Degree of cooperation with law enforcement agencies in the investigation of the offence and other offences; future cooperation: ss 16A(2)(h) and s 16AC of the Crimes Act
328 Section 16A(2)(h) of the Crimes Act is expressed in the past tense and may be taken to essentially refer to cooperation with or assistance provided to law enforcement agencies up to the point in time that the offender is sentenced. That interpretation is reinforced by the terms of s 16AC of the Crimes Act which, because it refers to undertakings by the offender to cooperate with law enforcement agencies in proceedings, and makes provision for the Director to appeal if the offender does not cooperate in accordance with the undertaking, must relate to cooperation that is to occur after the sentence is imposed. K-Line has not given any undertaking to cooperate in terms of s 16AC of the Crimes Act.
329 It is common ground that K-Line has provided some assistance to law enforcement agencies, in particular the ACCC, in relation to the ACCC's investigation into K-Line's participation in the Respect Agreement and the conduct engaged in to give effect to cartel provisions in that arrangement or understanding. There was, however, considerable disagreement as to the degree and proper characterisation of that cooperation.
330 Matters which may be relevant to an assessment of the degree to which an offender has provided cooperation to law enforcement agencies include: the effectiveness of the cooperation and its practical value to law enforcement agencies (Ma v R [2010] NSWCCA 320 at [28]; Zhang at [33]; R v Sukkar [2006] NSWCCA 92; 172 A Crim R 151 at [53]; R v El-Hani [2004] NSWCCA 162 at [73]; R v Barrientos [1999] NSWCCA 1 at [47]; R v Gallagher (1991) 23 NSWLR 220 at 232-233); the extent to which the offender has disclosed everything of relevance and not tailored the disclosure to material already known (Wang v R [2010] NSWCCA 319 at [36]; R v Cartwright (1989) 17 NSWLR 243 at 252-255); the extent to which the cooperation relates to offences which are otherwise difficult to detect and investigate (Hartman v R [2011] NSWCCA 261 at [96]); the extent to which the cooperation disclosed the offender's guilt in respect of other offences (R v Ellis (1986) 6 NSWLR 603 at 604; Ryan v The Queen [2001] HCA 21; 206 CLR 267 at [15]); the motive for the cooperation, including whether it was motivated by genuine contrition rather than self-interest (Wang at [36]); and whether the offender's cooperation caused others to cooperate (Lin v R; Ng v R [2016] NSWCCA 200 at [10]).
331 Cooperation which is ineffective or provides little practical value must nevertheless still be considered (R v Stanbouli [2003] NSWCCA 355; 141 A Crim R 531 at [52]) because it might provide some evidence of contrition (Sukkar at [53]; Wang at [36]), might be of some intelligence value (Barrientos at [48]); and should in any event otherwise be encouraged in the public interest (Wang at [36]; Cartwright at 252-255).
332 The authorities concerning cooperation in the sentencing context routinely refer to a "discount" for cooperation. There is, however, no obligation for the sentencing court to separately quantify a discount for cooperation: indeed, it may be impossible or inappropriate to specify a separate discount where cooperation forms part of a complex of interrelated considerations relating to the plea of guilty, contrition and rehabilitation: Gallagher at 227-228; El-Hani at [68].
333 There is also no fixed tariff or range for a discount for cooperation: R v Pang [1999] NSWCCA 4; 105 A Crim R 474 at [13]. That said, the authorities are replete with statements about the usual or "customary" range, which is typically said to be between 20% and 50%: see for example R v M [2005] NSWCCA 224 at [21]-[22]; Sukkar at [3], [5], [50], [54], [56]; Pang at [13]. It has been said that a discount exceeding 50% should be reserved for an exceptional case: SZ v R [2007] NSWCCA 19; 168 A Crim R 249 at [3], [53]. It should be noted, however, that the cases which discuss the range of discounts for assistance and cooperation almost invariably involve circumstances where the offender has implicated a co-offender or co-offenders and many have reason to fear retribution or harm arising from those circumstances. The cases also consider circumstances such as having to serve a period of incarceration in protective custody because of the assistance provided. Those circumstances obviously do not apply to the circumstances of this case.
334 After applying the relevant principles to the facts of the case and arriving at a discount, the sentencing judge is required to "stand back" and consider whether the resulting sentence is just and reasonable, not only to the offender but also the community at large: SZ at [5].
