table of contents

The law of conspiracy - paragraph 13

The conspiracy charged in this trial - paragraph 19

Controversies as to the elements of the conspiracy charged - paragraph 22

The submissions of the Crown - paragraph 30

The submissions of the accused - paragraph 44

The authorities - paragraph 47

Determination of the controversy as to the “final element” of the substantive offence of misconduct in public office in a conspiracy to commit that offence - paragraph 60

Is the conspiracy charged an offence known to the law? - paragraph 72

Is the failure to allege an “improper purpose” fatal to the indictment? - paragraph 75

Does the failure to specify acts of misconduct, or how they might be committed, render the indictment defective? - paragraph 87

Is the use of the conjunction “and/or” in the indictment fatal? - paragraph 112

Mr Neil’s additional challenges to the indictment: Does the Crown have to allege that Edward Obeid and Moses Obeid agreed to do anything to further the object of the agreement? - paragraph 120

Is the indictment defective because of the identity of the conspirators: the relevance of The King v Boston - paragraph 131

What is encompassed by the concept of acts (of misconduct) in connection with the granting of an EL at Mount Penny? - paragraph 139

The indictment is not defective: the elements of the offence charged as restated - paragraph 156

The timeframe of the conspiracy alleged - paragraph 160

The co-conspirators rule and the operation of s 87(1)(c) of the Evidence Act - paragraph 171

The Crown case as particularised - paragraph 175

The eight acts of misconduct, as particularised - paragraph 181

Proving the existence of the conspiracy by inference - paragraph 185

What is comprehended by Mr Macdonald’s duties of confidentiality and impartiality as Minister for Mineral Resources? - paragraph 188

How do the Ministerial duties of confidentiality and impartiality impact on proof of the Crown case? - paragraph 194

The Ministerial Code of Conduct - paragraph 211

The DPI Code of Conduct - paragraph 220

What is confidential information as a matter of fact and law? - paragraph 229

What constitutes the duty of confidentiality under the Ministerial Code of Conduct? - paragraph 233

The relevance, if any, of s 365 of the Mining Act - paragraph 247

The evidence of the DPI officers as to their understanding of their duty of confidentiality - paragraph 259

Mr Iemma and Mr Gibson’s evidence - paragraph 273

What will need to be proved to constitute a breach of Mr Macdonald’s duty of confidentiality? - paragraph 280

What constitutes the duty of impartiality under the Ministerial Code of Conduct? - paragraph 281

The Shepherd fact: Mr Macdonald’s knowledge of the Obeids’ ownership of Cherrydale Park - paragraph 292

The significance of the eight acts of misconduct to proof of the Crown case - paragraph 296

What does the Crown need to establish were Mr Macdonald’s acts of misconduct (as particularised) and to what standard of proof? - paragraph 305

The significance of the date by which the conspiracy was in existence - paragraph 311

Edward Obeid’s participation in the conspiracy (on the Crown case) - paragraph 335

Moses Obeid’s participation in the conspiracy (on the Crown case) - paragraph 338

The further directions by which I am bound in my deliberations to verdict - paragraph 339

The documentary evidence tendered in the trial, in summary - paragraph 360

Witnesses called in the Crown case - paragraph 371

Parliamentary witnesses - paragraph 372

Bylong properties witnesses - paragraph 375

DPI witnesses - paragraph 381

Ministerial staff - paragraph 384

Monaro Mining NL witnesses - paragraph 386

Officers of the Independent Commission Against Corruption (NSW) (ICAC) - paragraph 391

Expert witnesses - paragraph 395

Others - paragraph 397

The primary issues in dispute arising from the evidence at trial - paragraph 401

The significance of the pre-existing relationships between the accused to proof of the Crown case - paragraph 407

Other relevant relationships involving Edward Obeid and Moses Obeid as members of a family: trusts, directorships, family companies and beneficial interests - paragraph 410

Obeid Corporation Pty Ltd - paragraph 417

Locaway P/L - paragraph 418

The relationship between Mr Macdonald and Edward Obeid as Parliamentary colleagues - paragraph 422

Mr Macdonald and Edward Obeid: Factional allies - paragraph 434

Budgetary challenges facing the Labor government in 2007-2008 - paragraph 448

Mr Macdonald and Edward Obeid: Electricity privatisation - paragraph 460

Mr Macdonald and Edward Obeid: Personal relationship - paragraph 471

Mr Macdonald’s use of the Obeids’ Jindabyne apartment - paragraph 475

Edward Obeid and Moses Obeid - paragraph 478

The relationship between Mr Macdonald and Moses Obeid - paragraph 481

Other relationships: Mr Macdonald, Mr Fang and Moses Obeid - paragraph 487

Occasions where the accused are in each other’s physical presence - paragraph 501

The Telephone Summary - paragraph 510

Submissions of the Crown - paragraph 518

Submissions of the accused - paragraph 523

Diary entries

Crown Case - paragraph 532

Edward Obeid and Mr Macdonald’s Parliamentary diaries - paragraph 533

Parliamentary sitting days - paragraph 535

The probative value of the Telephone Summary and Parliamentary diaries - paragraph 537

What were the circumstances in which Cherrydale Park was acquired by the Obeid family in September 2007, when did the family learn of the encroachment of Authorisation 247 held by Anglo American P/L on the property and what impact did that knowledge have on their plans for the use of Cherrydale Park as a rural holding?

The acquisition of Cherrydale Park - paragraph 539

The location of Mount Penny adjacent to Cherrydale Park - paragraph 545

Edward Obeid negotiates for the purchase of Cherrydale Park - paragraph 555

Cherrydale Park is settled - paragraph 563

The significance of Authorisations 287 and 342 - paragraph 571

What the accused knew of the likely coal reserves generally in the area around Mount Penny, and what impact did that have on the Obeid family’s plans for the use of Cherrydale Park as a rural holding and “rural retreat”? - paragraph 578

Mr Macdonald’s knowledge of the ownership of Cherrydale Park as a fact indispensable to proof of the guilt of each of the accused - paragraph 591

Sources of evidence relied upon by the Crown to prove Mr Macdonald’s knowledge beyond reasonable doubt - paragraph 597

The submissions of the accused directed to proof of the Shepherd fact and its relationship with the “but for” test - paragraph 607

The question when Mr Macdonald learnt of the Obeids’ purchase of Cherrydale Park (if he did) - paragraph 613

What does the water licences issue reveal about Mr Macdonald’s knowledge of the ownership of Cherrydale Park? - paragraph 616

Mr Badenoch’s evidence concerning the water licences - paragraph 622

I am satisfied Mr Badenoch made the water licences enquiry at Mr Macdonald’s request - paragraph 642

What weight attached to the first and second acts of misconduct in proof of the Shepherd fact? - paragraph 645

The staff structures within the Minister’s office and the DPI - paragraph 654

The role of the Coal and Petroleum Group within the Minerals Division of the Department of Primary Industries - paragraph 665

Communication between the DPI and the coal mining industry - paragraph 668

What is coal? - paragraph 674

Coal mining methods and coal seams - paragraph 678

Coal resources in New South Wales - paragraph 683

Coal exploration activities - paragraph 685

The granting of an EL under the Mining Act - paragraph 687

The statutory scheme in the Mining Act for the grant of an EL - paragraph 692

The designation of New South Wales as a Mineral Allocation Area for coal - paragraph 696

Recommendations by the DPI to the Minister about releasing particular coal resources to tender - paragraph 700

The Guidelines for Allocation of Future Coal Exploration Areas (Coal Allocation Guidelines) - paragraph 703

Identifying coal resources for direct allocation and competitive tender - paragraph 715

A limited form of expression of interest - paragraph 722

The Evaluation Committee’s selection of a preferred mining company - paragraph 725

The granting of consent by the Minister for the preferred company to apply for the EL pursuant to the regime in s 13(4) of the Mining Act - paragraph 727

Application by the recommended company for the EL under s 13 of the Mining Act - paragraph 729

The grant of the EL by the Minister - paragraph 730

The policy imperatives for the release of new small to medium coal release areas in the Western Coalfield in 2008 - paragraph 734

The significance of Additional Financial Contributions - paragraph 740

The DPI’s knowledge of coal in the Bylong Valley (in the area of Mount Penny) and the DPI’s holdings under EL 6676 - paragraph 744

Mr Macdonald’s enquiries of the DPI in 2008 about coal reserves in the Bylong Valley in the area of Mount Penny - paragraph 754

The enquiries made by Mr Gibson on behalf of Mr Macdonald on 9 May 2008 and 14 May 2008 - particularised by the Crown as the first and second acts of misconduct - paragraph 759

The evidence relied upon to prove the first act of misconduct - paragraph 760

The production of Wiles Map 1 and the Ministerial Briefing - paragraph 767

The evidence relied upon to prove the second act of misconduct - paragraph 780

Is the first act of misconduct and/or the second act of misconduct proved? - paragraph 797

The Shepherd fact is proved beyond reasonable doubt - paragraph 812

The first and second acts of misconduct are established - paragraph 816

The relevance of the evidence of Mr and Mrs Fitzhenry to proof of the Crown case - paragraph 821

Mr Fitzhenry’s evidence - paragraph 845

Mrs Fitzhenry’s evidence - paragraph 852

The weight to be afforded the evidence of Mrs Fitzhenry - paragraph 869

The weight to be afforded the evidence of Mr Fitzhenry - paragraph 870

The events after 14 May 2008 up to and including the meeting on 6 June 2008 - paragraph 873

The third act of misconduct is abandoned by the Crown - paragraph 877

The events leading up to the 4 June 2008 meeting - paragraph 884

The Watermark EL - paragraph 887

Further events preceding the 4 June 2008 meeting - paragraph 895

The Ministerial Briefing of 2 June 2008 which included Wiles Map 2 and Ms Moloney’s six small areas - paragraph 904

The preparation of Wiles Map 2 - paragraph 908

Wiles Map 2

Ms Moloney’s identification of the “Six Small Areas” - paragraph 914

The Ministerial Briefing of 3 June 2008 - paragraph 915

The 4 June 2008 meeting - paragraph 922

Some preliminary observations with regard to the fourth act of misconduct - paragraph 934

The significance of the fifth act of misconduct to proof of the existence of the conspiracy - paragraph 940

The fifth act of misconduct - paragraph 950

The 6 June 2008 meeting - paragraph 951

Mr Gibson’s evidence in summary - paragraph 956

Mr Mullard’s evidence in summary - paragraph 961

The Crown’s position on how the Court should resolve conflict in the evidence - paragraph 982

The position of the accused - paragraph 997

Is there common ground between the evidence of Mr Gibson and Mr Mullard as concerns the 6 June 2008 meeting? - paragraph 1015

Is the fifth act of misconduct proved? - paragraph 1041

Other factual findings arising from the 4 June 2008 and 6 June 2008 meetings - paragraph 1046

Despite the fifth act of misconduct not being proved, is the evidence otherwise capable of establishing proof of the existence of the conspiracy beyond reasonable doubt? - paragraph 1049

When was the “Mount Penny Coal Release Area” (encompassing Cherrydale Park, Coggan Creek and Donola) designated and when was it included as Mount Penny Coal Release Area in the closed EOI process for the grant of an EL? - paragraph 1062

The 17 June 2008 meeting - paragraph 1069

Mr Schiavo creates Diagram X encompassing Cherrydale Park, Donola and Coggan Creek - paragraph 1074

Diagram X

The sixth act of misconduct - paragraph 1093

The 16 June 2008 EOI Areas document - paragraph 1097

The 16 June 2008 meeting - paragraph 1103

The 16 June 2008 Credo Dinner - paragraph 1108

The 17 June 2008 meeting [1023] - paragraph 1112

Was there the “opportunity” for Mr Macdonald to provide the “timetable information” to Edward Obeid or Moses Obeid? - paragraph 1120

The relevance of the 23 July 2008 Rumore conference to proof of the sixth act of misconduct - paragraph 1124

The letters by Mr Grigor and Mr Irwin - paragraph 1131

Mr Grigor’s letters - paragraph 1132

Mr Irwin’s letter - paragraph 1136

The source of the information provided by Mr Brook - paragraph 1138

Is the sixth act of misconduct established? - paragraph 1147

The timing and significance of Mr Rumore being retained to act for the Obeid family on 23 June 2008 - paragraph 1156

“Tianda” and Mr Fang are introduced to Moses Obeid who then introduces them to Mr Rumore - paragraph 1164

The initiation of contact between Mr Fang and Moses Obeid - paragraph 1168

The submissions of the accused - paragraph 1172

Mr Fang’s further dealings in relation to the Mount Penny area - paragraph 1181

Did Mr Macdonald introduce Mr Fang and Moses Obeid? - paragraph 1186

The first Wentworth Hotel meeting between Mr Brook and Moses Obeid: 3 July 2008 - paragraph 1194

My ultimate rejection of the “exit strategy” as an innocent explanation - paragraph 1204

The significance of Moses Obeid’s representation concerning a landholders alliance in his contractual dealings - paragraph 1213

The acquisition of Donola and Coggan Creek and the question of the existence of a landholders alliance - paragraph 1218

The first Wentworth Hotel meeting concludes - paragraph 1240

The second Wentworth Hotel meeting - paragraph 1244

Paul Obeid provides a cardboard cylinder containing “maps” - paragraph 1247

The voir dire on the issue of the “maps” - paragraph 1253

The voir dire concludes - paragraph 1258

Mr Brook’s evidence about the “maps” - paragraph 1259

The significance of the “contiguous” or “adjacent” area to the question whether Wiles Map 2 was produced at the second Wentworth Hotel meeting - paragraph 1272

The relationship between the contiguous/adjacent zone and “Stage 2” of the project as advanced by Mr Brook in his dealings after 7 July 2008 - paragraph 1282

Is the fourth act of misconduct established? - paragraph 1301

Was Wiles Map 2 produced to Paul Obeid at the second Wentworth Hotel meeting? - paragraph 1315

The issue of Mr Brook’s credibility on the question whether Wiles Map 2 was produced at the second Wentworth Hotel meeting and more generally - paragraph 1318

Submissions of the Crown on the confidentiality of Wiles Map 1 - paragraph 1333

Submissions of the Crown on the confidentiality of Wiles Map 2 - paragraph 1342

Submissions of the accused as to whether Wiles Map 1 and/or Wiles Map 2 were confidential - paragraph 1343

Is the fourth act of misconduct established and, if so, was it committed in furtherance of the conspiracy? - paragraph 1347

The second Wentworth Hotel meeting concludes - paragraph 1359

Mr Brook’s actions after the second Wentworth Hotel meeting - paragraph 1362

The seventh alleged act of misconduct - paragraph 1364

The evidence relevant to the preparation of the 2 July 2008 list - paragraph 1370

The Coal Register as the primary source from which the list was compiled - paragraph 1373

Was the Coal Register confidential? - paragraph 1374

The earlier draft lists of companies created by the DPI - paragraph 1375

The 2 July 2008 list - paragraph 1379

The form in which the 2 July 2008 list was provided to the Minister - paragraph 1385

The 7 July 2008 meeting with the Minister - paragraph 1389

Opportunity for Mr Macdonald to provide the 2 July 2008 list or the information on it to the Obeids - paragraph 1391

The handwritten list - paragraph 1395

Was the handwritten list in Moses Obeid’s writing? - paragraph 1396

What is the significance, if any, of the variations between the 2 July list and the handwritten list as concerns the provenance of the handwritten list? - paragraph 1405

The form and content of the various lists of companies in evidence - paragraph 1410

The submissions of the accused - paragraph 1420

Did Mr Macdonald provide the 2 July 2008 list (or the information it contained) to Moses Obeid? - paragraph 1438

Was the provision of the 2 July 2008 list (or the information on it) in breach of Mr Macdonald’s duties of confidentiality and/or impartiality and, if so, was that act of misconduct committed in furtherance of the conspiracy? - paragraph 1444

Dealings between Mr Brook (including as on behalf of Lehman Brothers), the Obeid family, and Monaro Mining NL - paragraph 1453

Mr Brook undertakes “desktop due diligence” of the handwritten list of companies - paragraph 1458

Mr Brook approaches Monaro Mining NL - paragraph 1459

Monaro Mining NL’s dealings with the DPI in 2007 and 2008 - paragraph 1464

Mr Brook’s further dealings with Monaro Mining NL - paragraph 1472

The 18 July 2008 conference with Mr Rumore and the first mention of Mr Brook and Monaro Mining NL - paragraph 1478

The “false” paper trail is created - paragraph 1482

23 July 2008: The initial Brook-Rumore-Obeid meeting and Lehman Brothers’ rejection of Mr Brook’s proposal - paragraph 1498

The Brook-Wong teleconference on 23 July 2008 - paragraph 1510

The Share Option Deed between Voope P/L and Monaro Mining NL - paragraph 1519

The first draft of the Share Option Deed [1604] - paragraph 1520

The second draft of the Share Option Deed [1620] - paragraph 1528

The third draft of the Share Option Deed [1650] - paragraph 1542

The fourth draft of the Share Option Deed [1660] - paragraph 1548

The executed Share Option Deed [1666] - paragraph 1552

Meanwhile at the DPI: The production of the documents the subject of the eighth act of misconduct from late July 2008 - paragraph 1563

The eighth act of misconduct - paragraph 1567

The Coutts memorandum of 5 August 2008 - paragraph 1582

Is the eighth act of misconduct established and, if so, was it committed in furtherance of the conspiracy? - paragraph 1587

The impact of the fact the Coutts Memorandum was not signed by the Minister upon proof of the eighth act of misconduct - paragraph 1598

The public launch of the EOI process and Monaro Mining NL is invited - paragraph 1608

Dealings between Mr Brook, Monaro Mining NL and the Obeids following the collapse of Lehman Brothers - paragraph 1612

The reopening of the EOI process and the ninth act of misconduct - paragraph 1636

The extension of the EOI process - paragraph 1638

Is the ninth act of misconduct established? - paragraph 1662

Monaro Mining NL’s Additional Financial Contribution (AFC) - paragraph 1672

Cascade Coal P/L submits an application for Mount Penny in the reopened EOI process - paragraph 1689

Post-conspiracy period - paragraph 1694

Moses Obeid meets with representatives of Cascade Coal P/L - paragraph 1700

The Evaluation Committee identifies an ambiguity in Monaro Mining NL’s application - paragraph 1702

Monaro Mining NL abandons its application - paragraph 1720

The Swissôtel Meeting - paragraph 1723

Were there further meetings between Mr Brook and Mr Rampe? - paragraph 1728

The first Cascade Coal P/L meeting - paragraph 1730

The second Cascade Coal P/L meeting - paragraph 1734

The third Cascade Coal P/L meeting - paragraph 1738

The Evaluation Committee’s decision in respect of the Mount Penny Coal Release Area and the grant of the EL - paragraph 1754

Mr Brook’s credibility and reliability - paragraph 1767

Sale of the Joint Venture - paragraph 1781

The Rights Termination Agreement - paragraph 1797

The Deed of Charge - paragraph 1800

Payment of Tranche 1 - paragraph 1804

Tranche 2 - paragraph 1806

Is the existence of the conspiracy established beyond reasonable doubt? - paragraph 1822

Money and motivation - paragraph 1882

The financial motives the Crown attributes to Edward Obeid and Moses Obeid - paragraph 1883

The accused’s submissions concerning motive - paragraph 1889

The motives the Crown attributed to Mr Macdonald - paragraph 1893

Mr Martin’s submissions on the question of motive - paragraph 1894

Change of ownership of Cherrydale Park - paragraph 1899

The appointment of UPG P/L as the new trustee company for the Moona Plains Family Trust - paragraph 1905

The Tripartite Landowners Deed - paragraph 1924

The Profit Sharing Deed - paragraph 1929

Moses Obeid’s further role in distancing the Obeid family from ownership of Cherrydale Park - paragraph 1936

Is Moses Obeid’s participation in the conspiracy proved beyond reasonable doubt? - paragraph 1951

The lies Moses Obeid told to Ms Davies - paragraph 1970

The lies Moses Obeid told to Mr Shanahan and Ms Jiminez - paragraph 1972

The guilt of Mr Macdonald and Moses Obeid is established beyond reasonable doubt - paragraph 1979

Is Edward Obeid’s participation in the conspiracy proved beyond reasonable doubt? - paragraph 1981

The co-conspirators rule - paragraph 1998

The Jones v Dunkel direction sought by the accused - paragraph 2021

Ultimate findings - paragraph 2031

Am I satisfied of the seriousness of the offending and that it merits criminal punishment? - paragraph 2034

Verdicts - paragraph 2046

JUDGMENT

1. HER HONOUR: The joint trial of the accused Mr Ian Macdonald, Mr Edward Obeid and Mr Moses Obeid was listed to commence before me on 10 February 2020 without a jury. ^[1]

2. During the course of pre-trial hearings on 3 - 9 April and 6 May - 6 June 2019, a draft indictment dated 8 April 2019 was served on the parties and furnished to the Court. It contained a minor amendment to the indictment dated 13 July 2017 upon which the accused were originally arraigned on 6 October 2017. The accused were not re-arraigned on the amended indictment.

3. The pre-trial hearings were conducted on the basis that the slightly reformulated charge in the indictment dated 13 July 2017 would be the offence the Crown intended to prosecute at trial and the charge upon which the accused would be re-arraigned at the commencement of the trial. That remained the position when the trial was listed for mention on 5 February 2020 to confirm the trial date. That indictment was in the following terms:

1. Between about 1 September 2007 and about 31 January 2009 at Sydney and elsewhere in the State of New South Wales (NSW), conspired together that Ian Michael Macdonald (Macdonald) in the course of or connected to his public office as Minister for Mineral Resources would wilfully misconduct himself, without reasonable cause or justification, by doing acts in connection with the granting of an exploration licence at Mount Penny NSW:

(a) without impartiality on the part of Macdonald; and/or

(b) in breach of Macdonald's duties of proper confidentiality; and

(c) concerning the interests of Edward Moses Obeid, Moses Edward Obeid, and/or their family members and/or associates, such misconduct being serious and meriting criminal punishment having regard to the responsibilities of the Office and the Officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those objects.

4. On 9 February 2020, the Crown notified its intention to seek a grant of leave to amend the indictment dated 13 July 2017 and to have the accused re-arraigned on a reformulated charge of conspiracy to commit the common law offence of wilful misconduct in public office. ^[2]

5. The charge as reformulated was in the following terms:

Between about 1 September 2007 and about 31 January 2009 at Sydney and elsewhere in the State of New South Wales, each of the accused conspired together that Mr Macdonald would, in the course of or connected to his public office as Minister for Mineral Resources in the Executive Government of the State of New South Wales, wilfully misconduct himself, without reasonable cause or justification, by doing acts:

(a)   in connection with the granting of an exploration licence at Mount Penny in the State of New South Wales; and

(b)   concerning the interests of Edward Moses Obeid and/or Moses Edward Obeid and/or their family members and/or associates; and

(c)   knowingly or recklessly in breach of:

(i)   his duties and obligations of impartiality as a Minister in the Executive Government of the State of New South Wales; and/or

(ii)   his duties and obligations of confidentiality as a Minister in the Executive Government of the State of New South Wales,

such misconduct being serious and meriting criminal punishment having regard to the responsibilities of the Office Mr Macdonald occupied as Minister for Mineral Resources and his responsibilities as the holder of that Office, the importance of the public objects which the Office and Officeholder serve and the nature and extent of the departure from those objects.

(Emphasis added.)

6. On 10 February 2020, the first day of the trial, the Crown applied for leave under s 20 of the Criminal Procedure Act 1986 (NSW) to amend the indictment in those terms.

7. The application for leave to amend the indictment was opposed by each of the accused. Mr Martin, counsel for Mr Macdonald, submitted that the reformulated charge was defective for latent duplicity and/or a lack of particularity in the identification of what the Crown alleged to be the acts of wilful misconduct Mr Macdonald agreed with Edward Obeid and Moses Obeid he would commit in the Office he held as Minister for Mineral Resources.

8. Ms Francis, counsel for Edward Obeid, contended that the reformulated charge did not disclose an offence known to law and, that being the case, Edward Obeid intended to enter a demurrer to the indictment were leave granted to amend it.

9. Mr Neil QC, senior counsel for Moses Obeid, complained that for the Crown to allege that the accused agreed that Mr Macdonald would wilfully misconduct himself in public office, either by knowingly acting in breach of his Ministerial duties and obligations or because he was reckless as to whether that were so, was to render the charge defective as a matter of law. Mr Neil also raised the possibility that his client might demur to the indictment irrespective of whether the Crown’s application for leave to amend the indictment was granted.

10. On 10 February 2020, after I reserved my decision on the Crown’s application for leave to amend the indictment, the Crown notified its intention to have the accused arraigned on a further reformulated charge in the following terms, the words “or recklessly” having been deleted:

Between about 1 September 2007 and about 31 January 2009 at Sydney and elsewhere in the State of New South Wales, each of the accused conspired together that Mr Macdonald would, in the course of or connected to his public office as Minister for Mineral Resources in the Executive Government of the State of New South Wales, wilfully misconduct himself, without reasonable cause or justification, by doing acts:

(a)   in connection with the granting of an exploration licence at Mount Penny in the State of New South Wales; ^[3] and

(b)   concerning the interests ^[4] of Edward Moses Obeid, and/or Moses Edward Obeid and/or their family members ^[5] and/or associates; ^[6] and

(c)   knowingly in breach of:

(i)   his duties and obligations of impartiality as a Minister in the Executive Government of the State of New South Wales; and/or

(ii)   his duties and obligations of confidentiality as a Minister in the Executive Government of the State of New South Wales,

such misconduct being serious and meriting criminal punishment having regard to the responsibilities of the Office Mr Macdonald occupied as Minister for Mineral Resources and his responsibilities as the holder of that Office, the importance of the public objects which the Office and Officeholder serve and the nature and extent of the departure from those objects.

11. On 11 February 2020, following correspondence from the Crown which attached the further amended indictment, the Court reconvened. The accused did not oppose leave being granted to file the further amended indictment.

12. On 12 February 2020, the Crown formally presented an indictment dated 11 February 2020 upon which the accused were re-arraigned. On their arraignment each of the accused entered a plea of not guilty. ^[7]

The law of conspiracy

13. The offence of misconduct in public office is a common law offence. ^[8] A conspiracy to commit that offence is also a common law offence. ^[9] At common law, a conspiracy is an agreement intentionally entered into between two or more people to do an unlawful act or to do a lawful act by unlawful means. ^[10]

14. It is the fact of the agreement, or combination, to engage in a common enterprise of that kind which is the actus reus of the offence of conspiracy. However, in the absence of evidence of the words used or other conduct of the alleged conspirators at the time the agreement is forged, what is done in executing the agreement is commonly relied upon to prove both an anterior agreement to achieve the unlawful objective and the terms of that agreement, sometimes referred to as the scope of the agreement.

15. Proof of the scope of a conspiracy may also consist in evidence of the separate acts and declarations of the alleged co-conspirators which point to their common or shared objective. When considered in combination, those separate acts and declarations may justify the tribunal of fact finding that there must have been a conspiracy of the kind alleged. ^[11]

16. The mental element that renders a person liable as a conspirator is a shared intention with at least one other person that the unlawful act be committed. To express it another way, the agreement that is the essence of the offence of conspiracy consists in the manifestation of a common intention that an unlawful act occur. A mere expectation by one or more of the alleged conspirators that an unlawful act will occur will not be sufficient to make out the offence. ^[12]

17. Accordingly, in this trial it is not enough for the Crown to prove that Edward Obeid and Moses Obeid had the hope or expectation, however fervently held, that Mr Macdonald would misconduct himself as the Minister for Mineral Resources in connection with the granting of an exploration licence (EL) at Mount Penny in a way that would be to their ultimate benefit; each of the accused must have agreed that he would act in that way.

18. In this trial, as in any trial where a conspiracy is alleged, a clear distinction must be made and maintained between the existence of the conspiracy that is alleged and the participation of each of the alleged conspirators in it. Proof of both facts, to the criminal standard, is essential to proof of guilt.

The conspiracy charged in this trial

19. The offence upon which the accused were ultimately arraigned alleges that “[b]etween about 1 September 2007 and about 31 January 2009” they each “conspired together” (that is, they each intentionally entered into an agreement) that “in the course of or connected to his public office as Minister for Mineral Resources in the Executive Government of the State of New South Wales”, Mr Macdonald would “wilfully” (that is, knowingly) ^[13] “misconduct himself” by acting in breach of his Ministerial duties and obligations of confidentiality and/or impartiality, “in connection with the granting of an exploration licence” at Mount Penny, and that he would do so for the improper purpose of benefiting Edward Obeid and/or Moses Obeid and/or members of their family and/or their associates.

20. Put simply, it is the Crown case that each of the accused agreed that as Minister for Mineral Resources Mr Macdonald would commit the common law offence of misconduct in public office by doing “the acts” alleged in the indictment, namely (unspecified) acts in connection with the granting of an EL at Mount Penny concerning the financial interests of the accused and/or members of their family and/or their associates, for the improper purpose of benefitting some or all of those people, and that, by agreeing that Mr Macdonald would act in that way, each of the accused knew and intended that Mr Macdonald would wilfully breach his Ministerial duties and obligations of impartiality and/or confidentiality.

21. The indictment also alleges that the misconduct is:

… serious and meriting criminal punishment having regard to the responsibilities of the Office Mr Macdonald occupied as Minister for Mineral Resources and his responsibilities as the holder of that Office, the importance of the public objects which the Office and Officeholder serve and the nature and extent of the departure from those objects.

Controversies as to the elements of the conspiracy charged

22. Two related controversies as to the elements of the conspiracy charged were addressed by the parties in their closing submissions.

23. The first concerned whether it is an element of the substantive offence of misconduct in public office that the misconduct in question is so serious as to merit criminal punishment and, if it is, how that element is imported into a conspiracy to commit that offence.

24. A related controversy concerned whether the Crown is obliged to prove that at the time the conspiratorial agreement was reached, each of the accused knew or appreciated that the acts of misconduct it was agreed Mr Macdonald would commit in public office was so serious as to merit criminal punishment, where the Crown alleges an agreement at a high level of generality rather than an agreement which contemplated that Mr Macdonald would commit specified acts of misconduct in furtherance of achieving the object of the conspiracy, or whether I am required to make that assessment before verdicts of guilty could be returned against the accused.

25. The following analysis addresses and resolves those controversies.

26. The first question involves a consideration as to whether what has been identified in the case law as the final element of the substantive offence of misconduct in public office, obliging the tribunal of fact to be satisfied that the proven act(s) of misconduct are so serious as to merit punishment before a conviction can result, ^[14] is imported as an element into a conspiracy to commit that offence. If it is, it follows that the Crown would be obliged to prove that those alleged to be party to an agreement that a public officer should wilfully misconduct themselves in public office must also know and intend that the misconduct comprehended by the agreement is so serious as to merit criminal punishment, and that they knew or appreciated that fact at the time they agreed to be party to the agreement.

27. That is a question as to which there is no binding or persuasive authority.

28. Its resolution will also inform resolution of the wider challenge to the indictment mounted by each of the accused. In different ways and with different emphasis, counsel for the accused in their closing submissions argued that the indictment does not disclose an offence known to the law and that I should direct verdicts of not guilty for each of the accused.

29. These various challenges to the indictment need to be resolved before any consideration can be given to resolving the factual disputes that arise on the evidence, and whether the facts and circumstances that I am satisfied are established by the evidence are sufficient to prove the guilt of any of the accused of the conspiracy alleged beyond reasonable doubt. ^[15]

The submissions of the Crown

30. In the Crown’s submission, the elements of the conspiracy offence charged are clearly identified in the way the indictment is framed.

31. Having regard to the elements of the substantive offence of misconduct in public office, the Crown accepted that in proving a conspiracy to commit that offence, it must prove that each of the accused knew or intended that Mr Macdonald would:

i. as a public official;

ii. in the course of, or connected to, his public office;

iii. commit misconduct by:

a. intentionally doing acts in connection with the granting of an exploration licence at Mount Penny NSW;

b. with the improper purpose of benefitting Edward and/or Moses Obeid and/or their family members and/or associates;

iv. commit the misconduct set out at (iii) above wilfully, that is knowing that he was acting in breach of:

a. his duties and obligations of impartiality as a Minister in the Executive Government of the State of New South Wales; and/or

b. his duties and obligations of confidentiality as a Minister in the Executive Government of the State of New South Wales;

v. without reasonable excuse or justification.

32. In relation to iii(b.) above, the Crown accepted that it was also obliged to prove that each of the conspirators appreciated that “but for” the improper purpose alleged, Mr Macdonald would not have agreed to act in connection with the granting of an EL at Mount Penny in wilful breach of his Ministerial duties and obligations. The improper purpose need not be the sole purpose for which Mr Macdonald agreed to misconduct himself in the way alleged, but it must be proved that he would not have acted in the way alleged were it not for that improper purpose. ^[16]

33. The Crown submitted ^[17] that were I satisfied that each of the elements in (i)-(v) above are proved beyond reasonable doubt, before I could convict any of the accused I must also be satisfied, beyond reasonable doubt, that the misconduct the subject of the agreement into which each of the accused intentionally entered was serious and meriting criminal punishment having regard to the responsibilities of the Office Mr Macdonald occupied as the Minister for Mineral Resources, his responsibilities as the holder of that Office, the importance of the public objects which the office and Officeholder serve and the nature and extent of the proven departure from those objects.

34. In the Crown’s submission, where a conspiracy to commit the substantive offence of misconduct in public office is charged, this final “element” does not require the Crown to prove that the alleged conspirators knew, intended or were aware that the commission of the particular acts of misconduct in public office contemplated by the agreement into which they intentionally entered were, or would be, so serious as to merit criminal punishment.

35. That is, for the purposes of this trial, the Crown submitted it was not obliged to prove that the accused agreed and intended that the acts of misconduct it was agreed Mr Macdonald would commit ^[18] pursuant to the agreement into which they each intentionally entered, and in which they each agreed they would participate, was, or would be, so serious that it merited criminal punishment. In the Crown’s submission, that “aspect” of the conspiracy, as framed in the indictment, is a qualitative assessment to be undertaken by the tribunal of fact. It only arises if I am satisfied that the existence of the conspiracy is proved beyond reasonable doubt and that the participation of the accused whose guilt is under consideration is also proved beyond reasonable doubt.

36. In the Crown’s analysis, the final “element” of the substantive offence of misconduct in public office operates to confine its scope so as to distinguish it from other conduct of a public official, or of a person holding public office, which might attract public condemnation, including, for example, corrupt conduct under statute. ^[19] The Crown submitted it is for that reason that the seriousness of the misconduct is assessed in the context of the responsibilities of the Office occupied by the public official and the public objects served by the Office and the Officeholder.

37. In the Crown’s submission, the significance of the qualitative assessment of the proven misconduct that must be undertaken by the tribunal of fact where a conspiracy to commit the common law offence is charged, also operates as a precondition to conviction and in the same way. That is, before a verdict of guilty could lawfully be returned against any of the accused in this trial, I must be satisfied that the scope or object of the misconduct which it was agreed Mr Macdonald would commit is so serious as to attract punishment as a crime. In that way, the conspiracy charged is distinguished from an agreement to commit another criminal offence that might also attract public opprobrium, including, for example, a conspiracy to defraud committed by executives of a public corporation.

38. The Crown submitted that, viewed in that way, and despite that qualitative assessment being described as an element of the substantive offence of misconduct in public office in the cases in this Court which have recently considered the constituent elements of that offence, ^[20] that assessment is not an element of the substantive offence, at least not in the technical sense. Rather, it comprehends what the Crown described as “an act, fact or circumstance, or state of mind [of the accused] at the time of [the commission of] the offence which renders it criminal”. ^[21]

39. The Crown submitted the correctness of that analysis follows, by analogy, from Peters v The Queen ^[22] where the concept of dishonesty in a charge of conspiracy to defraud the Commonwealth was held not to be a separate element of that offence. For that reason, the subjective test of dishonesty formulated in the English cases, including R v Ghosh, ^[23] which required a jury to be satisfied that an accused must realise that what they were doing was dishonest by the standards of ordinary and reasonable people, was regarded as superfluous in a conspiracy to defraud under the Crimes Act 1914 (Cth). As Toohey and Gaudron JJ observed at [9], dishonesty in the context of that offence is a characteristic of the means the conspirators agreed would be employed to affect the fraud and also descriptive of what is involved in fraud.

40. At [15], a passage upon which the Crown placed particular reliance, their Honours said:

There is a degree of incongruity in the notion that dishonesty is to be determined by reference to the current standards of ordinary, honest persons and the requirement that it be determined by asking whether the act in question was dishonest by those standards and, if so, whether the accused must have known that that was so. That incongruity comes about because ordinary, honest persons determine whether a person's act is dishonest by reference to that person's knowledge or belief as to some fact relevant to the act in question or the intention with which the act was done. They do not ask whether he or she must be taken to have realised that the act was dishonest by the standards of ordinary, honest persons. Thus, for example, the ordinary person considers it dishonest to assert as true something that is known to be false. And the ordinary person does so simply because the person making the statement knows it to be false, not because he or she must be taken to have realised that it was dishonest by the current standards of ordinary, honest persons.

41. At [28]-[29], and then later at [33]-[34], their Honours explained how the issue of dishonesty arises in the context of a conspiracy to defraud and how that issue should be dealt with in a jury trial:

[28] As in other contexts, the question whether the agreed means are dishonest is, at least in the first instance, a question of knowledge, belief or intent and, clearly, that is a question of fact for the jury. On the other hand, the question whether, given some particular knowledge, belief or intent, those means are dishonest is simply a question of characterisation. And as in other contexts, the question whether an act done with some particular knowledge, belief or intent is properly characterised as dishonest is usually not in issue. Thus, putting to one side the exceptional case where it is in issue, it is sufficient for a trial judge simply to instruct the jury that they must be satisfied beyond reasonable doubt as to the knowledge, belief or intent alleged by the prosecution before they can convict. Alternatively, the trial judge may instruct the jury that, if satisfied as to the knowledge, belief or intent alleged, the means in question are properly characterised as dishonest and they should so find.

[29] Because of the view expressed by McHugh J and Gummow J in this case, we should indicate that we incline to the view that should an issue arise whether the agreed means are properly characterised as dishonest, that issue should be left to the jury. At least, that is so if the means are capable of being so characterised. And the jury should be instructed that the question whether they are to be characterised as dishonest is to be determined by application of the standards of ordinary, decent people. However, these issues need not be pursued in this case.

…

[33] As already explained, "dishonesty" does not appear in the statute establishing the offence of conspiracy to defraud the Commonwealth. But when properly analysed, the offence of conspiracy to defraud involves dishonesty at two levels. First, it involves an agreement to use dishonest means. Ordinarily, the means will be dishonest if they assert as true something which is false and which is known to be false or not believed to be true or if they are means which the conspirators know they have no right to use or do not believe that they have any right to use the means in question. And quite apart from the use of dishonest means, the offence involves an agreement to bring about a situation prejudicing or imperilling existing legal rights or interests of others. That, too, is dishonest by ordinary standards. If those matters are properly explained to a jury, further direction that the accused must have acted dishonestly is superfluous. Conversely, if those matters are not properly explained, a direction that the jury must be satisfied that the conspirators were dishonest is unlikely to cure the defect.

[34] It need hardly be said again that a statute establishing an offence may use the term "dishonestly" in its ordinary meaning or use it in a special sense. In either case it will ordinarily be necessary for the trial judge to explain precisely what the legislation requires. In the case of conspiracy to defraud, it will ordinarily be sufficient to instruct the jury as to the facts they must find if the agreed means are to be characterised as dishonest. Alternatively, it will be sufficient to instruct them that, if satisfied as to those facts, they will be satisfied that the agreed means were dishonest. Only in the borderline case will it be necessary for the question whether the means are to be so characterised to be left to the jury. In this area, but only in this area, we differ from the approach taken by McHugh J and Gummow J.

42. The approach taken by McHugh J (with whom Gummow J agreed) was not entirely coincident with the approach taken by Toohey and Gaudron JJ. It was, however, otherwise concordant with the proposition that proof of a deliberate design on the part of conspirators charged with conspiracy to defraud by using dishonest means to achieve their object, whilst essential to proving the offence, does not equate with an obligation on the part of the Crown to prove that the conspirators must know they were acting dishonestly, whether that is judged by their own subjective standards or their knowledge of the standards of ordinary people. ^[24]

43. Consistent with the analysis at [15] in the joint judgment of Toohey and Gaudron JJ in Peters v The Queen, the Crown submitted that it would be incongruous to impose upon the Crown in this trial the obligation of proving that the accused were aware that the contemplated acts of misconduct were, or would be, assessed by a tribunal assessing their guilt as being so serious as to merit criminal punishment.

The submissions of the accused

44. The accused submitted that the Crown has fatally misconceived the case it seeks to prosecute by failing to allege in the indictment that the conspirators agreed and intended that Mr Macdonald would misconduct himself in such a way that would be sufficiently serious to merit criminal punishment. They submitted it is a fundamental misconception of the case brought against them that the Crown does not undertake the obligation of proving that they were each aware of, or knew that, the contemplated misconduct would be of that scope or character.

45. The accused submitted that it is not to the point that what they described as the final element of the substantive offence of misconduct in public office does not have a mental element, in the sense that the jury (or a judge in a judge-alone trial) does not enquire whether a person charged with that offence knew or believed or was reckless as to whether the act of misconduct committed by them was so serious as to warrant criminal punishment. The accused submitted that it remains a fundamental and uncontroversial feature of a conspiracy to commit a common law offence, that an accused know and intend each of the facts that make the act or acts unlawful, since it is that state of mind which is the source of the moral culpability comprehended by the crime of conspiracy. ^[25]

46. The accused submitted that this Court, and appellate courts in other jurisdictions, have consistently described the requirement that proven misconduct is serious and meriting criminal punishment as an element of the substantive offence of misconduct in public office, and that the Crown has cited no authority for what Mr Neil described in his submissions as the Crown’s “novel contention” ^[26] that the seriousness of the misconduct is not an element of the substantive offence “in the technical sense”. ^[27] Mr Neil observed that that contention was advanced by the Crown for the sole purpose of supporting the correctness of its analysis that the seriousness of the misconduct it was agreed that Mr Macdonald would commit is not a feature or factor which makes the agreement unlawful, but rather that it “sits outside” the agreement that is the subject of the conspiracy charged.

