R v Waldron

REMARKS ON SENTENCE

1. On 8 May 2024 following a trial by Judge alone the offender was found guilty of the following ten 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 were offences pursuant to s249B(1) of the Crimes Act 1900. Counts 8, 9 and 10 were offences pursuant to s249B(1) and s249F(1) of the Crimes Act. The maximum penalty for each offence is 7 years imprisonment, and there is no standard non-parole period prescribed.
3. As this was a Judge alone trial my judgment, R v Waldron (No.3) [2024] NSWDC 159 contained my summary of the evidence at trial, the facts agreed by the parties and the facts found by me. The offender is therefore to be sentenced on those facts and so these remarks are to be read with my judgment on verdict. The facts referred to above are Annexure A to these remarks.

Background to the offending

1. As set out in my judgment, in 2013 the offender was employed by the Commonwealth Bank of Australia ("CBA") as General Manager of Infrastructure Engineering, reporting to the co-offender Keith Hunter.
2. In 2011 ServiceMesh Inc. ("SMI"), an American corporation signed a Master Service Agreement ("MSA") with CBA to supply software services. At that time the CBA was transforming its computing services to a cloud computing system. Pursuant to the MSA, SMI supplied to CBA a software service known as "Agility Platform" to be the cornerstone of its cloud computing system.
3. SMI was based in Los Angeles, USA. The principal shareholder was Mr Eric Pulier and SMI employed Mr Bradley Twynham as a sales consultant to manage the corporation's relationship with CBA in Australia. The offender developed a close working relationship with both Pulier and Twynham over a number of years.
4. 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.
5. Contracts entered into between the 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 offender 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.
6. Mr Pulier made payments in 2014 via a Mr Goldstein, or a corporation registered by him ("ACE Inc.") to both the offender and Mr Hunter as a reward for their ensuring the contracts with CBA were made within the earnout period. The 10 payments subject of the counts on the Indictment were received without the knowledge of CBA and were received corruptly by the offender (in respect of Counts 1 to 7), and the offender aided and abetted Mr Hunter to receive corruptly the payments subject of Counts 8 to 10.
7. I found that the following payments were corruptly received by the offender and Mr Hunter:- 1. 16 May 2014 $99,971.02 was received by the offender (Count 1) 2. 29 July 2014 $199,908.26 was received by the offender (Count 2) 3. 7 August 2014 $330,000 was received by Hunter (Count 8) 4. 8 August 2014 $299,980.40 was received by the offender (Count 3) 5. 28 August 2014 $149,990 was received by Hunter (Count 9) 6. 24 September 2014 $149,990 was received by Hunter (Count 10) 7. 4 November 2014 $300,000 was received by the offender (ASB a/c) (Count 4) 8. 12 November 2014 $300,000 was received by the offender (ASB a/c) (Count 5) 9. 10 December 2014 $350,000 was received by the offender (ASB a/c) (Count 6) 10. 16 December 2014 $350,000 was received by the offender (ASB a/c) (Count 7)
8. Mr Hunter was sentenced by Judge Arnott SC on 20 December 2016 for the following two offences:- 1. Dishonestly causing a financial disadvantage ($6,756,750) by deception between 31 October 2013 and 31 March 2014, an offence contrary to s192E(1)(b) of the Crimes Act 1900 (NSW) ("the Act") which carried a maximum penalty of 10 years imprisonment. The particulars on the Court Attendance Notice provided that he did that "by purchasing unnecessary software and services from ServiceMesh Inc. without proper authorisation" using the deception of "splitting transaction documents and bypassing procurement processes". 1. As an agent of his employer he corruptly received a benefit between 28 August 2014 and 29 September 2014, an offence contrary to s249B(1) of the Act which carried a maximum penalty of imprisonment of 7 years. The Court Attendance Notice particularised the benefit that he received was US$300,000 as an inducement to showing a favour to SMI.
9. Mr Hunter received a 50% discount on sentence and was sentenced to a term of imprisonment of 3 years and a non-parole period of 1 year and 9 months with an additional term of 1 year and 3 months in respect of the first offence and a fixed term of 12 months in respect of the second offence. The total effective term of imprisonment imposed was 3 years and 6 months with an overall non-parole period of 2 years and 3 months. Principles of parity therefore will be applied in sentencing this offender.

The sentence hearing

1. The sentence hearing took place on 14 August 2024. Exhibit A was the Crown sentence summary bundle which included a copy of the Indictment, a copy of my judgment on my verdict (R v Waldron (No.3) [2024] NSWDC 159), the statement of agreed facts on which Mr Hunter was sentenced together with the Remarks on Sentence of Judge Arnott SC.
2. Exhibit B was a statement under the hand of Mr M Vudrag dated 2 August 2024 entitled "Report for the Court" which outlined the impact of the offending on the CBA. Mr Vudrag is the Executive General Manager of Global Technology Services employed by the CBA. The report set out the following list of proceedings for which the CBA had either been a party or was required to respond to legal requests for documents, information or evidence from current and former staff:- United States criminal proceedings (a) United States v Eric Pulier (United States District Court, Central District of California, 2:17-cr-00599). United States civil proceedings (a) Securities and Exchange Commission v Eric Pulier, United States District Court, Central District of California, 2:17-cv-07124; (b) Computer Sciences Corporation v Eric Pulier, United States Court of Chancery of the State of Delaware, C.A. No. 11011-CB; (c) Bradley Twynham v Computer Sciences Corporation, United States District Court, Central District of California, 2:17-cv-08107; (d) The ACE Foundation v. Commonwealth Bank of Australia, United States District Court for the Central District of California, 2:16-cv-00226-DMG-RAO; Australian civil proceedings (e) Application of Computer Sciences Corporation & Ors under the Evidence on Commission Act 1995 (NSW), Supreme Court of NSW Proceeding 126795 of 2017; (f) Application of Computer Sciences Corporation & Ors under the Evidence on Commission Act 1995 (NSW), Supreme Court of NSW Proceeding 143335 of 2017; (g) Application of Computer Sciences Corporation & Ors under the Evidence on Commission Act 1995 (NSW), Supreme Court of NSW Proceeding 105221 of 2019; (h) Application of the Securities and Exchange Commission under the Evidence on Commission Act 1995 (NSW), Supreme Court of NSW Proceeding 242151 of 2020.
3. Mr Vudrag described the impact to CBA from responding to requests arising from the various proceedings as "significant". He went on to state "The impact has not only arisen through the lost productivity and financial cost to respond to the multiple legal requests, but also through the personal and emotional impact on current and former staff members who have assisted. This impact has been felt most acutely by those staff members asked to provide witness statements and give evidence in the various proceedings, and in circumstances where the matters have taken almost 10 years to work their way through the various courts where proceedings were commenced."
4. Mr Vudrag also referred to the costs incurred by CBA in addition to loss of productivity, and its reliance upon external legal providers to ensure it could appropriately respond to requests. For example:- 1. responding to a significant number of requests for documents by the NSW Police and/or ODPP between 2015 and the time of Mr Waldron's trial; 2. encouraging former and current CBA staff to co-operate with the NSW Police and to provide statements to the New South Wales Police when requested by the NSW Police; 3. responding to various subpoenas issued by the Defence which required the collation and review of documents and information; 4. responding to a significant number of requisitions received from the ODPP, which involved the further collation of documents and information over a number of months; 5. providing support to current and former CBA staff required to provide statements and attend the committal hearing and be cross examined in February 2018, and including the costs of engaging external counsel with criminal expertise to assist staff. At least 7 current and former staff were required to attend the committal hearing for cross-examination; 6. providing support to current and former CBA staff required to provide statements and attend and give evidence at the trial of this matter. Because the trial dates moved several times, this support extended over a number of years, and includes the costs of engaging external counsel with criminal expertise multiple times to assist staff. More than 10 current and former CBA staff were required to give evidence at the trial; 7. considering matters such as confidentiality in relation to (i) materials requested and (ii) materials referred to publicly as the matter progressed and resolving confidentiality issues where required; 8. responding to matters relating to orders made under the Criminal Assets Recovery Act 1990; and 9. keeping relevant stakeholders informed of significant developments over the period.
5. Mr Vudrag also recorded the impact to the CBA caused by requests for assistance in respect of proceedings in the USA, for example where it was asked to:- 1. review and produce tens of thousands of documents in a series of productions to parties in the CSC v Pulier Proceedings; 2. produce documents and evidence to the SEC in relation to their proceedings in the United States; and 3. assist current and former CBA employees in relation to requirements that they be deposed, including obtaining US legal counsel to assist those individuals.
6. Finally in Mr Vudrag's opinion CBA had incurred significant costs over a 10-year period including the costs of obtaining external legal advice and assistance both in Australia and the USA. He recorded that the CBA had losses of more than $1.7 million in legal and other costs relating to the various proceedings of which at least $700,000 related to fees incurred for legal services arising from the investigation and criminal proceedings brought by the NSW Police in Australia.
7. Exhibit C was a Sentencing Assessment Report under the hand of Ms H Jovevski dated 8 August 2024. Under the heading "Attitudes" the author noted that the offender does not believe that he is guilty of the offences he has been convicted of and stated that the financial gain he received was from "lawful business dealings, outside of his primary role at the time." Under the heading "Insight into impact of offending" the author noted that the offender was able to identify how his offending has impacted himself, both financially and emotionally and his family. He was unable to identify how his actions may have impacted the community as he denies committing the offence.
8. The offender was assessed at a medium-low risk of reoffending and as suitable to undertake community service work.
9. Exhibit D was an amended agreed facts document regarding two charges of common assault together with a domestic violence offence occurring on 25 September 2023 which are currently subject to appeal to this Court.

