sent the documentation to the United Nations for the purpose of approval by the United Nations, that the documentation made no reference to the collateral arrangements between AWB and the IGB in relation to inland transportation fees and the incorporation of these fees in the contract price and that DFAT did not know about those arrangements. For all intents and purposes DFAT was an innocent agent.
Offences involving bribery or secret commissions
There are offence in both the Criminal Code and various the Crimes Acts and Codes of various States that involve the payment of bribes and secret commissions and other corrupt practises that are potentially applicable.
Division 70 of the Criminal Code was inserted into the Criminal Code with operation from 17 December 1999[361] to give domestic effect to Australia's ratification of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Subsection 70.2(1) of the Criminal Code provides as follows:
The elements of the offence created by subsection 70.2(1), relevant to the matter at hand, are as follows:
The defendant:
(1) promises to provide a benefit to be provided to another person (A); and
(2) the benefit is not legitimately due to A;
(3) with the intention of influencing a foreign public official (who may be the same person as A) in the exercise of the official's duties as a foreign public official;
(4) in order to obtain or retain business.
For the purpose of considering the potential availability of this offence, it will be assumed that the defendant is AWB, the other person (A) is an Iraqi Ministry or Government entity (for example the Iraqi State Company for Water Transport) and the foreign public official is the Director General of the Iraqi Grains Board. In the absence of any contrary intention in the section, the person to whom the benefit is paid (A) can be a body politic.[362]
In relation to element (1), 'benefit' is defined in section 70.1 as including any advantage and is not limited to property. Proof that AWB promised to pay money (indirectly via Alai) to the Iraqi State Company for Water Transport or any other Iraqi entity, in the form of inland transportation or after-sales-service fees, would satisfy element (1).
In relation to element (2), the Criminal Code does not define the circumstances in which a benefit is to be found to be not legitimately due. However, subsection 70.2(2) provides that in working out if a benefit is not legitimately due, the following matters should be disregarded:
(a) the fact that the benefit may be customary, or perceived to be customary, in the situation
(b) the value of the benefit
(c) any official tolerance of the benefit.
There are difficulties in determining whether the benefits received, or to be received, by the Iraqi State Company for Water Transport in the circumstances of this matter were not legitimately due. The difficulties arise because, as discussed in Chapters 13 and 21 the inland transportation fees and after-sales-service fees were demanded of, or levied from, AWB as a result of directives or orders from Ministers or Ministries of the Iraqi Government. The fees were akin to a tariff imposed by the Iraqi government on all goods imported under the Oil-for-Food Programme. It is open to conclude from this that the payments were lawful, or at least not unlawful, as a matter of Iraqi law. The lawfulness of the impost, as a matter of Iraqi law, amounts to more than 'custom' or 'official tolerance,' these being matters that must be disregarded in working out whether a benefit was not legitimately due.
In these circumstances, the only way in which it could be asserted that the benefits were not legitimately due to the Iraqis was that they were contrary to United Nations sanctions. It is however, questionable whether payments that are not unlawful in a country as a matter of domestic law could be held to be 'not legitimately due' solely by reason of actions taken by the United Nations.
In the end it is not necessary to decide this question because, as will be seen, the fact that the payments were not unlawful in Iraq constitutes a defence to the offence in any event.
In relation to elements (3) and (4), 'foreign public official' is defined broadly in section 70.1 and includes an employee or official of a foreign government body. In the circumstances of this matter, element (3) would be made out if the available evidence was sufficient to prove that AWB's intention in promising to pay the inland transport or after-sales-service fees was to influence an employee or official of the Iraqi Grains Board, in the course of that officer's duty as such an officer, to accept AWB's tender and agree to purchase its wheat. Proof that agreeing to pay the fees was a prerequisite to the Iraqi Grains Board entering into a contract and that AWB knew this would be sufficient proof.
Section 70.3 provides a number of defences to the offence created by subsection 70.2(1). The general thrust of the defences created in subsection 70.3(1) is that it is a defence if the defendant's conduct (relevantly, promising to provide the payment to the foreign public official) occurred in the country or place where the foreign public official was located, the defendant would not have been guilty of an offence against a law in place in that place or country. Subsection 70.2(1) contains a number of items that correspond to the paragraphs of the definition of foreign public official in section 70.1. In the circumstances currently under consideration, the foreign public official was an employee or official of a foreign government body as provided for in paragraph (a) of the section 70.1 definition. Item 1 of subsection 70.3(1) provides that if it were assumed that the person's (the defendant's) conduct had occurred wholly in the place where the central administration of the body is located (in this case Baghdad), the defendant is not guilty of an offence if the defendant would not have been guilt of an offence in that place (namely Baghdad).
By reason of sections 13.1, 13.2 and 13.3 of the Criminal Code, a defendant would bear an evidential burden in relation to the defence in subsection 70.3(1)-that is, the defendant must adduce or point to evidence that suggests a reasonable possibility that the matter (in this case the lawfulness of the conduct had it occurred in Baghdad) exists. Once that evidential burden is discharged, the prosecution bears the legal burden of disproving the existence of that matter beyond reasonable doubt.
There is evidence that points to the likelihood that if AWB's conduct in promising to make the payment to the Iraqis had occurred in Baghdad, AWB would not have been guilty of an offence against a law in force in that place. That is because the requirement to pay inland transport or after-sales-service fees to Iraqi entities was the result of directives or orders by Iraqi government Ministers or officials. The available inference is, therefore, that it was not unlawful in Iraq to make such payments. The fact that the payment may have been contrary to the United Nations sanctions would not have affected the lawfulness of the payments as a matter of Iraqi law.
It follows that, at least in relation to the payment of inland transport and after-sales-service fees, there is no reasonable basis for concluding that an offence may have been committed against subsection 70.2(1) of the Criminal Code.
A number of States prohibit the giving or offering of secret commissions to agents. Subsection 176(2) of the Crimes Act 1958 (Vic) provides, for example:
or
There is a similar provision in section 249B(2) of the Crimes Act 1900 (NSW).
It is unnecessary to give any detailed consideration to these provisions because they are unlikely to have any relevant application to the matter at hand. The general thrust of the offence is to criminalise the giving of money (or other valuable consideration) by a defendant to an agent as a reward for the agent granting, or causing to be granted, business from the agent's principal. A simple example of the type of conduct that would constitute an offence under this provision (and others like it) is the case where a defendant pays money to an agent, generally without the knowledge of the agent's principal, as a reward for the agent causing or procuring the principal to select the defendant as, for example, a preferred supplier of goods or services to the principal. In the present case, whilst on one view Alia was acting as an agent of the IGB when it received into its bank account payments representing inland transportation or after-sales-service fees, it received these funds pursuant to an arrangement with its principal (the IGB) whereby Alia was remunerated by the IGB (by being permitted to retain a percentage of the payment as commission) for its services as a conduit for the payments. It did not receive the funds from AWB as a reward for caused the IGB to award a contract or contracts for the supply of wheat to the IGB. The decision to award the contract to the AWB was made by the IGB well prior to the payment of the fees by AWB.
Offences involving the possession, concealment or disposal of the proceeds of crime may have some potential relevance if it is found that AWB committed offences arising from the recoupment of the Tigris debt via the inflation of the price in contracts 1670 and 1680. The money obtained and dealt with by AWB in these circumstances could be regarded to be the proceeds of crime. The most likely substantive offence relating to the Tigris debt is section 82 of the Victorian Crimes Act (considered above). Accordingly, the Victorian money
