R v Waldron

INTRODUCTION

1. On 5 February 2024 the accused pleaded not guilty to the following 10 Counts on the Indictment:- 1. On or about 16 May 2014, at Sydney in the State of New South Wales, did, being the agent of the Commonwealth Bank of Australia, corruptly receive a benefit, namely a credit in a bank account in the sum of US$99,971.02, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia 2. On or about 29 July 2014, at Sydney in the State of New South Wales, did, being the agent of the Commonwealth Bank of Australia, corruptly receive a benefit, namely a credit in a bank account in the sum of US$199,980.26, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia. 3. On or about 8 August 2014, at Sydney in the State of New South Wales, did, being the agent of the Commonwealth Bank of Australia, corruptly receive a benefit, namely a credit in a bank account in the sum of US$299,980.40, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia. 4. On or about 4 November 2014, at Sydney in the State of New South Wales, did, being the agent of the Commonwealth Bank of Australia, corruptly receive a benefit, namely a credit in a bank account in the sum of $300,000.00 as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia. 5. On or about 12 November 2014, at Sydney in the State of New South Wales, did, being the agent of the Commonwealth Bank of Australia, corruptly receive a benefit, namely a credit in a bank account in the sum of US$300,000.00, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia. 6. On or about 10 December 2014, at Sydney in the State of New South Wales, did, being the agent of the Commonwealth Bank of Australia, corruptly receive a benefit, namely a credit in a bank account in the sum of US $350,000.00, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia. 7. On or about 16 December 2014, at Sydney in the State of New South Wales, did, being the agent of the Commonwealth Bank of Australia, corruptly receive a benefit, namely a credit in a bank account in the sum of US$350,000.00, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia. 8. On or about 7 August 2014, at Sydney in the State of New South Wales, did aid and abet Keith Hunter, being the agent of the Commonwealth Bank of Australia, to corruptly receive a benefit, namely a credit in a bank account in the sum of US$330,000.00, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia. 9. On or about 27 August 2014, at Sydney in the State of New South Wales, did aid and abet Keith Hunter, being the agent of the Commonwealth Bank of Australia, to corruptly receive a benefit, namely a credit in a bank account in the sum of US$149,990.00, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia. 10. On or about 23 September 2014, at Sydney in the State of New South Wales, did aid and abet Keith Hunter, being the agent of the Commonwealth Bank of Australia, to corruptly receive a benefit, namely a credit in a bank account in the sum of US$149,990.00, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia.
2. Counts 1 to 7 concerned allegations that the accused received payments alleged to have been corruptly received by him pursuant to s249B(1) of the Crimes Act 1900 (NSW) ("the Crimes Act"). Counts 8 to 10 concern allegations that the accused aided and abetted Keith Hunter to corruptly receive payments pursuant to s249B(1) and s249F(1) of the Crimes Act.
3. On 24 October 2022 on the application of the accused Judge Williams ordered that the trial proceed by way of Judge alone pursuant to s132 of the Criminal Procedure Act 1986 (NSW).

Overview of the Crown Case

1. The Crown case is that both the accused and Mr Hunter were at all material times employed by the Commonwealth of Australia ("CBA") in senior positions in technology, operations and IT engineering. They reported to a Mr Michael Harte who was employed as the Chief Information Officer ("CIO") at the bank. In 2011 Mr Hunter was employed as the Executive Manager in charge of Operations, IT Security, Application Development and IT Engineering, reporting directly to Mr Harte.
2. On 31 May 2012 the accused was employed by CBA as General Manager of Infrastructure Engineering, reporting directly to Mr Hunter.
3. In 2012 the CBA under Mr Harte's direction adopted a policy of transformation of its computing systems to cloud technology. The policy was known as ES2012.
4. In 2009 ServiceMesh Inc. ("SMI") started supplying software services to the CBA. In 2011 SMI signed a Master Service Agreement ("MSA") with CBA. Pursuant to that agreement SMI supplied software services known as "Agility Platform" to the CBA as the cornerstone of its cloud computing system.
5. SMI was based in Los Angeles, USA. The principal shareholder was Mr Eric Pulier. SMI employed Mr Bradley Twynham as a sales consultant in February 2010 to manage the corporation's relationship with CBA in Australia. The Crown case is that the accused developed a close working relationship with both Mr Pulier and Mr Twynham.
6. In October 2013 SMI entered into an Equity Purchase Agreement ("EPA") with Computer Sciences Corporation ("CSC") for an agreed purchase price of US$291 million and a first payment of US$93 million. The EPA provided that, during an earnout period between 1 January 2013 and 31 January 2014, if SMI achieved revenue exceeding US$20 million CSC would pay SMI's shareholders an additional "earnout payment" equal to approximately 10 times that additional revenue.
7. The Crown alleges that contracts entered into between CBA and SMI in December 2013 ("The McAfee deal" comprising TDS 19 to 21) and January 2014 ("The Pivotal deal" involving TDs 17, 22 to 29) were facilitated by the accused and Mr Hunter to enable SMI to increase its revenue during the earnout period above US$20 million, to the benefit of SMI shareholders who received an earnout payment of over US$98 million. The recipient of the largest proportion of that payout was Mr Pulier.
8. The Crown case is that Mr Pulier made payments in 2014 via a Mr Goldstein, or a corporation registered by him ("ACE Inc.") to both the accused and Mr Hunter as a reward for their ensuring the contracts with CBA were made within the earnout period; that the 10 payments subject of the Counts on the Indictment were received without the knowledge of CBA and were received corruptly by the accused (in respect of Counts 1 to 7); and that the accused aided and abetted Mr Hunter to receive corruptly the payments subject of Counts 8 to 10.
9. The evidence in the trial concluded on 26 March 2024. The trial was adjourned to allow the parties time to prepare written submissions. The addresses were heard on 9 and 10 April 2024.

Evidence of William Deckelman Junior

1. Mr Deckelman is the Executive Vice-President and General Counsel at DXC Technology Company which is an amalgamation of two former computer companies namely, Computer Sciences Corporation ("CSC") and HPE Enterprises. He gave evidence about the acquisition by CSC of SMI in October 2013. Exhibit F was an email dated 21 October 2013 attaching documents relevant to the contract including an exclusivity letter agreement dated 16 October 2013, this was referred to as a term sheet. Annexed to it was a sales "pipeline" schedule prepared by Salesforce which outlined the potential revenue earning contracts for SMI.
2. Mr Deckelman gave evidence of the agreed purchase price of US$291 million together with an earnout period of 13 months from 1 January 2013 to 31 January 2014 which would allow for additional consideration depending on revenue earned by SMI. The earnout payment was in respect of revenue in excess of the US$20 million threshold with a maximum earnout opportunity of US$135 million. The earnout payment was calculated by way of a multiplier applied to revenue recognised in excess of US$20 million. The multiplier amount was a factor of approximately 10 applied to each dollar in excess of US$20 million revenue.
3. The purpose of the Salesforce pipeline was to give CSC the ability to understand how large the pipeline was when they were negotiating the maximum cap on the earnout payment. It identified five projects which were nominated as being in the pipeline for SMI with respect to CBA.
4. The witness identified the EPA executed on 29 October 2013 (Exhibit E, Vol. 1, pg.325).
5. The witness identified at Exhibit E, pg.467 a stock register for the equity shareholders in SMI indicating how many shares and calculating the percentages of entitlement to the earnout payment. The schedule indicated a payment to TechAdvisors LLC ("TA") of US$5,618,331.86. The earnout payments were made in February 2014, following validation of the contracts in this case by CBA.
6. The witness gave evidence of the total earnout payment was US$98,034,058 which included recognition of revenues by SMI from the McAfee deal and the Pivotal deals with CBA. The revenue recognised from those contracts was US$5,022,542 and US$5,404,084 respectively.
7. In cross-examination Mr Deckelman confirmed the contractual negotiations leading to the EPA. The initial terms of sale dated 9 September 2013 did not include an earnout payment. He agreed that an earnout provision first appeared in a term sheet dated 16 October 2013 and subsequent to the EPA dated 29 October 2013, CSC had agreed to increase both the consideration in the EPA and the cap on the maximum earnout payment.
8. Mr Deckelman agreed that the Pivotal deal was not recorded in the Salesforce Pipeline document, nor was the McAfee agreement. He gave evidence that both transactions were added to the earnout late in January by Mr Pulier. Neither contracts were in the Salesforce Pipeline report and therefore not contemplated by the EPA.
9. Mr Deckelman gave evidence that the two transactions were included after discussions between CSC and Mr Pulier. He agreed that the EPA did not contemplate their inclusion however CSC had agreed to it and once the CBA agreed it became part of the earnout.
10. Mr Deckelman was challenged about that evidence as follows:- Q. That's right, but the question is, this document does not refer to the earn out in any way, does it? A. I believe you're correct. Q. It doesn't ask for confirmation that the contracts generate revenue capable of recognition pursuant to the earn out clause, does it? A. No. Q. That wasn't the purpose of this document; correct? A. Again, the purpose of the document was to do exactly what was contemplated by the purchase agreement, to validate the accounts were validate agreements with the customers that ServiceMesh claimed it had signed contracts with, and, here, to my point earlier, January 28, very much last minute, as I recall, these documents were signed with CBA and this is what we asked to have certified. Q. But why, when the earn out provision did not provide for recognition of those contracts in terms of the calculation of the earn out revenue? A. But because the parties, obviously, between the date of the equity purchase agreement and closing had added these contracts. In fact, Mr Pulier and CBA, Mr Waldron, are the ones who signed these agreements and wanted them included as part of the earn out with the confirmation from CBA that they were valid contracts. We agreed to include them in the earnout and that's exactly what the documentation shows. Q. Firstly, Mr Waldron didn't sign any of these contracts, did he? A. I don't know. I meant the letter. I believe he signed the letter. Q. You said, "The parties obviously agreed." What do you mean by the word "the parties obviously agreed"? A. Because, again, you took me through the document at closing and it's clear that these agreements were included in the calculation of the earn out. In fact, as I recall, this is the way the $20 million threshold was met and this is why the earn out was paid in the first place. So, clearly, the shareholders were happy to have it included and it was agreed and it was done and documented. Q. Can I suggest to you that you're assuming what happened since the payout included contracts which were not contemplated as being recognised in the earn outs revenue calculation? A. During the equity at the time of the equity purchase agreement, that's true, but there's no other explanation as closing that it was included and it was agreed to by the parties and they took the money. So, it was clearly an agreement that was done as part of closing. Q. Might another explanation simply have been an error on the part of CSC accounting? A. No. Q. Why not? A. Absolutely not, because we had so many auditors and there was so critical for both - for all the parties involved, that it was very, very carefully prepared and reviewed and you're saying that CBA mistakenly sent us the letter confirming these agreements? I don't think so.
11. Mr Deckelman gave evidence that the CEO, CFO and himself were involved in the process of recognising the two sets of contracts. He gave the following evidence:- Q. Why did CSC agree to recognise these two sets of contracts? A. Because we were told they were valid contracts with an important customer, CBA. And CBA, through Mr Waldron, represented to us that these were valid contracts. It was during the earn out period, we were willing to accept those even though they weren't contemplated back at the time of the purchase agreement, it was part of a - a fair process and a careful process that was audited and so, we agreed to do that.
12. He then gave the following evidence:- Q. You agreed before that it was an important decision for CSC to agree to pay effectively gratuitously - my word, not yours $100 million; is that right? A. It is definitely your word, I would disagree with that. It was - yes, again, I'll I'll repeat what I said: it was a business decision to accept the CBA contracts that were represented to us to be valid contracts with CBA, and yes, that allowed for the earn out to be paid. We were willing to do that, that was a fairly negotiated, that was part of the - the deal, and we accepted to do that. And it was a perfectly valid business decision to do it. Q. And when did that decision take place? A. Sometime around January 28 when the contracts were signed with CBA.
13. It was put to Mr Deckelman that he was reconstructing what must have happened leading to CSC paying out on the two contracts which were not contemplated in the acquisition agreement which he denied.

Evidence of Ian Mark Narev

1. Mr Narev was employed by the CBA as Managing Director and Chief Executive Officer from December 2011 until April 2018. He gave evidence that Mr Michael Harte was employed by the CBA as Chief Information Officer. The total number of people within his area of responsibility was in the magnitude of 5,000, including the accused and Keith Hunter.
2. Mr Narev gave evidence that Mr Harte was brought into the bank to drive innovation and that he promoted a move in the bank to a cloud computing platform.
3. Through the witness Exhibit 3 was tendered, the Commonwealth Bank of Australia Statement of Professional Practice. It included, under the heading "Outside Employment and Appointments" the following:- "You may obtain supplementary employment of occupations outside the Bank, or hold honorary positions in clubs, charitable organisations etc, provided that performance of your Bank duties is not affected adversely, such employment or occupation does not in any way reflect adversely on the Bank and does not conflict with your duties to the Bank."

Evidence of Mr Andrew Goldstein

1. Mr Goldstein gave evidence that he was President of a corporation ACE Inc., which was incorporated in the State of Delaware on 9 May 2014. It subsequently changed its name to ACE Foundation.
2. Mr Goldstein had conducted a search for documents being Statements of Work and invoices associated with Digisol and the accused. He provided a list referring to 13 files in a folder named "Waldron/Digisol". Another folder named "Hunter" contained 4 files. He provided a schedule of documents which became part of Exhibit N in the proceedings. These comprised Statements of Work dated 21 July 2014 and 1 December 2014 from the accused, priced at $1.4 million and $1.05 million respectively, and invoices dated July 21, August 4, September 1, October 6, November 1 and December 1 and 15, 2014 on the letterhead of Digisol, a business name used by the accused. Also attached were Statements of Work for Keith Hunter dated 5 May 2014 (two), June 4 2014, and July 11, 2014 together with invoices dated 4 and 5 August 2014 and August 22, 2014 for the sums of $330,000, $330,000 and $150,000 respectively (a total of $810,000).
3. In cross-examination Mr Goldstein confirmed that he was requested to provide all records pertaining to Jon Waldron and Keith Hunter to investigators through US authorities. He did not produce any emails and gave evidence that he deleted all the emails back in 2015. He gave the following evidence:- Q. You produced some documents, however; correct? A. That's right. Q. Can I ask you where you found those documents? A. I have them in a folder on my laptop that I had copied retained from the computer that I was using back in 2014. Q. When you say you copied them off a computer, were they stored in a directory, were there other things in that directory, what can you tell us about the location where you found them? A. Yeah, there is a directory called Ace Subdirectories for all of the vendors and other material to, and so it was very easy for me to find the subdirectory that had digital material. Q. Can I ask you how would you describe your recordkeeping back in 2014? A. Inconsistent. … Q. You say inconsistent, what do you mean by that? A. Well, I was the financial records, the records of operational spending were excessively detailed, postage, things like that, for Ace's operations, but the records for important stuff sometime - I just wasn't good about keeping or organising that stuff.
4. In re-examination Mr Goldstein gave the following evidence:- Q. You said in answer to one of my learned friend's questions about why it was that you weren't able to retrieve emails and that you deleted all those emails back in 2015. A. Mm hmm. Q. Why did you do that? A. I was nervous about - I understood that there was an investigation going on and I was nervous about what it meant by me and - so I rashly deleted them.

Evidence of Mr Keith Robert Hunter

1. Mr Hunter was employed by the CBA in July 2011 and had about 25 years' experience in technology operations. He gave evidence that Mr Michael Harte had a strategy to move the CBA's computing to cloud computing thereby reducing the overall cost of its computing requirements. He became the head engineer on the CBA's cloud computing environment and identified Mr Bradley Twynham as SMI's Australian salesman.
2. Mr Hunter gave evidence of his regular contact with Mr Eric Pulier which concerned the contractual arrangements between SMI and the CBA. He gave evidence that by September or October 2013 he knew that Mr Pulier was in talks with CSC for the acquisition of SMI and that Mr Harte had expressed concerns about the company buying SMI continuing to support CBA.
3. Mr Hunter identified a diagram (Exhibit E, Vol. 5, pg.1966) which he had drawn for investigating police on 31 March 2016 which represented a document Mr Harte gave to him during a discussion about the type of compensation they should receive from SMI by helping them grow the company. He gave evidence that he showed the document to the accused and then travelled to the United States where he showed the document to Mr Pulier. He told Mr Pulier that he had been discussing compensation with Michael Harte. He left the original diagram with Mr Pulier who said he would take it under consideration.
4. Mr Hunter agreed that on 31 October 2013 the accused sent an email with the heading "RE: CSC acquires ServiceMesh" (Exhibit E, Vol. 3, pg.1328). On the same day the accused communicated that SMI providing McAfee software to CBA will increase SMI's revenue by $7 million dollars.
5. Mr Hunter gave evidence that from time to time Mr Pulier had made comments such as "I'm going to help you guys" or "I'm going to look after you guys" in the presence of the accused.
6. Mr Hunter gave evidence that he was aware that there would be a benefit to SMI as a consequence of signing the procurement contracts TDs 17 and 22 to 29 on 25 January 2014. He had discussions with Mr Waldron about signing those contracts to ensure they met the time period for the earnout.
7. Mr Hunter gave evidence that there was some urgency to execute the McAfee deal prior to the end of December 2013. Mr Hunter had received an email on 6 January 2014 in respect of Mr Pulier getting nervous about "the remaining TDs" (the Pivotal TDs). Mr Pulier had told him that "time is running out."
8. Mr Hunter gave evidence that in 2014 he and the accused had discussions with Mr Pulier about what type of compensation they would be receiving. He gave evidence that the accused had told him that following a meeting with Eric Pulier, he would be receiving US$750,000. He gave further evidence that the accused had inferred that he, the accused and Mr Harte would each be receiving the same amount. He gave further evidence that he had expected the amount would be more, around a million dollars and that he had expressed disappointment at the final number "because all we've been through and the risk we put ourselves at."
9. His first payment was received through the accused who told him that he had received $100,000. From that amount $20,000 was sent to his sister in the United States. He gave evidence that he received two further payments of US$300,000 each and then identified a transfer to his Bank of America account on 7 August 2014 in the sum of US$330,000 from ACE and two further transfers on 28 August and 24 September 2014 of $US149,990, totalling US$630,000. Together with US$20,000 transfer to his sister the total he received was US$650,000. He gave evidence that he never received the additional US$100,000 to make it up to US$750,000.
10. Mr Hunter gave evidence that the accused had told him that he was going to send Andrew Goldstein documents about working on how to build a data centre in a box so that it was transportable and self-contained. The documents were work orders and they would do an invoice for payment. When asked whether he had done any work in support of invoices that Mr Waldron sent on his behalf he said there were discussions on the topic and reading some documentation but that the time spent was minimal namely a "couple hours".
11. Mr Hunter gave evidence that he was sending the documents to ACE because ACE needed backup information to process the payments which he understood was for his compensation from the sale. He and the accused had discussions about the payments being for compensation. He gave evidence that he never did any work for ACE. Nor did he send any documentation to them.
12. Mr Hunter gave evidence that during his interview with CBA investigators he had told them that payments received were for consulting work. He had provided that explanation after he, the accused and Eric Pulier had discussed it.
13. The documents sent by him to ACE Inc. are part of Exhibit G. The accused had told him that he should not share the documents with the CBA's investigators.
14. Mr Hunter gave evidence that during his second interview with the CBA investigators he was told that they had discovered through forensic examination that the creation of the documents post-dated the first interview and he was escorted out of the building. He agreed that he did not tell them the truth about his involvement with ACE during the second interview. His laptop and iPad were seized and Exhibit H comprised messages between himself and the accused on 17 December 2014.
15. Exhibit K was a 3-page Statement of Work dated 20 June 2014 sent to him by the accused when he asked for something to use to make his own Statement of Work. Mr Hunter gave evidence that his bank account information was conveyed to ACE by him providing it to the accused who then sent it on to ACE.
16. Exhibit L were agreed facts on which Mr Hunter was sentenced on 20 December 2016.
17. Mr Hunter was cross-examined extensively. He conceded that he gave the CBA a misleading statement in December 2014 and that he created and modified fictitious Statements of Work and emails to mislead CBA investigators.
18. Mr Hunter agreed that it was not right to say that the transaction with the McAfee TDs involved the acquisition of unnecessary products or services. He gave the following evidence about the Pivotal TDs:- Q. Again, it would not be right to say that you used your position to purchase unnecessary products and services from ServiceMesh in relation to the Pivotal TDs; correct? A. No, I mean, we were going to be using their product and we were going to be using ServiceMesh to help us integrate it. Q. I suggest that even though you thought that these transactions, that is, McAfee and Pivotal, were of benefit to the bank, you were prepared to be sentenced on the basis that the transactions were in respect of overpriced and/or unnecessary products and services; is that not right? A. At the time, I - at the time, I, quite bluntly, I was not in a very good - great state of mind and I might have misunderstood what was in that, but I would say that, as far as overpriced, it's hard for me to say whether it was overpriced or not. So, I would have to reply yes to you on that, sir.
19. Mr Hunter agreed that he had received a discount on his sentence on the basis of future assistance namely, that he would give evidence in the trial against the accused. He was on medication for anxiety and depression but at the time of his interview by CBA investigators he was on anti-depressants but not suffering from anxiety. He agreed that his ability to remember facts and details was at various times affected by his physical and mental state.
20. Mr Hunter was asked about the six statements he had given to the police. He acknowledged that proceedings had been brought against him in the Central District Court of California and that he was contractually bound not to deny directly or indirectly any of the allegations contained in a document resolving those proceedings (Exhibit 8).
21. Mr Hunter was cross-examined on his work history and experience and his recruitment by the CBA. He was employed to assist Mr Harte to build and expand a cloud computing environment and he had a significant budget of $1.2 billion. He gave evidence that in 2013 Mr Harte was trying to break up the CBA's reliance on Hewlett-Packard, and the removal of the McAfee security software from the HP contract and its assignment to SMI was consistent with Mr Harte's goals.
22. Mr Hunter was cross-examined about his evidence of a meeting he held with Mr Harte in October 2013 when Mr Harte drew a diagram. He agreed the meeting could have been earlier or later, and that the purpose was to discuss bank business generally. The issue of compensation was discussed towards the end of the meeting. He gave the following evidence:- Q. How did he introduce it to you, that is the topic of compensation? A. Well, we were talking - we were talking about the options that could happen with - with the sale and/or going public of ServiceMesh and that's where it came up. Q. I'd like to ask you some questions about that. You talked about the options in the event of a sale or going public of ServiceMesh. Is that right? A. Correct. Q. Can I infer that at that stage, you didn't know that ServiceMesh was being acquired by CSC? A. That's correct. Q. Because you were discussing with Mr Harte what might happen if ServiceMesh were acquired or decided to list on a stock exchange. Is that right? A. Correct … Q. Coming back to the options, you and Mr Harte were discussing who might be potential corporate suitors for ServiceMesh. Is that right? A. Yes. Q. What was said then, after those names were mentioned? A. Again - again, it was a conversation about the different vendors out there that certainly would have the capability of purchasing them and - and ones that would want to, you know that are more expanding into the cloud environment in their own worlds, supporting cloud environments in their own world. Q. So, the conversation wasn't so much about protecting CBA, but rather speculation as to who might be a good fit for ServiceMesh. A. Correct. … Q. How did the conversation develop. A. Nothing more around that, but that - that there was those options. Q. Who introduced the topic of compensation? A. Michael Harte. Q. How did he introduce it? A. Just that when you go to the States, you need to sit with Eric Pulier and discuss compensation for all that we have done for the organisation and that's when he drew the chart for me. Q. This was something that took you by surprise, was it? A. Yeah, the whole drawing the chart and all that, yes. Q. Why did it take you by surprise? A. Only because, you know, he was being more direct about it., for, you know for me to talk to Eric Pulier and I've never done something like that, so I was sort of taken aback. Q. You said, I think, that the compensation was to be for "us". A. Yeah. Q. Is that the word that he used? A. Correct. Q. Did he use your name specifically? Did he say that you should be compensated, Keith Hunter? A. We didn't really get into - I can't remember directly, but when he said, "us", I mean, it was always thought of that there was a few people at CBA that should get something. Q. I'm asking specifically about what Mr Harte said. A. And, you know, I cannot remember if we discussed names or not. Q. When he drew the diagram, what did he say to you? A. He just said that this is an example that, you know, if depending on what ServiceMesh provide - provides and how much help we give them - we have given them to - with certain sales prices, the compensation for us should go up also. Q. At the time that this was discussed, would it be right to say that Mr Harte was engaging in hypotheticals by saying if the sale is 100 million, this must compensation should flow; if it's 200, that much compensation should flow. A. Correct. Q. In other words, he wasn't operating on a specific sale figure at that time, correct? A. Correct. Correct. Q. That's because I suggest the sale of ServiceMesh to CSC had not yet been publicised. A. Correct … Q. You told us beforehand that he said to take the graph to Mr Pulier when he went to the United States. Is that right? A. Correct. Q. Was it already clear that you would be going to the United States before this meeting you had with Mr Harte? A. Yes. Q. Did Mr Harte know of those plans, as far as you're aware. A. He always knew when I would be travelling, yes, sir. Q. When was it after this meeting that you travelled to the United States? A. A short time period after that. I cannot remember the dates. Q. You said in your evidence in chief, you spoke to Mr Waldron about the graph. Is that correct? A. Yes. Yes, sir. Q. That was before you travelled to the United States, you say? A. Yes. Q. You showed him the documents or the diagram, correct? A. Yes, sir. Q. What did you say to him about the diagram? A. Just that Michael had drawn it and he wanted me to have a conversation with Eric Pulier. Q. But what did you tell Mr Waldron the diagram meant? A. I told him exactly what I just said, it was, you know, sale price versus compensation. Q. But did you say that you had spoken to Mr Harte, firstly? A. Yes. Q. Did you say that Mr Harte had drawn the diagram? A. Yes. Q. Did you say that Mr Harte had told you to speak to Mr Pulier? A. Yes. Q. Did you say to Mr Waldron that this represented compensation to us? A. Yes. Q. Did you use the word "us", or did you say something different? A. I'm not positive I said but "us" when in that per that conversation, always referred to Jon Waldron, Keith Hunter, Michael Harte.
23. He gave evidence of his conversation with Mr Pulier as follows:- Q. But why do you say that you infer that it was those three people that was meant by the word "us". A. Because we had always we had a few conversations around it, Jon Waldron, myself and then, you know, Michael and myself. Q. That was based on conversations, you say, that were had with Mr Pulier. Is that the case? A. Correct. Correct. Q. What did Mr Pulier say to you that led you to have these discussions and infer that "us" meant you, Waldron and Harte? A. He always - it was very light hearted. He always said that, "we'll take care of you." You know, "you, Jon and Michael", that type of thing. Q. You suggest that he said specifically, "I'll take care of you, Jon Waldron" or "I'll take care of you, Keith Hunter" or "I'll take care of you, Michael Harte". Is that the case? A. He said, you know, "I'll take care of you guys and, you know, yourself, John Waldron and Michael Harte", and he also mentioned a gentleman by the name of Hans Gyllstrom.
24. Mr Hunter was cross-examined about his evidence concerning the meeting that took place with Mr Pulier at his office in Santa Monica in which he had raised the diagram drawn by Mr Harte with Mr Pulier. He was taken to evidence he gave in the committal proceedings in which he admitted he accepted a bribe from Pulier to direct work towards SMI. He had given evidence to the effect that the first conversation that he had directly with Pulier was around the time of the signing of the McAfee contract with SMI. That took place in December 2013.
25. Mr Hunter had also given evidence in those proceedings that the conversation with Mr Harte took place three weeks before that. He gave evidence that it was "somewhere around that time frame" which he clarified as "November/ December timeframe".
26. Mr Hunter agreed that he had given evidence that he had a recollection of the conversations however that his timing could be off. In his first statement to police signed on 31 March 2016 Mr Hunter told police he had a recollection of the conversation with Mr Harte and his office at Darling Harbour in 2013 "around the time of the acquisition". That acquisition had taken place in October, and it had been announced at the end of October.
27. Mr Hunter was then taken to evidence that he had travelled to the United States in December 2012 with Mr Waldron and had met with a number of companies including Dell and EMC. Exhibit 14 was an email from Mr Waldron relating to their travel to the USA.
28. Mr Hunter gave evidence that had no memory of exactly when his meeting with Mr Harte took place. At the time he raised the issue of compensation with Mr Pulier he gave evidence that Pulier was talking about either selling SMI or taking it public.
29. He was challenged about that evidence as follows:- Q. And can I suggest to you that those conversations took place at the end of 2012 or the start of 2013; do you agree with that? A. Probably some of those comments happened then, yes. Q. Well, can I suggest you gave this evidence at the committal hearing, page 35, line 31. Q. Again, you told us beforehand, did you not, that the conversations with Mr Pulier about being taken care of took place at the end of 2012 or the start of 2013; correct? A. Correct. Q. You told us that the conversations you had to use your expression amongst yourselves, they took place at the end of 2013; agreed? A. Correct. Q. They took place approximate in time to the closing of the McAfee deal? A. Correct. Q. So can we agree, can we not, that there was about a year between the being taken care of conversations and the conversations amongst yourselves? A. Correct." And do you remember giving that evidence? A. Yes. Q. Was that evidence truthful? A. Yes.
30. Mr Hunter gave further evidence that he felt uncomfortable raising the diagram with Mr Pulier and told him that he felt uncomfortable "but Michael asked me to discuss it".
31. Mr Hunter was then shown the diagram Mr Harte had drawn and gave the following evidence:- Q. When you handed the document to Mr Pulier, did you say anything? A. I told I explained what it what it was reflecting, you know, based on the sale price going up by, you know, hundreds of millions across the bottom and applicable - Mike's idea - Michael's idea about applicable compensation. He looked at it and he talked he responded that he would take it under consideration and let us know. Q. You certainly didn't discuss percentages or money values beyond your explaining to him what the graph meant. A. Correct. Q. It's certainly not the case either, is it, that Mr Pulier came back with a counter proposal, is it? A. No. Q. He just A. Not until after the sale when he informed of the amounts. Q. At the time that you met Mr Pulier though, there was no confirmed acquisition of ServiceMesh known to you. Is that not right? A. That is correct.
32. Mr Hunter was cross-examined about inconsistencies between his evidence and the proffer statement made to the US authorities including the FBI.
33. The proffer document had included, "Harte explains that CBA could help SMI generate additional revenue that would increase the amount of the earnout incentive SMI received from CSC". It was put to Mr Hunter that was incorrect. He answered by stating:- A. By earnout, I guess I was referring to the sale price. I apologise.
34. He repeated his evidence that in the conversation with Mr Harte, it was all about the sale price. He had given evidence at the committal proceedings that the potential rewards to him and others was directly proportionate to the sale price. He gave the following evidence:- Q. And I suggest that Mr Harte did not say to you that you ought to increase revenue by sending further contracts to the CBA; do you agree with that? A. He didn't say anything like that, no, at this you know, we didn't talk to that degree on it. Q. Was that your assumption as to what he meant? A. Not necessarily. Q. Well, what did you talk about in terms of increasing the value of ServiceMesh? That is, you and Mr Harte A. That - that - the sale price of ServiceMesh was you know, that do everything we need to do with them if you know, any work we're going to do with them, let's do it so that it will help their revenue base. Q. So Mr Harte said to increase their revenue base; is that right? A. No, to help them increase their revenue base but to do you know, I mean, any work that we needed to do, you know, we should move forward with it.
35. The proffer statement read "Harte explained to Hunter that Pulier had devised a formula to pay Hunter and Harte for assisting SMI to achieve the earnout incentive from CSC". Mr Hunter agreed that statement was incorrect and no formula was ever discussed between him and Mr Pulier when they met in Santa Monica. He gave evidence that it was not until well into 2014 that a formula was mentioned by Eric Pulier and Jon Waldron in different conversations. It was in that conversation that he was led to conclude that he would be entitled to $750,000. Where the proffer said there was a conversation about SMI generating additional revenue "during the meeting" that was incorrect.
36. Mr Hunter was cross-examined about his statement to police signed on 31 March 2016. In [18] of that statement, he referred to the meeting he had with Mr Pulier when he showed the diagram drawn by Mr Harte. His statement read, "We were in multiple conversations about the CSC deal". He gave the following evidence:- Q. So do we infer from that that you knew that ServiceMesh was going to be purchased by CSC at the time that you spoke to Mr Pulier? A. I must have. Yes, sir. Q. Did you also know that CSC was going to purchase ServiceMesh when you had the meeting with Mr Harte? A. I would have had to because that was the same timeframe. Q. But you told us yesterday, did you not, that when you spoke to Mr Harte, CSC wasn't even mentioned when you were considering the possible suitors for ServiceMesh? A. And again, when these conversations happened and all that, it was very hard for me to remember dates and timings and all of it since it was so long ago. You know, I would all I can assume that this one is correct but I'm assuming so Q. You don't know whether your evidence yesterday is correct or whether your statement is correct? Is that the position? A. Compared to this one, I don't know exactly at this point. Q. Just to be clear, I'm not asking you about dates, I'm asking you about contents of the conversation. Are you now saying you don't know whether CSC was discussed with Mr Pulier or not? A. Exactly. Q. And are you saying you don't know whether CSC was discussed with Mr Harte on the occasion when you say he drew the diagram? A. Correct.
37. It was put to Mr Hunter that at the time of his conversation with Pulier about the diagram, Pulier told him about the earnout provision. Mr Hunter gave evidence that he did not recall whether it was at that meeting but agreed that it was consistent with his earlier statement i.e., Pulier told him about the earnout provision in the same meeting.
38. Mr Hunter agreed that in order for the CBA to implement its plan of bringing security software into the cloud environment, the involvement of SMI was necessary. He also agreed that was one of the driving factors for using SMI in the provision of the licenses for the McAfee software. He agreed that in his deposition he had given evidence that McAfee had indicated it wanted to close out the deal before the end of the fiscal year. He also agreed that it was consistent with commercial practice in 2013 for companies to be incentivised to conclude contracts prior to the end of their financial years and that by doing so a benefit to the CBA could be realised. It was put to Mr Hunter that the CBA received a $1 million discount on the McAfee contract however he could not recall that. He had given evidence in his deposition that it was a good deal for the CBA, with which he agreed.
39. Mr Hunter gave evidence that Mr Harte had been putting pressure on him to implement Pivotal as soon as possible. It was put to him that the pressure started early in 2013 however Mr Hunter could not recall the timeframe. He recalled giving evidence previously that Mr Harte's view of Pivotal had been validated as Pivotal had become a transformative product and was now widely accepted as a market leader worth billions of dollars.
40. Mr Hunter agreed that he had previously given evidence that both Mr Harte and Mr Waldron wanted to integrate Pivotal's PaaS technology into the Agility Platform.
41. Mr Hunter gave the following evidence about Mr Waldron working with Mr Pulier:- Q. Mr Hunter, you said I suggest in the deposition, he, that is Mr Waldron, was putting time into working, talking to Mr Pulier. Why did you say that? A. Mr Waldron told- Q. I'm sorry? A. Mr Waldron and I had conversation on it. You know, we talked about it. He told me. Q. You also said that he was talking to "Pulier people", was the expression recorded at least in the transcript. Do you know what you meant by "Pulier people"? A. No, just in general. Q. When you say, "just in general", you're talking about people other than Mr Pulier. A. Correct. Q. How did you become aware that Mr Waldron was talking to people other than Mr Pulier? A. Again, Mr Waldron, you know, told me. Q. What did he tell you about the amount of time he was spending on this type of activity? A. I mean, he'd he'd be in contact with them, you know, from what I was aware, you know, a couple of times a week, maybe.
42. Mr Hunter agreed that he had given evidence in his deposition in relation to the payments made by ACE Inc., to the effect that Mr Pulier wanted to move all monies outside of ACE and make the payments that were necessary due to the fact that there were tax-related issues. That was a matter he actually discussed with Mr Waldron.
43. Mr Hunter agreed that Mr Harte left CBA around mid-year 2014 and that he looked for other employment opportunities including potentially working for CSC. Mr Hunter agreed that he had discussed Mr Pulier's not-for-profit ventures with him and that he had expressed interest in what ACE Inc. was doing. He gave the following evidence:- "Q. When you met Mr Pulier in April 24 to discuss these other ventures of his, I suggest you didn't ask him for money that you thought that was owed to you as a result of the sale of ServiceMesh, did you? A. Pardon me? No, no, that was too late."
44. Exhibit 20 was an email from Brad Twynham to Mr Hunter dated 2 April 2014 which contained a reference to the discussion Mr Hunter had with Pulier about employment with CSC.
45. Exhibit 21 was an email chain between Messrs Hunter, Twynham and Pulier dated 12 April 2014 in which he advised Pulier that they could not work anything out. He agreed that was because he wasn't happy with the possible salary offered to him. He was then asked:- Q. Now, can I suggest to you that when you spoke to Mr Waldron about being unhappy about the figure $750,000, I suggest that you were, in fact, talking about the possible income you might make from working at CSC? A. No Q. Isn't that the case? A. that was not - no, sir.
46. The defence case was then put to Mr Hunter as follows:- Q. I suggest that when you say that Mr Waldron was involved in conversations that either he, you and/or Mr Harte would receive effectively bribes for showing favour to ServiceMesh, that that is false. Do you agree or disagree. A. No. I disagree. Q. I suggest to you that it is also false when you say that Mr Waldron was involved in creating what are effectively sham records to explain payments that you say were received as bribes. That's false, isn't it? A. I disagree.
47. In re-examination, Mr Hunter clarified his evidence concerning Mr Waldron's contact with Pulier in 2014 as follows:- Q. It seems to be about in 2014 Mr Waldron's contact with Mr Pulier and his people, and you said that you were aware, through conversations with Mr Waldron, that he was talking with Mr Pulier and his people a couple of times a week. Do you remember saying that? A. I do. Q. Do you have any recollection about what it was that Mr Waldron was talking to Mr Pulier and his people about? A. I do not. Q. You said that you'd never done any work for Ace that supported the payments that were made to you. Do you remember giving that evidence in chief? A. Yes, I apologise. I didn't understand we were talking about Ace, sir. Q. Did you ever receive any information from either Mr Waldron or anybody else that he was doing work for Ace? A. Only that they were talking about different projects and going forward, sir. Q. You were aware that, in addition to payments you received, Mr Waldron also received substantial transfers from the company, Ace? A. I do. Q. At any time was it ever communicated to you by Mr Waldron or anybody else that those payments were for work done or to be done for Ace? A. No, sir.

Evidence of Christopher Kelada

1. Mr Kelada first commenced employment with the CBA in around 2008 and is currently in an Executive Management role as Head of Cloud Business Office. When he started at the CBA Michael Harte was the CIO of the CBA and he described him as "an evangelist for cloud technology very early". Mr Kelada became aware of SMI around 2009/2010 and was introduced by Mr Harte to Eric Pulier and Frank Martinez from SMI.
2. From around 2010 Mr Kelada worked under the supervision of the accused who was leading a team driving the cloud strategy for the CBA. SMI had a product called Agility Platform and the CBA was working very closely with SMI on evaluating this product and getting it into the bank's environment in a "proof-of-concept" type of capacity. This was a testing phase before a formal agreement was entered into for the purchase of the product.
3. Mr Kelada described Agility Platform as a tool that allowed automation and self-service to allow the bank staff to deploy technology into cloud environments. It was a software program that allowed the CBA to take advantage of third-party hardware.
4. Mr Kelada gave evidence that in 2012 the accused became General Manager of IT engineering and Mr Kelada's role in that team was Executive Manager of Technology Platforms, managing a portfolio of IT services relating to CBA's use of cloud technology.
5. Agility Platform was the first piece of software purchased by the CBA from SMI. It was the principal way in which the CBA engaged in the use of cloud technology.
6. Mr Kelada gave evidence that the McAfee deal and TDs 19, 20 and 21 were outside his area of responsibility being within the security domain. The products sold by way of TD 21 known as Cloud Secure was never used by CBA.
7. Mr Kelada gave evidence about the Pivotal deal involving TDs 17 and 22-29. He drew a diagram explaining the products relating to the cloud infrastructure which became Exhibit M. He gave evidence that he became concerned about each of the products subject of those TDs and that there were limitations in the purchase of migrating the software in each product as at 29 January 2014. He gave evidence that the bank had not made decisions to actually use or deploy the products and it was too early to be making a decision to purchase them. Further, it would have been an option to conduct a proof-of-concept in relation to each software product.
8. Mr Kelada gave evidence that there was no utility to the CBA in purchasing the products at that time. Some of the software related to applications which the CBA had not entered into licensing agreements for and did not thereafter, therefore the products were never adopted for use by the CBA.
9. Mr Kelada gave evidence that he had been asked by the accused to review the TDs before the contract was entered into by the CBA. He gave evidence that he expressed to the accused his concern about purchasing the products given that they were yet to make decisions around deploying the technologies in the bank. He stated, "it seemed a bit too early to be doing so". Those concerns had been expressed to the accused face to face and the accused had asked him to "think about whether there was value in these types of capabilities being added to the products from an industry perspective, so not only would they be good for the bank, but they would be good for a cloud management tool generally".
10. Mr Kelada gave evidence that he accepted the accused's explanation and cooperated, but it did not change his view about the products. On 23 December 2014 he sent an email to Tom Pennington and Nick Giles (Exhibit E, Vol. 5, pg.1853) in which he recommended each of the products subject of the TDs 17, 22-29 not be renewed. He gave evidence that no use had been made of each of the products subject to those TDs and none of the products had ever been put through a proof-of-concept evaluation. At no time up until 23 December 2014 had he had any conversations with the accused about these products.
11. In cross-examination, Mr Kelada denied that he was involved in concluding contracts with ServiceMesh but he was involved in contract reviews. This was mostly the technical focus. He agreed that the engagement with SMI seemed to be less structured compared to other suppliers to CBA.
12. Mr Kelada was questioned about the transaction document which related to adapters and blueprints for the SMI Agility Platform. The TDs relating to security software were not within his portfolio. His understanding of TDs 19 - 21 was that they enabled CBA to purchase McAfee software licenses at a lower price and this was part of a cost saving initiative on the part of the CBA. At that time there was a big focus on productivity and all areas of the bank targeted to save and reduce costs.
13. Mr Kelada gave evidence that he only heard of the product Cloud Secure "after the fact" which meant after the contract with SMI in relation to adapters and blueprints had been concluded. He gave the following evidence:- Q. You knew at the time, that is back in 2013 I suggest, that the bank was using agility platform, was it not? A. Yes, it was. Q. I suggest you also knew that the bank was using McAfee; correct? A. Yes. Q. Was there a management tool called ePO? A. Yes. EPO is part of the McAfee product suite, I believe. Q. Can I suggest that the Cloud Secure permitted the agility platform solutions to integrate with McAfee's management tool, ePO? A. I believe that was the intention, yes. Q. I think ultimately it's the case, is it, that the Cloud Secure software was not deployed by the bank; is that right? A. That's correct. Q. Was it tested by you or your team? A. I don't believe so, no. Q. Is the reason for that that there had been a custom script which had been created by the bank which permitted management of the McAfee software? A. That's right. So we had already integrated that capability in our deployment because we need to deploy McAfee to all of the - all of the virtual service. So we had to solve that problem and we did, and then later on obviously this feature was available in the product.
14. Mr Kelada agreed that when he was working as Executive Manager of Technology Platforms, his team was a busy with a lot of parallel projects. He agreed that Cloud Secure was not high on his list of priorities. He agreed that it was not the case that the software would not function, but he was busy doing other things of the time.
15. Mr Kelada gave further evidence that the CBA was SMI's largest customer and as a result of their relationship they were able to provide SMI with feedback around features of the applications which would be suitable for the CBA and other customers similar to it. He agreed that it was in the bank's interest for SMI to improve its products and to acquire additional customers which would ultimately lead to a higher quality and maturity of their solutions.
16. Mr Kelada agreed that in order for there to be integration between Agility Platform and PaaS, it was necessary for further programs to be written to provide for that functionality. Such programs included "adapters and blueprints". He agreed that blueprints provided for automation of repetitive processes and adapters provided for an interface between two sets of technology. Integration between Agility and PaaS did not exist in the products in 2013. He agreed that was the type of functionality described in the TDs 17 and 22-29.
17. Mr Kelada gave evidence that he did not view the adapters and or blueprints which underlay the transaction documents as unnecessary distractions in early 2014. That was because they were part of the bank's direction in moving towards cloud computing.
18. The witness gave evidence that Mr Waldron was championing the Agility Platform in 2013 and 2014 and at the beginning of 2014 he was attempting to accelerate the integration of Cloud Foundry at the bank. He agreed that once Mr Waldron left the bank support for the integration of Cloud Foundry effectively evaporated. He agreed his earlier evidence that when he had discussed the SMI PaaS TDs with the accused, he didn't find the products listed in the TDs to be too unusual given the prior history of the relationship between SMI and CBA. He had accepted the accused's explanation to "think about the bigger picture."
19. Exhibit 25 was an email trail beginning with an email from Zahid Arain to Helen Sutcliffe dated 22 May 2014. It referred to the request to accelerate the development of new features and capabilities which Mr Kelada understood were provided for in the TDs subject of these proceedings. He gave the following evidence: Q. And that those new features and capabilities would support the bank's continued evolution of the platform; is that not right? A. Potentially. Q. And by platform you mean the Agility Platform; is that not right? A. It was - yes, this was related to the Agility Platform. Q. Those features and capabilities would support the evolution and enablement of PaaS; correct? A. Yes. Q. And by "related integration", you're talking about integrating PaaS with the Agility Platform, I suggest? A. Yes.
20. Exhibit 26 was an email dated 23 May 2011 which included a diagram headed "X86 Domain Architecture". Mr Kelada agreed that the diagram suggested an overlap between the Agility Platform and other functions including infrastructure management, security integration and security, as well as other software functions.
21. Exhibit 27 was an email from Jon Waldron to Frank Martinez and others dated 8 December 2014. Mr Kelada agreed that at that time Agility Platform was the focal point of the bank cloud strategy. He further agreed that it was anticipated that its functionality would be enhanced with additional components.
22. Mr Kelada was cross-examined about numerous emails concerning the CBA's acquisition of products relating to cloud technology including from SMI. Exhibit 40 was an email from Mr Kelada to Mr Waldron dated 11 November 2014 reporting to Mr Waldron as to the impact of the cost of the SMI software. Mr Kelada gave evidence confirming that the benefits within the MSA between SMI and CBA following acquisition of SMI by CSC was that the fees payable by the bank would be reduced resulting in a cost reduction in SMI fees to the bank of approximately $1.5 million.
23. In re-examination Mr Kelada gave evidence that he was not aware of any situations where products were purchased without the preparation of a business plan by the CBA. He gave the following evidence concerning the lack of business plans for the software products contained in TDs 17, 22-29:- Q. As at January 2014, had any business plans been prepared in relation to the purchase of any of the Pivotal Cloud Foundry, OpenShift, or Azure PaaS products? A. Not to my recollection. We were just starting conversations with some of the developer community about - about it, but I don't - I'm not aware of a business case that was developed. Q. Would you expect that a business case would have had to be developed in relation to any one of those products before those products were purchased by the bank? A. That's just the - the normal process - procurement process, generally. Q. Is it the case that no business plans were produced in relation to any of the software products contained in TD17, 22-29? A. Not to my knowledge.
24. As to the contracts being premature Mr Kelada gave the following evidence:- Q. So you said in evidence in chief that you raised with Mr Waldron that the purchase of the integrating software from ServiceMesh in January 2014 was premature - I think it was in December, actually, you made those comments, 9 December? Do you remember that evidence you gave in chief? A. Yes. Q. Having had your attention brought to the various emails that you were cross examined about, do you agree with the opinion you expressed to Mr Waldron at that time as to the prematurity of the purchase of those items at that point in time? A. Yes. Q. And why's that? A. Because it's one thing to validate that the technology is compatible with your infrastructure, but there is more work required to engage with the actual user community to see if it's actually of value to them as users, and whether each of these technologies, these PaaS platforms, would actually deliver the benefits that they proposed to deliver on, namely, speeding up the application development process for the user community. Q. And if you had come to the conclusion through your POC process that one or other, or all of those products, weren't suitable for CBA implementation, how would that have impacted on the utility of the integration products that were purchased from ServiceMesh? A. Well, if we weren't using the underlying PaaS technologies, then we wouldn't need the integration. Q. And the process by which you were engaging in proof of concept in relation to the PaaS technologies; did that involve entering into purchase agreements with any of these companies at that point in time? A. Sorry, can you say that again? Q. Did the Commonwealth Bank enter into contracts and pay monies to Pivotal, or Microsoft, or Red Hat whilst you were engaging in the proof of concept process for their PaaS products? A. No, not to my recollection.
25. Mr Kelada confirmed that once Mr Waldron left the CBA's employment interest in the three PaaS products ceased and the projects did not proceed. He gave the following evidence:- Q. To what extent was that as a consequence of Mr Waldron leaving the organisation? A. It's hard to say. I think if there was you know, if we were, perhaps, further along, if we had - the developer community had been convinced of the merits of these technologies and had embraced it, then I think someone leaving the organisation would not really impact those plans; it would continue to execute, but we hadn't progressed to that point at that time.

Evidence of Mr David Bradbury

1. Mr Bradbury gave evidence that he commenced with CBA in 2012 as Executive Manager of the Information Security Services team, reporting to Benjamin Heyes. He was familiar with the security products provided to the CBA by McAfee and identified a McAfee proposal entitled "Take 4 Jan 2013".
2. Mr Bradbury gave evidence of an approach by Alexandra Drury at the end of 2012 on behalf of McAfee to provide security software to the CBA by way of an Enterprise License Agreement ("ELA"). The proposal which was to cost the CBA $2.4 million was shelved in April 2013.
3. Mr Bradbury gave evidence that Mr Waldron had raised the issue about an ELA for McAfee security products in October 2013. It was the accused who expressed a desire for SMI to provide McAfee product directly to the CBA as third-party reseller. Up until this time McAfee security software had been supplied to the CBA by Hewlett-Packard ("HP").
4. Mr Bradbury gave evidence that he had calculated how much the CBA was spending on McAfee products at the time. He gave evidence of this costing the CBA approximately $2.2 million per annum and he gave evidence that if the bank was to replace two other vendors with McAfee that would cost bank just over $3 million a year.
5. In relation to an email the accused sent on 17 December 2013 providing a contract price of $2.9 million per annum for the purchase of McAfee software through SMI Mr Bradbury gave evidence that this was "moving very fast for such a large deal and an enterprise contract with the bank. Similar contracts that I can recall negotiating with the vendors were taking 18 months to 2 years to negotiate, and we were negotiating this in days."
6. In an email to Tom Pennington on 17 June 2014 he raised a problem with the McAfee deal as follows:- "The problem is, is that, given that we didn't I did not have any visibility of the deal that had been negotiated, we had mistakenly agreed to sign up to having two onsite… resources to support us for a small period of time, which was not required."
7. In cross-examination Mr Bradbury was asked about the proposed transaction with SMI as follows:- Q. You ultimately became aware of the possibility of ServiceMesh providing McAfee software as a third-party supplier; did you not? A. Yes. I heard about this sometime, I think, in December of that year. Q. Your team, therefore, became involved in assessing at least parts of the proposed transaction with ServiceMesh, did it not? A. I wouldn't say we looked at any piece connected to ServiceMesh, but we were involved in discussions with McAfee to make sure the list the order form was filled out correctly and the right software was included. Q. Can I suggest that, as a result of those discussions, there was a variance between what had been previously offered by McAfee and what you, at the end of 2013, thought was necessary for you team; isn't that right? A. That's my understanding, yeah. Q. Can I suggest to you that a decision was made that Enterprise Mobility Manager was something that would not be required by the bank? A. I struggle to recall. Q. Can I suggest, however, that Enterprise Mobility Manager was something related to mobile telephones and the like and the security on them? A. I fail to recall a discuss about that. Q. I can I suggest to you that added to the list of software desired by your team was change control for servers; does that ring a bell? A. I recall additional security software requires for servers, so that - that may be item. Q. Can I suggest that the selection involved including something called MFE Real Time; does that ring a bell? A. It's an enhancement to their antivirus offering, so yes.
8. Mr Bradbury gave the following evidence about his knowledge of what HP was charging the CBA for the provision of McAfee:- Q. When was the first point in time when, to your knowledge, someone from the CBA sought transparency from HP as to what HP was charging the CBA for the provision of McAfee software? A. As far as I'm aware, that only began when we started to renegotiate the Windows contract for the desktop because, prior to that moment, it was all locked up in contacts, and to unlock those contracts would be a nonstarter. So I'm not aware of any discussions. The opportunity to begin those discussions started with the movement from one Windows version to the next. Q. Can you put an approximate date on when those negotiations began? A. November, October, 2013. Q. Is it right to say that those discussions occurred contemporaneously with your discussions with Mr Waldron about the possibilities of an ELA raised during the ODPIF project? A. Yes.
9. The following evidence was given by Mr Bradbury:- Q. In relation to the need for haste in 2013 to engage in this ELA through ServiceMesh, was there any other reason apart from the explanation provided by Ms Drury as to why that needed to be done by the end of December 2013? As in, entering into an ELA between CBA? A. My understanding was, it was also the end of financial year for McAfee, which, for all software companies, they do the majority of their business in any given year in the final month of the financial year, and so there would have been large targets on Ms Drury's side of the fence for her to hit, and therefore, there was pressure on her side to close out a deal to make their numbers for the year."
10. In re-examination, Mr Bradbury gave evidence that he had never known what the SMI Cloud Secure products subject of TDs 20 and 21 were.
11. Mr Bradbury was asked about Mr Nicholson's role as part of the procurement team. He gave the following evidence:- Q. From your experience, given the procurement was for products and services in the sum of $10 million, was that something that seemed unusual at the time? A. Yes. Q. Why was that? A. Typically, in particularly in multimillion dollar transactions, business leaders such as myself aren't allowed to negotiate those prices. Those prices are negotiated by the procurement team, because that's what their specialist specialisation is, as far as their - their job role is concerned in the bank. They are the ones who negotiate deals. They're the ones who negotiate prices, so to see them come in at such a late stage was different. Q. Are you aware as to any risk factors that might present where a unit such as the procurement team wasn't involved in such transactions? A. The risk of it is inherent in not having the procurement deal negotiate your prices is that you may not get the best deal that's going around.
12. Mr Bradbury gave evidence about the speed of the deal as follows:- Q. You said before about how, in your experience, this deal happened at a very quick rate. Do you remember giving that evidence yesterday? A. I do, yes. Q. This issue about resolving who of the entitles that would be included in the deal being sounded out on 29 November 2013, in circumstances where final contracts are signed on 23 December 2013, is that something which strikes you as unusual or different to your normal experience in relation to such products? A. The bank has a history of taking its times on everything. So to see us rush through anything is raises my eyebrow, and it's different, and it's normal for the bank. Q. I'm certainly asking just about, at this time, this aspect of the complexity of the negotiation. What efforts would you think would need to go into determining what entity should be included in the agreement that's reached with McAfee? A. This would be a key element of where procurement and others would lean into the deal to make sure that our subsidiaries in other locations are appropriately being accommodated. So this is what I would expect to do be a normal part of the procurement process.