The offender's evidence

1. The offender tendered 3 documents. Exhibit 1 was a report under the hand of Mr P Sheehan, psychologist dated 6 August 2024. Mr Sheehan had interviewed the offender for 2 ½ hours via audio-visual link on 2 July 2024 in relation to the Local Court proceedings. He conducted a further interview of the offender on 6 August 2024 over a period of 1.5 hours and was qualified with the Indictment, a redacted extract of my judgment of 8 May 2024 and a letter from psychologist Dr N Shavit dated 2 August 2024.
2. Mr Sheehan recorded the offender's family history and development. He was brought up in the home of his adoptive parents and reported a well-functioning and conventional family home in New Zealand. He moved to Australia in 2001 aged 30 years and has maintained unbroken contact with his family. Following his arrival in Australia he quickly acquired work as an IT consultant with the CBA and obtained a permanent role with the bank in 2008 where his career flourished, becoming General Manager of Technology Infrastructure in 2011. He had completed an MBA during his employment. Mr Sheehan noted that the offender had experienced a sudden loss of social status and standing when charged with the index offending in 2015. He had become more and more obsessively preoccupied with his court case. He had been in a relationship with his current partner since 2015 and he had expressed gratitude for his partner's patience and support over recent years.
3. Mr Sheehan took a history of increasing alcohol consumption following being charged with the index offences, which escalated and became more pronounced during COVID-19. He reported the offender's drinking became particularly intense during 2023 following the same trajectory as a worsening depression. He had been referred to Dr Shavit in March 2023 as an "AOD specialist psychologist". He had re-engaged with Dr Shavit on 1 August 2024.
4. Mr Sheehan stated:- "Mr Waldron reported insidious decline in emotional wellbeing since charged with corruption offences in 2015, losing confidence and identity, feeling increasingly demoralised and diminished by the cumulative demands of preparing his defence over a nine-year period. He has developed a kind of siege mentality, and has become obsessively preoccupied with his defence, slowly relinquishing other facets of his life that have otherwise sustained him. He has sought to cope through alcohol use but this has only destabilised him further. He described the requisite symptoms of Major Depressive Disorder, experiencing desperate mood for almost every day for periods of several months, diminished interest or pleasure in activities, changes in sleeping patterns (shifting between insomnia and hypersomnia), psychomotor agitation and retardation (being unable to sit down, feeling aggravated and irritable, or being listless), feeling worthless and ashamed, feeling preoccupied and scattered in his thinking, indecisive, unable to concentrate or stay on topic (this was also plainly evident in interview)."
5. In Mr Sheehan's opinion the offender met the criteria for Major Depressive Disorder (mild-moderate, in partial remission), with a potential differential diagnosis of Adjustment Disorder with mixed anxiety and depressed mood.
6. Mr Sheehan also opined that there are some indicators of personality vulnerability suggested by the offender's identity issues and inflexible thinking, which have made it more difficult for him to cope with the sustained stressor of his prolonged court matters since 2015.
7. Mr Sheehan opined that the offender had struggled to adjust to the psychological demands of a prolonged legal defence or to accept the need to recreate an alternative way of living positively, instead living in a kind of "suspended animation" for the past 9 years, with progressive atrophy of other interests, and worsening depression and alcoholism. He confirmed his diagnoses of Major-Depressive Disorder (in remission) and Alcohol Use Disorder, reactive to his offending.
8. Mr Sheehan then set out a treatment regime and concluded:- "Should Mr Waldron achieve sustained remission from his alcohol abuse and depressive illness, re-enter employment and re-engage with his broader social interest in the community, he would embody no ongoing features of dynamic risk and his live risk of recidivism in any way could be safely regarded as low."
9. Exhibit 2 was a letter from Dr Shavit dated 2 August 2024 confirming that she had been treating the offender since 23 March 2023 for assistance with his symptoms of depression and stress, as well as his tendency to use alcohol to manage distress. He had attended a total of 11 sessions, the most recent having taken place on 1 August 2024.
10. Exhibit 3 is a statement from Ms C H Fung dated 14 August 2024. Ms Fung stated she has been in a relationship with the offender since 2015 during which he has developed a close relationship with her extended family and she with his. She was aware of the criminal charges pending against the offender prior to the commencement of their relationship and described the current proceedings as having exacted a considerable toll on his mental health. She expressed her opinion that his mind "has been constantly preoccupied and is never relaxed", and she had observed his social withdrawal and increased reliance on alcohol describing him as becoming "easily irritable and would often stay in bed for extended periods". She confirmed that the offender was undergoing psychological counselling to deal with severe depression and alcohol withdrawal and that he had been prescribed medication to manage his anxiety. Ms Fung also noted that she and the offender are engaged in an active social life and that the offender's primary aspiration was to return to work and contribute meaningfully as a productive and industrious member of society.