The authorities

47. An authoritative analysis of the elements of the substantive offence of misconduct in public office commences with R v Quach, ^[28] a decision of the Victorian Court of Appeal in 2010. After considering the analysis by Sir Anthony Mason NJP in a decision of the Hong Kong Court of Final Appeal, ^[29] Redlich JA (Ashley JA and Hansen AJA concurring) identified what his Honour described as the elements of the substantive offence of misconduct in public office in the following way:

(1) a public official;

(2) in the course of or connected to his public office;

(3) wilfully misconduct himself; by act or omission, for example, by wilfully neglecting or failing to perform his duty;

(4) without reasonable excuse or justification; and

(5) where such misconduct is serious and meriting criminal punishment having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those objects.

48. Importantly, in identifying what Redlich JA described as the final element, his Honour rejected the analysis of Lord Widgery CJ in R v Dytham ^[30] proposed by the appellant, to the effect that the element of culpability in the commission of the offence must be of such a degree that the impugned misconduct was “calculated” to injure the public interest so as to call for condemnation and punishment for that reason, and it is that feature of the so-called “element of culpability” which should impose upon the prosecution the obligation of proving that the accused’s conduct was so calculated.

49. In rejecting that analysis, Redlich JA shared the views expressed by Mason NJP in Shum Kwok Sher v HKSAR at [76] that the remarks of Lord Widgery CJ upon which reliance was placed, when read in context, concerned a concept of culpability, not in the sense of incorporating it into the mental element of the offence, but as embracing two different considerations: first, the absence of reasonable excuse or justification for the misconduct; and, second, that the conduct complained of must not simply amount to corrupt conduct or dishonest conduct, but must be of a sufficiently serious nature to warrant criminal punishment. ^[31]

50. At [86], Mason NJP went on to describe the second concept of culpability as a “qualification” attaching to the elements of the offence which he had identified at [84] as:

(a) A public official;

(b) who in the course of or in relation to his public office;

(c) wilfully and intentionally;

(d) culpably misconducts himself.

51. At [86]-[87], that qualification was further described:

The second qualification which I attach to the elements of the offence stated in the previous paragraph is that the misconduct complained of must be serious misconduct. Whether it is serious misconduct in this context is to be determined having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those responsibilities.

Although this qualification is not made in the earlier cases, it underlies the concluding observations of Lord Widgery CJ in R v Dytham. The qualification is consistent with the concept of abuse of office and it is appropriate that the offence should be so qualified in the light of the creation of a range of disciplinary offences that now apply in the case of public sector employees. The qualification is not to be taken as a dividing line between the offence of misconduct in public office and disciplinary offences. There is no doubt a borderland in which the common law offence and disciplinary offences overlap.

52. In Obeid v R (2015), ^[32] having expressly adopted the elements of the offence identified in Quach (which it was noted followed a review of the Australian, Canadian, English and Hong Kong decisions), the Court made the following remarks about the so-called fifth or final element of the substantive offence of misconduct in public office:

Turning to Mr Obeid’s third submission, what delineates this offence is not the presence or absence of connection between the conduct and the office, but rather the qualitative assessment required by the fifth element, which reflects what has been said in R v Dytham [1979] 1 QB 722 at 727-728, Question of Law Reserved (No 2 of 1996) (1996) 67 SASR 63 at 78-79, by Mason NPJ in Shum Kwok Sher v HKSAR (2002) 5 HKCFAR 381 at 409-410 and by the Court of Appeal in Attorney General’s Reference (No 3 of 2003) at [56]. These authorities were considered in R v Quach at [42]-[45]. Far from leaving the boundaries of the offence “entirely at large”, it is a necessary condition that the misconduct has the requisite serious quality, meriting criminal punishment, in light of the nature and importance of the office and the public objects served. It is this requirement, ultimately, which confines the scope of the offence. In an appeal in which many points were taken, there was no objection taken to the fact that the qualitative assessment required by the fifth element rendered the offence uncertain.

53. That passage was then quoted with approval by Bathurst CJ in Obeid v R (2017) ^[33] at [221]. ^[34]

54. In that appeal, one of the grounds advanced by the appellant concerned the so-called fifth or final element of the common law offence of misconduct in public office, the contention being that the trial judge had wrongly directed the jury in respect of the need for the jury to be satisfied of the seriousness of the misconduct before returning a verdict of guilty.

55. The written direction given to the jury by the trial judge mirrored the articulation of the final element of the offence of misconduct in public office identified in Quach. In elaborating upon his written directions, the trial judge’s oral directions to the jury included the following:

… The misconduct must be worthy of condemnation and punishment. The misconduct must be so serious that it amounts to an abuse of the public's trust in the office holder. It can be distinguished from less serious forms of misconduct by a public officer, specifically in the case of a Member of the Legislative Council [MLC], it can be distinguished from other misconduct for which civil proceedings might be brought if say the State has suffered some loss from this conduct or say an MLC has profited from his actions.

The misconduct that constitutes this offence can also be distinguished from misconduct from which the appropriate sanction might only be censure by Members of Parliament or only by the exercise of a judgment by the electorate at the next election. As I said the threshold is a high one. It requires an objective assessment by you that the conduct is worthy of condemnation of [[sic]] criminal punishment.

As the written directions indicate to address this element you must have regard to the responsibilities of the office and office holder, the importance of the public objects which they serve and the nature and extent of the departure from those objects.

…

In relation to the public objects which the office of MLC serves you recall I outlined the place that MLCs occupy in the structure of government in this State. Members of the Legislative Council and the Legislative Assembly are an essential part of the structure of democratic Government. The necessity for them to act in the manner I have stated is self-evidently required to promote that form of government. Serious departures from that duty can undermine the public's confidence that Members of Parliament are representing their interests and those of the electorate and in turn they can undermine the integrity of parliamentary democracy.

56. On appeal, the appellant submitted the direction to the jury was wrong in law because it omitted two essential elements: (i) that the misconduct must be so far below acceptable standards as to amount to an abuse of the public’s trust in the officeholder; and (ii) that it must have the effect of harming the public interest. ^[35]

57. Neither of those submissions found favour with the Court. ^[36]

58. What is important for present purposes is not only the detailed analysis of authorities in other jurisdictions which informed the Court’s rejection of this ground of appeal, but the fact that, although at [222] Bathurst CJ implicitly emphasised that the seriousness of the misconduct and an assessment as to whether or not it merited criminal punishment operated as a limiting feature of the offence, at [223]-[234] his Honour consistently referred to the correct or appropriate formulation of a direction to the jury concerning the seriousness of the misconduct as comprising an element of the offence.

59. In adopting that nomenclature, it is clear that his Honour followed the decision of this Court in Obeid v R (2015), ^[37] and the decisions in other jurisdictions which both preceded and followed that decision where the formulation of the final element as a constituent component of the offence has been considered.

Determination of the controversy as to the “final element” of the substantive offence of misconduct in public office in a conspiracy to commit that offence

60. Unsurprisingly, in the course of identifying what needs to be proved beyond reasonable doubt for the substantive offence of misconduct in public office to be made out, this Court, as with courts in other common law jurisdictions, has applied the conventional legal analysis of identifying the constituent elements of the offence. In the absence of any binding or persuasive authority, I do not treat those same constituent elements or preconditions to proof of the substantive offence of misconduct in public office as determinative of what a party to a conspiracy that a public official commit misconduct in public office needs to know or intend in order that a conviction for a conspiracy to commit that offence is legally available.

61. I have come to that conclusion, not by reference to the what the Crown submitted was the analysis in Peters as to how the issue of dishonesty is to be treated where a conspiracy to defraud is alleged, as to which I am satisfied no useful parallels can be drawn, but instead by an analysis of what I am satisfied are facts each of the accused had to know in order to make the agreement to commit an unlawful act into which they are each alleged to have intentionally entered.

62. R v Freeman ^[38] (a case to which Mr Neil referred in his submissions in the course of challenging the indictment) is instructive.

63. Freeman was concerned with a charge of conspiracy to pervert the course of justice where, as Street CJ observed, the conspiracy was not constituted by an agreement to commit an unlawful act, but an agreement to achieve a result by unlawful means, namely the corruption of the bail process by an agreement that an accused would use his own money as security for release to bail. The significance of Freeman, for present purposes, is as an additional source of authority for the proposition that a person’s criminal liability for conspiracy is not one of absolute or strict liability. ^[39] The Crown must also prove that those who are participants in the conspiracy intend that the legal elements which comprise the conduct contemplated by the agreement will be agreed to in the knowledge that it is those facts which render that conduct illegal.

64. Freeman is also authority for another proposition which reflects an uncontroversial statement of the law that the common law offence of conspiracy is complete upon the making of an agreement. The additional proposition is that in proving the relevant intention which constitutes the mens rea of the offence of conspiracy (in this trial the intentional participation by each of the accused in an unlawful agreement that Mr Macdonald would commit misconduct in public office) the focus must be on the state of mind of the accused at the time the agreement was forged. As Street CJ said at 309, albeit in the context of a conspiracy to pervert the course of justice (the offence charged against Ms Freeman), it is “not relevant to look ahead and contemplate that unlawfulness or irregularity may have become apparent when one or more of the parties to the agreement was or were actually confronted with the bail documents or when their true purport was explained by the bail justice”. Similarly in this case, the Crown must prove that the parties to the conspiracy intended that the unlawful conduct the subject of their agreement would be committed by one of them, namely by Mr Macdonald as the only conspirator who had the capacity to commit that offence, but that all parties to the agreement (including Mr Macdonald) agreed that he should carry out their common design by doing things with the shared knowledge or belief that what they agreed that he should do would constitute a criminal offence.

65. The question, as I see it, is what did each of the accused need to know (or appreciate or understand) in order that what they agreed that Mr Macdonald would do in connection with the granting of an EL at Mount Penny concerning Edward Obeid and/or Moses Obeid’s interests and/or those of their family and/or associates would, in fact, constitute misconduct in the public office Mr Macdonald occupied as Minister for Mineral Resources in order to render them liable to conviction for the conspiracy charged?

66. I am satisfied, and direct myself accordingly, that the accused needed to know and intend that Mr Macdonald would:

1. as a public official;

2. in the course of, or connected to, his public office;

3. commit misconduct by:

(a) intentionally doing acts in connection with the granting of an EL at Mount Penny in New South Wales;

(b) with the improper purpose of benefitting Edward Obeid and/or Moses Obeid and/or their family members and/or associates;

and that he would

4. commit the misconduct set out at (iii) above wilfully, that is knowing that he was acting in breach of:

(a) his duties and obligations of impartiality as a Minister in the Executive Government of the State of New South Wales; and/or

(b) his duties and obligations of confidentiality as a Minister in the Executive Government of the State of New South Wales;

5. without reasonable excuse or justification.

67. In relation to elements (i) and (ii), there was no issue between the parties that, at all times relevant to the events comprehended by the conspiracy, in the Office Mr Macdonald held as a Minister in the Executive Government of the State of New South Wales, he was a public official. ^[40]

68. It is also essential for the Crown to establish as a fact that the Ministerial duties and obligations of impartiality and confidentiality it was agreed that Mr Macdonald would breach would be breached in the course of or in relation to the public office he held as the Minister for Mineral Resources. That is, the Crown must establish that what each of the accused agreed that Mr Macdonald would do by agreeing he would wilfully misconduct himself by breaching his duties of impartiality and/or confidentiality, in connection with the granting of an EL at Mount Penny for the improper purpose alleged, would be causally linked to the office he held as Minister for Mineral Resources. Although each of the accused contended that the Crown had failed to prove any relevant breach of those duties, in the event that a wilful breach of either or both Mr Macdonald’s duties of confidentiality or impartiality was established, it was accepted the necessary causal link was proved.

69. As to elements (iii), (iv) and (v), the Crown is obliged to prove (and I direct myself accordingly) that each of the accused knew and intended that Mr Macdonald would wilfully (that is, knowingly and deliberately) misconduct himself in the Office he held as Minister for Mineral Resources in connection with the granting of an EL at Mount Penny, and for the improper purpose alleged, because they each knew that by Mr Macdonald agreeing to act in that way he agreed he would breach his obligations and duties as a Minister without reasonable excuse or justification.

70. The Crown’s obligation to prove elements (iii), (iv) and (v) beyond reasonable doubt is fundamental to proving the guilt of each of the accused. Unsurprisingly, proof of those elements was the focus in the way the trial was conducted and the focus of closing arguments.

71. The Crown is not obliged, however, to prove that the accused knew or intended that the acts of wilful misconduct it was agreed Mr Macdonald would commit were of such seriousness that criminal punishment was warranted. That is a question that arises only if I am persuaded the Crown has established (i)-(v) above.

Is the conspiracy charged an offence known to the law?

72. Reasonably anticipating a challenge from each of the accused that the conspiracy charged on the indictment is not an offence known to law, the Crown submitted that a common law conspiracy to commit the common law offence of misconduct in public office is an offence known to law. The Crown also submitted that the indictment upon which the accused were arraigned does not otherwise suffer from any legal deficiency such as might attract directed verdicts of not guilty.

73. In their closing submissions, each of the accused submitted that the indictment is defective in failing to disclose an offence known to law and that verdicts of not guilty should be returned for that reason. ^[41]

74. Were I persuaded that the indictment fails to disclose an offence known to law, it follows that there will be no need to deal with a question raised by me during the course of closing arguments as to whether verdicts of guilty might be returned were I to conclude that a conspiracy of the same scope and object as that alleged in the indictment is established by the evidence, and that the other elements essential to proof of the conspiracy charged are proved beyond reasonable doubt, but that the underlying agreement was forged or came into existence later than 9 May 2008, the date on which, on the Crown case, the first act of misconduct was committed and the date by which, again on the Crown case, the agreement must have been in existence. In the event that I decline to direct verdicts of not guilty, it will be necessary to return to consider that question.

Is the failure to allege an “improper purpose” fatal to the indictment?

75. Ms Francis commenced her closing submissions by emphasising the statement of principle in the decision of Bathurst CJ in Maitland v R; Macdonald v R, ^[42] to the effect that where the offence of misconduct in public office is alleged, the line that distinguishes administrative fault from criminal liability must be clearly drawn. Ms Francis submitted that, as a consequence of the way the Crown has conducted its case in this trial, that line has not and cannot be drawn.

76. In developing her submission that the indictment fails to disclose an offence known to law, Ms Francis emphasised that fundamental to proof of the substantive offence of misconduct in public office is the proposition that the power or function exercised by the public official must be shown to have been exercised for a purpose foreign to the purpose for which the power or function was conferred. ^[43]

77. She submitted that it was on that analysis that Maitland v R; Macdonald v R is now binding authority for the proposition that in proving the substantive offence of misconduct in public office, the Crown is obliged to prove, as a component of the mental element of that offence, that “but for” the improper or illegitimate purpose for which the power, function or duty was performed in the particular case, the acts of misconduct would not have been committed. Ms Francis submitted that it follows that where a conspiracy to commit misconduct in public office is alleged, the Crown must prove that at the time the agreement is forged, the parties to that agreement must both know and intend that the public official will conduct themselves for an illegitimate or improper purpose, that is, for a power or function foreign to the purpose for which the particular power or function was conferred.

78. That being so, she submitted that the Crown was obliged to frame the conspiracy charged in the indictment so as to identify, in plain language, the improper purpose it alleges as the defining feature of the agreement that Mr Macdonald would misconduct himself in the public office he held as Minister for Mineral Resources. Ms Francis submitted that the indictment, as framed, is defective because it does not allege that defining or fundamental feature. She submitted that the Crown’s failure to identify, in express and clear terms, the improper purpose comprehended by the object of the conspiracy alleged, and the shared intention of the accused that the improper purpose be achieved, has resulted in an indictment that does not allege a conspiracy at law.

79. Ms Francis acknowledged that in its closing written submissions, the Crown accepted that in order to prove the conspiracy alleged, it must prove beyond reasonable doubt that each of the accused knew or intended, inter alia, that Mr Macdonald would commit misconduct by doing acts in connection with the granting of an EL at Mount Penny with the improper purpose of benefiting them and/or their family members and/or their associates. ^[44] However, that does not address what Ms Francis maintained was a fundamental defect in the framing of the indictment.

80. Ms Francis emphasised that the function of an indictment is to state with sufficient clarity the offence charged so as to define the issues for decision ^[45] and to clearly identify the case an accused is to meet. ^[46] The function served by the Crown particularising its case where a conspiracy is charged is to identify the overt acts of an accused referable to which the Crown seeks to prove both the existence of the conspiracy and participation of an individual accused in that conspiracy. Ms Francis submitted that the indictment is the formal statement of the charge and that the Crown cannot perfect an imperfect or defective indictment by serving a statement of particulars.

81. I do not accept the submission that the indictment upon which the accused were ultimately arraigned was defective by failing to specify or allege, in sufficiently clear language, that the improper or illegitimate misuse of Mr Macdonald’s power, duty or function as Minister for Mineral Resources in connection with the granting of an EL at Mount Penny was to benefit or favour the private interests of the accused and/or their family members and/or associates. It is not to the point that the indictment might have been framed differently or that it took a number of redrafts at the commencement of the trial before the indictment upon which the accused were ultimately arraigned was presented. I am satisfied that the indictment, as ultimately framed, alleges a single agreement to which it was alleged all three accused were party that Mr Macdonald would commit an unlawful act, namely, that he would misconduct himself in the course of or connected to his public office as Minister for Mineral Resources by acting, without reasonable cause or justification and in wilful breach of his Ministerial duties of impartiality and/or confidentiality, in connection with the granting of an EL at Mount Penny concerning the interests of Edward Obeid and/or Moses Obeid and/or members of the Obeid family and/or their associates.

82. Framed in that way, I am satisfied that the improper purpose that renders what it was agreed Mr Macdonald would do in connection with the granting of an EL at Mount Penny as unlawful, is inherent in what the Crown alleges was the agreement to which Edward Obeid and Moses Obeid are alleged to have been party, namely that Mr Macdonald would wilfully breach his Ministerial duties of impartiality and confidentiality concerning the interests of a discrete class of people, including Edward Obeid and/or Moses Obeid and/or their family and/or associates, in connection with the power or function of the Office he held as Minister for Mineral Resources, namely in connection with the granting of an EL at Mount Penny.

83. It is a question of evidence as to whether, in proving its case against all three accused, the Crown can prove that “but for” Mr Macdonald favouring the private interests of that cohort of people (or some of them) he would not have acted in the way he agreed to act, that is, were it not for that improper purpose he would not have misconducted himself in connection with the granting of an EL at Mount Penny by breaching his duty of impartiality in his dealings with the Department of Primary Industries (the DPI, the Department) in May and June 2008 (the first, second and fifth acts of misconduct, as particularised) and by breaching his duty of confidentiality and/or his duty of impartiality in his dealings with his co-accused (the fourth and the sixth to ninth acts of misconduct, as particularised).

84. In rejecting Ms Francis’ submission, I note that in Maitland v R; Macdonald v R, where the Court of Criminal Appeal held that the “but for” test of improper purpose was essential to proof of the mental element of the substantive offence of misconduct in public office, it was not suggested by the appellants that the indictment was defective by failing to allege (or even specify) the improper purpose which the Crown alleged was the reason the relevant power was exercised.

In that trial, Mr Macdonald was charged on an indictment with two counts of wilful misconduct in public office in identical terms as follows. Notably, in neither count is an “improper purpose” or the “improper purpose” alleged or identified:

1. On or about 21 August 2008 in Sydney in the State of New South Wales, then holding public office as Minister for Mineral Resources did in the course of and connected to his public office wilfully misconduct himself by granting Doyles Creek Mining Pty Ltd consent to apply for an exploration licence under the Mining Act 1992, without reasonable cause or justification, where such misconduct is serious and meriting criminal punishment having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those objects.

3. On or about 15 December 2008 in Sydney in the State of New South Wales, then holding public office as Minister for Mineral Resources did in the course of and connected to his public office wilfully misconduct himself by granting to Doyles Creek Mining Pty Ltd Exploration Licence No. 7270 under the Mining Act 1992, without reasonable cause or justification, where such misconduct is serious and meriting criminal punishment having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those objects.

85. The Court held that the trial judge had misdirected the jury as to what constituted the mental element for misconduct. The trial judge directed that the Crown was obliged to prove beyond reasonable doubt that Mr Macdonald was “substantially motivated” by the desire to confer a benefit (namely, the granting of consent to apply for an EL) on a private individual and a private entity and not, to “any significant degree”, by the object of furthering the interests of the State of New South Wales. The Court held that the trial judge should have directed the jury that the Crown was obliged to prove that the power exercised by Mr Macdonald by granting an EL to Doyles Creek Mining P/L would not have been exercised except for the illegitimate purpose of conferring that benefit. It is this element of the substantive offence of misconduct in public office that has since been referred to as the “but for” test. It is a test that needs to be satisfied in this case by the Crown proving that each of the accused knew, appreciated and intended that Mr Macdonald would not have agreed to act in connection with the granting of an EL at Mount Penny favouring their private interests “but for” that improper or illegitimate purpose.

86. Further, in seeking to prove the existence of the conspiracy by inference from what the Crown alleges were Mr Macdonald’s eight successive acts of misconduct as particularised, ^[47] the Crown accepted the obligation of proving (albeit not to the criminal standard) that each of those individual acts of misconduct would not have been committed by Mr Macdonald were it not for the improper purpose of benefiting the private interests of the accused and/or their family and/or their associates.

Does the failure to specify acts of misconduct, or how they might be committed, render the indictment defective?

87. Both Ms Francis and Mr Neil submitted that the indictment is also defective by failing to nominate or identify the acts of misconduct which the Crown alleges each of the accused Edward Obeid and Moses Obeid intended Mr Macdonald would commit pursuant to the agreement that he would misconduct himself in the office he held as Minister in connection with the granting of an EL at Mount Penny. Counsel’s submissions on that issue were similar but nonetheless sufficiently different to warrant separate consideration.

88. Mr Martin made the different submission that the scope of the misconduct alleged against Mr Macdonald in the indictment is “unduly expansive” and, for that reason, the Crown cannot prove that an agreement was reached which should attract criminal sanction. ^[48] This submission, while on one analysis, a challenge to the sufficiency of the indictment as a matter of law seems also to suggest that because the agreement was “unduly expansive” I would not be persuaded, as a matter of fact, that it was so serious as to merit criminal punishment. As to the latter question, it will only arise in the event I am satisfied the conspiracy is proved and that Mr Macdonald’s participation in that conspiracy is proved. Otherwise, I consider Mr Martin’s challenge to the indictment as “unduly expansive” is a variation on Ms Francis’ submission that the indictment is defective for lack of specificity as to the acts of misconduct it was agreed Mr Macdonald would commit.

89. Ms Francis submitted the indictment fails to conform with the common law requirement that the essential factual ingredients of an offence charged on indictment be identified. In her submission, in the context of this trial, that obliged the Crown to allege sufficient of the facts which would make what was agreed between the accused an agreement to commit an unlawful act. She submitted there can be no meeting of the minds where the conspiracy framed in this indictment fails to identify what is to be done pursuant to the agreement alleged, and fails to identify the nature of the benefit that the accused contemplated they would receive when the object of the agreement is achieved. ^[49] She submitted that the framing of a count of conspiracy in the terms alleged in the indictment in this trial by failing to identify the criminal liability that attaches to the conspiratorial arrangement is so reductive as to be meaningless at law. ^[50] By way of further elaboration, referring back to the statement of principle emerging from the observations of Bathurst CJ in Maitland v R; Macdonald v R, Ms Francis submitted that the agreement alleged in the indictment fails to “draw the line” ^[51] between administrative fault and criminal culpability.

90. Ms Francis developed that submission further by advancing the argument that the “high level agreement” ^[52] that the Crown has at all times sought to prosecute (that is, an agreement that had as its object that Mr Macdonald would commit misconduct in public office, but an agreement where the accused did not and could not have known at the time they entered into the agreement the particular acts of misconduct that Mr Macdonald would commit in its execution) ^[53] cannot, as a matter of law, constitute an agreement to commit the offence of misconduct in public office. Ms Francis submitted it is foundational to a conspiracy at common law that an accused know of the existence of facts which would make the conduct agreed to an offence as a matter of law, ^[54] and that an accused has that knowledge at that time the agreement is reached.

91. Ms Francis cited a number of cases in support of that proposition. ^[55] The correctness of those cases cannot be doubted.

92. In The Queen v LK; The Queen v RK ^[56] at [117] in the joint judgment of Gummow, Hayne, Crennan, Kiefel and Bell JJ, that principle was expressed in the following way. Although their Honours were concerned with the offence of conspiracy under s 11.5 of the Criminal Code (Cth), as their Honours make clear in the following passage, liability for the offence of conspiracy under the common law is no different to liability for the statutory offence of conspiracy:

[117] The offence of conspiracy under the Code is confined to agreements that an offence be committed. A person who conspires with another to commit an offence is guilty of conspiring to commit that offence. It was incumbent on the prosecution to prove that LK and RK intentionally entered an agreement to commit the offence that it averred was the subject of the conspiracy. This required proof that each meant to enter into an agreement to commit that offence. As a matter of ordinary English it may be thought that a person does not agree to commit an offence without knowledge of, or belief in, the existence of the facts that make the conduct that is the subject of the agreement an offence (as distinct from having knowledge of, or belief in, the legal characterisation of the conduct). This is consistent with authority with respect to liability for the offence of conspiracy under the common law. Subject to one reservation, it is how the fault element of the offence created in s 11.5(1) operates.

(Emphasis added and footnotes omitted.)

93. Ms Francis submitted that statement of principle should be extended to encompass a legal requirement that a party to a conspiracy must know of the existence of all and any facts necessary to make the conduct criminal. Authority for that proposition was said to source from R v Barbouttis (1995) 37 NSWLR 256; R v Schipanski (1989) 17 NSWLR 618; Pereira v DPP (1989) 82 ALR 217; [1988] HCA 57 and Bennett v R (1998) 144 FLR 311.

94. Mr Neil relied upon the same statement of principle in advancing the submission ^[57] that the conspiracy the Crown has elected to prosecute, where the misconduct the subject of the agreement is comprised in Mr Macdonald agreeing to do acts in connection with the granting of an EL at Mount Penny, but not an agreement to commit a specified unlawful act, is expressed at such a high level of abstraction as to allege a “general subject matter within which an unlawful act might potentially be found” ^[58] but not an unlawful act the commission of which has been agreed to. For that reason alone, Mr Neil submitted the indictment fails to allege an unlawful act sufficient at law to constitute a criminal conspiracy to commit that act.

95. Mr Neil submitted that it is not to the point that the Crown, in defence of framing the indictment as it was ultimately presented, relied upon the proposition for which the South Australian case of Aston v R ^[59] is authority, namely, that a person can be a willing conspirator (in that case to a fraudulent scheme knowing the scheme is fraudulent) but have no knowledge as to the manner in which the scheme was to be implemented, or knowledge of any of the essential steps that might be taken leading to its successful implementation.

96. I do not regard the case of Aston as decisive.

97. Aston concerned a charge of conspiracy to defraud the Commonwealth, an offence where the subject of the agreement was the intentional use of dishonest means to obtain an advantage for the accused by putting another person’s property at risk. In that case, the act identified in the indictment as the subject of the agreement was that various named people “conspired together” with other named people to defraud the Commonwealth in a particular way, namely:

… by arranging fictitious commodity futures trading losses through Southern Cross Commodities Pty Ltd such losses being capable of inclusion as to investment losses in income tax returns and intended to be so used whereby the Commonwealth would have been deprived of income tax properly payable to it. ^[60]

98. With the indictment in Aston framed with that level of particularity, it is, to my mind, hardly surprising that the Court took the view that there was no obligation on the Crown to prove in that case that the appellant/conspirator knew that fictitious documents were being used as part of a fraudulent scheme to which they were a party. The Court reasoned in the following way at 132:

Mr Borick complained that it was insufficient for the learned trial judge to direct the jury that there must be an understanding on the part of the appellants that their involvement was part of a larger scheme; he argued that there was an onus on the Crown to prove that the two appellants knew the bare essentials of the scheme; specifically, he said that the Crown should have been required to prove that the appellants knew that fictitious documents were being used as part of the scheme. This cannot possibly be the case; a person can be a willing conspirator in a fraudulent scheme, well knowing that the scheme is fraudulent, but having no idea of the manner in which it is implemented — not knowing any of the essential steps leading up to its implementation. If a person knows that a scheme is fraudulent and, nevertheless, participates in it, then he is as much guilty of the conspiracy to defraud as is the mastermind of the scheme. For example, if an accused person knows that a particular plan will enable a taxpayer (with apparent justification) to claim a deduction against his assessable income, and the accused knows that that deduction is or will be false — even though he does not know the details of the falsity or the means by which the falsehood was contrived — he can, if he appropriately participates in the plan, be guilty of conspiracy. In those circumstances it matters not whether the false deduction was contrived by use of false documents or by some other means: the actual method of operation is of no significance.

99. To the extent that passage is of persuasive guidance on the question whether the conspiracy charged in this case is sufficiently clear and unambiguous to constitute an offence known to law, it might be adapted and expressed in the following way: if either of Moses Obeid and Edward Obeid knew that what Mr Macdonald agreed to do in connection with the granting of an EL at Mount Penny concerning their interests would constitute a deliberate breach of his Ministerial duties and obligations of impartiality and confidentiality, and if they each knew that “but for” the improper purpose of benefitting either or both of them (and/or their family members and/or associates) Mr Macdonald would not have agreed to act in that way and, further, that with that knowledge they each intentionally entered into that agreement, then they are criminally liable as co-conspirators in a conspiracy that Mr Macdonald would commit misconduct in public office, irrespective of whether they knew of the precise steps Mr Macdonald would ultimately take to implement the agreement, and irrespective of whether, at the time the agreement was forged, they agreed that he should take those particular steps.

100. The resolution of the question raised by Mr Neil and Ms Francis is also usefully informed by three cases to which Mr Neil referred in his submissions. ^[61] Although those cases were cited as authority for the proposition that the offence of conspiracy is not committed merely by an accused talking about the possibility of committing some wrongful act or having an intention to agree that an unlawful act might be committed, in O’Brien the Court also emphasised that, unless the alleged conspirators reached the stage where they have agreed to commit that unlawful act, if it lies in their power, merely discussing the possibility of committing the unlawful act will not be sufficient to amount to a conspiracy at law. In that case, the question was whether the trial judge had adequately directed the jury that to convict the accused of a conspiracy to affect the escape of persons from prison, it needed to be satisfied that the only inference to be drawn from the primary fact of the accused taking pictures of the prison wall, and travelling some distance to the prison to do so, was that he had agreed with others to affect a prison break, as distinct from having had discussions with others to that end and taking preliminary steps to achieving it.

101. Again by analogy to this case, the question is whether the indictment, as framed, alleges a completed agreement where what is alleged is that Mr Macdonald will commit misconduct in the future by doing acts in connection with the granting of an EL at Mount Penny and where it is implicit that he will act in that way when the opportunity presents itself for him to do so without the need for further agreement as to what acts he would commit and when he should commit them.

102. In Mills (cited and discussed in O’Brien) Lord Parker CJ observed, authoritatively in my view, that even where an agreement has been reached “to do something if it is possible or propitious to do it”:

… if the matters left outstanding and reserved are of a sufficiently substantial nature, it may well be that the case will fall on the other side of the fence [that an agreement cannot be regarded as having been formed] and … that the matter is merely a matter of negotiation. ^[62]

103. The authorities discussed above guide the resolution of the challenges to the indictment raised by the accused by giving rise to the following questions.

104. Is there uncertainty or ambiguity as to what the accused are alleged to have agreed is the unlawful act that they agreed should be committed because: ^[63]

1. the object of the agreement was expressed at a level of generalisation or abstraction; or

2. the language used to identify the unlawful act averred in the indictment as the object of the conspiracy is vague or nonspecific; or

3. what was agreed upon was expressly or impliedly conditional as distinct from the manner of its performance; or

4. because of the existence of facts which make it uncertain whether the conduct the subject of the agreement is unlawful?

105. I am not satisfied that the way in which the indictment has been framed in this case admits of any defects of that kind. The indictment identifies the unlawful act as the offence of misconduct in public office. The indictment also makes it clear that the accused agreed that Mr Macdonald would commit that offence by doing acts in his capacity as Minister for Mineral Resources and in connection with the granting of an EL at Mount Penny concerning the interests of a discrete class of people, including the accused, in wilful breach of his Ministerial duties and obligations of impartiality and/or confidentiality. Although the Crown expressly disavowed any case that at the time the agreement was forged the accused (including Mr Macdonald) knew or could have known how or by what manner he would commit that offence, I am satisfied that what each of the accused is alleged to have agreed that Mr Macdonald would do (as the indictment is framed) is not so vague, ambiguous or uncertain as to undermine the legal sufficiency of the indictment to charge a common law conspiracy to commit misconduct in public office.

106. Mr Neil advanced the submission that the Crown’s express disavowal that the accused knew or could have known of the precise nature, or even the details of how Mr Macdonald would ultimately commit acts of misconduct in connection with granting an EL at Mount Penny concerning the interests of the accused and others at the time the agreement was forged, is also fatal to the Crown case. I am not persuaded of that submission or his further submission that without agreement as to what Mr Macdonald would do in that regard there could be no agreement to commit an unlawful act to which transactional details might later attach.

107. Mr Neil submitted the only possible construction of the agreement the subject of the conspiracy charged is that an agreement might crystallise at some time in the future once the details of what might be done in connection with the granting of an EL at Mount Penny were settled allowing the accused, at that time, to agree as to how Mr Macdonald would commit the offence of misconduct in public office for the improper purpose of benefitting them and others. To the contrary. In my view, the indictment does allege that the accused “conspired together” (that is, that they agreed that) Mr Macdonald would commit misconduct in public office in a specific way and to achieve an identifiable objective, namely, by doing acts in connection with granting an EL at Mount Penny concerning the interests Edward Obeid and/or Moses Obeid and others in wilful breach of his Ministerial duties and obligations of confidentiality and/or impartiality. At the time that agreement was reached (on the Crown case, at the latest by 9 May 2008), what remained to be determined was how the object of that agreement would be achieved in the transactional phase of the execution of the conspiracy. Those arrangements depended in large part, if not exclusively, on the unfolding course of Mr Macdonald’s dealings after 9 May 2008 with the DPI, the DPI with responsibility for the management of coal reserves in New South Wales, including what resulted from his specific dealings with the DPI in relation to its identification of a new coal release area at or near Mount Penny over which an EL might be granted, and his dealings with the Department thereafter resulting in the inclusion of the new Mount Penny Coal Release Area in an Expression of Interest (EOI) process for the grant of an EL.

108. That state of affairs did not render the forging of an agreement contingent on those steps being taken. Neither was it contingent on any further agreement as to how the object of their agreement might be achieved.

109. The indictment in this trial is to be contrasted with cases where it is obvious from the evidence adduced in the Crown case that the parties to an alleged conspiracy have not progressed their arrangements beyond negotiations or discussions about committing an unlawful act, or where it is clear, for other reasons, that there is no meeting of the minds as to the actual unlawful act to be committed. The indictment in this trial is also to be contrasted with cases where there is merely an expectation that one or other of the conspirators will be likely to commit an unlawful act without it being agreed that should occur. ^[64]

110. Mr Neil further submitted that the high level of abstraction in the way the Crown framed its case, including that there was no agreement that Mr Macdonald would do anything in particular in connection with the granting of an EL at Mount Penny, and that the indictment does not allege that Edward Obeid or Moses Obeid agreed to do anything at all, raises the further question as to how an agreement framed in that way could have been reached on the evidence the Crown adduced at the trial. That submission, together with other submissions which are focused on deficiencies in the evidence and the Crown’s failure to exclude a number of reasonable hypotheses consistent with innocence, must await an analysis of the evidence.

111. Accordingly, and for those reasons, I decline to direct verdicts of not guilty.

Is the use of the conjunction “and/or” in the indictment fatal?

112. Ms Francis submitted that there is a legal defect in the indictment inherent in the allegation that the accused conspired together that Mr Macdonald would knowingly breach his duties and obligations of impartiality and/or his duties and obligations of confidentiality. She advanced that submission using the following analogy: if one or more people agreed to rob a bank and contemplate the use of a gun, or a gun and a knife or simply a knife there is no conspiracy to commit the offence of robbery with a dangerous weapon. What is essential to proof of a conspiracy to commit that offence is that the parties to the agreement agreed and intended that a gun, simpliciter, would be used. ^[65]

113. That analysis is sound. It does not, however, follow by analogy that in this case there can be no conspiracy to commit the common law offence of misconduct in public office if the Crown proves that Mr Macdonald only acted knowingly in breach of his duty of confidentiality in connection with the granting of an EL at Mount Penny or if it proves that Mr Macdonald only acted knowingly in breach of his duty of impartiality. I understand the use of the conjunction “and/or” in the indictment to connote that what was contemplated by the agreement into which each of the accused intentionally entered, was that Mr Macdonald would misconduct himself as Minister for Mineral Resources by knowingly breaching either or both of those Ministerial duties and obligations when acting in connection with the granting of an EL at Mount Penny concerning the interests of Edward Obeid and/or Moses Obeid and/or their family and/or associates.

114. In his closing submissions, Mr Neil also addressed the use of the conjunction “and/or” in the indictment. Mr Neil submitted (as did Ms Francis) that the Crown case must fail because the indictment alleges that the misconduct it was agreed Mr Macdonald would commit was cast in the alternative, being a breach of his duty of impartiality and/or duties and obligations of confidentiality. He submitted that this was fatal to the Crown case not because the breach of Mr Macdonald’s Ministerial duties and obligations is cast in the alternative per se, but because of the way in which the Crown seeks to prove its case.

115. In Mr Neil’s submission, ^[66] there is nothing that can be demonstrated on the evidence to have been said or done by Mr Macdonald that could, as a matter of law, amount to a breach of any duty of confidentiality by which Mr Macdonald was bound as the responsible Minister under the Mining Act 1992 (NSW) (the Mining Act) (and in that capacity the embodiment of the State of New South Wales in the execution and administration of the Mining Act), in circumstances where the particular confidential information said by the Crown to have been provided or communicated as an act of wilful misconduct ^[67] was provided to him by the DPI in his capacity as Minister for Mineral Resources. Mr Neil submitted that the Crown has conflated a duty of confidentiality (which in his submission the Crown has failed to identify with sufficient particularity in the circumstances of this case) with a duty not to use information for an improper purpose (which he concedes does exist).

116. Mr Neil submitted that even if Mr Macdonald was bound by a duty of impartiality (which was not conceded), where the unlawful agreement the Crown sought to prosecute contemplated by the “and/or” construction a breach of confidentiality simpliciter (which Mr Neil submitted would not in law amount to an unlawful act, or at least not the unlawful act the subject of the conspiracy charged) then the Crown case must fail.

117. The question whether the Crown has established that Mr Macdonald in fact wilfully breached the duty of confidentiality imposed upon him at law in what he did from time to time in connection with the granting of an EL at Mount Penny (that is, the conduct particularised as five of the eight acts of misconduct ^[68] alleged to have been committed in furtherance of the conspiracy and, in that way, to prove, by inference, the existence of the conspiracy alleged) must await the detailed consideration which follows later in this judgment as to what is comprehended by a duty of confidentiality by which a Minister of the Crown is bound and by which Mr Macdonald was bound as Minister for Mineral Resources. Similarly, whether a Minister’s duty of impartiality is recognised at law and its scope and terms are such that a breach of it might ground an allegation of wilful misconduct must also await further consideration. ^[69]

118. On the remaining question raised by Mr Neil as to whether the framing of the indictment by use of the conjunction “and/or” is fatal to the integrity of the indictment, I apply the same analysis to the submission advanced by Ms Francis. I am not satisfied that framing the indictment in that way has produced the result that no offence known to law is disclosed. I refer later to the fact that each of the acts of misconduct numbered four and six to nine inclusive, in the way the Crown has particularised its case, allege a breach of both Mr Macdonald’s duties of impartiality and confidentiality. I also discuss at that time the impact of that formulation on the question whether all or any of those five acts of misconduct are established on the evidence the Crown relied upon to prove that fact.

119. I also note that there is a discrepancy between the indictment and the Crown’s Revised Statement of Particulars ^[70] as to the precise way in which the breaches of the relevant Ministerial duties are said to have been committed. In the indictment, it was alleged that the accused agreed Mr Macdonald would wilfully misconduct himself knowingly in breach of his duties of confidentiality and/or impartiality. On that construction, the acts committed in furtherance will be proved where a breach of confidentiality, or a breach of impartiality, or breaches of both duties, are established. However, in the Revised Statement of Particulars, the fourth and sixth to ninth acts of misconduct are said to have been committed in breach of Mr Macdonald’s duties and obligations of confidentiality and impartiality. In my view, nothing turns on that inconsistency. I do not regard the Revised Statement of Particulars as obligating the Crown to prove that each of those acts of misconduct constituted a breach of Mr Macdonald’s duties of both confidentiality and impartiality, in the sense that those acts of misconduct will not be proved unless a breach of both confidentiality and impartiality is proved. I regard it as sufficient that a breach of one or other of Mr Macdonald’s duties of confidentiality or impartiality is proved to have been breached in the commission of those of the acts of misconduct alleged to have been committed in breach of both duties.

Mr Neil’s additional challenges to the indictment: Does the Crown have to allege that Edward Obeid and Moses Obeid agreed to do anything to further the object of the agreement?

120. Mr Neil advanced a number of further submissions in support of the proposition that there are fundamental defects in the indictment which ought to attract directed verdicts of not guilty.

121. He submitted that Moses Obeid cannot be liable as a matter of law (or mixed fact and law) as a party to the conspiracy alleged where the Crown does not allege, either in the way the indictment is framed or in the way it puts its case, that when he entered into the agreement (on the Crown case on a date no later than 9 May 2008) he agreed to do anything in furtherance of the conspiracy.

122. As the Crown framed the charge, Moses Obeid (and Edward Obeid) agreed that Mr Macdonald would act unlawfully, namely by misconducting himself in public office in connection with the granting of an EL at Mount Penny concerning the interests of the accused and/or others, without that agreement comprehending or even contemplating that either of Edward Obeid or Moses Obeid would do anything to achieve or advance that shared objective. Mr Neil further submitted that it is no part of the Crown case that Moses Obeid asked Mr Macdonald whether he was prepared to commit acts of misconduct as the Minister for Mineral Resources, or that he induced Mr Macdonald to do so or that he agreed, knew and intended that Edward Obeid would do so. ^[71] Mr Neil submitted that the only submission advanced by the Crown was that Moses Obeid allegedly sought to take commercial advantage of information he received from Mr Macdonald in the months that followed the forging of the agreement (on the Crown case no later than 9 May 2008), despite the Crown disavowing any reliance upon that being something Moses Obeid agreed he would do upon entering into the agreement to the knowledge of his co-conspirators.