Evidence of Mr Marcus Nicholson

1. Mr Nicholson commenced employment with the CBA in 2006 as Manager of Software Licensing. In December 2013 he was the Manager of Software Services reporting to Mr Tom Richardson, the General Manager of Partner Management at CBA. He gave evidence that Partner Management looked after all commercial matters to do with the bank's software and hardware.
2. Mr Nicholson's area of specialty was software licensing and he was responsible for the end-to-end management software licensing and services associated with it.
3. Mr Nicholson gave evidence that he was not involved in the McAfee proposal which was shelved in March 2013. On 2 December 2013 Mr Richardson asked him to review the MSA for the McAfee deal. He contacted the accused to request the most recent copy of the MSA. He gave evidence that once he became aware of what was proposed to be purchased, he had a number of concerns. First, the price jumped "astronomically" from the original offer, there had been no legal review done at all on the contracts and there had been no risk review agreement. Further the MSA between the CBA and SMI did not contemplate SMI acting as a third-party reseller and the CBA had never been involved in any circumstances in which SMI had acted as a third-party reseller of software in the past.
4. Mr Nicholson gave evidence that he was interested in the commerciality of the agreement and the legality of it. He gave evidence that a procurement agreement in the order of $10 million would put the CBA in a strong negotiating position with a software vendor such as McAfee.
5. Mr Nicholson gave evidence that he had expressed his concerns and that on 12 December 2013 he had sent at email (Exhibit E, pg.1426) stating that his concerns had not been addressed. On 16 December 2013 he had a meeting with Brad Twynham in which a difficulty arose concerning areas of liability which Mr Nicholson indicated was a "showstopper." This led Mr Twynham to send an email headed "Impasse" to Mr Waldron (Exhibit E, pg.1519).
6. Mr Nicholson gave evidence that the issue was of significance because "the software in question was designed to protect CBA from virus attack on all of its desktops. If it didn't do its job, it left CBA liable for penetration of the desktop and any subsequent damages that arose from that - "breaches of privacy, et cetera so it was a very big deal."
7. Mr Nicholson gave evidence that he reached out to Miriam Lane, an Executive in the risk team at CBA on 16 December 2013 and she made it clear that a transaction of that size needed to have a risk review.
8. The witness gave evidence about an email from the accused dated 17 December 2013 in which he stated "commercial sense has already been verified…Keith and I want this sorted ASAP within the next 48 hours. Don't worry about steps that have already been done."
9. Mr Nicholson gave evidence that the problems he identified could not be sorted out in the next 48 hours.
10. Mr Nicholson gave evidence that he never received sufficient information throughout the course of the process to satisfy himself in relation to the commercial viability of what was being proposed. He had raised a number of issues with Mr Richardson including pricing, lock-in and legal. He was also concerned about the indemnity clause and removal of HP costs. There also did not appear to have been a risk assessment carried out. Mr Richardson identified these issues in an email to the accused on 17 December 2013 at 6:47pm.
11. Mr Nicholson gave evidence that this was completely different from how deals had been concluded the past. He did not believe that Mr Waldron was focused on trying to get the best outcome for CBA, "just a fast outcome".
12. On 18 December 2013 Mr Nicholson sent an email to Tom Richardson with his concerns. Under the heading "Deal Construct" those concerns were, in narrative form, as follows:- "The total value of this deal is $10.5 million over three years. Once this agreement is signed, there is no provision for the bank to terminate so we are locked into this payment. Whilst the majority of this deal is for McAfee software, it is being purchased through ServiceMesh at markup rates that I've been advised sit at 0, 5% and 10% depending on the products. I have, however, don't have a breakup of these numbers. There is confusion about what we are actually buying. According to the documents, the deal includes McAfee software in a ServiceMesh product called Cloud Secure." Jon has advised me, however, that this deal is just for McAfee software. If that is the case, and it's just McAfee software, why are we buying it through ServiceMesh and paying a markup? I've been told that the Cloud Secure product is a new product, which the bank will be the first to roll out. I've also been told that this product will be developed in conjunction with the bank. In an attempt to know more, I've tried to research the Cloud Secure product, and there's nothing on the ServiceMesh website that I could find. I believe the bank should be clear on all these points before signing."
13. In the same email Mr Nicholson noted that the bank was being asked to pay an additional $3.3 million from the previous proposal, a deal that was rejected for being too expensive. Mr Nicholson also stated that he was not happy with the accused's conduct as follows:- "•He's spoken to you regarding me, without checking facts. •He's been communicating directly with the vendors, behind our backs, as we try to finalise negotiation, then tries to push past processes. •The emails he sent mentioning that Keith and he just want it done, could be construed as intimidation."
14. Mr Nicholson gave evidence that upon review of the McAfee deal he was unable to validate the value of it to confirm if the additional $3.3 million made sense however he never formed the view that the transaction should not proceed at all. Rather he believed that significant changes were needed to happen in the commercial construct for it to proceed.
15. From Sunday 22 December 2013 Mr Nicholson had no more involvement in the review of the purchase proposal having told Mr Richardson that he believed it should not proceed.
16. Mr Nicholson was cross-examined extensively about the steps required for due diligence of the contracts that made up the McAfee deal.
17. Mr Nicholson agreed that the transaction with SMI was causing him "grief". He gave the following evidence:- Q. The transaction was causing you grief; is that right? A. Yes. Q. Why? A. It was being asked to be completed in unrealistic timeframes. It was being asked to bypass what I would classify as the normal protocol when you're negotiating a deal. As approaching a deal, I would run through normal ways of doing things. Understanding the facts, understanding the need. We were being asked to push it through in a quick timeframe, when I could see no reason for the quick timeframe. Nothing was presented to me that said, having it done by the end of this year would save the bank money, would be a benefit to the bank, other than just get it done. … Q. But you didn't need to know why it needed to be done immediately, did you? A. From a commercial perspective, yes. I needed to understand why it's important to have it done ASAP. Does the deal disappear if it's not done ASAP? Q. But you had been told that it would disappear unless it was concluded by the end of the calendar year, weren't you? A. I don't recall either way about that, no. But I certainly don't recall there also being a, if it's not done by the end of the year the price will go from 7 or 10.3 million, it will go up. Q. You were told, were you not, that the deal needed to be concluded before the end of the calendar year. A. I was told, internally, it needed to be concluded, yes. Q. You knew full well that software companies often provided incentives for deals to be concluded before the end of the calendar ‑ or their, specifically, financial ‑ year; correct? A. Correct, but I would not necessarily be aware of those deals as I'm lead negotiator on it.
18. Mr Nicholson agreed that one of the advantages of an MSA is the fact that transactions can occur with greater ease because certain terms and conditions are already agreed upon.
19. In relation to the ServiceMesh MSA, the witness gave the following evidence:- Q. Mr Waldron says this, according to the email, "There is no MSA to review. This transaction is under the ServiceMesh MSA, which is already done and dusted". Can I ask you some questions about that? A. Yes. Q. Do you agree that, ultimately, there was no MSA that needed to be reviewed? A. I would still review the MSA to make sure I was comfortable with it. I wouldn't take anyone in the business' word that they were comfortable with it. It's my own job to perform my own due diligence, make sure I'm comfortable with it. Q. He also says this, "This transaction is under the ServiceMesh MSA"; that's ultimately what occurred, isn't it? A. Yes, it is. Q. "Which is already done and dusted". Did you understand that to mean that it had already been concluded? A. Yes. Q. That was consistent with your knowledge of the arrangement between ServiceMesh and the bank as at 2013; correct? A. Yes.
20. On 12 December 2013 Mr Nicholson sent an email to Mr Pennington with his concerns regarding the ServiceMesh proposed transaction. He gave the following evidence:- Q. And you wrote, "With the exception of the overall price being included, a change in price for the RSAM and a clarification about platinum support, these documents are identical. None of my points have been addressed at all"; is that right? A. Yes, it is. Q. So you agree that certainly by now, you had the total price of the ServiceMesh proposed transaction? A. Yes. Q. You were, however, noting that other points raised by you those about which I asked you before and appear at the bottom of 1427 had not been taken into account; is that right? A. I would say so, yes. Q. And did Mr Waldron ask you to attend to things such as formatting typos and definitions in his email to you four minutes later at 1.04pm? A. Yes, he did. Q. In other words, he was asking for your help to address those matters that you had raised previously and that are at the bottom of 1427 and the top of 1428; correct? A. I would say so, yes.
21. The witness agreed that the CBA had a "procurement policy" in place at the time of the ServiceMesh transaction. The policy governed the procedures to be adopted by an individual seeking to acquire a product or service as part of his or her role at the bank. Mr Nicholson gave the following evidence:- Q. Can I suggest to you there was a requirement for commercial management to be consulted for any new contract, or contract renewal where there was to be a changed pricing or terms, isn't that right? A. Again, I don't recall the policy. Q. Can I suggest to you that new contracts were treated differently from contracts which were entered into pursuant to an MSA, were they not? A. They were to be a standard practice, yes. Q. A transaction document entered into, pursuant of an MSA, was treated as a work order, was it not? A. Yes. … Q. Can I suggest to you that it was commercial management's responsibility to engage with technology, media and IP legal, where appropriate? A. Yes. Q. In other words, it was the responsibility of commercial managements to engage with the legal department where it was considered their input was necessary. A. Yes.
22. In re-examination Mr Nicholson gave evidence that on 17 December 2013 there was correspondence between himself, Mr Waldron and Mr Twynham regarding the components of the deal. In particular how much of the deal was made up of McAfee software and how much of the deal included secure cloud software and maintenance by ServiceMesh. Mr Nicholson gave evidence that because he was unable to understand the components of the deal, he was unable to source a price for the McAfee product through a third-party vendor. He gave the following evidence:- Q. How would that break up have impacted on your ability to source a price for the McAfee product through a third party vendor? A. It certainly would have allowed for a direct comparison of pricing if we were to go to a third party vendor. Again, not having the ServiceMesh product, I wasn't able to determine how much CBA was paying for just MacAfee alone. Q. The response you received from Mr Waldron at 4.25pm is, "No, you don't need to. Commercial sense has already been verified. Tom P can get you that from Bradbury. Keith and I want this sorted ASAP within the next 48 hours. Don't worry about steps that have already been done. Thanks, Jon". Do you see that? A. Yes, I do. Q. What scope was there for you to obtain comparison prices from third party sellers or negotiate a reduction in price through such third party sellers in the 48 hour time period that was made available to you? A. Absolutely none. Q. What timeframe do you think you might have required in order to conduct those sorts of inquiries? A. At least three to four weeks, possibly longer, given the time of year as well when people are shutting down.
23. The witness gave evidence that he was concerned about the liability clauses in the draft transaction document because the clauses needed to be sufficient to compensate any loss the bank may suffer.
24. Mr Nicholson corrected his evidence in cross-examination to confirm that the suggestions he had made to the draft transactions document were rectified. He gave the following evidence:- Q. My learned friend put to you last Thursday, "What you thought to be a problem that needed to be rectified was not rectified. Is that right?" when he was referring to what was contained in the master service agreement. Do you remember him putting that proposition to you? A. I remember him putting it to me, yes. Q. Looking at what was proposed in the draft TD at 1397, what do you say to that proposition now? A. I believe it's incorrect. It certainly was rectified. Q. At 735.50 my learned friend put to you, "Would you agree with the proposition that any suggestions you might have made ultimately did not find their way into the contract, that is any suggestions concerning indirect damage or consequential loss did not find their way into the contact. Do you agree?" You said, "It appears they did not". Having looked at what was proposed at the draft contract 1397, do you stand by the response that you gave to that question last Thursday? A. No, I do not. My earlier response was wrong. Q. That's because of the limitations on liability contained in that proposed draft contract? A. Yes, it is.
25. Finally Mr Nicholson gave evidence that he had not embellished his evidence during the trial because he was retrenched from his executive management position in the bank in circumstances where he connected that outcome to Mr Waldron.

Evidence of Mr Thomas Richardson

1. Mr Richardson commenced employment at the CBA in 2004. In 2013 he was the General Manager of Partner Management, reporting directly to Keith Hunter. He was aware that in 2011 a Master Service Agreement (MSA) was signed with SMI and 18 TDs had been entered prior to December 2013 pursuant to that agreement.
2. On 28 November 2013 he received an email from the accused concerning an inconsistency between the MSA between the CBA and McAfee and the MSA between the CBA and SMI. He gave evidence that the MSA between SMI and CBA did not contemplate SMI acting as a third-party supplier of software products. He became aware of the transaction involving TDs 19 to 21 and gave evidence that he would expect a timeframe in the region of 6 to 8 weeks to be a normal period for such a procurement.
3. Mr Richardson gave evidence that Marcus Nicholson raised with him a number of concerns. He gave evidence that it was appropriate for Mr Nicholson to be reviewing the commerciality of the deal although ultimately responsibility for that sat with Mr Waldron.
4. Mr Richardson gave evidence that as at 18 December 2013 there had been no commercial review, no legal review and no risk review done in relation to the McAfee deal. He asked Mr Waldron for an explanation as to why it was a good deal by comparison to the previous proposal forwarded by McAfee. The accused had told him that the deal was structured fundamentally different in that it had unlimited licenses and the previous deal was limited to a particular volume.
5. Mr Richardson gave evidence that legal review of the deal was appropriate because of its size and nature.
6. On 19 December 2013 he had asked Mr Waldron whether he wanted to have terms included regarding acceptance testing of SMI software. He gave evidence that acceptance testing was required because the Cloud Secure product wasn't a standard commercially available high-volume software.
7. Mr Richardson identified the tax invoices in respect of TD 21 which totalled, inclusive of GST, $7,674,186.30. When factoring in the cost for the two years following it took the total price of TD21 to well over $10 million.
8. Mr Richardson became aware of the Pivotal deal in TDs 17 and 22-29 in early 2015 after the accused's employment had been terminated with the bank. At no time had they been referred to the Partner Management team for scrutiny. Mr Richardson gave evidence that he would have expected them to come through Partner Management given the large amount of money involved. He identified irregularities in the TDs including that a number of them were not witnessed and a number of them were over $1 million which sat outside Keith Hunter's financial delegation.
9. Mr Richardson was cross-examined about the restructure which led to Mr Nicholson losing his employment.
10. Mr Richardson gave evidence that on receiving emails from Mr Hunter who he reported to directly where Hunter stated, "I cannot have a delay with starting these initiatives". He did not perceive that to be an intimidatory direction. He gave the following evidence:- Q. How did you understand that comment, "I cannot have a delay with starting these initiatives"? A. The ServiceMesh McAfee deal was important to Keith's strategic agenda. Q. Therefore, it needed to be concluded swiftly; is that all right? A. Yes.
11. The witness gave evidence that the information technology budget at CBA in 2013 was about $2.5 billion of which $1.5 billion was in relation to external supply. The Budget of the IT engineering group in 2013 was approximately $700 million.
12. He gave the following evidence concerning his dealings with Mr Waldron:- Q. I'd like to suggest that you said the following as part of the deposition, page 25, "What were the nature of your dealings with Mr Waldron in 2013?" Answer, "So, he was a peer of mine, so we would attend leadership team meetings together. If those leadership meetings were having conversations around strategy, then we would have a collaborative and joint leadership working relationship around setting strategy. In terms of the interaction on a professional basis, essentially my team was a service provider to Jon's team, to assist in the management of some of his larger suppliers, and the sourcing of some of his larger contracts. So, it was regular, frequent, professional, good relationship with Jon." Do you remember saying that? A. Yes.
13. Mr Richardson identified the CBA Procurement Policy which became Exhibit 52. It set out contract minimum standards which included "Commercial Management must be consulted for a new contract or contract renewal where there is a change to pricing or terms." He gave the following evidence:- Q. I suggest the expression "new contract" was to be distinguished from a work order. A. In which case it wouldn't fit in the same sentence as a contract renewal. Q. I suggest to you that contract renewal related specifically to the events where there was a change to pricing or terms. Isn't that right? A. I think you'd need some commas around it if you wanted that interpretation of it. That's not my interpretation of it, no. Q. So your view was that for any new contract including any transaction documents that related to IT contracts, commercial management had to be consulted. Is that the position? A. Yeah. Q. Irrespective of the monetary value? A. Yes. Q. Irrespective of whether the supplier had an MSA with the bank? A. Yes. Q. And irrespective of whether the supplier had previously supplied products or services to the bank? A. Yes.
14. Mr Richardson gave the following evidence concerning the SMI McAfee transaction:- Q. I suggest to you that Mr Waldron engaged partner management in the ServiceMesh McAfee transaction. Isn't that right? A. I suppose on the evidence that we went through before started with an email to me with a one-off question, and I then referred it on to Marcus to say, "Can you please help with this?" because it seemed like an important deal. Q. Thereafter, you engaged with Mr Waldron sporadically about the transaction; do you agree? A. I engaged with him pretty frequently from the period that we were engaged through to the period that it was signed. I wouldn't call it sporadically. Q. You directed your team to engage with Mr Waldron in relation to the transaction, did you not? A. Yes. Q. Can I suggest to you that Mr Waldron did not in any way prevent the legal review from occurring? A. Other than questioning the need for it. Once we'd ascertained the need for it, he allowed it to happen. Q. Can I suggest to you that Mr Waldron did not interfere with the risk review? A. He tried a few different ways of suggesting that a risk review was not necessary, either by questioning the need for it or for saying explicitly that a risk review was not needed, but once I'd said that it did need to happen, he supported that process. Q. When you say he supported that process, in what way did he support the process? A. That he told Tom Pennington to assist with getting the risk team the information needed to do the risk review.
15. Mr Richardson was asked about a potential doubling up of fees for the provision of marketing software by both HP and SMI. He was referred to the email from Mr Waldron (Exhibit E, pg. 1555) which he had stated at page 1544 "but yes, they verbally have committed to pulling out the price for the component" referring to HP. He gave the following evidence:- Q. Were you therefore satisfied that the relevant business owner had confirmed that there was not to be a doubling up of costs? A. Yes. Q. And can I suggest that as a result of that confirmation you made no further enquires, did you? A. No, not before signing the deal. Q. Were you aware that as at 17 December 2013 Hewlett Packard had, in fact, agreed to pull out the price for the McAfee component of its WPaaS offering? A. Only based on what Jon had told me. I didn't have anything that had come direct to me.
16. In re-examination Mr Richardson gave evidence that he was not concerned about doubling up by the bank on its purchase of McAfee based on Mr Waldron's confirmation that the issue had been resolved with HP. In fact the obligation to pay HP continued for at least 12 months beyond 23 December 2013.

Evidence of Mr Tom Pennington

1. Mr Pennington commenced with the CBA in 2006 as Executive Manager Production Operations. In November 2013 he was Executive Manager Engineering Delivery reporting to Mr Waldron who had become his manager in around 2010.
2. Mr Pennington was responsible for the overarching life-cycle of the technology infrastructure services and components that were the responsibility of engineering. These products included everything from data centres, infrastructure platforms, servers and hosting infrastructure, workplace technologies, and networks.
3. Mr Pennington was familiar with the IT platform known as Agility procured from SMI by way of an MSA. He was also familiar with the McAfee security software which was being used by the bank on desktops. He acknowledged receipt of an email on 11 December 2013 from the accused (Exhibit E, pg.1412) concerning Cloud Secure software however prior to receiving that email he had no specific information about the deal with SMI.
4. Mr Pennington gave evidence that the initiative to purchase McAfee software through SMI came to him from Mr Waldron. The accused had told him that the recent acquisition of SMI by CSC meant that they had greater capacity to offer more services.
5. Mr Pennington gave evidence that he had conversations with the accused about Mr Nicholson being deliberately awkward with the process and making things harder than they needed to be. His own impression was that Mr Nicholson was operating largely in the way that he normally would, but he knew that he occasionally rubbed people up the wrong way. On this occasion he saw nothing that was consistent with him acting contrary to the interests of the bank. The questions he asked in scrutinising the proposal were appropriate. Mr Richardson had also asked him about Mr Nicholson and he had told Mr Richardson that Mr Nicholson had been challenging details in the contract, but not overstepping his bounds.
6. Mr Pennington gave evidence that there was pressure to get the McAfee deal signed off by the end of the year but that that was not an abnormal situation. He understood that the time constraint was to obtain a beneficial deal before the end of the year, and it was not unusual to fast-track deals at the end of the year.
7. Mr Pennington gave evidence that as at 21 January 2014 he was not aware whether the proposed TDs for the Pivotal deal had been referred to Partner Management for review.
8. In cross-examination Mr Pennington described the accused's management style as "fairly autonomous". He gave evidence that the accused was very focused on strategy and future direction.
9. Mr Pennington gave evidence that in negotiations with ServiceMesh and or McAfee in relation to TDS 19 to 21 Mr Nicholson was involved in negotiating pricing. He confirmed evidence that he had given in a deposition hearing that it was part of Mr Waldron's role within the CBA's IT group to get contracts signed within a specific time period, if doing so would result in a discount for the CBA. He had also given evidence at the committal hearing that the driver behind this particular deal was that CBA was being offered an end of financial year or end of cycle discount on the impending sale to ServiceMesh to negotiate a better price. With respect to pressure to get the document signed before the end of the year he had given evidence that it was not an abnormal situation. He had given evidence at the committal which confirmed that it did not appear to him that the ServiceMesh/McAfee deal was being pushed through fast compared to other deals undertaken at the bank. He was however asked to fast track this deal by the accused.
10. Mr Pennington confirmed evidence he had given at committal that he had the facilitated negotiations of the contract by bringing together the parties that were required to progress the contract to facilitate the provision of McAfee services through SMI. He had been directed to organise meetings between the key parties by Jon Waldron. It was his understanding that the deal was a commercially attractive one for the CBA IT group and if he had any concerns he would have expressed this to Mr Waldron. He gave the following evidence:- Q. Your position in terms of commerciality was that the proposed deal was no more expensive than what the CBA was then paying for McAfee software and was less expensive after three years; is that right? A. Yes.
11. Mr Pennington confirmed evidence he had given earlier that it was typical for Mr Waldron to contact him in relation to proposed deals with the CBA and for him to be directly involved in contract negotiations for a deal. A number of people responsible for verifying commercial sense being David Bradbury, Chris Kelada, Zahid Arain and Adrian Buxton from Workplace Technology. Based on information that he was provided, this deal appeared to make commercial sense. He did not have an understanding of what the specific split was between McAfee software and SMI software components. He was not aware of an early approach by McAfee to the bank to enter into an ELA.
12. Mr Pennington was cross-examined about Exhibit Q and the amortisation of SMI products over a period of 60 months. Working out the accounting treatment for products was necessary to determine the commercial viability of the contracts. When asked about the accounting treatment for the TD signed on 25 January 2014 the witness gave evidence that he expected "We would have made enquiries of Mr Arain in relation to that before the TDs were sent to Mr Hunter for signing." He gave evidence that they would have needed to check for budget headroom and to know that they could pay for what was proposed.
13. Mr Pennington gave evidence that any budget saving connected to the deal would be validated by Mr Arain and that he would normally be involved in the material budget transactions and conversations. He was asked about an email sent by Mr Waldron (Exhibit E, pg.1530) in which Waldron had stated "Important information we are waiting on…is confirmation of the accounting treatment for the licence capital." Mr Pennington's understood that was the ability to amortise the cost of the licenses over a five-year period.
14. Mr Pennington gave evidence about Exhibit 54, a spreadsheet calculation showing the amortisation of the fees payable in relation to TDs 19 to 21. He agreed that the figures therein demonstrated that after 10 years the total benefits of the transaction was approximately $17.6 million, the five year benefit was $4.5 million. It was consistent with the evidence he had given at the deposition.
15. Mr Pennington gave evidence that TDs were like a work order based on a MSA which contained the bulk of the terms governing the contractual relationship between the bank and the vendors. Where there was a deviation from the MSA CBA Legal would get involved. When there was no deviation CBA Legal may or may not get involved.
16. Mr Pennington was asked about the email he sent to Mr Hunter on 25 January 2014 and conversations that would have taken place with Mr Hunter. He confirmed that he had given earlier evidence in which he said, "advised to Michael under one million in value which meant the contract would be executed quicker than if they were over one million in value and they had to go through additional approvals". He gave evidence that the breaking up of the products into additional TDs was a negotiation technique on the part of CBA's IT group to reduce the price of the TDs, in return for executing them more quickly.
17. In re-examination Mr Pennington was asked about the calculations in Exhibit 54 which confirmed his previous evidence at depositions as to the benefits of the SMI TDs after 5 and 10 years. He agreed that as at 5 January 2014 the total cost for the TDs including maintenance costs was $1,863,500.

Evidence of Mr Zahid Arain

1. Mr Arain commenced employment with the CBA in 2005. In December 2013, he was the Executive Manager for Business Management and was responsible for the internal financials for three of the major divisions of IT within the CBA.
2. Mr Arain reported to Liam Buckley who was the Director of Finance for IT at the CBA. In his role Messrs Hunter and Waldron were his customers and he provided services for them from time to time.
3. Prior to receiving an email from Mr Waldron on 11 December 2013 (Exhibit E, Vol. 3, pg.1408) he had no involvement in the contractual negotiations involving the Cloud Secure Solution.
4. Exhibit R was an email from Peter Cliff, a financial analyst who reported to him in his role as Financial Manager. The email was dated 24 January 2014 and attached to it was the bank's pre-payments register which allowed him to determine whether there was room in the allocated budgets for the cost of procurements.
5. Exhibit S was an email from Mr Arain to Mr Cliff dated 24 January 2014 requesting whether there was approval from Group Treasury for the payments the subject of the 11 December 2013 email.
6. Exhibit Q was an email from Mr Arain to Mr Pennington dated 24 January 2014 attaching the pre-payments register. He gave evidence that the SMI contracts were amortised over 60 months.
7. Mr Arain identified the "Contract Execution Request" dated 20 December 2013 (Exhibit E, Vol. 4, pg.1651). On page 2 of that document an entry appeared against his name, "Finance (Budget Approval)" and was marked with a tick as "approved". He gave evidence that he was not delegated to approve any budgets. All he was delegated to do was to provide analytics to say whether there was money in the budget or not. From a budget approval perspective, the word "approved" was misleading, however he was not surprised to have a tick next to his box because they did the work to say that there was room in the budget. That work was the pre-payments register which was done on 24 January 2014, not as at 20 December 2013, the date of the Contract Execution Request.
8. Mr Arain gave evidence that it did not make sense to him to have a tick next to his name on a document dated 20 December 2013.
9. In cross-examination Mr Arain gave evidence that he left the CBA in April 2016. Mr Arain did not have access to his emails when he gave a statement to NSW Police in November 2018.
10. Mr Arain agreed that his memory of what occurred in 2013 and 2014 is affected by the passage of time. He gave the following evidence:- Q. Can I suggest to you that, in fact, there were two lots of Service Mesh transactions with which you were dealing in the time period 2013 and 2014, could that be? A. Quite possibly. These were small deals in the scheme of things, so if my attention was going to be around, that would've had to have been significant. Q. You said they were "small deals", why did you use that expression, "small"? A. Because in the scheme of things we were talking about a close to a billion dollar organisation that was that we were managing, and from a monthly perspective that's a - excuse the expression, but that's a big chunk of change that's going through the through the till, and deals of this size, with due respect, were deals which were done, I'd say, more than periodically.
11. In re-examination he gave evidence explaining how the pre-payments register worked so that when software products had been fully amortised that allowed additional space in the budget for purchase of new products.

Evidence of Mr Keith Buckley

1. Mr Buckley was the Managing Director of McAfee Australia and New Zealand in May 2013 and was responsible for the sale of all McAfee products in Australia and New Zealand. He gave evidence that McAfee was a supplier to the CBA for a number of years and in 2013 was trying to expand their products with the CBA.
2. Mr Buckley gave evidence that he met with the accused, Mr Bradley Twynham and Ms Alexandra Drury in November 2013 where the parties discussed expanding McAfee's "footprint" at the CBA. The purpose of the meeting was to discuss the supply of new products and Brad Twynham had said that there was a budget surplus of freed up money that had to be spent by the end of the calendar year. He then clarified that evidence by saying that it was the accused who said that. In an email dated 17 December 2013 (Exhibit E, pg.1534) he advised Mr Twynham and Mr Waldron that McAfee would make "every effort to get the deal done by 31 December". In that email he outlined a range of issues still outstanding namely "liability, auditing reporting, renewal terms, IP indemnity, licensing unit, definitions, daily rates for services etc."
3. In cross-examination Mr Buckley gave evidence about the distinction between sales to corporate individuals and individual customers. He gave evidence that ordinarily McAfee would not sell software directly to corporate individuals. Mr Buckley agreed that the software was always supplied through an IT reseller.
4. Mr Buckley was cross-examined about his meeting with Mr Waldron in November 2013. It was put to Mr Buckley that his recollection of the meeting was not accurate because of the passage of time. Mr Buckley responded, "I don't think so."
5. The witness was cross-examined about the exchange he had with Mr Waldron at the November 2013 meeting. He gave the following evidence:- Q. When you were asked questions before by my learned friend, you said that you were told the money had freed up and they had some money to spend by the end of the calendar year, and you then said, "I suggest that you were told that by Brad"; isn't that right? A. No. I believe it was Jon who spoke about the bank's available money. Q. Well, I suggest you initially said it was from Brad, didn't you? A. I don't think so. Q. Well, I suggest you also said that you had assumed the money was coming from the bank; isn't that right? A. I had assumed the money was coming from the bank. … Q. I suggest to you that Mr Waldron did not say to you that he had money to spend by the end of the calendar year. Do you agree or disagree with that? A. I disagree with that.
6. In re-examination, Mr Buckley clarified his evidence about who had communicated that there was money in the budget. He gave the following evidence:- Q. Sir, do you remember being asked some questions in cross‑examination about what you'd said, in your initial testimony, about who it was that communicated to you that there was money in the budget. Do you remember those questions by my learned friend? A. Yes. Q. Do you have a recollection now about what you told the police as to who it was, on 27 June 2019? A. I believe it was Mr Waldron who did that. The ‑ I'd just met Brad Twynham from ServiceMesh. I wouldn't have ‑ I wouldn't have deferred the conversation to him, when I was talking to Commonwealth Bank. So, the only serious part of that conversation for me would have come from CBA.

Evidence of Mr Matthew Smith

1. Mr Smith commenced employment with the CBA in 2013 as Head of Technology Risk for the IT Services Division. He was responsible for ensuring the risk elements from a technology perspective of the enterprise services division of IT which involved carrying out risk assessments and ensuring that risk to the division was being managed. He gave evidence that at that time the department was new and "still developing in terms of its capability and capacity".
2. Mr Smith gave evidence that he received an email from Miriam Lane who reported to him on 17 December 2013 (Exhibit E, pg.1481). He was familiar with TDs 19 to 21. He identified an email from Ms Lane to Mr Richardson, the accused and others dated 17 December 2013 (Exhibit E, pg.1501) in which she advised that she was "aware that there's a new arrangement for SMI with some urgency around signing the contract (tonight)."
3. Mr Smith gave evidence that the risk assessment work to support the contract had not been started at the time when he saw that email and he had a conversation with Mr Pennington who told him that the contracts related to the purchase of McAfee licenses and that the bank was getting a better deal through a new provider. Mr Pennington told him it was very urgent and that both the accused and Keith Hunter were in the US and they wanted the transaction to go through quickly and identified an email from the accused dated 17 December 2013 (Exhibit E, pg.1525) stating that "both Keith and I want this deal done ASAP within the next 48 hours" and asking "why are we doing a risk assessment?".
4. Mr Smith gave evidence that at the time because of the capacity of his team they rarely did any kind of risk assessments on the sourcing of hardware or software. He sent an email to the accused on 18 December 2013 (Exhibit E, pg.1543) advising that he had spoken to Tom Pennington who advised that the contract was not just for the purchase of McAfee software but also allowed for services to be provided in support of the software which were located both onshore and offshore. If that was the case his team was obliged to perform certain risk assessments in support of contract execution.
5. Mr Waldron had responded (Exhibit E, pg.1547) "Services, not that I'm aware of. Thought it was just software and its associated maintenance".
6. Mr Smith gave evidence that he did not see TDs 19 to 21 back in 2013. He gave evidence that if he had seen that the information in TD 20 "we might have made a different decision."
7. Mr Smith was told by Mr Pennington that the contract was for "just software maintenance, the McAfee license" and on the basis of that information it was a sourcing arrangement as opposed to an outsourcing arrangement which would have required risk assessment that would have taken, potentially, weeks.
8. Mr Smith was cross-examined about his evidence relating to TD 20. He gave the following evidence:- Q. I suggest, sir, that you said in answer to a question from my learned friend beforehand, "We might have made a different decision if I'd seen that", that being the transaction document; is that not right? A. That's correct. Q. I'd like to ask you about the word, "Might". A. Yep. Q. You're not saying, are you, that had you seen these transaction documents you would have concluded that this was an outsourcing arrangement, are you? A. I'm not saying that. I'm saying that we would have done further investigations. Q. You were aware, were you not, that RSAMs were installed, if I can use that expression, as part of the CBA's operations generally; correct? A. I am. Q. An RSAM, I suggest, was not necessarily an outsourcing position; is that right? A. That's not an outsourcing position; that's correct. Q. Were you aware that, as at the end of 2013 that there was already present in the CBA infrastructure an RSAM linked to McAfee? A. I was. Q. That also wasn't something that caused you concern of that being an outsourcing arrangement; correct? A. That's correct. Q. Was there anything in particular about transaction document 20 which you were shown, and specifically appendix B at 229, that suggested that this was an arrangement of an outsourcing type? A. Not on 229. Q. 230? A. Not on 230. Q. Would you have a look at 220, please. A. Yes. Q. Is there anything there that causes you to conclude that what was involved in transaction document 19, of which 220 is a part, was an outsourcing style transaction? A. So, yes. Appendix B, professional services, would have been an alarm bell that said you probably needed to do a bit more investigation into what those professional services entailed. Q. What investigations would you have done beyond ascertaining what was in paragraphs 1, professional services and deliverables, and, two, non supply tasks? A. I would have asked my team, which was Miriam at the time, to do a more thorough assessment of the contracts associated with it and then, depending on what was in the contracts, I would have asked that she talk to Tom, probably Tom Pennington, I should say at that point, to ask more about the types of services that were involved and what was meant by professional services to assess the materiality of those particular services. So I would have started with an assessment of materiality.
9. Mr Smith confirmed evidence he had given in an earlier deposition. In that deposition he gave evidence that the McAfee transaction was a sourcing transaction as opposed to an outsourcing transaction and therefore a data sensitivity assessment was not required for the transaction. He gave the following evidence:- "Q. And a technology risk assessment was not required Service Mesh McAfee CBA deal under CBA's policies because it was a sourcing transaction; right? A. Not specifically because it was a sourcing transaction. The technology risk assessment were operational risk assessments, it depends on the language we want to use. But that piece was not required because McAfee licenses or software was already existing in our environment and the technology risk had been assumed to be understood. Ie, it was changing by actually, you know, this transaction. Nothing was changing in relation to the actual software we were implementing, hence there was no reason to complete an operational or a technology risk assessment, it wasn't specifically because it was deemed as being a sourcing." Q. Is that correct? A. That's correct. Q. Then on 116, I suggest you gave this evidence: "Q. Now turning to the required assessments that were typically, but not in all cases, performed for sourcing vendors, you determined based on your conversation with Mr Pennington that a supplier risk assessment was not required to be performed in respect of the Service Mesh CBA McAfee transaction; correct? A. That's correct, as they were an existing supplier. Again, it had been assumed that the assessment of Service Mesh as a supplier to CBA have already been assessed." Q. Is that correct? A. Correct.

Evidence of Ms Alexandra Drury

1. Ms Drury was employed by McAfee as a Senior Account Director between 2009 and 2016. She was responsible for the CBA as a client of McAfee.
2. Ms Drury gave evidence of a proposal she sent to Mr Heyes dated 6 December 2012 with an attachment entitled "McAfee's Commercial Proposal TAKE 3 CBA". She gave evidence that in the majority of cases McAfee software and hardware would be supplied through third-party providers however on this occasion McAfee was making a direct proposal to the CBA. She explained that an Enterprise License Agreement was a contract between McAfee and the CBA because CBA were going to be the licensee of McAfee products however the purchase of the actual licenses would be through a reseller.
3. Ms Drury identified the proposal entitled "McAfee's Commercial Proposal TAKE 4 Jan 2013 CBA" (Exhibit E, pg.1319). That proposal was open for acceptance until 15 March 2013.
4. Ms Drury emailed a Mr Turner from HP (Exhibit E, pg.1897) on 18 August 2013 about providing the CBA with the ELA through HP. The negotiations between CBA and HP did not progress.
5. Ms Drury gave further evidence that on 30 October 2014 she received a text message from Mr Bradbury telling her that SMI will be in contact with her regarding the purchase of the company licenses. She gave evidence that she had no discussions with Mr Twynham about a mark-up on the McAfee products. It was a matter for SMI as to what margin they charged on the McAfee software products.
6. She gave evidence that McAfee's end of financial year was 31 December.
7. In cross-examination Ms Drury was asked about the earlier proposals for an ELA with the CBA. She was asked to recall her conversation with Mr Twynham in November 2013. She gave the following evidence:- Q. You said yesterday that you had spoken in November to Mr Twynham; correct? A. Yes. 2013. Yes. Q. And that you had not previously heard of ServiceMesh? A. Correct. Q. During that conversation, however, did you ask Mr Twynham a number of questions about ServiceMesh? A. Yes. Q. Was it during that conversation that he informed you that ServiceMesh had been acquired by CSC? A. Yes. Q. And that so far the company had been providing cloud based technology to the CBA? A. Yes. Q. You weren't familiar with ServiceMesh, but were you familiar with CSC? A. Yes. Q. CSC was a large company in the IT environment, was it not? A. Yes.
8. Ms Drury agreed that it was usual for there to be an urgency for transactions to complete before the end of the financial quarter. This allowed revenues to be recognised in that quarter. Ms Drury gave the following evidence:- Q. It was standard procedure for McAfee to make the commercials of the deal conditional on the deal being completed by the end of a financial period, was it not? A. Yes. Q. And could I suggest to you that that was the case for this transaction involving ServiceMesh as well? A. Yes.
9. In re-examination Ms Drury gave evidence that the discounts in each commercial proposal had approvals up until the end of a particular period and the dates referred to in each proposal referred to the date when those approvals expired. If a deal slipped into the next quarter, further approval had to be sought.
10. Finally Ms Durry was unable to recall if there were any commercial proposals made to the CBA between September 2012 and the end of 2013 beyond the three proposals - Take 2, Take 3 and Take 4.

Evidence of Mr Geoffrey Fuggle

1. Mr Fuggle was employed by HP as an Account Executive from 2011 to 2015 and was responsible for the CBA account. During 2013, HP was providing the CBA with end-use computing services including providing desktop and laptop services, email and end-user productivity software. These services came under the umbrella of "Workplace as a service" (WPaaS). This included the McAfee security software.
2. On 19 December 2013 Mr Fuggle sent an email to Mr Waldron (Exhibit E, pg.1965). He had become aware through a conversation with the accused that the CBA was negotiating directly with McAfee for an ELA. In his email he stated that it wasn't clear what the procurement mechanism would be for the bank and whether the CBA would procure direct from McAfee or through a reseller. The email then went on to propose HP to be the reseller for the ELA which would allow HP to offer greater value to the CBA.
3. Mr Fuggle gave evidence that if HP were to continue to be the third-party reseller of McAfee security software there would have been advantages, namely, HP would be able to provide levels of advice and consultation in the utilisation of the McAfee products. He asked Mr Waldron to call him or let him know his thoughts on the matter ASAP but never received a response from anyone at the CBA to his email.
4. In cross-examination Mr Fuggle, consistent with his statement to police gave evidence that the accused told him that a deal had been done with McAfee and that he implied that no opportunity exists for HP. HP were seeking renewal of a WPaaS renewal that was in the order of $4 to $5 million and he agreed that HP did not wish to jeopardise its prospects of securing that renewal with the CBA solely because of the lack of McAfee software.
5. Mr Fuggle gave evidence that HP intended to price match the deal proposed and agreed by the CBA. He gave the following evidence:- Q. You were taken to the second last paragraph by my learned friend amongst others and asked questions about "Nor would there be a change to the deal you have negotiated with McAfee direct"; do you see that? A. Correct. Q. Is another way of expressing that, that you would price match whatever had been agreed by the CBA? A. Yes. That was the intent. Q. Was there any discussion that you're aware of with the CBA that HP would in fact beat the price offered, apparently, to the CBA as at 19 December 2013? A. No, there was not, as far as I'm aware.
6. In re-examination Mr Fuggle described his conversation with the accused in the following evidence:- A. That the conversation I had with Jon was not a very long one, and, per my previous experience with Jon, it was polite, but with a normally dismissive undertone in regards to that topic.

Evidence of Ms Judy Cole

1. Ms Cole was employed by Hewlett-Packard from 2011 to 2019 as Account General Manager and was responsible for the relationship between the CBA and HP. The CBA was a client of HP since 2001 and was HP's largest account in the Southern Hemisphere. Mr Fuggle reported directly to Ms Cole.
2. Exhibit E, pg.1960 was an email from Ms Cole to Mr Fuggle dated 10 December 2013 forwarding an email she had received from Keith Hunter.
3. She gave evidence that the HP contract was due to expire at the end of 2014 or in 2015. She had become aware that the accused was currently negotiating an ELA with McAfee, and she had asked Mr Hunter whether there was an opportunity for HP, CBA and McAfee to have a discussion to take into account CBA's overall licensing commitments. He had advised her that the accused would reach out to her and she gave evidence that she met Mr Waldron on 10 December 2013. In that meeting he communicated that he was negotiating directly with McAfee and that he would like HP to take the McAfee licensing out of the scope of its contract with the CBA. She gave evidence that the accused said it was about getting the best price for the bank. Ms Cole gave evidence that the accused explained that he was still negotiating with McAfee, so the HP security team put together a proposal for HP to provide the McAfee license that was presented to the CBA on 19 December 2013. The accused had declined the proposal and informed HP he was proceeding directly with McAfee.
4. Ms Cole gave further evidence that she met with Mr Hunter at the CBA on 20 December 2013 and had discussions about the provision by HP of McAfee products. She knew at that time that CBA had not yet signed contracts. She informed Mr Hunter that it could impact their service agreements and HP's response times in an appeal to have them reconsider. She was told by Mr Hunter that they had made a decision and that "you need to basically let this go".
5. Ms Cole gave evidence that the new HP contract signed with the CBA in May/June 2014 removed the cost provision of the McAfee software to the CBA. She gave evidence that HP continued to provide backup software and services up until the signing of the new contract and continued to charge the CBA for the McAfee security software and services.
6. In cross-examination Ms Cole gave evidence that she subsequently learned that the third-party providing the software was a company called ServiceMesh. She found that out "probably like months later". The WPaaS between HP and the CBA was completed in 2014 and she confirmed that it ran for a number of years.

Evidence of Mr Tim Whiteley

1. Mr Whiteley was employed by the CBA from June 2000 to September 2013. Between 2006 to 2013 he was the Executive General Manager of Application Development at the CBA. He gave evidence that at some point in time he moved to a unit which was managed by Mr Hunter who was his peer. He gave evidence that at no point in time did he have any discussion with Mr Waldron about his engagement in secondary employment. Nor did Mr Hunter ever relate any information to him about any secondary employment that he had ever engaged in.
2. In cross-examination Mr Whiteley gave evidence about the accused's various roles at the CBA. He agreed that CBA's relationship with SMI initially began with a study into the suitability of moving the CBA's application to a cloud platform, and that it was expected this would provide cost savings and efficiencies to the CBA.
3. Mr Whiteley confirmed a letter from Mr Harte to Mr Pulier dated 19 April 2011 (Exhibit 60) referred to the CBA's commitment over a 48-month period to spend AUD$25 million to realise their cloud-based model. He was cross-examined on his police statement as follows:- Q. Can I suggest at page 3, paragraph 20 of your statement of 26 March 2015, you said, "I always thought it would have made sense if CBA had a financial interest in ServiceMesh. Do you remember saying that? A. Yes. Q. Why did you say that? A. The nature of the relationship and the stage of the technology. Q. Can I suggest that one other reason was that CBA was doing a lot of work to help ServiceMesh mature the agility product. A. We were doing work to help us use the agility product to solve - for CBA's interests in cloud computing. Q. Which in turn benefited ServiceMesh; is that not right? A. It would be a benefit to ServiceMesh, yes. Q. Can I suggest to you that Mr Harte suggested that the CBA should have warrants in ServiceMesh; isn't that right? A. Yes.
4. Mr Whiteley was asked about the "On Demand Infrastructure Program". He gave the following evidence:- Q. Can you tell us in general terms what the purpose of the ODI program was? A. That was the name of the program given to building the cloud computing capability. Q. Prior to cloud computing the bank was, I suggest, reliant upon large outsourcing contracts for companies to provide server infrastructure; isn't that right? A. That's correct. Q. Part of the ideology behind the move to cloud computing, I suggest, was to break up or decouple from such large contracts; isn't that the position? A. Yes. Q. And one entity that provided a significant number of outsourced services and servers to the bank was HP; isn't that right? A. That's correct. Q. Can I suggest, therefore, that part of the effect of the move to the cloud would be to reduce reliance upon companies such as Hewlett Packard and their large outsourcing contracts; correct? A. Yes.

Evidence of Ms Kate Brown

1. Ms Brown is employed by the CBA as Executive General Manager, Group Services Legal/General Counsel and has been employed by the CBA for approximately 15 years.
2. Ms Brown gave evidence that on 17 December 2014 she was requested by Matthew Keaney from the Group Security Unit at CBA to attend the meeting with Mr Waldron at CBA's head office in Sydney. She took contemporaneous notes during the meeting which were transcribed shortly thereafter. Most of the questions were asked of Mr Waldron by Mr Keaney. To summarise his answers, the accused told the investigator that he would have weekly calls with Mr Pulier and Mr Twynham. The nature of services provided by SMI to CBA was an Agility Product, which sat as a manager of cloud computing services. There was a Master Services Agreement with SMI and beneath that MSA were Statements of Work or contracts for the services to be provided.
3. During the meeting Mr Keaney made reference to the CBA's Statement of Professional Practice (Exhibit U). In response the accused had said that he had done work in the UK with the government working on cloud strategy and had also worked in the USA with the enterprisation of cloud computing and speaking arrangements. The accused said that he was very conscious of the CBA's intellectual property and that he was not currently doing anything in terms of consulting work. The accused said that eight weeks ago he was doing some documentary playbook work on the enterprisation of cloud technology which he had started in April last year and finished weeks prior to the meeting.
4. Mr Keaney asked the accused whether the outside work he was doing impacted the performance of his role at the CBA. The accused responded that many people had been involved in the SMI deal. The accused was also asked about ACE Inc., and he told the investigator that it was the corporation that engaged him as a consultant, and they paid him a fee-for-service.
5. Ms Brown gave evidence that when asked about payments made into his CBA account the accused acknowledge that $500,000 had been paid to him. He offered to check his records and said that there were invoices and Statements of Work. He told the investigator that the work he had been doing was to build an enterprise IT and develop a playbook for ACE and that Andrew Goldstein had requested the work. He also talked about building up a practice of enterprise transformation and said that the remuneration was about $400 to 500K "this year".
6. When asked if there were other consulting payments the accused responded that no other payments have been received from anyone else this year.
7. When asked what he'd done with the funds the accused said he had paid down his debt for the purpose of keeping his wife happy.
8. Mr Keaney asked the accused when did he find time to do this consulting work and how many hours he was spending working on the consultancy. Ms Brown gave the following evidence:- A. He said in response, talking about an old world and a new world, which I understood to be reference to changes in technology. He didn't specifically answer the question, but he talked about cloud software or cloud computing being everywhere, and he talks about taking a McAfee product set security next to the application he was talking about the technological things that he was working on, was my understanding. And then the new virtual machine has the security and then he started talking about ServiceMesh, which was an entity that the bank had a relationship with, and talked about cloud secure technology, was my understanding to do with ServiceMesh, and describing that we, being my understanding, was the bank used McAfee products, which is a security type product, and we only had utilised about half of what I understood McAfee had to offer, was I think he started talking about the McAfee security set the bank was using. Q. Did you see that as being responsive to the inquiry that Mr Keaney had made about how it was that he found the time to do $500,000 worth of work? A. No, I did not.
9. Ms Brown gave evidence that Mr Keaney asked the accused about TDs 19, 20 and 21. The accused responded that he had not had much involvement, that it was Tom Richardson's team that had been responsible and that he had been in New York. He was not involved in the day-to-day negotiations, but he had done one check in call when he was in New York. Mr Keaney asked him why the transaction documents were being rushed but there was no response to that question.
10. When asked about the value of the transactions the accused had said that there was a lot of value and spoke about a $60 million to $80 million benefit to the CBA.
11. Ms Brown gave evidence that Mr Keaney told the accused that he was going to ask him a confronting question, and then asked him whether he had benefited from the transaction to which the accused responded "No." Mr Keaney then showed him an email dated 21 December 2013 to his wife where there was a reference to $1.5 million being confirmed. The accused responded that it was not related at all to the transactions, that he was not sure what it was referring to, but he did not have $1.5 million in the bank and did not know what it was for.
12. Ms Brown gave evidence that during the meeting she asked about the urgency of the TDs and that the accused had responded that, "I - just trying to get it done."
13. Ms Brown gave evidence that the accused was asked about his relationship with Mr Pulier and whether it had been disclosed. The accused responded that he didn't think he should have to, otherwise he would have to disclose all his relationships. When asked about his engagement with ACE he gave the following answers:- A. Yes. In April that Ace had contacted him, and then he got a call, and he said, "Andrew is all I know", and I understand that to be a reference to Andrew Goldstein. Q. What was the next question that was asked? A. Mr Keaney asked does anyone else do work for Ace, is my understanding of that question. So anyone else do any work for Ace. Q. Did Mr Waldron respond? A. He did. He said, "Keith Hunter does some consulting", and he had said to Mr Hunter, "You should use Ace", and he didn't know Andrew Goldstein at all before he had been contacted by him. And four to six weeks to get to know him - get to know him, and then he started work for Ace, and that no other payments from anyone other - other than from Ace. Q. What was the next question that was asked? A. "Did you know Andrew knew Eric Pulier?" Q. Do you know who Mr Keaney was referring to when he said Andrew? A. I believe that was Andrew Goldstein. Q. Did Mr Waldron respond to that question? A. No, he did not.
14. Ms Brown gave further evidence that when asked about the payments of $400,000 to $500,000 he referred to, the accused said he would check his CBA accounts and confirm.
15. When asked whether he ever sought employment with SMI or CSC the accused responded that it was not the kind of work or company that he wanted to work for.
16. Finally the accused was asked if he was aware of any links between Eric Pulier and Andrew Goldstein. Ms Brown gave the following evidence:- Q. Did Mr Waldron respond to that? A. He said no, but in IT startups in the USA it's a very small world, and he would not be surprised if they knew each other. It was a small community. Q. Is that the full recollect - or is that the full extent of the conversation that occurred as far as you can remember by reference to your notes? A. Yep.
17. Ms Brown was cross-examined on the handwritten notes she took during the interview with Keith Hunter on 16 December 2014 (Exhibit 61).
18. Ms Brown was referred to her notes taken during the interview with Jon Waldron on 16 December 2014 (VD Exhibit A1). Ms Brown gave the following evidence:- Q. You also agree that you haven't set out every word that was spoken by the participants in the conversation; correct? A. That's correct. Q. Can I suggest that you also haven't included every question that was asked. A. I couldn't be confident of every question. There may have been pleasantries, for example, at the commencement of the meeting that I would not have recorded; however, if there was in my view and this is of course my judgment on the day an important question asked, I would have recorded that question. He did recall that question. I'm confident of that. Q. Can I suggest, however, that you didn't record every question. A. I may not have recorded things like pleasantries or other questions that I did not deem to be relevant, but not matter that went to the substance of what was being discussed on the day. I would have recorded that.
19. Ms Brown was shown a typed version of her notes taken during the meeting with Mr Waldron on 16 December 2014 (VD Exhibit A2). Ms Brown gave the following evidence:- Q. We see there in the left hand column a few lines down the initials "JW"; correct? A. Yes. Q. There are apparently a number of answers, which are said to have been given by Mr Waldron; do you agree? A. I don't know if they were answers, to be honest, or trains of thought, because there are in my experience of interviews, it could be a train of thought versus a question and answer scenario, so I couldn't distinguish. From this account it appears to me that it's not responsive to a question. Of course, this is a long time ago, but when I see that, it could be me taking notes of a train of thought as expressed by Mr Waldron, versus a question and answer scenario. Q. Can I suggest to you that it may be the case that this is, as you express it, a train of thought consisting of a number of different expressions? A. It could be. Q. Alternatively, it could be a series of question and answers; isn't that right? A. The best I could in my note I recorded questions and answers. So to the extent that Mr Keaney was asking a question, I sought to record the question and separately record the answer. I would be if it's not in that style, this answer, for me, it appears to be a train of thought, but, of course, it's a long time ago and I can't rule out that I may have missed a particular question. Q. I suggest to you at some time during the interview Mr Waldron said that he would show those in the interview the transactions he had received into his accounts using his iPad, isn't that right? A. I don't recollect that.
20. In re-examination Ms Brown was asked to clarify the evidence she gave regarding Mr Waldron's interview. Ms Brown gave the following evidence:- Q. Page 3 of those notes, at the top of the page you were asked questions by my learned friend about recording the phrase "Tim Whiting knew." Do you see that? A. Yes. Q. Did you know anybody called Tim Whiting when you were provided with that information on 17 December 2014? A. I may have when I see the surname Whiting, I'm speculating, may have conflated David Whiteing who was I think a group executive at the time. No, I don't recall knowing a Tim Whiting. Yeah, I don't recall the name.

Evidence of Darren Murphy

1. Mr Murphy commenced with the CBA in January 2011 as a Senior Manager in the Protective Security Business. In October 2012 he was promoted to Executive Manager of Investigations at the CBA. Previously he had spent 13 years as a detective in the New South Wales Police Force.
2. Mr Murphy gave evidence that he participated in the interview with the accused on 17 December 2014 at the CBA head office in Sydney. His General Manager Mr Keaney and Ms Brown from CBA's Group Legal Service team were also present during the meeting. He had taken handwritten notes and was given leave to refresh his memory from those notes.
3. Mr Murphy gave evidence that he asked Mr Waldron directly about SMI and his relationship with persons from that company. Mr Waldron responded:- A. "Brad/Eric are the two closest. Known them since 2010. Everyone else through working. Eric/Brad good friends. Came to wedding", indicating Mr Waldron's wedding, "Since CSC acquisition hasn't had much to do. Close friend with Brad", referring to Brad Twynham, "Team is still working with them. Eric interesting, clever, inspiring. Moved on Mindwise from CSC but still with them. Personal interactions, yes. Course with Keith once a week or fortnight. Key service provider. Cloud computing".
4. Mr Murphy asked the accused questions about the CBA's MSA with SMI and then asked the accused about the CBA's Statement of Professional Practice and conflict of interest policy. Mr Murphy gave the following evidence:- Q. What was said next? A. Mr Waldron replied, "Wasn't aware of that aspect specifically. Thought it was okay to do the work outside of the group, many people do." Q. Who spoke next? A. Mr Keaney. He referenced the SOPP, and per my notes I believe Ms Brown showed it to Mr Waldron. Q. Mr Waldron respond? A. He did. Q. What did he say? A. He made a gesture of being, you know, hands up, I wasn't aware.
5. Mr Murphy gave evidence that the accused disclosed he had engaged in external contracting up until eight weeks prior to the interview and although he had not received formal approval for that work, he told people and referred to Mr Whiteley, a former employee of the CBA.
6. Mr Murphy gave evidence that the accused was asked if he knew "ACE" and he responded, "Yep, they pay me."
7. Mr Murphy gave evidence that when he referred to Mr Goldstein the accused "paused to look up for recollection" which he found a little strange at the time. He gave the following evidence:- Q. What did you find strange about it? A. Well, he was providing answers in a, in a regular consistent fashion around this topic and then stopped to pause and go, "Oh, Andrew Goldstein, who is that?" And I just made a note to it because I thought it was odd. Q. Did he provide you with any further information at this point? A. Reference April this year. Q. Did you make any observations of him when he provided that information to you? A. Yes, I did. At this time, I noticed that Mr Waldron was quite visibly nervous during this part of the questioning and there was a change in the demeanour at this point. Q. What observations of him did you make that caused you to come to the conclusion that he was visibly nervous? A. So, his demeanour had changed from the normal questioning, at this point looking up and trying to recall in introducing who Andrew Goldstein was. He looked a little bit flush in the face and sort of stammering for his answers.
8. Mr Murphy gave evidence that Mr Keaney had asked the accused about payments from ACE and the accused had responded $500K roughly and referred to Statements of Work and associated invoices. He said he was looking to build a practice like KPMG to be a consultant.
9. Mr Murphy gave evidence that Mr Keaney had asked the accused if he had benefited from the McAfee in TDs19 to 21 to which he responded "No, not at all". He was then shown an email with a reference to $1.5 million (Exhibit E, pg.1349) which the accused responded that was, "Not related at all". Mr Murphy then gave the following evidence:- Q. What was the next thing that was said? A. Mr Keaney said, "Explanation". Q. Do you know what he was referring to when he sought an explanation? A. Yes. He was asking for an explanation as to what do you mean that comment it's "not related at all" to the line of questioning that we've been having around ServiceMesh and the transaction documents. Q. Did you make any observations of Mr Waldron at that time? A. I did. There was a noticeable pause and, sort of, a struggle to come up with the next answer and another - like my earlier comment, a visible changing in demeanour. Q. Did he say anything? A. He did. He took some time to respond initially. He then said, "Not sure. I should remember, as it's a huge number", continued to pause, in my words, struggle to answer, "I certainly don't have 1.5 million in the bank. It's me", as in referencing the email, not denying it's the email, "I don't remember writing it".
10. Mr Murphy gave evidence that Ms Brown asked the accused "How do you find time for consultancy work?" He then gave the following evidence:- Q. What did he say? A. "I don't charge by the hour", it says by two hour, I believe it says by the hour, "A set of documents, do the work at home, find time at home. It's more than a hobby, I'm a recognised world leader, I get asked all of the time." Q. Who spoke next? A. Ms Brown. Q. What did she ask about? A. "SOW" referencing Statement of Work for commissioning of this work. Q. Did Mr Waldron respond? A. Yes. Q. What did he say? A. He said, "Yes". In brackets I've got "provide copy." "Commission April through to September." Q. Do you have any recollection of receiving any documentation from Mr Waldron at that time? A. No, I can't recall if he actually had something on hand or not during the interview.
11. Mr Murphy gave evidence that Ms Brown asked the accused if there were invoices and if he could produce them. He had responded words to the effect "Check with ACE". When Mr Murphy asked "Who is ACE?" the accused responded, "Andrew Goldstein" and said "They found me; he emailed me" referencing April 2014.
12. Mr Murphy gave evidence that he asked the accused if he was actively seeking employment to which he responded, "No, I wouldn't want to work", as in outside of CBA.
13. During the interview the accused had cause to access his iPad which had been reset to factory settings. Mr Murphy gave evidence that the CBA devices that had been in Mr Waldron's possession prior to the interview had been remotely wiped, contrary to his instructions.
14. Exhibit V were the handwritten notes of Mr Murphy taken during the interview with Keith Hunter dated 17 December 2014. Exhibit W were the notes taken by him during Mr Hunter's interview on 23 December 2014. He gave further evidence that the electronic devices that were retrieved from Mr Waldron were subsequently supplied to Ernst & Young for forensic analysis.
15. In cross-examination Mr Murphy gave evidence that his initial investigation into Mr Waldron related to the use of his credit card and expenses charged to that credit card. The CBA then discovered that payments had been made into Mr Waldron's account. The payments were discovered by the investigations group of the CBA and not Mr Murphy personally. Thereafter Mr Murphy became responsible for the investigation.
16. Mr Murphy gave evidence that he spoke to Mr Waldron's upline manager, Mr Hunter on 10 November 2014. He gave the following evidence:- Q. Can I suggest to you that in your statement of 19 May 2015 at paragraph 14, you said the following: "On Monday, 10 November 2014, Geddes and I met with Hunter at his office at Sydney Olympic Park for the purposes of progressing the discussion of an investigation into Waldron's expenses. As a result of being aware of the large USD payments being received into Waldron's account, both Geddes and I asked Hunter whether Waldron was involved in any secondary employment outside of his employment with the Group." Do you remember saying that in your statement? A. I do and just for clarity, I think that's the second conversation we had with Mr Hunter. I thought you were referring to the first. Q. So you had an initial conversation on 23 October 2014. Is that not right? A. Yes. Q. And you agree that between the first and second conversations, you acquired the information about the payments into Mr Waldron's account; correct? A. In relation to the payments, yes, as well as other information came to light as well. Q. Focusing on that second conversation to give you the context, is it the case that Mr Hunter advised you that he was loosely aware that Waldron conducted consulting outside of his employment with the group? A. I believe that's correct. Q. And I suggest that he also stated to you that he believed Waldron had received approval to engage in secondary employment prior to him - that is, Mr Hunter commencing employment with the group in June 2011. A. Yes, I believe he said it was a pre-existing approval. … Q. Can I suggest to you that in that paragraph you said this: "When asked what Waldron did specifically, Hunter provided a somewhat vague answer and stated that it was 'consulting'. When pressed as to the type of consulting, Hunter stated he didn't really know, and it was for 'tech related stuff' or words to that effect." A. That's correct.
17. The witness gave evidence that at the time of Mr Waldron's interview it was a practice, and not a policy, that interviews were not recorded electronically at the CBA.
18. Mr Murphy agreed that his notes did not record every word that was said during the conversation with Mr Waldron. Mr Murphy created two documents, one being the handwritten notes and the other being a typed document. The typed document included an additional column (Exhibit B on the VD). Mr Murphy gave the following evidence:- Q. Can I suggest to you that the right hand column in the typed document is material that is not included in your handwritten notes; is that right? A. Yes, that's correct. Q. And that column, effectively, contains information explanatory of what appears in the left hand column. Do you agree? A. Yes. Q. The left hand column being a transcription of what was in your handwritten notes. A. That's right. … Q. When did you create the typed document, sir? A. Well, it's dated for my signature on 16 May 2019. I can't recall if that post dates or pre dates the committal hearing, but it was asked for in relation to trying to decipher the handwritten notes, which aren't exactly legible. Q. Can I suggest to you that the committal proceedings took place on 21 February 2018, relevant to you at least. Do you recall whether the typed document was created before or after the committal proceedings? A. I can't recall specifically, but I would go off that signature when I created it and signed it. Q. Can I suggest to you that by the time you had created the typed written document, there had already been approximately four and a bit years between the interview and your creation of that document? A. Yes, that's correct.
19. Mr Murphy gave evidence that when the accused told the investigator that ACE paid him, he looked visibly nervous. He gave the following evidence:- Q. What is it that you can recall happening. A. So when you interview somebody, there's normative and standard behaviours of how they generally respond, and then there's deviations from that. So my recollection at the time when I wrote the notes plus the interview, and even to this day, is there were several moments throughout the interview where Mr Waldron's behaviour and demeanour changed at various points where based on my training; my experience, I would say you exhibit stress behaviours. Q. And that stress behaviour is something that you now recall; is that the case? A. I recalled it at the time of writing the notes and it stayed with me the entire time.
20. Mr Murphy was questioned about the evidence he gave at the committal proceedings in relation to Mr Waldron's demeanour during the interview:- Q. I suggest you gave the following evidence at committal, page 8, lines 33 to 40: "Q. When you said, 'visibly nervous at this point', what did you mean by that? A. Well, a note to myself observing behaviour in the interview around the line of questioning and the answers, so Mr Waldron started appearing nervous. Q. Do you recall what you observed at that stage that caused you to write that note? A. I can't recall specifically, no. There's a range of behaviours that technically give rise to that, so. Do you remember giving that evidence? A. If that's in the transcript, yes. Q. So do you now have a recollection of those things happening about which you gave evidence yesterday? A. Yes. Q. Can I suggest to you your memory was fresher at the time that you gave evidence of the committal, was it not? A. It was more recent. Q. Therefore, relatively, it was fresher than it is now, isn't that right? A. Sure. Q. Can I suggest to you that the accused did not say, "Oh Andrew Goldstein, who was that?" A. That's not my recollection. Q. You, yesterday, also said this, I suggest, at lines 1103, line seven. "Q. What observations of him did you make that caused you to come to the conclusion that he was visibly nervous? A. So his demeanour had changed from the normal questioning at this point, looking up and trying to recall, and introducing who Andrew Goldstein was. He looked a little bit flush in the face and sort of stammering for his answers". Q. Do you remember giving that evidence yesterday? A. I do. Q. That doesn't appear anywhere in your handwritten or typed notes, does it? A. No detail, no. Q. Can I suggest it wasn't evidence you gave at the committal, instead you said, "I can't recall specifically, no", isn't that right? A. If that's what the transcript says, yeah. Q. Can I suggest to you that you're trying to reconstruct what occurred in the light of your notes that Mr Waldron was visibly nervous at this point, isn't that right? A. No I don't agree with that. I've had time to there's a couple of key moments from this particular interview that stood out as quite strange at the time. One of them was around the $1.5,000,000 payments which we discussed yesterday, the other one was around this in relation to the Andrew Goldstein piece. The answers were coming quite freely from Mr Waldron during the early parts of the interview and, at this point, was the first time he displayed that different behaviour and I - as I outlined yesterday, I thought it was odd, it was almost like it was a feigning or a mock, you know, "Let me think about who this person might be", so that's my recollection.
21. It was put to Mr Murphy that he was trying to reconstruct what occurred during the meeting from his typed notes with which he disagreed.
22. The witness was asked about his earlier evidence in relation to his typed notes. He gave the following evidence:- Q. Can I next ask you to turn, please, to page 9 of your typed notes. A. Yes. Q. And I'd like to ask you questions about the second entry under the heading "wrap up", "No, wouldn't want to work." Do you see that? A. Yes. Q. I suggest you gave the following evidence yesterday, page 1116, line 23 and 24: "Q. What did he say? A. He said, 'No, I wouldn't want to work as in outside of CBA." Do you remember giving that evidence? A. I do. Q. The words "outside of CBA" don't appear at page 9 of the typed document, do they? A. No, they don't. Q. Can I suggest they also don't appear in your handwritten notes at page 19 either, do they? A. No. Q. Is there some reason you, yesterday, said the additional words "as in outside of CBA?" A. I was just providing extra context. Q. And was that extra context based on your actual memory of what occurred during the interview? A. Yeah, it was a common thing that people say in relation to these kind of questions around secondary employment and outside work. Q. Is it the position, therefore, that you're reconstructing what Mr Waldron meant when he said, "No, I wouldn't want to work based upon what people frequently say." A. No, it's my understanding from - my interpretation of his answer is that he didn't want to do extra work, when he answered that question, outside of his employment of CBA. Q. I suggest to you that he didn't say that, did he? A. Well, the note said he said, "No, wouldn't want to work."
23. Mr Murphy gave evidence that on 18 December 2014 Mr Keaney wrote to Mr Waldron requesting further information associated with the responses he provided during the interview on 17 December 2014.
24. Exhibit 66 was a letter from Toomey Pegg Lawyers to Mr Keaney dated 23 December 2014.