The Crown's submissions on sentence

1. The Crown relied on a written outline of submissions in which it submitted that any penalty imposed on the offender would exceed the limits specified in s68 of the Crimes (Sentencing Procedure) Act 1999 ("the CSPA") and that no sentence other than one of full-time imprisonment was appropriate in all the circumstances of this case.
2. The Crown noted that the maximum penalty for the offences was 7 years imprisonment for each of the 10 Counts on the Indictment.
3. The Crown submitted that the objective seriousness was at the higher end of offending for this type. The Crown submitted the following relevant factors:- 1. The benefit derived personally by the offender was substantial; 2. The benefit that the offender assisted his co-offender to obtain was substantial; 3. The conduct involved a high level of complexity and the offender engaged in elaborate methods to conceal payments he received from SMI; 4. The offender provided assistance to Hunter to disguise the payments; and 5. The offending involved a substantial breach of trust to his employer.
4. The Crown submitted that the offender's breach of trust to his employer was an aggravating factor to be taken into account in sentencing this offender pursuant to s21A(2)(k) of the CSPA. It was submitted the offender was employed as a senior manager entrusted with a high degree of responsibility, including managing a budget of $740 million a year and 250 staff. The Crown noted that this offending conduct was significantly more serious than the offender in R v El Khatib [2019] NSWDC 158 who was sentenced to an aggregate term of imprisonment of 3 years and 9 months with a non-parole period of 2 years and 3 months. The Crown submitted that this offender's conduct involved a "far higher level of complexity" and that his position of trust and responsibility exceeded that of the offender in R v El Khatib [2019] NSWDC.
5. The Crown submitted that the offender abused his position of trust for his own financial gain and relied on Hamill J's summary of decisions regarding dishonest senior executives in McLaren v R [2021] NSWCCA 12; (2021) 287 A Crim R 542 at [81]-[96].
6. The Crown submitted the offence was part of a planned or organised criminal activity pursuant to s21A(2)(n) of the CSPA. It was submitted that the degree of complexity to which the dishonest conduct involved aggravated the criminality of the offence. The Crown submitted that the offender and Mr Hunter used their positions of authority to force through contracts that involved technical software products. In relation to the Pivotal deals, it was submitted that on the evidence of Messrs Kelada and Marsden there was no utility to purchase the software and that "on it's most generous interpretation, the offender and Hunter put at risk in excess of $5 million in CBA resources in committing to the Pivotal deal with SMI for the purpose of receiving rewards."
7. The Crown submitted that the process of ensuring payment of the rewards was complex and involved transfers to two separate overseas entities and transfers to the offender's offshore bank account to minimise the risk of detection. It was submitted that the offender took elaborate steps to conceal the true nature of the payments by falsely purporting to have engaged in the consulting work for ACE.
8. The Crown submitted that the need for general deterrence is an important consideration as the criminal activity was complex and may have been difficult to detect. The offence was also aggravated by the involvement of his co-offender, Hunter who was also a senior manager at the CBA.
9. The Crown noted that the offender's conduct had a significant impact on the CBA and relied on the statement of Mr M Vudrag dated 2 August 2024 (Exhibit B).
10. The Crown submitted that a further aggravating factor was that the conduct was motivated by the opportunity for financial gain pursuant to s21A(2)(o) of the CSPA. The Crown relied on the fact that the offender was receiving remuneration in excess of $600,000 per year and there was no evidence of drug dependency or a gambling habit to explain the offender's conduct.
11. The Crown noted that although the value of benefits derived from white collar crime are not necessarily determinative of the criminality of the offending, it is a relevant factor for the Court to take into consideration.
12. The Crown submitted the offender, having pleaded not guilty and being convicted following trial is not entitled to any discount for remorse and does not have the benefit of any pleas providing some evidence of contrition. The Crown submitted that specific deterrence had no role to play in sentencing this offender, on the basis that his conviction for the index offending will make it difficult if not impossible for him to rise to a position of trust in the future.
13. The Crown acknowledged that the offender agreed to facts which reduced the number of Crown witnesses to be called. The Crown submitted however that the offender "did little to facilitate the administration of justice and little if any weight should be given to this factor in mitigation".
14. The Crown accepted that the offender had no prior convictions prior to the index offending and noted that the fact that the offender was of good character is of minimal significance in circumstances where the courts have acknowledged that it is the prior reputation that presents offenders with the opportunity to commit offences of this type. The Crown noted that the offender was on bail when he committed domestic violence offences on 25 September 2023 which are currently before this Court on appeal from the Local Court.
15. It was submitted that the principle of parity had minimal application to the sentencing exercise for this offender. Mr Hunter was sentenced for two charges, namely dishonestly causing a financial disadvantage ($6,756,750 for entering CBA intro a procurement contract) and for corruptly receiving a benefit ($300,000 USD). The Crown rehearsed his submission that the sentence of 12 months imprisonment imposed on Mr Hunter for Count 2 is not a yardstick for the penalty that is likely to be imposed on this offender. The Crown submitted that the offender's criminality was escalated by his involvement in the McAfee tranche of contracts where he received $1.9m in bribes and assisted Mr Hunter to receive $630,000.
16. The Crown referred to the sentencing remarks of Judge Arnott SC, who rejected the submission that the seriousness of the offending by Mr Hunter was lessened because he believed that the Pivotal and McAfee deals would ultimately benefit the CBA. It was submitted that this Court would draw the same conclusion.
17. The Crown further submitted that the offences upon which the offender was found guilty reflected a higher level of criminality than the combined offences with which Mr Hunter was sentenced. The Crown relied on Jimmy v R (2010) 77 NSWLR 540; [2010] NSWCCA 60 where Campbell JA noted the limitations to the use of the parity principle at [203].
18. The Crown further submitted that despite their different levels of seniority at the CBA both offenders abused their positions of trust to secure benefits for themselves and that the criminality of the offender was equal to, if not greater than that of Mr Hunter because of the "technical capabilities he implemented to cause the deals to be completed in the requisite time period."
19. The Crown conceded that delay was a matter to be taken into account in sentencing but that the delay was not caused by a slow investigation or unreasonable conduct of the prosecution. The complexity of the offending across jurisdictions significantly frustrated efforts of investigators to obtain evidence and required Mutual Assistance arrangements and reliance on provisions of the Foreign Evidence Act 1994 (Cth). The Crown further submitted that there was no evidence before the Court which demonstrated any hardship to the offender by the delay, as he was on bail for an extended period of time with the exception of 2 months and 15 days he spent in custody for this offending. Therefore limited, if any, consideration could be given to delay alone on sentence.