123. In support of the proposition that to be a party to the conspiracy a person must either “agree to do something” in the sense of agreeing to co-operate in a specified way or ways to achieve the shared objective that an unlawful act be committed, or that an alleged conspirator at least “intend to play some part in the agreed course of conduct in furtherance of the criminal purpose which the agreed course of conduct was intended to achieve,” Mr Neil relied upon the Canadian authority McNamara ^[72] and a decision of the House of Lords in Anderson. ^[73]

124. Without seeking to distinguish or qualify the way in which both the Ontario Court of Appeal in Canada and the House of Lords in England elaborated upon the concept of membership of a conspiracy in the cases to which Mr Neil referred, in my view, there needs to be caution in applying them to the way in which the Crown frames the conspiracy in this trial. For my part, I do not regard either case as authority for the proposition that it is a legal prerequisite to charging a conspiracy that there is agreement that each of the conspirators will act in a particular way or that, as a matter of law, before a person can be found to be a party to a conspiracy they must agree to play a particular part or intend to play a particular part in achieving a common objective. I accept that mere knowledge of planned criminal conduct or discussion about it, including passive acquiescence in the outcome is not sufficient to render a person criminally complicit in a conspiracy. What does have to be proved to attract criminal liability as a conspirator is that each alleged conspirator must intentionally agree that the unlawful act will be committed. ^[74]

125. I accept that in many conspiracy trials, those who are alleged to be party to an agreement to commit an unlawful act usually have demonstrated and designated roles and functions which reflect their agreement to participate in the conspiracy charged. I also accept that conduct is usually relied upon as evidence from which to infer an anterior agreement with each other and a mutual intention to achieve the unlawful object which is suggested by the totality of their conduct. That is not, however, always the case.

126. I have no doubt that the following facts and circumstances which I have crafted are sufficient to constitute a common law conspiracy to murder. A and B are leaders of rival criminal organisations. Their businesses are located in New South Wales. C is the leader of a third rival criminal organisation also operating in New South Wales. C is overseas at the time A and B meet in New South Wales to discuss having C killed. A and B know a person who works at the international airport. They pay her a bribe to notify one or other of them when C passes through the customs barrier on his return to New South Wales. They give the customs official no information at all as to why they want to be notified of that fact. A and B subsequently engage D to commit the murder and each of A, B and D agree that D will carry out that agreement. A and B make it clear to D they have no interest at all in knowing how the murder will occur or when it will occur, they simply agree with him and each other that D should carry out the murder when he next hears from them, and that he should take whatever steps are necessary to achieve their common objective. Upon A receiving a phone call from the person who works at the international airport that C has returned to the jurisdiction, A notifies D that he should murder C when the opportunity best presents.

127. On those facts, while there is a conspiracy between A, B and D to commit murder, there is no settled agreement as to how that should be done, or when and where it should be done. In addition, there is nothing that A and/or B agreed to do to achieve that shared objective other than one of them would instruct D to wait for a phone call before seeking C out in order to kill him.

128. By analogy, I am satisfied that there is no legal deficiency in the framing of the indictment or the way in which the Crown put its case in this trial by the Crown neither alleging nor seeking to prove that Moses Obeid or Edward Obeid agreed, when the conspiracy was forged, that they would play some particular part in achieving the objective they shared with Mr Macdonald that he would commit misconduct in the office he held as the Minister for Mineral Resources in connection with the granting of an EL at Mount Penny. Neither is there any legal deficiency in the indictment by the absence of an allegation that they agreed to cooperate with him and each other in particular ways to achieve that common objective.

129. In the result, I am satisfied that it is open to the Crown to prove that each of the accused intentionally entered into an agreement with each other that Mr Macdonald would commit misconduct in public office by doing acts in connection with the granting of an EL at Mount Penny concerning either or both of their interests and/or the interests of their family members and/or associates in wilful breach of his Ministerial duties and obligations, without the need to prove, as a matter of law, that the agreement contemplated, much less required, that either Moses Obeid or Edward Obeid agreed to do anything to achieve that common objective.

130. It is, of course, an entirely separate question whether the Crown can prove the existence of a conspiracy of that scope and object beyond reasonable doubt, as it is whether the Crown can prove beyond reasonable doubt that Edward Obeid and/or Moses Obeid intentionally entered into that specific agreement with Mr Macdonald as a matter of inference from the evidence of what the Crown contends is their active participation in the conspiracy in the course of it being executed. ^[75]

Is the indictment defective because of the identity of the conspirators: the relevance of The King v Boston

131. Mr Neil submitted that the Crown is unable to cite any authority that would support the laying of a conspiracy charge against a private individual (in this instance both Moses Obeid and Edward Obeid) where that person is alleged to have conspired with a public official that the public official would misconduct themselves in public office, without the private individual agreeing to participate in the conspiracy by playing some specific part in achieving the object of the conspiracy.

132. The only authority referred to by the Crown in closing submissions relevant to that issue was The King v Boston. ^[76] The Crown referred to Boston as a case which, while not alleging a conspiracy to commit misconduct in public office per se, ^[77] concerned conduct which had that criminal complexion.

133. In Boston it was alleged that three men had unlawfully conspired together, and with other persons unknown, that two of them should corruptly give large sums of money to the third man, in his official capacity as a Member of the Legislative Assembly of New South Wales, to induce him to put pressure on the Minister of Lands and other Officers of the Crown to inspect and pay cash for certain properties from public funds.

134. The argument with which the High Court was concerned was whether the agreement, effectively to bribe a member of Parliament to induce him to use his position exclusively for purposes outside of Parliament and not for the benefit of the public, could amount to a criminal offence. In dealing with that argument Knox CJ said at 392:

Assuming, without deciding, that the construction put on the words of the information is correct, I do not agree that an agreement such as that indicated would not amount to a criminal offence.

135. Both the Crown and Mr Neil cited the passage from Boston extracted above, albeit for different purposes.

136. The Crown cited the extracted passage in support of the submission that, although obiter dictum, it serves to define the boundaries of misconduct in public office. In the Crown’s submission, this informs the proper approach to distinguishing between what the Crown described as “characterisations and conclusions of law” and considerations of “knowledge” and “intent”, ^[78] a submission advanced principally in support of the proposition that the quantitative assessment of the seriousness of misconduct such as to merit criminal punishment, as a feature or aspect of the substantive offence of misconduct in public office, is not a matter imported into a conspiracy to that offence. ^[79] For the reasons already given, I have determined that question in favour of the Crown’s construction of the indictment. I did not find any support for the construction I reached in the passage quoted from Boston above. I observed at the time the case was cited by the Crown that I did not see the obiter remarks of Knox CJ as helpful in resolving that question. I remain of that view. ^[80]

137. Mr Neil relied upon Boston as demonstrating what he contended was “missing” from the conspiracy alleged by the Crown, namely the absence of any allegation that either Moses Obeid or Edward Obeid agreed to do anything at the time the agreement was made, an omission which he submitted was fatal to the Crown case. Mr Neil submitted that despite the caution that needs to be exercised in relying on Boston in support of the submission that the Crown case is defective (given that a conspiracy to affect a public mischief, the effect of the offence charged in Boston, is no longer considered to be an offence known to the common law), the point of distinction between the liability of private individuals and public officials remains sound. He emphasised that in Boston the conspiracy charged was for two individuals (Harrison and Mitchelmore), neither of whom were public officials, to pay a bribe to a public official (Boston) and for Boston to accept the bribe in violation of his duties. As Mr Neil pointed out, quite apart from the question whether a private individual can ever conspire with a public official for the public official to breach their duties, the private individuals in Boston agreed to participate in Boston’s misconduct by paying him the bribe. In this trial the Crown does not allege that Edward Obeid or Moses Obeid agreed to do anything as participants in the conspiracy, let alone incentivise Mr Macdonald’s participation by the payment of a bribe or even the promise of a corrupt reward. Neither is it alleged that the fundamental fact underpinning the misconduct alleged in this case, namely that at all relevant times Mr Macdonald knew of the Obeid family’s ownership of a rural property (Cherrydale Park) located in the Bylong Valley near Mount Penny, was information provided by Moses Obeid, or that the provision of that information to Mr Macdonald by Edward Obeid was an act in furtherance of the conspiracy.

138. For the reasons given, I am not persuaded that the indictment is defective for failing to specify or identify of what Edward Obeid and Moses Obeid agreed they would or might do (if anything) by intentionally agreeing to participate in the agreement that Mr Macdonald would wilfully commit misconduct in the public office he held as Minister for Mineral Resources. Neither am I satisfied that, because they are private individuals, ^[81] they could not, as a matter of law, conspire with Mr Macdonald that he would commit misconduct as a public official.

What is encompassed by the concept of acts (of misconduct) in connection with the granting of an EL at Mount Penny?

139. Finally, Mr Neil advanced the submission that the Crown case must fail because the Crown has not established that the eight particularised acts of misconduct alleged to have been committed by Mr Macdonald in furtherance of the conspiracy, from which the existence of the conspiracy is said to be inferred, were acts he committed in connection with the granting of an EL at Mount Penny.

140. In contrast to the other complaints raised by Mr Neil in respect of the indictment, that submission was not advanced in support of what Mr Neil submitted was a defect or deficiency in the indictment, but rather because of the fundamental deficiency in the body of evidence adduced by the Crown to prove a particular aspect of the offence preferred on the indictment, that is, that the acts alleged to have been committed by Mr Macdonald were in connection with the granting of an EL at Mount Penny. It is, however, convenient to address it now in order to dispose of it.

141. Mr Neil cited Nye v State of New South Wales ^[82] and Xu v Minister For Immigration and Multicultural Affairs ^[83] in support of that proposition.

142. In Nye at [16], O’Keefe J attributed the following meaning to the words “in connection with”:

The phrase “in connection with” and similar phrases are also of wide ambit. However, whilst such phrases are wide in their ambit they are also imprecise. Australian National Railways Commission v Collector of Customs (SA) (1985) 69 ALR 367. It has been said to be:

“…capable of describing a spectrum of relationships ranging from the direct and immediate to the tenuous and remote” (Collector of Customs v Pozzolanic Enterprises Limited (1993) 115 ALR 1 at 10)

Where the connective phrase fits in this wide spectrum will, as in the case of its counterpart “relating to”, depend on the context in which it is used and this in turn will involve a value judgment by the court.

143. Mr Neil emphasised that although O’Keefe J endorsed a construction of the words “in connection with” being of “wide ambit”, the meaning to be attributed to them is necessarily contingent on the “context” in which the phrase is used.

144. In Xu at [20], Whitlam and Gyles JJ acknowledged the width of the phrase “in connection with” in reasoning to the conclusion that the “procedures” contemplated in Division 5 of Migration Act 1958 (Cth) are not “in connection with the decision” the subject of the appeal, but rather “in connection with the promulgation of the reasons for the decision” (emphasis added), noting further at [26] that there is “a difference in substance between these concepts”.

145. In reliance on those authorities, Mr Neil submitted there is an obvious and substantial difference between the concepts of putting together and initiating an EOI process where a mining company is invited by the DPI to lodge an application for the grant of an EL and a process that is “in connection with the granting of an exploration licence”. ^[84] In Mr Neil’s submission, the evidence in the Crown case revealed that the EOI process under which eleven small to medium coal release areas, including Mount Penny, were under consideration for the grant of an EL did not, and could not have, led inevitably to the granting of an EL to a coal mining company at Mount Penny, any more than that process could have led to the granting of an EL over any of those eleven areas. He submitted that being the case, the Crown could not rationally contend that what Mr Macdonald agreed to do in misconducting himself as Minister was in connection with the granting of an EL at Mount Penny.

146. I do not accept Mr Neil’s analysis.

147. I do not read the authorities Mr Neil relied upon as supporting the submission that in this trial there is a “complete, clear and substantial difference” ^[85] between the EOI process at the conclusion of which an EL may be granted and acts in connection with the granting of an EL at Mount Penny.

148. It was common ground at the trial that by inviting a limited number of companies to submit expressions of interest in respect of eleven small to medium coal release areas, including Mount Penny, the DPI could not know that any companies would accept that invitation (although I am prepared to find that there was a high probability that would be the case). I also accept that the EOI process may not have generated a single EOI in respect of the grant of an EL at Mount Penny. Similarly, the EOI process did not guarantee the Evaluation Committee appointed by the DPI would conclude, after their independent review of the applications lodged in accordance with the EOI Information Package and the Guidelines for Allocation of Future Coal Exploration Areas (Coal Allocation Guidelines), ^[86] that there was a preferred applicant referable to the selection criteria (and, preliminary to that finding, that a company had fulfilled the necessary selection criteria) such that the Evaluation Committee might issue a Ministerial Recommendation that Mr Macdonald should invite that company to formally apply for an EL at Mount Penny or that he would ultimately grant that EL.

149. In Mr Neil’s submission, with that level of contingency the prospective granting of any EL at Mount Penny was “wholly remote” from the conspiracy the Crown prosecuted which, on the Crown case, was forged on or before 9 May 2008 and which alleged an agreement that Mr Macdonald would misconduct himself in connection with the granting of an EL at Mount Penny. ^[87]

150. Mr Neil further submitted that it was not enough for the Crown to prove that when the agreement was reached, the accused knew of the possibility or the desirability or even the potentiality of an EL at Mount Penny being granted such that they agreed that Mr Macdonald would misconduct himself in connection with the granting of that EL. Rather, he submitted the Crown was required to establish, and beyond reasonable doubt, that there would be a grant of an EL at Mount Penny and that EL would be granted, and that Moses Obeid (and Edward Obeid) had that knowledge as a fact fundamental to either or both of them agreeing that Mr Macdonald would misconduct himself as Minister in connection with the granting of that EL. ^[88] In the alternate, Mr Neil submitted that, at the very least, the Crown is obliged to establish that Moses Obeid (and Edward Obeid) knew that Mr Macdonald would in fact grant an EL at Mount Penny. ^[89]

151. In Mr Neil’s submission, the Crown failed to establish its case on either basis. To the contrary; he submitted that in the Crown’s closing submissions the misconduct alleged against Mr Macdonald was wedded to the EOI process (cf. the granting of the EL at the end of that process), a position exemplified by the proposition he attributed to the Crown that “what Mr Macdonald was in substance doing was setting up an EOI process that was to include Mount Penny and that that process was in some way to concern the interests of the Obeids beneficially” and that Mr Macdonald had “slipped” Mount Penny into the EOI process. ^[90]

152. In my view, based largely on the evidence given by a number of DPI witnesses, in particular Mr Mullard in his capacity as Director of the Coal and Petroleum Development Group within the DPI, and the procedural precedent set by the granting of the Caroona and Watermark under Minister Macdonald, both of which were preceded by EOI processes, ^[91] I am satisfied the acts alleged to have been committed by Mr Macdonald preliminary to and during the course of the EOI process in respect of the eleven small and medium coal release areas are sufficiently close and material to be captured within the ambit of the words “in connection with the granting of an EL at Mount Penny”.

153. There may have been more force in Mr Neil’s submission were the indictment to have alleged an agreement that Mr Macdonald would commit acts of misconduct “in connection with the grant of an EL at Mount Penny”. However, I am not satisfied that by alleging an agreement that Mr Macdonald would wilfully misconduct himself “in connection with the granting of an EL at Mount Penny” the indictment necessarily contemplates, or presupposes, the actual grant of an EL at Mount Penny.

154. As to the state of knowledge the Crown is obliged to establish the accused had when the conspiratorial agreement was reached, I am satisfied, and direct myself accordingly, that it is sufficient that each of the accused had the hope or expectation that an EL might be granted over land at Mount Penny that included land owned or controlled by them. That is, it is not necessary for the Crown to prove actual knowledge on the part of each of the accused that the EL would in fact issue and that Mr Macdonald would, as the relevant Minister, be the person to grant it, having agreed with his co-conspirators that he would commit acts of misconduct in connection with the granting of an EL at Mount Penny.

155. I am satisfied, and direct myself accordingly, that I do need to be satisfied that at the time the agreement between each of the conspirators was forged (on the Crown case no later than 9 May 2008), they each knew and intended that Mr Macdonald would wilfully misconduct himself as Minister for Mineral Resources, by intentionally doing acts in connection with the granting of an EL at Mount Penny, for the improper purpose of benefiting Edward Obeid and/or Moses Obeid and/or their family members and/or associates. That is, I need to be satisfied that they each knew and intended that “but for” that improper purpose Mr Macdonald would not have agreed to do the thing he agreed to do and in the manner alleged, that is, he would not have agreed to act in connection with the granting of an EL at Mount Penny in wilful breach of his Ministerial duties of confidentiality and/or impartiality.

The indictment is not defective: the elements of the offence charged as restated

156. Having found the indictment discloses an offence known to law and that it is not otherwise legally defective, in charging a conspiracy of the scope and object alleged in the indictment, I direct myself that the Crown is obliged to prove, to the criminal standard, that Mr Macdonald together with at least one of the accused Edward Obeid or Moses Obeid intentionally entered into an agreement with Mr Macdonald that:

1. in the public office he occupied as Minister for Mineral Resources in the Executive Government of the State of New South Wales; and

2. in the course of or connected with that public office;

3. he would misconduct himself by doing acts in connection with the granting of an EL at Mount Penny for the improper purpose of benefiting Edward Obeid and/or Moses Obeid and/or members of their family and/or their associates; and, further, that

4. each of the accused knew and intended that by Mr Macdonald agreeing to act in that way, he would be acting wilfully, that is that he would act knowing that he was breaching the duties and obligation of impartiality and confidentiality by which he was bound as a Minister in the Executive Government of the State of New South Wales; and

5. that he would act in that way without reasonable excuse or justification.

157. I also direct myself that in order to return verdicts of guilty against each of Edward Obeid and Moses Obeid, the Crown also bears the burden of proving beyond reasonable doubt that they knew that what Mr Macdonald agreed with them he would do in the public office he occupied, and in the course of or connected with that public office, would in fact constitute a breach his duties and obligations of impartiality and/or confidentiality, and that each of them entered into the agreement with Mr Macdonald with that knowledge or understanding.

158. Finally, having regard to my earlier ruling as concerns the final “element” of the substantive offence of misconduct in public office, before a guilty verdict could be returned against any of the accused on the indictment upon which they were arraigned, I will also need to be satisfied that the nature of the acts of misconduct it was agreed Mr Macdonald would commit (that is, the (unspecified) acts of misconduct in connection with the granting of an EL at Mount Penny) and for the improper purpose it was agreed those (unspecified) acts would be directed to achieve (namely, to benefit the accused and/or their family and/or their associates) are serious and meriting criminal punishment, having regard to Mr Macdonald’s responsibilities as the Minister for Mineral Resources in the Executive Government of New South Wales, the importance of the public objects of that Office which he was obliged to serve as the holder of that Office, and having regard to the nature and extent of the departure from those objects as reflected in the conspiracy alleged.

159. Whether I am satisfied that the agreement into which the accused intentionally entered was sufficiently serious that it merits criminal punishment for those shown to be participants in that conspiracy, as a precondition to returning verdicts of guilty against any of them, is a question which will only arise later in this judgment after consideration has been given to the evidence relevant to proof of the existence of the conspiracy and the participation of each of the accused in it, and whether the evidence supports proof of both facts beyond reasonable doubt.

The timeframe of the conspiracy alleged

160. The indictment is framed to allege the accused “conspired together” between nominated, approximate dates, namely 1 September 2007 and 31 January 2009. This reflects the Crown case that by entering into an agreement of the scope and object alleged, the accused must be taken to have appreciated that the agreement (which was by its terms prospective) would continue until it was fully executed, whether or not that ultimately resulted in an EL at Mount Penny being granted and on such recommendations as may have been made by the Evaluation Committee after the EOI process, a state of affairs that developed during the currency of the conspiracy.

161. In framing the indictment on a between dates basis, the Crown did not nominate a date after 1 September 2007 when agreement was reached and was not obliged to do so. However, as I have already noted, the Crown conducted its case at trial on the firm and unerring basis that the agreement was reached at some time prior to 9 May 2008 when, on the Crown case, Mr Macdonald committed the first act of misconduct in furtherance of achieving the object comprehended by the scope of the agreement and in accordance with the terms of that agreement. That is a matter of significance.

162. In the way the Crown advanced its case at trial, each of the accused should be taken to have understood that whilst ever their agreement that Mr Macdonald would do acts in connection with the granting of an EL at Mount Penny for the improper purpose alleged was in the process of execution, they would each do things to further or enhance the achievement of their common objective, albeit, at the time the agreement was forged, without any settled way of knowing what that might entail or what might be required of any of them, including what precise acts of misconduct Mr Macdonald would commit in furtherance of the conspiracy and what each of Edward Obeid and Moses Obeid would do responsive to what resulted from the acts of misconduct he committed.

163. Although, as I have already decided, the Crown was not obliged, as a matter of law, to allege in the indictment that any one or more of the accused agreed to do anything in particular to further or enhance the achievement of their common objective, in this trial in proof of both the existence of the conspiracy and the participation of each of the accused in that conspiracy, the Crown adduced evidence of things said and done by each of the accused during the currency of the conspiracy, as things said and done by them in furtherance of achieving their common objective.

164. In its closing submissions, ^[92] the Crown identified that evidence as falling into two general categories:

1. Evidence that Mr Macdonald (in fact) acted in accordance with the conspiracy by causing a coal release area to be created near Mount Penny in the Bylong Valley; causing the coal release area to be included in an EOI process for the grant of an EL and by providing confidential information to Edward Obeid and Moses Obeid in connection with the granting of an EL at Mount Penny.

2. Evidence of the efforts by members of the Obeid family to pursue and secure a financial benefit from Mr Macdonald’s misconduct.

165. Insofar as concerns (b) above, the Crown relied, in particular, upon Moses Obeid’s conduct both during the currency of the conspiracy and after it had been fully executed as a discrete source of evidence in proof of the existence of the conspiracy against all three accused and, as against Moses Obeid, evidence of his participation in the conspiracy. ^[93] In relying upon that discrete body of evidence and for that purpose, the Crown made clear in its closing submissions that none of Moses Obeid’s so-called entrepreneurial activities, at least in so far as they involve his various contractual dealings with Monaro Mining NL, which continued after the conspiracy had been executed, or his dealings with Cascade Coal Pty Ltd (Cascade Coal P/L) which were concentrated in the period after the conspiracy had been executed, were activities pursued by him in furtherance of the conspiracy. ^[94]

166. In the Crown’s Revised Statement of Particulars, the overt acts/declarations relied upon as evidence of the existence of the conspiracy and/or Moses Obeid’s participation in it included the following:

On and from 23 June 2008, Mr Moses Obeid (and other members of the Obeid family) sought to negotiate a joint venture with a mining company for the purpose of an EOI application being made in respect of an exploration licence over Mt Penny, including:

(i) negotiations via Gardner Brook and Andrew Kaidbay with Monaro Mining NL; and

(ii) negotiations with Cascade Coal Pty Ltd. ^[95]

167. Given the Crown’s articulated position in closing submissions, I read down the Crown’s deployment of the term “overt act and declaration” in the Revised Statement of Particulars so as to distinguish between things said and done from which the existence of the conspiracy and Moses Obeid’s participation in it might be inferred and things said and done by him as “overt acts” in furtherance of achieving the object of the conspiracy and, in that way, available to the Crown in invocation of the co-conspirators rule in proving the participation of either or both of Edward Obeid and Mr Macdonald (to the extent that is necessary).

168. That approach reflects another segment of the Crown’s closing submissions when the prosecutor said: ^[96]

HER HONOUR: It was not contemplated, nor the subject of any agreement reached between the conspirators, as alleged, that Moses would go off and forge a deal with the mining companies or be party to the execution of a landowners' agreement that would be productive of a multiplier in land value. The conspiratorial agreement just did not go that far.

CROWN PROSECUTOR CALLAN: Correct, your Honour. In the same way that the Crown case is that at the time the conspiracy was forged didn't and couldn't have known what would be the particular acts of misconduct that Mr Macdonald would commit in furtherance of the conspiracy.

169. Were the Crown to fail to prove that Moses Obeid’s various commercial dealings with Monaro Mining NL in 2008 and later with Cascade Coal P/L extending beyond 31 January 2009 (both directly and through Mr Brook, an investment banker who assisted Moses Obeid in brokering mining deals with both of those companies) were based on the information generated by the conspiracy to which he is alleged to have been a party, that body of evidence will have no probative weight in proving the existence of the conspiracy or Moses Obeid’s participation in it.

170. That is, if I am satisfied of the reasonable possibility that such information as Moses Obeid had (and shared) with Mr Brook about the potential for a coal EL to be granted over an area which included his family’s rural holdings in the Bylong Valley, was information acquired other than through his participation in the conspiracy, it will be of no probative value in proof of his guilt, for example because of information his father, or even Mr Macdonald, shared with him without any knowledge on his part that Mr Macdonald was wilfully breaching his obligations of confidentiality and impartiality in so doing, or information he acquired without having agreed that Mr Macdonald should breach his Ministerial duties and obligations of impartiality and confidentiality in the way the Crown alleges.

The co-conspirators rule and the operation of s 87(1)(c) of the Evidence Act

171. The Crown relied upon evidence of the individual acts of each of the accused which, on the Crown case, were clearly directed to further, advance or achieve the object of the conspiracy, as providing the foundation for the invocation of the common law co-conspirators rule, ^[97] the operation of which is now reflected in s 87(1)(c) of the Evidence Act 1995 (NSW), ^[98] as an additional source of evidence to prove the participation of each of the accused in the conspiracy beyond reasonable doubt.

172. Section 87(1)(c) of the Evidence Act provides:

87   Admissions made with authority

(1) For the purpose of determining whether a previous representation made by a person is also taken to be an admission by a party, the court is to admit the representation if it is reasonably open to find that—

...

(c)  the representation was made by the person in furtherance of a common purpose (whether lawful or not) that the person had with the party or one or more persons including the party.

173. The Crown submitted that in the context of a conspiracy trial, s 87(1)(c) provides a statutory basis for the acts and declarations of an individual accused to be admitted in proof of the participation of others alleged to be complicit with the accused in the conspiracy alleged, if the Court is satisfied there is reasonable independent evidence of that accused’s participation in the conspiracy. Each of the accused submitted that the Crown had not established a sufficient basis to invoke s 87(1)(c) in proof of its case against them.

174. Resolution of the question whether there is reasonable independent evidence of the participation of any of the accused in the conspiracy alleged in this trial so as to invoke the inclusionary rule in s 87(1)(c), necessarily awaits a comprehensive review of the evidence both as to its sufficiency to prove a conspiracy of the kind alleged and in order to assess whether the acts and declarations of an individual accused provide a basis for a further finding that those acts and declarations constitute reasonable independent evidence of the participation of that accused in the conspiracy so as to permit the acts and declarations of each of the other two accused to be admitted against that accused.

The Crown case as particularised

175. The particulars of the Crown’s case were originally served on the accused on 20 March 2019, and amended by a letter of 1 May 2019 ^[99] (the 2019 Statement of Particulars), following a request for further and better particulars by the legal representatives of Moses Obeid by their letter of 19 March 2019.

176. On 20 October 2020, day 52 of the trial, the Crown served on each of the accused a document titled “Particulars of Crown case as at 19 October 2020”. ^[100] After objection was taken by each of the accused to what was said to be the prejudice occasioned to each of them by the Crown amending its particularised case late in the trial, the document served on 20 October 2020 was further revised. The further revised document is titled “Particulars of Crown case as at 30 October 2020”. ^[101] It was in the same general format as the earlier iterations of that document with significant amendments.

177. For reasons provided in a separate judgment, ^[102] I permitted the Crown to amend the particulars of its case over opposition by each of the accused. Those amendments are reflected in the document titled “Particulars of Crown case as at 30 October 2020” ^[103] (the Revised Statement of Particulars) referrable to which the Crown put its case against each of the accused in its closing submissions.

178. Consistent with the way the Crown particularised its case in the 2019 Statement of Particulars, the Revised Statement of Particulars alleged that each of the accused became party to the conspiracy between September 2007 and May 2008, ^[104] and that they each participated in the conspiracy for the entirety of the offence period alleged in the indictment, being between about 1 September 2007 and about 31 January 2009. ^[105] Again consistent with the 2019 Statement of Particulars, the Revised Statement of Particulars nominated various overt acts committed by each of the accused in furtherance of their agreement that Mr Macdonald would wilfully misconduct himself in connection with the granting of an EL at Mount Penny in New South Wales, for the “improper purpose of advancing the interests of Edward Moses Obeid, Moses Edward Obeid and/or their family members and/or associates”. ^[106]

179. The Crown has sought to prove the existence of the conspiracy of the object and scope alleged in the indictment by proving Mr Macdonald committed each of eight separate acts of wilful misconduct particularised in the Revised Statement of Particulars. In the Crown’s submission, those acts of misconduct committed by Mr Macdonald between May 2008 and January 2009, as the opportunity presented for him to fulfil his agreement with Edward Obeid and Moses Obeid (forged as at 9 May 2008) that he would intentionally do things in connection with the granting of an EL at Mount Penny for the improper purpose of advancing or benefitting Edward Obeid and/or Moses Obeid and/or members of their family and/or associates, in wilful breach of his Ministerial duties of confidentiality and/or impartiality.

180. The Crown submitted that those proven acts of misconduct, viewed in combination, are available to the Crown to prove that the conspiracy alleged was in existence before the first act of misconduct was committed by Mr Macdonald on 9 May 2008, that it continued up to 30 January 2009 (with the ninth act of misconduct committed no later than 13 January 2009) and that each of the eight acts of misconduct were acts of misconduct committed by him in furtherance of the conspiracy to which he was a party and from which his participation in the conspiracy is proved.

The eight acts of misconduct, as particularised

181. The first two acts of misconduct alleged by the Crown to have been committed by Mr Macdonald pursuant to the conspiracy and in furtherance of it are as follows:

FIRST MISCONDUCT: On or about 9 May 2008, Mr Macdonald sought information, via his chief of staff Mr Jamie Gibson, from the Department of Primary Industries (DPI) as to the volume of coal reserves in the area of Mount Penny (in the Bylong Valley, New South Wales) (Mt Penny). He did so in breach of his duty of impartiality as he knew the Obeid family owned property in this location.

SECOND MISCONDUCT: On or about 14 May 2008, Mr Macdonald sought further information, via his chief of staff Mr Jamie Gibson, from the Department of Primary Industries about coal reserves in the area of Mt Penny including whether it was possible for the DPI to open its holdings for tender. He did so in breach of his duty of impartiality as he knew the Obeid family owned property in this location. ^[107]

182. In the document titled “Particulars of Crown case as at 19 October 2020”, the Crown no longer pressed what was originally particularised as the third alleged act of misconduct, namely that in “late May 2008 Mr Macdonald directed that there be a coal mining exploration licence expression of interest process (EOI) targeting, inter alia, Mt Penny” at such time as “the DPI considered the Mt Penny area was not suitable as a potential coal allocation area as further exploration was required” and that he did so “in breach of his duty of impartiality as he knew the Obeid family owned property in this location”. ^[108]

183. That position was maintained in the Revised Statement of Particulars. ^[109]

184. The remaining six acts of misconduct, alleged to have been committed by Mr Macdonald pursuant to the conspiracy and in furtherance of it, retained the original numbering in the Revised Statement of Particulars as follows (footnotes and tracked changes omitted):

FOURTH MISCONDUCT: In the period 9 May to 9 July 2008, Mr Macdonald caused Mr Edward Obeid, Mr Moses Obeid or another member of the Obeid family, to be provided with a copy of:

(i)   a map titled ‘Mt Penny’ area, prepared by Ms Leslie Wiles dated 9 May 2008 (Wiles Map 1); and

(ii)   a map titled ‘North Bylong – Mt Penny Area’ prepared by Ms Leslie Wiles dated 30 May 2008 (Wiles Map 2).

He did so in breach of his duty of impartiality as he knew the Obeid family owned property in this location, and in breach of his duty of confidentiality as both maps were confidential.

FIFTH MISCONDUCT: Between 4 and 16 June 2008, Mr Macdonald directed that the “potential open cut area” depicted in Wiles Map 2 be reduced to a smaller area comprising the eastern portion only. He did so in breach of his duty of impartiality as he knew the Obeid family owned property in this location.

SIXTH MISCONDUCT: Between 17 June and 23 July 2008, Macdonald communicated to Edward Obeid and/or Moses Obeid that the EOI process for Mt Penny was to commence at the end of July 2008. He did so in breach of his duty of impartiality, as he knew the Obeid family owned property in a location proposed to be included in the EOI (ie Mt Penny), and in breach of his duty of confidentiality as this information was confidential.

SEVENTH MISCONDUCT: On or after 7 July 2008, Macdonald caused Edward Obeid, Moses Obeid or another member of the Obeid family, to be provided with:

(i)   a document titled ‘Company EOI 2 July 2008’ containing a list of companies proposed to be invited to participate in the EOI; or

(ii)   information as to the companies on that list.

He did so in breach of his duty of impartiality, as he knew the Obeid family owned property in a location proposed to be included in the EOI (ie Mt Penny), and in breach of his duty of confidentiality as the list was confidential.

EIGHTH MISCONDUCT: On or after 23 July 2008, Macdonald caused Edward Obeid, Moses Obeid or another member of the Obeid family, to be provided with:

(i) the page [of a memorandum titled “Coal allocation” dated 5 August 2008] with the heading ‘MEDIUM COAL ALLOCATION AREAS’; and

(ii) a map titled “Proposed Coal Release Areas for EOIs” prepared by Fred Schiavo dated 21 July 2008 (Schiavo Map 3).

He did so in breach of his duty of impartiality, as he knew the Obeid family owned property in a location proposed to be included in the EOI (ie Mt Penny), and in breach of his duty of confidentiality, as the information in this document was confidential.

NINTH MISCONDUCT: Between 27 November 2008 and 13 January 2009, Macdonald communicated to Edward Obeid and/or Moses Obeid that the EOI process was to be (or was) reopened to allow the ‘White Group’ of companies (including Cascade Coal P/L) to apply. He did so in breach of his duty of impartiality, as he knew the Obeid family owned property in a location included in the EOI (ie Mt Penny), and in breach of his duty of confidentiality as this information was confidential. ^[110]

Proving the existence of the conspiracy by inference

185. In proving the existence of the conspiracy (that is, in proving an agreement of the kind alleged in the indictment), the central and dominating fact in issue framing the way the trial was conducted was whether the Crown could establish that between May 2008 and January 2009 Mr Macdonald committed any of the eight successive acts of wilful misconduct particularised by the Crown and, if he acted in that way, whether he did so pursuant to the conspiracy alleged, including whether he did so for the improper purpose alleged.

186. The allied question whether the Crown can also prove that were it not for the improper purpose alleged, Mr Macdonald would not have acted in connection with the granting of an EL at Mount Penny as he has been shown to have acted ^[111] (that is, by deliberately breaching his duties and obligations of confidentiality and/or impartiality as the Minister for Mineral Resources) was also a dominating fact in issue in the trial.

187. A further and discrete fact in issue was whether the Crown could prove that Mr Macdonald knew that the Obeids owned a rural property (Cherrydale Park) situated near Mount Penny in the Bylong Valley. That fact was conceded by the Crown to be indispensable to proof of the conspiracy and, for that reason, it was a fact which needed to be established beyond reasonable doubt. ^[112] That fact is hereinafter referred to as the Shepherd fact.

What is comprehended by Mr Macdonald’s duties of confidentiality and impartiality as Minister for Mineral Resources?

188. The questions as to what is comprehended by a duty of confidentiality binding a Minister of the Crown in New South Wales, and what is comprehended by a Minister’s separate duty of impartiality, including the circumstances in which the duties are imposed and what might constitute a breach of either of them, are questions of mixed fact and law. ^[113]

189. Similarly, what is comprehended by the duty of confidentiality imposed upon the officers and employees of the DPI as members of the public service in their dealings with Departmental business and in their dealings with the government of the day (in this trial the staff of Mr Macdonald’s office as the Minister for Mineral Resources) is also a question of mixed fact and law.

190. A further and related question that arises in this trial (as a question of fact and, to a lesser extent, a question of law) is whether particular documents, generated by the DPI either on the initiative of its employees or officers as part of its internal processes or responsive to a request from the Minister or the Minister’s office, or documents received and maintained by the Department pursuant to its regulatory functions under the Mining Act, were confidential. Documents in those categories include Ministerial Briefings received or generated as part of the EOI process and the documents or information embedded in or annexed to them, and certain information received and retained by the Department from mining companies. ^[114]

191. There was no issue in the trial that in the public office Mr Macdonald held as Minister for Mineral Resources between 2005 and 2010 he was bound by the Code of Conduct for Ministers of the Crown (Ministerial Code of Conduct). That document was contained within the Ministerial Handbook, a document issued by the Cabinet Office, as the first of two annexures to the section of the Ministerial Handbook titled “Codes of Conduct”. ^[115] The relevant provisions of the Ministerial Code of Conduct are set out in full at par 211 and following below.

192. For completeness, I note that the second annexure to the section of the Ministerial Handbook titled “Codes of Conduct” was titled “Code of Conduct for Members of Parliament” (Parliamentary Code of Conduct). Although the Crown made reference to the Parliamentary Code of Conduct pursuant to which both Mr Macdonald and Edward Obeid were bound as Members of Parliament, it was not submitted that the content of the duty of impartiality provided for in that document had any relevant bearing in proof of the Crown case where the indictment alleged that it was agreed that Mr Macdonald would commit misconduct in the office he held as Minister for Mineral Resources by acting knowingly in breach of his duties and obligations of impartiality and/or confidentiality as a Minister in the Executive Government of the State of New South Wales (cf. misconduct committed by him in his position as a Member of Parliament).

193. What was the subject of contention was whether, in seeking to give content to the duty of confidentiality as it is expressed in the Ministerial Code of Conduct, the elements of a civil action for breach of confidence have any relevance. ^[116] Also in contention was whether the construction of Mr Macdonald’s duty of confidentiality is informed by the general obligation of confidence owed by all Ministers of the Crown. ^[117]

How do the Ministerial duties of confidentiality and impartiality impact on proof of the Crown case?

194. The nature and scope of the duty of confidentiality, and the separate duty of impartiality imposed upon Mr Macdonald under the Ministerial Code of Conduct, impacts upon proof of the Crown case in two ways.

195. First, the nature and scope of those duties are central to proving the existence of the conspiracy. Because the Crown seeks to prove the existence of the conspiracy by proving that Mr Macdonald in fact misconducted himself as a Minister of the Crown in connection with the granting of an EL at Mount Penny on eight discrete occasions between 9 May 2008 and 31 January 2009, careful consideration needs to be given as to whether the particular conduct the Crown attributes to Mr Macdonald as an act of wilful misconduct (whether committed in breach of his duty of impartiality alone or committed in breach of his duty of both impartiality and confidentiality) is open to be characterised in that way.

196. Of the eight acts of wilful misconduct alleged to have been committed by Mr Macdonald in furtherance of the conspiracy, ^[118] all are alleged to have been committed in breach of Mr Macdonald’s duty of impartiality. In addition, the fourth, sixth, seventh, eighth and ninth acts of misconduct are also alleged to have been committed in breach of Mr Macdonald’s duty of confidentiality. That is, it is the Crown case that Wiles Map 1 and Wiles Map 2 had the necessary quality of confidence (the fourth act of misconduct) as did information concerning the timeframe for the launch of the EOI process for the grant of the EL at Mount Penny (the sixth act of misconduct); the list of companies proposed to be invited to participate in that process in a document headed “Company EOI 2 July 2008” (the seventh act of misconduct); a document headed “Medium Coal Allocation Areas” and Schiavo Map 3 (the eighth act of misconduct) and information that the EOI process had been reopened to allow the White Group of companies to be invited to participate (the ninth act of misconduct).

197. If the Crown fails to establish that Mr Macdonald’s dealings with the Department in May and June 2008 (the conduct the subject of the first, second and fifth acts of misconduct) were acts done in wilful breach of his duty to “exercise [his] office [as Minister] honestly, impartially and in the public interest” ^[119] (no breach of confidentiality being alleged insofar as concerns the conduct the subject of those three acts of misconduct), those dealings could not as a matter of law (or mixed fact and law) be characterised as acts of misconduct. In that event, it follows that the conduct imposed by those dealings would cease to be available as directly probative of the existence of the conspiracy or Mr Macdonald’s participation in it in the way contended for by the Crown.

198. Were I to come to that conclusion, Mr Macdonald’s dealings with the Department in May and June 2008 might nonetheless be relevant to proof of the Crown case in other ways, for example as evidence of the context in which the other five acts of misconduct were allegedly committed. However, unless the Crown establishes that Mr Macdonald’s enquiries of the Department on 9 and 14 May 2008 about the volume of coal reserves in the area of Mount Penny in the Bylong Valley and the preparedness of the Department to release its holdings under EL 6676 in the Bylong Valley to tender, together with his dealings with the DPI in June 2008 preliminary to its designation of a new coal release area in the Bylong Valley (the related conduct particularised by the Crown as the first, second and fifth acts of misconduct) were for the improper purpose of advancing the personal interests of the Obeid family (and/or those of their friends and/or associates) ^[120] and not enquiries he made consistent with his general duties of acting “impartially, disinterestingly [sic] and in the best interests of the people of New South Wales”, ^[121] that is, unless the Crown establishes that Mr Macdonald’s dealings with the Department in his capacity as Minister in May and June 2008 were in breach of his duty and obligation of impartiality, then those dealings may prove to be of limited probative value in proof of the Crown case.

199. It also follows that if the Crown fails to establish that the particular information allegedly communicated or provided by Mr Macdonald to the accused or their family members in breach of his duty of confidentiality (the conduct the subject of the remaining five acts of misconduct as particularised, namely the fourth and the sixth to the ninth acts of misconduct inclusive) do not have the necessary quality of confidence to qualify as confidential information, then Mr Macdonald’s provision of that information to Edward Obeid, Moses Obeid or a member of their family (assuming that were proved) cannot be characterised as a breach of his duty of confidentiality and cannot constitute an act of wilful misconduct in the public office he held as Minister for Mineral Resources on that basis. However, if the provision of the information the subject of those five acts of misconduct is otherwise shown to be in breach of Mr Macdonald’s duty of impartiality, deficiencies in proving that the quality of confidence which attached to that information may not disentitle the Crown from relying on the conduct the subject of those five acts of misconduct in proving both the existence of the conspiracy charged and Mr Macdonald’s participation in it in the way contended for by the Crown.