Evidence of Mr Adam Harrison

1. Mr Harrison was the manager in the fraud investigation and dispute service for Ernst & Young consultants for two years up until 26 February 2015. On 17 December 2014 he received from CBA three devices that had formerly been in the possession of the accused namely, a HP Elitebook, Apple iPad Air 2 and Apple iPhone 6.
2. On 19 December 2014 he received a Dell E4300 laptop formerly in the possession of Jon Waldron.
3. On 22 and 23 December 2014 Mr Harrison also received a number of devices said to be formerly in the possession of Keith Hunter.
4. Mr Harrison gave evidence that on 18 December 2014 he examined the Apple iPad Air 2 of the accused which was in an unconfigured state. He gave evidence that the state could be achieved by either wiping or returning the device to factory settings. His analysis could not determine whether it had been used or not.
5. On 19 December 2014 Mr Harrison attempted to extract the contents of the hard drive of the HP Elitebook laptop of the accused. The device was encrypted, and Exhibit H was a table of messages between the accused and Mr Hunter.
6. Mr Harrison gave evidence that he had conducted a search by reference to a number of key words and had retrieved the text messages which were fragments of deleted data associated with a webmail account. In Exhibit H there was a column headed "Snippets". He gave the following evidence:- Q. Can you just clarify for us what you mean by snippet? A. So a portion of the message, potentially the whole message in the event of a short message, or it may be truncated, we may have lost the beginning, we may have lost the tail end of the message that was actually stored but by virtue of the fact it being in a temporary store are not, you know, specific data structure designed for long term storage. We may not have the whole message retrieved.
7. Mr Harrison gave evidence about his examination of the Apple iPhone 6 formerly in the possession of the accused. He gave evidence that the device had relatively limited data on it which indicated to him that it might have been or attempted to have been wiped to remove data from it. That had occurred at 11:45am on 17 December 2014. It had been returned to factory settings however subsequently credentials had been entered for an iCloud account and the device had been reconfigured which had caused data from the cloud that had been stored by Apple to be synced back to the device therefore negating, to an extent, the benefit of wiping it.
8. Mr Harrison gave evidence that the syncing process meant information was downloaded back into the "Notes" application on the iPhone. Exhibit Z was a file received from the "Notes" application.
9. Mr Harrison was shown Exhibit G. He had received from the CBA documents described as "SOW1", "SOW Invoice", "SOW2" and "SOW Invoice" under the name Keith Hunter. He examined the documents on 22 December 2014 and analysed the metadata in relation to each of the documents. He came to the conclusion that the creation and last modified date recorded on the metadata for the documents "SOW1" and "SOW2" were created on 20 December 2014. He then gave evidence that the signature on each of the documents, "Andrew Goldstein" was added to those documents on 21 December 2014.
10. Mr Harrison noted that the dates of creation of the documents and modification by the addition of the signature Andrew Goldstein did not coincide with the dates recorded on each of the documents. Similarly, by analysis of the meta data connected with the electronic copies he discovered the two invoices had been created on 20 December 2014. He gave evidence that did not coincide with the dates recorded on the documents.
11. In cross-examination Mr Harrison gave evidence that his analysis performed on the iPhone in possession of Mr Waldron (Exhibit Z) did not allow any conclusion as to the authorship except based on the discovery of the data on the phone. Mr Harrison confirmed that he could not tell if the note had been shared with the user of that particular iPhone.
12. Mr Harrison was asked to refer to his statement dated 22 May 2015 and the appendix therein referred to as "Appendix EYA of Mr Locke's letter" which included snippets which followed Magnetic Forensics case information. Mr Harrison gave the following evidence:- Q. You would agree, would you not, that what you extracted or what Mr Locke has extracted, I should say in his letter, is a mere fraction of what was recovered by you and your team, correct? A. If you'll excuse me I may be able to answer that more completely if I just have two seconds to review the first page? Q. Of course, please do. A. It would be an assumption based on the volume that it is probably a subset, but it is possible that those were all that were recoverable. Q. Can I suggest to you that there are 120 entries in this magnets case info document, are there not? A. Yes. Q. And there are but a fraction of those in Mr Locke's report, do you agree? A. Yes, certainly.
13. It was put to Mr Harrison that the data he extracted was found in a single temporary file created by an internet browser on the computer he analysed. Mr Harrison gave the following evidence:- Q. And it was one which had not at that stage been deleted, had it? A. No, it had not. Q. I suggest it's one temporary file created by an internet browser displaying what the user would have seen on the screen; is that right? A. Yes. Q. In other words, all the messages in Mr Locke' report as well as the other ones which were deemed irrelevant, would appear on the screen when the user accessed the webmail interface; correct? A. Yes, just an additional point. So they may not be visible to the user if, for instance, a page loaded and you were browsing and it went below the bottom of the screen and they didn't scroll down there. So the computer is aware of them. They get loaded into the cache. Q. But they're all displayed either on the screen or in the memory of the computer, if that makes sense, at the same time. Is that not right? A. I couldn't say definitely that this was the result of a single time that that mailbox was opened. It could have been two or three instances and that file being updated over time. Q. With respect, Mr Harrison, a temporary internet file was created by a web browser when a user accesses a web page; isn't that right? A. Yes, however, you can have data associated with multiple pages stored within one file. Q. If the file is updated, it deleted the data that was there previously, doesn't it? A. Not necessarily. Q. I suggest to you that if data is modified, it creates another temporary file in the temporary directory, doesn't it? A. Under what circumstances, sorry, would the data be modified. Q. I suggest this to you. If a person logs on to his Gmail webmail interface, is it possible that the internet browser creates a temporary page? A. Yes. Q. And that temporary A. Temporary file scoring page data. Q. And that page data will contain everything the user sees plus whatever might be beneath the screen to which he needs to scroll; correct? A. Again, it's on the basis of the browser as to what information it caches or does not. I couldn't say it was everything on the screen would be stored in this temporary file for instance. Q. Is it not possible, sir, that the data which you captured including the messages extracted in Mr Locke's report, were all displayed on the screen at a single time. A. Yes, I think that's fair to say that's possible.
14. In re-examination Mr Harrison identified the extraction report on the Apple iPhone dated 18 December 2014 (VD Exhibit 2) and gave evidence that the note in Exhibit Z was located between notes dated 2 February 2014 and 3 May 2014.

Evidence of Frank Martinez

1. Mr Martinez was the co-founder of SMI and served as its Chief Technology Officer and Chief Strategy Officer. Mr Pulier was the other co-founder and the Chief Executive Officer. SMI commenced in 2008.
2. Mr Martinez gave evidence that he had a service contract with SMI which completed upon the sale to CSC. There was a dispute between him and Mr Pulier as to his interest in SMI, concerning an agreement that he had come to with Mr Pulier. He gave evidence that Mr Pulier had indicated that he was going to pay him from the proceeds of the sale, but from another entity called TechAdvisors ("TA"). He gave evidence that he held no office in that company nor was he involved in its operations.
3. Mr Martinez gave evidence that he had a holding company named Tesoro. He gave evidence that on 6 March 2014 he had communications with Mr Pulier concerning TA about which Mr Martinez sought tax advice (see Exhibit AF).
4. Exhibit AF also included a spreadsheet created by Mr Martinez at Mr Pulier's direction. It was referred to in Mr Martinez's deposition on 25 June 2020 and included a column entitled "Total Payout (Net of Escrow)". Mr Martinez gave evidence that the column represented the allocations to each of the parties named in the spreadsheet.
5. Mr Martinez gave evidence about the various names on the spreadsheet including those of Michael Harte, Keith Hunter and Jon Waldron. Each of those persons was to receive a payment from TechAdvisors as set out in the schedule.
6. Mr Martinez gave evidence that he knew of Ace Inc. "peripherally", and knew nothing about what it did or any of its workings. He understood that Mr Goldstein was an employee of a corporation associated with SMI.
7. In cross-examination Mr Martinez gave evidence that SMI's engagement with the CBA initially involved providing the Agility Platform to the CBA. Mr Martinez held numerous patents in relation to the Agility Platform. Mr Martinez agreed that the Agility Platform was cutting edge technology at the time and was designed to assist reducing IT costs. The Agility Platform was used by Capital One, Visa, Deutsch Bank, UBS and the CBA.
8. Mr Martinez agreed that from 2010 and continuing until 2013 the relationship between CBA and SMI was a type of "open kimono" relationship.
9. Mr Martinez agreed that he met with Mr Waldron on 12 June 2013. Mr Martinez gave the following evidence:- Q. Can I suggest to you, Mr Martinez, that one of the reasons you met with Mr Waldron on that occasion was to explore possible corporation opportunities outside of the ServiceMesh CBA relationship? A. Possibly, I mean, I think I believe that the topic was there was a there was an opportunity that I was evaluating with the potential acquisition of some intellectual property and some technology for a company on my own behalf, you know, outside of outside of ServiceMesh, and I believe that we, you know, that we discussed it during that - during the course of that. It was a it was a database as a service company and it was that was a domain that John had a specific expertise in and I believe I discussed it with him in order to get some feedback from him on it. Q. And, in fact, you knew that Mr Waldron had been a senior figure at CBA involved in databases before he commenced on the cloud computing strategy; correct? A. That's correct.
10. Mr Martinez identified the draft document (Exhibit 68) which he had presented to Mr Waldron either during or after their meeting in June 2013. He described it as "a generic document" that his company used when they were considering adding an advisor to any of their portfolio companies.
11. Mr Martinez was cross-examined on evidence he had given on deposition concerning Mr Harte's goal to break down the monolithic outsourcing approach previously taken by CBA for their computing services.
12. Mr Martinez was asked about the relationship between TechAdvisors and SMI. He understood that TechAdvisors held shares in SMI. He gave the following evidence:- Q. When Mr Pulier suggested to you that the dispute about the equity you had raised with him, could be resolved by use of TechAdvisors, can I suggest that you understood that it was to be used that is TechAdvisors was to be used to give grants to prospective advisors to the company; is that not right? A. That was the understanding prior to the dispute. TechAdvisors came to be at the formation, at the time of the formation of the company. It was on the company's cap table from inception. Q. So, it's in fact since the inception of ServiceMesh you understood that it was to be used - TechAdvisors was to be used to give grants to prospective advisors to the company; is that right? A. That's my understanding.
13. Mr Martinez was questioned about his evidence in relation to the spreadsheet he created (Exhibit AF). Mr Martinez agreed that there were multiple revisions to the document which was finally subject to an agreement. He gave the following evidence:- Q. Can I suggest you also gave this evidence page 83. "This was part of the dialogue that we had that was going, you know, back and forth, you know, that figure, you know, tended to change. I think I provided him with what I felt was the target and then, you know, he indicated that whatever amount it was, you know, that was ear marked for me, that there should be a similar amount that should be ear marked for him." Do you remember giving that evidence? A. I do. … Q. Can I suggest that part of this process was that you devised the initial spreadsheet; correct? A. Did I devise the original spreadsheet? I took the inputs for the original spreadsheet from Mr Pulier. … Q. You assisted, in effect, by yourself adjusting those percentages; isn't that right? A. What I simply did was took what he had provided, you know, as the initial indication and tried to get it as close to pro rata so that it would equal 100%, and then provided that back to him for feedback, and he provided feedback to the amounts that were reflected, and those were exactly what were indicated in the version that you have. Q. Can I suggest that there was a backwards and forwards of this process of adjusting figures. Would you agree with that? A. Yes, there was. Q. Can I suggest, also on page 83, you gave this evidence: "It looks like Mr Waldron, who we talked about, is just listed as Jon, is at 14.95%. Do you see that?" Answer, "Yes." Question, "And a figure of 2.4 million. Just to be clear, Mr Pulier is the one that directed you to put those figures into the spreadsheet?" Answer, "Yes." Question, "Did he ever indicate to you why Mr Waldron was receiving a higher percentage to other people at CBA, namely Michael Harte or Keith Hunter?" Answer, "Not specifically." Question, "What did he say, something in general?" Answer, "In general, I recall, you know, him, you know, saying that, you know, he felt that Jon was someone, you know, who could bring a lot of value. That was, you know, pretty much it." Do you remember giving that evidence? A. I do. Q. Was that correct? A. Yes. Q. There's reference in that evidence to a figure of 2.4 million and 14.95%. I suggest those figures are different from the figures of the spreadsheet you ultimately produced to police; is that not right? A. Could be. Q. I suggest to you that there was in fact a revision of figures on a number of occasions; correct? A. That's correct. Q. I suggest that there were a number of versions of the spreadsheet with varying figures. Do you agree? A. Agreed. Q. Those various versions were exchanged between yourself and Mr Pulier and lawyers; is that not right? A. Some may have, some may have been simply between myself and Mr Pulier.
14. Mr Martinez gave further evidence about his discussions with Pulier:- Q. Can I suggest to you that in discussions with Mr Pulier, he mentioned to you that there was a tax benefit to shelling out money that he might receive as a result of the CSC acquisition of ServiceMesh, isn't that right? A. There were - there were probably a number of suggestions from Mr Pulier to that or other… but I don't recall anything specifically. … Q. To rephrase that, I suggest to you Mr Pulier told you that he saw a tax benefit in shelling out money TechAdvisors received as a result of the CSC acquisition of ServiceMesh, correct? A. Yes. Q. And that his idea was to pay out from TechAdvisors for prospects of work to pay individuals he would do work with in future, is that right? A. That may have been a topic of discussion. I don't recall specifics. Q. Can I suggest to you that you gave this evidence on page 287, "And you never talked to Mr Waldron about it" being the spreadsheet "either?" And your answer was, A. No, my understanding was that he was, you know, wanted to work with people in the future and it was a list of people that he wanted to work with in the future." Is that not right? A. Yes. Q. Was that correct? A. Yes.
15. Mr Martinez gave further evidence that he was concerned that Mr Pulier's ex-wife wanted to reopen her divorce settlement and he was concerned that she would come after the assets held by TA.
16. In re-examination Mr Martinez confirmed his evidence given on deposition in the SEC proceedings and confirmed his evidence that the money he received from TechAdvisors to resolve his claim with Mr Pulier was not for prospective work.

Evidence of Mr Bradley Twynham

1. Mr Twynham gave evidence that he had a contractual relationship with SMI as a consultant in February 2010. His work involved building relationships with key stakeholders within the account. He was introduced to Mr Waldron by Mr Pulier in December 2009. He gave evidence that he was tasked by Mr Pulier to get to know Mr Waldron well, make him a friend, and to develop a friendship with him and work alongside him to forward the strategic objectives that both the bank and SMI were focused on.
2. In Exhibit E Mr Twynham identified an email he sent to Mr Greenberg on 4 February 2010 in which he outlined eight "valuable insights" he gained after taking Mr Waldron out for a few drinks.
3. Mr Twynham gave evidence that the information the accused had conveyed about the internal workings of his organisation in 2010 were consistent with the confidentiality agreement involved in the commercial relationship that existed between SMI and CBA.
4. Mr Twynham identified an email from the accused to Mr Pulier and himself dated 24 May 2011 (Exhibit E, pg.561) in which Mr Waldron advised "where the money goes".
5. Following Mr Waldron's promotion to General Manager at CBA in 2011, Mr Twynham identified an email he sent Mr Pulier on 12 October 2011 (Exhibit E, pg.579). In a subsequent email Mr Twynham had responded, "We promised, we delivered, now we have the flow of the moolah!!". He gave the following evidence:- Q. What did you mean by the term "moolah"? A. Money. Q. And why was it that you believed that the elevation of Mr Waldron would specifically result in more money flowing to SMI? A. I believe I made that clear previously but just for clarity, we had a subscription model with the ServiceMesh agility platform. As those as a service offerings were rolled out and the bank started to use them it would increase the number of instances the bank was consuming of our product which meant that more money was flowing to ServiceMesh on a monthly basis.
6. Mr Twynham identified Exhibit Y as an email dated 20 October 2012 including the running order of speeches at the accused's wedding where Mr Twynham was the best man.
7. Mr Twynham gave evidence that he became aware of the negotiations for the sale of SMI to CSC and that Mr Pulier had an earnout of 3 years he had to stay at CSC as an employee. He gave evidence that in around September 2013 he had a conversation with Mr Waldron and Mr Hunter about that when he drove them to LAX. After the sale he continued his employment with CSC however after an internal investigation into the sale his company-issued mobile phone was handed over to CSC.
8. Exhibit AA contained 5 text messages between 20 and 29 September 2013 between himself and Mr Waldron. At the time Mr Waldron was in the United States. He gave further evidence about the conversation that occurred when he was driving Mr Hunter and Mr Waldron to LAX as follows:- Q. What did you talk about? A. We were talking about the potential acquisition of Computer Sciences Corporation and ServiceMesh. We were talking about how we felt that Mr Pulier was not adept at being able to operate in a corporate environment such as what CSC was providing, if we ever ended up being acquired by them. And that Mr Hunter and Mr Waldron offered Mr Pulier some counsel in and around that and were willing to continue to offer him counsel in and around that to ensure that the acquisition was successful if it went - if it went ahead.
9. Mr Twynham gave the following evidence about his knowledge of the terms of sale of SMI to CSC:- Q. As of that date, what did you know of the terms of the sale of SMI to CSC? A. I knew the sale price. I knew of the fact that we would be working and transitioning to CSC. I was aware of an earn out, and I was aware that the deal was part cash up front and part equity to be earned out over a three-year period. Q. And what was your understanding as to the earn out provision that was agreed between the parties. A. I believe for every dollar of revenue that ServiceMesh was to make between a certain time period, I believe that was November and the end of January 2014. It would count towards $10 of equity towards the sale of ServiceMesh. Q. Did that cause you to have any particular motivation from the date that the agreement for purchase was signed? A. Yes. Q. What was that motivation? A. Obviously, part of my equity which was around 1% of the total equity in the company would have increased as a result of money earned during that earn out period. Q. So what was your motivation? A. To maximise the amount of money that I was making. … Q. Did you have any discussions with Mr Waldron about the opportunity to earn money through this earn out provision. A. I'm sure I did, but I don't recall specific conversations.
10. Mr Twynham then gave the following evidence about discussing the terms of sale with Mr Waldron:- Q. When do you say it was that you first discussed this issue of an earn out with Mr Waldron? A. I don't recall when I first discussed the issue of an earn out with Mr Waldron. I recall having a conversation with Mr Waldron at some point about a deal involving McAfee software, so. Q. Was it before that conversation about that deal with McAfee software that you'd discussed the earn out with Mr Waldron? A. I don't recall.
11. The witness identified text messages received by him for Mr Waldron on 31 October 2013 (Exhibit E, pg.2020) advising that the CBA had a proposal on the table already. He understood the accused to be referring to the McAfee proposal. He gave the following evidence:- Q. Had you and Mr Waldron discussed the earn out before you received that text message from him? A. I'm uncertain if I had discussed the earn out with him. I suggest, given it was 31 October, and the deal had closed prior to that, we may have, but I'm uncertain if I had discussions or Mr Pulier was having discussions. Q. Do you know why it was that Mr Waldron was sending you information about a proposal that was on the table already? A. I believe I was informed by Mr Pulier that CBA would be willing to assist us during the earn out period. Q. You responded a few minutes later, "Coolies, can you get me the McAfee contract details. We will need to get into getting the partnership agreement signed". Do you see that? A. I do. Q. Prior to that, had you had any involvement in the purchase of software from McAfee whilst you were employed by SMI? A. No. No.
12. Mr Twynham identified an email sent to Mr Waldron at 9:17pm on 21 October 2013 (Exhibit E, pg.1333). It included an email forwarded to the accused from David Bradbury of the CBA earlier that day referring to the McAfee deal. The accused had written:- "This is what I'm aiming to get through on SM paper. Have checked and since the licences are perpetual the full amount qualifies as in year revenue. So here's 7 mil for them."
13. Mr Twynham gave evidence that the McAfee deal was Mr Waldron's idea. He gave further evidence that the revenue recognition in the McAfee deal counted towards the earnout.
14. Mr Twynham identified a series of text messages between himself and Mr Waldron on 2 November 2013 (Exhibit E, pg.2020) in which Mr Waldron communicated:- "Great news. That makes sense to be btw I've talked Keith and Ben through the McAfee deal and we're all primed from outside. If you can make it stick with McAfee, we should be able to do this. At the moment, McAfee resell through HP, so it should be no skin of their nose to resell through you guys".
15. He gave the following evidence:- Q. Did you have any discussions with Mr Waldron about why it was that he was proposing to use your company to supply McAfee as opposed to the arrangement that was currently in place with the CBA? A. I don't recall if I had a discussion with Mr Waldron about that. Q. The next message he says. "We'll need to structure that deal a little differently to separate out the perpetual licence purchase from the maintenance, and we wouldn't bother with the financing part of the deal either. We'll just pay the entire slump sum up front and emetise over five years". Q. Do you see that? A. I do. Q. Did you see any advantages for SMI in the proposed structure put by Mr Waldron in that communication to you? A. I don't recall. I don't recall if there was advantage. I'd suggest looking at this now, though, yeah, there would have been advantage by having a large amount of licence revenue up front. Q. Why? A. Because it would have counted towards more revenue for the earn out.
16. In another message Mr Waldron had referred to paying for the deal. Mr Twynham gave the following evidence:- Q. Then in the next message, Mr Waldron says to you, "I've got our security guys frothing to get this deal done now because they've wanted to get this ELA in place for a year, and I've come up with an answer and said I'll pay it for them". Do you see that? A. Yes. Q. You responded, "Nice"? A. I did. Q. What was nice about it? A. They were finally going to get what they wanted. Q. Why did you say, "money talks"? A. Well, Mr Waldron had the money to get them what they wanted, so they're excited, therefore, money talks. Q. His response was, "Do I pull some strings if we pull this off, Eric should be buying us a lifetime supply of Dom and clavier". Do you see that? A. Yes. Q. Your response was, "Ha, he already owes you that I think, you should aim for a mansion". Do you see that? A. Yes. Q. Why did you think that Mr Pulier was indebted to Mr Waldron? A. I believe throughout our entire tenure at ServiceMesh, Mr Waldron had always been very cooperative in and around Mr Pulier's request for certain things, such as expediting invoice payment, you know, a bunch of other activities and, you know, assisting us with when Eric was asking for assistance around certain deals and things like that, reference calls, a whole bunch of other stuff. I felt at the time that this is probably going a bit above and beyond.
17. Mr Twynham gave evidence that he took steps to ensure that the revenue recognition requirements for the earnout met the GAAP rules administered by the Securities Exchange Commission in the United States. Mr Twynham gave further evidence about the text messages and clarified the distinction between license revenue and maintenance which was a separate cost to the cost of purchase of the software. He gave evidence that the full license amount of the McAfee deal counted as revenue and the first year of maintenance.
18. Mr Twynham identified Exhibit AC as being an email trail dated 19 November 2013 in which he communicated to Mr Pulier as follows:- "Hi guys, we are going after three opportunities for the CBA portion of the earn out. HP Moonshot, 50 to 75k; Pivotal and McAfee, 7-10M. I need to put a pursuit team on this activity that is focused to ensure we have what we need both technically and commercially".
19. Exhibit AD were text messages between Mr Twynham and Mr Waldron commencing on 5 December 2013. He gave evidence that he was not leveraging off CSC's arrangements with McAfee rather he was dealing directly with McAfee and to do it through CSC would probably have slowed the deal down. He gave evidence that there was a January 31 deadline (i.e., for the earn-out) and that McAfee wanted the deal done prior to Christmas and they were pushing to get the deal done by December 31.
20. On 11 December 2013 Mr Twynham sent a text to Mr Waldron stating that "the support and maintenance is killing the deal… the more I increase their licence price, the less margin there is on our side which makes it worse".
21. Mr Twynham gave evidence that the deal was structured to maximise the amount that would be counted towards the earnout. He gave the following evidence:- Q. Why, to your understanding, are you manipulating or changing around the costs associated with this procurement deal in the way that it's indicated in these communications? A. Mr Waldron and I had worked very closely on these as a service offerings over a large number of years, and had to navigate through a large number of issues both from a financial perspective and also commercial and also technical perspective, as what we were trying to do at the bank I dare say was cutting edge in the industry. So we had been working this way for a number of years. So from where I was sitting this didn't seem unusual from that perspective. We were just trying to navigate and work through, you know, what we needed to do in order to get the deal done within the timeframes that we were trying to get it done. Q. Why structure in the way that you're proposing in these communications? A. Well, as I've repeatedly said, it was to justify the gap rules which we were all trying to get our heads around. Q. For what reason? A. For the earn out. Q. Were you aware of any reason why Mr Waldron wanted to maximise the earn out payment for SMI? A. Only from communications I'd received from Mr Pulier that CBA well, his discussions with Mr Hunter.
22. Mr Twynham gave further evidence that in November 2013 there were product issues with the Agility Platform which needed to be upgraded so that products they were developing as part of the earnout would be able to be accepted by the CBA.
23. Mr Twynham identified an email from a Ms O'Toole to him dated 27 November 2013 (Exhibit E, pg.613). He gave the following evidence:- Q. That's in response to an email that you sent to her and others where you say, "Hi all, I had a lengthy catchup with John Waldron yesterday afternoon. He has confirmed that the two deals he wants to get done are the security deal and the pivotal deal if we can establish value in relation to our pivotal story.". Do you see that? A. Yes. Q. "He is not overly keen to get a third deal done in a January 31 timeframe. The first thing he wants to get wrapped up is a security deal and then the pivotal deal.". Do you see that? A. Yes. Q. Did you have discussions with Mr Waldron about why it was in interests of the Commonwealth Bank to get these deals done with SMI before 31 January? A. I don't recall having discussions with Mr Waldron around that specifically. I was acting on the assumption that it was.
24. In respect of his email to Ms O'Toole on the same day Twynham gave the following evidence:- Q. Go back to that email. You say in your email to Ms O'Toole about three quarters of the way down the page, "On the Pivotal side, we need to do the following: get Jon across what it is we're doing and establish value, and get an SOW drafted. I believe Jon will be willing to do something around the 1.5m mark if we prove the value." Do you see that? A. I do, yes. Q. Where did you get the information about Mr Waldron being prepared to do something around the 1.5m mark? A. From Mr Waldron himself.
25. Mr Twynham identified Exhibit AH as text messages between himself and Mr Waldron dated 15 December 2013. In that correspondence the accused informed Mr Twynham that maintenance was causing concern and they needed to settle on a percentage. He gave the following evidence:- Q. You respond, "I don't think we are going to get the deal done in that case. It will never stand up to rev rec which makes the whole thing pointless." Is that correct? A. That's correct. Q. Why were you telling Mr Waldron that it makes the whole thing pointless? A. Mr Waldron was working on an assumption that the way that software maintenance was calculated with ELA's was, it would be a percentage year on year as to the accumulation of licences as you went along with that ELA. That's fundamentally incorrect. I've never seen an Enterprise Licence structured that way. Also, if it was to be structured in the way that Mr Waldron suggested, it would never pass rev rec. Q. What was the significance to you of it not passing revenue recognition? A. It wouldn't have counted for the earn out. Q. To what extent did you communicate that to Mr Waldron? A. I communicated that it would not, you know, it would not count, like it wouldn't stand up to rev rec, so it would be pointless doing the deal. Mr Pulier made that clear in that conversation back in - when was it - late October on that conference call, if you recall, sir. That we wouldn't do the deal if it wasn't gonna count.
26. Exhibit AI were text messages between Mr Twynham and Mr Waldron between 17 and 18 December 2013 including an email Mr Twynham sent regarding the "Impasse". That referred to the impasse in the meeting Mr Twynham held with Marcus Nicholson and Tom Pennington on 17 December relating to the question of liability for damages. Mr Twynham gave evidence that SMI resolved that issue with McAfee by Mr Pulier taking on the exposure that the issue was presenting.
27. Mr Twynham gave evidence that he was aware that Mr Waldron wanted to prevent the McAfee deal being referred to CBA Legal because resolving those issues could take weeks and they needed to get the deal closed by December 20. He gave the following evidence:- Q. Why did you need to get it closed by December 20? A. For two reasons. One, McAfee that's when they were going on holidays. We were working towards their timeframes to get it done by the end of their financial year; and secondly, if we couldn't meet their timeframes, there was no guarantee that they would hold the deal into the new year, and that ultimately would have meant that the deal would be pointless towards the earnout would be the second reason.
28. Mr Twynham identified his email to Messrs Pennington, Waldron and Richardson on 19 December 2013 (Exhibit E, pg.1631), regarding the MSA and whether the McAfee deal would provide for acceptance upon delivery. He gave the following evidence:- Q. Why did it need to be the case that the agreement would provide for acceptance upon delivery? A. ServiceMesh's master services agreement with the bank required, or had a clause in it requiring acceptance of all deliverables from ServiceMesh. I believe, Mr Crown, it was also a condition of the gap rules that software needed to be accepted prior to revenue recognition. … Q. You have extensive experience in negotiation of contracts. What's your view about the acceptance of such a piece of software without testing? A. I believe that given the type of software it was, which was predominantly Agility packages and policy requirements that were being packaged up with the McAfee software, that acceptance testing probably wouldn't have been overly important for that particular solution. Q. Do you see any risk resulting from the fact that no testing was done before acceptance of that product by the CBA? A. Well, there's always risk, but I couldn't speak for CBA's risk appetite or CBA's business's risk appetite around that. That's up to them, which is why I'm asking the question.
29. Mr Twynham identified in Exhibit AK text messages between himself and Mr Waldron on 20 December 2013 and the accused words, "It will be $1.5 mill which I'll pay". Mr Twynham gave evidence that this referred to the funding for the Pivotal deal which Mr Waldron had raised at the end of October/beginning of November.
30. Exhibit AL were further text messages between Mr Waldron and Mr Twynham dated 20 December 2013. He gave the following evidence:- Q. Mr Waldron messages you, "I also talked to Kyle and agreed scope for the Pivotal TD, so we should be able to land that one easily enough"; is that right? A. That's right. Q. Your response, "Great, we should put you on the payroll". Why did you say that, sir? A. I believe Mr Waldron was helping us develop ideas around particular solutions we were developing that were potentially resellable to other clients. So, I'd suggest that my statement would've been in respect to, you know, his input into all of that has been fantastic and we should put him on the payroll. I believe I was just trying to be a little funny, sir. Q. Mr Waldron's response was, "Hopefully I already am", with a smiley face. Do you see that? A. That's right. … Q. Why he said words to the effect that he was hopeful that he was already on the payroll? A. He did not, no.
31. Mr Twynham identified his email to SMI employees dated 24 December 2013 (Exhibit E, pg.797) where he communicated that the CBA Cloud Secure deal was closed for a total contract value of $10.5 million with $5.5 million recognisable to the earn-out. He then gave the following evidence:- Q. You also say that, "We got a landing from Jon to put together an additional 2 TD's for close, prior to January 31; Pivotal and Microsoft"; is that right? A. That's right. Q. Where did you get that information from? A. I believe it would've been from Mr Waldron. Q. Do you know why it was that he wanted to negotiate these two transaction documents before 31 January? A. I do not, sir. Q. A bit further down the page, you address Ms O'Toole; do you see that? A. Yes. Q. "When you get back from holidays, can you focus on getting the Pivotal TD and the Microsoft TD? Once drafted and okayed by Kyle, can you please send them to me to add the commercial components?" Is that right? A. That's right. Q. "The total of the two TD's will be 1.5 million"; is that right? That's your understanding? A. Correct, yes. Q. Where did you get that understanding from? A. Those previous text messages, conversations and exchanges between Mr Waldron and myself.
32. Mr Twynham identified in Exhibit AM text messages between himself and the accused between 22 December 2013 and 6 January 2014 in which the accused referred to Eric Pulier as getting "intense" about the Pivotal TDs. Mr Twynham gave evidence that he had no recall of specific conversations about including additional products in the negotiations that were occurring in January 2014. He identified an email from Mr Falkenhagen dated 15 January 2014 (Exhibit E, pg.869) in which additional products were discussed being adaptors and connectors. He gave evidence that it was his understanding at that time that Mr Waldron and Mr Pulier were discussing the price of the Pivotal deal.
33. Mr Twynham gave evidence that on 19 January 2014 he sent TDS 17 and 22-29 to Mr Waldron. At that point or "maybe a bit later" he became aware that the combined price of the procurement purchases had risen to $US6.9 million. He gave evidence that he did not know how the combined price of the TDs had changed from US$1.5 million at the beginning of January to $US6.9 million.
34. Mr Twynham was shown Exhibit AN, a bundle of emails between himself and Mr Pulier between 15 and 21 January 2014 which included an email sent by Mr Falkenhagen about the products subject of the TDs.
35. Exhibit AO was a trail of correspondence including an email from Ms O'Toole to Mr Twynham and others dated 25 January 2014. On 24 January 2014 Mr Twynham had sent a copy of the TDs for CBA to Mr Falkenhagen advising that the TDs were to be broken down under $1 million for Keith Hunter to sign off on them. He gave the following evidence:- Q. Whose idea was it to break the TDs down in the way that you proposed? A. I believe it would have been Mr Waldron's. May I suggest, probably Mr Waldron and Mr Hunter's, by the looks of this email. Q. Did you have discussion with either or both of them about why it was that they wanted those TDs broken down in that way? A. Not like - not why it was. I just took it that they needed to do that in order to get them signed on time, and - and followed the instructions I was given.
36. Mr Twynham gave evidence that Mr Falkenhagen had sent a further email on 25 January 2014 outlining adjustments to the prices for various adapters. Following that Ms O'Toole had sent another email later in the day where the same products were listed but some of the prices had been increased. Mr Twynham did not know why that had occurred as he was not part of those discussions.
37. Mr Waldron sent an email on 31 January 2014 (Exhibit E, pg.1741) confirming the CBA's acceptance of TDs 17 and 22 to 29.
38. Mr Twynham gave evidence about the message he received from Mr Waldron on 13 April 2014 (Exhibit E, pg. 2021) in which the accused had stated the "$$landed, Keith disappointed". He gave the following evidence:- Q. Did you know what Mr Waldron was referring to when he says, "$$landed, Keith disappointed"? … Q. Yes. Well, when you received that message are you able to, from your recollection say what he meant? A. I believed he was referring to a discussion Mr Pulier and Mr Hunter were having around coming over to CSC. Q. You responded, "Not good. Did Keith get some time with him", do you see that? A. Yes. Q. Mr Waldron responded, "Yes, Keith at 750K." Do you see that? A. Yes. Q. "But to be fair to Eric it is actually more than the formula. He was just hoping Eric would top it up to a million"; do you see that? A. Yes. Q. What did you understand Mr Waldron to mean when he said, "Keith at 750K"? A. My understanding was that was what was proposed as part of Mr Hunter coming over to CSC as a salary. Q. What did he mean when he said it was more than the formula? A. I have no idea, sir. Q. What formula was he referring to? A. I have no idea, sir. I assume it probably meant some kind of salary formula that CSC had but I don't know what formula he's referring to. Q. At any stage in your communications with Mr Waldron on this evening do you ask him what he means by the phrase "more than the formula"? A. No
39. Exhibit AS was an email trail between Mr Twynham and Mr Hunter dated 12 April 2014. Mr Twynham agreed that there was no reference in that correspondence about Mr Hunter being offered a position of employment by CSC.
40. Mr Twynham identified Exhibit Z and gave evidence that he was not responsible for the content within the document. Where it referred to "K's $759K" he denied having any discussions with Mr Waldron or Mr Hunter about that sum being received by Mr Hunter at any point in time.
41. Mr Twynham gave evidence that he became aware that the accused and Mr Hunter were subject to an investigation by CBA in early January 2015. He gave the following evidence about a meeting he subsequently held with Mr Waldron:- Q. I want you to say what was your intention in meeting with Mr Waldron at that time. A. To take him through them the chronology of the McAfee deal. Q. Did you show him things? A. I'm sure I did, sir, yes. I did - certainly showed him those text messages we were just going through. Q. Did you provide any item to Mr Waldron during the course of your meeting? A. Yeah, I think I provided several emails to him, sir. Q. Did Mr Pulier provide you with anything to give to Mr Waldron at any time? A. Not that I recall. … Q. Does that assist you to remember when it was you next met Mr Waldron after the Jervis Bay meeting? A. Yes, in 2015, sorry in - well in San Francisco in 2015, it doesn't have the date there. … Q. Had Mr Pulier given you anything to give to Mr Waldron when he met with you at that time? A. As per my statement a black thumb drive, sir. Q. What did you do with that black thumb drive? A. I gave it to Mr Waldron. Q. Did you access the contents of that black thumb drive yourself? A. No, I did not.
42. Mr Twynham identified in Exhibit AT an email from Ms Tammy Brandt to him dated 20 January 2015 in which he was requested to provide summaries of negotiations with McAfee, the CBA and a summary of the risk CSC was required to absorb on the McAfee deals. He gave evidence that he collected that information for Mr Pulier but at the time was not aware the matter had become the subject of a criminal investigation.
43. Mr Twynham identified the Salesforce 14 Pipeline document (Exhibit E, pg.492) and agreed that none of the 5 contracts included either the McAfee deal or the Pivotal deal. He agreed that was because those deals were not contemplated as contracts that SMI anticipated to enter into at the time of its acquisition by CSC.
44. Mr Twynham was shown an email from Mr Waldron to Mr Hunter dated 31 October 2013 (Exhibit E, pg.1329). He agreed that it was not until that date that he had first become aware that Mr Waldron was interested in entering into a contract involving McAfee products to SMI. He gave the following evidence:- Q. Yes, and from that point onwards you and Mr Waldron and others put an enormous effort in to ensure that the McAfee contract was completed without any delay; didn't you? A. Yes. Q. And you knew from discussions with Mr Waldron that the reason why he was participating in that process was because he was to receive a reward for his efforts from Mr Pulier in due course; didn't you? A. Are you suggesting that I knew that? Q. Yes. A. No.
45. Mr Twynham was asked about a text message to Mr Waldron on 20 December 2013 (Exhibit AL) concerning the Pivotal TD. He gave the following evidence:- Q. And you say, "Great, we should put you on the payroll"; yes? A. Yes. Q. And he says, "Hopefully I already am"; do you see that? A. Yes. Q. You knew full well, didn't you, that he was expecting to receive a reward for his efforts at that point in time? A. No. Q. You'll see the status of those emails is recorded as being deleted throughout the record. Do you see that? A. Yes. Q. Do you accept that you had deleted from your mobile telephone all your historical communications at the point in time when the FBI sought that material from you? A. No.
46. Mr Twynham agreed that he had participated in an interview with a lawyer engaged by CSC and during that interview he had not been able to provide the lawyer with any text messages from his mobile phone. He gave evidence that he provided his mobile phone for forensic analysis of the end of that interview. He agreed that he had deleted all messages from that phone. He gave the following evidence:- Q. You told counsel engaged by CSC that it was your practice to delete those messages as you went, didn't you? A. Yes. Q. That wasn't true, was it? A. No, it wasn't. Q. No. The reason you - or, the reality is that you deleted those messages at a point in time after you became aware that the CBA was investigating Mr Waldron and Mr Hunter in relation to what the contracts that the CBA had entered into at the end of 2013, beginning of 2014? A. Yes. Q. You did that because you didn't want your employer to see these emails these text messages, did you? A. No, sir. That's not true. Q. You deleted after you made copies of them and provided them as part of the background information that Mr Pulier had requested, didn't you? A. I deleted them while I was putting that information together, yes. Q. So that it couldn't be discovered by anybody that might be conducting an investigation into what transpired at the end of 2013, 2014? A. I reject that assertion, sir.
47. Mr Twynham gave the following evidence about his motivation for the Pivotal deal:- Q. I suggest that the TDs 17, 22 29 that they didn't become a subject of consideration until 20 December 2013 when Mr Waldron told you in that text message that that was something else that he was putting forward as a proposal for procurement that could occur at this point in time. A. That would be my understanding, yes. Q. You were motivated to get those contracts signed by the prospect of enhancing the earnout? A. Yes. Q. You knew that Mr Waldron was similarly motivated, didn't you? A. From the perspective of what I had known about they were helping us with the earnout, that was communicated by Mr Pulier, yes.
48. Mr Twynham was asked about the emails passing between SMI employees between 27 and 29 November 2013 (Exhibit AG). He gave the following evidence:- Q. They were things that were quickly put together for the purposes of being able to superficially demonstrate a basis for the CBA paying $6.9 million to ServiceMesh, weren't they? A. I believed I was under the impression that there were things being put to CBA as a V1 of a series of products. Q. They were concocted for the purposes of generating revenue for SMI to enhance the earning? A. I think, partly, yes. Q. That's reflected in those other emails I've taken you to, where there's talk about adapters being increased in value from $25,000 to $125,000.That's the nature of those communications, isn't it? A. As I said when you asked those questions previously, I was watching those communications go backwards and forwards, so I was trusting my colleagues in the US in relationship to that. Q. You knew, sir, didn't you, that what was being done was that the prices of various items were being significantly inflated in order to assist SMI with the amount of earnout that it received from CSC? A. I knew that everything that was being done was focused on the earnout, yes. Q. But you did know, also, that there was inflation of products that were the subject of those contracts, in order to enhance that earnout. A. At the time, I wasn't paying much attention to that, but, yes, obviously I was aware of it. Q. You're also aware, from some of those communications, that the master service agreement gave CBA free access to several of the items that were subsequently included with a price beside them in those contracts. A. Only due to what Mr Greenberg said, and as I've previously stated, I wasn't really paying much attention to those emails at the time. Q. You'd had discussions with Mr Waldron about the superficiality of these purchase agreements, hadn't you? A. No, sir. Q. You knew that Mr Waldron was well aware that these contracts were being entered into in a non bona fide on a non bona fide basis by the Commonwealth Bank, didn't you? A. No, sir. Q. You knew that he was motivated to do that because of a promise of a reward for assisting SMI in the way that he was assisting them. A. I disagree with that, sir.
49. It was put to Mr Twynham that he had reconstructed his evidence about why Keith Hunter was disappointed with the figure of $750K with which he agreed.
50. It was put to Mr Twynham that he didn't tell the truth during the course of a proffer statement he made to the FBI with which he disagreed.
51. Mr Twynham was cross-examined extensively in relation to the evidence he gave in the Crown case. He agreed he gave an induced statement to police providing him with immunity from prosecution except in the case of him giving false evidence. In 2015 he had participated in three interviews conducted by CSC's outside counsel. He gave evidence that he stopped communicating with the accused on the day the accused was charged.
52. Mr Twynham agreed that he had been interviewed by the FBI and an Assistant US Attorney-General in Sydney on 29 June 2016.
53. In making a statement to police Mr Twynham agreed that he had accessed his accounts to provide relevant emails but that in relation to text messages he had told Police:- "I have an issue with these text messages accurately representing a conversations and the totality of the context of what went into consummating these transactions. I would roughly estimate there are 50% of these text messages missing. I can confirm that 100% of the text messages are missing from other parties involved in consummating these transactions."
54. Mr Twynham conceded that in giving his evidence he had not have access to all relevant communications and in respect of events that transpired a decade earlier he was attempting to reconstruct what had occurred.
55. Mr Twynham agreed that he had described his relationship with the accused to the FBI as him being "coached" by the accused. He gave evidence that there was nothing improper about that and that it was standard practice for salespeople involved in selling to large enterprises.
56. Mr Twynham gave evidence about the ES2012 program which was driven by Mr Harte at the CBA. His strategy was to transition as many services as possible to cloud services to provide future innovation for the bank. In his deposition he had given evidence that Mr Harte felt that the CBA was being held for ransom by HP and he was receiving very little innovation from that company. Another issue was that CBA needed to spend in excess of $350 million to build a new datacentre, money they could save by transitioning to cloud computing. SMI were integral to providing advice to Mr Harte and other people in the bank to ensure his objectives could be met.
57. Mr Twynham confirmed that in his deposition he had stated that Hunter was brought in to ensure the ES2012 strategy was delivered, and that SMI had a moral and ethical responsibility as strategic partners with the CBA. He had stated:- "So our role was to ensure that this particular transformation was successful. I believe the intend behind those words is that everyone at ServiceMesh took this responsibility very seriously."
58. Mr Twynham was cross-examined about when he first learnt that CSC was interested in acquiring SMI. He gave evidence that he may have learnt about it when he had just arrived in Santa Monica in August 2013. In his deposition he provided evidence that did not recall when he learnt about the earnout. He gave the following evidence:- Q. Can I suggest you also said this, at page 79 of the deposition: "Q. And did you learn that part of that offer was to include what's known as an earnout? A. Yes. Q. And do you recall when you learnt of that? A. I do not. Q. And the "that" that I'm referring to, is that an earnout was a provision in the acquisition. Do you recall when you learnt of the earnout? A. I do not recall the exact time, other than it was around the time that the acquisition conversations were occurring. Q. Do you recall whether or not Jon Waldron was aware of the earnout? A. I believe I've seen some emails through the various things that have occurred in cases that have occurred that would suggest Mr Waldron knew. Q. Do you have your own recollection of that? A. I do not." Q. Do you remember giving that evidence? A. Yes. Q. Was that correct? A. Yes.
59. Mr Twynham confirmed evidence he had previously given that he had nothing to do with the negotiations between SMI and CSC over the terms of the acquisition.
60. Mr Twynham confirmed evidence he had previously given that he recalled discussing the earnout with the accused but did not recall the time, dates or nature of the conversation.
61. Mr Twynham also confirmed that when asked previously whose idea it was make SMI a re-seller of McAfee to CBA he had answered:- "I don't recall who specifically it was. I recall having a conversation with Mr Waldron and then Mr Pulier separately..."
62. Mr Twynham gave the following evidence concerning the purpose of the McAfee deal:- Q. Can I suggest you also gave this evidence at page 146 of the deposition: "Q. Mr Twynham, the entire purpose of this McAfee deal was to provide McAfee software to CBA through a reseller arrangement with ServiceMesh. Is that not correct? A. Not from where I was sitting. Q. And what was it? A. It had an additional purpose of being a blueprint for what we were calling the Agility store which had both ServiceMesh Agility software as a container that the software product sat in, but added the addition of policy control to allow those software products to be used in a Cloud environment." Do you remember saying that? A. Yeah, I do want to just call something out there though. The word, "blueprint", I don't want to get that confused with what was being sold as part of the pivotal deal. The blueprint being referred to here was a commercial blueprint, not how we go to market. Q. That was different from blueprints or adapters that form the basis of transactions? A. Yes, that's correct. It was more of a commercial construct blueprint. Q. And that blueprint was the same as I was asking you questions about beforehand, referring to page 136, namely a blueprint for how ServiceMesh would be packaging and selling services not just to CBA but other clients post acquisition; correct? A. Yeah, that's correct. Yes.
63. Mr Twynham gave the following evidence concerning the negotiations relating to price for the McAfee deal:- Q. Can I suggest, in terms of the negotiations with McAfee, you gave this evidence in your deposition, at pages 222 223: "Q. Do you know, after sending this email, whether or not Mr Waldron negotiated a million dollar discount on what you believe was the final pricing for the McAfee deal? A. I can't say for sure. What I can say is, Mr Waldron and I had a number of conversations with McAfee where we made it very clear to McAfee that, unless their price improved, there would be no deal." Q. Do you remember giving that evidence? A. Yes, I do. Q. In terms of the price, which was ultimately arrived at, I suggest you gave this evidence, on page 224 of your deposition: "Q. Do you believe that the ultimate price that CBA paid for the McAfee what I'll call the McAfee/ServiceMesh Cloud Secure offering, do you believe that was a competitive price? A. Yes, I do. Q. Was it hard for CBA and ServiceMesh to negotiate McAfee down to that price? A. Yes, it was." Q. Do you remember giving that evidence? A. Yes, I do. Q. I suggest you also said this, on page 225, about negotiations: "Q. Would it be fair to say that Mr Waldron negotiated with ServiceMesh for a much lower margin than the usual reseller margin in software reselling deals? A. That would be fair." Q. Do you remember saying that? A. Yes.
64. Mr Twynham confirmed that he had been working with the accused to get the best deal for the bank at the time from McAfee. He confirmed that he had stated in his deposition:- "Given the difficulty we had in getting McAfee to go as low as they did on the deal I believe CBA got the best deal possible. We didn't tender against anyone else in the process. Our goal was not to charge CBA, it was to get the best possible from McAfee and to ensure the deal counted as recognised revenue."
65. He also confirmed that he had given evidence that McAfee wanted to get the deal completed as quickly as possible in December 2013.
66. Mr Twynham gave evidence that the sales price was reduced from $7.188 million to "around 5.6 million". The maintenance costs were also reduced from 30% to 17%.
67. Mr Twynham confirmed evidence he had given in his deposition concerning Mr Nicholson's conduct during the negotiations for the McAfee deal and his description of Mr Nicholson's behaviour as "bordering on deplorable". He confirmed that he expressed his frustrations about Mr Nicholson to the accused.
68. In relation to the Pivotal deal Mr Twynham confirmed evidence in his deposition that there was a group of people at SMI involved in driving that deal including Kyle Falkenhagen who was the head of product marketing for SMI. Mr Twynham confirmed his evidence that he had no interest whatsoever in the Pivotal deal and had no personal knowledge as to why the prices fluctuated for the Pivotal TDs.
69. Mr Twynham confirmed that there were a number of prospective deals with CBA during the course of the earnout, one of which was "Moonshot". Ultimately, none of those came to fruition.
70. In relation to Mr Hunter signing TDs 17 and 22 to 29 Mr Twynham confirmed his deposition evidence that Hunter had previously signed TDs for SMI which did not have to go through a CBA procurement process so that it did not seem like anything out of the ordinary at that time.
71. Mr Twynham confirmed evidence in his deposition that his relationship with Mr Waldron changed over the years. He had moved into a larger role with ServiceMesh which was a global role so he could only get involved in discussions with the accused where there were significant activities at the CBA that required be involved in. Once Mr Waldron had been promoted to the position of General Manager in September 2011 Mr Twynham had no recollection of dealing more frequently with Mr Kelada.
72. Mr Twynham also confirmed his evidence that at some time in 2014 Keith Hunter discussed with him the possibility of coming to work at CSC. To facilitate that he gave evidence that he set up a dinner for Keith Hunter with Mr Jim Cook, a senior executive at CSC. He identified in Exhibit 20 an email dated 2 April 2014 in which he had informed Mr Hunter that Pulier was "absolutely keen to do it, but is concerned that CSC would not have the comp plan to get you there." By compensation plan he meant remuneration for Hunter's employment by CSC. In a related email Mr Twynham had stated that Pulier had "an appetite to do something" regarding Hunter's possible employment. In the same email he became aware that Mr Waldron was also looking at possible employment opportunities. He identified in Exhibit 71 an email trail with Mr Hunter concerning the possibility of Hunter's employment with CSC.
73. Mr Twynham gave evidence about his deposition concerning his provision to Waldron of emails regarding the CBA deal. He stated that he was instructed by Pulier to help Waldron and Hunter with their recollection of the deals. He gave the following evidence:- Q. Mr Twynham, I suggest that you said this, at paragraph 160: "At this time, I thought that my friends were treated unfairly and were trying to sort out the issues and were having accusations levelled against them by CBA, which I thought were unjust. I also had little knowledge of what had transpired with CBA other than what I was told by Hunter, Pulier and Waldron. I was providing them with information in the event they wanted to take legal action against CBA." Q. Do you remember saying that? A. Yes. Q. I suggest you also said this, at paragraph 161: "Pulier, Waldron and Hunter were all positioning the matter at this time as a contractual issue between CBA, Ace and CSC. By positioning, I meant that they told me it was a HR issue, that they were going to try and resolve it with the bank and if they couldn't, they would file a suit against the bank. I believe Pulier ultimately did file a lawsuit against CBA which was settled via Ace Foundation." Q. Do you remember saying that? A. Yes. Q. I suggest that, on the next page, page 43 of that same statement, paragraph 164, you said this: "Hunter said that he was innocent and that he had doctored one transaction document in a panic. I believe he told me this was a transaction document for his consulting work with Ace." Q. Do you remember saying that? A. Yes.
74. Mr Twynham rejected the assertion put to him by the Crown that he had deleted text messages so that they could not be discovered by anyone conducting an investigation into what transpired at the end of 2013 because he did not expect that this would ever turn into some kind of criminal investigation.
75. In relation to the value of the Pivotal deal to CBA Mr Twynham was cross-examined as follows:- Q. I suggest you also gave this evidence, page 1371 lines 11-19 of yesterday's transcript: "Q. They were things that were quickly put together for the purpose of being able to superficially demonstrate a basis for the CBA paying $6.9 million to ServiceMesh, weren't they? A. I believed I was under the impression that there were things being put to CBA as a V1 of a series of products. Q. They were concocted for the purpose of generating revenue for SMI to enhance the earning? A. I think, partly, yes." Q. Do you remember giving that evidence? A. Yes. Q. I'd like to ask you about that final answer of yours. It was suggested to you that the things were concocted, and you said, "I think, partly, yes". What did you mean when you said, "I think, partly, yes"? A. Well, formulated, if you like, or fleshed out, I believe is what I Q. You believed at the time that you were employed with ServiceMesh specifically in January 2014 that ServiceMesh was, in fact, delivering real products, didn't you? A. I did, yes. Q. You believe that those products had value, did you not? A. Yes, I did. Q. I suggest to you that you had no reason to suspect that the CBA was being misled? A. That's right. Q. I suggest to you that you believed that those transaction documents were capable of revenue recognition for the purpose of the earnout; do you agree? A. Can you say that again, please? Q. I suggest you believed that those transaction documents specifically, 17 and 22-29 were capable of being recognised as revenue for the purpose of the earnout? A. Yes. Q. You had no reason to believe that that was other than a genuine provision of software for payment; correct? A. That's right.
76. Mr Twynham acknowledged that throughout January 2014 there had been an inflation of prices for the Pivotal TDs but he did not know the reason why that occurred. He gave evidence that there were additional blueprints provided in the TDs, and gave the following evidence:- Q. You can't say whether that was as a result of the proposed provision of additional services; is that right? A. I don't believe there were any services involved with those transaction documents but there would have been resources behind the scenes putting those together. Q. Can I suggest the transaction documents involved the provision of maintenance and support by ServiceMesh? A. That's right.
77. Mr Twynham gave evidence that he did not know why the value of the TDs rose from 1.5 million to 6 million and therefore could not say whether the inflation of price was appropriate or otherwise.
78. Mr Twynham gave evidence that in February 2015 he met with Mr Waldron in San Francisco. Exhibit 74 was identified as an exchange of SMS messages between the accused and Mr Twynham in July 2014.
79. In re-examination Mr Twynham gave evidence that he participated in interviews with Mr Beretta, the lawyer for CSC because he was aware that Pulier's employment was terminated for cause when Pulier refused to participate in such interviews. He agreed that when asked by Mr Beretta if he was in communication with Pulier during the interview Twynham had said no, and that was not the truth.
80. Mr Twynham gave the following evidence about the accused's knowledge of the earnout and his statement to Detective Gebron:- Q. Right, and in paragraph 161, about a third of the way through the paragraph, you also make a statement about what you knew as to Mr Waldron's knowledge of the earnout; is that correct? Where you say, "Waldron knew"? Can you tell us A. Yes. Q. what you said to Detective Gebron there? A. Straight after it? Q. "Waldron knew", starting there. A. "I assume he would have known" Q. No, no. Sorry. Yes, sorry. You can start with "Waldron knew", if you like. A. Okay. "Waldron knew about the earnout. I assume he would have known around late September, early October". Would you like me to continue? Q. Yes, please. A. "I'm sure I spoke to Waldron about the earnout. It was well known to the SMI executive team that Pulier had asked a favour of Hunter and Waldron to assist with the earnout, and they would help out where it made sense to the bank."
81. Mr Twynham gave further evidence that in December 2013 he did not know what stage of development the software cloud secure was at, and further that SMI had not sold that software to anyone prior to its sale to the CBA.
82. Mr Twynham also gave evidence about the content of Exhibit AD. He gave evidence his communications with Mr Waldron established that through the manipulation of various parts of the proposal, McAfee was getting paid a million dollars more than was originally proposed by them. He gave further evidence that if the McAfee deal not been closed by the end of 2013 it would have "blown the deal up".
83. Mr Twynham was asked further about the impasse concerning the liability for damages and agreed that it was Mr Nicholson who identified that issue as a showstopper.
84. In relation to his deletion of text messages Mr Twynham was asked why he deleted them if he didn't expect that it would turn into a criminal investigation. He gave the following evidence:- "A. I don't really have an answer for that other than...well I do have an answer to that. I just felt I didn't need them anymore. I'd gone through, I'd documented the deal, and didn't feel I would need those text messages anymore."