The offender's submissions

1. Counsel for the offender relied on a detailed written outline of submissions. Counsel submitted the objective seriousness of the offending here fell below the putative mid-range for such offending. It was submitted that the Crown's characterisation of the offending as being at the higher end of the range for offending of its type attributed undue weight to the amount of money involved. It was submitted that the Crown's reliance on the judgment of Dunford J in R v Finnie [2002] NSWCCA 533 at [59] was particularly misplaced. Counsel referred to authorities for the proposition that the amount of money involved is a significant matter for consideration in assessing the gravity of offences involving pre-mediated deception and fraud. Here, it was submitted there was no "necessary correlation between the amount received by the offender and for example, any loss, or rather potential loss, suffered by either the offender's principal, or some third party such as CSC". It was submitted that the mischief to which s249B(1) of the Crimes Act is directed "is to prevent agents from being encouraged to act to the detriment or against the interest of their principals" relying on Mehajer v R [2014] NSWCCA 167; 244 A Crim R 15 at [60] per Bathurst CJ. It was submitted the focus of the enquiry ought not to be the amount received, but instead, "on the effect, which the receipt of those funds had upon the agent's adherence to his or her duties, vis-á-vis his or her principal."
2. Counsel submitted that there was no evidence that would satisfy the Court beyond reasonable doubt that the offender acted other than consistently with what he believed to be the interests of his principal. The offender relied on my finding on conviction at [798] that the McAfee deal did, in the long-term, have commercial viability for the CBA. Counsel referred to evidence given at trial by the offender, Mr Bradbury and Mr Hunter to submit that the offender's concluding of the McAfee ELA was in the interests of the CBA. Notwithstanding the offender's motivation to ensure the McAfee deal was concluded during the earnout period, such motivation it was submitted could sit comfortably with the motivation now advanced, namely that the offender was also motivated to advance the goals of the CBA. It was submitted this was amply demonstrated by the fact that the bank maintained the contract for the provision of the McAfee software well after the offending had been uncovered. It was further submitted that the offender's submission was not undermined by the finding I made that the offender was responsible for "negating HPs interest in continuing to resell McAfee security software." The offender relied on evidence given by Mr Martinez at trial that the CIO, Mr Harte had wanted to diminish CBA's reliance upon Hewlett-Packard. Thus the Court would reject the Crown's contention that "other software vendors to the CBA were affected by the offender's preferential treatment of SMI." It was further submitted there was no evidence that a transaction with Hewlett-Packard would have been advantageous to the bank, and thus counsel submitted that the Court would "positively conclude that the offender was motivated by desire to further the bank's interests", both in relation to the McAfee and Pivotal deals. Counsel submitted the evidence of Mr Kelada gave some weight to that conclusion.
3. Counsel submitted "the mere fact that the software procured was not ultimately utilised by the bank does not lead to the conclusion that, at the time it was acquired, it was not seen by the offender as being in his employer's interest." It was submitted such a finding appeared to have been reluctantly accepted by the Crown where it submitted "on its most generous interpretation the offender and co-offender put at risk in excess of $5 million in CBA resources in committing to the Pivotal deals with SMI for the purpose of receiving rewards."
4. Also relevant to the state of mind of the offender was that the Pivotal software had been the subject of discussion, and an interest of Mr Harte since the middle of 2013. Thus it was submitted that the Court would positively conclude that the offender believed that "even if he was acting in the financial interests of Pulier, he was also acting in the interests of his principal."
5. Counsel submitted an important factor was that the offender cannot have been said to have been the instigator of the corrupt agreement. The Crown case accepted the venture was initiated by Mr Harte, in conjunction with the offender's direct supervisor, Hunter. This placed into perspective the Crown's submission that the offending involved "complicity by management at the highest level of the CBA".
6. Counsel for the offender distinguished the decision relied on by the Crown of McLaren v R [2021] NSWCCA 12; (2021) 287 A Crim R 542. That decision was one of fraud and it was submitted that it had little to say about how any apparent breach of trust might be dealt with in this case. It was submitted that an apparent breach of trust is an inherent characteristic of the index offences pursuant to s249B(1) of the Crimes Act, as the receipt of a reward by an agent must be "in relation to the business of the agent's principal". Thus an apparent breach of trust should not be taken into account as an aggravating factor in accordance with s21A(2)(k) of the CSPA, relying on Elyard v R [2006] NSWCCA 43; 45 MVR 402. Further taking into account the offender's state of mind at the time meant that any breach of trust was of little consequence given that the offender was nevertheless acting in the interest of his principal. It was submitted, "therefore, while the non-disclosure of the receipt of the monies was wrongful, he otherwise performed his duty." Thus it was submitted that the Crown had not established that there was a substantial breach of duty.
7. Counsel further submitted that there was no evidence to suggest that the offender was in any way involved in the use of corporate vehicles for the payment of the monies. There was no evidence that the offender was complicit in the establishment of ACE or the decision to use it as the vehicle for payment.
8. In response to the Crown submission that the proceeds were received into an offshore bank account held by the offender, counsel submitted that the destination of the payments undermined the suggestion of sophistication. The offshore account concerned was held by a bank affiliated with the CBA and the offender knew very well that the CBA and ASB had transparency between them with regards to accounts, especially under anti-money laundering regulations.
9. With respect to the asserted impact on the CBA, counsel submitted that the statement of Mr Vudrag should be given no weight as no attempt had been made to particularise the expenses outlined. Further there was no evidence to support a contention that the bank's employees suffered any greater degree of stress than might otherwise be the case for a witness required to give evidence in criminal proceedings. Further it was submitted the Court would not conclude that any of the so-called losses mentioned in the statement should be taken into account relying on GG v R [2018] NSWCCA 280 at [105] per Schmidt J (as her Honour then was), where her Honour stated that it was the "consequences of an offence that were intended or could reasonably have been foreseen which should be taken into account". Counsel submitted that the matters referred to in Mr Vudrag's statement were not reasonably foreseeable. It was also of note that the bank did not suggest nor seek to quantify any loss resulting from the acquisition from the software. Thus the CBA suffered no economic loss as a result of the offences.
10. Counsel further submitted that the offender had originally been charged, like Hunter with an offence contrary to s192E(1)(b) of the Crimes Act 1900. The Crown ultimately did not proceed with that charge and to now take into account that the offender had occasioned a loss to the CBA would involve an infringement of the principles expressed in R v De Simoni (1981) 147 CLR 383; [1981] HCA 31. Counsel submitted:- "Therefore, irrespective of whether the Court concludes that the offender was also motivated by his duty to his employer, the Court may not conclude that, through his involvement in the so-called Pivotal transaction, the offender occasioned a loss to the bank."
11. Counsel submitted the objective seriousness of the aiding and abetting offences in Counts 8 to 10 fell very much towards the lowest end of the spectrum. The convictions were based on a finding that "it was the offender 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." Counsel repeated a submission made at trial that the second and third matter referred to could not amount to aiding and abetting on the facts of the case. The provision of banking details was very limited assistance and should not be seen as serious offending.
12. Counsel referred to the proceedings against the offender having been significantly delayed, bringing into play well established sentencing principles where delay is caused by matters beyond the offender's control, relying on R v Todd [1982] 2 NSWLR 517 and R v Blanco [1999] NSWCCA 121;(1999) 106 A Crim R 303. It was submitted the delay caused by the protracted nature of the proceedings had led the offender to alcoholism as well as having a psychological impact upon him. It was also a matter that goes to the issue of general deterrence, relying on PH v R [2009] NSWCCA 161 at [32] per Howie J.
13. Counsel submitted that the offender's prior good character, whilst a matter of less weight, was a factor that was nevertheless entitled to recognition. This was also relevant to the Court's assessment of his prospects of rehabilitation and the unlikelihood of him reoffending. It was submitted the fact that the offender was on remand in custody for a period in excess of 2 months would meet any need for specific deterrence. The Court would also find that the offender has good prospects of rehabilitation notwithstanding that he has maintained his innocence, relying on Alseedi v R [2009] NSWCCA 185 at [65] per Giles JA. The offender's prospects of rehabilitation and the unlikelihood that he would reoffend should both be taken into account as mitigating factors pursuant to s21A(3)(g) and (h) of the CSPA.
14. Counsel referred to well settled authorities relating to the application of the principle of parity in sentencing. In respect of Hunter's conviction for Count 2, an offence pursuant to s249B of the Crimes Act, Arnott SC DCJ had adopted a starting point of 2 years before discount. It was submitted here that the Court would conclude that a sentence of 3 years was appropriate. Two distinguishing features were relied on. First, Hunter pleaded guilty to a "so-called rolled-up charge" whereas the offender faced 7 individual charges. This had the effect of representing a complete concurrence of separate sentences which might otherwise have been imposed for separate episodes of criminality, relying on R v Glynatsis [2013] NSWCCA 131;(2013) 230 A Crim R 99 at [66].
15. Counsel referred to the application of principles when sentencing for a rolled-up offence as involving an exercise in sentencing for the entirety of the criminality involved. It was submitted that given that the sentence imposed upon Mr Hunter was well below the maximum penalty of 7 years imprisonment, "it is irrelevant that he faced a rolled-up count and the present offender individual offences. It is not a relevant distinction when considering the principle of parity."
16. A second point of distinction concerned the amount of money received by the two offenders. Hunter pleaded guilty in respect of the offence pursuant to s249B of the Crimes Act to receiving $300,000 as a reward for having shown favour. The offender here is charged with separate offences of receiving $1.9 million and aiding and abetting the receipt of $630,000 by Hunter. It was submitted that this distinction did not undermine the offender's contention that the head sentence of 3 years was appropriate, for the following reasons. First, Hunter was the offender's superior, and his breach of trust was greater than that of the offender. Secondly, Hunter used his position to enable the Pivotal transactions to be split so as to avoid scrutiny. This could not have been undertaken by the offender and Judge Arnott SC had characterised Hunter's role as being "an essential one". Thirdly, it was an agreed fact in the sentencing of Hunter that the McAfee deal "was only worth 70% of what CBA actually paid for". Fourthly there has been considerable delay in the finalisation of the matter, a significant feature which was absent in Hunter's sentence proceedings.
17. Counsel submitted that none of Hunter's subjective features distinguished him in any relevant sense from the offender. Both were of prior good character and Judge Arnott SC had taken into account Hunter's mental health issues as a matter constituting special circumstances. Judge Arnott SC further found that Hunter's primary motivation for the offending was greed which he had effectively acknowledged in his evidence.
18. It was submitted the only point of distinction between the two offenders was the question of remorse however it was submitted that remorse is not a matter which independently acts as mitigating factor. Rather remorse is indicative of a person being unlikely to reoffend which therefore moderates the need for specific deterrence. Thus this was not a subjective feature relevant to the issue of parity here.
19. On the issue of accumulation, counsel submitted that each of the offences charged as Counts 1 to 7 arose out of a single agreement to facilitate business opportunities for SMI. Therefore all of the offences could have been charged as a single offence, the different dates on which payments were received seemed to be "more an issue of happenstance rather than one which points to distinct offending." Thus there should be no accumulation as between offences "or at most only very slight."
20. Similarly for Counts 8 to 10 those offences arose out of a single act, namely the provision of the bank account details on one occasion. Again the receipt of payments by Hunter on different days was again "a matter of pure happenstance".
21. Counsel also referred to the comparative case relied on by the Crown of R v El Khatib [2019] NSWDC 158 and distinguished the outcome in that case on its facts.
22. Under the heading "The appropriate outcome" counsel made detailed submissions as to the correct approach to be taken once the Court had arrived at a sentence of 3 years or less to determine whether a non-custodial sentence was warranted referring to the High Court's decision in Stanley v Director of Public Prosecutions (NSW) [2023] HCA 3;(2023) 97 ALJR 107 and recent cases in the Court of Criminal Appeal including Zheng v R [2023] NSWCCA 64 and Chan v R [2023] NSWCCA 206.