200. That analysis will only apply if the scope and content of the duty of impartiality imposed upon Ministers of the Crown, and by which Mr Macdonald was bound as the Minister for Mineral Resources, is sufficiently clear and unambiguous for the Crown to rely upon Mr Macdonald’s proven conduct in the commission of those five acts of misconduct as constituting a breach of that specific duty. Neither the Crown nor the accused addressed that question in their opening or closing submissions. The precise scope and content of the duty of impartiality, both as a guiding principle as described in the Ministerial Code of Conduct and as a general obligation was not developed either in the Crown’s opening or in the Crown’s closing written submissions, other than to identify it as a duty by which Ministers of the Crown are bound and by which Members of Parliament are bound. The dominant focus of the submissions of the parties concerned the content of the duty of confidentiality.

201. Each of the accused submitted that the information (whether or not in documentary form) the subject of the fourth, sixth, seventh, eighth and ninth acts of misconduct has not been demonstrated to have the necessary quality of confidence, as a matter of law, such that provision of it was a breach of Mr Macdonald’s duty of confidentiality, whatever the scope of that duty. The accused also submitted that as the Minister for Mineral Resources, Mr Macdonald was not obliged to treat any of those various documents or the information they contained as confidential as it was not information “committed to [his] secrecy”. ^[122] That being the case, it was submitted that the provision of that information to others (a separate matter which is also in dispute on the evidence) could not constitute a breach of his duty of confidentiality.

202. Additionally, insofar as concerns what is alleged by the Crown to be the release of the particular information concerning the fact or timing of a pending EOI process (the sixth and eighth acts of misconduct), the accused complain that the Crown has failed to establish what information could or could not be disclosed about those aspects of the EOI process, there being no consistent or articulated Departmental or Government policy or practice that might dictate or even inform that approach. This was said to be in stark contrast to the document management process in place by the DPI in the evaluation phase of the applications for the granting of ELs under the EOI process. ^[123]

203. In relation to the fourth act of misconduct, the accused submitted that the bare information contained on Wiles Map 1 and Wiles Map 2 was publicly available via a range of information databases maintained by the DPI and that in those circumstances no quality of confidentiality could attach to those maps where that information has been visualised by an officer of the DPI.

204. The accused also submitted that where, as in this trial, there is an inherent tension between the goal of promoting the EOI tender process for the issue of coal ELs to industry participants in the public interest and maintaining the confidentiality of that process until it was publicly announced, and no guidance as to how that balance was to be struck, the Court cannot or should not find, as a matter of law, that the information the subject of the sixth to ninth acts of misconduct had the necessary quality of confidence such that the provision of that information by Mr Macdonald (which is disputed) would constitute an act of misconduct in the legal sense.

205. Secondly, the nature and scope of Mr Macdonald’s duties and obligations as a Minister impacts upon proof of the Crown case because the Crown is obliged to prove that at the time the conspiracy was forged (that is, no later than 9 May 2008) each of the accused knew and intended that Mr Macdonald would misconduct himself by wilfully acting in breach of his specific duties and obligations of impartiality and/or confidentiality (and for the improper purpose alleged). That imposes upon the Crown the obligation of proving that each of the accused knew of the existence of those duties and obligations, and that Mr Macdonald was subject to them in the discharge of the public office he held as the Minister for Mineral Resources.

206. As to the second issue, it is the Crown case that, as Minister for Mineral Resources between, as the Crown put it, 3 August 2005 and 5 June 2010, ^[124] Mr Macdonald would have been in no doubt as to the extent and scope of the duties and obligations of confidentiality and impartiality by which he was bound. Those duties and obligations were specifically articulated in the Ministerial Code of Conduct, versions of which were exhibited in the trial as current as at April 2007 ^[125] and October 2008 ^[126] with updated versions provided to Mr Macdonald’s Ministerial office from time to time. ^[127]

207. The Crown also submitted it could not be (and I note it was not) in dispute that as at May 2008, when on the Crown case the conspiracy was forged, Edward Obeid was also familiar with the Ministerial Code of Conduct given that he had previously held the office of Minister for Mineral Resources and the Minister for Fisheries, and at the time he served as a Member of Parliament more generally. ^[128]

208. Insofar as concerns Moses Obeid’s knowledge of the existence of the duties and obligations by which Mr Macdonald was bound as the Minister for Mineral Resources, the Crown submitted that I would be satisfied that the close relationship Moses Obeid enjoyed with his father, together with the length of his father's Parliamentary and Ministerial career, would necessarily imbue his son with an appreciation and awareness of Mr Macdonald’s Ministerial obligations and duties as Minister for Mineral Resources. More directly, the Crown submitted I would be satisfied that Moses Obeid knew it was not open to Mr Macdonald to provide or share information to which he had access (or information in his possession) as the Minister for Mineral Resources in connection with the granting of an EL at Mount Penny, given the nature of the information Moses Obeid either sought or was provided with, and the use he intended to make and did make of that information which, on the Crown case, I would be satisfied he knew was not information otherwise in the public domain.

209. The Crown further submitted that I would be satisfied that Moses Obeid also knew that it was not open for Mr Macdonald, as the Minister for Mineral Resources, to make focused enquiries of the DPI about the volume of coal reserves in the Bylong Valley in the area of Mount Penny (the conduct the subject of the first act of misconduct) or the willingness of the Department to open its holdings under EL 6676 to tender (the conduct the subject of the second act of misconduct) to promote the private financial interests of his family in connection with the granting of an EL at Mount Penny, where those enquiries were not made impartially (or disinterestedly) in the public interest.

210. The Crown submitted I would more readily draw that inference having regard to the various steps Moses Obeid took to conceal his family’s connection to the acquisition of the properties adjoining Cherrydale Park ^[129] and what the Crown submitted were the deliberate lies he told journalists in December 2012. ^[130] The Crown submitted that those steps were taken and those lies were told with the intention of concealing what Moses Obeid well knew were the discrete ways in which Mr Macdonald had breached his Ministerial duties and obligations of confidentiality by the provision of confidential information and in breach of his duty of impartiality during the currency of the conspiracy, coincident with the steps he had personally taken in furtherance of the conspiracy, including the use he made of Wiles Map 2 and the list of 15 mining companies in his dealings with Mr Brook, ^[131] information he must have known was provided by Mr Macdonald in breach of either or both his duties of impartiality and confidentiality.

The Ministerial Code of Conduct

211. The Ministerial Handbook, dated April 2007 and issued by the Office of the Director-General of the Cabinet Office, ^[132] is organised in a number of sections. The second section is entitled “Codes of Conduct”. ^[133] It includes two annexures, the first of which is entitled “Code of Conduct for Ministers of the Crown” (Ministerial Code of Conduct). ^[134] The Ministerial Handbook notes that the Ministerial Code of Conduct has been adopted, with minor amendments, by successive State governments since the Greiner government. ^[135]

212. I also note that the Revised Statement of Particulars provides that the iterations of the Ministerial Code of Conduct ^[136] current both prior to and during the period of the conspiracy (together with the Ministerial Handbook) ^[137] are relied upon by the Crown as the legal foundations of Mr Macdonald’s duties of confidentiality and impartiality.

213. The preamble to the Ministerial Code of Conduct provides as follows:

It is essential for the maintenance of public confidence in the integrity of the Executive Government of the State that Ministers of the Crown exhibit, and be seen to exhibit, the highest standards of probity in the exercise of their offices, and that they pursue, and be seen to pursue, the best interests of the people of New South Wales to the exclusion of any other interest.

It is essential for the proper working of executive Government that Ministers of the Crown should enjoy and retain the trust and confidence of their ministerial colleagues both in their official dealings and in the manner in which they discharge their official responsibilities. ^[138]

214. The following two principles are then identified as “guid[ing] ministerial conduct in office”:

1. Ministers will perform their duties impartially, disinterestingly [sic] and in the best interests of the people of New South Wales.

2. Ministers will be frank and honest in official dealings with their colleagues and will maintain the confidentiality of information committed to their secrecy.

(Emphasis added.) ^[139]

215. The Ministerial Code of Conduct is then introduced in the following way:

The following is not intended to be a comprehensive statement of the ethical responsibilities of Ministers of the Crown. One cannot anticipate and make provision for every contingency which can raise an ethical issue for Ministers. The requirements and guidelines set out below merely provide the broad framework to aid Ministers in the resolution of ethical issues. It is to be emphasised that each Minister will bear personal responsibility both for the decisions he or she makes on ethical questions and for the manner in which he or she complies with this Code. Any ethical determination on a matter not provided for in this Code should be in conformity with the two principles stated above. In any case of doubt the Minister should refer the matter to the Premier.

Ministers are reminded that, quite apart from their ethical obligations they are subject to the civil and criminal law as holders of public office. In particular they are reminded that they can be held personally responsible in law for (a) their intentional misuse of their office and the powers and duties they have in it; (b) conflicts of interests and the possession of interests which will disqualify them from parliamentary office; (c) the corrupt receipt or solicitation of benefits; and (d) the misuse of confidential information acquired by virtue of office.

(Emphasis added.) ^[140]

216. Part 1, entitled “General Obligations”, provides as follows:

1.1 Ministers will exercise their office honestly, impartially and in the public interest.

1.2 Ministers should avoid situations in which they have or might reasonable be thought to have a private interest which conflicts with their public duty.

1.3 In conformity with their Executive Councillor’s oath and the requirement of Confidentiality of Cabinet proceedings, Ministers will make no unauthorised use of disclosure of information committed to their secrecy.

1.4 A Minister shall be responsible for ensuring that members of his or her staff are made aware of their ethical responsibilities and will require such disclosure or divestment of personal interests by staff members as seems appropriate to the Minister.

(Emphasis added.) ^[141]

217. Part 4, entitled “Confidentiality of Information”, provides as follows:

4.1 Ministers will uphold their oath of secrecy as Executive Councillors and will maintain the confidentiality of information committed to their secrecy in the Executive Council or in Cabinet.

4.2 A Minister shall not use information obtained in office to gain a direct or indirect private advantage for himself or herself, or for any other person.

[4.3 and 4.4 are not material.] ^[142]

218. As I observed earlier, the Parliamentary Code of Conduct, also annexed to the Ministerial Handbook, was not relied upon by the Crown as informing the obligations of confidentiality owed by Mr Macdonald as the Minister for Mineral Resources.

219. Before considering the duties of confidentiality owed by officers and staff of the DPI, I note that the Crown did not tender any evidence of any formal, written Code of Conduct or other such document which applied to the staff in Mr Macdonald’s office and which imposed a duty of confidentiality upon those staff members.

The DPI Code of Conduct

220. The DPI Code of Conduct was revised in April 2006. ^[143]

221. Section 7 of the DPI Code of Conduct is in the following terms: ^[144]

Protecting confidential information

Official information must only be used for the work-related purpose intended and not for personal benefit. Unless authorised to do so by legislation, employees must make sure that they do not disclose or use any confidential information without official approval.

Unauthorised disclosures may cause harm to individuals or give an individual or an organisation an improper advantage. The integrity and credibility of NSW DPI may also be damaged if it appears unable to keep its information secure.

All employees must make sure that confidential information in any form (including computer files) cannot be accessed by unauthorised people, and that sensitive information is only discussed, within or outside the department, with people who are authorised and have a legitimate, work related reason for access.

(Emphasis added).

222. The Crown submitted that in the context of the facts in issue in this trial, the evidence of the approach the employees and officers of the DPI took to compliance with their duty or obligation of confidentiality as contained in section 7 of the Code of Conduct and their understanding of what that duty entailed is relevant to the Court’s consideration of the scope of Mr Macdonald’s duty of confidentiality as Minister for Mineral Resources as provided for in the Ministerial Code of Conduct. There is no equivalent in the DPI Code of Conduct to the Minister’s duty of impartiality.

223. The content and scope of the duties imposed upon Mr Macdonald as Minister on the one hand, and the content and scope of the duties imposed upon officers or employees of the DPI on the other, may be similar, in the sense that they are both intended to fix and preserve the highest standards of probity and integrity to which members of the Executive and Departmental officers should adhere in the public interest. However, and for a range of obvious reasons, the content and import of the respective Codes of Conduct differ. The most significant difference is that Ministers are commissioned by the Governor of New South Wales to be “responsible for the day to day administration of the State”, referable to the portfolio(s) under their control, and are required to take the Ministerial Oath of Office (or equivalent affirmation) pursuant to which the Minister promises to “perform the functions and duties of [their office] faithfully and to the best of [their] ability”. ^[145]

224. In addition, on appointment to the Executive Council, Ministers are required to take the Pledge of Loyalty and the Executive Councillor’s Oath of Office as prescribed by the Constitution Act 1902 (NSW). ^[146]

225. The Pledge of Loyalty provides:

Under God, I pledge my loyalty to Australia and to the people of New South Wales. ^[147]

226. The Executive Councillor’s Oath of Office provides:

I, [insert name] being appointed as a member of the Executive Council of New South Wales, do swear that I will perform the functions and duties of an Executive Councillor faithfully and to the best of my ability and, when required to do so, freely give my counsel and advice to the Governor or officer administering the Government of New South Wales for the time being for the good management of the public affairs of New South Wales, and that I will not directly or indirectly reveal matters debated in the Council and committed to my secrecy, but that I will in all things be a true and faithful councillor. ^[148]

227. While neither the Pledge of Loyalty nor the Executive Councillor’s Oath of Office inform, in any material sense, the Ministerial duties of confidentiality and impartiality, they do reflect the trust and confidence that a Minister of the Crown owes to the State and the members of the community which embody it and the polity they serve in the execution of their Ministerial powers and duties for the public benefit.

228. A number of Departmental officers and employees gave evidence of their understanding of the operation of the DPI Code of Conduct as it related to their dealings with information generated within the DPI and/or communicated or provided to the Minister. The extent to which that evidence assists in giving form and context to the Minister’s separate and discrete duty of confidentiality will be considered below at par 259 and following.

What is confidential information as a matter of fact and law?

229. The Crown acknowledged, and correctly so, that merely treating particular information as confidential, including the marking of a document as confidential by way of a stamp or other insignia, does not make it so. That is, in the circumstances of the case, I approach the fact that certain documents were regarded by DPI staff as being confidential as not dictating as a matter of fact or of law that those documents had the quality of confidence such that the provision of them, or the communication of the information in them, would constitute a breach of the duty of confidentiality by which the DPI officers and/or Mr Macdonald were bound.

230. The Crown also noted, again correctly, that what constitutes confidential information has largely arisen in the context of an action for equitable breach of confidence.

231. The Crown and the accused (principally through Mr Neil’s written submissions) addressed the equitable obligation of confidence referable to the classic formulation of the elements in an action for breach of confidence, namely:

1. the information must be specifically identified;

2. it must have the necessary quality of confidence;

3. it must have been imparted in circumstances importing an obligation of confidence; and

4. there must be an unauthorised use of that information to the detriment of the party communicating the confidential information.

232. While that formulation does not definitively inform of the scope of the duty of confidentiality that is in issue in this trial, in particular where the obligation of confidence is owed to the State by a Minister of the State and the notion of a personal detriment in (iv) above has no relevance, for the reasons which follow, I am satisfied that it informs that question.

What constitutes the duty of confidentiality under the Ministerial Code of Conduct?

233. In closing submissions, the Crown treated Clause 4.2 of the Ministerial Code of Conduct as “expressing the duty of confidentiality” by which Mr Macdonald was bound as a Minister in the Executive Government of the State of New South Wales. Clause 4.2 provides:

A Minister shall not use information obtained in office to gain a direct or indirect private advantage for himself of herself, or for any other person. ^[149]

234. In that formulation of the duty, there is a prohibition on the “use” of information obtained in the exercise of the office of Minister essentially for an improper purpose. On any sensible construction, that prohibition must also be taken to include a prohibition on the provision of information obtained by the Minister to another person for the purpose of gaining a private advantage for the Minister or for another person. If Clause 4.2 were not intended to prevent Ministers from providing information to others in order to gain a private advantage, it would follow that a Minister could permissibly impart an unlimited amount of information (which the Minister has by virtue of the Office they hold) to other people for the purpose of benefitting either or both of the Minister and the recipient of that information or for the purpose of benefitting a third party.

235. Mr Neil makes the sound point that while there is in Clause 4.2 a clear prohibition on the use of any information for an improper purpose, neither Clause 4.2, nor any other provision of the Ministerial Code of Conduct or the Ministerial Handbook, articulates what information warrants the designation of “confidential information” imposing on the Minister an obligation of confidence in the performance of, or adherence to, his or her Ministerial duty of confidentiality.

236. As I understand the Crown’s written closing submissions, ^[150] although it was not put expressly, the scope and content of the duty of confidentiality as expressed in Clause 4.2 can only be meaningfully gauged from the circumstances in which a particular Minister of the Crown receives information in the office they hold as a Minister and whether, in the assessment of the particular Minister, their possession of that information enlivens an obligation of confidence. In the Crown’s submission, again as I understand it, that may be because the information is commercially sensitive or because the nature of the information the Minister is dealing with is such that it is in the public interest that it be treated as confidential, even if only for a limited period of time.

237. In support of that construction of the scope of the duty of confidentiality, the Crown relied upon its analysis of what were described in a number of civil cases as circumstances importing an obligation of confidence, albeit, in each case, a decision which concerned an action to restrain publication of confidential information.

238. Confidential information imparted or received in circumstances importing an obligation of confidence was described in Coco v AN Clark (Engineers) Ltd ^[151] as follows:

[T]he circumstances are such that any reasonable man standing in the shoes of the recipient of the information would have realised that upon reasonable grounds the information was being given to him in confidence, then this should suffice to impose upon him the equitable obligation of confidence.

239. Similarly, in Attorney-General v Guardian Newspapers (No 2), ^[152] Lord Goff stated:

[A] duty of confidence arises when confidential information comes to the knowledge of a person … in circumstances where he [or she] has notice, or is held to have agreed, that the information is confidential, with the effect that it would be just in all the circumstances that he [or she] should be precluded from disclosing the information to others.

240. McHugh JA in Attorney-General (UK) v Heinemann Publishers Pty Ltd ^[153] observed that sometimes the information may be conveyed with an express statement that it is confidential, although, perhaps more commonly, the obligation of confidence is deduced from the circumstances in which the information is conveyed. In the context of trade or commerce, relevant circumstances will include the extent to which the information is known inside and outside the business, the measures taken to guard the secrecy and the value of the information.

241. McHugh JA went on to observe that in relation to government information: ^[154]

… Equity will not protect the disclosure or use of what I shall call government information unless, at the time when the information was acquired, it was or would have been regarded by the government and the confidant as confidential, that it was imparted in circumstances which imposed an obligation of confidence, that it retains its confidentiality, and that it is in the public interest to treat it as confidential.

242. Mr Neil dealt with some of those authorities but placed particular emphasis on what he described, accurately, as the need to view the disclosure of government information in contrast to where personal or commercial secrets were involved. ^[155]

243. Mr Neil’s reference to the need to assess the obligation of confidence owed to the State through a different lens derives directly from the decision of the High Court in The Commonwealth of Australia v John Fairfax and Sons Ltd. ^[156]

244. That case concerned whether certain publishers should be enjoined from publishing newspapers containing confidential information in the form of what were described as “official secrets” which the publishers knew was not information “in their hands” with the knowledge or authority of the Commonwealth. In those circumstances, it was the Commonwealth’s case as plaintiff that the recipients of that information were under a duty not to disclose it.

245. Leaving to one side Mason J’s consideration of the reach of an injunction as equitable remedy (in which case the publisher’s knowledge of the classified nature of the documents and the Commonwealth’s claim that it had not authorised release of the information might have been of particular relevance), Mr Neil relied upon the following passages (at 51-52):

The equitable principle has been fashioned to protect the personal, private and proprietary interests of the citizen, not to protect the very different interests of the executive government. It acts, or is supposed to act, not according to standards of private interest, but in the public interest. This is not to say that equity will not protect information in the hands of the government, but it is to say that when equity protects government information it will look at the matter through different spectacles.

It may be a sufficient detriment to the citizen that disclosure of information relating to his affairs will expose his actions to public discussion and criticism. But it can scarcely be a relevant detriment to the government that publication of material concerning its actions will merely expose it to public discussion and criticism. It is unacceptable in our democratic society that there should be a restraint on the publication of information relating to government when the only vice of that information is that it enables the public to discuss, review and criticize government action.

Accordingly, the court will determine the government's claim to confidentiality by reference to the public interest. Unless disclosure is likely to injure the public interest, it will not be protected.

246. The principle for which that case is authority (which seems to me to be concerned with the conflicting considerations a court must weigh in the balance in deciding whether the public’s interest in knowing and expressing its opinion about the business of government predominates over the need to protect the confidentiality of the information) has, however, been endorsed and followed in other contexts, ^[157] elevating the importance of the requirement that publication of information said to be confidential be restrained in the public interest or, to put it another way, that the public interest requires that publication of that information be restrained.

The relevance, if any, of s 365 of the Mining Act

247. In the context of considering the limitations to the scope of Mr Macdonald’s duty of confidentiality as the Minister for Mineral Resources, to ensure that restrictions on the disclosure of information are not imposed beyond what the public interest requires, both Mr Neil and Mr Martin relied upon the express provisions of s 365 of the Mining Act.

248. Mr Neil submitted that s 365 of the Mining Act is one of a number of sections of the Act which are relevant to determining the scope of Mr Macdonald’s duty of confidentiality as the responsible Minister under the Act. ^[158] He submitted that the Crown has not addressed how the information said by the Crown to have been confidential and disclosed contrary to the duty imposed on Mr Macdonald under the Ministerial Code of Conduct (the conduct the subject of the fourth, sixth, seventh, eighth and ninth acts of misconduct as particularised) ^[159] could be treated as confidential at law in circumstances where Mr Macdonald had the right to disclose the information under s 365 of the Mining Act and/or a member of the public had a right to access the information under the Freedom of Information Act 1982 (Cth).

249. In Mr Neil’s submission, two aspects of the Mining Act are of relevance in defining or determining the scope of any obligation of confidentiality imposed under Ministerial Code of Conduct.

250. First, s 22 of the Mining Act provides the relevant Minister with the sole power and unfettered discretion to grant ELs:

(1) After considering an application for an exploration licence, the Minister:

(a) may grant an exploration licence to the applicant, or

(b) may refuse the application. ^[160]

251. Second, s 365 of the Act provides:

(1) A person must not disclose any information obtained in connection with the administration or execution of this Act, unless the disclosure is made:

(a) with the consent of the person from whom the information was obtained, or

(b) in connection with the administration or execution of this Act, or

(c) for the purposes of any legal proceedings arising out of this Act or of any report of any such proceedings, or

(d) for the purposes of any investigation or inquiry conducted by a warden under this Act, or

(e) with the concurrence of the Minister, or

(f) under the Freedom of Information Act 1989 (NSW).

(2) A person employed in the Department must not use for the purposes of personal gain any information obtained in connection with the administration or execution of this Act.

252. Mr Neil submitted that a number of conclusions ought be drawn from the operation of those sections of the Mining Act: ^[161]

1. Section 365(1)(b), particularly when read with s 356(2), makes it clear that information obtained in connection with the administration or execution of the Mining Act may be disclosed by any person in connection with the execution of the Mining Act.

2. Section 365(1)(e) makes it clear that information obtained in connection with the administration or execution of the Mining Act may be disclosed with the consent of the Minister (which necessarily implies that the Minister may disclose the information himself or herself).

3. Section 365(1)(f) makes clear that prima facie the Freedom of Information Act applies to information obtained in connection with the administration or execution of the Mining Act.

253. In the Crown’s submission, ^[162] s 365 has no relevant bearing on what is comprehended by the duty of confidentiality expressed in Part 4 of the Ministerial Code of Conduct which binds all Ministers, and where, in any event, it is clear that the statutory purposes in the enacting of the Mining Act 1973 (NSW) (s 22 of which was the precursor of s 365 of the Mining Act 1992 (NSW)), addressed in the second reading speech as the Mining Bill passed into law in 1972, are to “conserve, manage and foster development of [the State’s] mineral resources for the maximum benefit of its present and future citizens”. ^[163] The Crown submitted the section should not be construed as providing “a form of legislative abrogation” of Mr Macdonald’s duty of confidentiality as Minister. In particular, s 365(1)(b), properly construed, would not authorise the disclosure of information of the kind the subject of the fourth and the sixth to ninth acts of misconduct, where it is the Crown case that the information was not disclosed in the public interest but to foster or enhance private interests.

254. In Mr Neil’s submission, ^[164] the Crown’s submission is misconceived. He submitted that the relevant question for the Court is not whether the section operates so as to provide a “form of legislative abrogation of the Minister’s duty of confidentiality”. ^[165] Rather, the question is whether it can meaningfully ascribe to Mr Macdonald an appreciation of what he must have understood as the obligation of confidentiality by which he was bound, having regard to the operation of s 365.

255. It is fundamental to proof of the Crown case that, on the basis of the facts established by the evidence and the inferences that might be legitimately drawn from that evidence, that the Crown exclude any reasonable or rational hypothesis inconsistent with what I might find was Mr Macdonald’s communication or dissemination of the information the subject of the fourth and the sixth to the ninth acts of misconduct as wilful acts of misconduct. It is equally fundamental, however, that I must be satisfied that the evidence provides a proper basis for considering that Mr Macdonald might have communicated the information the subject of those particularised acts of misconduct in connection with the administration execution of the Mining Act and not knowingly in breach of his Ministerial duties and obligations as the Crown alleges. Neither Mr Neil nor Mr Martin referred me to any evidence which might have supported the reasonable possibility that Mr Macdonald communicated any of the information the subject of those five particularised acts of misconduct in the legitimate discharge of his authority under s 365 of the Mining Act, or for any other purpose in the public interest.

256. In any event, I should add that I do not construe the operation of s 365 as defining, informing or constraining the reach or extent of the duties or obligations imposed under the Ministerial Code of Conduct. In my view, s 365 operates for a distinctly different purpose. It operates as an offence-creating provision providing for penal consequences where a person suspected of committing the offence created by the section cannot rely upon one of the statutory exceptions to the absolute prohibition upon the disclosure of “any information obtained in connection with the administration or execution of [the Mining Act]”.

257. Mr Neil also relied upon the Freedom of Information Act 1989 (NSW). In his submission, the “fundamental premise” of that Act, namely, the public’s right to access documents held by a public body, reflects the need to ensure that where a Minister is alleged to have been the source of the disclosure of confidential information, the test of whether that is in “the public interest” should be relied upon. ^[166]

258. Again, in my view there is simply no basis in the evidence, or as a matter of principled analysis, for the invocation of the operation of that statutory regime to be taken into consideration when determining the terms and scope of a Minister’s duty of confidentiality as imposed under the Ministerial Code of Conduct.

The evidence of the DPI officers as to their understanding of their duty of confidentiality

259. Mr Mullard, the Director of the Coal and Petroleum Development Group within the DPI, understood his obligations arising from the DPI Code of Conduct were to protect and deal with confidential and “sensitive” information, either generated by the Department or received by the Department from third party entities, in particular companies in the mining industry. That included what were considered by Mr Mullard to be “commercial in confidence” documents because they contained detailed information mining companies had supplied to the Department pursuant to their reporting obligations as the holder of an EL, including the results of their coal exploration activities and what future activities might be envisaged by them. ^[167] Mr Mullard gave evidence that some information received by the Department in that way was time-sensitive, in the sense that after the passage of time some company data, received on a confidential basis, might become publicly available.

260. A particular category of information which Mr Mullard identified as information the Department treated as confidential, involved arrangements for the release of new coal release areas pursuant to an EOI process. That information was treated as confidential to ensure that access to the information did not confer a commercial or pecuniary advantage on third party interests who may, for example, wish to acquire land over which a coal EL might issue. ^[168]

261. Mr Mullard also gave evidence that the staff within the DPI were also made aware of “what data could be provided” and “what data couldn’t”. ^[169] That information was not confined to information “on the [DPI’s] databases” but included what he described as “maps” and reports which identified unallocated coal release areas and potential coal resources. ^[170]

262. Mr Mullard also gave evidence that he understood that what was otherwise treated as confidential information could be released with “official approval”. ^[171] He said approval was sought from time to time from the Minister to release information and in many cases, although not invariably, in writing. ^[172] Mr Mullard also gave evidence that there was no impediment, as he saw it, to providing information to the Minister, even where it was treated by the Department as confidential or sensitive, given the Minister’s statutory responsibilities under the Mining Act. Mr Mullard also said that if a staff member of the Department was approached by another Member of Parliament for the release of what was otherwise treated by the Department as confidential or sensitive information, a departmental officer would seek the Minister's approval before providing that information. ^[173]

263. Mr Mullard gave evidence that some information either generated or commissioned by the DPI in the form of expert reports focusing on coal resources in particular areas ^[174] or information provided to the Department by mining companies including, for example, bore hole data and the identity and analysis of coal intersections, was variously treated as both “confidential” or “non-confidential”, in the sense that information of that kind might be received by the Department and retained as confidential for a period of time after which the information might become “open file or non-confidential”. ^[175] The responsibility of deciding what data was confidential at any one time devolved to staff members within the DPI who had the responsibility to manage the information held by the Department on its various databases. ^[176]

264. Mr Mullard also gave evidence that:

1. While working documents within the DPI were being developed, they were either sensitive or confidential and were not released and not available publicly. This could change at a later time when they were no longer working documents.

2. If the Minister decided that an area would be released for coal exploration and the Department commenced work to define that area and to prepare information packages, that information was confidential until such time as the new coal release area was publicly released, either an open or closed tender process.

3. The specific area that was going to be released was confidential but, for example, the fact that the DPI would be releasing areas in “the Western Coalfield” was not confidential.

265. As Director-General of the DPI, Dr Richard Sheldrake gave evidence that confidential or sensitive documents (such as Cabinet minutes and tender documents) should “remain within the Department or the Minister’s office” and should not be disclosed. In relation to tenders, this was because others could potentially make “significant gains inappropriately if that information was disclosed”. ^[177]

266. Mr Alan Coutts, as the Deputy Director-General of the DPI with responsibility for the Mineral Resources Division, gave evidence that a number of categories of information were confidential, including information that was Cabinet in confidence, official information and sensitive information, categories provided in the DPI Code of Conduct. ^[178] He gave evidence that submissions to the Minister were confidential and would not be provided outside the Minister’s office unless specific approval was obtained from the Minister, or the Director-General or the Deputy Director-General of the DPI. ^[179] He gave evidence that although there was no written document he was aware of which identified which documents were confidential or a practice of stamping documents “confidential”, there was a well-understood protocol within the DPI regarding the sort of information that could be disclosed. ^[180]

267. The Crown submitted that it was Mr Coutts’ understanding that information, whether or not marked “confidential”, which potentially formed the basis of an EOI document should not be provided outside the DPI (other than to the Minister’s office). ^[181] In support of that submission, the Crown relied on Mr Coutts’ evidence that the document titled “Prospective Coal Exploration and Expression of Interest Areas in NSW” dated 31 July 2008 ^[182] came to be labelled as confidential because “these were potentially forming the basis of an expression of interest document, which would have been confidential”. ^[183] The Crown also relied on Mr Coutts’ evidence that he would not provide information as to possible timeframes for the EOI process (information which he understood to pertain to the upcoming EOI process) to anyone outside the Department because he considered that information to be confidential. ^[184]

268. Ms Julie Moloney’s understanding, as Senior Project Officer within the Development Coordination section of the DPI, was that the documents and information she dealt with were highly confidential. She gave evidence that if the DPI was considering a competitive release process, disclosing that information in advance of the process being announced could secure an advantage for some at the expense of others.

269. Ms Leslie Wiles’ understanding, as the manager of the Coal Advice section of the DPI, was that any information that came from coal mining companies in their reports or exploration undertaken by the DPI (until it was publicly released) and any conversations mining companies had with the DPI were considered confidential and not to be discussed outside the office. She also gave specific evidence as to the confidentiality that attached to Wiles Maps 1 and 2 in the context of their inclusion in Ministerial Briefings in May 2008.

270. Mr Graham Hawkes, as the Principal Minerals Liaison Officer within the Ministerial and Executive Support Division of the DPI, gave evidence that he treated as confidential responses to requests for information – whether requests from the Minister’s office, the Deputy Director-General, the Director-General or those within the DPI who had prepared the response.

271. In the Crown’s submission, the evidence of how senior Departmental officers dealt with information which they considered would be encapsulated within the concept of “confidential” or “commercially sensitive” information, including, inter alia, and relevantly so far as the issues in this trial are concerned, Ministerial Briefings which included maps and other information generated by the DPI in connection with the creation of the Mount Penny Coal Release Area, and other documents created in connection with the DPI’s contemplated EOI process for the granting of an EL over that area, meaningfully informs the question of fact whether that same information, when furnished to Mr Macdonald as the Minister by the Department, was also “confidential” and/or “commercially sensitive” and should have been treated by him in the same way.

272. Mr Neil submitted that for the Crown to treat the duty of confidentiality imposed on officers of the DPI as analogous with the Minister’s duty of confidentiality was misguided. Mr Neil submitted the analogy fails to grapple with the particular circumstances in which the duty of confidentiality binding Mr Macdonald as the Minister for Mineral Resources arises in the facts of this case, including to whom any obligation of confidentiality was owed.

Mr Iemma and Mr Gibson’s evidence

273. The Crown relied upon the evidence of Mr Morris Iemma, a former Premier of New South Wales (extracted below), and Mr Jamie Gibson, Mr Macdonald’s Deputy Chief of Staff in 2008, to give content to the duty of confidentiality in Clause 4.2 of the Ministerial Code of Conduct (extracted above) as they understood it to operate.

274. Mr Gibson gave evidence that within the Minister’s office, Cabinet documents and any documents which contained commercially sensitive information or information not for public exposure would be treated as confidential.

275. Mr Iemma gave evidence which addressed the Ministerial Code of Conduct. He gave evidence of his understanding of the duties and obligations imposed under the Code; how they were (to his understanding) intended to operate, and how he saw himself bound by those duties and obligations in the discharge of his Ministerial responsibilities as the Minister for State Development from February 2006 to April 2007.

276. After confirming that the duties and obligations of impartiality and confidentiality provided for in the Ministerial Code of Conduct were what he described as principles of long-standing, he gave the following evidence:

Q. Do documents require a stamp marked “Cabinet in Confidence” for them to be considered confidential to a department?
A. Confidential to the Cabinet process they require the stamp. If it is a document generated to support a Cabinet submission, if it is a draft Cabinet submission, then it needs the stamp, it needs the seal of “Cabinet in Confidence”. To be confidential to the Cabinet process, a department could generate a document that could contain sensitive information which is not information scheduled to go to Cabinet or part of a Cabinet discussion, which could be sensitive and confidential; commercial, for example.

I had many examples of that when I was Public Works Minister, that as an agency that is the procurement agency for Government. So we, the department, had documents that were sensitive in a commercial sense that weren't headed for Cabinet or a Cabinet subcommittee but were sensitive. They weren't stamped “Cabinet in Confidence” but they were sensitive.

Q. Without breaching that confidence, are you able to give us an example of the type of document you are talking about?
A. The procurement documentation to go out to tender, when Government would be likely to call for expressions of interest. The department was the department that disposed of Government assets so information about would an asset be disposed of; the Public Works usually dealt with old school sites, TAFE sites, the medium and smaller physical assets of the State. So information about whether they would go for disposition was sensitive and any timing of any expression of interest to the market would be sensitive. So until there was a formal decision to dispose, in which there was a general notice, that was quite sensitive information. ^[185]

277. He also gave the following evidence:

Q. Returning then to the issue of the confidentiality of documents that may not be marked “Cabinet in Confidence”, was there guidance for Ministers generally as to what documents between a Minister’s office and their department would be confidential and/or commercially sensitive?
A. Not to my ‑ I can't recall if there was specific, no, advice.

Q. And when you say you can't recall if there was specific, are you talking about written guidelines?
A. Written guidelines, discussion in Cabinet. Cabinet discussion focused on Cabinet documents. Security of Cabinet discussion, security of Cabinet documents, avoiding leaks. The discussions focused on Cabinet documents.

…

Q. During your time as Premier, limiting it to that period, was it your observation that there was any general practice in place about the manner in which Ministers would deal with documents that came up from their department?

...

A. I can’t recall. I recall that the discussions in Cabinet when it related to documents were, where they were Cabinet submissions or were documents that were in support of Cabinet submissions and they were cloaked with the confidentiality of Cabinet, the discussions focused on ensuring no leaks, ensuring the security of the actual Cabinet submission and any documents that were supportive of the submission that were attached to it. So discussions about how they would be treated and confidentiality of those, certainly.

General documents and how each individual Minister treated documents generated in their department, I don't recall discussions about how they should be treated. ^[186]

278. Finally, he gave the following evidence:

Q. During your time as Premier between 2005 and 2008, was there a policy in place about the appropriate course that a Minister should take on becoming aware of a potential or actual conflict of interest?

...

A. From the Code of Conduct, and from practice, I was a member of the Cabinet when we were dealing with policy issues, proposed legislative change and Ministers would rise and inform the Premier, the then Premier, Mr Carr, that there was either an actual or perceived conflict and they would absent themselves from deliberations at that meeting. That was one example.

HER HONOUR

Q. Would I be right, Mr Iemma, it would really be a matter that would become active in the mind of the individual member because the conflict would only arise in that situation; and, similarly, where a Minister in the discharge of ministerial obligations ‑ that is, beyond Cabinet ‑ became concerned that there may be a conflict in one or other of his ministerial dealings or his dealings with department, again it would be activated in the mind of the Minister and, in accordance with the Code of Conduct, he or she would be expected to take appropriate measures?
A. Yes. Yes, your Honour. ^[187]

…

Q. You gave the example earlier of commercially sensitive documents. Can I ask this: Is it your view that if a Minister is of a view that a document is commercially sensitive, a document that goes between himself and his department, then that document should remain confidential?

…

A. Yes. ^[188]

279. Mr Neil submitted that Mr Iemma’s evidence does not meaningfully address the issues in this trial. In particular, his evidence, given at a general level, does not inform the principled approach the Court must take to identifying the defining features of a duty of confidentiality owed by Mr Macdonald as the Minister for Mineral Resources at law, in circumstances where, as Mr Neil submitted, the duty of confidentiality in the Ministerial Code of Conduct is heavily qualified by s 365 of the Mining Act ^[189] and the operation of the Freedom of Information Act 1989 (NSW).

What will need to be proved to constitute a breach of Mr Macdonald’s duty of confidentiality?

280. Taking into account the evidence of DPI officers and executives, and the evidence of Mr Gibson and Mr Iemma (the latter of which is, in my view, entitled to very considerable weight) and after considering the authorities to which I have referred, I am satisfied, and direct myself accordingly, that in order to establish that Mr Macdonald acted in breach of the Ministerial Code of Conduct by acting in breach of the duty of confidentiality imposed upon him as the Minister for Mineral Resources, the Crown must:

1. Identify the information that it contends is confidential, including information that may not be confidential per se because it is otherwise publicly available, but information that was or became “confidential” in the hands of Mr Macdonald (in the office of Minister for Mineral Resources) because of the form in which it was communicated or imparted by him (inclusive of the fact that the information was and remained confidential in the view of the DPI at the time it was allegedly provided by him);

2. Establish that the information said to be confidential was in fact communicated or imparted by Mr Macdonald in the form and/or manner alleged, as distinct from that information being obtained or accessed in some way independent of any breach of duty; and

3. Establish that of the information that satisfies (i) and (ii), it was imparted contrary to Mr Macdonald’s duty to keep that information confidential in the sense that he “used” it for legitimate public purposes, or in the public interest and not to gain a direct or indirect private advantage for others (namely, his co-conspirators and/or their family and/or associates).

What constitutes the duty of impartiality under the Ministerial Code of Conduct?

281. As stated above, I was without assistance from the Crown as to the precise scope and content of the duty of impartiality allegedly breached by Mr Macdonald in the commission of the first, second and fifth acts of misconduct and as an alternative to the breach of confidentiality alleged in respect of the remaining five acts of misconduct, expressed both as a guiding principle and as a general obligation in the Ministerial Code of Conduct.

282. In those circumstances, I propose to proceed on the basis that Mr Macdonald’s duty of impartiality was relevantly informed by the General Obligations set out in the Ministerial Code of Conduct to “perform their duties impartially, disinterestingly [sic] and in the best interests of the people of New South Wales” (emphasis added), ^[190] which I interpret to mean not responsive to private interests at the expense of the public interest.

283. In the Crown’s submission, the demonstrable factual interrelationship between what it submitted were the eight acts of misconduct committed by Mr Macdonald, and the conduct of Moses Obeid in particular, and, by inference, the conduct of Edward Obeid as overt acts by each of them in furtherance of the conspiracy including the receipt by one or both of them and their deployment of confidential information Mr Macdonald communicated to them in breach of his duty of confidentiality, leads inevitably to the Crown having established, beyond reasonable doubt, that the accused were at all relevant times acting in concert pursuant to the conspiracy alleged.

284. In that context, I note that in the Revised Statement of Particulars, ^[191] the fourth, seventh and eighth acts of misconduct are particularised in the same way, namely that Mr Macdonald caused the confidential information the subject of those alleged acts of misconduct to be provided to Edward Obeid, Moses Obeid, or another member of the Obeid family. The Crown did not, however, tender any evidence capable of establishing the existence of a relationship between Mr Macdonald and any member of the Obeid family other than Edward Obeid or Moses Obeid.

285. By casting the potential recipients of the confidential information in the alternative in that way, the Crown left open the possibility that neither of the accused received the information directly from Mr Macdonald, which allows for the further possibility that if Edward Obeid or Moses Obeid can be shown to have been in possession of that information, they may have been unaware of its provenance, or aware the information had the character or quality of confidential information.

286. In respect of the sixth and ninth alleged acts of misconduct, it was alleged that Mr Macdonald communicated the information the subject of those alleged acts of misconduct to Edward Obeid and/or Moses Obeid, that is, the information was communicated to one or both of them (cf. another member of their family).