Evidence of Mr Michael Marsden

1. Mr Marsden was previously employed by New South Wales Police in 2019 as a Chief Information Security Officer. He had experience spanning 30 years specialising in cyber security, critical infrastructure, ICT technology operations and enterprise technology strategy.
2. Mr Marsden prepared a report dated 15 August 2019 in respect of the Pivotal deal and TDS 17 and 22 to 29. He had concluded that the TDs described products or services that didn't exist, had little real-world utility, were significantly marked up in value and misrepresentative of the products on offer. He concluded that no reasonable business entity would enter into the contracts if adequate due diligence had been performed on the TDs.
3. Mr Marsden gave evidence about the SMI Agility Platform. He described it as a "DevOps orchestration platform" which was designed to allow customers to run in various cloud platforms. He gave evidence that the Agility Platform allowed software developers to create code to implement software on the platform that could be rolled out for commercial use in a reliably repeated way, and at scale.
4. Mr Marsden gave evidence about the operation of Agility Platform at CBA and noted the email from Mr Kelada to the accused (Exhibit E, pg.860) setting out the difficulties being experienced with upgrading the Agility Platform.
5. In relation to the time estimates to provide the technical solutions raised by Pivotal, based on the total contract amount of $6.9 million, he estimated that based on the industry's average for labour ($250,000 per employee) it required 27.6-man years of labour. Mr Marsden gave the following evidence:- Q. And you reason that over a three-month period, CBA could have dedicated in excess of 110 full time employees to develop their own software, and expended less cost. Is that correct? A. That was how the math played out, hence why I couldn't understand why it made sense that you would attempt to deliver such a product in such a short time. Q. And you qualified your use of $250 thousand as an average on cost for an employee on the basis that it was a rule of thumb you commonly used to estimate IT project costing. Is that correct? A. Yes, at that time. Q. But you qualify that on the basis that you are not aware of CBA's actual cost for IT employees in the 2013, 2014 period? A. That is correct. Q. And the conclusion you reach is that you cannot reach a conclusion as to why ServiceMesh would begin to create a brand-new product line in late November, and expect to be able to deliver 6.9 million work of value in under two and a half months, is that correct A. Yes, that - it was hard to reconcile that.
6. Mr Marsden gave evidence that the words "blueprint adapter", "service gateway" and "ecosystem solution" were used interchangeably over the course of the product development in the TDs. He identified an email from Mr Greenberg dated 17 January 2014 (Exhibit E, pg.867). He gave the following evidence:- Q. So that's an email chain from 865 869; is that correct? A. That's correct, and on page 867 a gentleman by the name of Bruce Greenberg notes, "You should be aware that the CBA ELA is pretty clear that the standard connector licence software licensed to the bank in relations to any ServiceMesh Cloud connectors quantity unlimited". Standard connectors mean any licensed software that enables the deployment and management of SWIs by Agility in particular the cloud deployment target via that cloud deployment target's API". Q. He goes on to say, "That definition would almost certainly cover an Azure adapter and/or any other Agility standard adapter connector"; is that right? A. That's correct.
7. Mr Marsden gave further evidence about the change in content and terminology in the TDs as follows:- Q. You saw a change in content and terminology through the course of those transaction documents; is that correct? A. Yes, that's correct. Q. One of the things you noted, as you just referred to, here, is that the term "adapter" was adjusted to "ecosystem solution" in the later iterations; is that correct? A. That's correct. Q. And you make note that that was identified by Mr Greenberg on 17 January the issue in relation to adaptors was identified by Mr Greenberg on 17 January 2014. Is that correct? A. That's - yes, that's what it appears. Q. And I think you were just going to take us to a further email, is that correct? Or a further communication in that chain? A. I think in that chain someone then that. Q. If you can take us to that email you're referring to now. A. So on page 865. There is a note around "here are the two TDs, please review." And at the bottom of the paragraph there it says, "Kyle, I believe it would be helpful if you could vary the definitions somewhat, otherwise it might appear that CBA is buying the same things under two different TDs".
8. Exhibit AW was Appendix B to Mr Marsden's report. It illustrated the change in terminology from "adapter" to "ecosystem solution" to "platform as a service adapter". In Exhibit AW he explained the different iterations of each transaction document and the changes in prices charged for them.
9. Exhibit AX was Appendix A to his report. Mr Marsden gave evidence that the final name for what was originally called an "ecosystem solution" became referred to as a "platform as a service adapter". He noted that the terminology changed on or around 19 January through to 24 January across TDs 23, 24 and 25.
10. Mr Marsden gave the following evidence about the term "blueprint" as it appeared in the TDs:- Q. And you say there that that term "blueprint" appears to be a defined configuration of subcomponents, which can be repeatedly assembled and deployed to different locations using the Agility Platform. Is that right? A. Yes. Q. What do you mean by that? A. The term "blueprint" seemed to define the definition of an application or a software solution to be deployed by the platform, and allowed the platform to compose this said application to a particular target environment, such as one of the cloud providers. Essentially the instructions or the recipe in order to assemble those components. Q. And you comment that there is some overlap with the term "eco systems solution", is that right? A. Yes, it appears to be some elements which were initially called a "blueprint" become called an "eco system solution", and then ultimately a "platform as a service adaptor". Q. Are these clearly defined industry terms, from your experience? A. At the time they were very emerging words. I would stay still, they're not necessarily common practice words. Q. You say in your report, "In the executed contracts, some items that were previously included in other elements became split out as separate products". And in brackets you say, "separate skews". A. Yes, so in the very original presentation, the email contained a bullet pointed list of blueprints. Those blueprints ultimately turn up as individual skews and individual TDs on or around the 24th onwards, as separate standalone products. Q. And they were renamed "eco systems solution", is that correct? A. A number of them were, yes. Q. And you found that the term "blueprint" more or less disappeared from the executed contracts, is that right? A. Yes. Q. Although it was a key solution component for the existing Agility Platform in its definition, is that right? A. My understanding is that was a core definition of the platform, that it deployed blueprints. Q. So the agility platform that was operated by CBA referred to blueprints. Is that correct? A. That's my understanding. Q. But the TDs describe what had originally been blueprints as, in the final signed documents, eco systems solutions? A. Correct.
11. Mr Marsden gave evidence that he commented on a document referenced as "144", i.e., that SMI became aware of a clause in the CBA ELA with SMI which entitled CBA to use any new original adapters produced by SMI free of further charges. At that time, Eric Pulier directed all TDs to be changed to use the term "ecosystems solution" and remove the term "adapter" from the deliverables.
12. Mr Marsden referred to Exhibit AW and gave evidence that the original product description forwarded on 5 January 2017 for TD17 with a product value of $850,000 included all four Pivotal blueprints at no extra cost. In the executed contracts, the four pivotal blueprints were expanded into four new products referred to as "ecosystem solution". He concluded that it had the effect of artificially inflating the overall price of the same software components by 500% and that the purpose was to generate revenue. He explained how he came to figure of 500% by giving evidence that one TD for the price $850,000 became five TDs each at $850,000.
13. Mr Marsden came to the ultimate conclusion in his report that the CBA procured components that were previously bundled into SKU as subcomponents, but were subsequently defined as four additional standalone products that were each similarly priced to the original bundle. He gave evidence that they were initially called "blueprints" but in the final stage, two weeks later, they were called "ecosystem solution" and were separately charged items.
14. By reference to his report Mr Marsden gave evidence that between 5 and 25 January 2014 the total contract value changed multiple times in the range of 1.6 million to 6.9 million and the products to be supplied increased from 2 to 9.
15. Mr Marsden identified an email from Mr Falkenhagen dated 14 January 2014 (Exhibit E, pg.857) and gave evidence that in that email the SMI team were discussing creating a new product by leveraging an open-source platform, in other words, a product that was free of charge. This related to Openshift which was the product in TD 23 which ended up being charged at $850,000 to the CBA. His report also noted the differences in pricing throughout January for TD 25 which increased in value from $25,000 on 19 January 2014 then to $75,000 on 25 January 2014.
16. Mr Marsden gave evidence that he concluded that it was not credible that an organisation performing proper due diligence would not challenge the change in pricing so dramatically over a short period of time. He formed the view that there was an overall goal to maximise the price paid by CBA within an arbitrary limit so that it could be signed off by Jon Waldron and Keith Hunter, and below a threshold where additional due diligence from a normal enterprise procurement process would apply. He based that conclusion on the correspondence between Mr Twynham, Mr Waldron and Mr Pennington on 24 January 2014 (Exhibit E, pp. 932-981).
17. Mr Marsden also noted that there was a price discrepancy in TD 26 where the price was recorded as $970,000 whereas internally in the document it was $950,000.
18. Mr Marsden also gave evidence about changes to the acceptance clause of the TDs over the entirety of the negotiation process. Clause 10 in TD17 provided that "Acceptance is verbally accepted by the bank stakeholders and delivered to CBA via electronic media, ready for installation". Mr Marsden gave evidence that this was an unusual contractual term. The final version of the acceptance clause in TD17 was modified to state that SMI "will deliver the software by making it available to download off SMI's FTP site". FTP means file transfer protocol. The license software was deemed to be acceptable upon delivery, that delivery being publication to the site.
19. Mr Marsden expressed his concern about a clause in those terms as it did not give the CBA much leverage to declare that the software does or does not purport to do what it is supposed to do. Rather it was deemed accepted by the mere fact that SMI had published it. It, therefore, didn't provide much recourse to the bank.
20. Mr Marsden prepared a second report in which he assessed the Digisol Statements of Work and invoices which he divided into groups. Documents numbered 1 and 9 he described as whitepapers which described a product called "Core" or "Ace Core". They described a larger technology set of converging infrastructure pods and software products. He gave the following evidence:- Q. What does that mean to you? A. Converged infrastructure means a set of technology deployed, typically in a datacentre, where there is a convergence of the core pieces underneath. I've just gone round in a circle. Typically, it refers to storage, compute, and the networking elements required to build many large computers, converging onto a single kind of platform, that can then be scaled and deliver that capability. And its associated set of software products that would manage that particular converged infrastructure. … A. And associated software products that would manage such converged infrastructure. Q. Conversion(as said) infrastructure? A. Mm. Q. You gleaned from those documents that the product Ace Core will become the property of Ace Inc. and it appears to be described as pre integrated and prebuild blend of open source technologies and frameworks, designed to be able to be used as building blocks in order to permit the creation of IT application software by third party not for profit organisations. Is that right? A. That is how it is described.
21. Mr Marsden gave evidence that documents numbered 10 number and 11 purported to describe the commercial arrangement between Digisol and ACE Inc. by way of a Statement of Work detailing two distinct engagements. Document number 10 (Exhibit N, pg.7) was dated 21 July 2014. He gave the following evidence:- Q. You analysed that document. Is that correct? A. I did. Q. And in your report you say that "it articulates the goal of this consulting engagement is to provide a blueprint for moving enterprises to a cloud operating model, and that project will deliver white papers and presentations, which together detail the roadmap to an IT as a service operating model". Is that right? A. The goal is verbatim from the Statement of Work. And yes, my conclusion about what it will deliver is correct. Q. And in the next paragraph you express an opinion as to the contents of document 10. Is that correct? A. Just checking. Yes, I do. Q. You say that "the project as described in the Statement of Work, and as the basis of a commercial agreement between Ace Inc and Digisol is a consulting engagement which will produce documents and plans for the implementation of the Ace Core product". Although you note that the product name itself is not referenced. But not the - should that be implementation, or? A. Yes, my apologies. A typographical error. Implementation with the actual product itself. Q. What do you mean by that? A. So the Statement of Work appears to be a consulting piece that will describe the designs and the plans to build this product, but doesn't appear to provide the scope and costs to build the actual product. Which is I think the purpose of the other scope of work. Q. Of the - sorry? A. The other Statement of Work. The subsequent Statement of Work, is to build it. Q. And that's the Statement of Work that's dated 1 December 2014. Is that correct? A. Yes, that's correct.
22. Mr Marsden gave evidence that he analysed the two-page document contained in Exhibit AU and page 143. He identified an inconsistency between documents 8,7,6,5 and 4, and document 10. He gave the following evidence:- Q. You identified an inconsistency between documents 8, 7, 6, 5, and 4, and document 10. Is that right? A. Yeah, there seems to be a disparity around whether there's an accountability to provide a product in the commercial narrative. Q. What does that mean? A. So the Statement of Work talks about commencing work, and that it will deliver white papers and presentations, road maps, and so on. It doesn't specifically say it will deliver a product.
23. An analysis of documents 8,7,6,5 and 4 was contained in Exhibit AY which was Exhibit A to Mr Marsden's report. He concluded that when read in their entirety the documents failed to convey a meaning that could easily be interpreted by competent IT engineers, product managers or business analysts in order to construct a product. He concluded that the documents were generic in nature and a technical audience reading the document would be unable to construct anything.
24. In relation to document 8 (Exhibit AY, pg. 22) Mr Marsden gave evidence that the document described an engagement commencement project which permitted Digisol to establish a delivery team, source necessary equipment and prepare for other projects. It had a nominated start date of July 2014 with a 6-to-8-week duration and a $200,000 budget. Mr Marsden noted that the document had no "deliverables" which meant that the document did not articulate what it would deliver.
25. In relation to the document entitled "Statement of Works" dated 1 December 2014 (Exhibit AY, pg.24) Mr Marsden gave the following evidence:- Q. Was there the sort of detail you would expect of a Statement of Works which was committing to a project with a pricing component of $1,050,000? A. No. Q. Tell us why? A. It's a reasonable sum of money, an organisation would expect that a Statement of Work would describe a tangible outcome in a way that if the tangible outcome wasn't achieved, that they would have recourse to get their money back.
26. Mr Marsden gave the following evidence about his final conclusion in relation to an analysis of all of the documentation:- Q. Yes. Your comment that, "Whilst providing some thought provoking, overarching principles and thought leadership, albeit incomplete, in the initial White paper" which was document 1 "upon closer examination of the project documents, it becomes apparent that the reader is left to imagine what possible solutions could be constructed for each technology area described, as against articulating any clear outcomes and detailed product requirements". That was the final conclusion you drew in relation to an analysis of all the documentation; is that correct? A. That is my main conclusion. … Q. You came to the conclusion, as a consequence of reviewing those materials, that the engineering effort described in the document, engagement commencement which is document 8 - which, I think you've said before was the only document that talked about implementation - does not match the technical breadth described in the White paper; is that correct? A. That is correct. Q. What do you mean by that? A. The very initial White paper, and then the subsequent documents, talk to a great variety of technology products to be integrated, developed, pulled together into a package. The engineering effort, however, is small teams of up to five people, for multiple short periods of time. That's inconsistent with the size and the scope of all of the words written previously. Q. To what extent, in your experience, was what was proposed in document 8 sufficient to achieve the sorts of objectives which are related in the other documents? A. Modern software engineering efforts, particularly of broad scale and depth, require many hundreds of engineers, many hundreds of test- test people, project managers, Scrum Masters. All sorts of different approaches. There's a there's a broad many dozens of products described here to be implemented. Very small teams such as this would only be capable of delivering one, two, three. A small number of those products. Q. What about in the timeframes that are suggested in the document? A. The timeframes equally are quite aggressive. So, a small number of people in a short timeframe may only be able to deliver a small amount of work. Dozens of man days, maybe 100-man days possibly. But some of these products are well beyond that, as described in the overall documents.
27. Mr Marsden also gave evidence about the requirement for payment in advance. He gave evidence that the documents contained no clauses pertaining to the quality of the products produced by the whitepapers, design or software components and that the purchaser, ACE, appears to have no recourse in the event that the documents or software are of poor quality or are never produced. He gave the following evidence:- Q. And you came to some conclusions in relation to that requirement for payment in advance, which included that there is some unusual degree of trust between the parties Digisol and Ace Inc, or that the representatives of Ace Inc organisation lack significant commercial acumen to fully protect their interests. Is that correct? A. It could be the case. Q. Either one. You're of the opinion that no reasonable commercial or not for profit entity would enter into such an agreement without the protections to withhold some or all of the payments for services inadequately delivered, or not at all. Is that correct? A. That is correct. My understanding of the not-for-profit sector is they don't have as much money as other sectors, and so are usually more careful with the money they do have. That's just my understanding. Q. You're unable to conclude whether this apparent commercial inaptitude is due to differing business practices in the not-for-profit sector. You accept that? A. Yeah, I don't know that. Yeah, that's correct. Q. And you don't know anything about the technical expertise of anybody from Ace who was engaged in negotiating this contract? A. No way to assess that.
28. Exhibit AZ was entitled "Appendix B - Statement of Work Analysis" annexed to Mr Marsden's report.
29. In cross-examination Mr Marsden was challenged about his evidence regarding the functionality of the Agility Platform. His evidence was not based on his own experience with the software but based on his depth of experience in cloud management platforms. He agreed that Pivotal was a company and Cloud Foundry was a platform and one of Pivotal's products.
30. Mr Marsden was cross-examined about the various software products that made up the Pivotal deal.
31. Mr Marsden conceded that the software programs known as Cloud Foundry and Open Shift were not responsible for "orchestration".
32. Mr Marsden was challenged about his evidence that it would take 27.6-man years to generate the software in the Pivotal deal if it were costed at $6.9 million. He gave the following evidence:- Q. You've been involved in the procurement of software for a number of organisations in the past, have you not sir? A. I have. Q. And would you agree with this proposition? That the cost of software is not simply computed based upon the number of man hours involved in generating the end product, correct? A. Very often it isn't. Q. One factor you mentioned yesterday was the margin, which is added by the software vendor. Correct? A. Sure. Q. Can I suggest that another factor is the ownership of intellectual property that might be employed in a new software venture, correct? A. Correct. Q. And I suggest that a further factor would also be time spent previously by investigating the market for, and the utility of a proposed software solution? A. Yes. Q. Effectively sunk costs before the venture commences, would be costs you would expect would be factored into the price of software. Do you agree? A. That's often the case. Q. You also gave this evidence, I suggest, at 1482, lines 34 to 39. "And you reasoned that over a three month period, CBA could have dedicated in excess of 110 full time employees to develop their own software, and expended less cost. Is that correct?" Answer, "That was how the math played out, hence why I couldn't understand why it made sense that you would attempt to deliver such a product in such a short time". Do you remember giving that evidence? A. I do. Q. I'll come back to the question of time shortly. But let me ask you about your conclusion, that the CBA would have expended less cost had it performed its own development of the software. On what did you base that opinion? Can you point us to the facts that you relied upon? A. You just stated them. That there would be no account for margin to a third party, or sunk intellectual property cost. Q. Would you agree that if there wasn't sunk intellectual property costs, a company such as a bank would either have to acquire the IP, or acquire the knowledge of the intellectual property, before it could engage in the development of the software. Correct? A. Yes, I guess so. Q. And that's something which takes time, do you agree? A. Yes. Q. And therefore also money, correct? A. Correct.
33. Mr Marsden was cross-examined about his evidence regarding the change in terminology, for example, some functions initially called adapters were re-branded as "ecosystem solutions" others referred to as blueprints became known as " a platform as a service adapter". He gave the following evidence:- A. The reasoning I followed in order to reach the conclusion that they had changed, was by tracing the stock keeping units in the transaction documents over time, with the words describing them. So over time, initially document 17 described them as blue prints, and then eventually, with different stock keeping units, they started to become described as what did they get described as, I looking at my table - ecosystem solution. That occurred at the point where TD17, on the fifth, was initially blueprints, and then by 23 January and 24 January became a series of other transaction documents.
34. Mr Marsden was then taken to a number of the documents. He gave this evidence:- Q. I suggest to you that that's the same for transaction documents 27, 28 and 29, that none of those evidence a transformation of something referred to, originally, in TD17 as a "blue print" to a "PaaS adapter"; do you agree or disagree with that? A. I don't disagree.
35. Mr Marsden was cross-examined on a number of the TDs. In relation to TD 24 he gave the following evidence:- Q. And can I suggest to you that transaction document 24 describes something called "Agility Cloud Foundry platform as a service adaptor licensed software", does it not? A. Yes, it does. Q. So it refers to an adaptor? A. Yes. Q. So an adaptor wasn't changed to an eco systems solution, was it? A. No, it was split out into two documents, yes. Q. And in the first document, it was referred to as an adaptor, correct? A. Yes, it is. Q. And in the second document it was referred to as an adaptor? A. Yes, it did.
36. He gave the following evidence about the change in nomenclature:- Q. Yes. What's the relevance, to your opinion, of the email at page 866, to the nomenclature or change of nomenclature that you've spoken about? A. So, the relevance of the email appears to be ensuring that the words "adapter" are not used for the new products that are being proposed in the new transaction documents. Q. When you say new transaction documents, are you talking about transaction documents 26 to 29? A. The transaction documents that have evolved since TD17 on the 5th. Q. All right, so TD17 included blueprints for Pivotal software. Do you agree? A. Yes, it did. Q. And those are referred to later on as ecosystems solutions, correct? A. Yes, so it appears. Q. At no stage were they referred to as adapters, were they? A. Possibly not. Q. So the one thing that is referred to as an adapter is the Agility Cloud Foundry platform as a service adaptor in transaction 24, correct? A. Yes. Q. And it was so described in the original transaction document 17, correct? A. Yes. Q. So there's been no change in relation to the Agility Cloud Foundry platform as a service adapter - being referred to as an adapter, was there? A. In this case, no. Q. So, in other words, what appears at page 866 is entirely irrelevant to the question of the naming of components as adapters because there was no change, do you agree? A. Sure, yeah.
37. Mr Marsden was challenged about his evidence that the final Pivotal TDs inflated the overall price for the same software components by 500%. He was cross-examined on TD 17. He gave the following evidence:- Q. Can I suggest to you therefore that you assumed that those four Pivotal blueprints were part of this original transaction document 17, because the definitions were included in this definitional table on page 837, correct? A. I think that's reasonable to assume. Q. Would you also agree with this general proposition, that there was variation made to the transaction documents? And I'm now not speaking just about transaction document 17, but all of the transaction documents through the various iterations. A. Yes, they varied each time. Q. And they varied in terms of content, to an extent? A. Contents, definition, names. Q. They varied in terms of price as well, did they not? A. They did.
38. He agreed that there was no attempt to remove the reference to "blueprints" in TD 26 that he could discern on the material provided to him, and that was the same for TDs 27, 28 and 29.
39. Mr Marsden was challenged as to the evidence he gave that in TDs 17 and 22 to 29 the term "blueprint" disappeared and was substituted by other descriptions. He gave the following evidence:- Q. So, it's not the case that the term "blueprint" more or less disappeared, is it? A. That will seem to be the case. It seems that the term moved from document 17 to document 26. Q. But there was no attempt to remove reference to blueprints, I suggest, in transaction document 26 that you can discern on the material provided to you, correct? A. I agree. Q. I suggest that's the same for transaction documents 27, 28 and 29; would you agree with that? A. No doubt.
40. Mr Marsden identified the problems of incorporating the proposed products in those TDs with the Agility Platform by interpreting the narrative in the emails between the various employees of SMI. He gave evidence that he did not seek access to the code for any of the products that were delivered as a result of those TDs as it was not within the scope of what he was doing. It was also not within the scope of his retainer to ascertain whether or not SMI and or CBA held the requisite licenses for the products. He acknowledged that there was nothing unusual about using what was known as "open source software", which included OpenStack.
41. Mr Marsden agreed that open-source software permitted the free use of the software for development purposes, depending on the nature of the license and that, Green Plum was an open-source license software. Mr Marsden agreed that the documentation he had examined suggested that the solutions outlined in the TDs would be provided in more than one stage.
42. Mr Marsden agreed that from the outset SMI was including five products in TD 17.
43. Mr Marsden was also cross-examined about the evidence he gave concerning the acceptance clause, namely, that the license software will be deemed accepted upon delivery. His evidence was that the clause did not give the bank much leverage to declare that the software did or did not do what it was purported to do. He gave evidence that appeared to be an intention to make it difficult for the bank to claim recourse. Mr Marsden was taken to the MSA (Exhibit E, Vol. 1, pg. 41, cl. 27) and agreed that it governed the Pivotal TDs. He gave the following evidence:- Q. Therefore, this dispute resolution clause and the expert determination clause applies to each of the transactions encompassed by those transaction documents; correct? A. I would imagine so, not a lawyer. Q. I suggest to you, therefore, the bank did have recourse in the event that the software did not live up to expectations; would you not agree with that? A. Recourse in terms of the execution of these clauses, yes.
44. Mr Marsden was cross-examined on the evidence he gave relating to the documents in Exhibit AU and his opinion that the documents failed to convey a meaning that could easily be interpreted by competent IT engineers, product managers or business analysts in order to begin to construct a product.
45. Mr Marsden was challenged about the "deliverables". He gave the following evidence:- Q. Can I suggest to you that, therefore - putting aside sample code and test code the deliverables do not, in fact, involve the building of a solution, let alone the building of a config management service; do you agree with that? A. Partially. The deliverables are asking a designer to design a system that is a config management system, and so it would be prudent and sensible to describe what the config management system was, so the designer could design it.
46. In re-examination the Crown established that the first TD 17 sent to the CBA included one product and not five products as put to the witness. He gave the following evidence in re-examination about the changes in definition of various items in Pivotal TDs as follows:- Q. It was put to you that you were mistaken when you said in your conclusion that the definition adaptor is changed to ecosystem, the first line of your conclusion at page 9 of your report. Do you remember that being put to you in cross examination? A. I do. Q. It's the case, isn't it, that you provided a definition for each of the different terminologies that was used throughout the documents under the heading at page 8, ServiceMesh Agility Platform Components and Subcomponents? A. I attempted to do so, yes. Q. You provided definitions in relation to the terms service gateway, ecosystem solution, adapter and platform as a service adaptor and blueprint; is that correct? A. That is correct. Q. You came to the conclusion that there was a degree of overlap in relation to the use of those terms; is that right? A. That's how it appeared, yes. Q. You've said in relation to blueprint, that, "Blueprint appears to be a defined configuration of subcomponents which can be repeatedly assembled and deployed to different locations using the Agility Platform. There is some overlap with the term Ecosystem solution". Is that correct? A. Yes, that's correct. Q. In the third paragraph you say, "The term 'blueprint' more or less disappears from the executed contracts (although it was a key solution component for the existing Agility Platform in its definition)". Is that correct? A. That is correct. Q. Is it the case that you were considering blueprint to the extent that it in the conclusion you drew, you were coming to the conclusion that it was the term, "Blueprint", that had disappeared from the nomenclature used in the contracts and that had changed to this term, "Ecosystem solution". A. That's how it read in some cases, yes. VOLUME 1 OF EXHIBIT E SHOWN TO WITNESS Q. If you go to page 294, for instance, you'll see TD26. Do you see that? A. I do see that. Q. Where it's now described as an ecosystem solution licensed software as opposed to the description that you first observed in earlier iterations of it being a blueprint; is that correct? A. Yes. The entire product in its title and description is now an ecosystem solution.
47. Mr Marsden gave further evidence concerning Exhibit AU, and his timeline of the pricing of the products in the Pivotal TDs:- Q. In that timeline of pricing you've noted that the products 26, 27, 28 and 29 only came into consideration from the communication sent to the CBA on 24 January 2014; is that correct? A. Yes, as near as I could decode all the emails. Q. There were some internal communications on that day between ServiceMesh staff which resulted in a document being sent to CBA at 1538 hours; is that correct? A. Yes, I believe so, obviously adjusting for the fact that one company is in America and one is in Australia, so, yes. Q. It was only at that time that these separate products now described as ecosystem solutions as opposed to blueprints made an appearance; is that correct? A. That is my understanding. … Q. When you were cross examined on Thursday afternoon, the point was made that there was no blueprint product included in the product descriptions in the offering of 5 January. Do you remember that being put to you? A. I remember it being put to me. Q. But this email on 19 January includes TD17 at page 919; do you see that? A. Yes, I see that. Q. At page 924 at term 7(ii) there's a provision which records that those four products are included as part of the software offering, isn't there? A. Yes, that's what it says. Q. It's on that basis that you came to the conclusion that what was being offered on 19 January 2014 for the price of 850,000, and that's on page 926, resulted in a final product being offered for the same price for TD17 which excluded those four additional pieces of software that were included in clause 7, but now included them in TDs 26, 27, 28, 29 for $850,000 each? A. That is correct. Q. That's where you came to the conclusion that it was now 500% more expensive than it was in the initial offering? A. That is what drew me to that conclusion, precisely.
48. Mr Marsden clarified the evidence he gave concerning the definition of "infrastructure as a service" as contained in MSA as follows:- Q. Is there a - would you accept that there's a degree of uncertainty as to whether "standard connect only" relates to connections of third party software to Agility infrastructure as a service, or Agility platform as a service? A. There's a huge amount of overlap. Infrastructure as a service and platform as a service are technically delivered in almost identical manner, the way you connect to it and ask to have it deployed for you. It's really just a matter of definition from a sales and marketing perspective as to which category a particular service may fall into. Q. Does that - do those definitions assist you to understand the issue that Mr Greenberg was raising, and the direction that Mr Pulier gave in relation to how the TDs should be structured? A. It's given there is no definition of platform as a service at this point in time. It could be reasonably interpreted that a request via the standard connector to request a service could be for either infrastructure as a service or platform as a service.

Evidence of Dr Allan Watt

1. Dr Watt practises as an Independent Digital Forensic Examiner and has training and experience in the identification, preservation, analysis and presentation of digital evidence. He has worked in his area of expertise since 1995.
2. Dr Watt gave evidence that he had met with an expert who was commissioned by the defence to prepare a report, a Mr Le Roux. Dr Watt had mentored Mr Le Roux from about 2011. Dr Watt was provided with a copy of Mr Le Roux's report and accepted the conclusions that he had drawn with respect to the metadata that he had analysed. Dr Watt had prepared a report dated 20 March 2023 and he agreed that his findings were the same as those provided by Mr Le Roux.
3. Exhibit AAB was a copy the parties' agreed facts together with the reports prepared by Lynswood Investigations & Forensics. Dr Watt gave evidence as to what metadata was and how it was created. Both he and Mr Le Roux had come to the conclusion that the metadata attached to the electronic records of the documents he had accessed through Dropbox did not appear to have been manipulated in any way. This referred to the SOWs and invoices provided by the accused.
4. Dr Watt went on to opine that metadata creation dates and creation tools on documents can be manipulated "very simply". He gave the following evidence:- Q. If you had access to the computer upon which the document was created, would you be able to examine the metadata to determine whether there had been any manipulation of the metadata? A. Yes. Yeah, if you go onto the Windows event logs on the computer it would actually show you if the date and time has been changed, and also the Word documents, when you open and create a Word document, they would be still present, and also they create temporary files when you're working on a Word document as an auto recovery in case the computer crashes. They'll be there as well. So there will be lots and lots of metadata all the way through the computer that would show if these had been manipulated. Q. What level of technical knowledge would a person be required to have to manipulate the data on a file such as the electronic data that you had access to? A. Just basic IT knowledge, and in fact this sort of stuff these days is all on Google. Just Google how to do this thing and it will tell you, and it will tell you all the little bits and pieces that if you were going to do this make sure you change the time, just not the date, otherwise if you've got 12 documents with different dates there's no point in having them with the same time, or within a short space of time, otherwise that will suggest manipulation. Q. You've reviewed the CV of the accused A. Yes. Q. during the course of this process. Is that correct? A. Yes. Q. Would you consider him technically capable of manipulating metadata in the way that you've described? A. Yes. Q. Why is that? A. Because he's got IT qualifications and IT experience, and he would have no difficulty in doing this.
5. Dr Watt was cross-examined about the release dates of various Microsoft Office software which were updated regularly. He was shown a video which set out the steps to be taken in order to modify the date on a PDF document. He agreed that it was impossible to use a new version of the software to generate backdating unless the user was licensed for the particular period for which the date on the computer was set.
6. In addition to the 2013 Microsoft Word software, the user would also require Adobe Acrobat Version 6 in order to backdate the documents.
7. Dr Watt gave the following evidence:- Q. You didn't have access to the computer on which these documents were generated, and therefore, couldn't analyse whether there was metadata on the computer; correct? A. Correct. Q. You were limited to the files themselves? A. Yes. Q. As far as the files themselves are concerned, you couldn't tell whether the process you've spoken about in your report was employed or not, could you? A. That's correct. Q. You couldn't tell one way or the other A. No. Q. in effect. Could I suggest that one other way of seeking to determine the authenticity of the date of a document, is to look at the document itself; would you agree with that? A. Yes, although that's independent from the computer, or the real day. Q. You, as a forensic person, might look to context to determine whether a date of a particular document is accurate or not, for instance? A. Yes, which is why we looked at the Word versions and the PDF versions. You know, for instance, if the PDF version was one from 2018, then that would have shown up a red flag straight away, and then even things like you look at the address where the company concerned was not at that address during that thing. There's a whole lot of other things that you learn through experience, that, independently, help you address those sort of questions. Q. Did you undergo that - undertake that task in the present case, as well? A. Yes. Q. Again, you couldn't find evidence one way or the other as to the accuracy of the dates of creation modification. A. That's correct.
8. In re-examination Dr Watt confirmed evidence he had given that Microsoft Office 13 was offered as a perpetual license. He gave the following evidence:- Q. Because Microsoft Office 13 was offered as a perpetual licence that didn't need to be renewed, and you could use that version of Microsoft Office forever after you'd installed it. Is that correct? A. Correct. Q. You gave some evidence that it's easy to obtain, even now? A. Correct. Q. It can be purchased off the net for a very small amount of money; is that correct? A. Yes, and some of these are brand new in the box, because they were redundant once the new version came out. Microsoft didn't want them so they just flicked them off and people sell them off. Q. It was put to you that you had given evidence that there was some difficulty in moving this type of software from one computer to another. Remember that proposition being put to you? A. Yes Q. What is your understanding of the capacity to install more than one version of Microsoft Office using the one licence key? A. Microsoft usually allow you to do one. Sorry, two - two versions, yes, on two separate computers, given somebody might have one at the office and one at home and they allow you to install it twice. Beyond that, it won't allow you to authenticate the licence. Q. Is there scope for you to request additional use? A. Yes. You then have to get on the phone and you give them your licence number and then they'll discuss it with you to ensure that you're not actually somebody's friend trying to relicense it. But a computer might break down, for instance, and you've got to get a new computer so you want to reinstall it, and then they would reactivate the licence and give you a special code for it. Q. Is that a situation that existed back when Microsoft 13 was the version of Office that was being A. Yes, it was.
9. Dr Watt gave further evidence that Adobe 6 software was offered free of charge and did not require a license.
10. Dr Watt gave the following evidence concerning the video which became Exhibit 78:- Q. That video also showed the attempts being made to convert a PDF document to a Word document and then attempt to reconvert that document back to Adobe. Did you see that on the video? A. Yes. Q. Is there any reason why the documents that were analysed could not simply have been constructed using Microsoft Word 13 without first being converted back to PDF? A. Yes. Q. Sorry? A. Yes. Q. Is there any reason why that couldn't have been the case? A. Yes. Well, exactly. It possibly was that they weren't - didn't need to be documents that were then edited. They could have been just created at a given date and the computer changed. The clock changed, sorry. Q. A possible scenario is that somebody has Microsoft 13, or Office 13, saved on their computer and they go into the Microsoft Word program and create the document from scratch; is that correct? A. Correct. Q. Then convert the document to a PDF document? A. Yeah. You save it - you go save as PDF. Q. In those circumstances, if the clock had have been altered then there would be no way of determining the provenance or the correctness of the metadata associated with an electronic copy of the document; is that correct? A. Yeah, unless you had the computer.