335 The agreed facts in relation to K-Line's cooperation were set out at length earlier.
336 The Director submitted that the agreed facts reveal that while K-Line provided "some cooperation", that cooperation was provided "reluctantly and somewhat tardily". In support of that submission, the Director emphasised that: K-Line did not provide full waivers to enable the sharing of confidential information between the competition authorities or regulators in different jurisdictions; K-Line did not provide turnover figures as requested by the ACCC; there was delay, sometimes considerable delay, in K-Line's provision of complete copies of the documents requested by the ACCC and English translations of some of the documents; the information that K-Line provided did not add significantly to the material available to the ACCC, rather it "lent support" to that material; the information did not lead to new investigations or prosecutions of other offenders; K-Line did not fully cooperate or assist in providing the ACCC with access in Australia to certain witnesses that the ACCC had indicated that it wished to interview; K-Line's application for leniency did not identify any of the instances of the cartel conduct that were the subject of the charge; and generally that K-Line did not actively assist the investigation, but was responsive and at times reluctantly so.
337 The Director also submitted that K-Line's cooperation was substantially less than the cooperation provided by NYK.
338 For its part, K-Line submitted that the Director's assessment of its cooperation as being reluctant and tardy was flawed and that the agreed facts revealed that its cooperation was in fact "high level" cooperation. In support of that submission, K-Line emphasised that: it was the second shipping company to seek immunity in Australia; it indicated at the first opportunity that it would be seeking to cooperate with the ACCC, notwithstanding that an immunity marker was not available to it; it provided extensive information to the ACCC about its operations and internal investigations into the cartel conduct, usually within weeks of the ACCC's requests; it made "admissions" which "lent support" to 16 of the specific 20 instances of conduct and revealed two instances not previously known to the ACCC; it arranged and funded independent legal representation for the employees of K-Line who were eventually interviewed by the ACCC and paid other expenses associated with those interviews; and that even though it did not provide waivers in relation to the information provided to the Japan Fair Trade Commission, it nonetheless provided documents relating to Australian routes that it had provided to the Japan Fair Trade Commission.
339 K-Line also submitted that it would be erroneous to approach the assessment or characterisation of its cooperation only by comparison with the assistance provided by NYK. It would also be erroneous to approach the assessment of the discount that should be given to it for its cooperation by using the discount of 40% given to NYK in relation to its past cooperation and guilty plea as a starting point.
340 There is considerable merit in K-Line's submission that the Court should not assess its cooperation and assistance by simply comparing and contrasting it with the assistance and cooperation provided by NYK. A comparison between the assistance provided by K-Line and NYK may, however, be relevant to a certain extent in considering the issue of parity. That issue is considered later.
341 Putting any comparison with NYK's cooperation to one side, it is in some respects difficult for the Court to assess and properly characterise the cooperation provided by K-Line. It is equally difficult to resolve the issues raised by the competing submissions. That is because the material put before the Court to assess the cooperation provided by K-Line was restricted to a statement of facts which appears to have been the product of detailed discussion and agreement between the respective legal teams. The result is a lengthy and detailed document which has no doubt been carefully crafted as a result of the negotiations, but which is nonetheless rather unhelpful in a number of important respects. The Court is left in the rather unenviable position of having to decipher and draw inferences and conclusions from that rather bland and sanitised document.
342 As has already been noted, the factors relevant to the assessment of the cooperation include the effectiveness and practical value of the cooperation to the relevant investigative agency, the extent to which the cooperation exposed the offender's guilt and the extent to which the cooperation may have involved, or been tailored to involve, the provision of information already known or likely to be known to the investigators. Often, but not always, the Court is assisted in its consideration of those sorts of matters by evidence from an officer of the investigative agency in question. Often that officer will provide the agency's assessment of the value and effectiveness of the cooperation, including the extent to which the information provided was already known to, or readily ascertainable by, the agency and the extent to which the information exposed the guilt of the offender. For reasons that only the Director, K-Line and their legal representatives know, the Director did not adduce any evidence from an officer of the ACCC in relation to K-Line's cooperation.
343 There is no doubt that K-Line provided information and documents to the ACCC in response to the ACCC's requests. It is, however, extremely difficult to assess the nature and quality of the information and documentation that was provided and the extent to which it provided effective and valuable assistance in the absence of either evidence from the ACCC about that issue, or in the absence of further detail about the nature, quality and extent of the information and documents.
344 The difficulty is even more acute when it comes to assessing what were said to have been admissions made by K-Line. The agreed facts suggest that the admissions were contained in a "high level summary table" and a "chronological table" which provided "additional information in relation to [K-Line's] conduct, and the conduct of NYK and [Mitsui], in relation to negotiations with various car manufacturers during relevant timeframes, including particulars as to time, the names of employees involved and the nature of the discussions". But what practical value did the admissions apparently contained in these tables give to the ACCC's investigations? To what extent did the admissions expose K-Line's guilt? To what extent did the table include information that was already known to the ACCC, or information that was otherwise readily ascertainable?