287. Some of those distinctions appeared to collapse in the Crown case as closed. In the Crown’s written closing submissions, the following information (which I was invited to find was confidential in the hands of Mr Macdonald as the Minister for Mineral Resources) was alleged to have been provided to Moses Obeid or another member of the Obeid family, without nominating Edward Obeid as one of those people:

1. Wiles Map 1 and Wiles Map 2 (the fourth act of misconduct);

2. The proposed date for the launch of the EOI (the sixth act of misconduct);

3. The list of companies proposed to be invited to participate in the EOI process (the seventh act of misconduct);

4. Schiavo Map 3 (the eighth act of misconduct);

5. A page of information headed “MEDIUM COAL ALLOCATION AREAS” (the eighth act of misconduct); and

6. Information about the reopening EOI of the EOI process for the White Group (the ninth act of misconduct). ^[192]

288. Although no specific mention was made of the confidential information in (a)-(f) above being provided to Edward Obeid by name, or that it was at any time in his possession, in the immediately following paragraph of the Crown’s closing written submissions, the schedule of telephone contact between the accused and diary entries which recorded scheduled meetings between them was relied upon as providing Mr Macdonald with “ample opportunity to provide this information to Edward Obeid, Moses Obeid, or another member of the Obeid family” (emphasis added). ^[193]

289. It is of some significance that it is not alleged in the Revised Statement of Particulars, or in the way the Crown put its case at trial, that the information the subject of the first and second acts of misconduct (being information inter alia concerning coal reserves in the Bylong Valley near Mount Penny furnished to Mr Macdonald by the DPI at his request), nor Mr Macdonald’s alleged direction to the DPI to reduce the potential open cut coal resource in the Bylong Valley as represented in Wiles Map 2 to make a smaller coal release area in the east in the area of Cherrydale Park, the subject of the fifth act of misconduct, was information communicated to the Obeids (or to anyone) by Mr Macdonald, or by anyone on his behalf in breach of his Ministerial duties of confidentiality or impartiality. ^[194]

290. Later in its closing submissions, however, ^[195] the Crown did submit that I would be satisfied that Mr Macdonald did inform Edward Obeid or Moses Obeid that a new coal release area incorporating Cherrydale Park had been created, and that it would be included in a forthcoming EOI process for the grant of an EL, after which steps were taken in earnest by Moses Obeid to purchase Donola and Coggan Creek, the properties adjoining Cherrydale Park. In support of that submission the Crown relied upon what was said to be the stark and otherwise inexplicable coincidence between the commission by Mr Macdonald of the first, second and fifth acts of misconduct (successive acts of misconduct which, on the Crown case, culminated in the creation of the Mount Penny Coal Release Area which encompassed Cherrydale Park by mid-June 2008) and the decision by Moses Obeid and his brothers Gerard Obeid and Paul Obeid to retain Mr Chris Rumore, solicitor, in late June 2008 to act for them on the purchase of the neighbouring properties and generally to provide commercial legal advice as to the structure of a landholders alliance in a proposed joint venture with a coal mining company. In large part, the force of the Crown’s submission depends on whether I am satisfied that the Crown has established that Mr Macdonald’s dealings with the Department in May and June 2008 were acts of wilful misconduct committed by him in furtherance of the conspiracy which, on the Crown case, was forged no later than 9 May 2008 (when the first act of misconduct was committed).

291. If I am not satisfied that such acts of misconduct as can be attributed to Mr Macdonald in his dealings with the Department in May and June 2008 (being the first, second and fifth acts of misconduct) were committed by him pursuant to the conspiracy alleged because, for example, there remains a reasonable possibility that he acted in that way for purposes extrinsic to the conspiracy, or for any other reason, the Crown has failed to establish Mr Macdonald wilfully misconducted himself as the Minister in the course of his dealings with the Department at that time, then, even were it open for me to find that Mr Macdonald shared information with Edward Obeid or Moses Obeid or another member of the Obeid family about the inclusion of Cherrydale Park and its surrounds in a new coal release area at Mount Penny, the Crown case would likely fail unless the sharing of that information, taken together with all the evidence relied upon by the Crown to prove the existence of the conspiracy beyond reasonable doubt, is capable of supporting proof of the existence of the conspiracy by 9 May 2008.

The Shepherd fact: Mr Macdonald’s knowledge of the Obeids’ ownership of Cherrydale Park

292. As noted above, the Crown also accepts that since Mr Macdonald’s knowledge that the Obeid family owned property near Mount Penny in the Bylong Valley (Cherrydale Park) is a fact that is indispensable to proof of the existence of the conspiracy it must be proved beyond reasonable doubt.

293. To elaborate, the Crown accepts that it must prove beyond reasonable doubt that Mr Macdonald knew of the rural holdings of the Obeid family in the Bylong Valley situated near Mount Penny as a fact fundamental to proving that Mr Macdonald committed the first and second acts of misconduct in breach of his duty of impartiality for the improper purpose alleged.

294. The Crown also accepts that it must prove Mr Macdonald had that knowledge when he caused Wiles Map 1 and Wiles Map 2, showing the potential coal reserves in the Bylong Valley, including those proximate to Mount Penny, to be provided to the Obeids (the fourth act of misconduct), and that he had that same knowledge when he directed the DPI that the potential open cut coal resource depicted in Wiles Map 2 be reduced to a small coal release area in the east, thereby resulting in the creation of the Mount Penny Coal Release Area which encompassed Cherrydale Park (the fifth act of misconduct).

295. Finally, the Crown also accepts that Mr Macdonald’s knowledge that the Obeids owned a rural property in the Bylong Valley near Mount Penny (Cherrydale Park) is fundamental to proving the remaining sixth, seventh, eighth and ninth acts of misconduct if the Court is considering whether Mr Macdonald committed each of those acts of misconduct in breach of his Ministerial duty of impartiality because they were committed by him knowing that the Obeid family owned property in the area of Mount Penny. Even were the Court to confine its consideration to whether, in the commission of those acts of misconduct, Mr Macdonald breached his duty of confidentiality, knowledge that the Obeids owned Cherrydale Park was also inherent in proving he committed those acts of misconduct for the improper purpose alleged.

The significance of the eight acts of misconduct to proof of the Crown case

296. In respect of some of the eight acts of misconduct, the underlying conduct is in dispute. The allegation that Mr Macdonald “directed” the Department to create a smaller area comprising the eastern portion only of the potential open cut area depicted on Wiles Map 2 (the fifth act of misconduct); the allegation that Mr Macdonald provided or arranged for the Obeids to receive Wiles Map 1 and Wiles Map 2 (the fourth act of misconduct); the allegation that Mr Macdonald provided information about the timing of the public launch of the EOI process (the sixth act of misconduct); the allegation that Mr Macdonald provided Edward Obeid, Moses Obeid or another member of their family with the list of companies to be invited to participate in the EOI process (or the information that list contained) (the seventh act of misconduct); and the allegation that Mr Macdonald provided Edward Obeid, Moses Obeid or another member of the Obeid family with the page headed “Medium Coal Allocation Areas and Schiavo Map 3 (the eighth act of misconduct) are all in that category.

297. In respect of other alleged acts of misconduct (namely, the first and second acts of misconduct, together with the fifth act of misconduct which falls in both categories) what is in dispute is Mr Macdonald’s intention in doing what the evidence establishes he did in his dealings with the Department, being conduct which (through his counsel) he embraced as exemplifying the proper and principled discharge of his role and responsibilities as Minister for Mineral Resources in the public interest. That conduct included his requests for information from the DPI, including information about the volume of coal resources in the area of Mount Penny, in his pursuit of the inclusion of additional small to medium coal release areas in the proposed EOI process.

298. It is the accused’s case that the Crown has failed to establish that what Mr Macdonald did in his dealings with the Department in May and June 2008 in connection with what was ultimately designated by the Department as the Mount Penny Coal Release Area, was for the improper purpose of favouring or advancing the interests of the accused and/or their family and associates, in the sense that “but for” that improper purpose he would not have acted in that way.

299. In advancing that submission, both Mr Neil and Mr Martin submitted that there is a clear and available hypothesis, arising on the evidence, that is inconsistent with Mr Macdonald having committed the acts of misconduct particularised by the Crown as the first, second and fifth acts of misconduct for the improper purpose alleged. They submitted that the evidence establishes that Mr Macdonald’s enquiries of the Department on 9 May 2008 as to the availability of coal reserves in the Bylong Valley and on 14 May 2008 whether the Department’s EL 6676 might be released to tender were entirely consonant with, and motivated by, his ongoing commitment to advancing the interests of the people of New South Wales, by releasing further areas for coal exploration and his enthusiasm for an EOI process to be initiated to facilitate that objective.

300. Mr Neil also submitted that even on the assumption that I am satisfied that it was Edward Obeid’s enquiry of Mr Macdonald in early 2008 as to whether he was aware of the DPI having any knowledge of a mine being planned by Anglo American P/L, or its subsidiary Anglo Coal (Bylong) Pty Ltd (Anglo American P/L) ^[196] in the Bylong Valley ^[197] that prompted Mr Macdonald to explore with the Department the prospect of opening up further areas for coal exploration in the Bylong Valley in the area of Mount Penny, that does not justify the Crown’s characterisation of Mr Macdonald’s dealings with the Department between 9 May 2008 and 6 June 2008 as acts of misconduct committed in furtherance of the conspiracy, even were I to find that Mr Macdonald did not adopt the best process of pursuing those enquiries by ensuring that all potentially interested landowners in the Bylong Valley were treated impartially to avoid the risk or perception that one landowner had obtained an unfair advantage over others.

301. Mr Neil submitted that Mr Macdonald’s enquiries of the Department in May 2008 about coal reserves in the Bylong Valley near Mount Penny, which logically progressed to include his dealings with the Department in June 2008 about that subject, were not capable of establishing that there was in existence, at that time, a specific agreement to which each of the accused were party that Mr Macdonald would misconduct himself in the way the Crown alleges in the indictment, namely that he would intentionally do acts in connection with the granting of an EL at Mount Penny to favour their interests by wilfully breaching his duties of confidentiality and/or impartiality.

302. The Crown submitted that in the context of other evidence in the Crown case, the fact that Mr Macdonald initiated enquiries of the DPI on 9 May 2008 focusing on the volume of coal reserves in the area of Mount Penny where, by that date, the Obeids had learnt through their own enquiries that there were coal reserves in the area of Cherrydale Park ^[198] and in circumstances where Edward Obeid had, on his own admission, asked Mr Macdonald for information about whether a coal mine was planned by Anglo American P/L in the Bylong Valley, ^[199] allows the Court to be satisfied, as a matter of compelling inference, that the conspiracy was in existence before 9 May 2008 and that Mr Macdonald’s enquiries of the DPI at that time was the first act of misconduct committed by him in furtherance of the conspiracy.

303. In the Crown’s further submission, the evidence in the trial that establishes Mr Macdonald’s enthusiasm for the release of further coal exploration areas in New South Wales for the revenue it would generate does nothing to undermine me finding, having regard to all the evidence, that “but for” the improper purpose of benefiting Edward Obeid and/or Moses Obeid and/or their family and/or associates, he would not have made the focused enquiries of the DPI about coal reserves in the area of Mount Penny on 9 and 14 May 2008 (the conduct the subject of the first and second acts of misconduct). The Crown also submitted that I would be satisfied that “but for” the same improper purpose, Mr Macdonald would not have “directed” the Department on 6 June 2008 to excise from the potential open cut coal resource represented in Wiles Map 2 a small coal release area comprising only the eastern portion of that large area, including the precise area where Cherrydale Park was located (the conduct the subject of the fifth act of misconduct).

304. It is the Crown’s further and allied submission that Mr Macdonald’s coordinated acts of misconduct in his direct and indirect dealings with the Department in May and June 2008, (that is, the conduct comprehending the first, second and fifth acts of misconduct as particularised) when considered with all the evidence in the Crown case, including the conduct comprehended by the balance of the eight acts of misconduct as particularised, will compel the further finding that each of the eight acts of misconduct, as particularised, were committed by Mr Macdonald pursuant to an agreement of the specific kind alleged in the indictment and in furtherance of achieving the object of that agreement.

What does the Crown need to establish were Mr Macdonald’s acts of misconduct (as particularised) and to what standard of proof?

305. Subject to the Court giving itself a Shepherd direction as concerns Mr Macdonald’s knowledge of the Obeids’ rural holdings at Mount Penny in the Bylong Valley before it would be open to find Mr Macdonald misconducted himself in the specific ways the Crown has particularised its case, a deficiency in the evidence supporting proof of one or more of the eight acts of misconduct does not, as a matter of law, lead to a finding that the existence of the conspiracy of the specific kind alleged in the indictment is not proved. That follows because, as a matter of law, proof of the existence of the conspiracy (of the object and scope alleged in the indictment) does not depend upon me being satisfied that Mr Macdonald committed all eight particularised acts of misconduct. Equally, Mr Macdonald’s participation in the conspiracy does not depend upon proof that the eight acts of misconduct were overt acts committed by him in furtherance of the conspiracy charged.

306. I accept, and direct myself accordingly, that the Crown may prove its case against each of the accused even were I to find deficiencies in the evidence relied upon by the Crown to prove some of the eight particularised acts of misconduct, whether because the Crown has not satisfied the “but for” test in respect of some of them or because those acts of misconduct which I am satisfied qualify as breaches of the substantive offence of misconduct in public office because they constitute a breach of Mr Macdonald’s duty of confidentiality and/or impartiality, I am not satisfied were committed in furtherance of the conspiracy alleged but for some purpose extrinsic to it.

307. Again, as a matter of strict legal reasoning, in order that an individual act of misconduct, as particularised, is available to the Crown as evidence probative of guilt, I need only be satisfied that it was committed by Mr Macdonald in furtherance of the conspiracy alleged as a matter of rational inference, either from the facts led in proof of the events underlying that particular act of misconduct (including proof that the act was committed by Mr Macdonald for the improper purpose alleged) and/or as a matter of rational inference from other acts of misconduct I am also satisfied are established by the evidence.

308. That said, the nature and extent of any deficiency in proof of one or more of the acts attributed to Mr Macdonald as acts of misconduct alleged by the Crown to have been committed by him in furtherance of the conspiracy, may give rise to a reasonable doubt as to whether the Crown has proved the conspiracy charged.

309. Finally, and again subject to directing myself that because Mr Macdonald’s knowledge of the location of the Obeids’ rural holding situated near Mount Penny is indispensable to proof of the improper purpose alleged and, for that reason, needs to be proved beyond reasonable doubt, none of the eight particularised acts of misconduct need to be proved beyond reasonable doubt.

310. It was, however, common ground at the trial that, if I am not satisfied that the evidence allows for a finding that Mr Macdonald committed any of the eight acts attributed to him by the Crown as acts of misconduct, the Crown’s case against all three accused must fail.

The significance of the date by which the conspiracy was in existence

311. In the course of Ms Francis’ closing submissions, I raised the question whether verdicts of guilty might be returned on the indictment were I satisfied that a conspiracy of the specific kind alleged in the indictment was forged within the timeframe alleged (that is, after 1 September 2007 but before 1 January 2009) but that it was not forged (that is, not in existence) until after 9 May 2008, being the time at which, on the Crown case, the first act of misconduct was committed by Mr Macdonald in furtherance of a conspiracy in existence before that date.

312. That issue arose following Mr Martin’s focused submissions on the evidence that related to whether the Crown had established the first, second and fifth acts of misconduct, and in the context of Ms Francis’ submission that there was no evidence that by 9 May 2008 Edward Obeid intended to enter into an agreement “whereby he knew and adhered, by knowledge and intent, that Mr Macdonald would misconduct himself seriously [so as to warrant criminal punishment]”. ^[200]

313. Mr Martin submitted that the evidence supported the rational possibility that as at 9 May 2008 the DPI was well advanced in identifying the release of unallocated coal reserves in the Bylong Valley, including in and around Mount Penny, and on their own initiative. He submitted that many months prior to Mr Macdonald’s focused enquiry of the Department as to the volume of coal reserves in the area of Mount Penny in the Bylong Valley, sent on his behalf via email on 9 May 2008 by Mr Gibson, his Deputy Chief of Staff, (the conduct subject first act of misconduct), the Department was involved in that process at Mr Macdonald’s direction and urging. In Mr Martin’s submission, the Crown’s reliance on Mr Gibson’s email of 9 May 2008 and a further email he sent on 14 May 2008, also on the Minister’s behalf enquiring as to whether the DPI would release to tender an EL it held in the Bylong Valley, ^[201] as related acts of misconduct carried out in furtherance of the conspiracy being the genesis of what became the Mount Penny Coal Release Area and its inclusion in the EOI process for the issue of an EL at Mount Penny was, on a proper analysis of the evidence, unsupported and misguided.

314. Those submissions prompted me to raise a number of questions for the consideration of the parties.

315. Initially a question that was exercising my thinking at that time was the approach I might take (or the approach it was open for me to take) in my deliberations to verdict were the Crown to fail to establish that Mr Macdonald wilfully misconducted himself in his dealings with the DPI on 9 and 14 May 2008 and then later on 6 June 2008 in connection with the issue of an EL for what would later become designated as the Mount Penny Coal Release Area, that is, were I not satisfied the first, second and fifth acts of misconduct were established.

316. I identified a related question as to the approach I might take in the event that the Crown did establish that Mr Macdonald’s dealings with the Department in May and June 2008 constituted acts of misconduct (because what he did was in breach of his Ministerial duty of impartiality) but the Crown failed to establish that Mr Macdonald would not have misconducted himself in that way were it not for the improper purpose alleged.

317. In either event, it appeared to me to follow that even if Mr Macdonald’s dealings with the DPI in May and June 2008 constituted substantive acts of Ministerial misconduct as a matter of law, the Crown would not have established that they were acts committed by him in furtherance of the conspiracy alleged.

318. That analysis provided the context in which a more focused question presented: what approach might I take, or what approach was open for me to take in my deliberations to verdict, if the Crown failed to establish that the first, second and fifth acts of misconduct, as particularised, were committed in furtherance of the conspiracy but if I was persuaded that one or more of the remaining five acts of misconduct were committed for the improper purpose alleged in the indictment and as acts in furtherance of the conspiracy alleged.

319. That question was raised directly for the consideration of the parties in the following way. ^[202]

320. Were I satisfied that by 7 July 2008 Mr Macdonald had provided Wiles Map 2 to Edward Obeid, Moses Obeid or a member of their family as a source of confidential information concerning the potential open cut resource in the Bylong Valley in breach of his duty of confidentiality and for the improper purpose alleged (inter alia, because I was satisfied that Wiles Map 2 retained its confidential status as at that date and that it was produced and discussed at some length at the second Wentworth Hotel meeting), and were I satisfied that Mr Macdonald provided Wiles Map 2 knowing that the Obeids owned a rural property (Cherrydale Park) in the Bylong Valley in the area of Mount Penny and knowing that the Department was considering creating a new coal release area at Mount Penny, and were I also satisfied that on 9 July 2008 Mr Macdonald provided Moses Obeid with a list of companies that might be invited to participate in an EOI process for the grant of an EL at Mount Penny (information which was also confidential) and that he provided it for the same improper purpose would proof of those two acts of misconduct (particularised as the fourth and seventh acts of misconduct) allow me to find the existence of the conspiracy alleged proved beyond reasonable doubt, not on the basis that the agreement was forged as at 9 May 2008, but forged sometime after 16 June 2008, after the Mount Penny Coal Release Area had been designated by the DPI for inclusion in the EOI process for the granting of an EL.

321. The Crown was invited by me to address that question, with leave, the Crown having concluded its closing submissions before the issue crystallised. Counsel for Edward Obeid and Moses Obeid were also invited to consider the question.

322. After the Crown was given the opportunity to take instructions and consider its position, I was informed that the Crown did not propose to take up the invitation to advance any submission responsive to the question I posed: ^[203]

CROWN PROSECUTOR CALLAN: First, the Crown does not accept that it has made time of the essence insofar as the date by which the alleged conspiracy was formed was not averred; rather, the indictment, as your Honour has observed, alleges between dates.

HER HONOUR: Yes.

CROWN PROSECUTOR CALLAN: What your Honour has raised is, in effect, a reasoning to verdict on the basis of a narrower case, specifically a narrower time frame, not an expanded or different case.

HER HONOUR: Correct.

CROWN PROSECUTOR CALLAN: In that respect, the Crown considers the current situation distinguishable from cases such as Mok.

HER HONOUR: I read Mok over lunch.

CROWN PROSECUTOR CALLAN: In Agius [2011] NSWCCA 119, Johnson J makes the point at paragraph 51 by reference to the English decision in Doot that:

“Although the essence or gist of conspiracy is the unlawful agreement made by the conspirators, and not the acts done under it, conspiracy as a crime is committed wherever and whenever it is shown that the agreement, the unlawful concert, exists between the conspirators.”

At paragraph 61, Johnson J observes:

“It is not necessary in the usual case of conspiracy where a succession of overt acts are relied upon to establish the date when, or the date before which, the conspiratorial agreement was made. The prosecution", his Honour observed, "is not bound to define the exact time at which the agreement began or the exact act which marked its inception.”

That being the case, your Honour, the Crown recognises the way it has put its case here. Namely, the Crown has defined the date by which it says the conspiratorial agreement was struck, namely 9 May 2008.

The Crown position is that your Honour would reason to verdict on the basis of the case as presented by the Crown, most recently in the Crown's closing submissions. That is, that by 9 May 2008, there was an agreement between the accused that Ian Macdonald would committee misconduct in pursuit of the potential for exploration of coal at Mount Penny and that inference arises from the whole of the evidence in the case, including the nine alleged acts of misconduct.

It is in those circumstances and for these reasons that the Crown does not take up your Honour's invitation to make submissions on the point your Honour raised just before lunch. And that is, as your Honour suggested, the Crown might say and is saying we're running the case we opened and closed and we do not want to be heard on whether or not your Honour can return a verdict on any other basis.

323. Despite the breadth of the timeframe in the indictment within which the Crown alleged the conspiracy was current and continuing, as is clear from the exchange extracted above, the Crown sought only to maintain the case that verdicts of guilty be returned against each of the accused on the basis that by 9 May 2008, at the latest, Mr Macdonald had agreed with each of the accused that he would misconduct himself as Minister for Mineral Resources pursuant to the specific agreement alleged in the indictment, and further, that by that date, at the latest, each of the accused had intentionally agreed to participate in that agreement.

324. The question that survives the position the Crown has taken is whether proof of the first, second and fifth acts of misconduct, as particularised, that is, what are alleged by the Crown to be acts of misconduct committed by Mr Macdonald in his dealings with the DPI in May and June 2008 in furtherance of an existing conspiracy, are factual findings that are fundamental to proving a conspiratorial agreement of the scope and purpose alleged in the indictment, even if not indispensable to proof of its case in the Shepherd sense.

325. The only fact indispensable to proof of the conspiracy charged is that Mr Macdonald knew that the Obeids owned property in the Bylong Valley situated near Mount Penny. That being the case, since the Crown does not seek a conviction against any of the accused unless I am satisfied that the conspiracy charged in the indictment was forged before Mr Macdonald’s dealings with the Department in May and June 2008 (on the Crown case, conduct which, viewed collectively, was directed to ensure the Department would designate a new coal release area in the Bylong Valley to include Cherrydale Park over which an EL might be granted), if I am not persuaded that Mr Macdonald’s conduct at that time constituted acts of wilful misconduct for any reason (including that the “but for” test is not satisfied), it would follow that the Crown has not proved the case it has elected to prosecute to verdict and verdicts of not guilty must be returned.

326. That is, I accept, as I must in the adversarial setting of this trial, that the Crown does not seek a conviction of any of the accused unless I find the conspiracy alleged in the indictment was forged on or before 9 May 2008.

327. Although it might be open to proceed to verdict on the basis that the evidence supports a finding that the agreement was in existence before 9 May 2008 but that there were no proven acts of misconduct committed by Mr Macdonald pursuant to that agreement until after the Mount Penny Coal Release Area, over which an EL might be granted, was designated, that approach is only open to me if there is evidence to support it. That is, it is not enough to find Mr Macdonald misconducted himself by providing confidential information to the accused or a member of their family after 16 June 2008 (the earliest he could have known that the Mount Penny Coal Release Area had been designated) and to reason to the conclusion that the conspiracy alleged must have predated that event by six weeks in order that the case the Crown has determined to prosecute remains open. There must be a sound evidential basis to support the Crown case if it is interpreted by me in that way.

328. Ms Francis’ submission responsive to the question I raised was to the effect that given the way in which the Crown has elected to frame the indictment and conduct its case, including by serving a Revised Statement of Particulars in the course of the trial, ^[204] it is not for me as the tribunal of fact in the course of deciding what of the primary facts alleged by the Crown are established and what facts I might be left in doubt about, to seek to give meaning to the case the Crown has elected to prosecute so as to allow for verdicts of guilty to be returned. ^[205]

329. Ms Francis emphasised that the Crown has consistently sought to prove its case against each of the accused referable to the agreement the subject of the conspiracy having been forged no later than 9 May 2008. She emphasised that the nomination of that date is not arbitrary. On the Crown case, it is that particular date that is the genesis of the Mount Penny Coal Release Area being designated by the DPI as a new coal release area, a factor which, in her submission, is intrinsic to the acts of misconduct which the Crown alleged were committed within the scope of the agreement that Mr Macdonald would misconduct himself, namely, by committing acts in connection with the granting of an EL at Mount Penny over that coal release area.

330. Ms Francis submitted, correctly, that it was not put in the Crown’s opening or particularised during the trial, including in the Crown’s closing address that Edward Obeid might have entered into an agreement with Mr Macdonald and Moses Obeid at some time after an agreement had been forged between Mr Macdonald and Moses Obeid, or that any of his proven conduct suggested participation in an agreement forged in a different timeframe.

331. Mr Neil submitted that were I to proceed to verdict on the basis of finding only that Mr Macdonald provided confidential information to Moses Obeid, for example Wiles Map 1 and Wiles Map 2 and the list of companies proposed to be invited to tender in the EOI process (or the information on that list), that is, were I satisfied that Mr Macdonald committed only the fourth and seventh acts of misconduct, verdicts of not guilty against each of the accused would be inevitable.

332. Mr Neil submitted that even were I satisfied that the confidential information comprised in the maps and the list of companies was provided by Mr Macdonald and received by Moses Obeid or another member of the Obeid family and then used by Moses Obeid in his dealings with Mr Brook from July 2008 to exploit the potential to contract with a mining company who might be granted an EL over Mount Penny, the Crown will have failed to prove the agreement at the high level of generality comprehended by the way the conspiracy is framed in the indictment, being the case the Crown has opened and has sought to prove. Mr Neil submitted that for me to proceed to conviction on the basis of a “granular” and “specific” agreement ^[206] to share confidential information is a different conspiracy from that alleged. He submitted were I to take that approach it would be contrary to principle ^[207] and in breach of fundamental dictates of fairness in the adversarial setting of a criminal trial.

333. It is not for me to enquire of the Crown why it has taken the approach it resolved to take in prosecuting its case. My task is to determine whether I am satisfied of the existence of the conspiracy alleged beyond reasonable doubt, an essential feature of which is that it was an agreement in existence as at 9 May 2008 and in which each of the accused agreed to participate by that date.

334. In those circumstances, given the way the Crown prosecutes its case to prove the existence of the conspiracy of the scope and object alleged as at 9 May 2008, I direct myself that if I am to find as a fact that the conspiracy was in existence by that date, I need to be satisfied, having regard to all the evidence capable of bearing directly and indirectly on the question (including such of the remaining acts of misconduct which are established and which are also capable of informing that question), that the first act of misconduct is established, and that it was an act of misconduct committed by Mr Macdonald pursuant to the conspiracy alleged.

Edward Obeid’s participation in the conspiracy (on the Crown case)

335. In closing written submissions, the Crown set out the evidence it relied on to prove Edward Obeid’s participation in the conspiracy beyond reasonable doubt and, to the extent necessary and permissible as reasonable evidence of his participation, to permit it to rely upon the co-conspirators rule, as reflected in the operation of s 87(1)(c) of the Evidence Act, in further proof of that fact. That evidence is as follows: ^[208]

• Edward Obeid’s “central involvement” in the purchase of Cherrydale Park, his involvement in the management of that property and his stated intention to live there in his retirement.

• The evidence that, in September 2007, Edward Obeid told Mr Macdonald about the purchase of Cherrydale Park, prompting Mr Badenoch, Mr Macdonald’s Chief of Staff, to send the email about the water licences in operation at that property.

• The evidence that, in May 2008, Edward Obeid asked Mr Macdonald for information about coal reserves at Mount Penny. What Mr Macdonald is alleged to have done responsive to that enquiry is the conduct the subject of the first act of misconduct.

• The location of copies of Wiles Map 1 and Wiles Map 2 during the Locaway Pty Limited (Locaway P/L) search warrant, together with an inference that Edward Obeid, Moses Obeid, or another member of the Obeid family received those maps from Mr Macdonald (the fourth act of misconduct).

• The evidence that Edward Obeid contacted Justin Kennedy Lewis shortly before Mr Lewis’ company purchased Coggan Creek, one of the two properties adjoining Cherrydale Park.

• Edward Obeid’s “central involvement” in attempting to change the ownership of Cherrydale Park from Locaway P/L to United Pastoral Group Pty Limited (UPG P/L) “in order to distance the Obeid family from property ownership at Mount Penny”.

• Edward Obeid’s meetings and telephone calls with Mr Macdonald in the period September 2007 to January 2009, from which, the Crown submitted, “a strong inference can be drawn as to communication regarding the object of the conspiracy”.

• Edward Obeid’s telephone calls with Moses Obeid during the period September 2007 to June 2009 from which, the Crown submitted, “a strong inference can be drawn as to communication regarding the object of the conspiracy, and pursuit of resulting financial benefit”.

• The admissions made by Edward Obeid in October 2009 to the journalist Tracy Ong.

• The admissions made and lie told by Edward Obeid in May 2010 to the journalist Anne Davies.

• The admissions made by Edward Obeid during the execution of the Locaway P/L search warrant in November 2011.

• The admissions made by Edward Obeid in December 2012 to the journalists Leo Shanahan and Katherine Jiminez.

336. That body of evidence generally reflected the overt acts and/or declarations the Crown relied upon as proof of the existence of the conspiracy and Edward Obeid’s participation in it.

337. The following particulars of the Crown case, as they relate to Edward Obeid, were not specifically addressed by the Crown in closing submissions as having been established by the evidence (tracked changes and footnotes omitted): ^[209]

(d) Between 17 June and 23 July 2008, Mr Edward Obeid and/or Mr Moses Obeid received information from Mr Macdonald that the EOI process for Mt Penny was to commence at the end of July 2008.

That is, consequent upon what the Crown particularised as the sixth act of misconduct committed by Mr Macdonald.

(e) On or after 7 July 2008, Mr Edward Obeid, Mr Moses Obeid or another member of the Obeid family, received from Mr Macdonald:

(i) a document titled ‘Company EOI 2 July 2008’ containing a list of companies proposed to be invited to participate in the EOI; or

(ii) information as to the companies on that list.

[That is, consequent upon what the Crown particularised as the seventh act of misconduct committed by Mr Macdonald.]

(f) On or after 23 July 2008, Mr Edward Obeid, Mr Moses Obeid or another member of the Obeid family, received from Mr Macdonald:

(i) the page with the heading ‘MEDIUM COAL ALLOCATION AREAS’;

(ii) a map titled ‘Proposed Coal Release Areas for EOIs’ prepared by Mr Fred Schiavo dated 21 July 2008 (Schiavo Map 3).

[That is, consequent upon what the Crown particularised as the eighth act of misconduct committed by Mr Macdonald.]

(g) Between 27 November 2008 and 13 January 2009, Mr Edward Obeid and/or Mr Moses Obeid received information from Mr Macdonald that the EOI process was to be (or was) reopened to allow the ‘White Group’ of companies (including Cascade Coal P/L) to apply. [That is, consequent upon what the Crown particularised as the ninth act of misconduct committed by Mr Macdonald.]

Moses Obeid’s participation in the conspiracy (on the Crown case)

338. In closing written submissions, the Crown set out the evidence it relied on as evidence of Moses Obeid’s participation in the conspiracy also so as to permit the Crown to invoke the co-conspirators rule reflected in the operation of s 87(1)(c) of the Evidence Act in proof of that fact, if necessary: ^[210]

• Based on research conducted in about April 2008, Moses Obeid became aware of coal at Mount Penny;

• Copies of Wiles Map 1 and Wiles Map 2 were located during the Locaway P/L search warrant, together with an inference that Edward Obeid or Moses Obeid or another member of his family received these maps from Ian Macdonald, being the fourth act of misconduct;

• Moses Obeid received information as to the timeframe for the launch of the EOI for Mount Penny, comprising the sixth act of misconduct;

• As at 30 June 2008, Moses Obeid (on an introduction by Ian Macdonald) had discussed the prospect of a mining project with Mr Fang;

• Moses Obeid received the list of companies from Ian Macdonald on 8 July 2008, being the seventh act of misconduct;

• Moses Obeid received further information about the EOI process (comprising a page headed “Medium Coal Allocation Areas”, and Schiavo Map 3) from Ian Macdonald, being the eighth act of misconduct;

• Moses Obeid’s pursuit (with his brothers Paul Obeid and Gerard Obeid) of financial gain as a result of the prospect of Mount Penny being included in the EOI, through:

○   his pursuit of suitable purchasers for Donola (the Triulcio family) and Coggan Creek (the Fitzhenrys, Tianda Resources (Australia) Pty Limited and Mr Fang, and Mr Lewis); ^[211]

○   his instructions to Mr Rumore in relation to the purchase of Coggan Creek and Donola, and a joint venture with a coal company; and

○   his dealings with Mr Brook in relation to a joint venture with Monaro Mining NL.

• Moses Obeid’s use of Andrew Kaidbay as an intermediary to deal with Monaro Mining NL, as a “dummy director” of various Obeid companies including UPG P/L and in seeking to shift ownership of Cherrydale Park to UPG P/L to distance the Obeids from Mount Penny;

• Moses Obeid obtained information from Ian Macdonald in January 2009 that the EOI had been reopened to allow the White Group to participate, being the ninth act of misconduct;

• Moses Obeid’s direct negotiations with Cascade Coal P/L for a joint venture in relation to the Mount Penny coal exploration area;

• Moses Obeid’s meetings and telephone calls with Ian Macdonald during the period September 2007 to June 2009 from which a strong inference can be drawn that they were communicating regarding the object of the conspiracy, and pursuit of resulting financial benefit;

• Moses Obeid’s telephone calls with Edward Obeid during the period September 2007 to January 2009 from which the same strong inference can be drawn;

• Moses Obeid’s lies to journalist Ms Davies in May 2010 about the circumstances of Mr Lewis purchasing Coggan Creek; and

• Moses Obeid’s admissions and lies to journalists Mr Shanahan and Ms Jimenez in December 2012.

The further directions by which I am bound in my deliberations to verdict

339. In considering the vast array of issues in dispute in the trial, and whether such of them that I am satisfied are established by the evidence, either directly or indirectly, support the inference of guilt for which the Crown contends, I am conscious, and direct myself accordingly, against the risk of inverting the burden of proof. That is, I am conscious, and direct myself accordingly, that the accused bear no legal or evidential burden of establishing any fact or series of facts (or circumstances) that might either prove their innocence or which might raise a reasonable doubt as to their guilt.

340. Neither do the accused bear the burden of establishing any reasonable hypothesis consistent with their innocence, whether on the basis of the facts or circumstances that I am satisfied are established by the evidence or on some other basis fairly arising on the evidence. In discharge of the legal burden of proving the guilt of each of the accused beyond reasonable doubt after full weight is given to the facts and circumstances established by the evidence, the Crown is obliged to negative any reasonable possibility that there remains a reasonable, that is a rational, hypothesis that is inconsistent with the guilt of the accused, or any one of them. ^[212]

341. I also give myself the further direction that each of the accused is entitled to have the question of their guilt determined by the evidence admissible against them. Subject to the Crown’s entitlement to rely upon s 87(1)(c) of the Evidence Act (to which I have already referred) and the Crown’s reliance upon the admissions made by each of Edward Obeid and Moses Obeid to journalists between 2009 and 2012, admitted pursuant to s 81 of the Evidence Act ^[213] (and, for that reason, admissions made outside the currency of the conspiracy and therefore not susceptible to admission under s 87(1)(c)), and subject to what the Crown relied upon as “consciousness of guilt” lies told by each of the three accused (also only admitted against the particular accused alleged to have told “the lie”), and to the limit on the use the Crown was entitled to make of Moses Obeid’s conduct in what was described as the entrepreneurial phase of the conspiracy, ^[214] the evidence adduced in the Crown case was available to the Crown in proof of the guilt of each of the accused.

342. That said, given the specific nature of the offence framed in the indictment and the way the Crown has sought to prove the guilt of each of the accused of that offence in the case it has elected to prosecute, I am conscious, and direct myself accordingly, that even were I satisfied that the evidence establishes that Mr Macdonald committed some acts of wilful misconduct as Minister for Mineral Resources in the Executive Government of the State of New South Wales, by acting in breach of his Ministerial duties and obligations of confidentiality and/or impartiality in connection with the granting of an EL at Mount Penny and for the improper purpose of benefiting Edward Obeid and/or Moses Obeid or members of their family or associates, unless the evidence also establishes that he acted in that way pursuant to an agreement with at least one of Moses Obeid or Edward Obeid that he should do so, the Crown accepts that verdicts of not guilty must be returned against each of the accused.

343. Accordingly, I further direct myself that in the event that I am satisfied the Crown proves that Mr Macdonald did wilfully misconduct himself as Minister for Mineral Resources by doing acts in connection with the granting of the Mount Penny EL in breach of his Ministerial duties and obligations, and I am also satisfied that he acted in that way for the improper purpose of benefiting Edward Obeid and/or Moses Obeid and/or their family members and/or associates because he knew that the Obeids owned property in the area of Mount Penny ^[215] and, further, that he would not have acted in that way “but for” that improper purpose ^[216] unless the Crown proves, beyond reasonable doubt, that at least one of Edward Obeid or Moses Obeid entered into an agreement with Mr Macdonald that he would conduct himself in that way, Mr Macdonald must also be acquitted. The indictment does not include any allegation that Mr Macdonald committed the substantive offence of misconduct in public office.

344. I further direct myself that even were I satisfied that Mr Macdonald did misconduct himself in the office he held as Minister for Mineral Resources by committing, for example, the acts of misconduct particularised as the first and second acts of misconduct concerning coal reserves in the area of Mount Penny, and even were I satisfied that either or both of Edward Obeid and Moses Obeid knew or suspected that Mr Macdonald had also directed the DPI to create the Mount Penny Coal Release Area which encompassed Cherrydale Park for their benefit (that is, assuming the fifth act of misconduct is established), that would not be sufficient to support verdicts of guilt against any of the accused. I would also need to be satisfied that by the time Mr Macdonald was dealing with the DPI in the way comprehended by the first, second and fifth acts of misconduct, either or both of Edward Obeid and Moses Obeid had intentionally entered into an agreement with Mr Macdonald that he would misconduct himself (to their advantage) in the specific way the Crown alleges, that is, in connection with the granting of an EL at Mount Penny and for the improper purpose of benefiting either or both of them and/or their family members and/or their associates.

345. Even were the Crown to prove that Edward Obeid and/or Moses Obeid “thought” that Mr Macdonald was providing them with valuable information (even confidential information) as a favour from a friend and colleague, the Crown case against each of the accused must fail unless the Crown can exclude the reasonable possibility that Mr Macdonald provided that ‘inside’ information not because Edward Obeid or Moses Obeid agreed that he should (knowing and intending that Mr Macdonald would commit the offence of misconduct in public office by doing so), but because Mr Macdonald chose to provide that information in the belief or hope that it would (or might be) of benefit to the Obeids - whether he was motivated to do so by friendship with Edward Obeid as a political ally or to ingratiate himself with Edward Obeid as a person he perceived as powerful or influential at a time when Mr Macdonald’s political career was nearing its end. ^[217]

346. In addition, even were the Crown to establish that either or both of Edward Obeid and Moses Obeid were aware that the information Mr Macdonald was providing from time to time concerning the designation of a new coal release area in the Bylong Valley in the area of Mount Penny and its inclusion in a forthcoming EOI tender process would give them a commercial advantage as landowners in their dealings with a coal mining company who might apply (or who had applied) for an EL over that area, and that Mr Macdonald gave them the information for that reason, each of the accused must be acquitted of the offence charged unless the Crown proves beyond reasonable doubt that Edward Obeid and/or Moses Obeid received that information from Mr Macdonald (and that he provided it) in accordance with the specific agreement alleged in the indictment to which they were each a party, namely an agreement that he would wilfully breach his Ministerial duties and obligations of impartiality and/or confidentiality in connection with the granting of an EL at Mount Penny and for the improper purpose of benefiting either or both of them and/or their family and/or associates.

347. I also remind myself of the direction given earlier that if the Crown is to prove the guilt of both Edward Obeid and Moses Obeid, the Crown must establish beyond reasonable doubt that in entering into the conspiracy they each knew or intended that by Mr Macdonald agreeing with them that he would intentionally do acts in connection with the granting of an EL at Mount Penny for the improper purpose alleged, he would wilfully, that is, knowingly, misconduct himself in breach of his duties and obligations of impartiality as a Minister and/or in breach of his duties and obligations of confidentiality in that same capacity.

348. Again for emphasis, I direct myself that the Crown will not have proved the guilt of any of the accused by evidence that goes no further than establishing that Mr Macdonald in fact wilfully misconducted himself in his dealings with the DPI in May and June 2008 in breach of his duty of impartiality (the conduct the subject of the first, second and fifth acts of misconduct), or that he in fact communicated or otherwise provided confidential information in connection with the granting of an EL at Mount Penny in repeated breach of his Ministerial duties of confidentiality and impartiality (the conduct the subject of the remaining five acts of misconduct as particularised). Neither will the Crown prove the guilt of the accused by evidence that goes no further than establishing that Moses Obeid, Edward Obeid or another of their family members were at one time in possession of confidential information that Mr Macdonald had provided to them, or that he caused to be provided to them, which they then sought to exploit to their commercial benefit in their dealings with a mining company (or other entity associated with a mining company) who might apply for an EL at Mount Penny.

349. Finally, and again for emphasis, in addition to proving that Mr Macdonald wilfully misconducted himself in his dealings with the DPI (in the manner particularised as the first, second and fifth acts of misconduct) and that he also wilfully misconducted himself by communicating confidential information concerning the granting of an EL at Mount Penny, and that information was received by Edward Obeid, Moses Obeid or other members of the Obeid family, knowing that it was confidential (in the manner particularised by the remaining five acts of misconduct), the Crown must also prove that Mr Macdonald misconducted himself in one or more than one of those ways pursuant to a pre-existing agreement he intentionally entered into no later than 9 May 2008, with either or both of Moses Obeid and Edward Obeid that he would wilfully misconduct himself in the office he held as Minister for Mineral Resources in the Executive Government of New South Wales in connection with the granting of an EL at Mount Penny for the improper purpose of advantaging either or both of his co-accused and/or members of their family and/or their associates.