Evidence of Mr Jon Waldron

1. The accused gave evidence that he did not take a bribe for having facilitated business opportunities for SMI, nor did he assist Mr Hunter to falsify records to cover up the fact that he received a bribe from SMI for facilitating opportunities with the CBA.
2. He agreed that he received payments for work done and for work to be done.
3. The accused gave evidence of his educational background and work history. He moved from New Zealand to Australia in 2001 and worked for a company called IT&E. In May 2001 he was farmed out to CBA on a database project on Oracle and then transitioned over to being a consultant for the CBA full-time. He worked as consultant until 2008 when he joined CBA on a permanent basis. In 2007 he won an international award in relation to databases from Oracle, as a database administrator.
4. In late 2009 the accused was moved to the architecture team looking after the cloud computing initiative. He gave evidence that Mr Harte was the CIO at CBA who was keen on being a "first mover advantage" in the CBA's transfer to cloud computing.
5. The accused gave evidence that he first met Eric Pulier in the second half of 2009 through Michael Harte.
6. The accused was given a retention bonus when he was put into the role of managing the CBA's cloud computing program in late 2009. In that year the bank had developed a strategy called ES2012 to move the CBA IT infrastructure away from monolithic outsourcing deals to more nimble contracts.
7. Exhibit 79 was an email from Mr Pulier to the accused dated 3 August 2010 which referred to the HP stranglehold on CBA infrastructure. It referred to the "on demand model" of the supply of IT software.
8. In 2011 the accused was appointed to the role of General Manager with a budget of $740 million a year. He had a staff of 250 people reporting to him. At the time SMI were consultants and they were bringing in the idea of the on-demand model and IT as a service. They did not supply software to the CBA at that time. In 2011 CBA signed an MSA with SMI and SMI then supplied software under an ELA. SMI became an embedded supplier to the CBA which meant that consultants had access to the CBA premises.
9. The accused gave evidence that cloud computing was a commercial solution and Mr Harte was intent on breaking down the monolithic structure involving HP. He wanted contracts that were contestable and portable meaning that there were alternatives available in the market. Mr Harte wanted ServiceMesh to build credible threats to HP meaning applications and "workloads that people would… flock to".
10. Exhibit 80 was an Infrastructure Portfolio Program Cloud Strategy - Executive Summary and Final Report dated 15 December 2010 referring to the strategic vision for CBA to cloud computing. It related to Exhibit 26 which was an explanation of the x86 architecture.
11. The accused gave evidence that Mr Twynham was an account manager in Australia for SMI. They became good friends however he had similar relationships with people employed by other suppliers including attending their weddings. He had agreed to organise Mr Twynham's bucks party.
12. The accused gave evidence of a non-disclosure agreement between SMI and the CBA in the MSA signed in February 2011. This related to the sharing of financial information which was confidential to the CBA and the accused described this as being "consistent with trying to execute on the program of work".
13. Exhibit 82 was an email from Mr Harte to Mr Pulier dated 21 June 2012 requesting "an Open Kimono conversation on strategic intent and action going forward". This meant an open and transparent relationship and the sharing of information.
14. The accused identified Exhibit 52, the procurement policy of the CBA as of 5 December 2013. He gave evidence that confidentiality agreements were in place with SMI and other suppliers as a normal practice.
15. The accused identified Exhibit 16, a letter addressed to Mr Pulier dated 19 April 2011 which he had written for Mr Harte. It concerned the partnership with SMI which was founded to enable CBA to move to the "everything as a service portable and contestable cloud-based business model". The letter also provided "by committing to Agility we are locked into this SeviceMesh cloud management toolset (and the associated three-year licensing agreement).This commitment to ServiceMesh prevents CBA exploiting alternate offerings in a rapidly maturing market".
16. The accused described this as "a shot across their bow, to make sure that ServiceMesh take what CBA have invested and continue to turn back to CBA a good return on that investment."
17. The accused also gave evidence that he had some involvement with an Australian start up media company known as "The Conversation" and that Mr Harte and Mr Hunter were aware of his involvement. He gave evidence that it was consistent with his duties to the CBA.
18. Exhibit 87 was an email from Mr Pulier to Mr Waldron dated August 2013 relating to a joint-venture known as Agora, which the accused was involved in, getting it set up by introducing people and getting those concerned in the join-venture together.
19. The accused gave evidence concerning Exhibit E, Vol. 3, pg. 1296 which was an email from Mr Pulier to him dated 10 April 2011 suggesting a dinner with Mr Hunter. He described this as a "mutual scoping out exercise" which led to Mr Hunter's employment.
20. Exhibit 88 was the accused's 2014 annual remuneration statement which included a short-term incentive potential by way of an allocation of shares. They were deferred for three years.
21. The accused gave evidence that of his total budget as a General Manager of $740 million dollars, the cloud computing portfolio commanded about $17 million dollars. There were close to 1,000 suppliers including very large companies such as HP. SMI was considered a smaller supplier. Once the accused was appointed General Manager Mr Twynham would have to make an appointment through his assistant to see him.
22. The accused identified Exhibit 10, a letter of intent sent by SMI to him on 28 August 2012 as relating to Exhibit 82. He gave evidence that in June 2012 CBA and SMI went into a re-negotiation phase during which they agreed to a letter of intent while they finished off the negotiations. He gave evidence that Exhibit 12 was the contract execution request for the negotiated deal that the letter of intent was subject to. He gave the following evidence: - Q. Just broadly speaking, at this stage, if you could go to the paragraph headed, "Terms negotiated include", which is about point 5 on the first page. Can you describe how those terms negotiated impacted upon the expenditure of the CBA with ServiceMesh after this CER was executed? A. Yes. There were two major changes on an expenditure point of view. The first was that the total contract here had been renegotiated and it moved to an ELA model and that resulted in a significant saving to CBA right then and there. The second major one was, we inserted a change of ownership clause into the MSA and related documents and that change of ownership clause had a basically a claw back clause to allow CBA to reduce their payments going forward.
23. The accused identified in Exhibit 13 the renegotiated clause at paragraph 6B that was triggered in the event of an acquisition of SMI.
24. The accused gave evidence that he heard of TechAdvisors in 2012 or 2013 in the context from Mr Pulier as "a sort of advisory board".
25. The accused identified in Exhibit AD the text messages between himself and Mr Twynham in December 2013 relating to the McAfee deal. He gave the following evidence:- Q. Could I ask you, please, to go over to the second page of that exhibit. Could I draw your attention to the bottom of the page. Do you there see a number of text messages relating to 11 December 2013? A. Yes. Q. Apparently, you sent a message on that day saying, "I've been looking at the numbers. What's the chance of having McAfee drop the support fees by $400,000 pa, but add $1.5 million onto the licences? We can increase the size of the deal by doing this and reduce the P&L impact at the same time"; do you see that? A. Yes. Q. Can you explain what you were trying to convey by that text message? A. Yes. I was trying to say, if you can change the balance between licences and licence sorry, the licence themselves, and the maintenance and support fees, it will change the amount of revenue that you can get out of that deal, and also, a change from a CBA perspective my P&L impact at that time. Q. What was the relevance of P&L impact for you, given your role as general manager? A. Our cost centres, or our accounts, were managed by a profit and loss model, and licence fees - the capital costs for the licence fees were commonly amortised, and by changing that, we could allow the amortisation over five years to reduce the P&L impact. That has means it makes it better for my budget.
26. The accused gave evidence that he stated "push this deal through" because of his understanding that it was "contingent on the McAfee getting the price hold they had at the time meaning that they had to get it done by the end of that calendar year."
27. The accused was shown the text messages in Exhibit E, Vol. 5, pg. 2020. It contained text messages between himself and Mr Twynham. On 31 October 2013 he had written "we have a proposal on the table already. We are yet to execute on it" which was confirmation about the McAfee proposal. The accused gave evidence that he heard about that proposal in a meeting on or about 17 or 18 October 2013. Exhibit 46 related to that meeting.
28. On 2 November 2013 at 4:02 p.m. he sent a message to Mr Twynham stating, "BTW I've talked Keith and Ben through the McAfee deal, and we're all primed from our current from out side". He gave the following evidence:- Q. What did you discuss with, is it Mr Hunter and Mr Hayes? A. Yes, I talked to Ben Heyes, my peer in the security area about this deal and the reason for it and for the project, he replies words to the effect of, "That's great, we've been looking to do this for a while", and I've talked to Keith, and he would just go, "Get on with this, get it done, something like that". Q. You then say, "If you can make it stick with McAfee we should be able to do this". Who suggestion was it that ServiceMesh would be brought in in order to supply the McAfee software? A. That was my idea. Q. Why did you suggest ServiceMesh? A. Because the project that we were doing it and needing it for specifically was a cloud based project and ServiceMesh were on that project in a different capacity than this. Secondly, I knew from my relationship with ServiceMesh that they would be amenable to being aggressive with the timeline. Third, I knew the MSA with ServiceMesh inside out, back to front, because I'd been on the negotiating team for it for nine months and that was a great advantage because it enabled us to back McAfee into them. So, there was quite a few things. But the overriding thing that this came about is because of the CSC acquisition itself. The CSC acquisition itself with ServiceMesh being wholly owned by CSC, they then had access to the balance sheet capability of CSC for the underwriting of the liability clauses.
29. The accused gave evidence explaining other messages including at 4:11 p.m. saying "Oh, do I pull some strings?". He described that as a generic statement of just getting everything to work, trying to get everything to happen. He also explained the following message - "If we pull this off, Eric should be buying this a lifetime supply of Dom and caviar". He described this as "just banter". He was asked:- "Q. Did you expect to receive a reward from Mr Pulier if you managed to pull this off? A. No. Q. That is, the McAfee transaction? A. No, of course not."
30. The accused was shown Exhibit B, Vol. 2, pg. 703 an email from Mr Pulier to himself dated 19 December 2013 in which he said "I think we may have just about pulled this one off". He described this as "the combined team has done a good job in celebrating after a deal is a very normal thing to do. It happens frequently."
31. The accused gave evidence about Exhibit E, Vol. 3, pg. 1329, an email between himself and Mr Hunter on 31 October 2013 concerning the deal that he was aiming to get done with SMI as the reseller. There is reference to "the in-year revenue" which he said did not relate to the earnout as he wasn't aware of it at that time. He gave evidence that he became aware of the earnout in late November in a meeting with Brad Twynham. In that email he had said "so here's 7 million for them". He gave the following evidence:- Q. Why do you say that? A. Well, the 7 million is the reference to the number and the deal below. That's where that number itself comes from, but the reason for me saying that in this context was one of incentivisation. We needed to get the ELA for our technical reason I was talking about before - the ELA with McAfee. McAfee was incentivised. ServiceMesh were incentivised. We can get this done now.
32. The witness was shown Exhibit AL being a series of text messages between himself and Mr Twynham, some of which were highlighted. He gave the following evidence:- Q. What I'd like to do is take you to the first set of three highlighted messages in the colour yellow. Do you see those? A. Yes. Q. You, I suggest, send Mr Twynham a message in the first one. "I also talked to Kyle and agreed scope for the Pivotal TD, so we should be able to land that one easily enough", is that right? A. Yes. Q. Then after that, a message from Mr Twynham, "We should put you on the payroll", do you see that? A. Yes. Q. Your response is, "Hopefully I am already", exclamation mark, smiley face, do you see that? A. Yes. Q. What did you mean when you said, "Hopefully I am already"? A. Look, I'm not 100% sure, I don't fully remember, I take it again, it was banter and humour, and certainly the payroll that Brad was talking about was CSC payroll, wasn't any other payroll. Q. The message occurs, I suggest, at or about the time at which the McAfee deal was concluded, correct? A. Correct, yes. Q. Did you have any expectation that you would receive a reward either from Mr Twynham or anyone else linked to ServiceMesh for your assistance with the McAfee transaction? A. No, of course not, no.
33. The accused gave the following evidence concerning the regulation of IT engineering at the CBA:- Q. Was the bank subject to any regulation that was relevant to your position as general manager of IT engineering? A. Yes, the banking regulator APRA was actively involved in my area and the area of my peers as well too, specifically in dealing with what they refer to as materiality or material applications. Q. Did that have anything to do with the move to cloud computing? A. Yes it did, in fact it was one of the drivers, in fact probably the main driver of the requirement and the associated urgency to get the McAfee deal done. There were regulatory requirements behind it. Q. You say there was some urgency, why was there urgency? A. Because we were meeting with APRA in January 2014, and we had to have a solid story to explain to them about the security controls we were putting in place or they would put a halt to our work because we were working with APRA at that time to advance banking into cloud computing. Q. You've used the expression "solid story", what did you mean by that? A. They needed to show that we had a plausible, cohesive security strategy with the tools and the software that could do the job they required, otherwise everything gets put on ice until those things get resolved and you lose six months, a year, in the process.
34. The accused gave evidence about wanting the McAfee deal closed out before Christmas. He was shown a message from him to Mr Pennington on 15 December 2013 in which he stated "I'm wanting to have this closed out by COB Tuesday". He gave the following evidence:- Q. Is there some reason you wanted to have the McAfee deal closed out by COB Tuesday? A. Yes, we wanted it closed out by, well, just before Christmas in order to put it to be done because after Christmas goes into holiday break, you can't get your sign offs and all that sort of thing. So, normally before Christmas is the last you've got. Q. You said before, I think, that you learnt about the earn out provision in the ServiceMesh acquisition sometime late November. Is that right? A. That's right. Q. Therefore, you accept that you would have known about it at the time you sent this email on 15 December, do you agree? A. Yes, I do. Q. Your expression of wanting to have the deal closed out by the closed business on Tuesday, did that in any way relate to the ServiceMesh earn out provision? A. Not at all. The earn out at this stage was incidental. It was not really that relevant at all. Q. You say it was incidental and wasn't really relevant at all, in what way was it relevant? A. Just that we knew about it, that's about it. I didn't have any impact on this deal in the slightest.
35. He gave evidence that if the deal was not concluded by the end of the financial year the offer would be taken off the table by McAfee and they would have to start the whole process all over again. He gave the following evidence:- Q. In your experience, how long would that have taken? A. A couple of months to get back to the stage again. Q. Would that have had any impact upon your plans for implementing strategy at BCBA? A. Yes, it means we could not have gone ahead with the ODP internet facing, and applications like Netbank could not have been moved out into the cloud. Q. Then a couple of lines down, you write, "Tom, from you I need the dollar sign comparison before and after ELA, approximate is fine. As per my email to you and Bradbury", do you see that? A. Yes.
36. The accused identified in Exhibit 4 the spreadsheet relating to the McAfee transaction. He explained the terms outlined therein and the calculations contained therein. He gave the following evidence:- Q. What can you say about the bottom table that talks about benefits after five years of being 4.5 something million, and after 10 years of being 17.683 million? A. That benefit profile where there's a big jump after year five is consistent with what you get when you model with amortisation. This benefit, though, of 4.56 million for five years is considered, given the size of the deal, that is a significantly good deal, and after 10 years that's a very good deal. Q. That's a very good deal compared to what? A. To what CBA would be paying at that time. So, this is an improvement in the cost base over that period of time. Q. Paying to whom? A. Paying to? Q. To whom are they paying at the time? A. They were paying to HP at the time. Q. What is your recollection of the financial benefits to CBA for the McAfee transaction, thinking back to 2013? A. The financial benefit, did you ask? Q. Thinking back to your state of mind in 2013, what was your view as to the financial benefit to the CBA if it entered into the McAfee transactional service? A. I knew it was a strongly good deal. I didn't perhaps have this detail in my head right then and there, but I knew it was a good deal.
37. The accused was shown the email trail in Exhibit E, Vol. 3, pg.1358 concerning the negotiations and issues arising therein in the McAfee deal with SMI. In it there was a request by Mr Nicholson for a most recent copy of the MSA. The accused gave the following evidence:- Q. Can I take you to your response above that, and you say, "There is no MSA to review. This transaction is under the ServiceMesh MSA, which is already done and dusted". Do you see that? A. Yes. Q. Why did you not provide, in your reply email, Mr Nicholson with a copy of the ServiceMesh MSA? A. Because ordinarily, CBA had something that was referred to as a contract management system, and people in partner management could go and access it and get those contracts any time they wanted to. As an engineer in the engineering team, I didn't walk around with MSAs on me, so I didn't have those sorts of things to access. Q. In your response say, "This transaction is under the ServiceMesh MSA, which is already done and dusted", what did you mean by that? A. That it's been fully negotiated and concluded. Q. What relevance was that to Mr Nicholson's request? A. Because he was asking to review this MSA, and I thought there was a confusion here, either he's trying to reopen negotiation or review of the MSA that was already resolved. Q. Coming back to Mr Nicholson's email, I suggest he asked you this in the second line, "Also, can you let me know who from CBA Legal has been handling this matter for you?", do you see that? A. Correct. Q. Had anyone been handling this transaction, that is, McAfee transaction, at CBA Legal? A. Not at that point. Q. Is there some reason why not? A. Generally, when a transaction document is made pursuant to an MSA, then as long as the transaction document does not attempt to change or override the MSA, then there is no legal review to do. So, it's only when a transaction document looks to do an override, do you need to engage a legal team. Q. Did you believe that engaging CBA Legal was necessary for the purpose of this transaction? A. At this time, it looked no, but this was the first inkling that there were going to be some terms that might need to be negotiated. So, this was where it first started to bubble up to that issue. But as I said, Mr Nicholson, you please go in sort it out with legal if you need to.
38. The accused identified the email he sent to Miriam Lane on 17 December 2013 (Exhibit E, Vol. 4, pg. 1525). He gave the following evidence:- Q. Now, can ask you firstly about the first line. You've written, "Both Keith and I want this deal done ASAP within the next 48 hours max". Do you see that? A. Yes. Q. Why and did you want it done within the next 48 hours at most? A. The same as the previous emails where date has been talked about. That was a cut off time for the deal. We wanted to make sure people were feeling the pressure to get it done. Sometimes a deadline serves as a useful focus mechanism, and I certainly wasn't above doing that. Q. You then, in the next line, saying, "We're just buying software, it's a McAfee ELA. Why are we even doing a risk assessment?", do you see that? A. Yes. Q. The transaction with ServiceMesh involved a number of transaction documents, do you agree? A. Correct. Q. Those transaction documents provided for the supply of McAfee software? A. Yes. Q. The transaction documents provided for the supply of some services, correct? A. Yes. Q. The documents also provided for the supply of something called Cloud Secure, correct? A. Yes. Q. Why then is it that you said, "We're just buying software, it's a McAfee ELA"? A. When we do ELA's, it's very common for a major supplier like an Oracle or a Microsoft to have a very small bit of service around it to help it get installed, with the license set up or something like that, that's a very normal practice. That doesn't qualify for a risk assessment under normal circumstances, especially in ELA with a major supplier or a well known supplier. ELA, buying software, you don't do risk assessments. That's what that was meaning. Now, I admit it's an inelegantly worded, but that's what it was meaning, yeah. Q. Is that what you meant when you said, "Why are we even doing a risk assessment"? A. Yes. When buying software, correct. Q. Now, was that the position also in relation to the Cloud Secure product? A. Yes, because of the MSA we had, we'd already been through buying software off ServiceMesh, and we didn't do a risk assessment every time we did a new transaction document.
39. The accused gave further evidence about an email from him to Mr Smith the Head of Technology Risk at CBA on 18 December 2013 as follows:- Q. Could I take you to Mr Smith's email, which appears at about point four, and I suggest that he says this, "When I spoke to Tom P yesterday afternoon, he advised that the contract also allowed for services to be provided in support of the software which were located both onshore and offshore, if this is not correct then please let me know", do you see that? A. Yes. Q. Your response is, "Services, not that I was aware of, thought it was just software and its associated maintenance", do you see that? A. Yes. Q. You subsequently reviewed transaction documents 19 to 21, did you not? A. Yes. Q. Did they provide for the provision of support located both onshore and offshore? A. Not software maintenance has level one, level two, level three, level three software maintenance, ie back at the engineers where the software is being built does not count as offshore for a risk assessment. I know it's a bit convoluted but that's actually how it works, so no, software maintenance is not offshoreable (as said), it's onshore.
40. The accused gave evidence that he had checked with Mr Twynham concerning risk assessment. He gave the following evidence:- Q. As a result of that discussion, what did you conclude about the need for a risk assessment? A. That it was blown out of all proportion, and it was a red-herring. Q. In relation to risk assessments, did you do anything to prevent a risk assessment from taking place? A. No, not at all. Q. In relation to legal assessment, did you do anything to prevent a legal assessment from taking place? A. No.
41. The accused gave evidence that following the McAfee deal the CBA continued to pay HP for the provision of services during the transition period. He gave the following evidence:- Q. You talk about a transition period, what transition period was that? A. Whenever you move a contract, a services contract from one contract to another contract, there is inevitably an overlap, a transition period. During that time, while one contract winds down and the other winds up, there will be some overlap. That's just a sunk cost of transitions. Q. What view did you have about the financial benefit of the ServiceMesh McAfee transaction to the CBA knowing that there would be this cost incurred for a doubling up? A. It's still strongly favourable to CBA.
42. The accused identified a diagram in Exhibit 26 as one drawn by him representing the components that fit together for the x86 domain platform as a service as depicted in that diagram was a nascent technology at the time. Platform as a Service represented a set of software that enabled developers to build applications. An ecosystem was a collection of all the components that go together.
43. The accused gave evidence that in September 2013 he travelled to the United States to meet with Pivotal and EMC in New York and Boston. On the return trip he met Mr Pulier and had dinner with him. He gave the following evidence:- Q. Did you discuss any earnout provision relating to the acquisition of ServiceMesh by CSC? A. No. There was nothing like that at that time.
44. The accused gave evidence that he spoke to Mr Twynham on the same trip and did not discuss the earnout with him.
45. The accused was shown an email from Ms O'Toole of SMI to Mr Twynham on 27 November 2013 (Exhibit E, pg. 613) which included a reference to a meeting with the accused. He gave the following evidence:- Q. Mr Twynham writes, apparently to Ms O'Toole, the following, I suggest, "Had a lengthy catchup with Jon Waldron yesterday afternoon. He has confirmed that the two deals he wants to get done are the security deal and the Pivotal deal, if we can establish value in relation to our Pivotal story". Do you agree that you had confirmed, as at November 2013, that you wanted to get two deals done with ServiceMesh, namely, the security deal and the Pivotal deal? A. Yes. It would be my recollection of that meeting, yes. Q. Can I ask you, were you interested in doing any other work at this time with ServiceMesh? A. Obviously, Brad had introduced a time period the January 31st timeframe, called the earnout, and said that he was looking to get deals done for the earnout, and I made it clear that I wasn't interested in CBA trying to do something for the earnout that wasn't already in play or already likely to be done, or anything like that.
46. Mr Waldron gave the following evidence in relation to the TDs 17 and 22 to 29:- Q. Can I take you to page 651. Is what is described on that page relate in any way to the Agility PaaS TDs which were numbered 17 and 22 to 29. A. Yes, there are a selection of these potential blueprints and adaptors that became what are the subject of those TDs, yes. Q. So you're saying there's a selection. Are you therefore saying that there are more here than were the subject of the transaction documents concluded with the CBA? A. What I'm saying is that CBA chose to do some of what are offered on here, not all. Q. Who made that decision? A. Me. Q. On what basis did you make that decision as to which to contract and which not to pursue? A. The ones that were relevant to potential uses we had for them, and then that reflects back to that meeting I had with Pivotal the notes that you took me through just before - and the data fabric if you look at the ones that we did acquire, they were focused mainly on the data fabric area. That's what we were looking at.
47. The accused gave the following evidence about the amendments to TDs 17 and 22 to 29:- Q. You were present when evidence was given by Mr Marsden about a number of iterations of the transaction documents which became 17 and 22 29, were you not, Mr Waldron? A. Yes. Q. Did you pay attention to that evidence? A. Yes. Q. Can I ask you, where were you in January 2014? A. The earlier part of January 2014 I was on leave, not returning till, I believe it was 9 January. I was in the office for a couple of weeks and then had a extended, sort of, long weekend break around the Australia Day weekend. Q. You know, do you not, that a transaction document was sent to you on 5 January; is that right? A. I do, as a result of this case, yes. Q. Do you otherwise have a recollection of that document? A. No. No. Q. Do you know what happened to that document? A. It looks like nothing. Q. Did you send any emails in response to that document? A. No. Q. Did you cause any actions to be undertaken as a result of that document, that you can recall? A. No. As I said, I was on leave. Q. Whilst you were on leave, was there anyone else who would step into your shoes? A. Yes, but in early January, no. I mean, that(as said) just in the Australian way of extended holidays. Q. From what point in time would someone, after the Australian way of extending holidays, jump into your shoes? A. Mid-January, and that would normally be Tom Pennington, as my 2IC would. Q.I suggest that you also sent subsequent iterations of the transaction documents; is that right? A. I believe so, yes. Q. Do you recall receiving those? A. No, I don't. Q. Is there some reason why you don't recall receiving those? A. I was, and usually am, very busy, and I had also delegated the responsibility of closing out those transaction documents to Tom Pennington, which was my usual practice with transactions like this. Q. You speak about "closing out". Did you have any involvement in these transactions? A. In the January timeframe, not that I recall. I'm sure there were conversations but I didn't take any actions. There's no emails. There's no nothing. Q. How about prior to January, what was your involvement in relation to these transactions? A. It was in - all the work that we'd been talking about this morning, getting them set up, obviously from a strategy point of view through to talking to the suppliers, you know, working with them, coming up with product development plans, all that stuff. The liaising with Michael Harte. So the previous six to 12 months. All of that, my work, and my job. The closing out is the function of getting them signed.
48. In relation to the work he did on those TDs in January 2014 he was shown an email from Mr Hunter to him on 6 January 2014 (Exhibit E, Vol. 4, pg.1684) to which he responded. He gave the following evidence:- Q. You say Mr Pulier's "getting nervous about the remaining TDs". Why did you say that? A. I take it, from the fact that he'd been calling Mr Hunter and then calling me, he's doing the rounds and getting spun up and making sure everything gets done on time, you know. The intensity that can sometimes get in the sale side of an organisation when it's getting near the end of their financial year, or any other financial period. Q. Did that have any impact upon how you dealt with the closing out of TDs 17 and 22 29? A. No. None whatsoever, because it was in progress and there was plenty of time, and I would have conveyed that back to Mr Pulier, "Just chill out. It will be fine", as in, there's plenty of time. Don't stress it. Q. Did you, in fact, speak to Mr Pulier to convey that message? A. I had - excuse me. From my calendar I can see there was one phone call I had with Mr Pulier in January, on January 9, the day I got back. Q. Did Mr Pulier mention the earnout period in January? A. He may have. I see it's likely, but I don't have a specific recollection of it.
49. The accused gave evidence that he had nothing to do with the process of splitting up the original Transaction Document 17.
50. The witness identified on Exhibit AAB at pp. 127 and 127 a spreadsheet he had prepared for the list of days for which he received the first payment from ACE. He gave evidence that it referred to the Tiscali visits that he had referred to earlier in his evidence.
51. The accused was taken to Exhibit E, Vol. 2, pg. 608 and gave evidence about the background to the Tiscali visits namely Mr Harte's reference to a "Pan-European practise" and his acquaintance with Renato Soru who owned Tiscali.
52. The accused was shown Exhibit 99, an email dated 7 December 2013 from Mr Harte to Mr Soru. The accused gave evidence that he went to Tiscali in December 2013 and Liam Buckley the Finance GM at CBA also accompanied him on some trips to Tiscali.
53. Exhibit 100 was an email from Mr Harte to Mr Hunter dated 9 December 2013 in which Mr Harte advised that he had "asked Jon and I would like Hans to take a look at Tiscali". Mr Harte had written, "I'd like to use Tiscali and help them become a pan- European cloud provider". The accused gave evidence that as a telecommunications company based in Sardinia Tiscali was well-placed to develop cloud technology to service North Africa, the Middle East and Southern Europe.
54. The accused tendered evidence regarding Mr Harte's dealings with Tiscali. Exhibit 102 was an email dated 10 December 2013 concerning a meeting with Tiscali.
55. Exhibit 103 was an email from Mr Soru dated 11 December 2013 concerning Mr Harte's intention to create solutions with partners that potentially could be resold to a wide array of customers.
56. Exhibit 104 was an email from the accused to Mr Scano dated 11 December 2013 discussing the agenda for a meeting with Mr Scano.
57. Exhibit 105 was an email from the accused to Mr Scano dated 12 December concerning that visit. He gave the following evidence:- Q. What was your understanding as to the purpose of your visiting Tiscali in December 2013? A. To, essentially, be a resource to work with them on that journey, on that project. Q. When you say to be a resource, what do you mean by that? A. A - an advisor. A consultant. Whatever the right word is, yes.
58. On the same trip the accused went to New York to meet with IBM. He gave the following evidence:- Q. What was the result of your meeting with IBM in December 2013? A. So IBM New York I was bought into their cloud services division with the head of cloud services at that time. IBM had been a late starter to the game, and Microsoft and AWS were streets ahead of them, which is as per my comment at the bottom there, "late starter". They were looking for me to advise them on how to do that journey.
59. Exhibit 106 was an email from the accused to Michael Harte dated 12 December 2013 concerning that meeting. He gave the following evidence:- Q. Did you take up the opportunity with IBM that was offered to you? A. At that meeting we did talk in depth about it. I asked what sort of commitment they're looking from me, and it was too all encompassing at that point, but what I did like, it wasn't compatible with actually having this job in CBA in Sydney at that time. What I did get out of that meeting, though - and it was really interesting, and that was on back of my visit to Tiscali was I got to a real sense that there was an appetite for this sort of advocacy or consultancy, and I sort of began to think of the idea of practise involved in doing this based on the experience I had gained in the CBA role.
60. Exhibit 107 was an email from the accused to Michael Harte dated 29 January 2014. He gave the following evidence:- Q. Could I take you, please, to that exhibit, and I suggest you write this in the second sentence: "I would think we engage Luca and team at this level and see if they are willing to invest to build out these foundational capabilities." Correct? A. Yes. Q. Luca's the Luca you spoke about beforehand; is that right? A. That's correct, yes. Q. What were you suggesting to Mr Harte in that sentence? A. I was suggesting that on the basis of our first meeting there's clearly an opportunity, there's potential. I'd done a bit of a writeup about steps that need to be taken, so let's go back and see if they're willing to invest, and an important thing to understand with that, is that Renato Soru, the man who owned the company Tiscali, is very wealthy. He's an Italian billionaire so that's why we were looking back to go and get some funding to invest in this. Q. You talk about "foundational capabilities", the last words; is that right? A. Yes. Q. What did you mean by "foundational capabilities"? A. Well, for me being an infrastructure engineer, I know you have to build from the bottom up. Michael, being obviously at a different level, he likes to think of the end, business services, but you can't get there until you build the foundations, and that's my job. Q. In the next sentence you talk about, "As a very rough estimate, I'd say they'd be looking at around $10 million initially to implement these building blocks." Do you see that? A. Yes.
61. The accused gave evidence that Mr Pulier was bought into the conversation about the potential of a deal involving Tiscali by Mr Harte.
62. The accused gave the following evidence concerning his work on Tiscali:- Q. Can I take you back to February 2014. Did you do any work on the Tiscali opportunity? A. Yes, through more meetings and continuing work on the overall plan. Q. Does this relate to meetings which were attempted to be put in place? A. Yes, I believe it does so, yes.
63. Exhibit 109 was an email from Mr Pileri to Ms Muggli, Mr Harte's Executive Assistant dated 15 February 2014 concerning a meeting to progress this opportunity.
64. Exhibit 110 was an invitation to a meeting dated 6 March 2013 with Mr Soru and Mr Scano of Tiscali. It was a telephone conference to set up the accused's next visit to Sardinia in April. At that time the accused was aware that Mr Harte was to leave the bank in late June/early July. He moved to Barclays in London.
65. The accused gave evidence about his travel in June 2014 to Italy where the Tiscali venture was discussed at length. They included discussions about the financial viability of the venture. In May or June 2014 there was a trading halt for the Tiscali corporation and an announcement to the market that they were needing to re-finance some bonds.
66. The accused gave evidence that on the same trip he went to San Francisco to visit Pivotal and its CEO Mr Paul Maritz. From there he went to LA to meet with Eric Pulier. He spent a day with Mr Pulier to have a planning session for the Tiscali venture. He gave the following evidence:- Q. At the end of that meeting, had you and Mr Pulier come to any concluded view as to what steps you would take in pursuing the Tiscali opportunity? A. Yes. It was mutually agreed between myself and Mr Harte and Mr Pulier that I would be the ideal candidate to oversee the implementation of the transformation of Tiscali to a Cloud Service Provider, and, essentially, I would run that venture. Eric was looking to put in equity to the new company. So was Mr Soru, so was Mr Harte, and in that under that arrangement, I would be, basically, looking after that joint venture on their behalf. Q. Would you have any equity stake in the proposed venture? A. Yes, I would. That would be the plan, as well, to yes. Q. Would you be investing money at that time - was that the plan - in the venture? A. Yes.
67. Exhibit 114 was an email from Mr Pulier to Mr Waldron dated 12 March 2014 concerning the trip to Italy in June that year. It also confirmed a discussion with Mr Pulier's lawyer Mr David Sands. The accused gave the following evidence:- Q. And who did you know Mr David Sands to be? A. He was both the ServiceMesh and Mr Pulier's personal attorney, and he was the one who oversaw the merger and acquisition with CSC from the ServiceMesh's side. Q. Why did you want to have a call set up with Mr Pulier's attorney? A. I wanted to get advice from him to discuss the impending activities that we were just starting to kick off with involving tech advisers and any funds from that to make sure that everything was appropriate and everything was above board, and whatever advice I was - to be received from there to make sure everything was proper; and, ironically, that I didn't end up in a situation like this.
68. The call with Mr Sands on 12 March 2014 was confirmed in Exhibit 115.
69. Mr Waldron was shown Exhibit 74, a series of text messages between him and Mr Twynham which concerned him trying to assist Mr Pulier in April 2014 to move beyond the acquisition and become a useful and constructive member of the corporation known as CSC. They met on 11 April 2014 and the accused gave evidence that following the meeting he knew that Mr Pulier would be unable to transition in terms of being a corporate citizen. He gave evidence that this meeting led to a strategy for him to develop consultancy. He gave the following evidence:- Q. Was that process in which you're engaging on 11 April in any way related to Tiscali. A. Yes, it turned out because I just returned - if my memory serves me right from Tiscali, so I'd gone from Tiscali to Chicago to San Francisco and to LA. That's right I think, and I just returned from Tiscali and as I was working through this project this plan with Eric - it occurred to me that it was almost identical to what I'd been doing with Tiscali. In other words, mapping out the way to transform an enterprise to the IT as a service operating model, and it was pretty much the same thing. Q. Having come to the conclusion that it was pretty much the same thing, what did you do then? A. Well, Eric and I saw the opportunity that this could become a practice that was transferrable, and, you know, to be able to be used and then, perhaps, CSC would actually need a practice like this, and there is precedent for that sort of thing. Other major IT companies like just Microsoft actually have their own specialist consultancy companies that specialise in Microsoft technology for that purpose. Q. You say Microsoft has its own consultancy company. A. Yeah. Q. You didn't work for CSC at that stage, did you? A. No. Q. So what was the plan that you had in mind? A. To set up an agency or a practice similar to that, that would be a specialist consultancy firm that would work alongside CSC to help CSC implement their technology into enterprise customers. Q. Did you and/or Mr Pulier agree on a plan of action after you had formed that opinion? A. The plan of action at that stage was to advice the Tiscali opportunity, and to use that as the "pilot" for want of a better word of this blueprint, and for me to map that out in more detail and to flesh it up, and that was sort of the beginnings of how all this thing came together in that way. Q. Did you flesh out this "blueprint", as you've called it? A. Well, I'd started doing the work on it already up at that point. So I agreed that I would continue on that, and it was to be the idea was to make it the plan or the process or the methodology is what the best word that work could be the foundation for the beginning of this consultancy practice, but we were to use Tiscali as the canary down the mine, so to speak.
70. The accused gave evidence that he became aware of ACE in late April. The accused gave the following evidence:- Q. In what context did you find out about Ace? A. I found about Ace in the context of Eric discussing that he wanted to use some of the funds that he had to setup new ventures. One of the ventures was a non profit prosocial organisation. He had had previous experience doing that. He was quite active in the philanthropic community, and he wanted to use that as a vehicle to basically take some of that money, put into new ideas and see which ones sprung out new, good ventures or new, good companies.
71. With respect to the spreadsheet of days devoted to Tiscali (Exhibit AAB, pp. 126 and 127) the accused gave the following evidence:- Q. Please just say what you know or what you were told. A. Yes, of course. I was told that Ace would be the road vehicle through which to incubate this Tiscali/IT as a service consultancy practice. Q. What did that have to do with the spreadsheet about which I asked you questions yesterday? A. Yes, so it was agreed that I had spent considerable time on this already, and that I was likely to in the future; and, furthermore, if Eric agreed after visiting Tiscali in June that it had legs, then that would likely become my closer to a full time kind of gig once Tiscali got up and running; but in order to get to that point, I said I'd put this sort of an effort in, and Eric and I agreed to an initial payment out of that. Q. What was that initial payment? A. $100,000. … Q. You've spoken about a $100,000 payment. Do you see any documents here relevant to the $100,000 payment about which you just gave evidence? A. Yes. This would be the invoice on page 59, invoice SOW001.1. Q. You've noted the invoice number, SOW001.1. Is there some reason why, presumably you, picked that invoice number? A. Yes, because associated with it was, we - sorry. I need to be - say that again. Mr Pulier and myself agreed to formalise this better with a Statement of Work after Mr Pulier's trip to Tiscali in early June. Q. Can you identify the relevant Statement of Work in this bundle, if it is there, sir? A. Yes. It would be the Statement of Work beginning at page 66. Q. That's dated 23 June 2014; do you agree? A. That is correct. Q. In what way do you say this relates to the work that you had performed at Tiscali? A. So it's a description of the overall - you know, in summary form, obviously but it's a description of the of the overall activity that was being undertaken to document the methodology, and to develop this guide, and as it and it was, clearly, what we were using - or intending to use - as the guiding blue print for the implementation of this transformation at Tiscali.
72. The accused gave evidence that he downloaded a template of the Statement of Work online. The template became Exhibit 116. It was sent from his CBA email address to his personal account.
73. The accused was shown Exhibit Z to explain its contents. The acronym "PNC LLC" referred to "Pearl Necklace Consulting", which was to be the name of the new company to be set up for his consultancy. He gave the following evidence:- Q. What was the relevance of pearl necklace? A. It's just a joke. Just something to be interesting. Q. I take you to the remainder of that sentence. This document, did you create it? A. As I said, I don't have an independent recollection of creating it, but based on the context, the time, and the language, I'm - yes. I'm comfortable in saying that I wrote that. Q. You say, then, this, in the first sentence, under "body", "Is there any concern around what can be paid out in a single transaction". Are you now able to recall what is meant by those words? A. Not in particular, other than a concern around logistics or costs or, or something. Other than that, that's the only thing I can think of, possibly. Q. Can I then take you to the next paragraph, and you say this, I suggest, "Because I'm going to need to draw down the delta between K and me upfront". Who was K? A. K would have been Keith. Q. What do you mean when you say, "Draw down the delta between Keith and me upfront"? A. Because, as this suggests, and - sorry, I just want to confirm the date there as 24 April, so it's just a - a week or two beyond the meeting I had with Mr Pulier in in earlier April. April 13 or 11th, whenever that was. So what we had come to was that we were going ahead with this consultancy idea at this stage. It hadn't quite everything hadn't quite been formulated. Things were in a state of flux, and PNC LLC was the codename, or the project, or the working name, for the consulting company that would look after what would become the - their IT as a service transformation for CSC, or Tiscali, or something of that nature. … Q. Did Mr Hunter have anything to do with that? A. No. Nothing. Q. Why, then, are you talking about the "delta between K and me upfront"? A. Because we wanted to put that - I wanted - was suggesting here to put that into PNLCC(as said) now, so that when we were moving to what was then the non profit activity, that there wouldn't be any difference, and there is a reason for that, if you would like me to explain why that is. Q. What's the reason, Mr Waldron? A. Yes. This is where my relationship with Keith at that stage had become a little awkward. When Mr Harte left, Mr Hunter responded by becoming emotional, crying, and having a day off work. Q. How did that affect your relationship with him? A. Over the time that I'd known Mr Hunter, when I first got promoted into the team, the relationship, at first, was quite one of mentoring, and that was, that was good. Q. Did that now change? A. Yes. It became obsessive, intrusive. Yeah. I would say I - it was becoming a bit weird. Q. Can you explain how that change in the relationship relates to this line about which I'm asking you questions? A. Yes, because I was very conscious of not wanting Mr Hunter to see that I had was developing relationships and developing ideas too much ahead of him, or outside of his sphere of influence, and if he was aware that I was thinking of going elsewhere, it would have - create this same, sort of, emotionally manipulative kind of responses. Q. What does that have to do with "drawing down the delta." What did you mean by that? A. So that that would be whatever we were going to invest into the consulting idea. We'd put that in there, hive that off, and start up that initiative and leave it independent from Mr Hunter's oversight or knowledge of it.
74. The accused gave evidence that Mr Hunter did become involved in Mr Pulier's non-profit venture. He did some preliminary work. The accused was asked about the statement in Exhibit Z "Given that I need to submit an SOW with a schedule consisting of a payment of approximately 1.05 million". He gave the following evidence:- Q. What's the reference to 1.05 million? A. From this vantage, I can't recall the exact figures being used here, but I assume that was my thinking of the time of conversations that we'd had worked out with Mr Pulier about the funds available. Q. You then continue, "That's 250K each for K and me" A. Mm hmm. Q. Is that right? A. Yes. Q. Do you recall whether you had an expectation at the time as to how much money you might receive? A. I don't recall at that time, how that was actually working. What I do know is that this was clearly something I was writing up. Obviously, they were thoughts in my mind at the time, but this didn't go anywhere to all of my knowledge of not being able to see your record of any of this, and I don't think this went beyond a note. Q. Let me ask you this then. You talk about "my $1.3 million" at the end of that line. A. Yeah. Q. What's that a reference to? A. Well, clearly, it says, "my 1.3". I believe there must have been the funds that were available at that time, but as things transpired that's not how it worked out anyway, so I think the whole idea that things were in a state of flux is quite real. Q. Then you also make reference to Kaye's 750,000; is that right? A. Yes.
75. By stating "Like you, I'm keen to disperse the funds out of TA as soon as we can" the accused was referring to the dispersal of funds from TechAdvisors. He never had any capacity to disperse those funds but thought the time was right "to move forward with the opportunity ahead of us". He gave evidence that Mr Pulier had expressed a view that he was keen to disperse funds out of TechAdvisors as soon as he could in the April meeting.
76. The accused identified in Exhibit AAB the Statements of Work he forwarded. The first Statement of Work was created in the middle of 2014 following which he received payment from ACE. He gave the following evidence:- Q. Why did you receive payment from Ace? A. The first three payments were associated with the transformation blueprint and the Tiscali work, as per Statement of Work 1. After that I had received, I believe, another four payments and they were related to Statement of Work number 2. Q. You say they're related to those two Statement of Work. What do you mean when you say they're related? A. Sorry, they are the payments as specified in those Statement of Work. Q. Did you perform any work? A. Yes, most definitely. Q. Does that answer apply to Statement of Work 1? A. Yes, it does. Q. Does it apply to Statement of Work 2? A. Yes, but minimally. Q. Why do you say, "minimally"? A. Because it never got past just initiation stage with Statement of Work number 2. Q. You are aware, are you not, that some payments were received into your CBA account? Is that right? A. Correct. Q. Some other payments were received into an ASB account; is that the case? A. Yes, that's correct. Q. Who decided into which account moneys would be paid? A. I did. Q. Why did you nominate the CBA account for some payments? A. Because that work was current and ongoing, and it was my current everyday account, and I saw no issue with it going into my CBA account. Q. Why then did you specify the ASB account for some payments? A. That was aligned with Statement of Work number 2, and for that reason, Statement of Work number 2 comes about for a different reason. It's quite unrelated to the first Statement of Work. Q. What was that different reason? A. Two parts to that question, sorry. The first part is as Ace initiated and kicked off the first major project that Mr Pulier was interested in Ace commencing was a project called Project Liquid.
77. The accused gave the following evidence concerning Mr Hunter's involvement in Mr Pulier's not for profit activity:- Q. Did you have a belief that he might be involved in any of this activity? A. Yes, Mr Hunter had been - what's the word I'm looking for - encouraged by Mr Pulier to get involved in his tech non profit operation. Q. Do you know whether Mr Hunter ever did become involved in the tech non profit venture? A. Notionally, yes, and he did do some preliminary work; but as we now know, he says that didn't amount to much.
78. The accused identified at page 73 of Exhibit AAB the draft version of what he described as "IT as a service transformation for the enterprise white paper or blueprint that I'd been working on." He gave the following evidence:- Q. And why did you prepare this document? A. This is the document that as we'd been discussing, I had been preparing as a result of the work I'd been doing culminating in this becoming a draft for the transformation at Tiscali. Q. What was intended to be done with this document? A. It was intended to be used and to work with it at Tiscali, refine it, and then bring it back into a consulting practice. Q. When did you create this document? A. Through the middle part of 2014. Q. Are you able to be more precise what you mean by "the middle part"? A. Starting - well, first of all, the seeds of it - beginning parts of it were created in January 2014, based on the earlier engagement with Tiscali. It got added to through the year, generally, but and more anger started around July June/July.
79. The accused gave evidence the part of Mr Pulier's not-for-profit work concerned the process known as micro payments. The "project scope" extended to crypto currencies including "Realcoin" and "Tether".
80. The accused gave the following evidence about his choice of accounts for the funds to be paid in:- Q. As a result of the conversation with Mr Pulier, did you suggest anything? A. Yes, that in order to expedite the transfer of funds out of Ace, to avoid an end of year tax liability, he could use New Zealand, because the New Zealand tax year was three months out of out of sync with the US tax year, so it gave us three months' time to, basically, work out how this how to do this, how to set up this project. So it gave us a three month window to get the project set up.
81. He gave evidence that the end of the tax year was at the end of March which was different from the US end of year being the end of calendar year. At Exhibit E, Volume 5, page 2021 was a text message on April 2014 from the accused to Mr Twynham which read "$$landed. Keith disappointed". The accused gave the following evidence:- Q. What did you meant to say in that text message by those words? A. First of all, it means exactly what it's - how it's written there. Keith was disappointed, dollars landed. What was meant by the dollars landed was after his discussion with Eric, he wasn't happy with the opportunities that were being presented to him, and the - by "opportunities", I mean, layover contracts of some description back in the US, and so he was disappointed with what he got. What was being offered, sorry. Q. You say, "$$landed". Can I ask you, had you received any payments from Mr Pulier, Ace, tech advisors? A. No. No. That's a reference to, conversationally landed. He's had a conversation and got a landing.
82. The next message read "Yes. Keith had 750, but to be fair to Eric, it's actually more than the formula. He was just hoping Eric would top it up to 1 million". The accused gave the following evidence:- Q. When you said, "Yes. Keith had 750", what was that a reference to? A. That was a reference to Mr Pulier being willing to, through one of his vehicles, to offer Keith a meaningful as I understood it meaningful, gainful, work back in the US for a contract of that of that rate. Q. Then you say that "It's actually more than the formula". What did you mean when you said, "the formula"? A. So again, this is me being I was actually quite incredulous, so sorry, the tone and the context here is, I was being incredulous at Keith being so ridiculous. The formula here is sort of a flippant comment. Eric, when he sets up new ventures, has a standard he prints out, around what he will pay people as CEOs, what equity stake they will get, and that was what I was referring to. Q. Did this relate to any scheme to receive compensation such as a bribe for assistance to ServiceMesh? A. No. Absolutely not. Q. Were you ever aware of any formula by which a bribe for to be paid for assistance to ServiceMesh. A. No. Q. You then say that "he was just hoping Eric would top it up to 1 million". When you say, "it", what did you mean by "it"? A. The offer. Q. What offer was that? A. This offer for gainful contract, for a layover.
83. The accused gave evidence that he had never met Mr Goldstein in person but had communicated with him by telephone two or maybe three times. Exhibit 117 was a bundle of email correspondence between the accused and Mr Goldstein in 2014. Those emails included a number of the Statements of Work.
84. The accused gave evidence that in 2014 his wife was employed as a recruitment consultant earning approximately $140,000 per annum.
85. The accused gave evidence of his meeting with CBA investigators in December 2014. He gave the following evidence:- Q. How did that interview come about? A. I was rung on my CBA mobile by Mr David Whiteing, who was the CEO at that time, and asked to attend a meeting to discuss a contract. Q. Did you attend that meeting? A. I did. Q. Did you discuss a contract during that meeting? A. Tangentially, the McAfee deal, yes. Q. Were allegations put to you during that interview? A. They were. Q. How did you react when those allegations were put to you? A. I felt I'd been bought in under false pretences. I did not like the accusation, and I certainly did not feel enamoured with those in the room at that time.
86. The accused gave evidence that during the interview he brought out his iPad to show the investigators his bank accounts with respect to the ACE payments however the device had been returned to factory settings. He had previously been audited on a regular basis the last taking place in June 2014. It was a requirement of his employment contract that he had an account with the CBA and a condition of employment that the bank was able to look at CBA accounts held by its employees. He believed that extended to ASB accounts as well.
87. The accused was shown Exhibit A which comprised snippets recovered from his CBA HP laptop and he gave evidence that none of the words in that document were his - they were all Mr Hunter's. He had no recollection of reading any of the messages.
88. The accused was asked why he sent his email of resignation (Exhibit AU).He gave the following evidence:- Q. Why did you send that email? A. Two reasons: (1) I had always been intending to resign at this time as I say in this email. Mr Nick Giles was aware of that as was Mr Hunter and other people too; and, secondly, after the events of the previous day, I was pretty annoyed and so I took that option.
89. The accused gave evidence that he pursued an opportunity for employment with ING bank in Amsterdam, was offered a contract which he was on the way to sign when Mr Hunter got arrested.
90. The accused identified Exhibit 66 being a letter from his solicitors to the bank on 23 December 2014. He gave the following evidence:- Q. Why did you ask that it be sent? A. Because I felt the way the interview was conducted was blatantly unfair. I wasn't aware of what it was about. It became like a star chamber at the end, and so I wanted them to start particularising what the issue was, so I could respond appropriately. Q. Was there any further engagement as far as you're aware between that firm of solicitors and the CBA? A. The only engagement was the reply that I was resignated - that I was terminated.
91. The accused gave the following evidence about his discussions with Mr Hunter about pro forma invoices or Statements of Work:- Q. In December of 2014, did you have any discussions with Mr Hunter about either pro forma invoices or Statements of Work? A. He after the investigations, he requested from me the Statements of Work and invoices that I had sent to Ace. Q. Did he tell you why he made that request of you? A. He was vague. He said he just wanted to see what they were like. Q. Did you provide those to him? A. Not immediately. I was reluctant to do that, and I can now understand why. Q. Did you suggest to Mr Hunter that he could use your invoices to create a fictitious trail of work for himself? A. No, and I don't believe there's any evidence of that. Q. Mr Waldron, did you receive bribes for facilitating work for ServiceMesh in order to secure greater earnout payments at the end of the earnout period 31 January 2014? A. No, not at all.
92. The accused was cross-examined extensively on the evidence he gave in chief. The accused agreed that he had sent Mr Hunter an email on 31 October 2013 at 8:58 p.m. (Exhibit E, Vol.3, pg. 1329) stating "This is what I'm aiming to get through on SMI paper… I've checked and since the licenses are perpetual, the full amount qualifies as new revenue… So here's $7 million for them." The accused did not agree that this reference to $7 million was to a payment SMI would receive as a consequence of the McAfee proposal but rather it was "potential revenue from the proposed deal."
93. He disagreed that this was different from his evidence in chief where he had stated the reason for saying that was one of incentivisation for both McAfee and SMI. The accused denied that at that time he was aware of the earnout provision in the CSC acquisition of SMI.
94. The accused acknowledged that he had received from Mr Bradbury the McAfee proposal dated 3 January 2013. He denied the proposition that his evidence in chief to the effect that he had no previous knowledge of the McAfee proposal was disingenuous. He denied that he had initiated following a meeting on 17 October 2013 the McAfee deal and that he was aware of the previously rejected proposal for an ELA with McAfee.
95. Mr Waldron agreed that within seven hours of receiving the email from Mr Bradbury he informed Mr Hunter he was going to do that deal with SMI. He agreed that it was a proposal for a direct supplier and that he made no enquiries with any third party that might have had experience in the supply of McAfee software, in particular HP who were supplying a substantial part of the McAfee product that the CBA was using at the time.
96. The accused agreed that before communicating with Mr Hunter he made no enquiries as to what commercial arrangements were to be made in relation to the supply of McAfee software. He agreed that in his evidence in chief he had said that HP had been sitting on the opportunity for an ELA for over a year and failed to execute upon it. When that evidence was challenged he said that HP "HP were a counter party to the discussions at that time. They had the opportunity." He rejected the proposition that he and Mr Hunter had conspired to exclude HP from bidding on the role of third-party supplier of McAfee products.
97. The accused agreed that he had not responded to the email for Mr Fuggle from HP on 19 December 2013 (Exhibit E, Vol. 4, pg.1653)
98. The accused denied that he needed to get this deal done through SMI so he could give them $7 million. In relation to the payment of $7 million in revenue, the accused said "'yes, it is a natural consequence of executing on this deal". He gave the following evidence:- Q. Yes, and the only relevance in relation to your reference to qualifying as in year revenue is for the purposes of the earnout, isn't it, sir? A. No, that's not correct. … Q. There is no reason why you would have any concern whatsoever as to whether ServiceMesh was earning $7 million as in year revenue, except as it related to the earnout, is there? A. No, I disagree with that proposition. There are other reasons to be aware of that as has been shown in other evidence. Q. Not for you, sir, from your position as a general manager in the Commonwealth Bank. You're paying a party money to provide you with a service, correct? A. Correct. Q. It doesn't impact on you in any way, shape or form, when they get their money in normal terms, does it? A. That's not how commercial transactions work, sir. Q. Sir, I'm not asking you to tell me how commercial transactions work. I'm putting to you that there is no reason for you, in the position you are in, to have any concern whatsoever as to when it was that ServiceMesh earnt their money from the CBA. A. No, I disagree with that, sir. Q. There is no basis for that disagreement, sir, is there? A. No, I disagree. Q. Why? A. As it has been shown, deals need to work on both sides, and I use the HP example of that. Here's 30 million for them. Q. Sir, why did it matter to you, when ServiceMesh received its payment from the Commonwealth Bank, to you? A. It mattered to CBA and it mattered to me as an executive in CBA. Q. Why? A. So that we could get this deal across the line. We wanted to be successful with this deal. Q. So you're saying that ServiceMesh might not be interested in receiving $7 million from the CBA if it didn't happen at a particular time; is that correct? A. I'm saying we have incentives to make sure it works well. Q. Well, the incentive was to enhance their earnout with respect to the sale to CSC. That was the incentive, wasn't it, sir? A. No, sir. I reject that.
99. The accused was shown an email from Ms Cole of HP (Exhibit E, Vol.3, pg. 1378). He agreed that he told Ms Cole that he was negotiating directly with McAfee and denied that was a lie. He gave the following evidence:- Q. You weren't negotiating directly with McAfee at all, were you, sir? A. Yes, I was. Negotiating directly is not the same as how a third party can be brought in as a reseller. Q. Sir, from the get go, communicated to Mr Hunter that you were going to be engaging SMI as the third party supplier. A. As the reseller, yes. It doesn't preclude negotiating directly. Q. The reason why you told Ms Cole that you were negotiating directly with McAfee is because you expected that that would cause HP not to pursue their attempts to convince you to use them as their reseller, didn't you? A. No, I don't believe I was motivated like that, no.
100. The accused agreed that the acquisition by CSC was a very big deal for ServiceMesh and for Mr Twynham who had shares in SMI. He gave the following evidence:- Q. There is no possibility that Mr Twynham would not have communicated that information to you at a point in time very soon after he became aware of this opportunity, is there? A. I agree with that.
101. The accused agreed that he sent a text message to Mr Twynham at 2:50 p.m. on 31 October 2013 (Exhibit E, Vol. 3, pg. 1329), shortly after the PSG meeting held at 2:00 p.m. that day, putting him on notice of the CBA had a proposal on the table for SMI to execute on. He agreed that shortly after his communication to Mr Hunter on the same day he sent the McAfee proposal to Mr Twynham. He gave the following evidence:- Q. This is pricing information being provided confidentially by a third party to the Commonwealth Bank. A. I fail to see how Mr Twynham could engage in a deal with McAfee without the McAfee information. Q. Because he wouldn't know what McAfee was proposing to offer the product for; is that right? A. Correct, he's a reseller. He didn't need to know, he just needed to how to resell it. Q. Gives him a distinct advantage, doesn't it? A. Advantage Q. If he knows what McAfee is offering the CBA. A. An advantage against whom? It wasn't a competitive tender.
102. In relation to SMI selling McAfee software, he gave the following evidence:- Q. You had no idea about the appetite McAfee might have for SMI, did you? A. It's not a - that was never going to be an issue, sir. If McAfee could get an ELA with CBA, they would. Q. You had no idea about whether McAfee would have been content with using SMI as a third party to supply products to you, did you? A. They would've gone through the corner shop to get an ELA with CBA. Q. You'd had no conversations with McAfee at all; is that right A. Correct. Q. You didn't seek their permission to disclose the pricing proposal that they had provided to you earlier in the year, did you? A. I didn't - under the terms of the confidentiality and the MSA with ServiceMesh, I did not need McAfee's permission.
103. About the proposal by him concerning the $7 million dollar payment to SMI he gave the following evidence:- Q. What was being proposed by you $7 million to SMI was nothing better than what McAfee was proposing back in January 2013, was it? A. No, it was just a statement of what the size of that current offer. Q. You didn't care what the deal was that Commonwealth Bank signed up for with McAfee, did you? A. I disagree with that. Q. All you cared about was that it enabled SMI to earn $7 million that would go towards the earnout calculation. That was all you cared about at the time, wasn't it? A. No, that's incorrect, sir.
104. The accused was cross-examined about Exhibit AD concerning text messages between himself and Mr Twynham. He agreed that he understood what Mr Twynham referred to as "recognising the revenue" as being a need to have it recognised as part of the calculation of the earnout. He gave the following evidence:- Q. So you're suggesting that Mr Twynham manipulates the prices so that the support fees are reduce by 400,000 and the licence fee is increased by 1.5 million. Is that right? A. That's correct. Q. This was a deal that was to be struck over a three year period. Do you agree with that? There's a contract for three years. A. Yes. Q. The consequence of manipulating the figures in that way was to make the deal $300,000 more expensive for the CBA, wasn't it? A. Yes, but not over the period of amortisation. Q. Sir, it made the deal $300,000 more expensive for the CBA, didn't it? A. Over three years, not over five. Q. It just made the deal $300,000 more expensive, didn't it? A. If that's how you want to say it, yes. Q. Reducing the support fees by 400,000 per annum reduces the cost of the deal by 1.2 million, doesn't it? A. Correct. Q. But adding 1.5 million to the licence fee means the deal is $300,000 more expensive; is that correct? A. The - sorry, the name you're referring to is a TCV, the total contract value. It goes up by 300k, yes. Q. That worked to the advantage of Mr Twynham as far as calculations of the earnout was concerned, didn't it? A. It did. Q. You were engaging in some creative accounting to assist Mr Twynham in that objective, weren't you? A. It's called deal structuring and it also benefitted CBA. Q. It didn't benefit CBA because it was $300,000 more expensive for CBA, wasn't it? A. 500,000 less expensive over five years.
105. The accused denied that this was all about achieving an advantage for SMI and stated, "It was about ensuring a win/win outcome so that everyone would get what they needed."
106. The accused agreed that throughout the course of the contracting process there were issues about the alignment of a MSA between McAfee and SMI a MSA between SMI and the CBA.
107. Mr Waldron was asked about his evidence in chief, namely, that the main driver of the McAfee deal was the regulatory requirements behind it. He gave the following evidence:- Q. The suggestion that you were exposed to the regulator is a fiction, isn't it? A. With respect, sir, you're…there because the issue with the regulator was one of materiality. Q. Sir, that's an explanation you've come up with as an added reason why you say there was an urgency for the bank in entering into this contract, isn't it? A. No, materiality is an absolute aspect of the IT regulatory framework. Q. Nobody else within the CBA had pursued an ELA with McAfee over the previous 12 months, had they? A. I thought we just discovered that discussed that Mr Heyes and Mr Bradbury and Mr Nicholson even gave evidence they all were involved over the last 12 months, and no one could bring it home… CBA have tried but it's not tried very well.