345 All that is known in relation to those issues is that the admissions "lent support to 16 of the 20 instances"; that "two of these instances were previously unknown to the ACCC"; that the admissions "provided the basis for the ACCC to identify and pursue other sources of evidence"; and that the admissions were "consistent with five of the 20 instances of conduct". Those rather bland and potentially ambiguous statements do not greatly assist. They certainly indicate that the admissions were of some assistance or value to the ACCC. The expressions "lent support to" and "consistent with" would tend to suggest that the ACCC already had some information or evidence about the matters admitted, though even that is somewhat unclear. The statement that the information provided the basis for the ACCC to pursue other sources of evidence would tend to suggest that the admissions were not particularly comprehensive or decisive. That, of course, is entirely consistent with the fact that K-Line continued to maintain its not guilty plea for some considerable time after it was charged. Plainly the admissions did not completely expose K-Line's guilt. In K-Line's favour, however, it is clear that the admissions did relate to some conduct which was previously unknown to the ACCC.
346 In all the circumstances, it is not really possible, and, in any event, not particularly useful, to attempt to sum up the character and degree of the assistance and cooperation provided by K-Line in one word or one sentence. On balance, however, the following findings can be made concerning the cooperation and assistance provided by K-Line.
347 First, K-Line provided information and documents to the ACCC that it otherwise was not required to provide and could not have been compelled to provide. The information included some admissions.
348 Second, the information and documents that K-Line provided to the ACCC were of some value and practical assistance to the ACCC's investigation. Some of the information comprised "high-level" summaries or general information and some of the documentation was transactional and may not have added significantly to the material otherwise available to the ACCC. The precise extent of the practical assistance provided by the provision of information and documents is difficult to determine, but it could fairly be said to be significant, though not necessarily substantial.
349 Third, K-Line made some admissions which were of some value and practical assistance to the ACCC investigation, particularly insofar as they related to particular incidents of giving effect to the Respect Agreement that were not previously known to the ACCC. The admissions "lent support" to material that appeared to be otherwise available to the ACCC in relation to the majority of specific incidents of giving effect to the Respect Agreement. On the limited facts provided by the parties, however, it cannot be concluded that the admissions were "substantive" as claimed by K-Line. The admissions were, however, of some significance.
350 Fourth, it would, as the Director submitted, be fair to characterise the provision of information, documents and admissions by K-Line as essentially responsive, rather than active. It would also be fair to say that the assistance was at times reluctant. The provision of information and summaries was also, for the most part, not timely and involved significant delays.
351 Fifth, while some of the information provided by K-Line related to the activities of other carriers, it cannot be concluded that it led to any new investigations or materially assisted the ACCC in investigating or prosecuting any other offenders. As already noted, no undertaking of the sort referred to in s 16AC of the Crimes Act was given by K-Line.
352 Sixth, K-Line did not provide the ACCC with all of the information or documentation which it requested. Importantly, it also did not provide any waiver which would have enabled or facilitated the Japan Fair Trade Commission to provide the ACCC with information and documentation that K-Line had provided to the Japan Fair Trade Commission.
353 Seventh, while K-Line ultimately arranged and paid for its employees or former employees to be provided with independent legal advice and assistance, it cannot be concluded that this aspect of K-Line's conduct materially or relevantly facilitated or assisted the ACCC in interviewing and taking statements from those individuals. Such limited assistance as was provided in relation to the interviewing of the employees was certainly not provided in a timely fashion. It also appeared to be provided with considerable reluctance and mostly occurred after the ACCC had independently approached the individuals.
354 As has already been noted, it is not particularly useful to attempt to sum up the degree of assistance provided by K-Line in one word or sentence. Even if it was, it could not be said that the degree of assistance and cooperation was "substantial" or "high level" as K-Line submitted.
355 As for the appropriate discount, in all the circumstances it would be appropriate to specify or quantify a single discount in respect of K-Line's cooperation and its early plea of guilty and the contrition and remorse that is reflected in both the cooperation and early plea. That is because there is a clear and manifest public interest in encouraging corporations who have engaged in cartel conduct to come forward and cooperate with the ACCC and, where applicable, the Director, at the earliest opportunity. Cartel conduct often involves secrecy and collusion and is notoriously difficult to detect, investigate and prosecute. While a mathematical approach to sentencing is generally eschewed, remarks or reasons for imposing a sentence which, in an appropriate case, clearly and transparently articulate the extent to which the cooperation and plea of guilty have resulted in a lower sentence are likely to encourage such cooperation in other cases.
356 In all the circumstances of this case, an appropriate discount for K-Line's cooperation, assistance, plea of guilty and the contrition and remorse reflected in the cooperation and plea is 28%.