350. I am also conscious, and I direct myself accordingly, that it is not my role or function, whether in directing myself as the judge of law or making factual findings as the tribunal of fact, to endeavour to find a case of criminal culpability in any of the accused. My role and function is to determine whether the Crown has proved the criminal culpability of each of the accused of the conspiracy charged in the indictment beyond reasonable doubt in the case that the Crown elected to prosecute at trial.

351. Neither is it my role or function as the tribunal of fact to seek to improve or perfect, or change in any way, the way the Crown has sought to prove its case. As a matter of fairness to the accused, I am obliged to consider whether the Crown has proved the guilt of each of them referable to the evidence adduced by the Crown at trial and the case ultimately put by the Crown in closing submissions. That is important in this trial, as it is in criminal trial process generally. It is a fundamental principle inherent in an adversarial system of criminal justice that it is for the Crown to prove the guilt of an accused on the case it prosecutes beyond reasonable doubt. I have already noted that the Crown amended the particulars of its case in the course of the trial by deleting the third act of misconduct by reason of what it perceives as a deficit in the evidence and amending the fourth and eighth acts of misconduct to reflect the evidence that was adduced. ^[218] In proof of the fifth act of misconduct, the Crown also adapted its case in closing submissions to accommodate the evidence given by Mr Gibson, Mr Macdonald’s Deputy Chief of Staff, for the first time and without notice to the Crown.

352. In this trial, I also direct myself that it is not open to me to moderate, in any way, the Crown’s obligation to adduce evidence of each of the legal requirements fundamental to proof of guilt of each of the accused of the conspiracy charged. ^[219] I am also conscious, and I direct myself accordingly, that in discharge of the role and function I have in this trial as the judge of the law, it is not for me to seek to improve or moderate the legal requirements of the offence the Crown has preferred on indictment and upon which each of the accused was ultimately arraigned. Accordingly, I am bound by the law that applies in this State as concerns the elements of the conspiracy charged and the legal requirements for proof of the guilt of each of the accused of that offence where the unlawful act the subject of the conspiracy alleged that Mr Macdonald would wilfully commit misconduct in public office in breach of his Ministerial duties and obligations in a particular respect; namely, in connection with the granting of an EL at Mount Penny concerning the interests of Edward Obeid, Moses Obeid, their family and associates and that “but for” the improper purpose of advancing those private interests, he would not have agreed to commit that offence. ^[220]

353. For the reasons already given, and again for emphasis, I direct myself that I am also obliged to determine whether the Crown has proved the guilt of Mr Macdonald (or either or both of Edward Obeid or Moses Obeid) of the offence charged on the indictment, by confining myself to the question whether the Crown has proved the case it confirmed in the course of closing arguments as the only basis upon which convictions were sought, namely a conspiracy that consisted of an agreement forged no later than 9 May 2008 (and in which each of the accused agreed to participate by that date) that Mr Macdonald would misconduct himself by doing acts in connection with the granting of an EL at Mount Penny in breach of his Ministerial duties of impartiality and confidentiality for the improper purpose alleged in the indictment.

354. As the tribunal of fact, it is for me to determine what facts and circumstances are established by the evidence, and to identify what facts and circumstances, proof of which I might be left in doubt about. As I have already discussed, ^[221] it is only Mr Macdonald’s knowledge of the Obeids’ ownership of a rural property (Cherrydale Park) situated near Mount Penny in the Bylong Valley that has legal quality of a fact indispensable to proof of guilt and, therefore, a fact the Crown has the burden of establishing beyond reasonable doubt. Each of the accused contends the Crown has failed to prove that fact.

355. The Crown also bears the legal obligation of negating any reasonable hypothesis arising on the evidence that is inconsistent with the guilt of the accused. Each of the accused also contends the Crown has failed to prove its case, inter alia, for that reason. They each contend, and in different ways and with different emphasis, that the evidence admits of a range of alternate hypotheses for what I will be satisfied the evidence reveals about the conduct of Mr Macdonald, as Minister for Mineral Resources, in connection with an EL which was ultimately granted over a coal release area in the Bylong Valley which encompassed land owned or controlled by the Obeid family, on the one hand, and the conduct of Edward Obeid and Moses Obeid as landowners and developers on the other, both within the indictment period and, so far as Moses Obeid is concerned, after 31 January 2009. ^[222]

356. The burden and standard of proof imposed upon the Crown in proving the case it elected to prosecute obliged the Crown in its closing submissions to identify the evidence which allows me to be satisfied beyond reasonable doubt that the only rational inference for what the Crown submitted were Mr Macdonald’s successive and interrelated acts of proven and wilful misconduct (or those acts which the Crown is able to prove to a standard of comfortable satisfaction are acts of misconduct in the relevant sense) is that he acted pursuant to an agreement with either or both Edward Obeid and Moses Obeid that he would wilfully misconduct himself in his role of Minister, since in the way the Crown has sought to prove its case it is only Mr Macdonald’s proven act(s) of wilful misconduct which are capable of establishing the existence of the conspiracy of the scope and object alleged by the Crown in which each of three accused is alleged to have participated.

357. In closing submissions, the Crown argued that I will be satisfied beyond reasonable doubt of the existence of the conspiracy of the scope and object alleged, and the participation by each of the accused in that conspiracy, as a matter of overwhelming inference from the confluence of various facts and circumstances established by the evidence adduced in the trial and the combined weight of that evidence.

358. On the Crown case, that body of evidence includes what each of the accused said and did from time to time during the currency of the conspiracy and in furtherance of achieving their common objective (the overt acts particularised and set out in full above and other evidence eloquent of their participation in the conspiracy), and what the Crown submitted was the opportunity they had during that time to keep each other informed of the progress being made to achieve their shared objective.

359. Again as noted above, the Crown also relied upon the steps taken by each of the accused, in different ways, to conceal the existence of the conspiracy both during its currency and after the object of the agreement had been fully executed as part of the available evidence to establish the existence of the conspiracy. That conduct included what the Crown alleges were lies told by each of the accused as evidencing a consciousness of their guilt as participants in the conspiracy alleged.

The documentary evidence tendered in the trial, in summary

360. A series of interrelated events or occurrences before, during and after the conspiracy are established by various objective sources of evidence concerning proof of those events or occurrences, including in the documents tendered both by the Crown in Exhibit A, the documents supplementing Exhibit A, ^[223] including documents tendered by the accused, ^[224] and by reference to the evidence of witnesses concerning those events or occurrences.

361. None of the accused went into evidence.

362. Exhibit A, comprising the Crown Tender Bundle, comprises approximately 4,173 pages of documentary evidence dating from 8 April 1999 to August 2013, arranged chronologically in four volumes.

363. Following objection at the pre-trial stage by each of the accused to a large body of evidence in the proposed Crown Tender Bundle concerning a succession of interrelated events and commercial transactions of various kinds engaged in or entered into after 31 January 2009 extending through to May 2012, that is, after the indictment period (described as the global objection) that evidence was admitted in the case against all three accused as to the existence of the conspiracy alleged, and in the case against Moses Obeid as to his participation in it (see R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 1) [2019] NSWSC 322).

364. Objection was also taken during the pre-trial stage to the tender of a succession of emails of 9 and 10 November 2010 passing between Mr Sassine, a chartered accountant who acted from time to time on behalf of members of the Obeid family (including on behalf of the Obeid Family Trust No 1 and Obeid Family Trust No 2); Mr Chalabian, a partner in the legal firm Lands Legal; Mr Grant, a partner and tax consultant with PKF Australia, a firm of chartered accountants and business advisers; and Paul Obeid, Moses Obeid’s brother and Edward Obeid’s son. ^[225] Subject to my decision in R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 2) [2019] NSWSC 775, that body of evidence was not admitted.

365. Objection was also taken by Moses Obeid to the tender of a body of evidence relating to the purchase and ownership of Cherrydale Park and enquiries made in relation to water licences in operation on that property. Subject to my decision in R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 3) [2019] NSWSC 898, that body of evidence was admitted.

366. The documents which comprise Exhibit A include emails and documents, including maps attached to emails generated within the DPI. It also includes correspondence between the DPI and the Minister’s office, correspondence in the form of ongoing advice from Mr Rumore, who was retained to act for Gerard Obeid and Paul Obeid on 23 June 2008 and later that month jointly be Moses Obeid and his brothers, including handwritten notes of conferences they attended and draft documents prepared by him, and a large number of contractual and other documents generated by other solicitors representing various contracting parties in the entrepreneurial phase of the events with which the trial was concerned. ^[226]

367. Exhibit A also includes correspondence between Mr Gardner Brook, Senior Vice President with Lehman Brothers, and others, including his superiors at Lehman Brothers; officers of Monaro Mining NL (some of which was forwarded or copied to Moses Obeid); and Cascade Coal P/L as Mr Brook endeavoured to broker an arrangement first between Monaro Mining NL and Voope P/L, a company controlled by Moses Obeid, and later between Cascade Coal P/L and Buffalo Resources P/L, a company also controlled by Moses Obeid, in the event that either company was granted the EL at Mount Penny in the EOI process in which both companies submitted an application for the grant of an EL over a number of the eleven coal release areas that were the subject of that closed tender process.

368. Exhibit A also comprised evidence of diarised meetings and minuted conferences between various individuals.

369. Most of the evidence in Exhibit A was not in dispute. What was in dispute were the circumstances in which some of the documents were created and sent, including what they are capable of revealing about the state of knowledge (or the attitudes and motivations) of the authors of those documents in resolving the facts in issue in the trial, including legal documents or drafts of such documents created by solicitors representing contracting parties and what those documents revealed about the person or entity providing instructions.

370. I have endeavoured where possible in my deliberations to verdict to undertake a broad factual analysis of the evidence in order to determine what the interrelated events or occurrences that are established by the evidence (or the facts foundational to proof of those events or occurrences) prove, or are capable of proving about either the existence of the conspiracy alleged or the participation of each of the accused in that conspiracy, or what that evidence might support as an hypothesis inconsistent with proof of either of those facts.

Witnesses called in the Crown case

371. Ultimately, 38 witnesses gave evidence in the Crown case. Those witnesses can be grouped into several categories as follows.

Parliamentary witnesses

372. Morris Iemma, ^[227] Premier of the State of New South Wales from 3 August 2005 to 5 September 2008, ^[228] gave evidence about the factions comprising the New South Wales Branch of the Australian Labor Party, the roles of Mr Macdonald and Edward Obeid within those factions, various policy issues during the time period with which the trial was concerned, and his understanding of the scope and import of the Ministerial Code of Conduct.

373. George Campbell, ^[229] Luke Foley ^[230] and Anthony Albanese, ^[231] all key figures in the New South Wales Branch of the Australian Labor Party at all relevant times, gave evidence about the events which transpired at the Noble House lunch on 20 February 2006, including discussions around Mr Macdonald’s preselection in the upcoming New South Wales State election. ^[232]

374. Kate Boyd, ^[233] General Counsel of the Department of Premier and Cabinet, gave evidence about Parliamentary and election procedures and the Ministerial Code of Conduct.

Bylong properties witnesses

375. Peter Druitt ^[234] was the real estate agent who acted in the sale of Cherrydale Park to Locaway P/L.

376. John Cherry ^[235] was the vendor of Cherrydale Park.

377. John Rodd ^[236] was a stock and station agent who advised members the Obeid family on the purchase of Cherrydale Park. ^[237]

378. Stewart Adlington ^[238] was the real estate agent who acted in the sale of Coggan Creek.

379. Ted O’Brien ^[239] was the vendor of Coggan Creek.

380. Chris Rumore ^[240] was a solicitor specialising in commercial property transactions and a partner of the firm Colin Biggers and Paisley. He was initially retained by Gerard Obeid and Paul Obeid on 23 June 2008, and from 30 June 2008 by Moses Obeid, also to advise in relation to the purchase of rural properties in the Bylong Valley under a Heads of Agreement with a group of property developers. Mr Rumore ultimately rendered advice on a range of matters including the negotiation of a joint venture agreement with the mining company expected to be awarded the Mount Penny EL and the drafting of various contractual documents to advance and protect his clients’ interests.

DPI witnesses

381. Richard Sheldrake, ^[241] Alan Coutts, ^[242] Brad Mullard, ^[243] Fred Schiavo, ^[244] Graham Hawkes, ^[245] Robert Larkings, ^[246] Leslie Wiles ^[247] and Julie Moloney ^[248] were executive officers or staff members of the DPI in 2008 and 2009. They were involved in various ways in the preparation and release of the EOI process in respect of eleven small to medium coal release areas, including Mount Penny.

382. William Hughes ^[249] was the Chair of the EOI Evaluation Committee in relation to the EOI process. ^[250]

383. Kevin Fennell ^[251] was the probity auditor for the EOI process.

Ministerial staff

384. Adam Badenoch ^[252] was Mr Macdonald’s Chief of Staff in 2007 and 2008.

385. Jamie Gibson ^[253] was Mr Macdonald’s Deputy Chief of Staff in 2007 and 2008. He was promoted to Chief of Staff in January 2009. During 2008, Mr Gibson attended meetings with Mr Macdonald and DPI officers about the EOI process. He received a range of documents regarding that process from the DPI on Mr Macdonald’s behalf.

Monaro Mining NL witnesses

386. Gardner Brook ^[254] was an investment banker with Lehman Brothers. He was introduced to Moses Obeid, Gerard Obeid and Paul Obeid in July 2008. From 2008 to 2011, Mr Brook dealt variously with Monaro Mining NL (including by making the initial approach to that company on behalf of the Obeids) and, later, Cascade Coal P/L in relation to the pursuit of the grant of an EL at Mount Penny in the Bylong Valley on behalf of Moses Obeid.

387. Mart Rampe ^[255] was the CEO and Executive Director of Monaro Mining NL in 2007 and 2008.

388. Warwick Grigor ^[256] was the Chairman and a director of Monaro Mining NL until his resignation in April 2009.

389. Harold Bowman ^[257] was engaged as a consultant by Monaro Mining NL in late 2006 or early 2007 until at least late 2008. He worked previously in various positions in the Department of Mines, the Department of Mineral Resources, and as the Chief Executive Officer of the Coal Compensation Board until his retirement in 2006. He also worked as a consultant to the DPI from 2006 to at least 2009.

390. Greg Barns ^[258] was a non-executive director of Monaro Mining from 30 July 2008 to 2 February 2012. ^[259]

Officers of the Independent Commission Against Corruption (NSW) (ICAC)

391. Ultimately only three ICAC officers gave evidence in the trial.

392. Tim Fox ^[260] was the Chief Investigator at ICAC and the officer-in-charge of Operation Jasper, the investigation into various events including those events the subject of the trial. He executed a search warrant at the Locaway P/L premises on 23 November 2011.

393. Ron Hillier ^[261] was the property officer during the execution of the search warrant at the Locaway P/L premises on 23 November 2011. ^[262]

394. Lisa Stockley ^[263] was an investigator who reviewed documents seized during the search warrant executed at the Locaway P/L premises.

Expert witnesses

395. Candice McKerrell ^[264] is a handwriting expert. She prepared a report at the request of ICAC dated 30 January 2013 that pertained to the investigation which included the events the subject of the trial. ^[265]

396. Laurie Whiddon ^[266] is a cartography expert. He was engaged by ICAC in 2013 to produce maps of an area broadly known as the Bylong Valley as part of the investigation which included the events the subject of the trial. ^[267]

Others

397. Peter Fitzhenry ^[268] and Nicole Fitzhenry ^[269] were Moses Obeid’s neighbours in 2007 and 2008.

398. Greg De Ross ^[270] was the General Manager of Tianda Resources (Australia) Pty Limited (Tianda Resources P/L) from December 2007 until December 2009. ^[271]

399. Rodney Pryor ^[272] was an analyst at Lehman Brothers and a colleague of Mr Brook.

400. Anne Davies ^[273] was a journalist with the Sydney Morning Herald. On 20 May 2010, she published an article entitled “Coal down below - how rich is his valley?” ^[274] which related to the ownership of Cherrydale Park by the Obeid family and prospective coal in the area.

The primary issues in dispute arising from the evidence at trial

401. The great bulk of the evidence at trial concerned events within the timeframe particularised in the indictment, namely between 1 September 2007 and 31 January 2009. The evidence also includes some events before 1 September 2007 and events three years after the conspiracy was executed. ^[275]

402. The length of final submissions by the Crown and the accused ^[276] and the detailed analysis they each gave to the evidence as it relates to either proving or raising a doubt about guilt highlights the extent and breadth of the facts in dispute. I have endeavoured to resolve all factual disputes that I regard as fundamental to the Crown proving the guilt of the accused beyond reasonable doubt. I have also endeavoured to identify and resolve the conflict between the Crown and the accused as to whether the facts that I am satisfied are established by the evidence, and the inferences legitimately drawn from those facts, are capable of proving guilt as the ultimate fact in issue beyond reasonable doubt or whether, in light of those findings, I am left with a reasonable doubt as to guilt, either because I am not satisfied of the existence of the conspiracy alleged beyond reasonable doubt or, if I am satisfied of that fact, I am left in doubt as to whether the Crown has proved the participation of at least one of the accused Edward Obeid or Moses Obeid in that conspiracy. ^[277]

403. The interrelated events or occurrences that are established by the evidence, including the facts foundational to proof of them), when ordered chronologically, also provides the context in which a number of primary issues in dispute in the trial arise, some of which I have already identified. They include, but are not limited to, whether the Crown has established that Mr Macdonald misconducted himself as Minister for Mineral Resources between 9 May 2008 and 31 January 2009 by committing one or more of the eight particularised acts of misconduct relied upon by the Crown to prove the existence of the conspiracy, and if he did misconduct himself in the manner alleged on any of the occasions particularised by the Crown, whether he did so in furtherance of the conspiracy alleged. If Mr Macdonald misconducted himself as Minister in connection with the granting of an EL at Mount Penny but for reasons unconnected with an agreement with Edward Obeid or Moses Obeid that he should do so then, whatever his motivations might have been for acting in that way, and irrespective of whether his conduct might be a criminal breach of his Ministerial duties and obligations, his conduct will not provide an evidentiary basis to infer the existence of the conspiracy.

404. That same broad analysis of a number of interrelated events or occurrences that I am satisfied are established by the evidence also allows me to make an informed assessment as to whether I am satisfied that at the time Mr Macdonald is alleged to have entered the conspiracy by agreeing to commit misconduct in public office in connection with the granting of an EL at Mount Penny, he knew that the Obeids owned a rural property (Cherrydale Park) situated near Mount Penny in the Bylong Valley. As I have already emphasised, the Crown accepts that proof of that fact is indispensable to proving that Mr Macdonald misconducted himself as alleged, and for the improper purpose alleged. Viewed in that way, the Crown accepts that it is a fact which, being indispensable to proof of the existence of the conspiracy, must be proved beyond reasonable doubt. ^[278]

405. Moses Obeid’s relationship with Mr Brook and the capacity in which Mr Brook acted in his dealings with Monaro Mining NL from July 2008, and in his dealings with Cascade Coal P/L in 2009 (both companies having lodged an application for the grant of an EL at Mount Penny in the EOI process initially publicly launched on 9 September 2008 but extended on 9 January 2009), provides the context in which a number of critical issues arise. The resolution of those issues will likely inform the question whether the Crown is able to prove that the conspiracy alleged in the indictment was forged before 9 May 2008 and, if that fact is proved beyond reasonable doubt, it may also serve to identify the participants in that conspiracy.

406. Those issues include, in particular, what, if anything, Moses Obeid told Mr Brook in July 2008 about:

1. the pending EOI process for the grant of an EL at Mount Penny

2. the location of coal reserves beneath land owned or controlled by his family at or near Mount Penny and coal resources adjacent or “contiguous” to that area

3. the mining companies which were to be invited to participate in the EOI process for the granting of an EL over that land

4. to the extent that Moses Obeid told Mr Brook about any of those things, the source of his information.

The significance of the pre-existing relationships between the accused to proof of the Crown case

407. The Crown submitted that the existence of the conspiracy and the participation of each of the accused in it were proved, in broad and non-exhaustive terms, by their pre-existing relationships which, in the Crown’s submission, gave context to what they each said and did in furtherance of achieving the shared object of the conspiracy. ^[279]

408. It is the Crown case that the various configurations of the relationships between the three accused that existed prior to September 2007 converged when they agreed that Mr Macdonald would misconduct himself in the manner alleged in the indictment.

409. The closeness of the relationship between Edward Obeid and Moses Obeid as father and son was not in issue. The nature and extent of the relationship between Mr Macdonald and Edward Obeid, on the one hand, and between Mr Macdonald and Moses Obeid, on the other hand, was the subject of considerable contention in the trial.

Other relevant relationships involving Edward Obeid and Moses Obeid as members of a family: trusts, directorships, family companies and beneficial interests

410. Historically and during the currency of the conspiracy, the Obeid family managed their business interests through a series of family trusts and companies.

411. The Crown tendered a document entitled “Trusts Summary”. ^[280]

412. In the joint interview with Edward Obeid and Moses Obeid conducted by the journalists Mr Shanahan and Ms Jiminez on 18 December 2012 (the Shanahan/Jiminez interview), Edward Obeid explained that he “started” the family trust in order to manage the distribution of profits and dividends from his family business. ^[281]

413. Edward Obeid was the appointor of the Obeid Family Trust No 1 settled and executed on 13 May 1974 ^[282] and the Moona Plains Family Trust settled and executed on 25 October 1994. ^[283] Moses Obeid was a specified beneficiary of the Obeid Family Trust No 1 ^[284] and a primary beneficiary of the Moona Plains Family Trust. ^[285] He was also a beneficiary of the Obeid Family Trust No 2 settled on or about 14 May 2002 with SS Nominees No 1 as Trustee. ^[286]

414. The Elbeg Unit Trust was settled under Deed on 6 August 2008 and executed by Mr Rumore for Geble Pty Limited (Geble P/L) as Trustee. ^[287] The beneficiaries of that trust are its Unit Holders, one of which is UPG P/L as Trustee for the Moona Plains Family Trust. The significance of both the Elbeg Unit Trust and UPG P/L will be addressed later.

415. The Crown also tendered a document entitled “Companies Summary”. ^[288]

416. The Companies Summary set out a comprehensive history and profile of all corporate entities referred to in the trial drawn from ASIC records. In addition to a number of corporate entities owned or controlled by members of the Obeid family, the Companies Summary also included entities owned or controlled from time to time by people associated with the Obeid family, including associates or business advisors.

Obeid Corporation Pty Ltd

417. On 9 November 1978 Edward Obeid was appointed as a director and ordinary shareholder of Smatera Pty Ltd, which became Obeid Corporation Pty Ltd (Obeid Corporation P/L) on 11 May 1979. The two issued shares were held by Edward Obeid and his wife. Edward Obeid transferred his share to Paul Obeid on 23 May 2012. On 25 February 1987, Moses Obeid was appointed as a director, together with his brothers, Damian Obeid and Paul Obeid. Edward Obeid’s directorship ceased on 20 August 1993. ^[289]

Locaway P/L

418. Locaway P/L was registered on 20 October 1994. On 15 February 1995, Paul Obeid, Edward Obeid Jr, Damian Obeid, Moses Obeid and Gerard Obeid were appointed as directors. Gerard Obeid’s directorship ceased on 24 August 2005. ^[290]

419. During the Shanahan/Jiminez interview, Moses Obeid described Locaway P/L as “the families [sic] rural properties entity” and the “main family rural company”. ^[291]

420. As at 23 November 2011, the date of the execution of the search warrant at the premises of Locaway P/L by ICAC, Moses Obeid occupied an office space at those premises. ^[292] While it does not appear from the “mud map” prepared by Mr Fox upon the execution of the search warrant that Edward Obeid had a designated office space at those premises, he was present during the search warrant and, as is apparent from the related video footage, there was apparently nothing unusual about his presence, ^[293] despite not being a director or otherwise a named associate of Locaway P/L. ^[294]

421. During the Shanahan/Jiminez interview, Edward Obeid and Moses Obeid jointly volunteered details about the purchase and management of Cherrydale Park by Locaway P/L, including knowledge of running costs, the logistics involved in operating a rural property, the work undertaken to run cattle on the property, ^[295] and the details of the vendor finance used to purchase the property. ^[296] Although the interview reveals a degree of closeness between Edward Obeid and Moses Obeid as father and son, with them talking over one another, ^[297] correcting one another, ^[298] taking over from one another in answering a question put to them by one of the journalists, ^[299] asking clarifying questions of one another ^[300] and contributing to what the other was saying, ^[301] the Crown did not specifically rely on those aspects of the interview to establish the nature of their relationship. ^[302]

The relationship between Mr Macdonald and Edward Obeid as Parliamentary colleagues

422. Mr Macdonald and Edward Obeid were both longstanding members of the New South Wales branch of the Australian Labor Party. ^[303]

423. Mr Macdonald held the following positions over the course of his political career:

1. A Member of the Legislative Council between 19 March 1988 and 7 June 2010, having been successively elected at the New South Wales State elections in March 1988, May 1991, March 1999, and March 2007.

2. A Member of the Executive Council from 2 April 2003 to 5 June 2010 (except from 5-7 September 2008).

3. Minister for Agriculture and Fisheries for a period of time commencing in 2003. ^[304]

4. Minister for Mineral Resources between 3 August 2005 and 17 November 2009 (except from 5-7 September 2008), Minister for Mineral and Forest Resources between 8 December 2009 and 5 June 2010, Minister for State Development between 2 April 2007 and 5 June 2010 and Minister for Primary Industries between 3 May 2004 and 17 November 2009. ^[305]

5. He also became the Minister for Energy following his re-election in April 2007, retaining that position throughout 2008 until at least Mr Badenoch’s resignation. ^[306]

424. Edward Obeid held the following positions over the course of his political career:

1. A Member of the New South Wales Legislative Council between 12 September 1991 and 10 May 2011.

2. Minister for Mineral Resources and Minister for Fisheries between 8 April 1999 and 2 April 2003. ^[307]

425. Relevantly, for the purposes of the trial, Mr Macdonald held the positions of Minister for Mineral Resources, a Member of the Legislative Council and a Member of the Executive Council throughout the currency of the conspiracy. Edward Obeid held the position of Member of the Legislative Council throughout the same period.

426. Ms Boyd, General Counsel of the Department of Premier and Cabinet, gave evidence concerning the formal process by which members of the Executive Council and Ministers of the Crown are appointed in New South Wales:

… the appointment of Members of the Executive Council is done by the Governor of New South Wales under commission which is issued under seal. That commission is then retained by the Department of Premier and Cabinet, forms part of the Register of Patents held by that department. Ministerial portfolios are also commissioned in that way, so a formal commission will be given to the Minister under seal and then a record of that is kept by the department. ^[308]

427. Ms Boyd also gave evidence that after a general election, even if the party in government is restored, the Premier resigns to ensure that the Ministry is dissolved allowing for new Ministerial appointments. When that occurs, the incoming Premier will advise the Governor on the formation of the cabinet through an Executive Council minute. The Governor will allocate the commissions accordingly.

428. Ms Boyd gave evidence that Ministerial portfolio allocation is the responsibility of the Premier, who also determines the administrative responsibilities imposed upon Ministers.

429. Legislative responsibilities are allocated to Ministers under the Administration of Acts pursuant to an order made by the Governor under the Constitution Act. A Minister to whom responsibility for the administration of an Act of Parliament has been vested is legally authorised to exercise the power conferred on “the Minister” in the Act where “the Minister” appears in the legislation.

430. Mr Iemma, the Premier of New South Wales from 3 August 2005 to 5 September 2008, ^[309] gave evidence in the Crown case.

431. He gave the following evidence about Mr Macdonald’s performance and attitude as a Minister:

Q. During your time as Premier, what was your view of Mr Macdonald’s efficacy… in the role of Minister for Primary Industries?
A. That he was a well performing Minister, he was energetic in his duties. When Cabinet met in rural and regional New South Wales, his office stood out as one that organised the events and visits with stakeholders. His office stood out as one of the more organised, well disciplined offices that delivered.

Q. When you say energetic, enthusiastic, can you give an examples of what you mean by that?
A. He came across as someone that embraced his portfolios, got across the detail and he spoke with genuine enthusiasm on the issues and the policies in his portfolios. ^[310]

432. In cross-examination by Mr Martin, Mr Iemma gave the following evidence:

Q. You have made the observation in your evidence that Mr Macdonald was well performing and energetic in his duties?
A. Yes.

Q. His duties as Minister?
A. Yes, and prior to that.

Q. And prior to that. You regarded him as a competent and energetic Minister?
A. Yes.

Q. Would you agree that you would describe him as someone of energy and capacity?
A. Yes.

Q. It is the case that you entrusted him with major projects?
A. Yes.

…

Q. It is also the case that Mr Macdonald had a reputation for consulting stakeholders and industry groups within his economic development and regional development, all his portfolios?
A. Yes. ^[311]

433. Mr Gibson, Mr Macdonald’s Deputy Chief of Staff in 2008, described the relationship between Mr Macdonald and Edward Obeid as Parliamentary colleagues in the following way:

… the nature of the interactions were good. They were colleagues and parliamentarians. They certainly had a casual contact around the Parliament, to my observation … both in the chamber and without, and they did catch up beyond that … ^[312]

Mr Macdonald and Edward Obeid: Factional allies

434. The Crown submitted that the closeness of the relationship between Mr Macdonald and Edward Obeid prior to September 2007 is revealed by their political affiliations and the way in which they forged a political alliance as factional leaders within the New South Wales Labor Party.

435. The Crown submitted that I would be satisfied, as a matter of inference from the forging of that political alliance and the friendship that developed between the two men as a result, that Mr Macdonald considered himself indebted to Edward Obeid for what the Crown submitted was Edward Obeid’s patronage of him within Caucus and in Edward Obeid’s dealings with Mr Iemma as Premier. The Crown submitted that this sense of “indebtedness”, amongst a range of other motivations, including Mr Macdonald’s friendship with Edward Obeid, is capable of explaining why, as Minister for Mineral Resources, Mr Macdonald agreed to wilfully and repeatedly (if necessary) misconduct himself to advance the financial interests of Edward Obeid and his family and/or associates.

436. The parties addressed the issue of motive in their closing submissions. It is a complex issue, if for no other reason than, as the Crown concedes, in contrast to Edward Obeid and Moses Obeid, no financial benefit has been shown to accrue to Mr Macdonald from his agreement to wilfully breach his Ministerial duties and obligations, and there is no evidence of any collateral advantage of any kind, or any promise of an advantage of any kind that might explain why, on the Crown case, he agreed to act as he has been shown to have acted. While the question of what might have motivated Mr Macdonald to engage criminally with Edward Obeid and Moses Obeid in the way contended for by the Crown is intriguing, it is, in my view, unhelpful to address it before a detailed analysis of whether the evidence is capable of proving the existence of the conspiracy charged beyond reasonable doubt. ^[313]

437. I will return to consider the motive for what the Crown submitted was the criminal complicity of each of the accused in the conspiracy charged later in my deliberations to verdict.

438. Mr Iemma gave evidence about the emergence of factions within the New South Wales Labor Party.

439. Mr Iemma gave evidence that in the 1970s and 1980s, under the premiership of Mr Neville Wran AC QC, division arose within the New South Wales branch of the Australian Labor Party in the context of who should be appointed to the position of Deputy Premier. This conflict gave rise to subdivisions in the left wing of the Labor Party with two groups emerging, notionally referred to as the “hard left” and “soft left”. ^[314]

440. In the early 1990s, the right wing of the New South Wales branch of the Australian Labor Party also split into two factions. ^[315] One of the factions, known as “the Trogs”, was generally understood as not being supportive of the then Premier, Mr Bob Carr, and having a “fractious relationship with the party office”, while the other faction, known as “the Terrigals”, provided a support base for Premier Carr. ^[316] Mr Iemma explained that “the Terrigals” was the largest grouping within the right wing and, for that reason, it exerted a controlling influence on the right wing of the Party and, since the right wing had control of the Caucus, “the Terrigals” effectively had control of the Caucus. ^[317]

441. Mr Iemma identified Edward Obeid as the leader of “the Terrigals” during the period 2005 to 2008. ^[318] He gave evidence that, in that capacity, Edward Obeid exercised “significant influence” within the New South Wales Branch of the Australian Labor Party. ^[319]

442. Mr Iemma identified Mr Macdonald as a “convener”, “leader and negotiator” for the “hard” left faction of the left wing of the Labor Party. ^[320] In that capacity, Mr Macdonald also had an important role representing the left faction in the right-dominated Caucus. The core support group for the “hard” left faction was the Australian Manufacturers Workers Union with whom Mr Macdonald had a long association. That union provided Mr Macdonald with a power base to which he was entitled to appeal when seeking preselection in advance of the 2007 election. ^[321]

443. Mr Albanese, who was at the time of trial a member of the House of Representatives in the Commonwealth Parliament and Leader of the Opposition, was also a former General Secretary of the New South Wales Labor Party. Mr Albanese was a senior figure in the left faction of the Labor Party in New South Wales. He gave evidence that, at times, Mr Macdonald played a key role at times in supporting “hard” left candidates for both houses of the New South Wales Parliament. ^[322]

444. Mr Iemma gave evidence that to his observation, both during his Premiership and earlier, Mr Macdonald and Edward Obeid had “a cordial, good relationship” and that they “appeared to work well together”. ^[323] He gave the following evidence:

[In] the Upper House, they were in the same chamber. They often spoke in support of each other. They seemed to mix well and they made it known to their colleagues that they had respect for each other. Mr Obeid thought that Mr Macdonald was someone that, in a factional sense, you could work well with. That if you struck a deal with him, that it would stick. And that he was a hard-working and energetic member of Parliament that had talent and ability. ^[324]

445. Mr Iemma recalled that in Caucus meetings, over dinner and in general discussion, Edward Obeid was always supportive of Mr Macdonald, inclusive of comments of the following kind:

… Mr Macdonald was … someone who took time to get across his brief. He spoke well in Parliament. He was across issues, particularly issues that didn’t impact on metropolitan areas and in that there were not many in the Government that took a strong interest in issues to do with rural and regional New South Wales; Mr Macdonald was one that did so. He had talents in organising. He was someone that if he gave his word and you reached an agreement, he would stick to that. And these were positive aspects of his character that was discussed.

…

That Mr Macdonald was someone who was worthy of promotion to more senior positions within the Government, that his talents were best used in more senior capacity than being a backbencher. ^[325]

446. Mr Iemma recalled that after the State election on 24 March 2007, Edward Obeid expressed the view that Mr Macdonald “would make a good Planning Minister”. ^[326]

447. In cross-examination by Mr Neil, Mr Iemma confirmed that in appointing Mr Macdonald as Minister for State Development after the 2007 election, in particular charging him with the task of being “the face of investment in New South Wales”, he had confidence that Mr Macdonald’s previous experience as a Minister would equip him to relate well to stakeholders within the portfolio. ^[327]

Budgetary challenges facing the Labor government in 2007-2008

448. Mr Iemma also gave evidence that in 2007 and 2008 the State Government faced significant financial challenges. ^[328] Upon becoming Premier in 2005, Mr Iemma commissioned an expenditure audit. The Stokes Report was generated as a result of that process, following which an Expenditure Review Committee was charged with the objective of “enforcing budget objectives in relation to departmental spending”. ^[329]

449. A number of Expenditure Review Committee Meetings were convened from time to time to consider the progress of achieving that objective. Ultimately, a range of recommendations were proposed to bring greater discipline to departmental expenditure and a process established to track the implementation of those recommendations. ^[330] One of the recommendations was the adoption of an efficiency dividend of 2.5% that all departments were expected to “yield up” to bring the state budget back into balance. ^[331] Mr Iemma gave evidence that the objective was to achieve a saving of approximately $6 billion in government expenditure.

450. Mr Badenoch, Mr Macdonald’s Chief of Staff in 2008, confirmed that the Department of Primary Industries absorbed the Department of Mineral Resources in 2004. His involvement in mineral resources was on the budgetary side of the now merged portfolio. He explained that there were three methods for the DPI to meet its budgetary targets: firstly, to generate additional revenue; secondly, to reduce or cut the provision of services; and thirdly, staff redundancies. ^[332]

451. One method of generating additional revenue was via the payment to the DPI of significant additional financial contributions by mining companies who successfully tendered for ELs over coal resources. An Additional Financial Contribution (AFC) could be nominated by a company as part of its EOI application in respect of the grant of a coal EL. AFCs were paid by mining companies as an optional additional to the minimum financial contributions which they were required to make as part of that process. AFCs were assessed along with other evaluation criteria for the purpose of determining which company would ultimately be awarded a particular EL. ^[333]

452. In Mr Badenoch’s view, if the Department could not attract AFCs the DPI would not have been able to meet its budgetary commitments without resorting to further voluntary staff redundancies or cuts to services, neither of which were desirable or, it must be thought, politically palatable. From that perspective, he became aware of the need to stimulate the release of coal ELs to market to generate income for the Department. ^[334]

453. Mr Iemma gave evidence that Mr Macdonald spoke with him about his ideas as to how to meet the efficiency dividend of the Departments over which he had Ministerial control. He gave the following evidence:

Because of the nature of [Mr Macdonald’s] portfolios and the offices are located in regional and rural New South Wales, the adoption of measures to reduce staff would have a disproportionate impact on the local communities where the offices, the departmental offices were and that would have social and political consequences and that is something that was generally agreed to. ^[335]

454. Mr Badenoch was asked in his evidence to reflect upon the Expenditure Review Committee meeting of 21 November 2007. In that meeting, he confirmed that Mr Macdonald indicated that he expected to meet the 2.5% efficiency dividend through raising AFCs from the release of further areas for coal exploration in the 2007/2008 fiscal year and that he proposed bringing “further large exploration licences to market through open expression of interest processes in the 2008 to 2009 and 2009 to 2010 financial years.” ^[336]

455. It is clear from that evidence that it was Mr Macdonald’s express preference for savings to be yielded in revenue terms rather than expenditure cuts, an approach for which he sought Mr Iemma’s approval. Mr Iemma gave evidence that one of the ideas discussed with Mr Macdonald “was to parcel up packages of the State’s resources” and release them to market and, in that way, to derive revenue from fees that would be paid by the mining industry “for the right to explore and later exploit the State’s natural resources”. ^[337]

456. Mr Iemma confirmed that those plans came to fruition in the granting of the Caroona EL followed by the granting of the Watermark EL. ^[338] The Caroona EL generated an Additional Financial Contribution (AFC) of $91,235,000. ^[339] The Watermark EL generated an AFC of $389,300,000. ^[340]

457. Dr Richard Sheldrake was the Director-General of the Department of Primary Industries from about January 2008 to July 2009. In his capacity as Director-General, he occasionally attended Budget Committee meetings and Expenditure Review Committee meetings.

458. Dr Sheldrake gave evidence that upon his appointment as Director-General he had the understanding that the DPI’s budget was in the order of $700-$750 million. ^[341] He also agreed that a 2.5% efficiency dividend was substantial and that searching for means to achieve that efficiency dividend was “a difficult task” where the wages and salary component was a substantial component of the Department’s annual expenditure. ^[342] On the issue of the viability of AFCs from coal ELs as a means of meeting budgetary constraints, he said:

The amount of money that flowed to the department from coal licences was actually quite - well, it wasn’t significant in that Treasury effectively took control of most of those funds. There was an agreed amount, if you like, of funds, but it was relatively small. The challenge that we had was much greater and effectively was managed by a voluntary redundancy program. ^[343]

459. Dr Sheldrake also said that the amount which it was agreed Treasury would allow to flow to the Department was directed to the costs of operating the Evaluation processes for the release of coal ELs. He described it as “effectively… a service fee. It wasn’t seen as a way of the department effectively funding the organisation.” ^[344] Ultimately, Dr Sheldrake expressed his view of the efficiency of revenue raising from the coal industry to meet the efficiency dividend in the following answer:

Q. It is fair to say that this coal boom provided an opportunity for raising funds for the Government and the department?
A. I think as I pointed out before, certainly the Government would have potentially benefited, and as her Honour mentioned, the allocation then down to individual departments came through, effectively still came through the budget appropriations to the agencies. ^[345]

Mr Macdonald and Edward Obeid: Electricity privatisation

460. Mr Iemma also gave evidence that the challenges experienced by Mr Macdonald in meeting the financial commitments of the departments within his portfolios continued after the New South Wales state election in March 2007. Those continuing challenges were a key motivator for a review into New South Wales electricity infrastructure and whether upgrading the state electricity infrastructure could be financed by privatisation.

461. Mr Iemma accepted the proposition put to him by Mr Martin that it was the role of factional leaders to negotiate and, where possible, facilitate agreement on key issues to prevent the New South Wales branch of the Australian Labor Party from descending “into conflict and turmoil”. ^[346]

462. Mr Iemma accepted that factional leaders “would be expected to be in daily contact, especially in crisis periods”. ^[347] He accepted that the negotiation over electricity privatisation in 2007 and 2008 was one such period of crisis. ^[348]

463. The Owen Report on the issue of electricity privatisation was released in November 2007. ^[349] Following the publication of the Owen Report, there was considerable opposition from some sectors of the New South Wales branch of the Labor Party to electricity privatisation. ^[350] What would emerge as the Labor Party’s formal position on electricity privatisation was discussed in Cabinet over many months. The recommendations of the Owen Report were endorsed in Caucus and ultimately adopted by Cabinet.

464. Mr Iemma confirmed that as Minister for Energy, Mr Macdonald had “an important role” in the consideration the government was giving to electricity privatisation including, in particular, marshalling essential support for that proposal from a number of unions. ^[351] Mr Iemma agreed that during what became the prolonged privatisation debate within Caucus, Mr Macdonald, Edward Obeid and John Della Bosca, another prominent member of the New South Wales Labor Party at that time, were in frequent contact by telephone and at meetings. ^[352] Although Mr Iemma could not specifically recall attending a meeting on 10 April 2008 with Karl Bitar (General Secretary of the Australian Labor Party), union leaders including John Robertson and Bernie Riordan, together with Edward Obeid, Michael Costa and Mr Macdonald, he did recall “many, many meetings” attended by those people. ^[353] Mr Badenoch confirmed Edward Obeid’s attendance at that meeting and the fact that the concerned the issue of electricity privatisation. ^[354]

465. Mr Gibson gave evidence in similar terms confirming that Mr Macdonald, Mr Della Bosca and Edward Obeid were in “very high frequent contact throughout the entire privatisation period.” ^[355]

466. Mr Iemma gave evidence that there were “around a hundred” meetings over the entire period of the privatisation debate leading up to the New South Wales Labor State conference on 3-4 May 2008 with an increase in the frequency and intensity of those meetings after the federal election in November 2007. ^[356] At the New South Wales Labor State conference, Mr Iemma, Mr Costa, Mr Tripodi and Edward Obeid negotiated with Mr Macdonald and Mr Della Bosca in relation to potential solutions to what had become a divisive electricity privatisation debate. ^[357] At that conference, the Government's policy position on privatisation was rejected when over 700 votes were cast against the Government's privatisation plans with only over 100 votes cast in favour of the plans.