108. Mr Waldron was asked about his involvement in the McAfee deal. He gave the following evidence: - Q. You were heavily involved in this deal. A. I was, out of necessity. Q. It was something that occupied a large amount of your time. A. A disproportionate (as said) amount for the size of this deal, but most of the time, obviously, was being spent by Mr Nicholson and Mr Pennington Q. So you were A. and Mr Bradbury. … Q. You were not honest with CBA investigators when they asked you about the extent to which you were involved in the McAfee deal, were you? A. No, I - I reject that, because the question at that time - they came out of the blue, and a year had passed, and to my recollection, that was a correct and accurate answer. Yes, I initiated the deal, but, like all deals of that size, my involvement is only when things escalate. Q. You don't accept that your answer to their question about the extent of your involvement - not a huge amount - was a misrepresentation? A. I believe it's given what we know now it's probably a not 100% accurate, but it wasn't a purposeful lie, sir. No. Q. You were trying to downplay the extent of your involvement in that deal, weren't you? A. No. I think when you contemplate how much work and how many deals of this nature happen in the course of a year, the fact that I could hardly remember the deal when it was bought (as said) up at that time, I think you could understand that answer. Q. You certainly had a large amount of input as to why it was that various governance requirements didn't need to be complied with, didn't you? A. I think, obviously, my input, given my role, had a disproportionate what's the word - emphasis, or strength to it, that's reasonable. If you look at the number, yes, it was more than, say, the Agility PaaS TDs by quite a considerable amount, but still, we're only talking about ten, maybe a dozen emails, or something of that nature.
109. Mr Waldron agreed that the indemnity issue was resolved because Mr Pulier agreed to terms in the MSA that saw the risk fall on SMI. At the time he was in New York but not with Mr Pulier when he discussed the matter with Mr Nicholson on the telephone.
110. He agreed that on 19 December 2013 he had sent an email to Mr Pulier stating, "I think we may have just about pulled this one off!!".
111. In relation to the McAfee deal the accused gave the following evidence:- Q. You and Mr Hunter had put in an enormous effort to speed this deal through, hadn't you? A. I wouldn't categorise it as enormous. I would categorise it as a frustrating effort. Q. Every time an obstacle appeared in your way or in the way of the deal being finalised, you came over the top or Mr Hunter came over the top and impressed upon those that were tasked with doing the legwork that this had to go through. That's the tenor of the emails that were sent by you and Mr Hunter towards the end of this deal, weren't they A. Toward the end, yes, that was - that's correct, and that - I believe that to be a correct and proper thing to ensure everything gets completed in a timely fashion. Q. Because you knew that if the deal didn't get completed before December, then there was very little prospect of it being completed before the 31 January deadline, didn't you? A. I knew if it didn't get completed by December, we'd have a long time before we got back to this point with McAfee again.
112. In relation to the payment for the McAfee deal the accused gave the following evidence:- Q. The reason you wanted to pay the entire amount of the license fee upfront is so that it would count in its entirety towards earnout calculation, wasn't it? A. That was not even the faintest consideration with that deal structure in there, sir.
113. The accused was challenged about his evidence that the main driver of the urgency behind the McAfee deal was the meeting he had with the regulator APRA in January 2014. He gave the following evidence:- Q. You said in your evidence that it was perhaps the main driver in relation to urgency, that's the phrase you used. A. But those two - yes, I agree. Those two things were together, yes. Q. You have seen numerous communications about the progress of the McAfee deal from your initiation of it on 31 October 2013, haven't you? A. Yes. Q. There were several instances in which you communicated the need for urgency? A. Correct. Q. There were several instances in which Mr Hunter communicated or reiterated your message about the need for urgency; you agree with that? A. Yes. Q. You heard a number of persons give evidence about the manner in which you drove this deal over that short period of time? A. Yes. Q. I'm going to suggest to you that with the exception of one instance, there has not been a single mention of the APRA consideration you claim was the main driver. You agree with that? A. I'd agree with that, yes.
114. The accused agreed that the CBA had to pay two sets of McAfee license fees for about six months. He disagreed that this was an "unnecessary cost" and stated that it was "an inevitable but unfortunate part of transition". He agreed that he did not factor those costs into his spreadsheet which became Exhibit 54.
115. In relation to the Pivotal deal the accused gave the following evidence:- Q. You heard Mr Kelada's evidence that when you were proposing the purchase of software to integrate the PaaS products with agility, he expressed the view that it was premature. You remember him saying that? A. Yep, I certainly do. Q. He also gave evidence that the CBA held no licences in relation to the PaaS products that could be integrated through the software that was proposed to be purchased in TD17, 22 to 29. He said that as well, didn't he? A. Yes. Q. That was true, wasn't it? A. I believe so, yes. Q. I think you gave evidence that CBA never obtained licences in relation to any of those PaaS products, did they? A. We might have. We did do an agreement with Red Hat, I think that was in March 2014. So I think something was bought through Red Hat, I assume that was for OpenShift or would've been. I'm not sure how extensive that was, though. It was, I think, about $200,000, from memory. Q. Certainly after the purchase by the CBA of $6.5 million worth of software integration products A. Mm. Q. that resulted from CBA entering into those TDs. A. Yes. 6.1, sir, but yes, that's right. Q. You've heard the evidence of Mr Kelada that in due course, he recommended that the maintenance costs in relation to those contracts be terminated or not be renewed A. Yes. Q. because they weren't being used? A. Well, that was his prerogative to make that call at that time. I wasn't there, so that's for him to make. Q. There was no good commercial reason for the purchase of the software integration products at a point in time when CBA did not own the PaaS products themselves, was there? A. No, that's wrong. Sorry, that's incorrect, both technically and commercially. Q. You disagree with the opinions of Mr Marsden in relation to that A. Yes. Q. and Mr Kelada? A. Mr Kelada's evidence was accurate, but incomplete.
116. The accused gave evidence that on his trip to Los Angeles in September 2013 there were no discussions of any earnout provision in the proposed sale of SMI CSC. At that time he said stated that he didn't even know what an earnout was.
117. The accused confirmed that the software the subject of the original TD 24 concerned "Moonshot" for which a MSA was required to be entered into between SMI and Hewlett-Packard. For that reason, the proposal never proceeded and was instead replaced by another TD relating to the Pivotal projects. The accused gave the following evidence:- Q. It's not as though it was a project that didn't go ahead within the earnout period because the CBA decided it shouldn't go ahead at that time, is it? A. I didn't think it was...I think my evidence was yesterday that I just wasn't relevant for the earnout, and I think that's actually accurate. For that time period, I should say. Q. I suggest what you were trying to suggest in your evidence was that this is an example of a matter which you could have put forward to assist ServiceMesh in their enhancement of the earnout payment, but didn't. That was the point you were trying to make in the evidence that you gave, wasn't it? A. No, I don't believe I was making that point like that, sir. Q. The fact is that it was never really a prospect at all because of the information that's contained in that email. Would you agree with that? A. That's correct, sir.
118. The accused agreed that the Pivotal deal TD's went to Partner Management and said he would not have had an issue with that if it had done. He gave the following evidence:- Q. You would say that because of the procedures in place in the CBA, there was no reason for it to go through partner management; it being a contract for the purchase of IT software. Is that right? A. These transaction documents were made pursuant to the MSA, which was an existing contract. There was no override. They were very straightforward, certainly something that CBA and ServiceMesh had done by the numbering, obviously, TD17, 1 16, multiple times before, so it was pretty straightforward. Nevertheless, it was my common practice to flick it over to partner management and transaction documents like this just to make sure there was no deviation from the MSA or no attempts to override it, notwithstanding that these were very straightforward.
119. In relation to TD17 the accused was cross-examined about the acceptance clause (Clause 10, Exhibit E, Vol.1, pg.255) and disagreed that it was a variation from the acceptance clause that was provided in the MSA. He gave the following evidence:- Q. And it says the bank may require the software undergo acceptance testing; is that correct? A. Yes, sir. Q. This was a marked difference from what was proposed as the usual situation. Will I put it that way? A. Not necessarily, sir. It depends on the nature of the software and certainly delivery of the software to an FTP site, especially when it's been considered COTS software, that is, commercial off the shelf software; then, yes, being deemed accepted upon that is quite normal as per even Mr Nicholson himself said regarding the McAfee software. Q. So you certainly disagree with the opinions expressed by Mr Marsden about the risks associated with an acceptance clause in the terms that is contained in TD17, 22 to 25. A. Most definitely. Mr Marsden, as it is clear from both his evidence and the Court here and in the statements to not review the MSA; and, consequently, his evidence is without foundation as it is relaxed of these TDs.
120. The accused agreed that he knew about the earnout clause by 27 November 2013 when he had told Mr Twynham the day before that he wanted to get the security deal and the Pivotal deals done. He gave the following evidence:- Q. You were working with Mr Twynham in order to engage in procurement contracts that worked to the advantage of ServiceMesh, as far as that earnout provision was concerned? A. No, I disagree with that, sir. Mr Twynham was doing here, what's known as deal qualification. He was asking what could be done in that timeframe and I gave our confirmation that the Pivotal deals could be done within that timeframe. It's not accurate to classify that or to imbue with that the idea I was doing it for the purposes of the earnout. Q. This was at a point in time when there had been no formulation of what the Pivotal deal would involve; would you agree with that? A. I think we were working through it at that phase, if I remember rightly. If you look at it from a chronological point of view, clearly TD17 came before TD18 to or 19 to 21, which was the McAfee deal. So it was only a matter of days, if not a week or so, away before the first cut of TD17 was produced. And let us also remember the amount of work that's been done in this over the previous six months or so.
121. The accused was taken to Exhibit E, Vol. 2, pg. 613, an email from Mr Twynham to others at SMI "on the pivotal side we will need to do the following. Get Jon across what we are doing, and establish value… I believe Jon will be willing to do something around the 1.5 million mark if we prove the value". The accused gave the following evidence:- Q. It is the case, isn't it, that you told Mr Twynham that you were prepared, as at 27 November 2013, to commit $1.5 million of the Commonwealth Bank's money towards these Pivotal projects, wasn't it? A. I believe that Mr Twynham may have got that from the text message I sent him where I said $1.5 million, and I believe that text message to have been the source of some confusion, as we discussed on Friday with regards to another email where I wrote "$30 million". I write "$30 million", meaning, per annum. Certainly, that was my intention at that time. It's a default way of speaking, given the nature of the budgets and accounting that I was doing. Q. So you're suggesting that there's a text message in existence between you and Mr Twynham where you conveyed a reference to 1.5 million. A. Yes, there is, sir.
122. The accused identified a text message in Exhibit AK he sent to Mr Twynham on 20 December 2013, three weeks after Mr Twynham said that he had already committed to a $1.5 million payment. He gave the following evidence:- Q. So, sir, that's got nothing to do with your communication to Mr Twynham towards the end of November as to your intention to commit $1.5 million to that project, has it? A. I would say they're consistent, and I'd say it was the same thing 1.5 million per annum - that'd be my take on that, but I mean that's just the way that we spoke about deals at that time, particularly based on the amortisation. This isn't a TCB conversation.
123. He agreed that he had already committed 1.5 million in oral conversations with Mr Twynham prior to 27 November 2013. He gave the following evidence:- Q. About which you've already committed $1.5 million of the bank's moneys; is that right? A. Well, I would suggest, sir, based on the way this whole progress - what do we call it - endeavour, sir. This whole endeavour has developed that we're doing what we had always done and that's co product development; and, certainly, when you do co product development those costs are capitalised, so, yeah, I'd committed to around about 1.5 million per annum to that initiative. Q. You've heard evidence from Mr Twynham that the reason for the ServiceMesh portion in relation to this sale to the CBA was to enhance the earnout. You've heard him say that, haven't you? A. I'm sure everybody in ServiceMesh was in line behind that goal. Q. And you were assisting in that endeavour by promising $1.5 million in sales to ServiceMesh at this time, weren't you? A. No, sir. I wouldn't characterise it like that. There's no question that ServiceMesh benefitted from CBA's engagement with them at this time, but my actions here were for the interests of CBA, and the benefit that flowed to ServiceMesh as a result of my actions were a derivative result. They weren't the purpose or the intent of it and therein, I believe, lies a very big difference. Q. Sir, Mr Pulier is sending you something which is at the early stages of development on 29 November 2013 about which you are proposing to commit $1.5 million. Do you agree with that? A. I would agree with that, sir, and also acknowledge that's consistent with the way we have co developed over the previous years.
124. In relation to the accused's involvement in the McAfee deal he gave the following evidence:- Q. You certainly don't deny extensive involvement in the development of the TDs relating to the McAfee deal, do you? A. I believe I initiated it, and I got involved as an escalation to deal with certain issues. I mean, I think if you like at it from hours involved then, obviously, Mr Pennington and Mr Nicholson and Mr Bradbury probably spent the most hours, but obviously, I had influence in the deal, for sure.
125. The accused was challenged about his statement that he had little to do with TDs 17 and 22 to 29 in January 2014. He was shown an email from Mr Twynham to him dated 6 January 2014 (Exhibit E, Vol. 4, pg. 1683). He gave the following evidence:- Q. That's an email from Mr Twynham to you on 6 January 2014 at 9.25am attaching the transaction documents for the people at Microsoft solutions you discussed with Eric. Do you see that? A. Yes, I do. Q. So you don't dispute that you received transaction documents that were attached to that email. A. That's correct. Q. If you go to the next page 1684. There's some backwards and forwards communications between you and Mr Hunter on that evening. Do you see that? A. Yes, I do. Q. And about point 4 of that page, or a little bit higher up than that point 2 that you sent an email to Mr Hunter at 10.21pm. Do you see that? A. Yes, I do. Q. And about three paragraphs down, you say, "Eric has been calling you, LOL. He's getting intense. He's getting nervous about the remaining TDs. I told him I'd be back Thursday." You communicated that to Mr Hunter. A. Yes. Q. You knew why it was that Mr Pulier was getting nervous about the remaining TDs, didn't you? A. Of course, yes. Q. Because he wanted them executed before the earnout period expired. A. Correct. Q. You knew Mr Hunter was similarly aware of that consideration, didn't you? A. The stage that was clear, yes. Q. That's something that you and Mr Hunter had discussed from time to time around this period, wasn't it? A. Around this period, yes.
126. He was further challenged about the Pivotal TDs:- Q. You and Mr Twynham had been working on these TDs throughout January, hadn't you? A. No, I - that's not my recollection, sir. I'm sure we had conversations, don't get me wrong, but, no. As far as sitting down, working on them, no. That was done in LA previously, in December, and the months leading up to it. Q. Go back to 1697. Mr Twynham confirms his discussion with you in relation to those TDs on the morning of 20 January, doesn't he? A. Yes. Q. You certainly been discussing him with - do you accept that you had been discussing them with him on that day? A. Look, as I said, there's I'm sure there were discussions, but as far as sitting down, working on them in detail, I don't - don't think that was the case, sir.
127. In relation to the Pivotal TDs being broken up so that they were all below the $1 million mark the accused gave the following evidence:- Q. Mr Pennington forwards them to Mr Hunter and yourself on 25 January 2014; do you see that? A. Yes. Q. "Morning, boss. TDs broken down as discussed"; do you see that? A. Yes, and I think, from this email and the context, it's quite clear he's talking to Mr Hunter, and Mr Hunter's evidence is also clear, that he was the one who asked for the TDs to be broken down. Q. In discussions with you, I would suggest, sir. A. Well, obviously, I was aware of those discussions, but Q. You knew why it was that Mr Hunter wanted them broken down in the way they were broken down, don't you? A. This is a - a slightly complex, because there's two aspects to that. Mr Hunter said he wanted them broken down for him to sign under his - his level, his limit, which is his prerogative and, as Mr Twynham said, that's happened before - but, subsequent to that, that also reducing - the TDs reducing in price by approximately $800,000. It was used as a negotiation because, in order for Mr Hunter to sign them, the licence fee and the first year maintenance had to come under his $1 million cap, so that's what brought the licences down further.
128. He agreed that each of the TDs were within Mr Hunter's delegation. He was aware that the total of the contracts was going to be in excess of $6 million. He gave the following evidence:- Q. But, sir, you knew, certainly, by 20 January - 1697 - that the amount contemplated for the agreement was in excess of $6 million A. Yes Q. didn't you? A. I - I expected around $6 million. It makes sense, yes. And that's reasonable and that's certainly reasonable based on previous work we've done, and the volume of work that this is. Obviously, there's a sanity check that goes into that, that makes sure it looks reasonable, and for the amount of work that this is. I mean, this is eight months' worth of work, here. This is - this is reasonable. Q. Sir, you gave evidence in chief to answers(as said) asked by my learned friend, in effect, that you didn't have any involvement in the increase in the purchase price of the TDs from $1.5 million to in excess of $6 million. That was the effect of your evidence, wasn't it, sir? A. I believe it - I mean, that's - that's accurate. I mean, I can't remember the exact words I used, but that is, in effect, and that is accurate. Q. That's what you want to convey to his Honour? A. Well, it's accurate, sir. Q. You don't deny knowledge of the fact that, towards the end of January, you were well aware that the price had increased to in excess of $6 million, do you? A. I think the starting point of that is, what was I aware of the original price, and I don't believe the 5 January ones I paid any attention to whatsoever, sir.
129. He then gave the following evidence:- Q. Do you accept that it was - you knew that it was in excess of $6 million A. Yes, it was Q. don't you? A. Yeah. I knew the final price was $6.1 million, yes. Q. By virtue of your texts on 20 December 2013, you, initially, contemplated $1.5 million, didn't you, sir? A. $1.5 million per annum, because capitalised, that's about the same price. Q. It's about the same price? A. Yeah, well, $6 million capitalised is about $1.5 million per annum, sir. Yes.
130. The accused agreed that $6 million was to be paid by the CBA, from a "cash point of view" but from his budget it was 1.5 million per annum P&L.
131. The accused agreed that the cost of the product subject of the Pivotal deal as at early January to his profit and loss after amortisation would have been the order of $500,000 per annum.
132. The accused agreed that SMI employees added OpenShift options to the Pivotal deal in early January but denied that additional products got added in to multiply the cost by a factor of four. He denied communications in which Mr Pulier expressed to him concerns that other customers weren't purchasing products from SMI that he could use to count towards the earnout.
133. In relation to the software the subject of TD 23 the accused was referred to an email from Mr Falkenhagen on 18 January 2014 to others at SMI including Mr Twynham and Mr Pulier. He gave the following evidence:- Q. And in paragraph 2, he says, "TD23 is an OpenShift blueprint which we have all but scoped at this time. Do you see that? A. Yes. Q. And there's some further discussion about creation of a new TD in the ten days we have left. Do you see that? A. Yes. Q. And he says, "However, we may be able to glue something together if Jon Waldron is willing to sign off on it." Do you see that? A. Yes, sir. Q. And you were willing to sign off on what they were able to glue together, weren't you, sir? A. Well, yes, sir, because we were looking for those work orders to be committed - endeavours by ServiceMesh - particularly as the CSC was swallowing up ServiceMesh. We wanted to set out their product road map and make sure that they had in train the product direction for the next six to nine months, so we were basically setting the product direction for them. Q. Intimately involved in the development of these TDs that were the subject of negotiations at this stage; weren't you sir? A. I wouldn't say that's intimately involved, sir, no. I'd say having a phone conversation and putting together an idea and letting ServiceMesh go off and create it I wouldn't, I wouldn't characterise it that way, it means putting in an order for want of a better word. Q. This is not the peripheral role you would have his Honour believe you were involved in in relation to these TDs; is it, sir? A. Well, sir, when I referred to Mr Pennington closing those out, the OpenShift ones weren't contemplated at that time and Mr Pennington was responsible for closing out those TDs, particularly as they related to the Pivotal ones.
134. In relation to the breaking up of the TDs the accused gave the following evidence in relation to an email from Mr Twyman to Mr Falkenhagen (Exhibit E, Vol.4, pg. 1066) in which Mr Twynham stated, "the current status is that Keith and Jon are willing to sign off a total value of AUD$6.9 million". The accused gave the following evidence:- Q. I'm just asking you a straight simple question. The email reads there, "The current status is that Keith and John are willing to sign off a total value of AUD 6.9 million dollars." That was communicated on Friday, 24 January 2014 at 2.27am. Do you see that? A. Yes. Q. That was information that you had conveyed to Mr Twynham; wasn't it? A. I don't believe so, sir, no. Q. And he goes on to say, "However, we need to keep each TD under one million in licences for him to be able to do this." Do you see that? A. Yes. Q. That's so that Mr Hunter would be able to sign off on those licences; do you accept that? A. Well, I think before him I think that would have to be Mr Hunter, yes, because I didn't have the authority to sign off licences like that, sorry, work orders of that Q. Again, that was something you had communicated to Mr Twynham; wasn't it? A. I don't believe it was communicated in this way. I don't believe it came about in this fashion, sir, and that's a part of the problem of having an internal email and trying to reverse engineer it. I don't think it came about in that fashion.
135. The accused was cross-examined on the evidence he gave concerning Exhibit Z and his explanation about the meaning of PNC LLC. He gave the following evidence:- Q. You've relied on certain documents which you say evidence the agreement that you entered into with Ace about the performance of consulting work with them. You know which documents I'm talking about; don't you? A. Sorry, maybe you could just be more clear there, sir, sorry. Q. You caused a series of documents to be submitted to a forensic examiner A. Sorry, yes, yes. Q. Those documents I'm talking about, you know the documents I mean. A. Yes, sir, yep. Q. Nowhere in any of those documents is there any reference to Pearl Necklace Consulting or an entity called PNC; is there? A. No, sir. Q. Nowhere in any communications whatsoever of the many that have gone before the Court is there any reference to any Pearl Necklace Consulting entity; is there? A. No, sir. Q. What I'm suggesting is that you have reconstructed this name in a desperate attempt to disguise the meaning of the note that you had recorded in your mobile telephone on 21 April 2014. Would you agree with me, sir? A. No, I would not, sir.
136. It was suggested to the accused that the reference to PNC was to a major national bank in the USA. The accused gave evidence that he was not aware of it at the time. The annual report for PNC for the financial year ending 2014 became exhibit AAE.
137. It was put to the accused that his evidence about PNC had been completely fabricated which he denied.
138. The accused agreed that what was contained in Exhibit Z was a draft of something he was proposing to send to Mr Pulier, but it never went anywhere. He was questioned as follows:- Q. You were going to receive an extra $550,000 more than what Mr Hunter was going to receive, by reference to that email; do you accept that? A. Yeah, Mr Pulier had allocated more funds for the projects that we were going to do. Yes, that is correct, and I did not want Mr Hunter being made aware of that. Q. What you were proposing to do was manipulate the transactions so that Mr Hunter didn't become aware that you were being paid more than him; do you accept that? A. No. I think - I wouldn't say it like that. As I mentioned in my evidence in chief, I was looking to forge a path away from Mr Hunter for various reasons, and this is evidence of that, and it's also evidence of the fact that there are two separate gigs, two separate engagements. The $550K for the PNC became the $600K for the Tiscali PNC consulting gig, so those two are quite similar. The rest of it never happened. As I said, that thing never went, and it's a work in progress at this stage.
139. The accused agreed that he met with Mr Pulier and Mr Hunter in LA in April 2014. He gave the following evidence:- Q. Yes, and during those meetings there was discussion between the three of you about the amount that Mr Pulier would pay each of you as a reward for the efforts that you had made with respect to the contracts that were entered into in December and January of immediately preceding, weren't there? A. No, sir. The Friday conversation included Brad Twynham, and that's when I was in Mr Pulier's office writing up a draft CSC strategy for their cloud implementation 0 cloud strategy for CSC - that was worth four people. There was no mention of moneys in that particular conversation. In that particular afternoon meeting. It was about a three hour, four hour long meeting.
140. The accused was questioned about an email he sent to Mr Twynham on 13 April 2014 (Exhibit E, Vol.5, pg. 2021) which included the words "$$landed. Keith disappointed". He gave the following evidence:- Q. Sir, I'm just asking you. Mr Twynham was not present during the course of any discussion about dollars to be paid to Mr Hunter, was he? A. And neither was I, sir. Q. Sir, I'd asked you whether Mr Twynham was there. You say, "yes" or "no". A. Well, I wasn't in that meeting so I can't be sure, but obviously, from this note. Q. That's right, sir, because you're not going to be telling him about it if he was there, are you? A. Well, I wasn't there either, sir, so. Q. All right. You say you weren't there. A. No. I wasn't. Q. Mr Twynham asked, "Not good? Did Keith get some time with him?", and you respond, "Yes. Keith at $750K"; that's exactly the same amount A. Yes. Q. as the amount that you referred to in your notes entry some eight days later; do you accept that? A. I do, sir. … Q. You're saying that it's just a massive coincidence that the amount that's referred to in your text to Mr Twynham is identical to the amount that you are referring to as a payment for Mr Hunter from a consultancy that you, he and Mr Pulier are about to enter into? A. So - no, I don't. I think I give in my evidence in chief, I said it was the same same number. Mr Hunter told me about his meeting with Eric that day while we were in the taxi on the way to the airport. If you look at the time on the left, that's an Australian time. Move that back to LA time, it's around about 8 o'clock in the evening, or 8:30 in the evening on the 12th. So that was Mr Hunter updating me on his one on one time with Mr Pulier. Q. Sir, in response to Mr Twynham's inquiry, you say, "Yes, Keith at $750K but to be fair to Eric, it is actually more than the formula. He was just hoping Eric would top it up to $1 million"; do you see that? A. Yes. Q. You are referring to a means by which an amount is to be calculated, aren't you? A. No. That was a slightly, sort of, sarcastic, facetious comment, more based on my incredulity at the way Keith was going on about this. Q. Sir, you specifically used the term "formula", didn't you? A. I did, sir. Q. You were referring to your understanding of a means by which a dollar value had been calculated, aren't you, sir? A. No, sir. There was no such thing as a - as is used in this case, or as it's been alleged in this case. There was no such thing as any payout formula.
141. The accused was taken to the evidence of Mr Martinez concerning the list of names of people Mr Pulier provided who were to be paid from funds from TA by percentage. The spreadsheet of Mr Martinez was Exhibit AF. Mr Martinez gave evidence that the column headed total payout (net of escrow) was meant to represent the allocations to each of the parties named in the spreadsheet. He agreed that he was nominated in that spreadsheet and the amount recorded beside his name was "1480148". He gave the following evidence:- Q. You accept, don't you, on your evidence, that this is well in advance of you having any discussions with Mr Pulier about engaging in an enterprise for the purposes of providing water purifying systems for the third world? A. This spreadsheet here, sir, I believe is dated in March, I think. My conversations with Pulier mainly came to a head in April regarding Tiscali, and then the Ace initiative. Q. Mr Martinez gave evidence that he first received information about the amounts to be recorded in such spreadsheet in November 2013 A. Yes, he Q. do you agree with that? A. Yes, he - yes - that's what he - that's his evidence, yes. … Q. You were in negotiations with Mr Pulier about a payment to be received by you as early as November 2013, weren't you? A. No, sir, that's incorrect.
142. The accused was asked about Exhibit AL and the three text messages between himself and Mr Twynham on 20 November 2013. He gave the following evidence:- Q. In the first, you say, "I also talked to Kyle and agreed scope for the Pivotal TD, so we should be able to land that one easily enough." Yes? A. Yes. Q. And Mr Twynham responded, "Great, we should put you on the payroll." Yes? A. Yes. Q. And you responded, "Hopefully, I already I am" (smiley face). A. Yes. Q. Because you knew by that stage that you were to receive a payment consistent with your discussions with Mr Pulier from TechAdvisors for the efforts you had put in, didn't you? A. No, I disagree with that, sir. That's not what this is about.
143. The accused was questioned about Mr Hunter's disappointment expressed to be for receiving $750,000 as follows:- Q. The reason why Mr Hunter was disappointed was because he wasn't going to get a bribe to the extent that he expected to get for the assistance he had provided to SMI. That's what you knew to be the reason for his disappointment. A. No, Mr Hunter was on A1.25 million, and US1 million was approximately the same, so that's what he was expecting. Q. Sir, the reference in your text message to formula is a reference to the discussions that you and Mr Hunter had had with Mr Pulier consistent with the graph that Mr Hunter said he showed Mr Pulier at an earlier point in time. Do you agree with that? A. No, not at all, sir.
144. The accused was shown Exhibit N and the Statement of Work from Digisol dated 1 December 2014. He gave the following evidence:- Q. It's not a Statement of Work that is included in the bundle that you had forensically examined, is it, sir? A. Correct. Q. And if you go to the second page of that Statement of Work, you'll see in the pricing description there is a figure of 1 million 50 thousand. A. Yes. Q. Which is consistent with the notes you made about preparing a Statement of Work with a payment of that amount in your notes. Do you agree with that? A. I do, sir. Q. That's because this document 0 the one you're looking at now - was what was contemplated when you made that note on 21 April 2014, wasn't it? A. No, it wasn't, sir.
145. The accused was shown Exhibit 116 which was an email that he sent from his CBA email address to his personal email address attaching a template for a Statement of Work. It was sent on the 21st of April 2014, the same day he made a note on his phone about doing a Statement of Work. He gave the following evidence:- Q. And the template is the template that is consistent with the Statement of Work that Mr Goldstein produced in exhibit N; aren't they? A. They are the same template, sir, yes. Q. The same template, so what you did was use that template to create those documents that Mr Goldstein produced with respect to the payments that you subsequently received from Ace. That's the case; isn't it? A. No, sir, it's not.
146. The accused was shown Exhibit E, Vol. 3, pg. 1271 an email from Mr Pulier to his Executive Assistant attaching Digisol invoices including SOW001.1 dated 25 April 2014. He was asked as follows:- Q. That's just four days after you made the note to yourself about the arrangements with respect to payments to you and Mr Hunter; isn't it? A. Yes, it is, yes, sir. Q. So that's the document that you sent to Mr Pulier on 25 April; isn't it? A. I mean I can't be sure of the date that that was sent to Mr Pulier but it does look like a draft, early draft copy. Q. You accept that that was a document that you sent to Mr Pulier? A. We haven't got the email to definitively prove that but I'd say it's likely, sir, yes. Q. Well, it's got your company's letterhead on the top; hasn't it? A. Yes, yes, that's what I'm saying. I'm not disagreeing with you I'm just saying we haven't got the email that confirms that. Q. It's got your bank account details A. Yes. Q. at the bottom of the email? A. Yes. Q. Mr Pulier is not going to have had your bank accounts for any other reason; is he? A. Correct, sir. Q. Will you accept that it was a document that you did send to Mr Pulier? A. As I said, sir, yes. Q. And as a consequence of that Ms Morreiro sent it across to Mr Goldstein for payment. You accept that? A. Well, that's not exactly happened, sir, but obviously Ms Morreiro was in contact with Mr Goldstein after that and a payment was made for a $100,000 Q. 100,000. It couldn't be paid out of the Ace account because Ace didn't even exist at that time; did it? A. That's correct, Ace were being set up then, sir, yes. Q. Mr Goldstein made arrangements to pay it out of a bank account in his own name; didn't he? A. Well, look, I wasn't privy to those particular machinations but as we now know that's what happened, yes.
147. The accused was then shown Exhibit AAB at page 59 being a document that was SOW001.1. He was asked:- Q. It is very different to the document that you see at page 1273 of Exhibit E; isn't it? A. It is, sir. Q. It purports to be for a payment that was made to you on 16 May 2014; is that right? A. That's right, sir. Q. And this was for work that you say you had done in relation to the non profit joint venture when you had met with people from Tiscali in May of 2014; is that right? A. Right, with this slight alteration, sir, that the joint venture wasn't to be a non profit, it was separate from Ace. Ace was being used as an incubator for this idea. … Q. This is the work that you say justified your billing Ace in the sum of $100,000 in that first invoice; is that correct? A. That's correct, sir. Q. And so that's itemised as three activities you engaged in with Tiscali and one activity that you carried out involving Cloud strategy for Eric; is that right? A. Yes, that's right. Q. With various hours nominated for each of those activities on the next page; is that right? A. That's right, sir. Q. Or days, sorry, yes? A. Yes. Q. Days? A. Yes. Q. Totalling 20 days? A. Yes. Q. At $5,000 a day? A. That's correct, sir. Q. So that was the work you say that you'd done that you were entitled to a $100,000 payment for; is that correct? A. I don't know about the word "entitled" sir, but that was the remuneration for that work, sir, yes.
148. The accused was then shown Exhibit C which reflected the series of transactions tracing the $100,000 payment from TechAdvisors to the accused's Commonwealth Bank account on 16 May 2014. He gave the following evidence:- Q. So, you've been paid for, you say, that first amount of work you had done for this joint venture; is that right? A. Or to be set up joint venture, yes. Q. You used some of the monies you received from that payment to pay down various debts you had at that time. Do you accept that? A. Just paid off some credit cards, yes, paid down credit cards, yes, that's right, sir.
149. The accused was asked about the USD$20,000 he then transferred to Sheila Hunter from the $100,000 received by him. He gave the following evidence:- Q. You did that on the instruction of Mr Hunter, didn't you? A. On the request of Mr Hunter. Q. You want to distinguish between the words "request" and "instruction", do you, sir? A. Yeah, because it was - it was under false pretences, Mr Crown. I was - as I found out during the course of these proceedings, Mr Hunter's reasons he gave for asking me to do that turned out to not be honest. Q. You gave no evidence about this in chief, did you, sir? A. No. … Q. You heard Mr Hunter's evidence that you had a conversation with him where you asked him whether he wanted some - anything from the monies you were to get, and he said, "Yes. Pay $20,000 to my sister Sheilah". That's what he said, didn't he? A. That's not a truthful account. Q. Sir, I'm asking if you heard him give that evidence. A. Sorry. Yes, I heard him give that evidence, yes. Q. That's precisely what's depicted in this spreadsheet, isn't it? That you transferred 20,000USD to Sheilah Hunter, didn't you? A. I'm not denying the mechanics of me transferring the money, yes, sir. Q. The reason you transferred that money was because you were distributing what Mr Hunter wanted of his payment of the bribe to the person he nominated to you, wasn't it? A. No, that's not accurate, sir.
150. The accused was asked about his interview by CBA investigators on 17 December 2014. He gave the following evidence:- Q. When they asked you about various payments that they had identified as being received into your Commonwealth Bank accounts, you told them that you had been doing some documentary playbook work on the enterprisation of cloud technology. That's what you told them; is-- A. Correct. Q. --that correct? A. That's correct, sir. Q. You knew, before you attended that interview, that they were going to ask you questions about the receipt of those payments into your account, didn't you? A. No, I didn't, as I gave evidence, sir. I was brought into that meeting until a false pretence. Q. You heard Darren Murphy give evidence that this was a subject that he had broached with Keith Hunter on 10 November 2014. You heard him give that evidence, didn't you? A. Yes. Q. You and Mr Hunter were close compatriots at that time, weren't you? A. We worked in a close environment, but I wouldn't call us close at that time. No, sir. As I've said, I'd been working towards moving on my own path away from Mr Hunter during the latter part of that year. Q. You heard Mr Hunter give evidence that he told you that this issue had been raised with him prior to the interview on 17 December 2014, didn't you? A. The only information I received from Mr Hunter was the - to do with the audit with my credit card. I did not receive any information about this beforehand.
151. The accused denied that he wrote any of the snippets in Exhibit H. He gave evidence that at the time of the communications from Mr Hunter he did not have any of his devices. He denied that before the interview commenced he well and truly knew that investigators were going to ask questions about monies that had been received into his bank accounts. He gave the following evidence:- Q. In the interview with investigators, you disclosed a discrete period of work between April and eight weeks prior to the interview. That's what you said was the work that you had engaged in; is that right? A. Yes. Q. You admitted payments from Ace in the order of 400 to $500,000. That's what you said, didn't you, sir? A. Correct, sir. Q. You told the investigators that you had bank accounts other than the CBA accounts that you held in Australia in the United States and England, didn't you, sir? A. Yes, sir. Q. You made no reference to any accounts held by you with the Auckland Savings Bank, did you, sir? A. I didn't mention the Auckland Savings Bank, no. Q. You made no mention of receipt of the far more substantial payments than the four to $500,000 that appeared in your Midas bank account, did you, sir? A. Sorry, could you just rephrase that, sorry, sir. Q. You made no reference to the additional $1.4 million that you had received in payments from Ace above the four to $500,000 that had been made into your Midas bank account, did you, sir? A. I made no reference to the moneys received to the ASB account, is that? Q. That's what I'm saying, sir. A. Missed that. Q. That's correct, isn't it, sir? A. That's correct, sir. Q. You were aware that the investigators knew of deposits made into your Commonwealth Bank accounts, weren't you, sir? A. Well, I assumed. I didn't know. Q. And that's why your admissions were only in relation to those payments. A. No, sir. That's not the reason. Q. You hoped that the payments made into the ASB account would never be discovered by the Commonwealth Bank, didn't you, sir? A. That was never a hope or even a prospect. Q. You lied to them about what you'd received from Ace. A. No, sir, not in the way the questions were asked, no. Q. The day before the interview, US$350,000 was paid into your ASB account, wasn't it, sir? A. That's correct. Q. At no point during the course of the interview did you convey information to the investigators about the receipt of that payment, did you? A. No, sir. … Q. On 10 December 2014, you received a US$350,000 payment into the ASB account, didn't you? A. Yes, sir. Q. And on 12 November 2014, you received a $300,000 payment into the ASB account; is that correct? A. That's correct, sir. Q. And on 4 November 2014, you received a $300,000 payment into the ASB account; is that correct? A. Yes, sir. Q. You disclosed none of those payments made to you by Ace during the course of the conversations with the CBA investigators, did you? A. No, sir. Q. You, certainly, transacted on that account as late as 10 November 2014, didn't you? A. I believe $200,000 was transferred, yes. Q. You knew full well that that money was going into that account, didn't you, sir? A. Yes, yeah. Q. But chose not to disclose any information about those transaction to the CBA investigators; is that correct? A. I chose. It's to do with the way the questions are asked, sir; but, no, obviously, I didn't disclose those. Q. They were asking you about large payments received by you into your CBA bank account, weren't they? A. Correct. Q. And you knew that they were seeking information about payments you had received from a third party, weren't they? A. I was responding to the questions that were being put to me, sir. Q. Sir, you knew that they were inquiring about your receipt of large payments, didn't you? A. It's not that the - no, I wouldn't phrase it like that. Q. You had nothing to defend yourself about, did you? A. I'm not sure I understand that question. Q. You'd done nothing wrong. A. No. Q. There was no reason for you not to be open and honest and frank with those people that were seeking information about your receipt of large deposits into an account that they had identified, was there? A. I would accept that there was no reason for me not to be open or honest about anything in that regard, but that's just not how the questions played out, sir.
152. The accused gave the following evidence about his interview with CBA investigators:- Q. During the interview with CBA investigators, you told them that it was Mr Goldstein from Ace that had found you, in relation to the work you did from them, didn't you? A. My recollection is, it was more to the likes Mr Goldstein reached out to me. Q. You've given evidence in chief that it was discussions between you and Mr Pulier that resulted in you doing consulting work involving Ace, haven't you? A. Yes, and those are both accurate statements. Mr Goldstein did reach out to me. Q. Sir, you've seen the material in exhibit E that relates to the exchanges between Ms Morreira and Mr Goldstein about - which demonstrate his lack of knowledge as to what that first payment is all about. You've seen those, haven't you? A. Yeah, yes. I understood - I know the transcript you're talking about. The email exchange you're talking about, yes. … Q. Mr Goldstein did not reach out to you about any so-called contract work that you were contemplating doing with Mr Pulier, did he? A. Yes. He sent me an email, sir, and then I think we arranged a phone call. Q. Sir, the answer you provided in the interview, in response to the question about Goldstein was, "He found me. He emailed me." That was a lie, sir, wasn't it? A. No, sir, no. What also suggest that those interviews they weren't verbatim. They miss a lot of context. They miss a lot of nuance. Mr Goldstein reached out to me. That's an accurate statement. Q. Sir, you're carefully crafting your answers to these questions based on your extensive examination of the brief of evidence, aren't you, not your recollection? A. No, I'm aware that Mr Goldstein reached out to me. That did not preclude the fact that Mr Pulier and I had discussed how this was all going to work out before that, but those two things can exist side by side, sir. … Q. You didn't say to the investigators, "Eric Pulier and I came to an agreement about doing this project, and he told me that it was going to be paid through Ace, and I didn't know who Ace was, but later I got an email from a bloke called Andrew Goldstein who told me he was going to pay the bills for this project." You never said anything like that in your interview, did you? A. Well, I don't believe the questioning went along that line, sir. Q. You never said anything like that in the interview, did you, sir? A. I wasn't asked to answer a question in that fashion. Q. You never said anything like that in the interview, did you, sir? A. No, sir. Q. That's a pretty simple statement to make about what you know claim was the way things transpired, isn't it? A. It would have been, if those are the way the questions were asked, sir.
153. It was put to the accused that he lied to the investigators about his knowledge of the relationship between Mr Pulier and Mr Goldstein which he denied. He also denied having been introduced to Mr Goldstein by Mr Pulier in the past. He was however aware that Mr Pulier had put Mr Goldstein in to run ACE but denied that he lied when he told investigators he did not know of any relationship between Mr Pulier and Mr Goldstein.
154. The accused agreed that he told investigators that he would provide invoices for the consultancy work that he said he had done for ACE but was never given the opportunity to do so because he was terminated.
155. The accused agreed that at the time he attempted to resign he was receiving a total remuneration package of $600,000 and that he had not secured any other employment at that time. He gave the following evidence:- Q. The reason why you attempted to resign was because of your awareness of the criminal conduct that you had engaged in whilst employed by the bank; isn't it? A. No, sir, that's not correct. Q. Your hope was that by resigning that would cause the CBA to stop any further investigation of the activities you had been engaged in? A. No, sir, that was my consideration. Q. You gave evidence that you had been contemplating resigning from the bank for some time; is that correct? A. Indeed, that's correct. Q. That's contrary to what you said when you were asked about what plans you had for alternative employment by the investigators during the course of the interview; isn't it? A. I don't recall that specifically, sir, that's not part of my recollection of that interview. Q. I suggest to you that you denied any intention to move on from the bank when asked about that by CBA investigators. A. I think, I think I can vaguely remember what section of the interview you're referring to but I don't think that's what that was about, I think that's a slight misinterpretation of those notes. Q. You deny that you told investigators words to the effect that you weren't contemplating leaving the bank during the course of the interview? A. No, I did not say, communicate that and I think I was referring to something else, sir.
156. The accused agreed that he made the Statement of Work documents and invoices in Exhibit AAB available to Lyonswood Investigators in August 2018 for analysis. He received the report from Lyonswood in August or September 2018 and gave evidence that he elected not to serve the material on the prosecution until 2 September 2022.
157. The accused denied manipulating or changing the metadata in relation to the production of the Statements of Work and invoices. He denied that he fabricated documents to fit with his explanation for the payments that he received and further denied that he recorded dates that fitted with the payments that were made into his bank accounts. He gave the following evidence:- Q. You fleshed out the Statement of Works and the white paper to give substance to your claim that you were working on a project for Ace that justified the payment to you of $1.9 million over seven months, didn't you? A. No, sir. Q. And you disclosed those documents at the very latest time you could, so as to minimise the extent to which they could be scrutinised or challenged by contrary evidence. A. I reject that, sir. Q. You've never made available to the Director of Public Prosecutions the computer hard drive upon which you say those documents were created, have you? A. No, that computer, sir, is long since gone.
158. The accused identified the invoice he created on 5 December 2014, just 12 days before his interview with the CBA investigators. He gave the following evidence:- Q. You were then asked questions about payments you had received from Ace during that interview on 17 December, yes. A. Yes, sir. Q. So this would have been a pretty important record for you to keep secure, if you were accused of wrongdoing in relation to the receipt of those payments, wouldn't it, sir? A. Well, yes, sir. I have given evidence. Q. Sir, you became aware immediately after Mr Hunter's second interview with CBA on 23 December 2014, I believe it was, that he had been caught out in relation to the provision of backdated documentation to the CBA. You became aware of that, didn't you? A. I wasn't aware of Mr Hunter partaking other interviews. I became aware of the issue of Mr Hunter's backdating of documents some considerable time after the fact. I can't recall when it was. It may have been many weeks after the fact. Q. You're saying that Mr Hunter never communicated to you the fact-- A. No, he-- Q. --that he had been questioned about fabricating documents on the 23rd. He never communicated soon after that allegation that was put to him that he had created false documents to support the payments he'd received. You're saying that's the case. A. Mr Hunter lied to me about ever going back to CBA interview again. I did not - I was not aware of that until some long time after the fact that he was intending not to go back. That was what we said, look, let's not do that and he did, and he kept it hidden from me. Q. You knew that Mr Hunter was intending to provide documentation to the CBA supporting the payments that he'd received, didn't you? A. No, I didn't know anything of the sort, sir. I had no expectation he was going back to see CBA again.
159. The accused was shown Exhibit K which he identified was the document he caused to be sent to Mr Hunter to enable him to create documents. He did not agree that they were false documents. He agreed that he sent the documents after the first interview. He gave the following evidence:- Q. And the reason you sent him that material is because he told you that he had been questioned about payments that he had received from Ace? A. I don't believe we had that sort of level of detail of conversation, sir. I believe it was a couple of text messages and a phone call send us, send me some stuff. I was reluctant and he'd sort of follow it up and sort of ask several times. He was quite insistent actually. Q. You concede that that Exhibit K is a Statement of Works that you had sent to Ace that you were providing to Mr Hunter to assist him or in response to his request for such document; is that right? A. That's correct, sir, yes. Q. So that's a Statement of Works that you sent to Ace; is that correct? A. I'm not sure if I sent this one to Ace or not, certainly an earlier iteration of it, maybe-- Q. You're struggling now to remember whether it is the same as one of the documents that's contained in the Lionswood report; aren't you? A. No, no, not at all. That's not what I'm saying at all. I know it's not in the Lyonswood report, that's not what I'm saying. What I'm trying to say is there were some earlier drafts, I'm just trying to see whether this one went to Mr Goldstein or not, that's all I'm thinking about. Q. The reality is, well, firstly on the second page of that document is acceptance information consistent with this being a finalised document between you and Ace; isn't it? A. I think nothing, nothing's finalised, sir, until it's finalised. I don't, I think this is certainly an earlier iteration of this document that - Q. You're thinking on the run now; aren't you? A. No, not at all. It's perfectly legitimate and normal for documents to go through iterations and phases, that's not particularly noteworthy I wouldn't think. Q. You sent in response to Mr Hunter's request for an example of a Statement of Works that you had sent to Ace, you sent him this document? A. Yes, I did. Q. Yes. On your version of events, you never sent that document to Ace, that's what you-- A. I said I'm unsure about whether I sent this specific version to Ace or not as well as the other ones, that's what I'm trying to say. That's all I'm saying. Q. You accept, sir, that there is no corresponding document in terms of exhibit K in the material that you sent for forensic examination? A. Sorry, which is, this is exhibit K, sorry. Q. AAN. A. Yeah, no, sorry, sorry, correct. This is not, this is not the one I sent through because it's not the final version.
160. The accused agreed that given the allegations that were being made by the CBA the documents that explained the payments became very important however he made no attempt to retain the electronic device upon which he created the documents.
161. Exhibit 117 was shown to the accused. It was the email sent to Mr Goldstein attaching the various Statements of Work. He gave the following evidence:- Q. You never caused any of these emails to be sent to the forensic examiner in electronic form for the purposes of evidencing the dates upon which these emails were created, did you? A. No, sir. Q. That's because you appreciate that it's much more complicated to change metadata in relation to email communications, don't you, sir? A. Don't know, sir. Just going for the documents. I thought that was the relevant piece of material that needed to be reviewed by the expert, sir. Q. You've simply fabricated documents which appear to be emails sent on a particular date, haven't you, sir? A. No, sir.
162. The accused was shown Exhibit AU and identified that it was one of the documents CBA lawyers received from ACE evidencing the work the accused had done or Digisol had done for ACE. He gave the following evidence:- Q. This is the white paper that you had prepared about this work, isn't it, sir? A. In part. Just a very small part. Q. It is very different to the white paper that is contained in the documentation that was provided to Lyonswood in August 2018, isn't it, sir? A. Yes, it's a different engagement to. Q. It is complete. From page 73 onwards is a far more complicated document about describing the work that, you say, you did for Ace, isn't it? A. I guess, reasonable mind won't disagree. I wouldn't say this is more complicated. I would say it's more technical, but probably you just don't want to be splitting hairs there. Q. You accept the evidence of Mr Marsden that the criticisms that he levelled at the document which appears at page 73 of exhibit AU. You heard him give evidence about A. Yeah. Q. what his view was of the substance of the information contained in that document. A. Mm hmm. Q. Do you accept that? A. In part, yes, sir.
163. The Crown case was put to the accused as follows:- Q. You were conscious of the fact that the various invoices and Statements of Work that you had provided to Ace to support the payments to you were inadequate; weren't you? A. No, sir. Q. So, you have fabricated a collection of documents which you sent off in electronic form for forensic examination. That's the case; isn't it? A. No, it's not, sir. Q. And the documents that Mr Goldstein produced, that he said that he held, they were the documents that you submitted to Ace in support of payments you received from Ace; aren't they? A. No, they're not, sir. Q. You don't deny, do you, that the documents that Mr Goldstein produced are documents that you sent to Ace at some point in time; do you? A. I do deny that actually, yes. Q. You deny that? A. Yes, I do. Q. You have no authorship of any of the documents that Mr Goldstein said were documents that he could recover that related to either you, Mr Hunter or Digisol? A. They are documents that are certainly based on things that I had sent but they're not the ones I sent. Q. So, okay, you say that you're not the author of any of those documents; is that correct? A. No, sir, and it's relatively easy to demonstrate why that is the case. Q. You deny being the author of those documents A. I do, sir, yes.
164. The accused was asked about the email trail between himself and his wife at Exhibit E, Vol. 4, pg. 1654 and his statement, "Either way confirmed 1.5 million". He was shown the spreadsheet in Exhibit AF and the entry next to his name of $1.48 million. He gave the following evidence:- Q. Very close to the $1.5 million that you're confirming you will have, to your wife; do you agree with that? A. No, sir, because this is US and that's not, because this would be Australian. Q. You've got a recollection now of what the exchange rate was between Australian and US dollars in 2013, do you, sir? A. It's about - yeah, it was pretty good, actually, but that would be 1.480148USD would be about 1.6AUD, so no. It's not the same number. And this was also from 6 March. It's a completely different time period. Q. You are confirming to your wife an expectation of payment of $1.5 million, aren't you, sir? A. No, sir. That's not what that's about.
165. The accused was asked about his interview with CBA investigators concerning that email. He gave the following evidence:- Q. When you spoke with CBA investigators about that email, the question that was put to you was, what explanation you could provide in relation to that communication; do you remember that? A. Mm hmm, yes. Q. You paused. A. Mm hmm. Q. Do you remember that? A. Mm hmm. Q. You struggled to come up with an answer? A. Yes. Q. It was a visible change in your demeanour. A. Yes. Q. You said, "I'm not sure. I should remember, as it's a huge number". Remember saying that? A. I've read that in the notes, sir, and I think that sounds about right. I don't I at that time, I couldn't - did not remember ever sending that email, so when these things get put down in front of you for the first time they can be quite, you know, can take your breath away for a little bit, going, what's that about? Q. That's because you realise you've been caught out in a conversation which revealed the bribe you expected to receive, isn't it? A. No, sir, and my emails were public. My secretary had - my assistant had full access to them, so nothing about this was private or had any expectation of being private. Q. All you say is "Confirmed $1.5M". That's all you say, isn't it, in that email? A. That's correct, and probably I wrote it like that because my assistant would have access to it. Q. Are you trying to hide something from your assistant? Is that what you're suggesting? A. It's very common that things in my emails would find their way into the office gossip, so, yes. Q. You - after you said, "I should remember, as it's a huge number", you continued to pause, and struggled to answer. A. Mm hmm. Q. You did? Agree with that? A. Yeah, I - I didn't know what it was at the time. Q. You said, "I certainly don't have $1.5 million in the bank". A. Correct. Q. You said, "I don't remember writing that". A. That's correct. Q. That was only - less than 12 months before the interview with the CBA investigators. A. Well, I Q. Agree with that? A. Yes, although, with respect, apart from the fact this case has taken nine years to get here, under normal work environment 12 months is a very long time. Q. About something which was a pretty significant piece of information that you were communicating to your wife; would you agree with that? A. No, sir. I don't. Q. I can tell you've got an explanation for it. Why don't we hear what it is you've got to say is the explanation you've now come up with as a consequence of reading the brief of evidence, sir. A. Not as a consequence. Sir, the key factor is there that I hadn't had a time to debrief my wife, Sinead, at that time, coming back from Italy. It was to do with our conversations around Italy, and, as you can tell by my subsequent job with ING in Amsterdam, we were actually looking to relocate to Europe, and so that's what we were referring to there, was about how much money could I make for two years over there. My daughter was only 18, 20 months, and so two years over there before she came back to go to school. That's what we were looking at. My wife is from the UK. She's got family there, got friends there. So that's - that's actually what that was about. Q. You wouldn't have struggled to relate that information to the CBA investigators if that was a truthful answer, would you at all, sir? A. Yeah, if I hadn't remembered the email and wasn't preparing it, yeah, sir. Q. Just made that up. Just made that up, having reviewed the brief, and knowing that you had to come up for an explanation for the statement you made to your wife on that occasion. A. No, sir, and the $1.5 million number, if you want to check the exchange rate, is exactly 1 million Euros. Q. Which precisely coincides or, largely coincides, with about the money that was proposed you would be paid by Mr Pulier, as evidenced in that spreadsheet that Mr Martinez produced. Would you accept that? A. No, I don't, sir. That number is $1.6 million, if it were to be translated back.
166. In re-examination the accused gave evidence that he knew about the earnout in his meeting with Mr Twynham near the end of November 2013. He learned about the possible acquisition of SMI by CSC in late September and knew around the middle of October that it was about to be consummated. He gave the following evidence about the earnout:- Q. I've asked you about the earnout. What particulars did you know about the earnout? A. Nothing, absolutely nothing. I knew there was an earnout, but I didn't know anything else about it. Q. And what did you understand an earnout to be? A. Well, that was why it stuck in my mind the conversation I had with Mr Twynham - because I didn't actually know what an earnout was. It was not a concept I was familiar with at the time, and I had to ask him to explain what an earnout actually was. Q. Did Mr Twynham explain any relevant figures to you? A. No, and I'm not sure he actually knew, to be honest, either. … Q. Did he provide you with any relevant figures? A. No. Q. Relevant to the earnout, that is. A. No, he told me the mechanism, how it works, and the date 31 January.
167. In relation to his evidence about SMI being a third-party supplier of McAfee software to CBA he gave the following evidence:- Q. My question is, therefore, why did you not approach or make inquiries with other third-party suppliers of McAfee software before concluding a transaction with ServiceMesh? A. The choice to use ServiceMesh was one of expedience, and because it aligned closely with the cloud computing work that we were doing at the time. Furthermore, that my understanding that ServiceMesh had just been acquired with CSC meant that due to the larger balance sheet of CSC that deal would be enabled to be done through them.
168. The accused was asked about evidence given by Mr Kelada concerning the Cloud Secure products. He gave the following evidence:- Q. Why did Mr Kelada's statement to you about the existence of custom scripts not have an impact, if it didn't, on your decision to purchase on behalf of the CBA the Cloud Secure product? A. Yes. As part of the transformation towards an IT as a service model you're moving away from custom built code to more industrialised off the shelf code. Scripts such as those are customised, they require maintenance and over a period of time you progressively take those out of your own custom code and move them into a standardised off the shelf product and that's what this was doing.
169. The accused gave evidence about the relevance of the APRA regulation and the test of materiality to the regulator. He gave the following evidence:- Q. And why was that relevant to the McAfee transaction? A. First of all because the applications that were coming along, looking to move into the AWS Cloud, the Amazon Cloud, were banks like NetBank which are a material application and, secondly, as part of that, what we had in place at the moment just wasn't mature enough to host material applications, we needed a much better more mature solution that would meet APRA's requirements for risk and security. Q. And what did that have to do with the timing of the McAfee transaction? A. The applications coming along were scheduled to go into the AWS environment and the APRA regulation meeting was in January, both those two things had to be ticked off and signed by APRA and that required the McAfee… Q. And if the… had not been in place what was your expectation as to what would occur with the transition to the Amazon Cloud? A. We would have been delayed by 3 to 6 months, sir.
170. In relation to Mr Kelada's evidence that it was premature for the CBA to integrate the capital PaaS products with the Agility Platform and that the CBA held no licences in relation to the PaaS product. The accused gave the following evidence:- Q. Do you agree with the proposition expressed in Mr Kelada's evidence that in the absence of licences, the PaaS products could not be integrated; is that right? A. No, I don't agree with that. …. LANGE: Why not? … A: Yes, as I said, Mr Kelada's evidence there is accurate but incomplete. The reason for that is in enterprise software the idea of a licence, of course, is a legal contract or a contract to use, but unlike consumer software there is no need for a licence key or no need for a subscription. The software works without a licence, and you then go forward and negotiate your commercial terms as you move towards production, as we did, with Pivotal.
171. The accused was asked about his evidence that there was no reference to a Pearl Necklace Consulting entity in documents identified by him in cross- examination. He gave the following evidence:- Q. Why was there no reference to a Pearl Necklace Consulting entity in the documents referred to by my learned friend? A. Sure. The - the name "Pearl Necklace Consulting", or PNC, was just an early stage, like, project name, and obviously there's an element of humour in it. It's not dissimilar to what CSC did when they called Project Seashell, the M&A, but in the final EPA you don't see Seashell in there.
172. The accused was asked about his evidence concerning the payment of $20,000 to Sheila Hunter. He had given evidence that Mr Hunter's evidence was not a truthful account. The accused gave the following evidence:- Q. When you said, in answer to that question, "That's not a truthful account", what did you mean by that? A. Sure. Mr Hunter had told me that his sister was very unwell and needed money to pay for her medical bills, and could I lend him $20,000 and he would pay me back later. That was the extent of the conversation. … Q. Then it was suggested to you my words, not my learned friend's that this was the payment, or part payment, of a bribe, and you said, "No, that's not accurate". Why did you say that? A. Because it was nothing to do with the bribe. It was to do with the first tranche of money I had received from Ace for the engagement I was undertaking with them regarding the Tiscali opportunity, and the transaction to Mr Hunter transpired in the - in the means that I was describing just then.
173. In relation to the accused's failure to tell CBA investigators about his ASB account he was asked about what he meant by his answer in cross-examination "that was never a hope or even a prospect". He gave the following evidence:- Q. What did you mean when you gave that answer? A. I - especially given the job that I had, I was very well aware there was complete transparency of information between ASB and CBA and Bankwest for that matter so any investigation that was going to look at monies in my accounts would automatically include ASB.
174. He then gave the following evidence:- Q. You then said in the last answer, which I quoted to you, "No, sir, not in the way the questions were asked. No." A. Mmm hmm. Q. What did you mean by that? A. Sure. The first questions were asked about funds in response to the work that I'd been doing. I went to go and get my iPad out to show them my bank accounts and the funds transfers in so that we could confirm what the amounts were. That's when I noticed my iPad had been returned to factory settings. At that point, there was an extended… in the meeting - in the interview; probably 20 to 30 minutes. After that, Mr Keaney came back and then, and, sort of, big grandiose sort of body language said, "And so, is there anything else outside of CBA?" Now, as we discussed with Ms Brown, CBA is an ambiguous term because it can mean CBA Group, or it can mean CBA Yellow Brand. I took advantage of that ambiguity and chose to say, no, there's nothing - there's nothing more, outside or inside - outside of CBA including ASB, because ASB and CBA are a merged entity. Q. And you say you took advantage of that; what did you mean by that? A. At that point it was very clear that this investigation had taken what I perceived to be quite a forceful and aggressive kind of - aggressive's probably the wrong word. Forceful and accusatory kind of tone. I certainly had my back up at that point, especially after my iPad had been wiped. I certainly wasn't being cooperative.
175. In relation to the questioning by the CBA investigators concerning Mr Pulier and the payments made by ACE, the accused gave the following evidence:- Q. What did you mean when you said, "I don't believe the questioning went along that line"? A. No, well - the question never got to the level of detail of how did the engagement with ACE start and that whole way, or how was your engagement with Mr Pulier, or how did this job come about? It was just significantly more succinct than that, and the question as I remember it, like, how did this happen someone was to Mr Goldstein reached out in an email which is accurate.
176. In relation to never providing invoices to the CBA investigators and his explanation the accused gave the following evidence:- Q. Question, "You never provided any such invoices, did you?", answer, "I was never given the opportunity to, sir, because I was terminated." Why do you say you were never given the opportunity to provide such invoices? A. Certainly. The interview happened - during that interview - I think it's in the notes as well, too - I made clear that I wanted to get some advice about my standing with regards to IP; with regards to - because certainly the amount of the work that I'd done came off the back of my experience with CBA, so I was concerned about IP. I asked I was going to get some advice about that, then I got the letter from the bank. My lawyer replied, well, look, can we just particularise things and then I got terminated.
177. In relation to the accused's evidence that he never considered retaining the electronic device upon which he created the SOW documents the accused gave the following evidence:- Q. Why did you say, "I don't think that was ever a consideration"? A. Because it never entered my mind that that would be a necessary thing to do, and certainly from my recollection, the device I was using back then was an old work laptop anyway, and that's well and truly past it's use by date like 10 years past, so, no. Just I've probably had four laptops since that time.
178. On those documents in Exhibit N the accused identified the documents produced by Mr Goldstein the US date format which was different from the Australian format.
179. Finally by leave, the accused gave evidence that he had no prior convictions nor had he ever been charged with any offence of dishonesty.