23. Finally it was submitted that should the Court not accede to the principal submission that a non-custodial sentence be imposed, the Court would nevertheless make a finding of special circumstances to enhance the offender's rehabilitation.
24. In his oral submissions counsel referred to three significant matters the Court must have regard to in determining the appropriate outcome. The first required an assessment of the state of mind of the offender at the time at which he was involved in the offending conduct. Secondly the issue of delay and thirdly how the principle of parity operates.
25. Counsel submitted that the offender was not a person who with premeditation set out to secure a reward, thereby causing detriment to his employer. On the other hand it was submitted that Mr Hunter was such a person who acted with knowledge and belief that a loss would be occasioned to his principal. Counsel rehearsed his submission that the offender here breached his duty by failing to disclose the reward to the bank but was otherwise acting in the interest of the CBA. In support of that submission counsel relied on my finding on conviction that in the long term the McAfee transaction did have commercial viability for the CBA, and therefore the transaction ultimately was for the benefit of the bank. Counsel rehearsed his submission that this transaction was also consistent with Mr Harte's desire to remove the monolithic aspects of Hewlett-Packard's involvement with the bank. Thus the offender was "conflicted because of the payment undisclosed to him of monies. Nevertheless, he was still acting in the interest of the bank."
26. Counsel rehearsed his submission that the Court would come to the same conclusion with respect to the Pivotal transactions notwithstanding my findings regarding the evidence of Mr Kelada on conviction. The basis of this submission was that whilst the bank ultimately did not utilise the software it was otherwise in a position to test the utility of that software and to do so even without purchasing the licenses. It was further submitted there was no reason to doubt that appropriate licenses could have been acquired for the PaaS Adapters to be put to use. Counsel went on to submit:- "Ultimately, the question was whether or not a case could be made for the programming community as to utility and that was one which was still open and in my submission, your Honour may conclude that there was a departure of Mr Waldron after the investigation may have played some impact as to the future direction."
27. Counsel rehearsed his submission that there had been great interest on the part of Mr Harte and Mr Hunter in implementing such technology since the middle of 2013, "even before the inception of this corrupt scheme", relying on Exhibit 94 at trial, an email from a Mr Winder at a company called EMC. It was submitted that there was a "continuum of interest on behalf of Mr Harte in relation to Pivotal and its connection with the Agility Platform which meant that the offender was nevertheless acting in the interest of the bank in pursuing this line of innovation". Counsel rehearsed his submission that the fact that ultimately the bank did not use the software does not "undermine the contention that it was the offender's state of mind that this was software which was consistent with the line that had been advocated by Mr Harte for a considerable period". Counsel submitted further that this was also consistent with the evidence of Mr Hunter.
28. Counsel submitted on behalf of the offender that the acquisition of SMI by CSC provided an opportunity for Pulier to enjoy a windfall but also presented an opportunity to the CBA to acquire services and or software at a rate which would otherwise be difficult to attain and at a speed at which it might be difficult to obtain.
29. Counsel submitted that notwithstanding that there was no fixed market for Pivotal software because it had to be created by SMI, "the price paid for it would be worth it to the bank and in light of the prior interest of Mr Harte in particular… the bank was willing to pay a price for such capability, whether it was precise about which was paid or more or less there is no evidence one way or the other." Counsel went on to submit that the tight deadline which required the earnout period to be satisfied by 31 January "led to a situation where there was not the degree of due diligence that might otherwise have been applied to the procurement process." Counsel submitted that there was a reasonable hypothesis that the procurement process did not occur because it would have slowed down the transaction and would not have enabled the conclusion of the transaction to occur by the end of January 2014. Counsel further submitted that notwithstanding the finding that there had been a circumvention of the ordinary processes "that does not inevitably lead to the conclusion that was done in order to avoid an assessment as the appropriate value", notwithstanding that it had that affect.
30. In respect of the amounts received by the offender counsel asked rhetorically, "Why does the amount received affect the objective seriousness?". It was submitted that in the context of fraud cases the degree of loss is demonstrative of an offender's willingness to become involved in the offending. In respect of the offence under s249B of the Crimes Act it was submitted it was the departure of the duty which was otherwise owed to the principal which was relevant "because it is that which the payment of the reward or inducement seeks to subvert". Counsel submitted that the focus "ought to be on the degree of departure from the duty" and that the degree of departure was putting aside the usual non-disclosure, "quite minimal in the present case". Therefore it was submitted whether the offender stands to be sentenced for half a million dollars or $2 million dollars appears to be a matter of "happenstance".
31. Counsel submitted that the Pivotal transaction had not got off the ground and that there was "a degree of fluidity as to what favour was to be expected from the offender for which he was to receive a reward". It was further submitted that whether the offender had been paid $1 million or $2 million ultimately "matters little in the present case because, irrespective of the state of mind your Honour finds established or not… the outcome was nevertheless still the same. That is there was a windfall to the shareholders of SMI. I submit no relevant loss to the CBA… and no loss in any relevant sense to CSC… because the board of CSC ratified the transactions even though there was no legal obligation to include them in the earnout provision".
32. In respect of the impact on the CBA, counsel referred to the statement of Mr Vudrag and characterised it as not being a victim impact statement. It was submitted that nowhere in Exhibit B was there any suggestion of a loss being occasioned to the bank relating directly to the acquisition of either the McAfee software or the Pivotal suite of products. The proceedings listed in Exhibit B involving CSC and the SEC were not referable to the present offender.
33. Counsel submitted that on a proper analysis the losses referred to in Exhibit B "were occasioned simply because the bank was a witness, and it is remarkable… that a witness in criminal proceedings should put forward a document complaining about having been required to assist the prosecuting authorities. Every witness who comes before this Court or provides a statement, even if it not giving evidence in court, is required to assist the authorities". Counsel further referred to the reference in Exhibit B to the significant impact to staff at the CBA which was referred to as "the personal and emotional impact on current and former staff members". Counsel submitted that any such impact "must pale in comparison to that which has been suffered by the offender who has awaited trial for the better part of almost entirely of a decade". Counsel submitted that what was required by s3A of the CSPA was that the Court may only take into account those consequences that were intended or can reasonably have been foreseen.
34. Counsel rehearsed his submission relying on GG v R [2018] NSWCCA 280 to submit that the Court could not possibly conclude that any of the matters contained in Exhibit B were reasonably foreseeable by the offender. Counsel further rehearsed his submission that the Court could not conclude that the offender intended or knew that loss would be occasioned to the bank. Unlike Mr Hunter, the offender was not tried on a count pursuant to s192E of the Crimes Act, notwithstanding that he was originally charged with an offence of fraud. Counsel submitted that it was not in dispute that in order to succeed on a charge contrary to s249B of the Crimes Act, it was not incumbent upon the Crown to prove a loss to any person. It was submitted that it would infringe the principles expressed in R v De Simoni (1981) 147 CLR 383; [1981] HCA 31 to sentence the offender as if he occasioned or caused a financial disadvantage to the bank.
35. Counsel rehearsed his submissions regarding Counts 8 to 10 to submit that the offending ought to be seen "very much at the lowest end of the spectrum".
36. In relation to delay counsel referred to the judgment of Latham J in R v Donald [2013] NSWCCA 238 at [49]. Counsel submitted that the reason for the delay "matters not, because of its impact on the offender". Counsel submitted that the Crown had not suggested the offender was to be held accountable for any of the delays in this case. Rather, counsel rehearsed his submissions regarding the psychological impact on the offender caused by the delay as outlined in the report of Mr Sheehan and the letter from Ms Fung. It was submitted that the offender had a significant period of time in which to demonstrate rehabilitation and the Court would conclude that he is rehabilitated. It was submitted that in light of the offender's prior good character he has excellent prospects of rehabilitation, "and that is a matter which is borne out by the Court observing continued non-offending and compliance with bail conditions over a lengthy period of time".
37. It was further submitted that general deterrence is of less significance than it otherwise might be because of the delay between the offending and the imposition of sentence, relying on PH v R [2009] NSWCCA 161 per Howie J.
38. Counsel rehearsed his submissions relating to the offender's prior character to submit that this was not a case where the offender used his prior good character in order to commit the offences, "but rather it was in a position which he found himself in as a result of his prior good character. The Court should still give weight to his prior good character as a mitigating factor, together with the unlikelihood of him reoffending."
39. Counsel addressed the assessment by Community Corrections in Exhibit C that the offender was a "medium/low risk of reoffending" and noted that Mr Sheehan came to the same conclusion but ultimately concluded the risk may be regarded as "low". Counsel submitted that the offender has excellent prospects of rehabilitation, notwithstanding he is not acknowledging his guilt "at this stage", and that his risk of reoffending in the same manner "is unthinkable".
40. On the issue of parity counsel noted that Mr Hunter had been afforded a 50% discount and was sentenced in relation to the same offence for a fixed term of 12 months. It was submitted that the aspects of the offending here were not however identical and the assessment was also affected by the issue of delay which required a flexible approach by the Court. In sentencing Hunter, Judge Arnott SC had taken into account general deterrence but not his psychological condition in mitigation. The subjective distinctions here would lead to the Court to conclude that a sentence of less than 2 years imprisonment was warranted for the offender. Counsel rehearsed his submissions concerning the "discount" to be given to an offender who faces a rolled-up count. He submitted:- "If the totality of the criminality warranted a sentence in excess of the maximum penalty for a single offence and the offender who was to be sentenced for a rolled-up count could only be sentenced to the maximum penalty no more, but otherwise there is no benefit is what one derives from the cases".
41. Counsel submitted that the differences in monetary amounts should not be a principal factor in distinguishing the present offender for the reasons he had outlined. Counsel also relied on the superior position Mr Hunter held in the enterprise notwithstanding that there was no evidence, counsel submitted that the corrupt scheme originated from the offender's superiors at the CBA, and there was no evidence that the scheme originated from the offender. Notwithstanding that, counsel accepted that the offender was a willing participant in the scheme, and it was also Hunter who in respect of the Pivotal transaction split the transaction documents. That was a process in which the offender could not have participated, he not having the appropriate delegation. This demonstrated "the very integral nature of Mr Hunter and the role he played in the offending" and it was unsurprising that Judge Arnott SC found that Hunter's role was "an essential one".
42. Counsel also referred to the agreed facts upon which Mr Hunter was sentenced which give rise to different charges namely the charge pursuant to s192E which carried a maximum penalty of 10 years imprisonment. Counsel rehearsed his submissions regarding any loss to CSC and, relying on the remarks on sentence of Judge Arnott SC submitted there was no relevant distinction in favour of Mr Hunter.
43. Counsel rehearsed his submissions concerning Counts 1 to 7 namely that all of those Counts stemmed from a singular agreement "as manifested in the December email to provide the facilitation of business opportunities to SMI". The amount of the payments and the dates on which they were received were characterised as "a matter of happenstance", and there was no additional criminality reflected beyond the original agreement and therefore there ought not to be any accumulation in sentence for the 7 Counts. Counsel rehearsed his submissions concerning Counts 8 to 10, submitting there was "once more a matter of happenstance and therefore there ought not to be any accumulation" as the offender had no role to play in how those payments were received.
44. Counsel rehearsed his submissions concerning the prospect of an Intensive Correction Order being imposed for a sentence of 3 years or less as being the appropriate outcome.