467. A Caucus meeting was scheduled on 7 and 8 May 2008 to further discuss the issue of electricity privatisation. Mr Iemma accepted that Mr Macdonald and Edward Obeid were also heavily involved in negotiations at that time. ^[358]

468. In the lead up to the resumption of Parliament in late August 2008, various further meetings were held, including two meetings at Mr Iemma’s home on a Sunday night. Those meetings were attended by Mr Macdonald, Edward Obeid, Mr Tripodi and Mr Costa, other senior figures in the New South Wales branch of the Australian Labor Party at that time. Those meetings resulted in a further draft of the electricity privatisation legislation which it was proposed would be introduced into Parliament on 21 August 2008. ^[359] Mr Iemma gave evidence of the perceived risk of Members, in either the soft left or hard left factions, “cross[ing] the floor” when the legislation was tabled, giving rise to what he described as “a continual process of discussion” around successive rounds of “lobbying or pressuring or threats”. ^[360]

469. Mr Martin submitted that the Crown’s uncritical reliance on the Telephone Summary to prove the existence of a conspiratorial relationship failed to reflect what he described as “the contemporary contextual realities present in the year 2008 and avoids the inconvenient truths of the political activity of that time and the daily pressures of Government, including the events amounting to the equine influenza epidemic”. ^[361]

470. In that regard, Mr Martin also drew attention to Mr Iemma’s evidence that, as the Minister responsible for the Primary Industries and Agriculture portfolios, Mr Macdonald managed the equine influenza outbreak and its economic impact on the State of New South Wales over an extended period from August 2007 to March 2008. ^[362] Dr Sheldrake, the Director-General of the Department, confirmed that Mr Macdonald had responsibility for the management of the equine influenza outbreak. He gave evidence that Mr Macdonald “spent a lot of time engaging with stakeholders, industry and other governments in dealing with the outbreak”. ^[363]

Mr Macdonald and Edward Obeid: Personal relationship

471. On the Crown case, in addition to Mr Macdonald and Edward Obeid being close political allies across a range of fronts, they shared a close personal friendship. ^[364]

472. As an indication of the closeness of the friendship, the Crown relied upon what it submitted was evidence that Edward Obeid was invited to, and attended, Mr Macdonald’s wedding in Orange on 15 September 2007. That evidence consisted of a handwritten entry in Edward Obeid’s diary for 15 September 2007 which read “Ian/Anita Wedding” accompanied by the addresses for Five Frogs Guest House and Borrodell Winery in Orange. ^[365]

473. Mr Martin submitted that the Crown’s sole reliance on the diary entry was an insufficient basis from which to find as a fact that Edward Obeid attended Mr Macdonald’s wedding or even that he was an invited guest. Mr Martin emphasised that there was no evidence that anyone saw Edward Obeid at the wedding, and no cell tower data was adduced confirming Edward Obeid’s location in Orange at the relevant time or that he was a guest at either the Guest House or the Winery. Mr Martin also submitted that the Crown did not confirm by other evidence that the wedding was at the time stated in Edward Obeid’s diary. ^[366] Mr Martin relied on Mr Gibson’s evidence that to his recollection no members of the Obeid family attended the wedding, in contrast to Mr Gibson’s clear recollection of sighting Mr Fang at the wedding. Mr Martin submitted that the attendance of Edward Obeid (who had a prominent position as the head of the “Terrigals” sub-faction that dominated the Right Faction of the New South Wales branch of the Australian Labor Party) would be a memorable event and his attendance or non-attendance would be a fact that would be remembered by Macdonald’s Deputy Chief of Staff. ^[367]

474. In the Crown’s submission, the fact that Mr Gibson did not recall seeing any members of the Obeid family ^[368] at the wedding does not mean Edward Obeid was not in attendance.

Mr Macdonald’s use of the Obeids’ Jindabyne apartment

475. An entity controlled by the Obeid Family Trust No 1 held a sublease over an apartment at The Stables, an apartment complex near Jindabyne in New South Wales. ^[369] On 13 July 2008, Mr Macdonald billed a meal at Perisher to that apartment and while on annual leave from 1 to 7 August 2008, Mr Macdonald stayed at that apartment. ^[370] The Crown case, as closed, was that on both occasions Mr Macdonald “was a non-paying guest of Edward Obeid”. ^[371]

476. Ms Francis submitted that there is no evidence that Mr Macdonald did not pay for the accommodation, that the apartment was not generally available to Members of Parliament, or that Edward Obeid joined Mr Macdonald at Perisher, or on any holiday. ^[372]

477. Mr Martin submitted that the Crown led no evidence capable of establishing that Mr Macdonald and Edward Obeid had anything other than a professional relationship. ^[373] In her closing submissions, Ms Francis submitted that the Crown adduced no evidence which would allow the Court to find that Mr Macdonald and Edward Obeid were close friends or that they shared a relationship of personal trust such as might inform or colour their relationship as alleged co-conspirators. ^[374]

Edward Obeid and Moses Obeid

478. That Edward Obeid and Moses Obeid had a close relationship as father and son was not controversial. The Telephone Summary reflected nearly daily contact (often multiple times a day) before, during and after the conspiracy. ^[375]

479. During the period 2007 to 2010, Edward Obeid initiated telephone contact with Moses Obeid 2,159 times either from his personal telephone or via his office. ^[376] During the same period, Moses Obeid initiated telephone contact with Edward Obeid’s personal telephone or his office 1,792 times. ^[377]

480. The Crown also relied on Mrs Fitzhenry’s evidence that Edward Obeid would “drop in” at Moses Obeid’s Elizabeth Bay residence “most weekends” and that she observed Edward Obeid and Moses Obeid together at Obeid family gatherings to which she and Mr Fitzhenry were invited. ^[378]

The relationship between Mr Macdonald and Moses Obeid

481. The Crown submitted that the contact between Mr Macdonald and Moses Obeid as evidenced in the Telephone Summary, together with meetings recorded in Mr Macdonald’s diary were, in certain respects, pivotal to the conspiracy being executed. The Crown also relied upon Mrs Fitzhenry’s evidence of observing Mr Macdonald at Moses Obeid’s house more than once and Mr Fitzhenry’s evidence of being introduced to Mr Macdonald by Moses Obeid as “Macca”. ^[379]

482. Mr Neil submitted in closing that the telephone contact between Mr Macdonald and Moses Obeid at particular times and generally relied upon by the Crown to prove the conspiratorial relationship between Moses Obeid and Mr Macdonald, was of no weight in circumstances where the two accused were “consistently in contact (typically a number of times per month)” and where no evidence was called to prove their relationship was other than that they “were friendly and traded horse racing tips … and evidence that Moses Obeid had an interaction of some kind in relation to horse racing issues”. ^[380] Mr Neil also relied in closing upon Mr Fitzhenry’s evidence that apart from one discussion about a horse racing tip, there was no other instance where Moses Obeid spoke about Mr Macdonald.

483. Mr Martin submitted that the contact between Mr Macdonald and Moses Obeid during the currency of the conspiracy likely related to horse racing and horse training. Moses Obeid’s connections to horse racing generally were the subject of limited evidence in the trial. Mr Fitzhenry gave evidence that after being provided with a tip by his friend Bart Cummings, Moses Obeid arranged for him to pass that tip on to Mr Macdonald. While on a call to Mr Macdonald, Moses Obeid passed the phone to Mr Fitzhenry saying, “This is Macca, you can give him the tip”. ^[381]

484. In cross-examination by Mr Martin, Mr Fitzhenry confirmed that he introduced Anthony Cummings, a horse trainer involved at Randwick Racecourse and the son of Bart Cummings, to Moses Obeid.

485. Mr Badenoch gave evidence that the impact of the equine influenza was “tied up with… the impact of World Youth Day appropriating Randwick Racecourse” which impacted on horse trainers in the context of a state-wide horse lockdown. ^[382] Mr Badenoch gave evidence referable to a schedule of Mr Macdonald’s Parliamentary diary ^[383] that meetings about equine influenza were held and attended by Mr Macdonald on 25 September, ^[384] 24 October, ^[385] 12 November, ^[386] 26 November, ^[387] 17 December 2007 ^[388] and 31 January 2008. ^[389]

486. There were ongoing issues in relation to horse trainers at Randwick Racecourse and equine influenza at the time of the Credo dinner attended by Mr Macdonald and Moses Obeid, as to which see par 1108 and following. ^[390] Mr Martin submitted that the dinner meeting likely related to New South Wales horse racing issues and that absent any evidence called by the Crown to suggest otherwise, I would not treat that entry in Mr Macdonald’s diary as providing an opportunity for the exchange of information between Moses Obeid and Mr Macdonald relating to the unfolding events contextual to the conspiracy as contended for by the Crown.

Other relationships: Mr Macdonald, Mr Fang and Moses Obeid

487. Mr Alan Fang was the chairman and founder of the Tianda Group. ^[391] That group of companies included Tianda Resources P/L, ^[392] a company included in the list of companies the subject of the seventh act of misconduct.

488. During the period 2007 to 2009, Mr Fang was based in China but travelled regularly to Sydney. Mr De Ross, the General Manager of Tianda Resources P/L, described Mr Fang as “someone who was interested in investing in resource projects in New South Wales”. ^[393]

489. It was the Crown case that Mr Macdonald introduced Mr Fang and Moses Obeid to one another some time prior to 30 June 2008, on which date Mr Fang attended a conference with Moses Obeid and Mr Rumore, solicitor. I return to the determination of that question later in my deliberations.

490. The origin of the relationship between Mr Fang and Mr Macdonald was not the subject of evidence in the trial. Dr Sheldrake gave evidence that he was introduced to Mr Fang by Mr Macdonald. However, he could not recall when or in what circumstances that occurred.

491. Mr De Ross gave evidence he was introduced to Mr Macdonald by Mr Fang in business meetings convened at Mr Macdonald’s office. In those meetings, Mr Macdonald introduced Tianda Resources P/L to other companies who had projects in which Tianda Resources P/L may wish to provide investment capital. Mr De Ross gave evidence that Tianda Resources P/L lacked the experience or infrastructure necessary to establish itself as a mining company. He also gave evidence that Mr Macdonald introduced him to the principals at Felix Resources Ltd, with a view to participating in a joint venture on the Watermark EOI process. No such arrangement eventuated. ^[394]

492. The EOI for the Watermark Coal Exploration Area was announced in October 2007. ^[395] It follows that Mr Fang and Mr Macdonald knew each other by that time.

493. From 15 to 26 May 2008, Mr Macdonald and Mr Fang attended a trade mission to China and South Korea. ^[396] During that trip, on 17 May 2008, Mr Macdonald, Mr Fang and others attended a meeting with the Land and Resources Department of Gansu Province to discuss the potential for co-operation between Gansu Province and New South Wales. That event was followed by an official dinner hosted by the Party Secretary of Gansu Province. ^[397]

494. Mr Iemma also attended the trade mission, as did Mr Coutts, the Deputy Director-General of DPI with responsibility for the Mineral Resources Division. Mr Iemma met Mr Fang in Sydney prior to the trade mission and in Guangzhou during the trade mission. ^[398] He observed that, at that time, Mr Fang was already known to Mr Macdonald. ^[399] Mr Iemma gave evidence that Mr Macdonald told him that Mr Fang “had extensive contacts in Guangzhou and could be of assistance to the State in encouraging investment in New South Wales”. ^[400]

495. Mr De Ross also attended the trade mission. He gave evidence that Mr Fang arranged for Mr Macdonald to participate in “high level meetings with some people in the Gansu Province”. ^[401] During the course of that trip he observed that Mr Macdonald and Mr Fang were “familiar” and “friendly” with one another. ^[402]

496. Mr Fang and Mr Macdonald also collaborated in other capacities, including in fundraising efforts following an earthquake in the Gansu and Sichuan provinces of China. ^[403] Additionally, Mr Fang and Mr Macdonald were patrons of the Sydney Symphony Orchestra. ^[404] They were jointly involved in planning the Orchestra’s inaugural tour of China ^[405] and in that capacity they attended a meeting with Libby Christie, then the CEO of the Sydney Symphony Orchestra, on 2 July 2008. ^[406]

497. The Crown described Mr Macdonald’s relationship with Mr Fang (as it did with Mr Macdonald’s relationship with Edward Obeid) as a collaborative relationship, providing multiple opportunities for their mutual advancement, albeit that the relationship between Mr Macdonald and Edward Obeid developed into a relationship of close criminal complicity.

498. The interrelationships between Mr Macdonald, Mr Fang and Moses Obeid and, most particularly whether the Crown can establish that it was Mr Macdonald who introduced Mr Fang to Moses Obeid with a view to their mutual advantage in pursuit of a mining deal at Mount Penny, was in contest. That question will be addressed later in my deliberations to verdict. ^[407]

499. In his closing written submissions, Mr Martin emphasised that, as the Crown is obliged to disprove any and every reasonable inference consistent with innocence, the Crown is also obliged to address the numerous innocent explanations arising from the evidence for the degree of contact between Mr Fang and Mr Macdonald during the currency of the conspiracy.

500. Mr Martin submitted the frequency of contact between Mr Macdonald and Mr Fang could be explained by their joint fundraising efforts following an earthquake in the Szechuan and Gansu provinces of China, along with their joint patronage of the Sydney Symphony Orchestra. ^[408]

Occasions where the accused are in each other’s physical presence

501. Significantly, the evidence in the Crown case places all three accused in each other’s physical presence on only two occasions during the currency of the conspiracy.

502. With respect to the first of those two occasions, Mrs Fitzhenry (a neighbour and friend of Moses Obeid) gave evidence that around the time the purchase of Cherrydale Park was settled (an event she nominated without reference to a month or year but which the evidence establishes was in November 2007), she observed Moses Obeid, Edward Obeid and Mr Macdonald at Moses Obeid’s house in Elizabeth Bay. ^[409] The Crown confirmed in its closing submissions that discrete piece of evidence went no higher than providing an opportunity for “discussion” between the accused. ^[410]

503. With respect to the second of those two occasions, an entry in Edward Obeid’s diary on 21 August 2008 reads “Moses/Ian/ … Sydney Hosp”. ^[411] By that date, on the Crown case, the first to the seventh acts of misconduct, inclusive, had been committed. With respect to the eighth act of misconduct, the Crown case as closed was that prior to 22 September 2008, but most likely by mid-August 2008, Mr Macdonald had imparted the confidential information the subject of that act of misconduct to Moses Obeid. ^[412] The Crown relied upon the entry in Edward Obeid’s diary as an opportunity for Mr Macdonald to provide that information.

504. The primary evidence relied upon by the Crown to prove the conspiratorial relationship between all three of the accused was comprised in a schedule of telephone contact (the Telephone Summary). ^[413]

505. Mr Macdonald and Edward Obeid’s Parliamentary diaries were also a source of evidence of scheduled meetings, principally between Edward Obeid and Mr Macdonald but also on occasions where Moses Obeid was mentioned. ^[414] Although the Parliamentary diaries of Edward Obeid and Mr Macdonald recorded scheduled meetings with each other or with Moses Obeid at various locations proximate to Parliament House, there was no evidence that the meetings took place or, if they did, the reason for the meetings or their duration.

506. The Crown also relied on a schedule of Parliamentary sitting dates between September 2007 and January 2009 ^[415] as evidence of the opportunity for contact between Mr Macdonald and Edward Obeid.

507. The Crown submitted that the Telephone Summary, the diaries and the Parliamentary sitting dates were sources of abundant evidence of the frequency of contact between the accused and the opportunity they had to keep each other apprised of the unfolding events contextual to achieving the object of the conspiracy, including the opportunity they had to share the confidential information that Mr Macdonald had at his disposal as the Minister for Mineral Resources concerning the granting of an EL at Mount Penny.

508. There is no evidence of email contact between the accused (although there is evidence of email contact between Moses Obeid and other individuals). Mr Macdonald’s computer “illiteracy” was the subject of evidence and not contested by the Crown. Mr Badenoch gave evidence that Mr Macdonald was not “a competent user of modern technologies”. ^[416] Mr Gibson gave evidence he only communicated with Mr Macdonald via email “very infrequently”. ^[417]

509. The accused submitted that neither the diarised meetings nor the Telephone Summary are probative of the facts in issue in the trial in circumstances where, as the Telephone Summary reveals, Edward Obeid and Moses Obeid as father and son were in frequent telephone contact and it reflects regular contact between Edward Obeid and Mr Macdonald as Parliamentary colleagues and political allies again before, during and after the timeframe of the conspiracy and where, in particular, during the currency of the conspiracy there were a number of “crises” within the Labor Party in government that called for dialogue across the factional divide.

The Telephone Summary

510. The Crown tendered a document titled Telephone Summary ^[418] of 132 pages pursuant to s 50 of the Evidence Act. The document was complete as at 12 October 2020. The Telephone Summary covers the period 1 January 2007 to 31 December 2010, incorporating the period of the conspiracy between 1 September 2007 and 31 January 2009. It comprises, in total, 7,294 calls placed by each of eight individuals in various combinations, including each of the accused and Mr Brook, Mr Fang, Mr Rampe, and Mr Grigor (from Monaro Mining NL) and Mr Lewis (who, through an entity he controlled, purchased Coggan Creek).

511. Significantly, no telephone conversations between the accused (or between the accused and third parties) were intercepted, recorded or otherwise overheard. Neither was the content of any SMS messages sent or received included in the Telephone Summary. It is the bare fact of calls made, voicemails recorded and SMS messages sent or received that is relied upon by the Crown as evidence of the close and intersecting relationships between the three accused and as evidence of the opportunity they had to forge the agreement the subject of the conspiracy and keep each other updated as to the steps they were each taking in furtherance of achieving the object of the agreement.

512. The Crown also tendered a series of Explanatory Notes to accompany the tender of the Telephone Summary, some parts of the document the Crown proposed to tender having been withdrawn by the Crown following objection by the accused.

513. The Explanatory Notes, as edited, identify the source materials from which the information included in the Telephone Summary was compiled, including the identifying details of phone numbers used from time to time by the eight individuals whose phone records form the basis of the summary, and the subscriber details of the various phone services.

514. The Explanatory Notes also to the Telephone Summary include details of the month and year for which call charge records for each of the eight individuals were available; where that material is located in the brief of evidence as served and points of distinction between calls and SMS messages. Calls are also distinguished referable to whether they were diverted to voicemail. Finally, there is a detailed explanation as to how the summary is to be interpreted, that is, whether the time of the call and its duration are rounded up to intervals of 30 seconds or whether calls are not rounded up at all.

515. The parties addressed the admissibility of the summary in written submissions and in oral argument. Ultimately the Telephone Summary and the revised Explanatory Notes were admitted into evidence as Exhibit U. They are the subject of a published judgment. ^[419]

516. In that judgment I accepted that the telephone contact between various of the eight individuals whose telephone records were summarised and included in the Telephone Summary, including most particularly contact between the accused, was not capable of establishing the reason for the contact or the content of what was said by any of the callers (assuming calls of under ten seconds constituted contact), other than contact between Mr Brook and Moses Obeid, and Mr Brook and Mr Rampe and Mr Grigor, as to which they gave evidence. I also accepted that there may be an innocent explanation for frequency of contact between Moses Obeid and Edward Obeid given their filial relationship, and Edward Obeid and Mr Macdonald as Parliamentary colleagues. However, I did not regard the evidence in the Telephone Summary as intractably neutral as contended for by the accused, in the sense that it was incapable of supporting proof of the probability of any of the facts in issue in the trial.

517. The weight of the Telephone Summary was the subject of closing oral and written submissions.

Submissions of the Crown

518. Annexure C to the Crown’s closing written submissions provided a numerical and statistical analysis of the Telephone Summary. On average, Mr Macdonald and Edward Obeid contacted one another by phone 24 times per month in the pre-indictment period, 33.2 times per month during the indictment period, and 21.6 times per month in the post-indictment period. Edward Obeid and Moses Obeid contacted one another by phone 85.1 times per month in the pre-indictment period, 87.9 times per month during the indictment period, and 77.2 times per month in the post-indictment period. Moses Obeid and Mr Macdonald contacted one another by phone 1.9 times per month in the pre-indictment period, 6.6 times per month during the indictment period, and 5.3 times per month in the post-indictment period. ^[420]

519. In closing written submissions, the Crown relied upon the telephone contact between the accused at critical points in what the Crown submitted was the execution of the conspiracy which, in the Crown’s submission, provided ample opportunity for confidential or otherwise critical information to be relayed between the accused and for Moses Obeid in particular, to update his co-conspirators.

520. The Crown did not seek to suggest that on every occasion of contact between the accused something nefarious was at play. ^[421] The Crown made the following submission:

In relation to the phone and diary records indicating very regular communication between Edward Obeid and Ian Macdonald, evidence has been adduced … about a number of significant political issues during 2007/2008 (such as electricity privatisation) which would have caused Ian Macdonald and Edward Obeid to attend meetings and talk to each other by phone. That may be so. But it does not mean when they spoke and met they only talked about one topic, or exclusively about political issues of the day. There is no mutual exclusivity in this evidence. All the phone calls and meetings between Ian Macdonald and Edward Obeid provided opportunities for the conspiracy to be formulated and put into effect. ^[422]

521. The Crown also submitted that the telephone, diary, and Parliamentary sitting day evidence established the overwhelming opportunity for communication and that the most direct line of communication was between Mr Macdonald and Edward Obeid, ^[423] that supported the inference that Mr Macdonald conveyed the conspiratorial and other information to Edward Obeid, who then conveyed it to Moses Obeid to use in pursuit of realising the commercial value of that information.

522. The Crown relied on the following:

1. Telephone contact between Mr Macdonald and Edward Obeid on 16, 18, 19, 20, 21, 25 and 26 September 2007 as providing evidence of the opportunity Edward Obeid had to inform Mr Macdonald of the purchase of Cherrydale Park. ^[424]

2. Regular telephone contact between each of the accused from September 2007 to May 2008 as providing an opportunity for the accused to discuss and then enter into the agreement the subject of the conspiracy. ^[425]

3. Calls between Edward Obeid and Moses Obeid and Edward Obeid and Mr Macdonald on 8 May 2008, as providing opportunity for Edward Obed to convey a request to Mr Macdonald for information about the volume of coal reserves at Mount Penny (the subject of the first act of misconduct). ^[426]

4. Calls placed by Edward Obeid, firstly to Mr Macdonald and then to Moses Obeid on 9 May 2008, as providing an opportunity for Mr Macdonald to discuss the content of the Ministerial Briefing of that date (including Wiles Map 1), and to provide Edward Obeid with the information about coal reserves at Mount Penny and for Edward Obeid to convey that information to Moses Obeid. ^[427]

5. Calls between Edward Obeid and Moses Obeid and between Edward Obeid and Mr Macdonald on 12 and 13 May 2008 as providing an opportunity to ask about the possibility of the DPI releasing Mount Penny for tender (the subject of the second act of misconduct). ^[428]

6. Telephone contact between each of the accused on 14 and 15 May 2008 as providing the opportunity to further discuss the information that Mr Macdonald sought from the DPI about the possibility of the Department opening its holdings under EL 6676 in the Bylong Valley (the subject of the second act of misconduct) before Mr Macdonald departed on a trade mission to China and South Korea on 15 May 2008. ^[429]

7. Telephone contact between the accused on 4 June 2008 as providing an opportunity for Mr Macdonald to discuss with Edward Obeid and Moses Obeid the potential for a coal release area in the area of Mount Penny to be designated from within EL 6676 (ultimately the subject of the fifth act of misconduct). ^[430]

8. Telephone contact on 20 August 2008, the date the Share Option Deed between Monaro Mining NL and Voope Pty Limited (Voope P/L) was executed, together with telephone contact the following day, between Mr Brook and Moses Obeid, followed by calls placed by Moses Obeid firstly to Edward Obeid and then to Mr Macdonald, providing an opportunity for each of them to discuss the developing potential for Moses Obeid to successfully position his family, via Voope P/L, contractually with Monaro Mining NL as an applicant for the grant of an EL at Mount Penny. ^[431]

9. Telephone contact on 15 September 2008 between Moses Obeid and Mr Brook, and Edward Obeid and each of Moses Obeid and Mr Macdonald as providing an opportunity for them to discuss developments between Monaro Mining NL and Lehman Brothers, Lehman Brothers having entered Chapter 12 insolvency that day. ^[432]

10. Telephone contact on 12 January 2009 between each of the accused as providing an opportunity for Mr Macdonald to convey information about the reopening of the EOI process to allow “The White Group” to make an application for an EL at Mount Penny (the ninth act of misconduct). ^[433]

11. Telephone contact on 2 June 2009 between Moses Obeid and each of Mr Brook and Edward Obeid, followed by phone contact between Edward Obeid and Mr Macdonald, as providing an opportunity to update the status of the agreements between Cascade Coal P/L and Buffalo Resources Pty Limited (Buffalo Resources P/L). ^[434]

Submissions of the accused

523. Each of the accused addressed in their closing submissions what they submitted was a range of “innocent” explanations for the degree of contact between them, including telephone contact.

524. Mr Neil also submitted that there were numerous deficiencies in the Telephone Summary, including that it did not contain records of Mr Macdonald’s home telephone; that the record of calls made by and to Moses Obeid was incomplete; that parts of the Telephone Summary did not distinguish between calls and voicemails or between call attempts and SMS messages; that the Telephone Summary included calls under ten seconds (presumably as a call of that length could not convey information in any meaningful sense); that calls under 30 seconds duration were rounded up to 30 seconds, and that the Telephone Summary lacked location data, all of which rendered the Summary of no weight in resolving the facts in issue and an unsafe basis upon which to draw the inferences sought by the Crown. ^[435]

525. Mr Neil advanced the further submission that the telephone records after 31 January 2009 should be distinguished from the various business records generated after that date that formed part of Exhibit A because the fact that the persons identified by the Crown remained in contact after 31 January 2009 (or did not stay in contact) is not relevant to demonstrating the use that was made of any alleged misconduct in the entrepreneurial phase of the conspiracy and, for that reason, reliance on the telephone record from that period of time invited “speculation and unfair prejudice”. ^[436] Further and in addition to that submission, Mr Neil submitted that the records of telephone calls made and received in 2010 are of no weight at all and, due to the incompleteness of the phone records available for that year, the Crown “cannot establish … that there was a reduction in the number of calls between Moses Obeid and Ian Macdonald in 2010”. ^[437]

526. Mr Neil submitted that the fact that Moses Obeid and Edward Obeid were consistently in frequent telephone contact throughout the entirety of the relevant period was hardly surprising given they are in a father-son relationship. He also submitted that Edward Obeid and Mr Macdonald were also in frequent contact throughout the entirety of the relevant period as professional colleagues engaged in political issues including electricity privatisation; and that Moses Obeid and Mr Macdonald were also in contact in the same period in circumstances where no evidence was called to contradict the fact that their relationship was based on friendship sufficiently close for Mr Macdonald to be invited as a guest to Moses Obeid’s home and sharing a common interest in horse racing.

527. Mr Neil also made the following submission:

The frequency and the typical pattern of the contact between the three co-accused means that the contact could be lined up against virtually any chronology of key events in a manner that may suggest that the events are linked …

The Crown artificially picks a day (e.g. 26 September 2007) and then seeks to use the frequent contact between Moses Obeid and Edward Obeid (typically including at least every morning and every afternoon/evening and frequently during the day) to invite the speculation that the subject-matter of those calls concerned the events identified by the Crown (in this case, certain correspondence regarding Cherrydale) despite there being no direct evidence that Moses Obeid had any role whatsoever in those events. ^[438]

528. Mr Neil submitted that, “[t]he phone summary demonstrates that there is no contact between Moses Obeid and Ian Macdonald on the most critical dates in the Crown case”, ^[439] including the following:

1. From 1 to 15 May 2008, the period during which the Crown alleged the first and second acts of misconduct occurred.

2. From 4 to 6 June 2008, the period during which the Crown alleged the fifth act of misconduct occurred.

3. From 2 January to 2 February 2009, the period during which the Crown alleged the ninth act of misconduct occurred.

529. Mr Neil also submitted that Moses Obeid’s telephone contact with each of Mr Lewis, the purchaser of Coggan Creek, and Mr Fang of the Tianda Group should be disregarded when neither was called as a witness and where there was a paucity of evidence about the nature of their relationships with Moses Obeid.

530. Finally, Mr Neil submitted that the Crown attempted to overcome the clear deficiency in contact between Moses Obeid and Mr Macdonald during the currency of the conspiracy by scheduling the contact in the Telephone Summary in a way that suggests there is a sequence of related calls, for example where Edward Obeid calls Moses Obeid after speaking to Mr Macdonald. ^[440] In Mr Neil’s submission, the inference of a three-way communique for which the Crown contends invites impermissible speculation about the content of the communications, in circumstances where the Crown did not tender the entirety of phone calls made by any of the accused on a given day with people other than with each other.

531. On the basis of Mr Iemma’s evidence (referred to earlier), as well as the uncontradicted evidence of Mr Badenoch and Mr Gibson, Mr Martin submitted that the Court would proceed to assess the weight of the so-called “opportunity” evidence on the basis that Mr Macdonald and Edward Obeid were factional leaders of the New South Wales branch of the Australian Labor Party, that they engaged in a large number of phone calls and meetings devoted to the major and long-running issues of electricity privatisation and other major issues such as equine influenza, the redevelopment of the Randwick Racecourse, World Youth Day and managing the relationship with the Shooters Party. Mr Martin further submitted that the Telephone Summary showed increased contact between Edward Obeid and Mr Macdonald after the outbreak of equine influenza in late August 2007.

Diary entries

Crown Case

532. Annexure B to the Crown’s closing written submissions summarises the diary evidence contained in Exhibit A. As noted above, the Crown relied on that evidence, inter alia, as “opportunity” evidence. ^[441]

Edward Obeid and Mr Macdonald’s Parliamentary diaries

533. In addition to the Telephone Summary, the Crown relied on evidence of meetings between Mr Macdonald and Edward Obeid, scheduled in one or both of their diaries, in further proof of the closeness of their political relationship. In particular, the Crown relied on evidence of approximately 13 diarised meetings in the period 22 January 2007 until the beginning of the indictment period on 1 September 2007, together with approximately 40 meetings during the currency of the conspiracy. ^[442]

534. In particular, the Crown relied upon:

1. An entry in Edward Obeid’s diary on 15 September 2007 which read “Ian/Anita Wedding” followed by an address in Orange, New South Wales. ^[443] The Crown submitted that diary entry is evidence both that Edward Obeid was invited to, and that he attended, Mr Macdonald’s wedding. The Crown further submitted that the fact that Mr Gibson did not recall seeing any members of the Obeid family ^[444] at the wedding does not mean Edward Obeid was not in attendance. In the Crown’s submission, the fact of the invitation is itself an indication of the strength of their relationship. ^[445]

2. An entry in Mr Macdonald’s electronic diary for a meeting with “Eddie Obeid” at 5:30pm on 8 May 2008, ^[446] the day before the enquiry made by Mr Macdonald made of the DPI via Mr Gibson the subject of the first act of misconduct.

3. An entry in Edward Obeid’s diary on 5 June 2008 for a State Cabinet Budget Dinner ^[447] which, in the Crown’s submission, provided the opportunity for Mr Macdonald and Edward Obeid “to consider and discuss the contents of Wiles Map 2” ^[448] which had by that date been marked up by Mr Macdonald (the subject of the fifth act of misconduct).

4. An entry on 16 June 2008 in Mr Macdonald’s electronic diary for a dinner meeting with Anthony Cummings. ^[449] Mr Cummings was a horse trainer involved at Randwick Racecourse. ^[450] According to the relevant entry in Mr Macdonald’s electronic diary, that meeting was held at Credo Restaurant in Cammeray. That diary entry also lists the name of Moses Obeid. The Crown relied on the inclusion of Moses Obeid’s name in that diary entry as evidence of contact between Mr Macdonald and Moses Obeid at the time of the sixth alleged act of misconduct. ^[451] In cross-examination of Mr Badenoch, Mr Martin established that as at the time of that meeting, there were ongoing issues in relation to horse trainers at Randwick Racecourse. ^[452]

5. An entry on 8 July 2008 in Mr Macdonald’s electronic diary for a meeting with Moses Obeid from 12:30 to 1:00pm at Sydney Hospital Cafe. ^[453] Along with other meetings recorded in Mr Macdonald’s diary, in the Crown’s submission this meeting was at a time when significant events were unfolding in Moses Obeid’s developing relationship with Mr Brook after the successive meetings with him at the Wentworth Hotel on 3 and 7 July 2008, events which included, on the Crown case, Mr Macdonald providing a handwritten list of companies to be invited to participate in the EOI process, the subject of the seventh act of misconduct. ^[454]

Parliamentary sitting days

535. Although no evidence was adduced by the Crown in its case as to the protocols that applied in New South Wales, I proceed on the basis that as Members of the Legislative Council, Mr Macdonald and Edward Obeid were expected to attend Parliament on Parliamentary sitting days. A schedule of New South Wales Parliamentary sitting dates between September 2007 and January 2009 was tendered by the Crown without objection. ^[455] In that time, the Legislative Council sat on 67 occasions. ^[456] The Crown did not adduce any evidence which indicated the degree of face-to-face contact between Mr Macdonald and Edward Obeid on any of those occasions such as might provide direct evidence of an opportunity for them to discuss entering into the agreement the subject of the conspiracy or updating each other as to the progress of its execution, including Mr Macdonald furnishing Edward Obeid with confidential information from time to time.

536. The Crown relied upon particular Parliamentary sitting days between September 2007 and May 2008 as providing an opportunity for Edward Obeid and Mr Macdonald to reach a conspiratorial agreement which was forged so as to include Moses Obeid by no later than 9 May 2008: ^[457]

1. The Australian Labor Party Conference held on the weekend of 3 and 4 May 2008 ^[458] was attended by Mr Macdonald and Edward Obeid. In the Crown’s submission, that occasion provided an opportunity for Edward Obeid to ask Mr Macdonald about coal reserves at Mount Penny, prompting Mr Macdonald’s request of the DPI on 8 May 2008, the subject of the first act of misconduct.

2. The Crown also pointed to 6 to 8 May 2008 as Parliamentary sitting days where Edward Obeid had the “opportunity” to request more information from Mr Macdonald about coal reserves at Mount Penny including whether the DPI would release its holdings to tender (the subject of the first and second acts of misconduct).

3. Further, the Crown pointed to 4 June 2008 as an opportunity for Mr Macdonald to update Edward Obeid as to the outcome of his meeting with the DPI that day, and 5 June 2008 for Edward Obeid and Mr Macdonald “to consider and discuss the contents of Wiles Map 2” before the 6 June 2008 DPI meeting which the Crown alleged the fifth act of misconduct was committed by Mr Macdonald “directing” that a small coal release area be excised from Wiles Map 2 in the area of Mount Penny. ^[459]

The probative value of the Telephone Summary and Parliamentary diaries

537. In making the findings of fact that underpin proof of what the Crown alleged is the strength of its circumstantial evidence case, including the question whether the Crown has proved that the accused were parties to the conspiracy alleged, I have not attributed significant weight to the Telephone Summary per se or the quantum analysis of the extent of contact between the accused before, during or after the timeframe during which the Crown alleges the conspiracy was extant and continuing, or the diarised meetings between Edward Obeid and Moses Obeid, Edward Obeid and Mr Macdonald, and Mr Macdonald and Moses Obeid. I do, however, accept it is a source of evidence of the existence of a relationship between the accused not otherwise established by the available evidence, in particular, a relationship between Moses Obeid and Mr Macdonald which predated the conspiracy and apparently extended beyond it.

538. I also accept that in a number of limited respects (which I will identify with particularity in the course of my deliberations which follow) the Telephone Summary and the diarised meetings do provide evidence of the opportunity for the accused to discuss matters material to proof of the existence of the conspiracy where there are contextual events which depend in some material way on the accused being in direct and continued contact with each other.

What were the circumstances in which Cherrydale Park was acquired by the Obeid family in September 2007, when did the family learn of the encroachment of Authorisation 247 held by Anglo American P/L on the property and what impact did that knowledge have on their plans for the use of Cherrydale Park as a rural holding?

The acquisition of Cherrydale Park

539. The acquisition of Cherrydale Park and the circumstances in which the accused came to learn of coal deposits under the property are important events in proof of the Crown case.

540. Mr Cherry purchased a property called Little Plain, together with two other properties, Bimble and Wingarra, ^[460] in around 1987, as an investment property principally for the farming of cattle. The three properties came to be known as Cherrydale Park. Mr Cherry later sold Wingarra but retained the balance of his holdings until he sold Cherrydale Park in 2007 to Locaway P/L, a company controlled by the Obeid family. ^[461] Prior to the sale, Mrs Cherry resided at Cherrydale Park. Mr Cherry visited the property on weekends and, after his retirement in 2004 or 2005, he lived there permanently. ^[462]

541. Cherrydale Park is an established rural property of 600 hectares situated on the eastern side of the Bylong Valley, a valley which intersects the Great Dividing Range between the Goulburn River National Park and the Wollemi National Park in New South Wales.

542. As at September 2007, Cherrydale Park comprised a homestead and yard situated in grounds occupying over 22 hectares. Vast tracts of cleared pasture extended over the north-west of the property. Approximately 24 hectares of sown lucerne was adjacent to the homestead and gardens to the southeast. ^[463] The sown pasture was part of a tract of about 100 hectares of irrigated land in the east of the property, extending along the Bylong Valley floor. That land was irrigated from an underground stream from which water was pumped under water licences issued variously by the Department of Infrastructure, Planning and Natural Resources, the Department of Land and Water Conservation and the Department of Water and Energy. ^[464] Because it was irrigated and it was eastern-facing, the eastern aspect of Cherrydale Park was the most valuable part of the property from an agricultural perspective. ^[465]

543. Mr Cherry described the property in his evidence at trial as “just beautiful”. ^[466] He gave evidence that the construction and maintenance of the property cost $10 million. Under the vendor financing arrangements (see pars 618-620 below), the maintenance of the garden by Locaway P/L was included as a requirement. ^[467]

544. Mr Cherry decided to sell Cherrydale Park in about May 2007. He confirmed that the photographs comprising Exhibit F in the trial were taken for the purposes of advertising the sale of the property by auction.

The location of Mount Penny adjacent to Cherrydale Park

545. The relative geographic locations of Cherrydale Park and Mount Penny was significant in the trial because of the Crown’s accepted obligation to prove as a fact beyond reasonable doubt that by no later than 9 May 2008, when the first act of misconduct was committed by Mr Macdonald, he knew the Obeids owned Cherrydale Park, a rural property situated near Mount Penny in the Bylong Valley.

546. One of the photographs in Exhibit F shows Mount Penny as a dominating topographical feature rising from the valley floor to the east of Cherrydale Park which is photographed in the foreground: ^[468]

547. Mr Cherry gave evidence that he understood that Mount Penny was not within the surveyed boundaries of Cherrydale Park but within “Crown land or National Park” which bordered the property to the east. ^[469]

548. Mr Whiddon, a cartographer, gave evidence that in 2013 he was supplied with information by an ICAC investigator from which, using information available on the Australian Map Grid, he plotted, on a series of maps, the coordinates of the boundaries of Cherrydale Park, Donola and Coggan Creek as adjoining properties to Cherrydale Park to the north ^[470] relative to the Mount Penny EL ^[471] and to Mount Penny itself which he appointed by a trig point icon. ^[472] The maps were broadly described as maps of the Bylong Valley. ^[473] A selection of those maps was included in Exhibit A. ^[474]

549. In his evidence in chief, Mr Whiddon was not asked about the precise location of Mount Penny relative to Cherrydale Park or to the neighbouring properties, although it is obvious from the exhibited maps that Mount Penny (or the area of Mount Penny) is in the Bylong Valley.

550. In cross-examination, Mr Whiddon confirmed that he used a trig point icon to represent the location of Mount Penny on the maps he prepared. He gave the following evidence:

Q. … On map [Exhibit A p 6574], there is shown in the centre right the words “Mount Penny” and to the right of that, to the east, is a triangle, correct?
A. Yes.

Q. Is that meant to represent a trig point for Mount Penny?
A. Yes, it is.

Q. Did you actually locate a trig point as such on any map for doing this? How did you derive that trig point?
A. From the digital elevation model I have in the background of this. You can’t see that,

…

Q. You would agree, would you not, that the trig point, generally speaking, would be the highest point of a topographical feature such as a mountain?
A. More or less, yes.

Q. But the topographical feature of the mountain could stretch for many kilometres, correct?
A. Yes, yes, it does, yes.

Q. And if you then look at the map [at Exhibit A p 6576], you have there shown again Mount Penny but on that one you have got it between the two lines, the red one and the black one, do you see?
A. Yes, go on.

Q. But could it be that these trig point positions are not necessarily completely accurate?
A. Not - it's a graphical representation. I mean, that is what it is, yes.

Q. Because if you look at [Exhibit A p 6578], you have got the trig point in effect sitting with the very lowest portion of the trig point, the southern portion of it, basically sitting on the Cherrydale Park boundary but substantially, save for a very small portion, to the west of the eastern boundary of 7406, correct?
A. Sort of, yes, yes. Do you know how big that trig is, the actual symbol on a map?

Q. Well, tell us?
A. It is probably 200 metres wide. ^[475]

…

Q. … I want to put to you that that is the topographical area of the Mount Penny mountain, do you agree?
A. Yes. Yes, it is.