The Crown address

1. The Crown relied on a written outline of submissions supplemented by oral submissions. The Crown conceded from the outset that if the evidence of the accused as to the reasons why he received the payments into his accounts reflected in Exhibit C was accepted then the verdict would be not guilty for each of Counts 1 to 7. The Crown submitted however that the explanation provided by the accused that the payments made into his accounts were for work done or to be done by the accused for a project agreement between him and Pulier should be rejected.
2. The Crown referred to the documents in Exhibit AAB pp.59-127 which comprised Statements of Work and invoices that the accused said he had created contemporaneously with the dates appearing on each of those documents. The Crown submitted that no weight should be given to that evidence for the following reasons. First, Andrew Goldstein had produced all records he said he could locate having conducted a search of documents held by ACE in the names of the accused, Keith Hunter or Digisol Pty Ltd. None of the documents in Exhibit N are in Exhibit AAB. Secondly, the documents produced by Goldstein with respect to Hunter coincide with the documents that Hunter provided to CBA investigators which were subsequently determined to have been created after Hunter's first interview on 17 December 2014.
3. The Crown relied on the following two documents. On 21 April 2014 the accused transmitted to Pulier by email a draft invoice (Exhibit E, pg.1273) of which the accused admitted authorship, but claimed it to be a draft. That document formed the basis of the first payment to the accused and was transmitted by Pulier's personal assistant, Ms Marrero to Goldstein on 25 April 2014. The document bears the reference number SOW001.1 but differs in significant respects from the document that the accused asserts is SOW001.1
4. The format of the various documents was consistent with the template which the accused produced in evidence (Exhibit 116). The Crown submitted the fact that Goldstein did not produce the document forwarded by Miss Marrero was consistent with ACE not having been established at the time the first payment was made and the manner in which it was made on 16 May 2014.
5. The second document which the Crown submits was submitted by the accused to Goldstein is the White Paper that ACE sent to lawyers for the CBA in support of its attempt to convince the CBA to return the payments made by ACE to the accused and Hunter (Exhibit AU, pg. 6). The Crown submitted it differed markedly from the corresponding document which the accused asserts was the detailed description of the project that he had commenced for which payments were received. The Crown submitted that in the second report of Mr Marsden he had been very critical of the subject matter of the White Paper but had not been cross-examined on his opinions.
6. The Crown referred to Exhibit Z, the note retrieved from the accused's mobile phone dated 21 April 2014. It contained a reference to the need to create a "SOW". The Crown referred to the SOWs produced by Goldstein, noting the second SOW contains a reference to payments totalling $1.05 million which coincides with the amount referred to in the note in Exhibit Z.
7. The Crown submitted that Exhibit N does not provide a legitimate explanation for the payments made to the accused. It submitted they were created by the accused to substantiate the payments he received as bribes. The Crown submitted the documents had the same format, consistent with the template he downloaded on 21 April 2014, referring to Exhibit 116.
8. The Crown submitted that the court would not accept the explanation asserted by the accused in re-examination that the documents produced by Goldstein are easily demonstrated to have not emanated from the accused because the format of the date contained in each document is that of a US configuration. The Crown submitted there was no evidence before the court as to any default process that would cause a particular date format depending on the location in which the document was created. It was submitted that the document the accused sent to Pulier (Exhibit E, pg.1273) had the date in US format. It was further submitted that there are inconsistencies in the format as amongst the documents produced by Goldstein in Exhibit N. Both documents entitled "Statement of Work" are in Australian format. The false documents produced by Hunter to CBA investigators was in US format (Exhibit G), notwithstanding that they were created by Hunter in Australia. The Crown submitted that the distinction drawn by the accused in the examination was a "desperate attempt to gain credibility for the documents upon which he relies but that credibility is undermined by other evidence". The Crown submitted the Court would place no weight on the documents relied on by the accused and conclude that they were fabricated by the accused after he was charged. In doing so they demonstrate a consciousness of guilt on the part of the accused.
9. The Crown did not submit that the documents were designed to conceal the real purpose of the payments. Rather the evidence in the invoice at Exhibit E, pg. 1273, Exhibit N and the White Paper (Annexure 4) demonstrated that the documents were created for the purpose of justifying the payments which were really made as a reward for efforts by the accused and Hunter.
10. The Crown submitted that the accused had asserted to CBA investigators a preparedness to produce documentation demonstrating the legitimacy of the payments that he received but that he never produced such documents. The Crown submitted that after he was charged, he produced a new set of documents which was sent for forensic examination and became Exhibit AAB in the proceedings.
11. The Crown submitted that a comparison of the documents in Exhibit N and Exhibit AAB demonstrated that the invoices in Exhibit AAB were dated to coincide with the payments the accused received into his bank accounts. The invoices in Exhibit N however were all dated after dates of the comparable invoices in Exhibit AAB and therefore could not be draft invoices as suggested by the accused. The Crown submitted that the documents in Exhibit N were not sent to ACE for legitimate work done by the accused. Exhibit N contained the documents Hunter had copied from the accused and provided to CBA investigators which following forensic examination Hunter conceded were fabricated documents.
12. Another inconsistency was evidenced in Exhibit E, pg.1272, an email from Pulier to his executive assistant attaching invoice SOW001.1 for a sum of $200,000, sent on 8 May 2014. This was followed by the first payment made by Pulier to the accused on 16 May 2014 for $100,000. Although the payment was facilitated by Goldstein, prior to the incorporation of ACE Inc., he had no knowledge of the reason for the payment. The Crown submitted that Goldstein was merely a conduit of the funds forwarded by Pulier to the accused.
13. The Crown referred to the accused's denial of any knowledge that allegations of misconduct regarding the payments he received was to be an area of discussion during the interview. The Crown referred to the evidence of Mr Murphy that the irregular payments into the accused's account had been discovered and that on 10 November 2014 he had told Hunter which was a matter of significant concern for Hunter. Hunter gave evidence that he discussed the topic with the accused before the interview.
14. The Crown relied on the snippets of conversations that occurred on the morning of 17 December 2014 between Hunter and the accused as evidence that the accused was aware that the payments were to be the subject of the investigation for example the message with the subject "Who is the ACE owner?". The Crown submitted that the evidence demonstrated knowledge by the accused as to the matters about which he was to be investigated and that his responses during the interview were consistent with him being both aware and cagey with interviewers in response to the questions they were asking on this topic.
15. The Crown submitted that the accused lied about the extent and timing of the work. His disclosure that the payments he received were in the order of $400,000 to $500,000 between April and September was consistent with the belief on his part that the investigators were only aware of deposits made into his CBA accounts. The Crown submitted he deliberately understated the value of payments he received.
16. The Crown submitted that he had lied to investigators when he nominated Tim Whiteley as a person who had approved his work for ACE. The Crown submitted the accused also lied in telling the investigators that in April 2014 ACE had found him on the internet and his denial of any knowledge of a relationship between Pulier and Goldstein. The Crown submitted this was powerful evidence of the accused's consciousness of guilt with respect to the payments.
17. In relation to the Crown's submission that the documents in Exhibit AAB were fabricated by the accused having been created after he was charged to give support to his assertions that payments received were not related to any assistance provided to SMI, the Crown submitted the facts relating to disclosure of the documents support an inference of fabrication. The Crown noted that Hunter's fabrication of documents was discovered and disclosed to Hunter at the time of his second interview with CBA investigators on 23 December 2014. The Crown submitted Twynham had discussions with Hunter and the accused in the early part of 2015 which gave rise to an inference that the accused was aware that Hunter's fabrication of documents had been discovered by investigators.
18. The Crown noted the accused had produced no documents to investigators as he had asserted that he would during the interview. He then attempted to resign.
19. The Crown submitted the circumstance of the disclosure of the documents in Exhibit AAB to the Crown further undermines the credibility of the documents. They were first provided for forensic examination in August 2018, some three years after he was charged. The analysis of metadata attaching to the electronic documents does not prove dates of creation because of the limitations of that analysis as conceded by the forensic experts. The Crown submitted, "in the absence of the availability for analysis of the device upon which the documents were created, the possibility of manipulation of the metadata connected to the electronic data cannot be excluded." The Crown submitted that the documents were disclosed at the last opportunity prior to the date the accused thought was to be the trial date and that this strategy was adopted to prevent to the Crown from subjecting the documents to scrutiny. The Crown submitted "the only logical conclusion as to their production was that the accused was conscious of his guilt and attempted to falsely demonstrate the legitimacy of the payments received by creating these false documents."
20. The Crown relied on the evidence of Hunter that he had done no work for ACE and that the payments were a reward for his efforts in facilitating the SMI contracts. The Crown relied on the spreadsheet produced by Mr Martinez on 6 March 2014 (Exhibit AF). The Crown submitted it was no coincidence that the amount allocated to the accused was $1.48 million, an amount close to the $1.5 million the accused had nominated in an email to his wife on 21 December 2013 following closure of the McAfee deal.
21. The Crown submitted that the most compelling instance of the accused's fabrication concerned his attempt at explaining the transfer of US$20,000 to Hunter's sister from the first payment he received of $100,000. Hunter gave evidence that the accused had sought instructions from him as to what payment Hunter sought and how it should be paid. The Crown submitted that Exhibit D corroborates with Hunter's account and that the accused's explanation was disingenuous, claiming that there was a breakdown in the relationship between himself and Hunter early in 2014. This was not put to Hunter in cross- examination. Further the accused's evidence that Hunter had sought a loan for his sister who needed financial assistance was a version of events not put to Hunter in cross-examination. The Crown submitted in any event it was a version that was not conceivable given the unlikelihood of Mr Hunter needing to borrow a relatively small sum of money given his position and remuneration. The Crown submitted this explanation "was a blatant attempt to contrive an explanation about a fact in the Crown case which incontrovertibly demonstrates the accused's guilt. He was facilitating part-payment of the bribe payable to Hunter. It undermines his elaborate attempt to fabricate an innocent explanation for that first payment, that it was somehow connected with the time he spent with Tiscali."
22. The Crown submitted that the money trail in Exhibit C made the accused's explanation of the payments being for work done or to be done for ACE and nothing to do with Mr Pulier to be demonstrably false. The Crown submitted that the accused could not overcome the fact that the payments were made by Pulier and that Goldstein was a conduit for them.
23. The Crown referred to the meeting that took place between the accused and Pulier in Santa Monica on 11 April 2014 following the accused's trip to Italy. The Crown noted there had been no mention of Tiscali in Exhibit N whereas it was mentioned in the first Statement of Work in Exhibit AAB.
24. The Crown also relied on Exhibit J, a message retrieved from Hunter's iPhone sent by the accused on 10 December 2014 in which the accused stated "EP wants to send us more money via ACE so he can clear it out before EOY and avoid tax. Told him I'll hold it ransom until we all land happily, lol."
25. The Crown submitted that the evidence relied on by the accused in Exhibit 119 of Ms Sugar concerning Pulier's desire to avoid tax commitments was irrelevant to any issue to be determined by the court. The message in Exhibit J had not mentioned that the payments were for a project carried out on behalf of ACE. The Crown submitted the evidence in Exhibit J was consistent with the Martinez spreadsheet and that the payments were for providing assistance to SMI regarding the earnout clause.
26. On the same day namely, 10 December 2014, $350,000 was received by the accused in his ASB account. Seven days later another $350,000 was received in the same account. The Crown referred to the evidence of Hunter that an agreement had been reached at that time that all money owing to both himself and the accused would be cleared by payment out to the accused.
27. The Crown submitted that to the CBA investigators the accused had implicitly denied any involvement of Pulier in the payments. Rather he said Goldstein had paid him $400,000 to $500,000 for work done between April and September. That sum had been paid into his CBA account. The Crown submitted that the accused had tailored his evidence to fit what he thought was in the state of knowledge of the investigators. The Crown submitted the falsity of the information he provided to the investigators was demonstrated by the fact that $1.4 million had been received by him into his ASB account however he had made no mention of that whatsoever. The Crown submitted it was "beyond belief that the explanation he offers that he wasn't asked questions about those things particularly in circumstances where he had been put on notice…that his receipt of moneys into bank accounts is going to be the subject of enquiry."
28. It was the Crown's ultimate submission that the documents in Exhibit N had been fabricated by the accused and that the documents contained in Exhibit AAB were further iterations of fabrications, "but better".
29. The Crown rehearsed his submissions regarding the inconsistencies in the documents in Exhibit AAB by comparison to those in Exhibit N. He referred to the accused's explanation to Mr Murphy in his interview that the nature of the work concerned a "playbook." The Crown submitted that the documents in Exhibit AAB were a recent invention to explain how he and Pulier came to embark on a project. The Crown was not saying that the accused did not go to Italy and meet with Tiscali, as it was clear Michael Harte had intended to pursue Tiscali prior to December 2013. The Crown submitted the suggestion that Tiscali was a motivator for a plan hatched during the accused's meeting with Pulier on 12 April 2014 was a fantasy designed to explain the initial payment based on contact he had with Tiscali presumably in his capacity as an employee of CBA and based on the timesheet at pages 126 and 127 in Exhibit AAB.
30. The Crown referred to two pieces of damning evidence concerning the bribes. First Exhibit K established that Keith Hunter had falsified invoices for payment. Secondly the text message in Exhibit E, Vol. 5, pg. 2021 i.e., "$$landed KH not happy…KH at 750K… It is more than the formula". The Crown noted that this was a message sent on 13 April 2014, just after the accused's meeting with Pulier in Santa Monica. It was one week before the note that was extracted from the accused's iPhone in Exhibit Z which may have been a draft communication dated 21 April 2014, four days before Pulier sent the first invoice to his executive assistant for payment.
31. The Crown submitted that the accused's explanation for the file note in Exhibit Z had "no approximation to reality."
32. The Crown referred to Exhibit E, pg. 1273 concerning the direction for payment to the accused's CBA account. The Crown submitted there had been, for whatever reason, a change of mind about how the payment should be made, i.e., not in a single transaction but in a series of deposits into various accounts.
33. The Crown referred to the evidence of Hunter that he thought everyone was getting the same amount and only found out later that the accused was paid more. This provided some explanation for the accused saying in Exhibit K that he was to "draw down the delta" - between him and Hunter. The Crown submitted this was consistent with a payment for reward, not for work done or to be done for a not-for-profit organisation.
34. The Crown referred to the document SOW001.3 in Exhibit N dated 1 September 2014, a Digisol invoice for the sum of $300,000 payable to Keith Hunter. The account details were the same as those for Hunter's account in Exhibit C. This evidenced a payment of $300,000 to Hunter whereas the accused had denied any knowledge that Hunter was doing work for ACE. The Crown submitted that having regard to all the evidence it was "absolutely clear" that the documents in Exhibit AAB are of recent invention, and demonstrated a clear consciousness of guilt on the part of the accused.
35. In relation to the message forwarded to the accused's wife on 21 December 2013 the Crown referred to the evidence that the accused was caught out when that message was put to him during his CBA interview on 17 December 2014. The sum of $1.5 million referred to was consistent with the amount in Martinez's spreadsheet which was finalised on 6 March 2014 which the Crown submitted was the figure promised to the accused by Pulier.
36. The Crown rehearsed its submissions concerning lies it submitted the accused told the investigators. These gave rise to a consciousness of guilt in the accused. The Crown also rehearsed his submissions concerning the "snippets" in Exhibit H. At 8:21 a.m. on 17 December 2014 Hunter had asked "Who is the ACE owner?" At 8:49 a.m. the accused had responded "just water" a reference to the project discussed with Pulier concerning the provision of clean water in third-world countries. The inference could be drawn that he was telling Hunter to be guarded in his answers. With respect to the accused's resignation the Crown submitted given his wage and share entitlements there was no reason for him to resign on 18 December 2014, the day after the interview, at a time when he had no other job lined up. The circumstances of his resignation also gave rise to a consciousness of guilt.
37. The Crown also relied on the snippet in Exhibit H, where Hunter said, "I am so shocked. I want to vomit. I cannot believe we were this stupid", as evidence referring to the fact they had allowed the payments to go into accounts that were discoverable by the CBA.
38. The Crown submitted that for all of the above reasons the court would reject the accused's evidence. With respect to the case brought by the Crown, the Crown referred to the evidence of Mr Deckelman concerning the sale of SMI to CSC. The first term sheet dated 9 September 2013 contained no earnout provision. The next term sheet dated 16 October 2013 did contain an earnout provision as did the "exclusivity letter of agreement" dated 16 October 2013. It limited transactions to those signed before the EPA on 29 October 2013 or included in the Salesforce Pipeline document. Neither of the McAfee nor Pivotal transactions were included in that document.
39. The Crown submitted that Mr Deckelman's evidence was clear that those contracts were recognised by CSC in the earnout calculation, a process that was subject to a detailed process of scrutiny by accountants and auditors on behalf of CSC. The Crown referred to the submission on behalf of the accused that the accused had no expectation of the receipt of a reward as the inclusion of the two contracts in the earnout must have been an error on the part of CSC. The Crown submitted "Mr Deckelman was highly amused by that proposition, and your Honour can have absolute confidence that it wasn't a $100 million accident, it was part of a developing series of agreements between the parties, and it's evident from the evidence of Mr Twynham, and the various communications he confirmed, that certainly everybody at ServiceMesh was focused on writing these contracts,… it must have been the case that the contemplation of the parties throughout this entire period was that there was going to be recognition of contracts entered into up until 31 January 2014."
40. The Crown submitted that the evidence clearly established that both the accused and Hunter were aware of the proposed sale on 22 September 2013 when they had discussions with Twynham when he met them in Los Angeles.
41. The Crown referred to the evidence concerning the graph provided by Mr Harte to Mr Hunter and Hunter's evidence that he showed it to Pulier. The Crown submitted there was no reason to doubt that evidence and that the three individuals, namely the accused, Hunter and Harte would be rewarded in accordance with some set formula is corroborated by the accused in the text message he sent to Twynham on 13 April 2014 at 1:32 p.m. (Exhibit E, pg. 2021).
42. The Crown described the evidence of Mr Hunter as "a fairly uncomplicated story" in which he had conversations with the accused about the meaning of the graph and the accused said that it was better he'd been asked to do it than the accused, and that Mr Pulier had taken it on board. In his oral submissions the Crown noted that Mr Harte was on the spreadsheet provided by Mr Martinez in March 2014 and he had knowledge of the McAfee transactions.
43. The Crown further referred to the evidence of Mr Hunter that the arrangement towards the end of 2014 was that all monies were to be paid into Mr Waldron's account to be distributed between the parties, and that the dollar values equate reasonably well with the monies payable to Mr Harte, the accused and Mr Hunter consistent with the spreadsheet.
44. The Crown submitted that the fact that the accused signed the letter on behalf of CBA confirming the contracts within the earnout period was a small part of all the evidence that shows the accused deliberately engaged in conduct to push the agreements through. The evidence concerning the negotiation of the various contracts demonstrated the accused was clearly engaged in the process for the purpose of benefitting ServiceMesh. A clear example of that was the final acceptance provisions appearing in TDs 22 to 29. The Crown relied on the evidence of Mr Marsden about the commercial impropriety of having an acceptance clause like that in a contract of this nature.
45. The motivation of the accused was made clear by the email he sent Hunter on 31 October 2013 (Exhibit E, pg. 1329) in which he stated "Here is $7 million for them. It's just up to Eric and Brad now to sort this out with McAfee." This occurred two days after the EPA between SMI and CSC was entered into and one day after the public announcements. It also occurred less than seven hours after the accused had first seen the previous McAfee ELA proposal, in circumstances "where SMI has never been involved in the sale of third-party software previously, had no prior contractual engagements with McAfee and there were no attempts by CBA to negotiate with any other parties about their capacity to act as third-party sellers." The Crown submitted the only reasonable inference to be drawn was that the accused was aware that SMI would benefit from the increased revenue and that he took steps to assist SMI in that endeavour.
46. The Crown referred to the referral by Mr Richardson to Mr Nicholson for assessment of the McAfee deal and the number of obstacles that he identified. The Crown submitted that it was clear from the communications that the accused and Hunter repeatedly communicated to those involved that the matter had to go ahead and that there should be avoidance of the sort of governance practices that Nicholson wanted to pursue with respect to the contract. The Crown referred to the evidence of both Twynham and Drury that a consequence of the delay in the execution of the McAfee deal beyond the end of the year in 2013 would have required terms to be resubmitted to the McAfee head office and the contract would not have been entered into before the earnout period.
47. The Crown submitted that the accused had sent through to Twynham the previous proposal by McAfee with the intention of providing a commercial advantage to SMI in its negotiation with McAfee as third-party seller. Neither the accused nor Hunter made attempts to seek alternative pricing directly with McAfee or other third-party vendors such as HP or Dell. Rather, they took active steps to exclude HP from any proposal.
48. The Crown referred to the relationship between the accused and ServiceMesh as being "unusual", that it was not a proper arm's length relationship but one in which the accused relayed confidential information to ServiceMesh, to that company's advantage. This included confidential CBA information about arrangements it made with other suppliers. The Crown submitted that the accused had characterised the relationship as one of "open kimono" and the Crown conceded there were instances where the communications were appropriate. However there were other communications demonstrating that the accused was clearly in the ServiceMesh camp.
49. In relation to the McAfee deal the Crown submitted that David Bradbury had not carried out a commercial viability assessment of the proposal as asserted by the accused (Exhibit E, pg.1512). The spreadsheet prepared by the accused after the event (Exhibit 54) similarly compared only the cost to the CBA of the non-ELA contracts for purchase of the McAfee software. There was no comparison with other suppliers for the initial proposal by McAfee to CBA at the beginning of 2013 which was deemed at the time to be too expensive when reviewed by Partnership Management.
50. In respect of TD 21, the Crown submitted that Kelada gave evidence that the Cloud Secure software required pursuant to that contract was obsolete because the bank had developed its own custom script which would do the same thing. The Crown referred to the text messages between the accused and Twynham on 2 November 2013 as clearly illustrating the accused's motivation with respect to the McAfee contracts. The accused told Twynham that he "has the security guys frothing to get the deal done because they have wanted it for some time, and now he's going to pay for it" and then comments that he "does pull some strings" and further "expects a lifetime supply of Dom and caviar from Pulier as a consequence of his efforts."
51. The Crown submitted the extent to which this agreement was to the advantage of CBA is not relevant to the question to be determined by the court namely were the payments subsequently made to the accused and Hunter as a reward for their efforts in respect of TDs 17 and 22 to 29.
52. With respect to the Pivotal contracts the Crown noted that the accused accepted in cross-examination that by 27 November 2013 he had communicated to Twynham that CBA was prepared to commit $1.5 million to this deal. The Crown submitted that it was clear at this time there was no definitive plan in place as to what precisely would be purchased and a series of communications between SMI staff demonstrated attempts by them to work up a product that might justify the expenditure committed by the accused.
53. The Crown submitted that the evidence given by the accused that he had some initial involvement in the structuring of the deal but then delegated it to Mr Pennington to finalise through the course of January 2014 was inconsistent with the various communications in the evidence. The Crown submitted that it was inconceivable that he would not be involved in a procurement purchase that went initially from $1.5 million to $6.9 million. The Crown referred to the communication by the accused with Hunter on 6 January 2014 where the accused referred to Pulier "getting intense" about the remaining TDs. The accused went on to say "All under control. Worked through them in quite some detail in LA."
54. The Crown submitted that the spreadsheet provided by Mr Marsden (Exhibit AW) provided an appreciation as to the way the TDs developed over the course of the month of January 2014. This was further informed by the synopsis of internal SMI emails in Exhibit AX.
55. The Crown referred to the accused's denial of any knowledge as to why the prices increased from $1.5 million to in excess of $6 million. In cross-examination he gave evidence that the $1.5 million he was prepared to commit related to an amortised yearly spend however the Crown submitted that was inconsistent with the evidence of Twynham that the accused told him prior to 24 December 2013 that the total spend would be $1.5 million. Further Twynham had acknowledged that by 15 January 2014 SMI had been advised that UBS would not be going through with a purchase that could count towards the earnout.
56. The Crown referred to the various communications concerning the development of the TDs during January, many of which the accused was copied into, and the conversations that SMI employees had with the accused to submit the only possible conclusion was that the accused was well aware of the developments and was sanctioning the increase in costs to be incurred by CBA. The Crown referred to the evidence of Kelada and Marsden that there was no utility in the CBA purchasing connecting software at that time. The Crown submitted the various pieces of engineering software were still in proof-of-concept stage and there was no need for CBA to spend in excess of $6 million on the SMI connectors which were still in the early stages of development, except to enhance the earnout. The inevitable conclusion will be that this was the motivation for the accused and Hunter in making these purchases on behalf of CBA.
57. The Crown referred to the accused's financial position as outlined in Exhibit AU which on the limited material available demonstrated that as at 21 December 2013 he had debts of over $114,000 and in May 2014 he had debts of over $124,000. When he received the first payment of $100,000 he had dissipated the funds to discharge various debts as well as transferring $20,000 to Hunter's sister.
58. In relation to the evidence of Hunter, the Crown did not dispute that he had been criminally involved but that didn't mean the court would discard all of his evidence. The agreed facts upon which he was sentenced (Exhibit L) were not to be accepted as proven facts in this trial. What could be inferred is that Hunter was prepared to admit against his interest those facts for the purpose of resolving his criminal matter in New South Wales. The Crown submitted that Hunter initially attempted to avoid responsibility by lying to CBA investigators and by creating false documents with the assistance of the accused. He was then caught out in relation to that, he engaged a lawyer and attempted to explain away his conduct before he was subsequently charged. It was submitted that his imprisonment had a significant impact on him including his mental well-being and from the way he gave his evidence the court would infer that he doesn't fully accept the wrongness of the activities that he was engaged in. It was however clear that he accepted that he did no work for ACE and the payments made to him were payments as a reward for the efforts he made for ServiceMesh with respect to the earnout. The Crown submitted that there could be no doubt that he did not do any work in any capacity for ACE and the $650,000 worth of payments he received, including $20,000 that was directed to his sister, were bribes that he received from Pulier through ACE.
59. The Crown submitted that the accused had conceded that the payments were calculated on the basis of some sort of previous agreement in his message to Twynham on 12 April 2014 in which he stated "$$landed, 750 for Keith, he is disappointed, but to be fair to Eric, it's more than the formula allows" or words to that effect. The Crown submitted that the court would reject the suggestion that those communications related to some sort of offer of employment to Hunter by CSC through Pulier. The formula referred to was not going to be about the determination of some wage payments for future employment. Rather it was completely consistent with the note the accused made in Exhibit Z on 21 April 2014 as to how the funds were to be distributed between him and Hunter. That note was made just nine days after his message to Twynham on 12 April 2014.
60. The Crown also referred to the email sent by the accused to his wife on 21 December 2013 confirming an amount of $1.5 million. The spreadsheet provided by Martinez in Exhibit AF recorded payments of $1,480,148 to the accused. That spreadsheet pre-dated discussions the accused said he had with Pulier about setting up a not-for-profit venture on 11 April 2014.
61. In relation to the accused's evidence about Tiscali, the Crown did not dispute that in his capacity as a CBA employee under the guidance of Michael Harte that he engaged in discussions with representatives of Tiscali regarding the expansion of cloud-based technology. However the accused had attempted to use that activity as the basis for involvement in the ACE project and the receipt by him of the payment of $100,000 in May 2014. The Crown submitted that made no sense given that the accused had already been earmarked for payment of approximately $1.5 million from TechAdvisors in the spreadsheet as at 6 March 2014, and was aware that he was to receive such a payment as evidenced in the text message he sent to his wife on 21 December 2013. The Crown characterised the Tiscali evidence as "a desperate attempt by the accused to try and justify that payment to him of $100,000 in circumstances where, on his own evidence, he hadn't even embarked on the project with ACE at that point in time."
62. The Crown submitted it was apparent from a comparison of the documents produced by Goldstein (Exhibit N) and those relied upon by the accused (Exhibit 116) that the accused added references to Tiscali in an attempt to give credibility to his version of events.
63. The Crown further submitted the payment of $20,000 from the first payment of $100,000 to Hunter's sister demonstrated the payments were being made to the accused by TechAdvisors through ACE as a reward for efforts enhancing the SMI earnout as asserted by Hunter. The accused's evidence that the payment was made after Hunter lied to him about his sister being sick and Hunter needing a loan from the accused was never put to Hunter in cross-examination. It was further highly improbable that a person in Hunter's position would have needed a loan of $20,000 or would have sought it from the accused at the precise time the payments begin to flow from TechAdvisors to the accused and then Hunter. This was the most telling example of the accused attempting to weave a false explanation around the evidence that he knew inculpated him in the offending. The Crown submitted there was no legitimate explanation for the transfer of $20,000 except that provided by Hunter, namely it was paid on Hunter's instruction as part-payment of the bribes he was expecting.
64. The Crown submitted the evidence of Hunter fitted perfectly with all other evidence in relation to the transactions, the speed they were entered into, the way they were pushed through by the accused and Hunter and the subsequent payments that were received in the various bank accounts. On the basis of all of the evidence the court would have no doubt that the payments received by the accused were received as bribes and not as payments for work done or to be done for ACE. The accused assisted Hunter in his receipt of payments made to accounts in Hunter's name by providing Hunter's banking details to Goldstein and agreeing to receive some of the funds on behalf of both Hunter and Harte. The court will also have regard to the evidence of the consciousness of guilt referred to by the Crown and that the accused did provide assistance to Hunter so that Hunter could also receive those payments from ACE. On the basis of all the evidence the Crown submitted that the accused should be convicted on all counts.

The accused's address

1. Counsel for the accused also relied on a written outline of submissions. He submitted the principal question for the court is whether the accused received the benefits alleged in Counts 1 to 7 (and Mr Hunter received in Counts 8, 9 and 10) for having shown favour to ServiceMesh Inc., and relatedly, whether the receipt of those benefits was corrupt. The accused submitted the court would not find any of the offences have been established beyond reasonable doubt.
2. In relation to the evidence given by Mr Hunter counsel submitted that a number of factors would have caused him to accept the allegations against him, even if they were unsubstantiated. These included his mental health conditions at the time of the alleged offences, which affected his ability to recall events. Secondly his partner had been threatened with prosecution by US authorities concerning falsified invoices. Thirdly Hunter believed he was facing the very real prospect of imprisonment for many years if he refused to cooperate with authorities. Fourthly he was subject to investigations by the FBI, SEC, and NSW Police. Sixthly and perhaps most importantly he believed that he was unable to contest the allegations since he did not have the financial resources to do so. It was submitted that this meant that a plea of guilty was in his mind inevitable.
3. Counsel submitted Hunter's willingness to adopt statements put to him was illustrated by the agreed statement of facts upon which he was sentenced (Exhibit L). In that statement he accepted that both sets of transaction documents involved the acquisition of unnecessary or overpriced products. However in his evidence he remained adamant that the acquisitions were part of the bank's IT strategy and had merely been accelerated to meet the earnout timeline. In the agreed statement of facts he had also incorrectly accepted that the accused had pushed for Hunter to obtain the position as his manager so they could promote the interests of SMI over those of the CBA.
4. Counsel rehearsed reasons why many informer witnesses including Hunter had a motive to reaffirm evidence they have given to investigative authorities. He was given a discount for future assistance, however he had an additional incentive because he was contractually precluded from publicly contradicting the allegations made in the complaint. Also the terms of his agreement with the US Attorney's Office required him to plead guilty to the offences in New South Wales, thus the motivation to give evidence consistent with the prosecution case irrespective of the veracity of that account was far greater than that which ordinarily presents itself.
5. Counsel submitted that the evidence of Hunter about the idea of a bribe emanated from Mr Harte was most improbable given Harte's position and the inference that he was person of considerable wealth. Notwithstanding his name being on the Martinez spreadsheet (Exhibit AF), there was no evidence of any payments being made to Harte.
6. Counsel submitted that Hunter's evidence about his meetings with Harte and Pulier was so unreliable that it gave rise to a question as to whether the meetings took place at all in the circumstances suggested by Hunter. There were inconsistencies in his evidence during cross-examination about the meetings. Counsel submitted there was a very real prospect that Hunter was either confused about past events, forced to reconstruct the events or was deliberately fabricating the two meetings.
7. Counsel also relied on inconsistencies with what Hunter told the FBI in his proffer statement about the meeting with Mr Harte, namely, that he had discussed the upcoming purchase of SMI by CSC. In cross-examination he accepted that was different to what he said in evidence. It was also contrary to his committal evidence.
8. Counsel referred to the assertion in Hunter's proffer statement that prior to the meeting with Mr Harte, Pulier devised the compensation formula based on the earnout. Hunter accepted that the proffer was incorrect, it also contradicted his statement of 31 March 2016.
9. Hunter had also sought to explain an inconsistency in his evidence concerning a discussion with Pulier about the earnout incentive by asserting there was another meeting with Pulier where those matters were discussed. He gave inconsistent versions as to whether that occurred prior to or after the conclusion of the McAfee transaction.
10. Counsel submitted that Hunter not only gave inconsistent accounts but he also added to evidence, for example, in his evidence in chief he added the fact that he and Pulier had discussed increasing the sale price of SMI by generating additional revenue as well as the fact that Mr Pulier agreed at that meeting to confer a gift.
11. In his statement of 31 March 2016 Hunter also stated the accused had suggested buying Pivotal to help with the earnout. Counsel submitted that assertion was non-sensical, since the acquisition of Pivotal could have no impact upon any earnout.
12. Counsel submitted that the court could not accept anything Hunter said in the absence of corroboration, of which there was none. In relation to the sums paid, counsel noted the Crown's opening in which he accepted that if payments were received by the accused for reasons other than showing favour to SMI then there would be no corruption, irrespective of whether there was a breach of the terms of the accused's contract of employment. Counsel submitted that the Crown has failed to exclude that alternative, reasonable hypothesis. Counsel referred to the evidence the accused gave about the work which he performed which had the Tiscali project as its genesis. If that evidence left the court with a doubt, then the accused cannot be found guilty. In relation to the documents supporting the payments counsel submitted the court could not deduce anything from the difference in documents provided by Mr Goldstein (Exhibit N) to those provided by the accused (Exhibit AAB). The documents produced by Goldstein had come from his personal file and he gave evidence that he did not believe that ACE still had records which were available. Further, the evidence of the experts, Dr Watt and Mr Le Roux did not permit a conclusion that the documents produced by the accused were fraudulent. To the contrary, the metadata of those documents was consistent with them being created at the stated date and time.
13. The Crown suggestion that the documents were falsified in order to resist allegations of impropriety was significantly undermined by the accused downloading the template on 21 April 2014. This occurred prior to the payments and well in advance of any allegations being levelled against the accused.
14. Counsel submitted that it was relevant that the accused had been audited during his employment at the CBA and that he believed there was transparency concerning his CBA and ASB accounts. His willingness to have the payments paid into those accounts suggested that the accused did not perceive any need to disguise the transactions. Given the substantial sums which were transferred they would have been readily apparent on a review of his accounts. Counsel referred to the fact that the accused attempted to show the CBA investigators relevant information on his iPad concerning the payments during his interview on 17 December 2014 but was unable to do so because the bank had inadvertently reset the device to factory settings.
15. Counsel submitted that the accused relied on the evidence of Ms Sugar to establish Pulier's interest in establishing a not-for-profit organisation and that she provided advice to him concerning his tax liability. This evidence lent support to the accused's evidence of his understanding of the purposes of ACE, and explained the perceived need to pay "consultants". It was submitted the evidence left open the very real possibility that Pulier paid the amounts when he did in order to avoid a tax liability. It was further submitted that if that was a reasonable possibility then the accused must be acquitted of Counts 1 to 7 since the payment was not made as a reward to the accused for facilitating business opportunities for SMI.
16. Counsel submitted that the timing of the earnout provision in the SMI acquisition by CSC and the EPA undermined the prosecution's case theory. The first termsheet on 9 September 2013 did not refer to an earnout. It was first suggested in the document dated 16 October 2013. There is no evidence as to when the earnout provision first arose in discussion. It is also significant that the contract ultimately excluded the relevant McAfee and Pivotal transactions from the calculation of the earnout. They were not included in the Salesforce Pipeline.
17. Counsel submitted that the court would not accept the evidence of Mr Deckelman, that there must have been a subsequent agreement with Mr Pulier to include those amounts in the earnout. It was submitted that it was most unlikely that such a large public company would simply agree to pay an amount that it was not contractually obligated to pay, against the interests of its shareholders. Counsel submitted it was much more likely that a mistake was made by someone involved in the process of calculating the earnout. Further it was remarkable that there was no record of any such agreement. Counsel submitted that the fact that the final contract expressly excluded the transactions suggested there was no request by Pulier to the accused to increase the revenue of the company.
18. Counsel submitted that Twynham was simply operating on an assumption that all additional revenue would increase the earnout figure. If there was no request by Pulier, this supported the accused's evidence that the earnout clause was being leveraged to secure a better bargaining position for the bank.
19. Notwithstanding that the Crown had opened its case by stating there was no "crucial importance" whether the contracts were of benefit to the CBA or not, there can be no doubt on the evidence that there was a pressing need for the CBA to conclude an ELA for security software. That pressing need arose because of the requirements of the security team but also because of the need to satisfy the regulatory requirements imposed by APRA. Counsel submitted that the Agility-PaaS TDs were not acquired for an improper purpose. Their implementation was consistent with the discussion held with EMC in June 2013 and with the bank's strategy under Mr Harte.
20. Counsel for the accused referred to the absence of evidence concerning manipulation of the ten Adobe PDF files in Exhibit AAB and the Crown submission to the effect that the documents were in fact altered and manipulated, or at least constructed in such a way as to evidence a consciousness of guilt. Counsel referred to Exhibit N to submit that it was clear that Mr Goldstein had not provided, or had available to him, all relevant documents.
21. In relation to the Crown's reliance on the evidence of Mr Marsden to the effect that the White Paper was not capable of understanding for a proper build by competent engineers, counsel submitted that the court "couldn't take much from Mr Marsden's evidence. It was not contested, and was accepted by the accused, but ultimately, does not demonstrate, as appears to be suggested by the Crown, that document was a fiction which had been devised in order to cover up illicit payments."
22. Counsel submitted that a fundamental difficulty in deriving much assistance from the documents in Exhibit N was the absence of any evidence from Mr Goldstein on the various topics about which he could have been asked questions. It was submitted there was an absence of evidence as to the state of the White Paper contained in Exhibit AU namely about the contribution apparently made by the accused to that document.
23. Counsel conceded that in respect of the invoices in Exhibit AAB there was consistency between the dates specified in the invoices, temporally with the dates on which payments were made. This did not however apply to a document in Exhibit N being SOW001.3 dated 1 September 2014 which referenced two payments. Those payments were made into Mr Hunter's CBA account on 27 August and 23 September 2014. Thus the first payment was made before the invoice date and the second payment thereafter. This raised a question of whether in fact the documents in Exhibit N related to payments which were in fact made. This undermines the suggestion that the documents contained in Exhibit N are the "true documents". It was impossible to reconcile those documents with the documents in Exhibit AAB.
24. Counsel also relied on the template for an SOW the accused forwarded to himself on 21 April 2014. It was submitted that the document was not a reconstruction but rather it was already in existence. That also supported the draft document sent to Mr Pulier (Exhibit E, pg.1273), which was then forwarded to Pulier's executive assistant. There could therefore be no doubt that the accused was in the process of generating these documents including invoices as early as April 2014. Counsel asked rhetorically "Why would the accused be generating documents in 2014 if the scheme was, as is suggested by the Crown, an illicit one?". Counsel submitted it did not make sense that he would be generating invoices in 2014 unless the accused was doing so because he had performed or intended to perform work for either Mr Pulier or ACE.
25. Counsel noted that the Exhibit N invoices included documents relating to Hunter. There were anomalies referred to in those documents including logos, which did not accord with the Statements of Work in Exhibit G. Counsel submitted that the Crown submission that it was coincidental that these documents appear in Exhibit N was only a partial coincidence namely, they were only partially overlapping. Counsel submitted that the evidence established that the invoice (Exhibit E, pg.1273) forwarded by the accused for a payment of $200,000 was never sent to Mr Goldstein. The Crown however could not explain the difference between that sum and the first payment made, as directed by Pulier to his executive assistant, of $100,000. The explanation probably was that the document at page 1273 was simply a draft as evidenced by the generic fields which needed to be filled in on that document. The court would therefore conclude the document at page 1273 of the evidence was merely a draft.
26. Counsel submitted that the White Paper referred to in the Crown submissions at [10] differs markedly from the corresponding document that the accused asserted was the detailed description of the projects that he had commenced for which payments were received. Counsel referred to the evidence given by the accused that the document provided to Lyonswood in August 2018 was very different to the White Paper and concerned a different engagement. It was submitted that the court would readily accept that the document in Exhibit AU related to a different engagement from the one in Exhibit AAB. Mr Marsden's opinion was expressly in respect of the document in Exhibit AU.
27. Counsel noted that whilst Exhibit Z was a note dated 21 April 2014 speaking to the need to create a Statement of Work, the first SOW was in fact dated 21 July 2014. Counsel referred to the formatting of the various documents and in particular the explanation raised by the accused concerning the date format as indicating whether the documents were created in Australia or the US and submitted that was simply not a rational basis to conclude that the documents were fabricated as submitted by the Crown.
28. Counsel referred to the Crown submission concerning the failure of the accused to produce documents to the CBA investigators having told them that he could provide them with invoices. Counsel submitted that after the interview the accused did engage with the CBA through a solicitor who sought further particulars of the allegations against the accused however there were no further dealings emanating from the bank. Thus it was submitted that no adverse inference could be drawn against the accused for his failure to provide invoices to the CBA. Counsel also referred to the evidence that during the interview the accused did attempt to access his iPad to demonstrate the evidence of his work however that process was stymied because of the factory resetting of his iPad.
29. Counsel addressed the submission made on behalf of the Crown that at the time of his interview the accused knew what the topic of discussion would be. Counsel submitted that the submission was not borne out. Counsel referred to evidence given by Hunter that the accused was interviewed prior to him being interviewed. Counsel relied on evidence given by Hunter that he had no recollection of when he became aware that CBA had knowledge of the payments made by ACE. Counsel also relied on the evidence of Mr Murphy in which he had asked the accused only about secondary employment. This, it was submitted, undermined the Crown contention that the accused was already aware of what he was to be interviewed about.
30. Counsel addressed the Crown submission concerning the snippets in Exhibit H. The accused denied having sent any of those messages. Counsel submitted that the court would take into account that after the interview the accused did not have access to his devices which made it less likely that any of the snippets in Exhibit H were in fact sent by the accused. Counsel also referred to the evidence of Hunter that he was the one texting the accused. Further, it was not in dispute that the snippets arose as a result of what was displayed on a computer screen from a person viewing a Gmail account. Thus, Hunter was sending emails and not texting. It could be inferred that Hunter's recollection of what was happening on that day might be therefore defective particularly given his mental health condition at the time as well as his anxiety which no doubt would have been exacerbated by his being required to attend for an interview.
31. Counsel addressed the Crown submission at [17] concerning his failure to disclose the full extent of payments made to him. Counsel submitted that the court should "tread very carefully in this area" because of the dispute as to what was precisely said. Counsel submitted I could make very little of the notes taken by Ms Brown and Mr Murphy as both witness had accepted the notes were not intended to be a verbatim record of the conversation. Counsel submitted that many questions were missing and there were inconsistencies between the notes of the two witnesses. That was borne out in the cross-examination of both witnesses. Counsel submitted it would be fraught with danger to engage in consciousness of guilt reasoning on the basis of the answers given because a conclusion that the answers are false necessarily depends on the question which is posed to the accused. Also Mr Murphy had candidly stated the he had taken notes so that he had a record in the future for his own purposes and the notes would not act as a substitute for something akin to an ERISP. Counsel submitted there was therefore some force in the accused's evidence that "the questions weren't asked in such a way." The accused accepted that he had answered the questions very narrowly which was not unsurprising in circumstances where allegations had been levelled against him and he didn't have the assistance of a solicitor or support person from whom he could seek advice. Counsel submitted it was to his credit that he accepts his answers were precise and that he did not volunteer information. Therefore the court would accept his explanation as far as the answers he gave and that they were not in fact lies.
32. Counsel submitted that before the court could adopt consciousness of guilt reasoning there must be a finding that there was an act which was a material act. It was submitted that the accused's resignation on the following day could not be characterised as a material act relating to the payments by Pulier and Goldstein. Nor was it a material act relating to the accused's answer that he was approached by Goldstein via email.
33. In relation to a matter raised by the court, namely the absence of any reference to the recent payments made into the accused's ASB accounts, counsel submitted that the accused was withholding the information in the absence of a specifically directed question. It was submitted that it was a case of "one keeps one's powder dry until one knows precisely what the allegation is that is being made". Counsel submitted that another example of the notes taken by Ms Brown and Mr Murphy being deficient was the reference to Tim Whiteley, and that he knew about the ACE agreement. It was submitted that could make absolutely no sense whatsoever because Mr Whiteley had already left the CBA long before the question of the ACE payments was raised.
34. Counsel addressed the invoice in Exhibit N being SOW1.3 made on the letterhead of Digisol but requiring payment in favour of Hunter. It was submitted that if this were in fact a true invoice it would make little sense as an invoice made out for work, on the face it, performed by the accused. Counsel asked rhetorically "why would the payment instructions require payment to Mr Hunter?" if what was sought was to cover up an illicit payment. Counsel submitted "one would wish to make sure that the document appears as legitimate as possible, and there is simply no reason why payment would be directed to Mr Hunter, rather than to the accused". Counsel referred to the evidence of Mr Hunter that the accused was to receive payment for Mr Harte and the accused had received the first payment of $100,000, part of which was due and owing to Hunter. Counsel submitted there was no cross-examination of the accused as to why, if that was a legitimate document, he might have included the details of Hunter in it.
35. In response to an enquiry from the court concerning the addition of the Tiscali reference in the third paragraph of the first Statement of Work in Exhibit N, counsel submitted that the court could not place any great reliance on that variation. He submitted that it gives credence to the fact that the accused was engaged in the venture involving Tiscali, "but it's not a situation where your Honour can conclude that was a deliberate fabrication after the event."
36. Counsel submitted that little could be derived from the fact that Hunter had fabricated documents in circumstances where Hunter acknowledged that the accused told him not to proceed "with this step of fabrication."
37. Counsel submitted that the Crown reliance on the fact that the accused as at 18 December 2014 did not have a position of alternative employment that he could take up was answered squarely by the accused's evidence that he intended to leave the bank and that there were other employment opportunities on the horizon. He had referred to those opportunities in his letter of resignation and ultimately had accepted a position from ING. Therefore it was submitted no weight could be given to that argument advanced by the Crown.
38. Counsel rehearsed his submissions concerning the authenticity of the emails sent by the accused in Exhibit 117 relating to the timing of the accused's disclosure of the material, and service of the expert reports, which was done in compliance with court orders.
39. In response to the Crown submission concerning the accused's evidence that he made a loan to Hunter of $20,000, counsel submitted that there was absolutely no evidence as to Mr Hunter's financial capability or his management of funds. Counsel submitted, "it is simply the case that Mr Hunter would have become aware of Mr Waldron's windfall of the $100,000 through that initial payment. He may have used that as a reason to request payment to the accused. The accused said it was for one reason different from that given by Mr Hunter. Ultimately that doesn't matter. The question is, why was the payment requested?" Counsel conceded that the accused's evidence about that payment was not put to Mr Hunter in cross-examination. Counsel submitted that the reason for the payment was "neither here nor there". It was agreed between the parties that the payment was made, and the question was whether Hunter had an entitlement to a portion of that payment, or it was a loan or some other gratuitous payment by the accused. Counsel submitted that this was not "something that is the silver bullet that demonstrates that there must have been an enterprise involving both Mr Hunter and the accused for which they were both to be paid."
40. In relation to the inclusion of the McAfee and Pivotal deals as part of the basis of the calculation of the earnout amount, counsel referred to the evidence of Mr Deckelman to the effect that there must have been agreements between the parties to allow them to be captured for the purpose of the earnout. It was put to Mr Deckelman in cross-examination that this was a result of a mistake on the part of CSC. Counsel submitted his extensive cross-examination raised the following salient points. First, the first agreement did not include an earnout provision but was for the sale of the company for a fixed sum. This undermined quite fundamentally the proposition that there was a discussion between Hunter and Harte about the scale of compensation. That was not consistent with the initial term sheet.
41. By 16 October 2013 there was an earnout provision agreed. Counsel submitted that this reduced the timing where such discussions between Hunter and Harte and presumably Pulier could have occurred. The term sheet dated 16 October (Exhibit F) included the earnout provision but also expressly permitted for the possibility of other contracts being recognised for the purpose of the earnout. Ultimately, that provision was not reflected in the Equity Purchase Agreement on 29 October 2013 and any belief that Mr Pulier had that the transactions were capable of inclusion in the earnout were "squelched" at that time. This undermined the Crown's reliance on the email the accused sent on 31 October 2013 saying, "Here's $7 million for them". Counsel submitted it did not make sense at that stage that the accused was talking about $7 million for the purpose of the earnout because only the transactions in the pipeline could be considered for that purpose. Counsel submitted that email was "actually of very little forensic significance to the Crown case because the revenue concerned was not capable of recognition at that time."
42. Counsel referred to the evidence of the accused that there was incentivisation for SMI because it was a large contract. Irrespective of whether there was an earnout, and irrespective of whether or not Pulier stood to gain from that earnout, counsel submitted it could not be doubted that a $7 million contract was a substantial contract for SMI and therefore did act as an incentive to them, as a profit-making organisation. Counsel further submitted that if the contracts were included in the earnout as a mistake by CSC, then that "undermines still further the prospects that Pulier would seek to press the McAfee transaction and the Pivotal transactions in circumstances when there were other transactions contained within the Pipeline."
43. Those other transactions were five CBA transactions, none of which proceeded.
44. Counsel referred to the Crown submission relating to the evidence of Hunter that he was given a diagram by Harte relating to compensation which he in turn gave to Pulier. The Crown submitted that "whether this proposal was in contemplation of a specific earnout provision or was more generally designed to establish a process of a reward for assistance cannot be determined on the evidence." Counsel submitted that it did not really matter whether it was one or the other.
45. Counsel submitted that the court would rely on "other artefacts outside of simply his evidence". This included the deed of release and indemnity in Exhibit AU prepared on behalf of ACE and forwarded to the CBA which referred to monies to be advanced to Hunter for work performed for ACE. It was submitted this provided an explanation, namely, that there was an agreement between ACE and Hunter that he would be pre-paid monies for work to be performed, even if he had not in fact performed work up until that stage.
46. Counsel referred to the submission made on behalf of the Crown that throughout the relevant period SMI employees were focused to maximise revenue for the earnout. It was submitted there was nothing improper about that. It was submitted that because the accused was assisting in the generation of revenue for SMI he therefore must have been a party to an unlawful enterprise. Counsel referred to the evidence that established that the mark-up on the McAfee product was 5% and the transaction served the bank's purposes as well.
47. Counsel submitted that the evidence of Martinez not only did not support the Crown case, but that it positively undermined it. Counsel referred to the evidence of Mr Martinez regarding his conversation with Mr Pulier concerning the names included in the spreadsheet. Mr Martinez had given evidence that Pulier "just generally indicated that they were people that, you know, he wanted to continue to develop a relationship, you know, with, and prospectively work with in other ways in the future."
48. Counsel referred to other evidence of Mr Martinez where Pulier had told him that the accused was receiving a higher percentage than other people at the CBA because Pulier "felt that Jon was someone, you know, who could bring a lot of value." It was submitted that this supported a finding that the payments were made in relation to prospective work and a desire to work with the individuals named in the future. Other names on the spreadsheet appeared to be significant executives in the banking industry. There was no evidence that any of the individuals were involved in any wrongdoing and there was no evidence of payments to those of other individuals. Counsel submitted that the position of each of the individuals made it most unlikely that this document refers to a scheme for profit.
49. Secondly it was submitted that the figures in the spreadsheet, which added up to 100%, did not really tally with any of the transfers or the total amount of the transfers to the accused and Hunter. It was submitted there was simply no connection between the amounts ultimately paid, and the figures in this document.
50. In relation to the accused's email to his wife on 21 December 2013 in which it stated "by the way, confirmed $1.5 million", counsel referred to the accused's evidence that the sum referred to the money he could make in two years working in Europe.
51. Counsel referred to the table of payments comprising the earnout revenue at Exhibit E, pg.527. Counsel submitted that as at December on the Crown case the evidence demonstrated at best a willingness for the accused to provide $1.5 million by way of the Pivotal transaction. Counsel asked rhetorically "why would Mr Pulier confirm that Mr Waldron is entitled to $1.5 million, when his efforts up until that point were, in a sense, futile because they would've helped to reach the $20 million mark, but no one would've earnt a dime, or at least very little." Counsel made the following submission:- "Yet, the agreement, apparently, is a fixed one, namely, the provision of $1.5 million in December, confirmed in the Martinez spreadsheet if that's what it means, and, in my submission, that does not make logical sense because either the accused required further remuneration and 1.5 was just for the McAfee transaction, which seems unlikely, given that there was still not a great payout."
52. Counsel submitted that as Pulier was paying for a service, it was only if he could achieve his purpose namely to exceed the earnout revenue threshold, that he would share in the benefit of the earnout as would the accused and Hunter.
53. Counsel submitted that it could not be the case that there had been confirmation of the reward in December and that was why the Martinez spreadsheet could not be reflective of the agreement to pay the accused $1.5 million which, in any event, is inconsistent with what was ultimately paid.
54. Also relevant in counsel's submission was the fact that in November the accused had advised Twynham that he was not keen to do any other transactions other than the McAfee and Pivotal deals. Counsel submitted that whilst it would have been quite simple for the accused to engage in other projects and accept those to generate revenue that was not done. Examples of other projects were those included in the Pipeline.
55. In relation to Tiscali, counsel submitted that the evidence of Mr Narev demonstrated that he had no knowledge of it which was consistent with the accused's evidence that Tiscali was an independent project removed from the CBA that he and Harte were engaged in.
56. Counsel also referred to the evidence of the accused's meeting with Mr Pulier and his lawyer on 12 March 2014. The accused gave evidence that the purpose of the meeting was to "nut out the detail with the lawyer as to how to proceed" with the consultancy project. Hence it was submitted that the Martinez spreadsheet coming afterwards was not remarkable for that reason. There was therefore little force in the Crown's argument that the spreadsheet came at a time when no provision would have been made for the accused.
57. Counsel referred to Exhibit Z and the entry concerning the accused drawing down "the delta between K and me upfront", and the following words that appeared namely "for when he is involved" meaning Hunter. Counsel submitted that this was talking prospectively about what was to occur not as compensation for what has already occurred. Also consistent with the tax advice received by Pulier, the accused had written "I'm keen to disburse the funds out of TA as soon as we can." Counsel relied on the evidence of Ms Sugar in Exhibit 119 concerning the need to disburse the funds for tax reasons.
58. Counsel also referred to Exhibit AAD, an agreed fact that $200,000 was transferred out of one account of the accused to another on 10 November 2014 following receipt of $300,000 on 31 October 2014 pursuant to an invoice which had been allocated under the heading "Project costings" the sum of $200,000. Counsel submitted there was a consistency by what the accused did with the money and the Statement of Work and that went also to the question of truthfulness of the documents and established that they had not been falsified.
59. On the question of what the accused did with the monies in the first payment received by him namely paying down debt, it was submitted that reflected only the financial position of the accused as far as could be ascertained from the document. Other than the transfer of $200,000 from one of the accused's accounts to another, there was no evidence of any other movements of the funds received by the accused. Counsel submitted this demonstrated that the accused was holding funds, either for future work to be performed or alternatively, in relation to a need to deal with the consequences of tax legislation. If they were received from Pulier for the latter purpose then they were not received for the reason of having shown favour to SMI.
60. Counsel submitted that the message in Exhibit J in which the accused stated he would hold the money sent by Pulier "at ransom" was an acknowledgement that he was holding Pulier's money. It was not however clear what the words "until we all land happily" meant. Counsel submitted that those words may relate to when they all have employment outside the CBA.
61. Counsel referred to the letter sent by Ms Morris on behalf of ACE to the CBA (Exhibit AU, pg.19) in January 2015 which supported the need to disburse funds. Further support was found in the evidence of Ms Sugar. Counsel submitted that if the court concluded that the payments were made in order to avoid tax obligations or for the legitimate reasons as pre-payments then the Crown case must fail.
62. Counsel referred to the argument advanced by the Crown that Mr Goldstein did not know the purpose of the first payment (see Exhibit E, pg.1273 to pg.1283). Counsel submitted that was explicable because the first invoice related to work for Tiscali which was otherwise unrelated at that stage to ACE. In those circumstances it was not at all unreasonable that Mr Goldstein would not know the purpose of the payment.
63. Counsel also addressed the Crown's submission relating to the closeness of the association between the accused and employees of ServiceMesh. Counsel submitted that the relationship was close, but not improper both because of the integral nature of the software provided by SMI, namely Agility Platform, and because of the services provided by SMI which were of importance to the bank. Counsel submitted that any disclosure by the accused to SMI employees were subject to the confidentiality regime which was part of the agreement between the bank and SMI. Further, there was no evidence that such disclosures were contrary to the bank's policy.
64. Counsel also addressed the Crown submission relating to the accused's answer in his interview by Mr Murphy when asked about the work he was doing for ACE when he referred to documenting a "Playbook". That was not a misleading answer given that Exhibit AAB at page 79 included an explanation in the White Paper referring to the IT as a service ecosystem which "no-one has yet tied this together into a repeatable Playbook". Counsel submitted that what the accused was stating in the interview about the work that he was doing was directly tied to the White Paper.
65. In relation to the text messages in Exhibit E, pg.2021 between the accused and Twynham, the text stating that "Keith was unhappy with $750K" should be viewed through the following prism. First, there was evidence about discussions involving Mr Hunter and his search for other employment opportunities. Secondly, there was no mention of $750K in the Martinez spreadsheet (Exhibit AF) rather the figure there was close to $1 million. Counsel submitted, "if the Martinez spreadsheet is a true reflection of bribes to be paid, then there is simply no explanation as to why Mr Hunter would be left in that state of dissatisfaction. In my submission, your Honour would more readily conclude that this related to legitimate employment opportunities."
66. Counsel submitted that in relation to the transaction document, that even if I accepted the criticism made by the Crown of the accused's conduct, that did not alter the fact that the McAfee transaction was one which was of benefit to the bank. Whilst this is not determinative of the ultimate finding in the trial, I would more readily conclude that the accused was not motivated by greed but rather by his duty to his employer and it was of benefit to the bank. Although the costings might have been "rough and ready, ultimately, they justified a conclusion that the McAfee ELA would be value for money. Exhibit 54 demonstrated that the software transaction was going to cost the CBA less than the current expenditure with HP, and it provided more products." Counsel submitted that there was also a desire to break up the "so-called HP monopoly. All of these matters demonstrated that the transaction was conducted for a legitimate purpose, one which had been the focus of the security people since the beginning of 2013, but upon which they were unable to execute because of lack of funding."
67. In relation to the Pivotal transaction documents, counsel referred to evidence supporting the proposition that this had been a matter of discussion with the CBA in 2013. The TDs which were referred to as providing Agility PaaS capability were consistent with the use by the CBA of the Agility Platform and the ultimate goal expressed by Mr Harte to move to cloud-based computing technology. Counsel submitted that the Crown reliance on impropriety of the acceptance provision that was agreed upon went nowhere as accepted by Mr Marsden in cross-examination.
68. Counsel submitted that what was involved was accepted by the bank as phase 1 of the suite of software and not a completed product. It was submitted that the TD secured for CBA a significant development of software for a price which "came down ultimately and, therefore, it accelerated the development of the software to the benefit of the CBA". Counsel submitted the court would not find any impropriety on the part of the accused in relation to the Pivotal transaction.
69. In relation to the Counts relating to Mr Hunter (Counts 8, 9 and 10) counsel submitted that in his address the Crown had not set out how those offences were established. The only conduct on the evidence of the accused being of assistance to Mr Hunter was a provision of the Statement of Work at around the time of the CBA interview to enable Hunter to falsify documents. It was submitted that would not amount to "aiding and abetting" since the funds had already been received and would properly be characterised as amounting to being an accessory after the fact. For those reasons the offences in Counts 8 to 10 had not been made out. Alternatively, the court could not be satisfied beyond reasonable doubt that the accused received payments for having shown favour to Pulier or SMI and the only appropriate verdicts are verdicts of not guilty.

Directions of law

1. Section 133 of the Criminal Procedure Act 1986 (NSW) provides as follows: "(1) A Judge who tries criminal proceedings without a jury may make any finding that could have been made by a jury on the question of the guilt of the accused person. Any such finding has, for all purposes, the same effect as a verdict of a jury. (2) A judgment by a Judge in any such case must include the principles of law applied by the Judge and the findings of fact on which the Judge relied. (3) If any Act or law requires a warning to be given to a jury in any such case, the Judge is to take the warning into account in dealing with the matter."
2. The accused has the presumption of innocence in his favour, i.e. he is presumed to be innocent unless and until the Crown has proved each of the elements of the offence beyond reasonable doubt. I am mindful that the onus of proof remains at all times on the Crown to prove the elements of the charges beyond reasonable doubt. Speculation cannot enter into my considerations and suspicion, not even the gravest of suspicion, can be a substitute for proof beyond reasonable doubt.
3. I have heard submissions from both the Crown and counsel for the accused. I will consider those submissions and give them such weight as I think they deserve. In no sense are those submissions evidence in the case.
4. It is for me to assess the various witnesses and decide whether they are reliable. The reliability of any witness' evidence depends upon both the witness' honesty and also the witness' accuracy. The honesty of a witness involves considering not only what the witness said (or perhaps did not say) but also the impression that the witness made upon me. I am not obliged to accept the whole of the evidence of any witness. I may, if I think fit, accept part and reject part of that witness' evidence.
5. I remind myself that the fact that a proposition is put by counsel to a witness does not mean that the proposition is evidence of the fact contained in the question, and it only becomes evidence of the fact if the witness accepts that proposition as true or if there is other evidence that proves the proposition.
6. I remind myself that I may as a Judge of the facts draw inferences from the direct evidence. Inferences are conclusions of fact rationally drawn from a combination of proved facts. Inferences may be valid or invalid, justified or unjustified, correct or incorrect. In this criminal trial I must be satisfied of the guilt of the accused beyond reasonable doubt. Amongst other things, that means that I should be extremely careful about drawing any inference. I should examine any possible inference to ensure that it is a rational inference in the circumstances.
7. The following are the elements of the 10 offences on the Indictment which the Crown has the onus of proving beyond reasonable doubt:-

Elements of Counts 1 to 7 The elements of the offence alleged in each of the above counts are as follows:- 1. The accused was an agent as defined in s249A of the Crimes Act, 2. The accused corruptly received from another person, 3. A benefit in a form as an inducement or reward for having done something, 4. In relation to the affairs or business of the agent's principal.

Counts 8, 9 and 10 The elements of these alleged offences are as follows:- 1. Keith Hunter was an agent as defined by s249A of the Crimes Act, 2. Keith Hunter corruptly received from another person, 3. A benefit in a form as an inducement or reward for having done something, 4. In relation to the affairs or business of the agent's principal, 5. The accused knew the matters set out in paragraphs (1)-(4), 6. The accused intentionally assisted or encouraged Keith Hunter to commit the offence.

1. "Agent" is defined in s249A of the Crimes Act 1900 to include any person employed by any other person (referred to as the principal). "Benefit" is defined as including money.
2. Section 249B(1) of the Crimes Act 1900 provides as follows:- "249B Corrupt commissions or rewards (1) If any agent corruptly receives or solicits (or corruptly agrees to receive or solicit) from another person for the agent or for anyone else any benefit - (a) as an inducement or reward for or otherwise on account of - (i) doing or not doing something, or having done or not having done something, or (ii) showing or not showing, or having shown or not having shown, favour or disfavour to any person, in relation to the affairs or business of the agent's principal, or (b) the receipt or any expectation of which would in any way tend to influence the agent to show, or not to show, favour or disfavour to any person in relation to the affairs or business of the agent's principal…"
3. The section was construed by the Court of Criminal Appeal in Mehajer v R [2014] NSWCCA 167; 244 A Crim R 15. The court held that an element of the offence was that any alleged payment was corrupt. Bathurst CJ (with whom Johnson, and R A Hulme JJ agreed) held that the mischief to which the section is directed is "to prevent agents from being encouraged to act to the detriment or against the interests of their principals" (at [60]). His Honour held that it was necessary to demonstrate that the impugned payment was made in circumstances which would be regarded as being corrupt according to "normally received standards of conduct. The fact of non-disclosure to the principal generally will be sufficient to satisfy this element" (at [64]). His Honour went on to hold that the requisite mental element for the offence is that the corrupt benefit is received, and "it is not necessary for there to be an actual showing of favour or that the assets of the principal were in peril" at [87].
4. In addition to the matters set out above, I am required to give myself the following directions of law in my determination of the factual matters in the trial and ultimately my verdicts. The directions are as follows:- 1. Direction pursuant to s165(1)(d) of the Evidence Act 1995 regarding the evidence of Bradley Twynham The Crown relies upon the evidence of Bradley Twynham. The Crown also asserts that Bradley Twynham is a person who was, or might have been, involved in the alleged crime. The law requires me to give certain warnings and directions concerning this evidence. They are given in every case in which the Crown relies upon the evidence of a witness who was, or might have been, involved in the alleged crime. The need to give such directions arises because the courts have, over the years, a great deal of experience concerning the reliability of evidence given by a witness who was, or might have been, involved in the alleged crime. That experience has shown that the evidence given by such a witness may be unreliable. I do not intend to suggest, however, that such evidence is always unreliable. My purpose in giving myself these directions is only to warn myself that the evidence of such a witness may be unreliable and for that reason, I must approach that evidence with considerable caution in the way in which I will outline shortly. There are many reasons why the evidence of such a person may be unreliable. Possible reasons are:

• It is only natural that a witness who was, or might have been, involved in the alleged crime, may want to deny involvement in such crime, and to justify his or her own conduct. In the process, the witness may construct untruthful stories, which tend to deny or play down his or her own part in the crime.
• Persons who are, or might have been, involved in an alleged crime may make false claims as to the involvement of others out of motives of self protection or the protection of others.
• There may be other reasons or motives why false evidence has been given by such a witness. It is not for the accused to establish what they might be. The Crown has to prove the essential aspects of its case and the accused does not have to prove anything.
• Experience has shown that once such a witness has given a version to the police or in evidence at other proceedings, he or she may feel locked into that version, even if it contained inaccuracies or even if it were substantially untrue.
• Finally, in relation to the evidence of Bradley Twynham a number of his motives for lying, or possibly lying were explored. They included that he had a close personal friendship with the accused, that he was aware that the accused was to be rewarded for efforts made by the accused that would assist Twynham in his business endeavours and that he provided assistance to the accused after evidence of wrongdoing by the accused and others had been discovered. When assessing the evidence of Bradley Twynham, the warnings and directions referred to above must be taken into account. 1. Direction pursuant to s165(1)(d) of the Evidence Act 1995 concerning the evidence of Keith Hunter The Crown relies upon the evidence of Mr Hunter. The law requires me to give myself certain warnings and directions concerning this evidence. They are given in cases in which the Crown relies upon the evidence of a witness who has been given a benefit for giving evidence against an accused person. The need to give such directions arises because the courts have, over the years, a great deal of experience concerning the reliability of evidence given by a witness who receives a benefit for giving evidence against an accused person. That experience has shown that the evidence given by such a witness may be unreliable. I do not intend to suggest, however, that such evidence is always unreliable. My purpose in giving myself these directions is only to warn myself that the evidence of such a witness may be unreliable and for that reason, I must approach that evidence with considerable caution in the way in which I will outline. There are many reasons why the evidence of such a person may be unreliable. Possible reasons are:
• Such a person may be motivated to give false evidence in order to qualify for a reduction in his or her own sentence. I recognise that, if Mr Hunter had failed to give evidence in accordance with the undertaking he gave, it would be open to the prosecution to appeal against the sentence imposed upon him, which might have had the effect of removing the discount he had received for his promise to give evidence against the accused.