The Crown submissions in reply

1. The Crown submitted that the Court would reject the submission on behalf of the offender that he was pursuing the interests of the CBA whilst at the same time receiving corrupt payments. The Crown submitted his overwhelming motivation was to enter into procurement contracts that would assist SMI in the full knowledge that would translate into an enhanced earnout payment. Without those contracts there would have been no earnout received by SMI at all. The Crown submitted I would reject the offender's submission that he breached his duty to disclose the payment of the bribes, but he otherwise acted in the interests of the bank.
2. The Crown submitted that the offender really had a total disregard for the risk that presented to the CBA having regard to the evidence that he made no effort to engage in any tendering process whatsoever. Rather the Crown submitted that in respect of the McAfee transaction the evidence demonstrated the offender's determination to enter into the transaction no matter what the risk for the bank.
3. With respect to the Pivotal transaction the Crown relied on the evidence at trial as clearly demonstrating the products were not fit for purchase at that time relying on the evidence of Messrs Kelada and Marsden. The Crown submitted there was "just no reason for the CBA to commit in the order of $6.9 million over the course of that month of January to that second tranche of transactions". The Crown submitted that the offender was intimately involved with the discussions and agreements that saw the price change from $1.5 million to $6.9 million. This demonstrated his state of mind was to focus on the benefits that were to accrue to him with complete and utter disregard of the risk that this might present to the CBA.
4. The Crown submitted that the offender's state of mind was to disregard, as a very senior manager of the CBA, any risk to the bank. The Crown rehearsed its submission that this put the offending at the highest level of objective seriousness.
5. It was submitted that the reliance by the offender on evidence suggesting that the CBA had an interest in implementing Pivotal technology in the middle of 2013 really confused the evidence. That did not fit with the fact that the CBA had not entered into any contracts with Pivotal or EMC or purchased licenses to use any of the software the subject of the Pivotal transactions.
6. With respect to the offender's submission that there was no evidence that Hewlett-Packard would have offered a more beneficial arrangement for the McAfee deal was in the Crown's submission beside the point. No opportunity was given to Hewlett-Packard or any other organisation to compete on a commercial basis for the provision of that software. That demonstrated that the offender had no regard for the risk that presented for the CBA whatsoever.
7. The Crown submitted that the Court would give no weight to the offender's submission that CSC had suffered no loss, having accepted the bona fides of the transactions as part of the earnout payment.
8. The Crown characterised the offending conduct as "cavalier behaviour on the part of the offender including various attempts to avoid proper commercial processes within his organisation and various misrepresentations made to persons over which he had responsibility in order to achieve this objective."
9. As to the losses outlined by Mr Vudrag in Exhibit B the Crown submitted that all of the losses particularised could well have been foreseen in a general sense. The Crown also referred to the evidence to submit that the offender did not really have a great deal of regard from what might flow from entering the contracts because of his intention of moving on to "bigger and better opportunities" so he would not have to perhaps "face the music in relation to these high-risk procurement agreements." It was submitted that anyone in the position of the offender with "the sort of business acumen and responsibility of the offender would have foreseen the possibility of significant commercial damage resulting from entering into these contracts in the way that he entered into them and in the speed with which he entered into them and with the disregard for proper processes and the committing to purchase of McAfee, for instance in circumstances where there is already a contractual arrangement with Hewlett-Packard buying of these integrating products in circumstances where they didn't have the licenses to use the fundamental parts" (sic).
10. The Crown rehearsed his submissions regarding delay in sentencing and submitted it was not the delay that had an impact on the offender but the fact that his offending had been discovered and he had been prosecuted for it with the consequences for his ongoing employment and risk of incarceration which have had the greatest impact upon him. The Crown accepts that the delay was exacerbated in circumstances where the offending was of a complex nature and prosecution was made all the more difficult because of activities which crossed international borders.
11. The Crown submitted that the delay was not attributable to the Crown but rather the complexity of the prosecution as outlined in his written submissions. The Crown submitted that delay should not be a significant mitigating factor in all of the circumstances.
12. The Crown submitted that the offender does not have positive prospects of rehabilitation. There was a logical difficulty with that proposition given there had been no acceptance of the offending but rather a dogged determination which had consumed the offender and caused him to engage in substance abuse. Rather the Court would accept the evidence of Mr Sheehan that he remains a low to moderate risk of reoffending although the Crown accepted it was unlikely he would be able to reoffend from a position of trust given his convictions.
13. On the issue of parity, the Crown rehearsed his submission to submit that Hunter had been sentenced on a very different basis from the offender. The Crown referred to the agreed facts upon which Hunter was sentenced to submit that the Court would not accept that he had a greater criminal culpability than the offender.
14. The Crown submitted there was a high degree of comparability between causing a financial disadvantage to the CBA in the order of $6.9 million by Hunter and in the offender's case a determined effort to push the CBA into a set of agreements at a cost of $6.9 million so he could receive rewards for his efforts. There was therefore a direct correlation between the criminality of the count upon which Hunter was sentenced and the offences that the offender now faced.

