Guy Sebastian's former manager convicted of fraudulently embezzling more than $600,000 from the pop star remains on bail despite a second attempt at revoking his freedom.
Crown prosecutor David Morters SC said Titus Day had exclusive knowledge of payments being received on behalf of Sebastian who relied on and trusted him, but over 34 separate instances he embezzled more than $624,000.
Mr Morters submitted a jail sentence was inevitable, and that a lesser punishment such as an Intensive Corrections Order was not even in the "ballpark of consideration".
He submitted that recent changes to bail laws meant there needed to be special or exceptional circumstances for Day to retain his liberty and asked NSW Supreme Court Justice Peter Garling on Tuesday to revoke bail.
But Justice Garling dismissed the Crown's application.
Titus Day, 49, had pleaded not guilty to dozens of charges alleging he embezzled almost $900,000 owed to Sebastian through royalties, performance and ambassador fees.
A NSW District Court jury convicted him of 34 charges, and acquitted him of the remaining 13 counts.
Day's barrister Dominic Toomey SC said his client's case was yet to be made at a later hearing date and there were other options before the court.
"It cannot be said on the balance of probabilities that no consideration will be given to an intensive corrections order in this case ... Particularly where the subjective case is not before the court," Mr Toomey said.
"It's a very real prospect. It's not a mere hope."
Mr Morters argued that despite Day's unblemished criminal record, he was not aware of any similar cases that weren't dealt with by way of a custodial sentence.
However, Justice Peter Garling contended that an offender following conviction could accept he held a genuinely wrong belief of being entitled to the money, perhaps related to a mental illness.
And in those circumstances, the moral culpability would be lowered and a full term in custody would not be appropriate, Justice Garling said before dismissing the application.
He will publish his reasons at a later date.
Judge Timothy Gartelmann in June said it was "highly likely" Day would be sent to prison, but also refused to withdraw his bail before formal sentencing.
Day managed the Australian Idol winner via his company 6 Degrees between 2009 and 2017 before the pair's relationship ended acrimoniously.
The singer filed a lawsuit against his former manager in the Federal Court in July 2018.
Two years later he approached police when he says he discovered criminal behaviour.
The matter will return to court for sentence hearing on September 16.