Identification of factual issues

1. As identified by counsel for the accused the principal issue in the trial is whether the accused received the monies referred to in Counts 1 to 7 (and Mr Hunter received in Counts 8, 9 and 10) corruptly, that is, for having shown favour to ServiceMesh while he was in the employment of the CBA. In determining that ultimate issue, a number of factual issues arise for determination as follows:- 1. The accused's role in the McAfee deal 2. The accused's role in the Pivotal deal 3. The acquisition of SMI by CSC and the accused's knowledge of the earnout clause 4. The significance of the Martinez schedule in Exhibit AF 5. The nature of the payments made in Exhibit C 6. The role of Keith Hunter and his plea of guilty 7. The interview of the accused by CBA investigators on 17 December 2014 8. The conduct of the accused following the interview 9. The accused's defence that payments received were for work done or work to be done 10. The documents supporting that defence in Exhibit AAB, by comparison to the documents adduced by the Crown in Exhibit N
2. The determination of those issues, and my factual findings must begin with an assessment of the witnesses.
3. The majority of the witnesses called in the Crown case were honest and reliable witnesses who were doing their best to assist the court in giving evidence about events that took place some ten years ago. This assessment is applicable Mr Deckelman, Mr Narev, Mr Bradbury, Mr Nicholson, Mr Richardson, Mr Pennington, Mr Arain, Mr Smith, Ms Drury, Mr Harrison, Mr Martinez, Mr Fuggle, Ms Cole and Mr Whiteley. No adverse credit findings were sought, and none could be made in relation to any of those witnesses.
4. Ms Brown was an impressive witness. She was Executive General Manager Group Services Legal/General Counsel for the CBA and had been employed by the bank for approximately 15 years. As a lawyer and officer of the court she gave her best evidence of the interview conducted by Matthew Keaney of the accused on 17 December 2014. She did so, with leave, from contemporaneous notes she took during the meeting however shortly after the meeting those notes were transcribed and checked by her. She made appropriate concessions as to the incompleteness of the notes as a transcription of everything that was said at that interview, however I have accepted her evidence as a reliable record of the matters noted by her and about which she gave evidence.
5. Mr Murphy was an experienced investigator who acknowledged the shortfalls in not conducting an ERISP type interview and having to rely on contemporaneous note taking. He gave evidence in a straightforward manner and did his best to assist the court.
6. Similarly the expert evidence given by Mr Marsden and Dr Watt was presented in a straightforward fashion. Whilst there was little controversy concerning the evidence of Dr Watt, who had agreed with an expert qualified by the accused Mr Le Roux about the metadata related to the documents in Exhibit AAB, Mr Marsden made appropriate concessions when challenged in cross-examination and no adverse credit finding was sought in relation to his evidence.
7. I will deal with my assessment of the evidence of Mr Hunter, Mr Twynham and the accused which are subject to directions of law that I have given myself, in my dispositive reasons below.

Facts agreed by the parties

1. In Exhibit A the parties agreed on the following facts pursuant to s191 of the Evidence Act 1995 (NSW):- 1. At all material times, Commonwealth Bank of Australia Limited was a company duly incorporated in Australia. 2. The employee structure for the Commonwealth Bank of Australia Limited was as depicted in the three diagrams in the supplementary trial pack. 3. Computer Sciences Corporation (CSC) was a company duly incorporated in the state of Nevada in the United States of America. In 2017, CSC merged with HP Enterprises Services to create a new company, DXC Technology (DXC). 4. At all material times, ServiceMesh Incorporated was a company duly incorporated in Delaware USA until it was sold to Computer Sciences Corporation on 15 November 2013. 5. Eric Pulier was the Chief Executive Officer and Co-Founder of ServiceMesh Incorporated. 6. TechAdvisors LLC was a company duly incorporated in the state of Delaware, USA on 30 January 2008. 7. As at 17 January 2013, Eric Pulier was the Chief Executive Officer of TechAdvisors LLC. 8. On 13 November 2013, Eric Pulier signed documents for the opening of Business Deposit Bank Account with Citibank in the USA account No 205519473 in the name of TechAdvisors LLC ("TechAdvisors LLC Citibank Account"). He was the sole nominated signatory for this account on that day. 9. Ace, Inc. was a company incorporated in the state of Delaware on 9 May 2014 by Andrew Goldstein. At all material times, Andrew Goldstein was the President of Ace, Inc. 10. On 30 May 2014, Andrew Goldstein signed documents for the opening of a Business Deposit Account with Citibank in the USA, account No 205765100 in the name of ACE Incorporated (Ace Inc Citibank Account). He nominated himself as President Ace, Inc in that form. He was the sole nominated signatory for this account on that day. 11. At all material times, Andrew Goldstein was the nominated account holder and sole signatory for Bank of America account No 3250 2562 6649 (Goldstein BoA account) and an Ameritrade account No 884-496997 (Goldstein Ameritrade account). 12. At all material times, the accused held a foreign currency Midas bank account with the Commonwealth Bank of Australia (CBA), account No 100684377USD115601 (the CBA foreign currency Midas account). 13. At all material times, the accused held a foreign currency call account with the ASB Bank in New Zealand, account No 26871649 (the ASB foreign currency account). 14. At all material times, Keith Hunter held a bank account with Bank of America account No 0010 8790 6742 (the Hunter BoA account). 15. At all material times, Keith Hunter held a Smart Access account with CBA, account No 062-000 14129709 (the Hunter CBA account). Contractual Arrangements between CBA and SMI 1. On 4 February 2011, CBA and SMI entered into a Master Supply Agreement, a copy of which is contained at tab 1 of the trial pack 2. On 4 February 2011, CBA and SMI entered into an Enterprise License Agreement (ELA) for the use of the ServiceMesh Agility software. This ELA was evidenced in Transaction Document 1, a copy of which is contained at tab 1 of the trial pack. 3. On 23 December 2013, Mark Potter as delegate for Michael Harte signed Transaction Documents 19-21 on behalf of CBA, copies of which are contained at tab 2 of the trial pack. 4. On 25 January 2014, Keith Hunter signed Transaction Documents 17, 22-29 on behalf of CBA, copies of which are contained at tab 3 of the trial pack. CBA Records 1. At tab 13 of the trial pack are various CBA emails. 2. At tab 17 of the trial pack are communications retrieved from the CBA issued devices of the accused and Keith Hunter. CSC Records 1. At tab 10 of the trial pack are various CSC emails. 2. At tab 10 of the trial pack are email and SMS communications from the devices of former SMI and CSC employee Bradley Twynham. Funds Transfers 1. On 16 May 2014, $USD 99,971.02 was transferred from the accused's CBA foreign currency Midas account to the accused's CBA Smart Access account. 2. On 16 May 2014, $AUD 104,648.82 was received into the accused's CBA Smart Access account. This was the converted amount from USD to AUD. 3. On 16 May 2014, a total of $80,875.00 was dispersed from the accused's CBA Smart Access account, including a total of $52,000.00 to the credit of various accounts associated with the accused, as follows: Date Amount (AUD) To 16 May 2014 $ 20,000.00 CBA Credit Card 16 May 2014 $ 30,000.00 Citibank Account 16 May 2014 $ 2,000.00 American Express Credit Card 16 May 2014 $ 28,875.00 Watermark Property

1. On 16 May 2014 the accused transferred $30,000 from a Commonwealth Bank of Australia account held in his name with account No 10458480 to a Citibank account held in his name with account No 600582118 (per agreed fact 26). 2. On 26 May 20014 the accused transferred $21,881.60 from the Citibank account held in his name with account No 600582118 to foreign currency remittance facilitator Hi Fx Australia. 3. The accused instructed Hi Fx Australia to remit the funds referred to in agreed fact 28 to a Wells Fargo account in the name of Shiela Hunter. 4. Hi Fx Australia remitted the funds in accordance with the accused's instructions resulting in a credit to the Wells Fargo account in the name of Shiela Hunter of USD$20000. 5. On 31 July 2014, $USD 150,000.00 was transferred from the accused's CBA foreign currency Midas account to the accused's CBA Smart Access account. 6. On 16 May 2014, $AUD 158,411.66 was received into the accused's CBA Smart Access account. This was the converted amount from USD to AUD. 7. On 31 July 2014, a total of $141,500.00 was dispersed from the accused's CBA Smart Access account, including a total of $103,000.00 to the credit of various accounts associated with the accused, as follows: Date Amount (AUD) To 31 July 2014 $ 51,000.00 CBA Credit Card 31 July 2014 $ 45,000.00 Citibank Account 31 July 2014 $ 7,000.00 American Express Credit Card 31 July 2014 $ 38,500.00 Watermark Property

International Movements 1. On 7 June 2013, Keith Hunter departed Sydney to Los Angeles, USA. On 25 June 2013, Keith Hunter returned to Sydney from Los Angeles, USA. 2. On 18 September 2013, Keith Hunter departed Sydney to Los Angeles, USA. On 24 September 2013, Keith Hunter returned to Sydney from Los Angeles, USA. 3. On 9 October 2013, Keith Hunter departed Sydney to Denpasar, Bali, Indonesia. On 17 October 2013, Keith Hunter returned to Sydney from Denpasar, Bali, Indonesia. 4. On 23 November 2013, Keith Hunter departed Sydney to Honolulu, USA. On 1 December 2013, Keith Hunter returned to Sydney from Honolulu, USA. 5. On 11 December 2013, Keith Hunter departed Sydney to Dallas-Fort Worth, USA. On 4 January 2014, Keith Hunter returned to Sydney from Los Angeles, USA. 6. On 9 April 2014, Keith Hunter departed Sydney to Los Angeles, USA.On 14 April 2014, Keith Hunter returned to Sydney from Los Angeles, USA. 7. On 6 June 2014, Keith Hunter departed Sydney to Los Angeles, USA.On 26 June 2014, Keith Hunter returned to Sydney from Los Angeles, USA. 8. On 29 October 2014, Keith Hunter departed Sydney to Singapore, Singapore. On 2 November 2014, Keith Hunter returned to Sydney from Singapore, Singapore. 9. On 4 January 2013, Jon Waldron departed Sydney to Auckland, New Zealand. On 7 January 2013, Jon Waldron returned to Sydney from Auckland, New Zealand. 10. On 23 April 2013, Jon Waldron departed Sydney to Singapore, Singapore. On 25 April 2013, Jon Waldron returned to Sydney from Singapore, Singapore. 11. On 10 May 2013, Jon Waldron departed Sydney to Dubai, UAE. On 10 June 2013, Jon Waldron returned to Sydney from Dubai, United Arab Emirates. 12. On 19 June 2013, Jon Waldron departed Sydney to Los Angeles, USA. On 1 July 2013, Jon Waldron returned to Sydney from Los Angeles, USA. 13. On 18 September 2013, Jon Waldron departed Sydney to Los Angeles, USA. On 24 September 2013, Jon Waldron returned to Sydney from Los Angeles, USA. 14. On 12 December 2013, Jon Waldron departed Sydney to Dubai, UAE. On 23 December 2013, Jon Waldron returned to Sydney from Los Angeles, USA. 15. On 3 April 2014, Jon Waldron departed Sydney to Dubai, UAE. On 14 April 2014, Jon Waldron returned to Sydney from Los Angeles, USA. 16. On 30 May 2014, Jon Waldron departed Sydney to Dubai, UAE. On 16 June 2014, Jon Waldron returned to Sydney from Los Angeles, USA. 17. On 25 July 2014, Jon Waldron departed Sydney to Queenstown, New Zealand. On 30 July 2014, Jon Waldron returned to Sydney from Queenstown, New Zealand. 18. On 23 August 2014, Jon Waldron departed Sydney to Los Angeles, USA. On 5 September 2014, Jon Waldron returned to Sydney from Los Angeles, USA. 19. On 21 September 2014, Jon Waldron departed Sydney to Auckland, New Zealand. On 22 September 2014, Jon Waldron returned to Sydney from Auckland, New Zealand. 20. On 3 October 2014, Jon Waldron departed Sydney to Singapore, Singapore. On 7 October 2014, Jon Waldron returned to Sydney from Singapore, Singapore.

1. In Exhibit X the parties agreed on the following facts pursuant to s191 of the Evidence Act 1995 (NSW):- Employment & Training 1. CBA provided in house training to staff on workplace conduct. 2. The accused completed the following training: 1. Conflicts of Interest (new starters only), Anti-Money Laundering and Counter Terrorism Finance Risk Awareness. Completed 11 July 2011. This was an online interactive course. 2. Anti-Bribery and Corruption Awareness for Senior Managers. Completed 13 March 2014. On 6 June 2012 the accused signed a letter of offer for employment and acknowledged having read and understood the terms of employment which included the Statement of Professional Practice. Cellebrite Analysis of Keith Hunter's iPad 1. The three page document tendered as Exhibit K was retrieved from Keith Hunter's personal iPad that was seized by police from his residence upon his arrest. Analysis of Keith Hunter and Jon Waldrons's CBA Devices 1. Relevant communications retrieved by Adam Harrison from the accused's CBA-issued HP EliteBook on 19 December 2014 are reproduced in Exhibit H. 2. Relevant communications retrieved by Adam Harrison from Keith Hunter's CBA-issued iPhone on 14 January 2015 are reproduced in Exhibit J.
2. In Exhibit AU the parties agreed on the following facts pursuant to s191 of the Evidence Act 1995 (NSW):- The accused's employment and resignation 1. In September 2011, the accused was promoted to General Manager IT Engineering. In June 2012, the appointment was formalised in writing and his remuneration package is as set out in the document attached to these agreed facts and marked "A". 2. On 18 December 2014, the accused communicated his intention to resign from the CBA. A copy of this email and CBA's letter in response is attached to these agreed facts and marked "B". Documents provided by lawyers for Keith Hunter and Ace, Inc. 1. Herbert Smith Freehills (HSF) were engaged by the CBA in response to a claim by Ace, Inc. for payment of funds in bank accounts held by Keith Hunter and the accused. 2. On 16 January 2015, the legal representatives of Keith Hunter sent HSF a draft Deed of Release between Mr Hunter and Ace, Inc. That document is attached to these agreed facts and marked "C". 3. On 23 January 2015, Christine Wong and other solicitors from HSF had a telephone conference with Mr Peter Morris who was the legal representative of Ace, Inc. 4. On 3 February 2015, Herbert Smith Freehills received a letter from Mr Morris on behalf of Ace Inc with a number of documents. That letter and documents are attached to these agreed facts and marked " D". 5. Between 9 February 2015 and 26 February 2015 there was further correspondence between Mr Morris and HSF. That correspondence is attached to these agreed facts and marked "E". 6. There was no further correspondence between the parties after 26 February 2015. The accused's financial records 1. During the course of the investigation of this matter, NSW Police obtained bank records in relation to the accused. 2. A summary as at 21 December 2013 and 15 May 2014, as collated from these records, is extracted below: No Account Account Number Balance as of 21 December 2013 Balance as of 15 May 2014 1 American Express Platinum Reserve Credit Card X41001 -10,696.12 -12,420.88 2 Citigroup Ready Credit Account 600582118 -45,009.66 -47,231.53 3 ASB Omni Account 123072044381600 -47.8 -9.33 4 ASB Fast Saver Account 123072044381651 0.02 0.02 5 ASB Mastercard Account X9118 -6,300.16 -6,840.04 6 CBA Diamond Awards Credit Card 5523 5052 7286 9871 -50,244.56 -48,935.23 7 CBA Direct Investment Account 11992396 0.29 Nil 8 CBA Net Bank Saver 10006887 0 0 9 CBA Smart Access 10458480 -2,131.14 -8,761.89

1. In Exhibit AAA the parties agreed on the following facts pursuant to s191 of the Evidence Act 1995 (NSW):- 1. The collaboration function for the Apple Notes application was first available in version iOS 10, which was released in July 2016.
2. In Exhibit AAB the parties agreed on the following facts pursuant to s191 of the Evidence Act 1995 (NSW):- 1. On 2 September 2022, the Office of the Director of Public Prosecutions ('ODPP') received several emails from the solicitors for the accused attaching a letter and numerous documents. Annexed and marked "A" is a copy of these emails and the attachments. 2. As at 2 September 2022, the trial for this matter was listed to commence on 4 October 2022. 3. On 28 October 2022, the ODPP sent an email to the solicitors for the accused requesting access to the device or devices upon which the files provided to Lyonswood Investigations were created. Annexed and marked "B" is a copy of this email. 4. On 4 May 2023, the ODPP received an email from the solicitors for the accused advising that the device(s) upon which these files were created are not available. Annexed and marked "C" is a copy of this email.
3. In Exhibit AAD the parties agreed on the following facts pursuant to s191 of the Evidence Act 1995 (NSW):- 1. On 10 November 2014, the accused transferred $200,000 from the ASB foreign currency account to another ASB account in his name.

Chronology of relevant events

1. The following chronology will assist in placing the evidence of the various witnesses in context and ultimately the determination of the factual issues in the trial. Date Event Reference 4/06 Michael Harte employed by CBA 2008 Accused employed by CBA 2009 ServiceMesh ("SMI") first became suppliers to CBA 4/2/11 SMI enters Master Supply Agreement (MSA) with CBA 2011 Accused appointed General Manager IT Engineering 2011 Keith Hunter employed by CBA, Executive Manager in charge of Operations, IT security, Application Development and IT Engineering. Reported directly to Mr Harte. 24/5/11 Email accused to Eric Pulier "Where the money goes…" Exhibit E, Vol.2, pg. 561 12/10/11 Email Bradley Twynham to Eric Pulier "Now we have the flow of the mulla!!!" Exhibit E, Vol. 2, pg. 579 31/5/12 Accused employed by CBA as General Manager of Infrastructure Engineering. Reporting directly to Mr Hunter. 3/7/12 Email from Brad Twynham of SMI to the accused re. options for renewal of SMI's license with CBA in the event of acquisition or merger of SMI Exhibit 9 9/13 Accused and Hunter travel to USA to meet Mr Eric Pulier 9/9/13 Expression of interest by CSC to acquire SMI for US $335 million for 100% equity - No earn-out provision Exhibit E 16/10/13 "Exclusivity Letter Agreement" from CSC to SMI annexing Term Sheet and Salesforce Piepline, provides for earnout payment of US$135 million in addition to purchase price of $291 million Exhibit F 23/10/13 Email Eric Pulier to Michael Harte, J Waldron and Keith Hunter, re. ServiceMesh and Pivotal Exhibit E, Vol. 3, pg.1310 29/10/13 CSC (incorporated in Navada, USA) enters into EPA to purchase SMI for US$293 million, with an "earnout payment", based on a multiplier of revenue above US$20 million for the period 1 Jan 2013 to 31 Jan 2014 (Schedule 3.1(e) at pg. 463) Exhibit E, Vol.1, pg. 325 31/10/13 David Bradbury email to the accused attaching McAfee Proposal TAKE 4 January 2013 Exhibit E, Vol. 3, pg. 1318 31/10/13 The accused sends email to Hunter re. CSC acquisition of SMI with hyperlink to article Exhibit E, Vol. 3, pg. 1328 31/10/13 The accused discloses commercial-in-confidence proposal by McAfee to CBA from an ELA offer to Twynham at SMI. He texts Twynham, "We have a proposal on the table already." Exhibit E, Vol. 5, pg. 2020 31/10/13 Accused's email to Hunter disclosing SMI license to supply McAfee software would increase SMI revenue by $7mil - "so here's $7m for them" Exhibit E, Vol. 3, pg. 1329 1/11/13 Email Eric Pulier to Michael Harte re. how Pivotal can be introduced into CBA and adopted for use on the Agility Platform Exhibit E, Vol. 2, pg. 584 2/11/13 Twynham email to accused and Hunter enclosing consent to their SMI license agreement with CBA to CSC Exhibit 3, Vol. 3, pg. 1335 2/11/13 Texts between accused and Brad Twynham re. McAfee deal Exhibit E, Vol. 5. pg. 2020 15/11/13 Letter from SMI to Equity holders re. calculation of closing payment Exhibit E, Vol 2, p.504 5-11/12/13 Text messages between accused and Brad Twynham re. McAfee deal Exhibit AD 27/11/13 Email from accused to Twynham re. two deals he was willing to commit to i.e. McAfee and Pivotal Exhibit E, Vol. 2, pg. 613 10/12/13 Email from Judy Cole, HP to Keith Hunter re. exclusion of McAfee software from HP license agreement at request of accused Exhibit E, pg. 1378 11/12/13 Transaction documents from the McAfee purchase from SMI sent to Nicholson who was very sceptical of the proposal 12/12/13 Nicholson email to Luke Ellery - "I'm becoming increasingly uncomfortable with this" Exhibit E, Vol. 4, pg. 1420 12/12/13 Accused responds to Nicholson with comments "CSC's fingerprints are all over this…" Accused departs Australia for the USA 15/12/13 Text messages between accused and B. Twynham re. McAfee deal Exhibit AH 16/12/13 Accused sends email to Tom Pennington and Nicholson insisting on the urgency of the McAfee transaction Exhibit E, Vol. 4, pg. 1436 Accused tells Tom Richardson, Nicholson's superior, that Nicholson was being obstructive, and the transaction had to be completed by Christmas. 16/12/13 Nicholson email to Tom Pennington - "This deal doesn't add up" Exhibit E, Vol. 4, pg. 1449 16/12/13 Miriam Lane email to Tom Pennington advising risk assessment not completed Exhibit E, Vol. 4, pg. 1458 16/12/13 Brad Twynham email to accused re. "Impasse" concerning liability for damages Exhibit E, Vol. 4, pg. 1483 17/12/13 Richardson raises a no. of issues with the accused, including with respect to pricing, lock-in, legal, indemnity and risk issues Exhibit E, Vol. 4, pg. 1533 17/12/13 Accused email to Pennington and Nicholson - "Just so you feel Keith's vibe - I need this done ASAP" Exhibit E, Vol. 4, pg. 1519 17/12/13 Accused email to Miriam Lane - "both Keith and I want this deal done ASAP… Let's not do stuff we don't need to do!" Exhibit E, Vol. 4, pg. 1525 17 and 18/12/13 Text messages between accused and B. Twynham re. liability issue Exhibit AI 18/12/13 Nicholson email to Pennington re. his concerns with McAfee deal and accused's conduct (intimidation) Exhibit E, Vol. 4, pg. 1536 18/12/13 Accused email to Richardson responding to his issues with McAfee deal Exhibit E, Vol. 4, pg. 1554 19/12/13 Richardson emails accused stating "agreed on all points and are finalising documents" 19/12/13 Accused email to Eric Pulier - "I think we may have just about pulled this one off" Exhibit E, Vol. 2, pg. 703 and Vol.4, pg. 1635 19/12/13 Geoffrey Fuggle (Account Executive at HP) emails Mr Waldron seeking to negotiate for HP to act as reseller of McAfee Exhibit E,Vol.4, pg. 1653 (and Vol. 5 pg. 1965 20/12/13 Contract Execution Request prepared by Pennington Exhibit E, Vol. 4 pg. 1651 20/12/13 Emails exchanged between B.Twynham and accused discussing progression of the Pivotal deal. Twynham stated, "We should put you on the payroll" Accused responded, "Hopefully I already am" Exhibit AL Text messages from accused to B. Twynham "Great!! Wow, looks like we have pulled this off!!..." 20/12/13 "…And, by the way, I have sorted the $$ for the Pivotal/Agility TD. It will be $1.5m, which I'll pay." Exhibit AK

"I have a little fund, $3m, I have kept aside to cover emergencies and make good for helping out the BUs, and I've tapped that. Keith didn't know I had it. He just laughed at me. So we're all good there. Will just need to get the TD solid so no one can poke holes in it." 21/12/13 Accused email to his wife regarding finance difficulties. He stated "By the way, confirmed: $1.5m" Exhibit E, Vol. 4, pg. 1654 McAfee deal finalised by execution of TDs 19, 20 and 21 Total value of contracts ("TDs") $10.5m, made up of: 22/12/13 (a) License fee: $5,522,410 (one off payment) (b) Support and maintenance fee: $1,454,123 (annually) (c) Professional services fee: $235,350 (annually) 23/12/13 Richardson notifies accused and Hunter that TDs had been signed. Accused forwards email to Pulier and Twynham. 24/12/13 Accused receives email from Kyle Falkenhagen, Director of Product Management at SMI re. the acquisition of programs/software extensions by CBA Exhibit E, Vol. 4, pg. 1666 6/1/14 Accused email to Hunter - Eric's "getting intense. He's getting nervous about the remaining TDs" Exhibit E, Vol. 4, pg. 1684 Sends text to B. Twynham to same effect Exhibit AM 6/1/14 Twynham sends accused an email attaching TDs 17 and 22 Exhibit E, Vol. 2, pg. 857 14/1/14 K Falkenhagen email - "CBA is willing to give us another $750K" Exhibit AX, pg. 21 19/1/14 Twynham emails the accused attaching TDs 17,22-25 24/1/14 Twynham seeks approval from Falkenhagen at SMI to break down the 3 TDs into 6 TDs (i.e. TD 17, 22-26) of <$1m each. Exhibit AX, Total paid $6.9m pg. 25 24/1/14 Twynham email to accused attaching TDS 17 and 22-29 Exhibit E, Vol. 3, pg. 982 Falkenhagen email to Twynham re-pricing TDs 24 and 25 and creating TD29 "RabbitMQ Ecosystem Solution". Exhibit E, Vol. 3, pp.1064-1066 25/1/14 Total price remained $6.9m. Exhibit E, Pivotal deal finalised when Hunter signs amended TDs 17 and 20-29 with new total of $6.1m. His signatures were not witnessed. Vol. 4, pg. 1699-1700 30/1/14 Exchange of emails between the accused, Pulier and Twynham in which accused confirmed CBA had accepted the TDs. and waived any requirement for acceptance testing Exhibit E, Vol. 4, pg. 1741 and pg. 1743 11/2/14 Letter from SMI to CBA seeking confirmation of contracts within the earnout period. Accused signs on behalf of CBA Exhibit E, Vol 2, pg. 519 21/2/14 Accused sent Twynham document confirming TDs 17, 21-29 for purposes of verification by CSC's internal auditors Exhibit E, Vol. 2, pg. 521 (and Vol. 4 pg.1772) 21/2/14 Notice from CSC to SMI that earnout payment of $98,034,058.00 Exhibit E, Vol. 2, pg. 524 6/3/14 Frank Martinez spreadsheet re. payments to be made by TA Exhibit AF SMI shareholders receive US$98,034,058 [$20m threshold exceeded by US$9,659,265] Distributions included: 14/3/14 a. Pulier $25,584,634 b. Twynham $935,539 c. Hans Gyllstrom $286,651 d. TechAdvisors LLC ("TA") $5,618,331 11/4/14 Accused meets with Pulier in Santa Monica 12/4/14 Two SMS conversations between B. Twynham and JW and KH. "Keith at $750K…it was more than the formula" Exhibit AR 13/4/14 Exchange of messages between accused and Twynham re. "$$ landed. Keith at $750K..." He was just hoping Eric would top it up to $1m" Exhibit E, Vol. 5, pg. 2021 21/4/14 File note retrieved from accused's iPhone - "draw down the delta between K and me upfront... Given that, I'd need submit SOW with a schedule consisting of a payment of approx. $1.05m (that's $250k each for K and me + the $550K delta between my $1.3m and K's $750k. Exhibit Z Like you, I'm keen to disburse the funds out of TA as soon as we can." 8/5/14 Pulier sends emails to his assistant attaching invoice from Digisol addressed to Ace Consulting seeking payment of $200K to accused Exhibit E, Vol. 3, pg. 1271 9/5/14 Ace Consulting Inc. incorporated in Delaware (subsequently became Ace Foundation, a public charity, in 2015) 15/5/14 Pulier transfers US$100K from TA's account to Goldstein's account 16/5/14 US$99,971.02 transferred by Goldstein to accused's Midas CBA account (Count 1) Exhibit C 30/5/14 Goldstein opens Ace bank account nominating himself as President 25/6/14 US$1.25m deposited into ACE's bank account from TA, approved by Pulier 07/14 Harte resigned. 28/7/14 US$200K transferred from Ace to the accused's Midas CBA account - receives $199,980.26 (Count 2) Exhibit C 7/8/14 US $330K transferred from transferred from Ace to Hunter (Count 8) Exhibit C 8/8/14 US$300K transferred from Ace to accused - receives $299,980.40 (Count 3) Exhibit C 28/8/14 US$150K transferred from Ace to Hunter - receives $149,990 (Count 9) Exhibit C 19/9/14 US$3.5m deposited to Ace from TA, approved by Pulier 24/9/14 US$150K transferred from Ace to Hunter - receives $149,990 (Count 10) Exhibit C 3/11/14 US$300K transferred from Ace's Citibank account (approved by Goldstein) to accused's Foreign Currency ASB (Auckland Savings Bank) account - receives $300K (Count 4) Exhibit C 10/11/14 US$300K transferred from Ace to accused's Foreign Currency (ASB) account (Count 5) Exhibit C 9/12/14 US$350K transferred from Ace to accused's FC (ASB) account (Count 6) Exhibit C 10/12/14 Message from accused to KH "(3) EP wants to send us more money via ACE." Exhibit J 14/12/14 Accused and Hunter discuss leaving CBA 15/12/14 US$350K transferred from Ace to accused's FC (ASB) account (Count 7) Exhibit C 16/12/14 Accused and Hunter invited to attend interviews on 17/12/14 with CBA Group Security and Legal Services Various messages exchanged between accused and Hunter - Snippets "Who is the ace owner?" 17/12/14 Exhibit H 10:00 a.m. Hunter's interview commences 10:30 a.m. accused's interview commences - denies benefitting personally from the SMI McAfee transactions 18/12/14 Accused submits resignation by email 23/12/14 Second interview with Hunter 23/12/14 Kelada email to Pennington re. status of software products in TDs 17 and 22 to 29, recommends not to pay renewal Exhibit E, Vol. 5, pg. 1853 24/12/14 Accused and Hunter dismissed by CBA 5/1/15 Pulier sends email to accused and Hunter requesting return of funds to ACE Exhibit E, Vol. 3, pg. 1287 15/1/15 Ace Inc changed to a not-for-profit, "the Ace Foundation" Exhibit L [66] 20/2/15 CBA Notice of Termination of TDs 17 and 22-20 sent to SMI Exhibit E, Vol. 5, pg. 1895 24/2/15 CBA terminate TDs 17 and 22-29 Exhibit E, Vol. 3, pg. 1292 26/3/15 Accused arrested

Findings of fact

1. Having regard to the whole of the evidence I make the following findings of fact:- 1. In 2012 the CBA adopted under its CIO, Michael Harte a policy to transform its computer-based technology systems to a cloud computing system. 2. The accused, as general manager of IT engineering reporting to Keith Hunter was responsible for procuring the software systems to facilitate this transformation. At the relevant time in 2013 he was responsible for a budget of $740 million per annum. 3. SMI had supplied software to CBA since 2009 and had signed an MSA in 2011. 4. The accused and Keith Hunter developed a close working relationship with the principal of SMI Eric Pulier and with Brad Twynham as its sales consultant in Australia. 5. Pursuant to the MSA the CBA purchased and implemented SMI's Agility Platform software as a cornerstone of its cloud computing system. 6. On 9 September 2013 CSC signed an expression of interest to acquire SMI for US$335 million for 100% equity. The terms provided for no earnout provision. 7. On 16 October 2013 CSC signed an exclusivity letter agreement annexing a term sheet and Salesforce Pipeline which provided for the purchase of SMI for US$291m with an earnout payment of up to US$135 million. 8. On 29 October 2013 CSC entered into an EPA to purchase SMI for US$293 million with an earnout payment based on a multiplier of revenue above US$20 million for the period 1 January 2013 to 31 January 2014. 9. On 31 October 2013 the accused sent a text message to Mr Twynham stating, "We have a proposal on the table already" and on the same day sent an email to Hunter disclosing that an SMI license to supply McAfee software would increase SMI revenue by $7 million, "so here's 7m for them". 10. I find that both the accused and Keith Hunter knew at that time about the earnout provision in the CSC EPA and I accept the evidence of Mr Twynham that the accused knew about the earnout provision from late September to early October. 11. On 1 November 2013 Pulier raised the prospect with Mr Harte of Pivotal software being adopted by CBA for use on the Agility Platform. 12. I find the accused played an integral role in the CBA executing the McAfee deal on 22 December 2013 (i.e., TDs 19, 20 and 21), overcoming issues raised by Marcus Nicholson concerning liability issues, risk assessment, and legal assessment and its commercial value, as well as negating HP's interest in continuing to re-sell McAfee security software. 13. Exhibit AL established that on 20 December 2013 the accused sent Twynham a message that read "I also talked to Kyle and agreed scope the Pivotal TD, so we should we able to land that one easily enough." Twynham replied, "Great…We should put you on the payroll." The accused responded, "Hopefully, I already am! :)" I find the only rational inference to be drawn from that exchange is that the accused regarded himself as on the "payroll" of SMI and was therefore entitled to some payment. 1. I find that the accused, Hunter and Pulier had discussed compensation for facilitating SMI to meet the earnout clause, probably in September 2013 and certainly after the EPA was executed. The EPA attached the Salesforce Pipeline referring to 5 potential contracts with the CBA none of which materialised. Within two months of the EPA the CBA executed the McAfee deal which produced revenue of over $5 million for SMI to include in the earnout. 2. Within a further month the Pivotal deal (TDs 17, 22 to 29) was executed which raised in excess of $5 million for the purpose of the earnout. 3. Without both deals, SMI would not have surpassed revenue of US$20 million in the timeframe provided and thus would not have been entitled to a payment under clause 3.1 of the EPA. With the revenue from the two deals SMI became entitled to a further payment of over US$98 million. 4. I accept the evidence of Mr Kelada and Mr Marsden that the software products subject of TDs 17 and 20 to 29 were premature, being at proof-of-concept stage, and incapable of utility by the CBA which in respect of at least some of the products held no licenses for their use. 5. The email evidence established that SMI employees manipulated the contracts to satisfy SMI's need for revenue and the accused facilitated that process by agreeing to split the Pivotal deal from one transaction with the consideration of $1.5 million to nine separate TDs totalling $6.1 million. 6. I find that the accused facilitated the Pivotal deal and both the accused and Hunter agreed to split the deal into nine separate deals to avoid scrutiny and to ensure the deal was finalised within the earnout period i.e. before 31 January 2014. 7. I accept the evidence of Mr Marsden as to the pricing timeline of the products contained in the Pivotal TDs as depicted in Exhibit AY. 8. The Pivotal TDs were subsequently terminated by the CBA in February 2015. 9. I accept the evidence of Mr Hunter that he did discuss compensation for facilitating the two agreements, first with Mr Harte and subsequently with Mr Pulier by providing him with the draft diagram proposed by Mr Harte for his consideration. I find that conversation probably took place during his trip to the USA in December 2013. I also accept Mr Hunter's evidence that he showed the diagram to the accused prior to that meeting. 10. In so finding, I do not accept the submission made on behalf of the accused that I should reject the evidence of Mr Hunter and that he was motivated to accept the allegations made against him, even if they were unsubstantiated. He accepted and acknowledged his guilt for receiving the payments as bribes because he did no work for either Pulier or ACE. Notwithstanding that his evidence was characterised by the accused as "informer evidence", he was in fact a co-offender whose evidence was not tainted by the fact of his undertaking to give future assistance. The inconsistencies in his evidence were generally not significantly material and were explicable by the state of his mental health and the effluxion of many years since the events occurred. 11. I also accept Mr Hunter's evidence that in 2014 he and the accused discussed payment of compensation with Pulier and the accused had told him he would be receiving $750,000. 12. I accept the evidence of Mr Martinez regarding his receipt of monies from Pulier via TA and the schedule of payments agreed between them in Exhibit AF. That schedule included payments to Hunter of $US925K and the accused of US$1.48 million. I accept the evidence of Mr Martinez that the percentages were adjusted by him to "pro-rata, so that it would equal 100%". That evidence explains the amount payable by Pulier to the accused was recorded as US$1.48 million, and not US$1.5 million as the evidence established, he expected to receive. 13. Whilst the accused undoubtedly had the technological skills to create and modify computer-generated documents there is no evidence that he did so and I accept the evidence of Dr Watt that the metadata demonstrates the documents in Exhibit AAB were created on the dates contained therein. 14. I find that the accused met with Pulier in Santa Monica on 11 April 2014. The only plausible explanation for the communications that followed on 12 April 2014 between the accused and Twynham namely "Keith at 750K…it was more than the formula" and "$$landed. Keith at 750K… He was just hoping Eric would top it up to $1m" is that they discussed payments by Pulier to the accused and Hunter from the proceeds of sale received by Pulier and TA. It also explains the file note in Exhibit Z created by the accused on 21 April 2014 which also informs the purpose for which the accused submitted his first Statement of Work with a schedule consisting of a payment of approximately 1.05m, acknowledging the differences between the payments to himself and Hunter. 15. I find that the sums referred to i.e. "Keith at 750K" did not refer to any proposed employment of Mr Hunter by CSC as propounded by the accused. His evidence that the "formula" related to a proposed remuneration for employment by CSC was without foundation and I reject it. 16. I accept the evidence of Mr Deckelman that the McAfee and Pivotal deals were accepted by CSC following agreement between Pulier and CSC and auditing of the transactions. From the McAfee deal revenue of US$5,022,542 was included in the earnout and from the Pivotal deal US$5,404,084 was included. I find they were not included by mistake on the part of CSC. 17. The evidence established the following chronology of payments received by the accused and Mr Hunter:- 1. 16 May 2014 $99,971.02 received by the accused (Count 1) 2. 29 July 2014 $199,908.26 was received by the accused (Count 2) 3. 7 August 2014 $330,000 received by Hunter (Count 8) 4. 8 August 2014 $299,980.40 received by the accused (Count 3) 5. 28 August 2014 $149,990 received by Hunter (Count 9) 6. 24 September 2014 $149,990 received by Hunter (Count 10) 7. 4 November 2014 $300,000 received by accused (ASB a/c) (Count 4) 8. 12 November 2014 $300,000 received by the accused (ASB a/c) (Count 5) 9. 10 December 2014 $350,000 received by the accused (ASB a/c) (Count 6) 10. 16 December 2014 $350,000 received by the accused (ASB a/c) (Count 7) 1. The accused received payments into his CBA Midas account totalling $599,931.68. He received payments into his ASB account of $1,300,000, a total of $1,899,931.68. 2. Mr Hunter received in respect of the above payments $629,980. He also received the sum of $21,881.60 from the first payment of $100,000 made to the accused and therefore received a total of $651,861.16. 3. I find that Exhibit AU established the accused had debts as at 21 December 2013 of $114,427 and as of 15 May 2014, $124,196. He dispersed $80,875 from the funds received in his first payment on 16 May 2014 to pay down outstanding debt, and $141,500 on 31 July 2014 for the same purpose. On 10 November 2014 he transferred $200,000 from his ASB foreign currency account to another ASB account.

Determination

1. The documents produced by Mr Goldstein in Exhibit N include the following:- 1. A Statement of Work dated 21 July 2014 with the job name "IT as a Service - Transformation to a Cloud Operating Model." The document set out a contract price of $1,400,000 and the following payment schedule:- 21 July 2014 $200,000 4 August 2014 $300,000 1 September 2014 $300,000 6 October 2014 $300,000 3 November 2014 $300,000

1. The Statement of Work and invoices referred to were on Digisol letterhead. The first two invoices requested remittance of payment to the accused's account at the CBA, Sydney. The third requested remittance to Keith Hunter's account at the CBA, Sydney and the fourth invoice requested remittance of payment to the accused's account at the ASB Bank Limited, Auckland. The fifth invoice dated 1 November 2014 requested remittance of payment to Digisol Services at an account with ASB Bank Auckland. 2. The second Statement of Work on Digisol letterhead was dated 1 December 2014. The job name was "IT as a Service - Digitised Service Catalogue". It provided for a price for software build and delivery for $1,050,000 with the following payment schedule:- December 2014 $350,000 15 December 2014 $350,000 29 December 2014 $350,000

1. The two invoices produced were dated 1 December 2014 and 15 December 2014 respectively. Each was in the sum of $350,000 and payment remittance was requested to an account for Digisol Services at the ASB Bank, Auckland. 2. Exhibit N also included the Statement of Work and invoices that Mr Hunter had fabricated. They included two Statements of Work dated 5 May 2014 for "Business Planning & Strategy Consulting". Both were in the same format and were for the same price, $330,000, but were on different letterhead. A Statement of Work dated 4 June 2014 for "Consulting Services/Data Center Build" was on the letterhead of Keith Hunter and provided a price of $150,000. Another Statement of Work also on the letterhead of Keith Hunter dated 11 July 2014 was also for "Consulting Services/Data Center Build" and was also priced at $150,000. 3. Also included in Exhibit N were two invoices from Mr Hunter dated 22 August 2014 and 16 September 2014 both seeking payment of $150,000.
2. As conceded by the accused, the documents referred to above in Exhibit N cannot be reconciled with the documents sent by the accused for analysis which are contained in both Exhibit AAB and Exhibit 117. The first Statement of Work referred to in Exhibit AAB is dated 23 June 2014 - the job name being "IT as a Service - Transformation to a Cloud Operating Model."
3. The document has the same summary of work as in the Statement of Work in Exhibit N dated 21 July 2014 with the addition of the following paragraph:- "On completion it is envisaged that this blueprint, in a real-world pilot, will serve as the workplan guide of a multi-year IT-as-a-Service transformation for Italian telecommunications company Tiscali S.p.A."
4. The schedule to the Statement of Work provided for a price of $600,000 and payment was required according to the following schedule:- 9 May 2014 $100,000 - Invoiced on 23 June 2014 and paid on 16 May 2014 27 June 2014 $200,000 - Invoiced on 27 June 2014 and paid on 29 July 2014 1 August 2014 $300,000 - Invoiced on 1 August 2014 and paid on 8 August 2014

1. The second Statement of Work in Exhibit AAB was dated 31 October 2014, and was on Digisol letterhead. The job name was "Micropayments on Blockchain" and the total price was $1,650,000.
2. The schedule to the Statement of Work provided for the following schedule:- 31 October 2014 $300,000 - Invoiced on 31 October 2014 and paid on 4 November 2014 into the accused's ASB account 7 November 2014 $300,000 - Invoiced on 7 November 2014 and paid on 12 November 2014 into the ASB account 21 November 2014 $350,000 - Invoiced on 21 November 2014 and paid on 10 December 2014 into the ASB account 5 December 2014 $350,000 - Invoiced on 5 December 2014 and paid on 16 December 2014 into the ASB account 19 December 2014 $350,000 - Not invoiced

1. It is abundantly clear from the above comparison that Statements of Work and invoices in each Exhibit cannot be reconciled. They relate to differently described work, have different pricing and payment schedules, and are not executed by the contracting parties. The payments received by the accused do however generally follow the two schedules of payment in the Statements of Work in Exhibit AAB except for the first payment of $100,000 made on the 16th of May 2014 but not invoiced by him until the 23rd of June 2014. The accused provided no explanation for that anomaly.
2. Exhibit 117 established that the accused was first contacted by Mr Goldstein on 12 May 2014 by email. The emails in that Exhibit established that on 22 June 2014 the accused forwarded the Statement of Work dated 23 June 2014, describing it as "the finalised SoW we agreed for the Tiscali work" and forwarded "the invoice to cover off the initial payment". This explains the addition of the third paragraph of the summary of work referred to above and the change in the payment previously made on 16 May from $200,000 as initially invoiced, to $100,000.
3. The emails exchanged between Goldstein and the accused between 25 October 2014 and 30 October 2014 shed little light on whether work was actually carried out for Ace. For example, on 25 October 2014 the accused wrote to Goldstein:- "I have been talking with Eric recently re. ACE. He mentioned he's looking to disburse the funds from ACE intended for one of the project LiQuid sub-projects (Micropayments) so as to avoid an end of year tax liability. He asked me to reach out to you and coordinate this with you. Has Eric brought you up to speed here? Are you familiar with all this? If so, how do you suggest we proceed? I can work on a SoW to cover off the initial phase of the project - ideas which I have been discussing with Eric anyway. So I'll need to set that up and kick off this project in anger as soon as I can. But it looks like I'll also need to include advances from ACE to cover off the rest of the project too. How much is ACE needing to disburse at this stage? Eric wasn't exactly sure - He said you'd know. Thoughts on how we go about this?"
4. In reply Goldstein wrote:- "Yes, Eric and I have been talking too. He's brought me up to speed on your conversations. I am fine with however you want to arrange it. But perhaps it makes best sense to do it as four or five similar size wire transfers from now until the end of the year? That way everything stays consistent. Make the total amount for $1.65m please. This would be very helpful. Thank you."
5. I therefore find that the Statement of Work and invoices in Exhibit AAB do not substantiate that the accused did work for ACE. Rather, I find they were a device to facilitate the payments Pulier intended to make to the accused and Hunter to compensate them for facilitating the earnout. I accept the Crown submission that the documents were fabrications in the sense they were created to justify the payments which were really made as a reward for efforts by the accused and Hunter.
6. Whilst it is clear from the evidence of Ms Sugar that Eric Pulier was motivated to disburse funds from ACE for tax purposes that does not in any way establish that the payments made to the accused and Hunter were for work done or for work to be done. I reject the submission made on behalf of the accused that the evidence left open the very real possibility that Pulier paid the amounts when he did in order to avoid a tax liability and if that was accepted then the accused must be acquitted of Counts 1 to 7 since the payments were not made as a reward to him for facilitating business opportunities for SMI. How Pulier chose to make the payments was a matter for him, and the evidence established that he used the proceeds of the sale of SMI that were divested to TA which were then transferred (except for the first payment of $100,000) to ACE for payment on to the accused and others as listed in the schedule in Exhibit AF. That Pulier chose to reduce the tax liability of ACE in respect of those payments does not change the character of those payments. In any event, all of the payments were made before the end of December 2014, and therefore the evidence of the accused and Ms Sugar regarding the need to take advantage of the New Zealand end-of-tax-year (i.e. March 2015) was irrelevant.
7. I found Mr Hunter to be a poor historian due to the anxiety and depression he had suffered over a long period of time, the effluxion of over 10 years since the events in question, the fact he had made numerous statements to the police here and the authorities in the USA as well as giving evidence at his committal and sentence hearings. This gave rise to inevitable inconsistencies in his statements and testimony which were a fertile field for cross-examination. Notwithstanding that, whilst he was obliged to give evidence in accordance with the discount given to him for providing that assistance to the Crown, I accept that he was endeavouring to give truthful evidence and was prepared to concede occasions when where he had failed to do so in the past.
8. Generally, Mr Twynham gave his evidence in a straightforward fashion acknowledging evidence he had given previously including where that evidence was not truthful. His evidence was, however, somewhat evasive in respect of the following matters:- 1. When he first learnt of the earnout provision in the EPA. 2. When he first discussed the earnout provision with the accused. 3. Whether he was aware that the accused progressed the McAfee deal so as to receive a reward. 4. How the Pivotal TDs increased from $1.5 million to $6.9 million. 5. Mr Hunter's disappointment with the sum of $750,000 was related to a salary "formula", when he had no idea what the formula was. 6. The reason for deleting his text messages once he had discussed the events of 2013 with Mr Waldron in 2015.
9. He was, however, steadfast in his evidence that the McAfee deal was the accused's idea, that it was structured to maximise the earnout payment and that it was Hunter and the accused's idea to break down the Pivotal deals into nine separate TDs of less than $1million value to bring them within Hunter's delegated authority.
10. In accordance with the directions of law that I have given myself, if I were to find that the accused's evidence that he did not receive bribes from SMI and that payments received by him were for work done or to be done for ACE by him was true, or even if I was to find that it might be true, then there would be a verdict of not guilty in relation to Counts 1 to 7 and it would follow that there would be verdicts of not guilty to Counts 8, 9 and 10 on the Indictment.
11. I do not accept the accused's evidence to that effect as being truthful nor do I accept that it might be true for the following reasons. First the accused had a close working relationship with Pulier and Twynham. The events which are the subject of evidence in this trial clearly took place in a dynamic commercial environment where large sums of money were being expended by the CBA on an emerging technology, which involved close co-operation on a commercial-in-confidence basis by those involved. This explained the close personal friendships that developed as established on the evidence. As soon as the EPA between CSC and SMI was signed on 29 October 2013, I find that the accused became aware of the provision of the earnout clause and immediately set out to facilitate revenue to be earned for the purpose of that clause by initiating the McAfee ELA proposal in which SMI would become the reseller of McAfee security software to the CBA, when the bank already had a contract in place for that service with HP. Within two days on 31 October he had provided the McAfee proposal to Twynham and informed Hunter of it, stating "here's $7 million for them."
12. I find that the accused played an integral part in progressing the negotiations and contractual arrangements for the McAfee deal notwithstanding in the short term the CBA derived little commercial benefit from it. Whilst in the long term it did have commercial viability for the CBA, the execution of the contract before the end of December 2013, whilst mandated by McAfee, resulted in the revenue being included in the earnout provision, to the benefit of SMI.
13. I am also satisfied that the accused played an important role in the Pivotal deal that was executed on 25 January 2014 to ensure the revenue earned by SMI was included in the earnout clause. The adoption of Pivotal products had been raised by Pulier in early November 2013 and the accused had discussed the first proposal for the Pivotal deal with Pulier on his trip to the USA in December 2013. I am satisfied that what were ultimately nine separate transaction documents of less than $1 million each was done at the instigation of the accused to bring the Pivotal deal under the delegated authority of Hunter to execute and thereby avoid the CBA's procurement policies and an inevitable assessment of the commercial viability, as well as risk and legal assessment. The manner in which those contracts evolved over a period of three weeks is best demonstrated by Exhibit AW, which is set out below. It is supported by the synopsis of internal SMI emails set out in Exhibit AX.
14. Whilst the evidence established that the accused travelled with Harte to Italy during his employment by CBA and met with executives employed by Tiscali, there was no evidence linking Pulier with Tiscali and it is commercially implausible that Goldstein would, through ACE, employ the accused for doing work on the Tiscali project, a project being promoted by Michael Harte. It was also implausible that the accused would be paid $1.65m in advance "for work to be done".
15. Other than the Statements of Work and invoices produced by the accused by way of analysis by Lyonswood, there was no objective evidence from any other source either establishing or corroborating that any such work was done. The evidence of Mr Marsden establishes that the whitepaper and documents in Exhibit AU and Exhibit AY were meaningless as far as commercial implementation was concerned, i.e., they failed to convey a meaning that competent IT engineers, product managers or business analysts could interpret so as to construct a product, or otherwise provided no "deliverables". I reach the same conclusion in relation to the whitepaper in Exhibit AAB, which on its terms is a guide for the development of "a new IT-as-a-Service Transformation Consulting Practice", and is qualified by the statement that "this is intended to be illustrative, not prescriptive."
16. I found that during his interview with CBA investigators on 17 December 2013 the accused told the following lies:- 1. That he played a small part in negotiating the McAfee and Pivotal TDs and it was mostly Tom Richardson's team. 2. That he received in the order of $400 to $500K in payments from ACE. 3. That he had received payments from ACE between April and September 2014. 4. That Goldstein had found him and emailed him to do work for ACE. 5. That Hunter had done work for ACE as well but he did not know what. 6. That he disclosed the work he had done for ACE to Tim Whiteley. 7. That all payments from ACE went into his CBA accounts. 8. That he held accounts elsewhere in the USA and UK but did not disclose the ASB account into which four payments had been received between 4 November 2014 and 16 December 2014 totalling USD$1.3 million. 9. That he denied any knowledge of a connection between Eric Pulier and Goldstein.
17. I find each of the accused's statements were untrue and that each was relevant to whether he corruptly received the payments into his accounts. I further find that in making each of the statements the reason the accused did so was because he feared that telling the truth might reveal his guilt in respect of each of the ten Counts on the Indictment namely, that the payments were received by him as rewards for directing procurement contracts to SMI to enhance the earnings of SMI in its sale to CSC so as to count towards the earnout payment, or that he aided and abetted Hunter to receive such payments.
18. The evidence of the accused was unsatisfactory in a number of other respects including that he lied about the purpose of the payment of $20,000 to Mr Hunter from the first payment of $100,000. In addition I find that the fact of his resignation and his provision of a draft Statement of Work to Hunter in circumstances where he must have known that Hunter intended to fabricate documents to conceal his corrupt payments demonstrated a consciousness of guilt by the accused. This was the only rational explanation for doing so, and it demonstrated his involvement in the criminal conduct alleged against him.
19. I further do not accept his explanation for the message sent to his wife on 21 December 2013 "By the way, confirmed $1.5m" related to his prospective earnings for two years work in Europe. Nor do I accept his evidence in respect of the following:- 1. His explanation for what he wrote on 31 October 2013, "So here's $7m for them" was evasive. 2. His evidence in respect of the entry in Exhibit AL concerning being on the payroll was also evasive. 3. His evidence concerning APRA being a major consideration for the McAfee deal was exculpatory and disingenuous. The CBA already had McAfee security software in place supplied by HP, and there was no evidence APRA constituted a "pressing need" as submitted by the accused's counsel. 4. I do not accept his evidence that the earnout was incidental to the McAfee deal. 5. I do not accept his evidence that he had very little to do with the Pivotal deal. 6. Nor do I accept the accused's explanation for his file note in Exhibit Z. This was disingenuous evidence tailored to exculpate him from the receipt of monies as a bribe. 7. Similarly his evidence for the message in Exhibit E, pg. 2021 "$$landed…K disappointed" was inconsistent with any relationship between a salary negotiation by Hunter for employment with CSC and was consistent with the monies being paid by Pulier through TA consistent with the evidence of Mr Martinez. 8. I do not accept his evidence concerning the first payment of $100,000 for work caried out on Tiscali, at a time when he was employment by the CBA and/or in Italy under the direction of Mr Harte, in December 2013 (4 days claimed), January 2014 (5 days claimed), April 2014 (6 days claimed), and June 2014 (5 days claimed), a total of 20 days, unspecified as to the dates in each month claimed.
20. I therefore set aside the evidence of the accused and will determine this matter on the basis of the evidence adduced by the Crown. I find that the payments were received by the accused and Hunter at a time when they were both employed by the CBA and that at no time had either the accused or Hunter approval from the CBA for any outside contracting work. I find that the CBA, at the time the payments were received, had no knowledge of those payments and became aware of them upon examination of the accused's CBA account in November 2014. Whilst using accounts that his employer had authority to examine would on its face readily expose any illegal activity, that proposition is answered in effect by the snippet in Exhibit H from Hunter stating, "I can't believe we were this stupid". It is also clear from those snippets that Hunter had no knowledge of ACE - see Ex H, email subject "Who is the Ace owner?" sent by Hunter at 8:21 a.m. on 17 December 2014.
21. I therefore find that the payments subject Counts 1 to 7 on the Indictment were, by reference to community standards, corruptly received by the accused and the elements of the offences in those Counts have been established beyond reasonable doubt. I am satisfied that there is no reasonable hypothesis available on the evidence consistent with the innocence of the accused. Rather, it is implausible that the accused received the payments for work he did for ACE, and even more implausible that he would be paid a further $1.65m for work "to be done", of which he received $1.3 million. There will be verdicts of guilty in respect of each charge.
22. I also find that the accused aided and abetted Hunter corruptly receiving the payments in Counts 8, 9 and 10 in the Indictment. At the time those payments were made no work had been done by Hunter for ACE. I have found that Hunter assisted in facilitating the McAfee and Pivotal deals so as to enable SMI to earn revenue for its earnout clause. It was the accused who passed on the banking details of Hunter to enable the three payments to be made into Hunter's account, who agreed to receive some of those funds on behalf of Hunter and provided Hunter with the Statement of Work which Hunter fabricated. I am therefore satisfied beyond reasonable doubt that the elements of the offences in Counts 8, 9 and 10 have been established and there will be verdicts of guilty in relation to each of those accounts.

Orders

1. I hereby enter verdicts of guilty in respect of each of the following Counts on the Indictment:- 1. On or about 16 May 2014, at Sydney in the State of New South Wales, did, being the agent of the Commonwealth Bank of Australia, corruptly receive a benefit, namely a credit in a bank account in the sum of US$99,971.02, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia. 2. On or about 29 July 2014, at Sydney in the State of New South Wales, did, being the agent of the Commonwealth Bank of Australia, corruptly receive a benefit, namely a credit in a bank account in the sum of US$199,980.26, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia. 3. On or about 8 August 2014, at Sydney in the State of New South Wales, did, being the agent of the Commonwealth Bank of Australia, corruptly receive a benefit, namely a credit in a bank account in the sum of US$299,980.40, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia. 4. On or about 4 November 2014, at Sydney in the State of New South Wales, did, being the agent of the Commonwealth Bank of Australia, corruptly receive a benefit, namely a credit in a bank account in the sum of $300,000.00 as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia. 5. On or about 12 November 2014, at Sydney in the State of New South Wales, did, being the agent of the Commonwealth Bank of Australia, corruptly receive a benefit, namely a credit in a bank account in the sum of US$300,000.00, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia. 6. On or about 10 December 2014, at Sydney in the State of New South Wales, did, being the agent of the Commonwealth Bank of Australia, corruptly receive a benefit, namely a credit in a bank account in the sum of US $350,000.00, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia. 7. On or about 16 December 2014, at Sydney in the State of New South Wales, did, being the agent of the Commonwealth Bank of Australia, corruptly receive a benefit, namely a credit in a bank account in the sum of US$350,000.00, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia. 8. On or about 7 August 2014, at Sydney in the State of New South Wales, did aid and abet Keith Hunter, being the agent of the Commonwealth Bank of Australia, to corruptly receive a benefit, namely a credit in a bank account in the sum of US$330,000.00, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia. 9. On or about 27 August 2014, at Sydney in the State of New South Wales, did aid and abet Keith Hunter, being the agent of the Commonwealth Bank of Australia, to corruptly receive a benefit, namely a credit in a bank account in the sum of US$149,990.00, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia. 10. On or about 23 September 2014, at Sydney in the State of New South Wales, did aid and abet Keith Hunter, being the agent of the Commonwealth Bank of Australia, to corruptly receive a benefit, namely a credit in a bank account in the sum of US$149,990.00, as a reward for facilitating business opportunities for ServiceMesh Inc. with the Commonwealth Bank of Australia.
2. You are therefore convicted of each of the offences in Counts 1 to 10 on the Indictment.

Amendments 09 May 2024 - Formatting issues only. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 May 2024