Determination

1. Section 3A of the CSPA sets out the purposes of sentencing as follows: "3A The purposes for which a Court may impose a sentence on an offender are as follows: (a) To ensure that the offender is adequately punished for the offence, (b) To prevent crime by deterring the offender and other persons from committing similar offences, (c) To protect the community from the offender, (d) To promote the rehabilitation of the offender, (e) To make the offender accountable for his or her actions, (f) To denounce the conduct of the offender, (g) To recognise the harm done to the victim of the crime and the community."
2. In assessing objective seriousness of the offending I have had regard to the facts, matters and circumstances relating to all of the offending and am mindful that an assessment must be made of the objective seriousness of each offence. The offences in Counts 1 to 7 pursuant to s249B of the Crimes Act 1900 each relate to the corrupt payments received by the offender as set out in my judgment on conviction at [764]. In Mehajer v R [2014] NSWCCA 167; 244 A Crim R 15, 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].
3. As set out in my judgment on conviction each of the offences in Counts 1 to 7 arise from a course of conduct undertaken by the offender from October 2013 to 31 January 2014 designed to facilitate SMI achieving the threshold to qualify for its earnout payment in the expectation that the offender would receive a reward for doing so which ultimately became the seven payments received by him. As held by me at [798] the offender 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 I held that 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.
4. I also held at [799] that the offender 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. Notwithstanding that the adoption of Pivotal products had been raised earlier I found that ultimately the nine transactions of less than $1 million each was done at the instigation of the offender 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 of the products.
5. In assessing the objective seriousness of the offending I have therefore had regard to the role of the offender. I accepted the evidence of Twynham that the McAfee deal was the offender's idea and that it was both Hunter and the offender's idea to break down the Pivotal deals into nine separate TDs of less than $1 million value to bring them within Hunter's delegated authority.
6. The amounts of each of the payments corruptly received is also relevant to the assessment of objective seriousness of the offending. The payments, in fact, range between $99,971.02 and $350,000. The last four of those payments, as outlined above, were paid into the offender's account with the Auckland Savings Bank on 4 and 12 November 2014 ($300,000 each) and on 10 and 16 December 2014 ($350,000 each), which the offender failed to disclose to the CBA investigators, when interviewed by them on 17 December 2014.
7. I therefore find in all of the circumstances that the offending in each of Counts 1 to 7 was serious offending falling in the mid-range of objective seriousness for an offence pursuant to s249B of the Crimes Act.
8. I reject the submission made on behalf of the offender that there was no "necessary correlation between the amount received by the offender and for example, any loss, or rather potential loss, suffered either by the offender's principal or some third-party such as CSC." Cleary, CSC suffered a loss in that it paid out USD$98 million pursuant to the earnout provision for which it would not have been liable had SMI not met the threshold amount of revenue, which the offender facilitated. CBA too paid $6.9 million for Pivotal products which were of no utility to it. Further, the McAfee deal meant there was an overlap to the CBA for a period of some 6 months paying both McAfee and Hewlett-Packard for the same product. As the offender's employer it was reasonably foreseeable that the offender's criminal conduct would have an impact on the staff and commercial operations of the CBA as outlined in the statement of Mr Vudrag. I reject the submission that this may be characterised as "witness expenses".
9. I reject as sophistry the offender's submission that his motivation in facilitating these transactions was to advance the goals of the CBA . It would be antithetical to the very mischief to which s249B is directed to accept that submission. Rather, at the relevant time the offender's whole focus was on implementing the McAfee deal (e.g. his message "Here's $7m for them") and ensuring the avoidance of appropriate governance oversight and risk assessment, in that process. That CBA's interests were advanced at all could not be regarded as mitigating the objective seriousness of the offending conduct.
10. I reject also the submission on behalf of the offender that he believed that "even if he was acting in the financial interest of Pulier, he was also acting in the interests of his principal". Rather than his state of mind being directed to the interests of his principal, it was focused at all relevant times on ensuring that the earnout clause of SMI was met so that he would be "looked after" by Pulier.
11. I have also taken into account that the offending involved a breach of trust by the offender of his obligations to his employer the CBA. This was not an element of the offence and the offender's counsel's reliance on Elyard v R, supra was misplaced. I also reject the related submission that "taking into account the offender's state of mind at the time meant that any breach of trust was of little consequence given the offender was nevertheless acting in the interest of his principal". I am therefore satisfied that there was a substantial breach of trust here, and that it aggravated the objective seriousness of the offending. In so finding, I reject the offender's submission that the degree of departure from his duty to his employer was "quite minimal".
12. The offender aided and abetted Hunter corruptly receiving the payments in Counts 8, 9 and 10 by passing on the banking details of Hunter to ACE, by agreeing to receive some of the funds on behalf of Hunter and subsequently providing Hunter with a pro-forma statement of work which Hunter fabricated. Having regard to all of the circumstances of the offending the objective seriousness of the offences pursuant to s249B(1) and s249F(1) falls at the lower end of the range of objective seriousness for such offences.
13. I find that all of the offending conduct of the offender was of a high moral culpability, given his employment as a senior IT executive with the CBA responsible for a large number of staff and a budget of hundreds of millions of dollars.
14. I further accept that it was an aggravating factor pursuant to s21A(2)(n) of the CSPA that there was a degree of complexity in the planning and sophisticated organisation of the commercial arrangements of the CBA which gave rise to the corrupt payments. I accept the Crown submission that the offender used his position of authority to force through the contracts involving technical software products.
15. A further aggravating factor was that the offender's conduct was motivated by the opportunity for financial gain pursuant to s21A(2)(o) of the CSPA.
16. General deterrence is important in sentencing for offences of receiving corrupt payments. A clear message must be sent to like-minded members of the community and in particular the commercial community that Parliament has prescribed lengthy maximum penalties of imprisonment for such criminal conduct and that the courts will impose condign punishment in appropriate cases. White collar crime that is financially motivated is often difficult to detect and is committed because of the trust employers place in senior executives. However I accept here that specific deterrence has a limited role in sentencing this offender.
17. I take into account that Parliament has prescribed a maximum penalty of 7 years imprisonment for each of the ten offences for which the offender is being sentenced. The maximum penalty is a guideline in the sentencing process, and an indication of the seriousness with which Parliament regards such criminal conduct.
18. The offender has continued to protest his innocence and has appealed his convictions. Thus he has shown no remorse for his offending conduct and has made no progress in his rehabilitation. Rather, I accept the conclusion of the author of the Sentencing Assessment Report that his focus has been on how his offending has impacted upon himself, both financially and emotionally and that he is unable to identify how his actions may have impacted the community. Notwithstanding that, I accept that he is at a low risk of reoffending given that it is unlikely he will be able to obtain employment in any position of trust in the future.
19. I take into the account as a mitigating factor pursuant to s21A(3)(f) of the CSPA that the offender was a man of good character at the time of the offending having no prior criminal antecedents. He had led a pro-social life since coming to Australia in 2001 and had enjoyed success in his career as an IT consultant and enjoyed success in his career with the CBA having risen to a position of senior management. I accept the opinions of Mr Sheehan that the offender has met the criteria for a Major-Depressive Disorder and potentially a differential diagnosis of Adjustment Disorder with mixed anxiety and mood, no doubt reactive to being charged with the index offending. I also accept Mr Sheehan's opinion regarding the offender's identity issues and inflexible thinking and that he has developed an alcohol use disorder reactive to his offending. He is now 54 years of age and I accept Mr Sheehan's opinion that these conditions have worsened with his focus on his prolonged legal defence of the charges over a period of 9 years.
20. I take into account that there has been considerable delay in bringing these proceedings to finality. The investigation was no doubt complex and crossed international borders with both criminal and civil proceedings brought in both USA and Australia as outlined in [14] above. The impact of delay on sentencing was described by Street CJ in R v Todd [1982] 2 NSWLR 517 at p.519 as follows:- "Moreover, where there has been a lengthy postponement, whether due to an interstate sentence or otherwise, fairness to the prisoner requires weight to be given to the progress of his rehabilitation during the term of his earlier sentence, to the circumstance that he has been left in a state of uncertain suspense as to what will happen to him when in due course he comes up for sentence on the subsequent occasion, and to the fact that sentencing for a stale crime, long after the committing of the offences, calls for a considerable measure of understanding and flexibility of approach - passage of time between offence and sentence, when lengthy, will often lead to considerations of fairness to the prisoner in his present situation playing a dominant role in the determination of what should be done in the matter of sentence; at times this can require what might otherwise be a quite undue degree of leniency being extended to the prisoner."
21. Notwithstanding that Mr Sheehan described the offender as living in a kind of "suspended animation" for the past 9 years, he has adhered to his pleas of not guilty throughout and I do not accept that he has been in a state of uncertain suspense of the type referred to by Street CJ, or that he has progressed his rehabilitation. Whatever the multiple causes of the delay however, a delay in finalising serious criminal proceedings of 10 years is too long on any view, and does warrant a more flexible approach in sentencing including diminution of the weight to be placed on general deterrence in the sentencing process.
