On Wednesday 2 August, the High Court handed down a judgment in The King v. Jacobs Group (Australia) Pty Ltd formerly known as Sinclair Knight Merz [2023] HCA 23 which may have ramifications for several corporate penalties. The court concluded that in assessing the ‘value of a benefit’ obtained through bribery, the court is not to discount any legitimate expenses the accused incurred.

While this particular case related to foreign bribery charges under s 70 of the Criminal Code (Cth), the statute books are replete with the same (or very similar) penalty provisions. The ruling will have far-reaching implications for all corporations and directors that face civil or criminal penalties for corporate wrongdoing.

Background to the case

The case centred around a charge against the Australian Jacobs Group for bribing foreign public officials in the Philippines and Vietnam.

The charge, to which the Jacobs Group pled guilty, carries with it a maximum penalty that is the greatest of three amounts: 100,000 penalty units (at the time $11 million); three times the value of the benefit obtained from the bribery; or 10% of the annual turnover of the body corporate.

The Jacobs Group had admitted to bribing a public official to secure contracts for various philanthropic work funded by the World Bank or the Asian Development Bank, for which they were paid $10,130,354. In order to perform this contract, the group incurred legitimate expenses of $7,449,538.

The issue before the court was whether the ‘value of the benefit’ was to be interpreted to mean the net benefit of the contract (ie. with a deduction of legitimate expenses), or whether it was to mean the gross benefit of the contract (ie. $10,130,354 without any deductions).

At first instance, it was decided that the correct interpretation was the net benefit. As a result, the New South Wales Supreme Court handed down a penalty of $1.35 million – a penalty that discounted for, amongst other things, self-reporting and cooperating with authorities. For many, this was a surprising result as the penalty was lower than the net benefit the group obtained, raising concerns this may set a precedent for the penalty being merely a cost of doing business.

On appeal to the New South Wales Supreme Court of Appeal, the first instance ruling was upheld with the court agreeing that the value of a benefit meant the net benefit.

However, the High Court has granted the Crown appeal and overturned the NSWCA ruling, instead opting to favour an interpretation where the ‘value of the benefit’ was to be measured without discounting for any expenses.

The Decision

In a unanimous decision, the High Court found that in order to give teeth to the legislation and comply with the OECD (Organisation for Economic Co-operation and Development) Convention on Combating Bribery of Foreign Officials in International Business Transactions, the penalty ought not to be limited to a multiple of profits after expenses. Importantly, Australia amended the Criminal Code in 2009 to increase the penalties for bribery and introduce the wording we have today after an OECD request to ‘substantially increase the deterrent effect of the offences in the Criminal Code that deal with those who bribe a foreign or Commonwealth public official’. The court found that legislators, in an effort to enact that change, would not have intended to leave any doubt that the penalty would be more than just a cost of doing business.

Furthermore, they ruled that as the ‘benefit’ that is given to the official who is bribed is measured in a gross manner, and therefore, in the absence of clear statutory wording to the contrary, the ‘benefit’ obtained by the company doing the bribing ought be measured similarly.

The court highlighted some practical concerns that may come with a valuation of the net benefit, such has how to value expenses and determining which expenses are legitimate and which are not, before finally noting that the provision is merely a maximum penalty, and that sentencing hearings still allows for the hearing of mitigating factors such as legitimate expenses already incurred.


While every statute must be interpreted individually with consideration of its own terms and context, there are a number of statutes throughout Australian law that have the same or similarly worded penalties, including: the Criminal Code, the Competition and Consumer Act 2010 (Cth), the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission Act 2001 (Cth), the Privacy Act 1988 (Cth), and the Customs Act 1901 (Cth).

These statutes cover a broad range of offences such as cartel conduct, market manipulations, false and misleading statements, insider trading, breach of directors’ duties and continuous disclosure obligations, and domestic bribery.

Given the similarity in wording across these provisions, it is likely that this High Court ruling will have a significant effect on the penalties for white collar criminals. Corporations and individuals alike are now susceptible to penalties that may far exceed the previous maximum, and ensure that they are unlikely to come out of a guilty verdict with anything but very detrimental financial outcomes.