22. The principle of parity is a principle of equality in justice, and requires that equal offending be treated equally and that significant differences be taken into account - see Green v The Queen (2011) 244 CLR 462; [2011] HCA 49. Here, the offender has urged that parity with the sentence imposed by Hunter warrants the imposition of a sentence for the multiple offending of this offender by way of an aggregate sentence of 3 years or less thereby giving rise to consideration pursuant to s68 of the CSPA as to whether that sentence may be served in the community pursuant to an Intensive Correction Order.
23. As set out above, Hunter was sentenced for two offences, the first being an offence of dishonestly causing a financial disadvantage by deception pursuant to s192E(1)(b) of the Act which carried a maximum penalty of 10 years imprisonment and the second being an offence of corrupting receiving a benefit contrary to s249B(1) of the Act which carried a maximum penalty of imprisonment for 7 years. Hunter pleaded guilty and received a 50% discount on sentence and was sentenced to a total effective term of imprisonment of 3 years and 6 months with an overall non-parole period of 2 years and 3 months.
24. It is the Crown submission that the principle of parity has minimal application in this sentencing exercise. Hunter was sentenced on the basis of agreed facts which related to, first, dishonestly causing a financial disadvantage namely $6,756,750 for entering into a procurement contract on behalf of the CBA being the Pivotal transactions and secondly for corruptly receiving a benefit of USD$300,000. This offender's criminality was escalated by his involvement in the McAfee contracts and receiving $1.9 million by way of 7 corrupt payments and assisting Hunter to receive three payments totalling $630,000. There were also subjective factors to be taken into account namely that at the time of the offending Hunter suffered anxiety and depression.
25. The offender submitted that his position at the CBA was subservient to that of Hunter and that he was not the "instigator" of the Pivotal transactions as these were consistent with the policy being pursued by Mr Harte on behalf of the CBA. He relied on Judge Arnott SC's characterisation of Hunter's role as an "essential" one.
26. The evidence adduced at trial as summarised by me in my judgment on conviction is far more detailed than the agreed facts upon which Hunter was sentenced and demonstrates with more clarity the roles and activities of the co-offenders. Notwithstanding that he reported to Hunter, this offender's role was integral to the genesis of the earnout clause being satisfied by SMI and the capacity of Pulier to make the payments the subject of the index offending. The fact that this offender received seven payments totalling $1.9 million by comparison to the three payments received by Hunter is a significant indicator of the roles played by both co-offenders and how Pulier assessed those roles and was prepared to reward them.
27. In Jimmy v R (2010) 77 NSWLR 540; [2010] NSWCCA 60 Campbell JA, having reviewed numerous authorities on the application of the parity principle said at [203]:- "There are significant limitations, however, on reducing a sentence on the basis of that of a co-offender who has committed a different crime. At least some of the limits on the use of the parity principle in such a case are: 1. It cannot overcome those differences in sentence that arise from a prosecutorial decision about whether to charge a person at all, or with what crime to charge them. 2. If it is used to compare the sentences of participants in the same criminal enterprise who have been charged with different crimes, there can be significant practical difficulties. Those practical difficulties become greater the greater the difference between the crimes charged becomes, and can become so great that in the circumstances of a particular case a judge cannot apply it, or cannot see that there is any justifiable sense of grievance arising from the discrepancy. 3. It cannot overcome differences in sentence that arise from one of the co-offenders having been given a sentence that is unjustifiably low. 4. There are particular difficulties in an applicant succeeding in a disparity argument where the disparity is said to arise by comparison with the sentence imposed on a co-offender who has been charged with an offence that is less serious than that of the applicant." [Authorities and citations omitted]
28. Having regard to those limitations and the significant differences outlined above, I accept the Crown submission that the principle of parity, whilst it has some application here, that application must be regarded as minimal.
29. I have had regard to the various comparative cases relied on by the Crown and note that each may be distinguished either on its facts or having regard to the different nature of the charges and offending conduct. Sentencing is an idiosyncratic exercise, dependent on the specific factual background of the offending and subjective features of the offender to which sentencing principles are applied.
30. I am satisfied pursuant to s5 of the CSPA, having considered all possible alternatives, that no penalty other than imprisonment is appropriate. I propose to proceed to sentence the offender by way of an aggregate sentence pursuant to s53A of the CSPA. So as to provide transparency in the sentencing process, I provide the following indicative sentences, taking into account the objective seriousness of the offending, the aggravating and mitigating factors set out above and the subjective case of the offender.
31. In respect of Counts 1 to 7, notwithstanding that the amounts corruptly received by him ranged in value from approximately $100,000 to $350,000 my indicative sentence on each count is 2 years imprisonment, consistent with the sentence imposed on Hunter prior to his 50% discount for the same offence. I reject the offender's submission that the offending arose from one agreement, and that the number of payments, the amounts received and the dates were a matter of "happenstance".
32. As outlined above, the offending in Counts 8 to 10 was in the lower end of the range for such offending and given the identical nature of the offences my indicative sentence in respect of each of Counts 8 to 10 is a sentence of 6 months imprisonment on each count.
33. In arriving at an aggregate sentence it is important that principles of proportionality, in accordance with Pearce v The Queen (1998) 194 CLR 610; [1998] HCA 57, accumulation and the principle of totality be applied. In R v Van Ryn [2016] NSWCCA 1 the Court of Criminal Appeal set out as follows concerning the application of the principle of totality:- "[228] Street CJ described the principle of totality in sentencing in R v Holder; R v Johnstone (1983) 3 NSWLR 245 at 260 as follows: The principle of totality is a convenient phrase, descriptive of the significant practical consideration confronting a sentencing judge when sentencing for two or more offences. Not infrequently, a straightforward arithmetical addition of sentences appropriate for each individual offence considered separately will arrive at an ultimate aggregate that exceeds what is called for in the whole of the circumstances. In such a situation, a sentencing judge will evaluate, in a broad sense, the overall criminality involved in all of the offences and, having done so, will determine what, if any, downward adjustment is necessary, whether by telescoping or otherwise, in the aggregate sentences in order to achieve an appropriate relativity between the totality of the criminality and the totality of the sentences."
34. The Court went on to emphasise the need to maintain public confidence in the administration of justice when sentencing for multiple offences, and also referred to the judgment of Howie J in Cahyadi v R [2007] NSWCCA 1; (2007) 168 A Crim R 41 at [27]: "There is no general rule that determines whether sentences ought to be imposed concurrently or consecutively. The issue is determined by the application of the principle of totality of criminality: can the sentence for one offence comprehend and reflect criminality for the other offence? If it can, the sentences ought to be concurrent otherwise there is a risk that the combined sentences will exceed what is warranted to reflect the total criminality of the two offences. If not, the sentences should be at least partly cumulative, otherwise there is a risk that the total sentence will fail to reflect the total criminality of two offences. Similarly, where they are part of a single episode of criminality with common factors, it is more likely that the sentence for one of the offences will reflect the criminality of both."
35. I am satisfied that there is some accumulation required here in the application of the principle of totality, given that the totality of the criminality arises not just from one agreement as advocated by counsel for the offender, but from a course of conduct pursued by this offender over a number of months which led him to corruptly receiving benefits on seven occasions totalling $1.9 million, as well as the three offences of aiding and abetting Hunter to receive three such payments. I consider 8 years imprisonment as an appropriate starting point but have, in accordance with the flexible approach outlined above as a result of the delay in sentencing and the diminution of significance of general deterrence in this sentencing exercise determined that an appropriate aggregate sentence is one of 6 years and 8 months imprisonment.
36. I make a finding of special circumstances pursuant to s44(2B) of the CSPA on the basis that this is the offender's first time in custody, there has been some accumulation in sentence, and he will require an extended period of supervision upon his return to the community. I therefore intend to vary the statutory ratio and impose a non-parole period of 4 years imprisonment. The sentence will be backdated by 2 months and 15 days to commence on 14 July 2024.

Orders

1. I make the following orders:- 1. You are convicted of the 10 Counts on the Indictment. 2. I impose an aggregate sentence pursuant to s53A of the CPSA and sentence you to a non-parole period of 4 years imprisonment commencing on 14 July 2024 and terminating on 13 July 2028. 3. The balance of term is for a period of 2 years and 8 months commencing on 14 July 2028 and terminating on 13 March 2031. 4. You parole eligibility date is 13 July 2028. You should understand that release to parole is not automatic. The State Parole Authority will hold a hearing sometime before that date and decide whether they are going to release you to parole on that date or some later date. You should understand that your parole will be subject to stringent conditions, one of which is not to commit offences whilst on parole. Other conditions will include things such as who you associate with, where you live and doing what your parole officers direct. If, during the time you are on parole, you breach any condition of parole, the State Parole Authority will revoke your parole and you will have to go back to gaol to serve the balance of your sentence. Annexure A (54311, docx)

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