Q. And the bulk of it is on the A287 Anglo authority area, would you accept that?
A. Yes, I would.

Q. Would you agree that it forms a ridge line?
A. Yes. Yes, it does. ^[476]

551. Mr Whiddon was then shown Wiles Map 2, ^[477] a map prepared by Ms Wiles from the DPI on 30 May 2008 prior to the designation of the Mount Penny EL, where she placed an icon representing Mount Penny. She said she used “Mount Penny” in the title she gave to both Wiles Map 1 and Wiles Map 2 initially because the internal enquiry that resulted in the creation of Wiles Map 1 referred to “Mount Penny”, and that the name acquired currency in various Departmental documents, including Wiles Map 2, from that time. Wiles Map 2 is reproduced below but discussed at length later. ^[478]

552. In re-examination, Mr Whiddon was questioned about the following map he produced: ^[479]

553. He gave evidence that the Mount Penny “trig point” on that map (referrable to the scale used in that map) was “probably 200 metres wide” because:

If you are looking at the map of Australia, for example, you have to put a circle on it to delineate towns. At scale … that circle could be many kilometres wide … that position on my map, at that scale of our maps that we had, that symbol could represent 100 metres wide or 200 metres wide, depending on the size of the symbol we put on the maps. ^[480]

554. Mr Whiddon also produced a map which overlay the potential open cut area depicted in Wiles Map 2 with the boundaries of the Mount Penny EL and the boundaries of Cherrydale Park, Donola and Coggan Creek: ^[481]

Edward Obeid negotiates for the purchase of Cherrydale Park

555. Commencing in about mid-September 2007, Edward Obeid negotiated directly with Mr Cherry to purchase Cherrydale Park prior to Mr Cherry listing the property for sale by auction, ^[482] after learning that the property was for sale from Mr Rodd, a stock and station agent who had been for some years assisting the Obeid family with general advice in their rural and agricultural endeavours. ^[483]

556. In 2005 or 2006, Mr Rodd was aware from Damian Obeid that his family was interested in acquiring another rural property after the sale of a 6000 hectare cattle grazing and timbered property known as Moona Plains situated near Walcha, New South Wales. Mr Rodd had advised the Obeids (principally Damian Obeid) on the management of Moona Plains. ^[484] The principal criteria for the new property were that it be within three hours of Sydney, suitable for cattle breeding, with a “nice house and garden”. ^[485]

557. Moses Obeid and Damian Obeid attended with Edward Obeid and other members of the family to inspect Cherrydale Park on multiple occasions, including to evaluate plant and equipment. Mr Rodd also inspected Cherrydale Park with various members of the Obeid family including Damian Obeid, Edward Obeid and Moses Obeid. Mr Rodd gave evidence that he understood cattle were to be run on the property and that his advice was sought as to how to maximise the potential for a profitable cattle farming enterprise. He gave the following evidence:

I told them it would probably take me four or five years to build it up to a self-replacing herd. In other words, we wouldn’t have to buy any [cattle] outside, we could replace them all ourselves within. And the four or five years was really only a guess because if you got three good seasons you’d get there, but the way the seasons are the last few years, I thought it was safe and I said four or five and we certainly did that. We achieved that. ^[486]

558. Negotiations for the purchase of the property were conducted by Edward Obeid directly with Mr Cherry, including meetings in Sydney and by telephone. One of the issues discussed during the negotiations was the purchaser’s entitlement to the unrestricted water licences that attached to the property. Mr Cherry gave evidence that he accessed water for irrigation under licence and that without access to that water the property would have been incapable of supporting cattle farming for commercial purposes.

559. Condition 53 to the Contract for Sale for Cherrydale Park provided that:

The purchaser acknowledges that the water licences will not be assigned to the purchaser or the purchaser’s nominee until the moneys advanced pursuant to special condition 52 have been repaid in full. ^[487]

560. The negotiations for sale culminated in a Contract for Sale dated 27 September 2007 being executed by Paul Obeid and Damian Obeid on behalf of Locaway P/L as trustee for the Moona Plains Family Trust ^[488] as purchaser. The purchase price was $3.65 million. ^[489] As at the date of settlement, the identity of the purchaser remained unchanged.

561. As noted earlier, the Moona Plains Family Trust was settled by a Trust Deed executed by Locaway P/L as trustee on 25 October 1994. ^[490] The primary beneficiaries under the trust were each of Edward Obeid’s sons: Damian Obeid, Paul Obeid, Moses Obeid, Gerard Obeid and Edward Obeid Jr. Discretionary beneficiaries include the primary beneficiaries and their parents, children, siblings and spouses.

562. Of the two shares Locaway P/L issued as trustee of the Moona Plains Family Trust, one was held by Paul Obeid and the other by the Obeid Corporation P/L as trustee for the Obeid Family Trust No 1. ^[491] It is the Crown case that, both in anticipation of and then after the EOI process for the grant of an EL at Mount Penny was publicly launched on 9 September 2008, Edward Obeid and Moses Obeid attempted to distance their family from the ownership of Cherrydale Park (as they did their relationship with the neighbouring properties, Donola and Coggan Creek). This was relied upon by the Crown as evidence of their participation in the conspiracy. ^[492]

Cherrydale Park is settled

563. The purchase of Cherrydale Park was settled on 15 November 2007. ^[493]

564. Pursuant to Condition 52(a) of the Contract for Sale, $2.38 million of the purchase price of Cherrydale Park was provided by an advance by the Cherry Superannuation Fund. ^[494] A mortgage to that effect was executed on 15 November 2007. ^[495] The Mortgagor was listed as Locaway P/L. The Mortgagee was listed as Mr John Cherry and Mrs Barbara Cherry, joint trustees of the Cherry Superannuation Fund. ^[496]

565. Pursuant to special condition 52(b) of the contract for sale, a further advance of $250,000 was to be provided by the vendor, Mr Cherry. ^[497]

566. It is unclear precisely when the Obeid family took possession of Cherrydale Park or whether any family members took up residence on the property, and, if so, when that occurred. In the interview with journalists Ms Jiminez and Mr Shanahan on 18 December 2012, Edward Obeid stated that “we spent the summer of 2008 up on the farm”. ^[498]

567. Mr Rodd gave evidence that, at an unspecified time after settlement, the agricultural infrastructure on the property was upgraded. New fencing was installed and pasture improvement was undertaken, together with other unspecified works. Mr Rodd also acquired a herd of Angus cattle on behalf of the Obeids:

A. They wanted to start a really good Angus herd so I made a few trips to the south and I used to do a fair bit of that in those days, setting up Angus herds in the early days of Angus. And they were pretty good that way. The first lot were fairly expensive. The second lot I actually got some I actually bought the Compton Angus Stud from down at Henty which were magnificent cattle.

HER HONOUR

Q. How many head did you secure?
A. I think of Compton there were about 70 or 80.

Q. And they were all steers for fattening or were they
A. No, they were actually stud females; they were beautiful cattle. And then I bought a couple of B doubles of really good cows and calves from Mountain Station at Culcairn, a bloke called John Atkins from Walbundrie, out that way, and they were all very good cattle. ^[499]

568. After taking into account the capacity of a herd to “grow and shrink,” Mr Rodd estimated the number of cattle that were run at Cherrydale Park at 260-270 head. ^[500] Mr Rodd also gave evidence that Damian Obeid expressed a keen interest in expanding the herd to include about 1000 head of breeding cattle. Mr Rodd gave evidence that on his recommendation a herd of that size could be better accommodated on an adjoining property without the need for a substantial increase in the number of staff. To this end, Mr Rodd undertook inspections firstly of Donola ^[501] followed by Coggan Creek ^[502] on behalf of the Obeids at sometime in mid-2008, prior to 23 June 2008. ^[503] That date is significant, on the Crown case, as the date Mr Rumore, solicitor, was retained to advise on a proposal with a third party entity which would have had the three properties acquired for a prospective sale to a mining company with the properties used for grazing and cropping in the interim, before “mining leases” issued. The evidence relevant to that aspect of the Crown case will be developed at length later.

569. Mr Rodd gave evidence that, in his assessment, the cattle could be grazed across the three properties, with Cherrydale Park as the headquarters. By utilising Cherrydale Park staff, he estimated the properties could be built up to support up to 1000 head “quite comfortably”. ^[504] He agreed with the proposition put to him by Mr Neil that “without oversimplifying matters”, it made sense “to combine the three properties to run an agricultural operation”. ^[505] He explained as follows:

Well looking at it now, it would have went well for a few years but then we would have copped this three year drought so it would have knocked us for six a little bit. You get used to that anyway but it would have worked well. Because Cherrydale being a much better place than the other two, you could have used the two northern properties as breeding country and finished everything off to a heavier weight on Cherrydale. So it would have worked well, yeah. ^[506]

570. Mr Rodd gave evidence that for “a couple of years” after the purchase of Cherrydale Park in September 2007, Donola was used to graze the Obeid family’s cattle. ^[507]

The significance of Authorisations 287 and 342

571. As at the date of the settlement of Cherrydale Park, Authorisation 287 and Authorisation 342 ^[508] were held by Anglo Coal (Bylong) Pty Ltd. ^[509] In a report commissioned by the DPI in 2005, they were estimated to contain 460Mt of coal. ^[510]

572. Mr Mullard, the Director of the Coal and Development Group within the DPI, agreed that “Anglo American” was a major mining company which, together with companies such as BHP, Rio Tinto and Xstrata, dominated the New South Wales coal mining industry.

573. On 17 November 2003, pursuant to the Mining Act, under delegation from Minister Hickey, Authorisation 287 was renewed for a further term until 27 July 2008. ^[511] On 30 March 2009, under delegation from Minister Macdonald, Authorisation 287 was renewed for a further term until 27 July 2011. ^[512] Authorisation 287 was subsequently sold for a significant sum to Korean Electric Power Corporation (KEPCO), ^[513] which went on to produce a plan for a large mine on the site. ^[514]

574. While there is no equivalent Instrument of Renewal in respect of Authorisation 342 in evidence, an email internal to the DPI sent on 24 July 2008 confirmed that that the records held by the Coal Advice section within the DPI indicated that Authorisation 342 (and Authorisation 287) had been held by “Anglo Coal” from 2000 to the present. ^[515] At that time, Coal Advice was assessing that company’s application for the renewal of both Authorisations.

575. Authorisation 287 was located generally to the east of Cherrydale Park. Authorisation 342 was located further south. Authorisation 287, an area embracing approximately 6685 hectares (16,500 acres), ^[516] encroached onto the eastern portion of Cherrydale Park by approximately 300 acres. ^[517]

576. In cross-examination by Mr Martin, Mr Rodd gave the following evidence about the agricultural value of Cherrydale Park:

Q. ... Would it be fair to say that that eastern border or eastern side of Cherrydale was the most valuable part of the property from an agricultural point of view and therefore‑‑
A. Oh, God yeah.

Q. Did that make it perhaps the most valuable property in the whole valley?
A. It's right up there. And I know older agents and cattle buyers and things and that Bylong Valley through there has got a hell of reputation. Probably some of the best cattle sold in Mudgee used to come out of the Bylong Valley. And since having a bit to do with it these years, I'd agree wholly, entirely. ^[518]

577. The existence of Authorisations 287 and 342, and the fact that they were due to expire on 27 July 2008, ^[519] was not disclosed to Edward Obeid in negotiations with Mr Cherry prior to the issue of the Contract for Sale, neither were they disclosed in the Contract for Sale. ^[520] Mr Cherry gave evidence he “had no idea that there was coal underneath Cherrydale” at the time of the sale. ^[521]

What the accused knew of the likely coal reserves generally in the area around Mount Penny, and what impact did that have on the Obeid family’s plans for the use of Cherrydale Park as a rural holding and “rural retreat”?

578. While it is the Crown case that the agreement the subject of the conspiracy might have been forged as early as 1 September 2007, it does not allege that Cherrydale Park was purchased by the Obeid family as an act by either Edward Obeid or Moses Obeid in furtherance of the conspiracy, or even that the property was purchased in contemplation of the accused entering into the unlawful agreement with Mr Macdonald of the scope and object alleged.

579. Neither does it form any part of the Crown case that when Cherrydale Park was purchased, Edward Obeid, Moses Obeid or any member of the Obeid family knew or believed that the property, or any of the neighbouring properties, contained unexploited underground coal reserves, or that Cherrydale Park was subject to any existing Authorisations issued by the DPI or proximate to any existing ELs held by the DPI. ^[522]

580. The Crown did not seek to make the case that when Mr Macdonald was told about the prospective purchase of Cherrydale Park (that is, on the Crown case, during the last phase of Edward Obeid’s negotiations for the purchase of the property in September/October 2007 when the issue of water licences was in play) he already knew of the likely extent of coal reserves in the particular area of the Bylong Valley where Cherrydale Park was located from his own knowledge or as the responsible Minister under the Mining Act.

581. Neither does the Crown seek to make the case that upon learning that the Obeids had purchased Cherrydale Park, Mr Macdonald was unilaterally motivated to make enquiries of the DPI about coal reserves in the area, whether out of curiosity or to have a store of information which he might be in a position to share with Edward Obeid and/or Moses Obeid to their mutual advantage in the event that a new coal release area in the Bylong Valley was included in an EOI process that might be launched by the Department as part of Mr Macdonald’s general policy of expanding the potential for coal mining in New South Wales for the fiscal and other benefits that would be generated for New South Wales.

582. The Crown also accepted that the evidence establishes that from mid-2007 the Obeid family were apparently genuinely motivated to purchase a rural property closer to Sydney to foster and extend their established cattle farming business and as a rural retreat and lifestyle investment, and that for a range of reasons, largely personal to the Obeid family, Cherrydale Park proved to be the optimum prospective acquisition. It is the Crown case, however, that within a few months of the purchase of Cherrydale Park, when Edward Obeid, Moses Obeid, Paul Obeid, Gerard Obeid and Damian Obeid learnt of coal resources on and around Cherrydale Park, apparently from sources other than Mr Macdonald, the Obeid family changed their focus from cattle farming to exploring the potential for Cherrydale Park to be incorporated in a coal mining project with a coal mining company, and that later in 2008 they took steps to acquire Donola and Coggan Creek to form a landholders alliance to further that same objective.

583. In advancing that submission, the Crown appears to have expressly adopted, or at least impliedly accept, the account given by Edward Obeid and Moses Obeid when they were interviewed by the journalists Ms Jiminez and Mr Shanahan on 18 December 2012 to the effect that when Moses Obeid and Paul Obeid researched the Authorisations held by Anglo American P/L sometime in early 2008 they realised that any mine that company developed would be underground (as opposed to open cut). The Crown also appears to have accepted, at least at that early stage, that with that information, Moses Obeid and Paul Obeid assessed that the infrastructure which would be required to develop mining operations on that scale would necessarily be located proximate to Coggan Creek, and that if the Obeids were to acquire Coggan Creek and Donola as properties neighbouring Cherrydale Park, they could sell all three properties as an attractive and composite land holding to a mining company. ^[523]

584. What the Crown did not accept is the styling of that scenario by Edward Obeid and Moses Obeid in the Shanahan/Jiminez interview as an “exit strategy” ^[524] to be activated in the event that the Anglo American P/L Authorisations were renewed or released to market. It is the Crown case that Edward Obeid and Moses Obeid and, it would appear, other members of their family (in particular Paul Obeid) ^[525] were committed from early-July 2008, at the latest, to pursuing a joint commercial venture with a mining company in which they owned or controlled all three properties, a prospect they had been maturing over some months.

585. It is against that background that the Crown alleges that Edward Obeid and Moses Obeid were motivated to enter into the conspiracy with Mr Macdonald which had as its object that Mr Macdonald would misconduct himself in connection with the granting of an EL over land at Mount Penny which included Cherrydale Park, a conspiracy which on the Crown case was forged and into which each of the accused agreed to participate no later than 9 May 2008.

586. Although the Crown does not make the submission expressly, it is implicit in the way the Crown puts its case that by 9 May 2008, Edward Obeid and/or Moses Obeid were keen to acquire more detailed and reliable information than was otherwise available to them on the public record about the volume of coal reserves under or proximate to Cherrydale Park, in order that they might pursue the prospect of a joint venture with a mining company who might wish to apply for a licence to explore the potential for coal mining over land which included Cherrydale Park.

587. It is the Crown case that Mr Macdonald’s enquiries of the Department (via Mr Gibson as his deputy Chief of Staff) on 9 May 2008 about the volume of coal reserves in the Bylong Valley, specifically in the area of Mount Penny, were made at that time because Edward Obeid asked him for that information to supplement the information the family had been gathering from their own enquiries ^[526] and, it must be assumed, because Mr Macdonald did not have that information to share with his co-conspirators pursuant to the conspiracy which, on the Crown case, was already in existence at that date.

588. It is the Crown case that following the designation of the Mount Penny Coal Release Area by the DPI by 17 June 2008 (the boundaries of which encompassed Cherrydale Park, Donola and Coggan Creek as visualised in Mr Whiddon’s overlay map at par 552 above) and after Moses Obeid and/or Edward Obeid learnt of that fact from Mr Macdonald, Moses Obeid’s pursuit of a range of commercial negotiations to best exploit that fact for the financial benefit of his family and his associates gathered impetus. As noted earlier, Mr Rumore, solicitor, was retained on 23 June 2008.

589. The Crown also appears to accept that while the Obeids may have initially contemplated purchasing Donola and Coggan Creek for the purposes of cattle grazing, ^[527] upon learning that there were coal deposits under Cherrydale Park both from their own researches in early 2008 and then, on the Crown case, following the information Mr Macdonald obtained for them from the DPI in May 2008 in his commission of the first and second acts of misconduct, the Obeid family’s interest in exploring the potential for coal exploration was stimulated, to the extent that the potential profit from cattle farming (one of the primary motivators behind the acquisition of the property in 2007) ^[528] became of secondary significance and, eventually, as the prospect of a joint venture with Monaro Mining NL developed from about mid July 2008, of no significance at all. The Crown submitted that the evidence leaves no room for doubt that even when Mr Rumore was first instructed on 23 June 2008 that the Obeids were contemplating a landholders alliance with the Boyds (a family associated with the property development company Pace Developments ^[529] ) for the purchase of Donola and Coggan Creek, a mining deal was already under contemplation. ^[530]

590. It is also the Crown case that the picturesque setting of Cherrydale Park and its prime location as a rural retreat for the Obeid family and for Edward Obeid in retirement (another factor the Crown accepts apparently motivated the initial purchase of the property), was also of diminishing significance, including to Edward Obeid, by the time Paul Obeid and Moses Obeid sought to attract the financial backing of Lehman Brothers to a joint mining venture in their meetings with Mr Brook on 3 and 7 July 2008. ^[531] It is the Crown case that the concept of Cherrydale Park being used as a “rural retreat” was ultimately of no significance at all as the joint venture with Monaro Mining NL progressively crystallised following Mr Brook’s approach to the company on behalf of Moses Obeid and his brothers on 15 July 2008 (on the Crown case with confidential information provided by Mr Macdonald to facilitate that approach, the conduct the subject of the seventh act of misconduct).

Mr Macdonald’s knowledge of the ownership of Cherrydale Park as a fact indispensable to proof of the guilt of each of the accused

591. The Crown seeks to prove the fact of Mr Macdonald’s knowledge of the Obeids’ ownership of a rural property (Cherrydale Park) in the Bylong Valley near Mount Penny for two related purposes:

1. As an intermediate fact indispensable to proof of the guilt of all three accused of the offence charged. ^[532]

2. As the factual foundation for proving that Mr Macdonald told a deliberate lie to Mr Gibson when, in October 2009, at a time when there was speculation that Edward Obeid had an interest in property near Mount Penny (including the article published by Tracy Ong on 28 October 2009 ^[533] ), Mr Gibson raised that issue with Mr Macdonald. Mr Gibson gave evidence that he was told by Mr Macdonald that “Eddie’s property’s over the ridge and away from Mount Penny.” ^[534] The Crown submitted that Mr Macdonald lied to Mr Gibson about the location of Cherrydale Park, both conscious of what he had done in execution of the conspiracy and with the intention of concealing both the existence of the conspiracy and his participation in it. ^[535]

592. I will return to consider whether Mr Macdonald told a deliberate lie to Mr Gibson later, after determining whether I am satisfied the Crown has proved the existence of the conspiracy beyond reasonable doubt.

593. Although, as I have emphasised, the Crown does not allege that Cherrydale Park was purchased by the Obeid family as an act in furtherance of the conspiracy or even in contemplation of it, the Crown does allege that between about 15 September 2007, when Edward Obeid was first engaged in spirited negotiations with Mr Cherry to purchase Cherrydale Park, and 27 September 2007 when the Contract for Sale was executed, he told Mr Macdonald about the prospective purchase of the property, and either at that time, or at some later date but before 9 May 2008, Mr Macdonald learnt (from either or both of Edward Obeid and Moses Obeid) that the property was situated near “Mount Penny” in the “Bylong Valley”.

594. The Crown has characterised the Shepherd fact as comprehending that Mr Macdonald knew that the Obeid family were purchasing or had purchased a rural property (Cherrydale Park) that was “situated near Mount Penny in the Bylong Valley” (emphasis added). ^[536]

595. The Crown accepted that if it is to prove the case it prosecutes, it is obliged to prove as a primary fact and beyond reasonable doubt that no later than 9 May 2008 when, on the Crown case, Mr Macdonald had Mr Gibson make enquiries of the DPI about the volume of coal reserves in the area of Mount Penny (the conduct the subject of the first act of misconduct) ^[537] and, thereafter when he committed each of the successive seven acts of wilful misconduct in connection with the granting of the EL at Mount Penny for the improper purpose alleged, ^[538] he knew that the Obeids owned a rural property (Cherrydale Park) situated near Mount Penny in the Bylong Valley. ^[539]

596. The Crown accepted that proof of Mr Macdonald’s knowledge of that fact is indispensable to proof of the conspiracy ^[540] since, without proof that Mr Macdonald knew that the Obeids owned Cherrydale Park, and the geographic location of the property in the Bylong Valley near Mount Penny, the things allegedly said and done by him between 9 May 2008 and January 2009, constituting what the Crown says are the eight acts of misconduct committed by him in furtherance of the conspiracy and from which the existence of the conspiracy is inferred, are deprived of an essential feature of the improper purpose the Crown identifies as inherent in the conspiratorial agreement. Additionally, insofar as a breach of Mr Macdonald’s duty of impartiality is relied upon, Mr Macdonald’s knowledge of the Obeids’ ownership of Cherrydale Park is what the Crown relied upon to prove his wilful breach of that duty.

Sources of evidence relied upon by the Crown to prove Mr Macdonald’s knowledge beyond reasonable doubt

597. There is no direct evidence that Mr Macdonald was told by Edward Obeid or Moses Obeid that Cherrydale Park had been purchased by an Obeid family company in September 2007, or that he came to know of their ownership of that property from any other source.

598. The Crown relied upon a number of pieces of circumstantial evidence to prove, by inference, Mr Macdonald’s knowledge of that fact. In the Crown’s submission, the combined probative force of a number of interrelated facts and circumstances, some of which are established by the evidence and others which are proved by inference, lead inevitably to me being satisfied, beyond reasonable doubt, that Mr Macdonald knew from at least early 2008, if not earlier, but no later than 9 May 2008, that the Obeids had not only recently acquired a rural property known as “Cherrydale Park”, but that it was situated in the area of Mount Penny in the Bylong Valley.

599. Some of the individual facts and circumstances relied upon by the Crown to prove Mr Macdonald’s knowledge of that fact are not in dispute. For example, the Crown places considerable reliance on Edward Obeid having told the journalists Ms Jiminez and Mr Shanahan in the course of being interviewed on 18 December 2012 that after having spent the “summer of 2008” at Cherrydale Park he asked Mr Macdonald, upon his return to Parliament, “if the Department has any knowledge of a mine being planned for Bylong by Anglo”, ^[541] a request for information which the Crown submitted must have been in the context of informing Mr Macdonald that he had bought a rural property (Cherrydale Park) in the Bylong Valley near Mount Penny.

600. Other facts are in dispute. For example, there is considerable conflict as to whether what became referred to in the trial as the water licences issue ^[542] provides a legitimate evidential basis to support the inference that in September 2007 Mr Macdonald asked Mr Badenoch (his Chief of Staff) to make enquiries about the water licences, knowing that they attached to Cherrydale Park, and that he did so at Edward Obeid’s request at a time when negotiations for the purchase of the property were underway. There is also considerable conflict as to the weight, if any, that might be attributed to Mrs Fitzhenry’s evidence of a conversation she said she overheard her husband have with Moses Obeid where he told her that Mr Macdonald told “his father” about “coal leases” over Cherrydale Park. ^[543]

601. In the Crown’s submission, however, even if doubt attends one or more of the individual facts and circumstances relied upon to prove Mr Macdonald’s knowledge of the Shepherd fact, when all the evidence which bears relevantly upon proof of that fact is considered collectively, there is no other rational or reasonable explanation for what Mr Macdonald has been shown to have said and done in connection with the granting of an EL at Mount Penny (including his involvement in the process of the Mount Penny Coal Release Area being designated for inclusion in the EOI process for the grant of an EL at Mount Penny) without knowing of the Obeids’ ownership of a rural property (Cherrydale Park) in the Bylong Valley near Mount Penny.

602. In the Crown’s submission, an additional source of evidence in proof of Mr Macdonald’s knowledge of the geographic location of Cherrydale Park in the Bylong Valley near Mount Penny is the conduct comprising the first, second and fifth acts of misconduct themselves.

603. There is a certain circularity in that submission if it proceeds on the basis that Mr Macdonald’s dealings with the Department in May and June 2008 were acts of misconduct committed in breach of his duty of impartiality because he knew about the Obeids owning land near Mount Penny in the Bylong Valley. On the other hand, if the Crown’s submission invites focus on the timing and the content of Mr Macdonald’s dealings with the DPI in May and June 2008, in particular, if the Crown demonstrates Mr Macdonald’s focused enquiries about “Mount Penny” at that time are otherwise inexplicable, then there is no necessary circularity. However, if the Crown fails to establish that Mr Macdonald’s dealings at that time were acts of misconduct committed in furtherance of the conspiracy because it fails to prove Mr Macdonald’s knowledge of the Obeids’ ownership of Cherrydale Park (perhaps because I am satisfied of the reasonable possibility that he came to learn about the Obeids’ property being within the newly created Mount Penny Coal Release Area entirely incidental to his otherwise legitimate engagement with the Department as the Minister for Mineral Resources) there is no circularity in the Crown’s reasoning, but the Crown case is undermined for other reasons.

604. Another source of evidence independent of Mr Macdonald’s dealings with the DPI in May and June 2008 might be the opportunity Mr Macdonald had, before that time, to meet and discuss with Moses Obeid and Edward Obeid their growing appreciation and awareness of the potential coal resource under Cherrydale Park, and, in that same timeframe, the opportunity they had to raise with Mr Macdonald whether he knew of the extent of coal reserves proximate to Cherrydale Park and in the Bylong Valley more generally. In considering the question, I am invited by the Crown to consider the regularity of telephone contact, in particular between Mr Macdonald and Edward Obeid in the days before 9 May 2008 as reflected in the Telephone Summary.

605. I am also invited by the Crown to accept Mrs Fitzhenry’s evidence that she overheard Moses Obeid telling her husband in late 2007 or early 2008 that Mr Macdonald had told Edward Obeid about “coal leases at Cherrydale”, as another source of evidence to prove Mr Macdonald’s knowledge that the Obeids owned a rural property (Cherrydale Park) in the Bylong Valley near Mount Penny. The evidence of Mr and Mrs Fitzhenry was the subject of a substantial credit attack. Their evidence will need to be considered in detail before it is available to the Crown in proof of any aspect of its case. I will return to deal with whether their evidence carries any probative weight in proof of Mr Macdonald’s knowledge of the Obeids’ rural holdings in the Bylong Valley near Mount Penny (Cherrydale Park) presently.

606. Finally, the sufficiency of the evidence to prove the Shepherd fact might also include a consideration of what might have motivated Mr Macdonald not merely to listen disinterestedly to Moses Obeid and Edward Obeid’s apparent appetite to explore the potential to exploit the available coal resource under their land (and perhaps even their interest in acquiring surrounding properties to maximise that potential), but for him to enter into a criminal conspiracy with them with the knowledge of the location of their property colouring what the Crown alleges were the proven and successive acts of misconduct he committed in furtherance of achieving their common objective.

The submissions of the accused directed to proof of the Shepherd fact and its relationship with the “but for” test

607. Each of the accused submitted that when the facts and circumstances relied upon by the Crown are considered together, they do not prove, to the requisite criminal standard, that at the time Mr Macdonald is alleged to have committed any of the acts of misconduct upon which proof of the conspiracy depends, he knew the Obeids owned a property called Cherrydale Park or, if he knew that fact, that he knew its geographic location in the Bylong Valley near Mount Penny.

608. The accused submitted there was a paucity of reliable evidence to prove Mr Macdonald knew of the family’s purchase of Cherrydale Park in September 2007 or at any time proximate to that date. The accused also submitted that even if the Crown does prove that Mr Macdonald came to learn of the Obeids’ rural holdings in the Bylong Valley at some time after the Mount Penny Coal Release Area was designated by the DPI in mid-June 2008 and before 9 September 2008 when the EOI process (which included Mount Penny as one of eleven small areas for the grant of an EL) was publicly launched, the Crown has failed to prove that it was his knowledge of that fact that motivated him to act as he did in his dealings with the DPI as Minister for Mineral Resources in May and June 2008, the conduct particularised by the Crown as the subject of the first, second and fifth acts of misconduct.

609. The accused submitted that the Crown has failed to discount, or negative, the reasonable and rational possibility, arising directly from the evidence, that what Mr Macdonald actually did in his dealings with the DPI, initially in May 2008 and then in June 2008 when he made focused enquiries of the DPI as to the possibility of releasing a new small to medium coal release area in the Bylong Valley, and then later in July and August 2008 when he was engaged with the DPI in the process of approving the inclusion of the Mount Penny Coal Release Area in the EOI process for the grant of an EL, was entirely consistent with his commitment to the release of new small to medium coal exploration areas in the Western Coalfield in New South Wales to attract the involvement of small to medium mining companies.

610. Contrary to the inference contended for by the Crown, each of the accused submitted that the countervailing inference is that Mr Macdonald’s dealings with the Department throughout that period was not for the improper purpose of advancing the private interests of Edward Obeid, Moses Obeid or members of their family and/or associates, knowing they owned land in the area of Mount Penny, but for legitimate policy purposes being pursued by him in the public interest as a responsible Minister.

611. The accused submitted that in 2007/2008, with the global price of coal being at a premium, the fiscal incentives in seeking to exploit the coal reserves in New South Wales generally and within the Western Coalfield in particular, were obvious and the financial benefits equally as patent. The accused also emphasised that the release of new areas for coal exploration would address the concerns of smaller industry players that large mining companies were controlling the industry including by “land parking” coal rich areas under existing ELs or authorisations.

612. With Mr Macdonald’s legitimate dealings with the DPI and the coal mining sector analysed in that way, the accused submitted that the Crown has failed to discharge the obligation of proving that “but for” the improper purpose of benefiting or advantaging Edward Obeid, Moses Obeid or their family and associates, Mr Macdonald would not have misconducted himself as the Crown has alleged he did in connection with the granting of the EL at Mount Penny by committing eight successive acts of misconduct. They submitted the Crown had failed to prove that fact, not only because it has failed to prove beyond reasonable doubt that Mr Macdonald knew of the Obeids’ rural holdings in the area of Mount Penny in the Bylong Valley, but also because, to the extent Mr Macdonald acted as he is alleged to have acted, he has been shown to have acted for legitimate policy purposes. That is, the accused submitted the Crown has failed to discharge the “but for” test.

The question when Mr Macdonald learnt of the Obeids’ purchase of Cherrydale Park (if he did)

613. Even if I am satisfied that the probabilities favour a finding that Mr Macdonald was the source of the enquiries about water licences made by Mr Badenoch in September 2007 (a matter which I will consider presently), a related question arises as to whether I am also satisfied that it was at that time that Mr Macdonald learnt of the geographic location of Cherrydale Park (in the Bylong Valley situated near Mount Penny), as distinct from the possibility that information was something Mr Macdonald came to learn of after Cherrydale Park was purchased, perhaps even after the Obeids learnt that there were coal deposits under the property in early 2008, perhaps even further still, after the Mount Penny Coal Release Area (which encompassed Cherrydale Park) had been designated by the DPI in mid-June 2008.

614. If, after giving careful consideration to all of the evidence bearing upon proof of Mr Macdonald’s knowledge that the Obeids owned Cherrydale Park, and that he knew of its geographic location near Mount Penny in the Bylong Valley, there remains a reasonable possibility that Mr Macdonald came to learn of that fact after he had undertaken his own independent enquiries of the DPI about the volume of coal resources in that area, then a central aspect of the structure of the Crown case falls away.

615. In considering that question, it will be necessary to consider what other evidence there is in the Crown case which might allow for a finding that Mr Macdonald knew of the geographic location of Cherrydale Park on or before 9 May 2008. As I have already emphasised, that date is critical. If the Crown fails to prove Mr Macdonald had that knowledge at the time he is alleged to have made focused enquiries of the Department in May 2008 about coal reserves near Mount Penny in the Bylong Valley (the first and second acts of misconduct), and that it was with that knowledge that he is alleged to have directed the DPI in June 2008 to create a small coal release area by reducing the potential open cut coal resource depicted in Wiles Map 2 to the east (the fifth act of misconduct), the Crown case on the charge it has elected to prosecute, namely a conspiracy which was in existence as at 9 May 2008 will be seriously undermined.

What does the water licences issue reveal about Mr Macdonald’s knowledge of the ownership of Cherrydale Park?

616. So far as the issue of the water licences is concerned, the inference for which the Crown contends is that I will be satisfied that enquiries made by Mr Macdonald’s Chief of Staff, Mr Badenoch, about the water licences (identified by number) that attached to Cherrydale Park by an email Mr Badenoch, Mr Macdonald’s Chief of Staff, sent to Mr Gardoll of the Department of Water and Energy on 26 September 2007 ^[544] were made (a) at Mr Macdonald’s request and (b) on behalf of Edward Obeid at a time when Edward Obeid was positioning himself as a prospective purchaser of Cherrydale Park. The Crown invites me to draw the inference that it was at that time that Mr Macdonald learnt that Cherrydale Park was in the Bylong Valley situated near Mount Penny, as information Edward Obeid was likely to have shared with Mr Macdonald incidental to asking for his assistance concerning the water licences.

617. The issue of the water licences arose in the course of negotiations for the sale of Cherrydale Park which included Mr Cherry’s offer of vendor finance through the Cherry Superannuation Fund. One of the terms upon which finance was to be provided concerned the eight water licences identified by their individual licence numbers and noted on the contract of sale as the property of the vendors. Although the licences formed part of the property the subject of sale (and noted on contract of sale for that reason) they were only to be transferred after the discharge of the registered first mortgage over the Cherrydale property which secured the vendor finance.

618. That state of affairs was reflected in the letter from the solicitors for Mr Cherry of 26 September 2007 to Damian Obeid, one of four directors of Locaway P/L as purchaser (the remaining directors being his brothers Paul Obeid, Moses Obeid and Edward Obeid Jnr).

619. The Crown adduced evidence from Mr Cherry that without a licence to access water, or if the water licences that attached to Cherrydale were somehow compromised, the property would essentially become dry farming land substantially reducing its commercial value and undermining the value of the property as security under the vendor finance loan agreement.

620. The grant of a water licence, and the entitlement of the licence holder to extract water under that licence, is controlled the Department of Natural Resources. Mr Macdonald had no responsibility for the allocation of water rights or any Ministerial responsibilities over the issue of water licences.

621. These are matters of fact and not in dispute.

Mr Badenoch’s evidence concerning the water licences

622. What was in dispute was the identity of the person on whose behalf Mr Badenoch sent an email to Mr Gardoll on 26 September 2007 at 6:32pm which reads as follows:

Hi Brian,

As discussed, could you please chase up the following licence numbers for me.

[the licence numbers are then set out in a sequence that corresponds with the sequence in which they are noted on the contract of sale]

Any info you might be able to provide, would be most appreciated. ^[545]

623. There is no evidence that the email was responded to by return email. Mr Gardoll was not called in the Crown case.

624. As at 26 September 2007, Adam Badenoch held the position of Chief of Staff to Mr Macdonald as Minister for Mineral Resources. He was appointed to that position following the New South Wales State election in March 2007. ^[546] Mr Badenoch gave the following evidence as to his duties and responsibilities in the role of Chief of Staff:

I was responsible for the running of the office as a whole, ensuring that it functioned appropriately, that people performed their duties appropriately. I took the lead on certain sensitive policy matters and I acted as a representative of the ministerial office in conjunction with numerous stakeholder engagements. ^[547]

625. Mr Badenoch gave evidence, consistent with the evidence of other witnesses, that Mr Macdonald had an office at Parliament House and another office at Governor Macquarie Tower with the former only being used on Parliamentary sitting days. ^[548] He gave evidence that the Parliamentary office was “a very open, dynamic environment ... it was open to a significant number of people”. ^[549]

626. Mr Badenoch gave evidence that on a Parliamentary sitting day it would not be unusual for up to 14 staff members to be in Mr Macdonald’s Ministerial office sharing ten desks that “abutted” one another, exclusive of the Minister’s office and the desk occupied by his personal assistant. ^[550]

627. Mr Badenoch gave evidence that although he had very cursory dealings with Edward Obeid, he had never met any members of Mr Obeid’s family. He did observe Edward Obeid to attend Mr Macdonald’s Parliamentary office but had no recall of him attending Mr Macdonald’s office at Governor Macquarie Tower.

628. Mr Badenoch gave the following evidence about his relationship with Edward Obeid as at September 2007:

I don’t know that I would have said personal dealings, no. I think I have given evidence on this before, that Mr Obeid and my relationship was largely restricted to salutations as we passed one another or he came to see the Minister for whatever the reason may have been. ^[551]

629. In cross-examination by Mr Martin, Mr Badenoch confirmed he had a “difficult relationship” ^[552] with Edward Obeid from mid-2006 onwards following an incident where Mr Badenoch was critical of Edward Obeid in the company of others. That criticism was then relayed to Edward Obeid by another person, prompting Edward Obeid to place a call to Mr Macdonald to request that Mr Badenoch be dismissed as Mr Macdonald’s Chief of Staff. ^[553]

630. Mr Badenoch was able to confirm that, at the time of sending the email to Mr Gardoll on 26 September 2007, Mr Macdonald did not have Ministerial responsibility for “the water aspect” of the Department of Water and Energy. By September 2007, that responsibility had been allocated to different Ministerial portfolio. Mr Badenoch gave evidence that Mr Macdonald did retain “policy responsibility for energy and … budgetary responsibility for the entire [Department of Water and Energy]”. ^[554]

631. Mr Badenoch was unable, either by reference to the alphabetic or numeric identifiers he typed into the email, to identify the “specific type of licence” about which he was seeking information. ^[555] He said neither the identifying number “20” and letters “BL” were a formulation or identifying number with which he was familiar, nor, was the formulation of the licence number in its entirety something which he had encountered in the course of his duties. He gave evidence that he had no current recall as to why he sent the email, other than what is revealed in the text of the email, and that he was seeking the information because he did not have it. Mr Badenoch accepted that amongst a number of possible explanations for sending the email (having no personal interest in any rural land or water licence), ^[556] it was “possible” he made the enquiry or sent the request to Mr Gardoll on Mr Macdonald’s behalf. ^[557] The Crown asked no further questions of Mr Badenoch concerning the email.

632. When asked by Mr Martin about the email, Mr Badenoch said it would be “very - highly unusual” ^[558] if that enquiry were made by him at the request of one of the Mr Macdonald’s staff. He did accept, however, that the request could have issued from any Ministerial staff of other Ministers.

633. Mr Badenoch also accepted the proposition put to him by Mr Martin that not only was he well known as having expertise in natural resources and water issues but that, as at September 2007 and throughout the years of drought in the early 2000s, “water … was a very live issue for the government.” ^[559]

634. He also agreed with the following propositions:

Q. Is it the case that all staff in the ministerial office knew of your knowledge of water issues?
A. Yes, they did.

Q. Your knowledge of water issues and specifics in the management of water was also known around the New South Wales State Government and by stakeholders in the water industry?
A. That’s correct.

Q. I suggest that it wouldn't be unusual for you personally to field an inquiry about water?
A. No, no, not at all.

Q. Or a water licence?
A. No, no, I think people would just gravitate to if they knew someone who knew something or could do something then they would ask them the question.

Q. That was the case even after you left that portfolio or the portfolio of water shifted out of Minister Macdonald’s formal control?
A. That’s correct. I mean, I just need to sort of make the point again, we did not have policy responsibility but we had budgetary responsibility for the entire department. ^[560]

635. Ultimately, Mr Badenoch’s evidence, including after cross-examination, was to the net effect that he has no recollection of sending the email, no recollection of why he sent the email, no recollection of discussing the subject of the email with Mr Gardoll or anyone else, and no recollection of receiving any response to his email.

636. It is the Crown case, that despite Mr Badenoch having no recollection of sending the email, including no memory of any discussions with Mr Gardoll which preceded it or any memory of the person on whose behalf he had those discussions, he was able to reason to the conclusion that the enquiry about the water licences was not made directly on behalf of Edward Obeid (or any member of his family) and it was not an enquiry initiated by him on his own behalf. He also gave evidence that if the enquiry had been made at the request of Mr Macdonald, and Mr Macdonald had told him the enquiry was made on behalf of Edward Obeid, he would likely have remembered that. In the Crown’s submission, in those circumstances, the only rational inference is that Mr Macdonald asked Mr Badenoch to make the enquiry on Edward Obeid’s behalf without giving Mr Badenoch any explanation for doing so, including and specifically without making any reference to Edward Obeid.

637. The Crown also relied upon evidence from Mr Cherry that before the conveyance of the property settled he was contacted by Hermantha de Silva from what he described as the “Department of Water” who claimed to have heard that Cherrydale Park may be sold and was concerned about whether the unlimited water licence should be preserved.

638. It was in the course of that phone call that Mr Cherry learnt of the identity of Edward Obeid as the prospective purchaser. Mr Cherry explained:

Q. Just going to the commencement of your discussion with Edward Obeid by telephone after having had this conversation with Mr De Silva. Did the conversation commence on the topic of what, if any, role Edward Obeid had had which had given rise to Mr De Silva contacting you?
A. Mr De Silva did not I asked I found out it was Obeid because I asked Hemantha De Silva had he talked to anybody about it, he said "My boss" and I said, "Who's your boss?"

Q. Yes?
A. And he said "um", equivocated, and finally I got out of him Obeid's name. ^[561]

639. Following the telephone conversation with Mr De Silva, Mr Cherry called Edward Obeid. He gave the following evidence in relation to that phone call:

Q. What did Mr Edward Obeid say?
A. Mr Obeid, as I said before, was of the view that a purchaser had the right to know what the water supply situation was and whether the unlimited licence would continue. He said he had that right and obviously I said he didn't. But that was quite a lengthy telephone conversation accompanied by some angry words from me.

Q. To your recollection what was the status when the telephone conversation ended as to this issue of the inquiry made about the water licences?
A. That he could well have facilitated a review of the water licences and they would come back to a standard format of 6.4 litres, 6.4 megalitres per hectare, or was it 6.4 hectares? A megalitre is 6.4 hectares, yep. ^[562]

640. Mr Cherry also gave evidence that during that call, Edward Obeid confirmed he had contacted the “Head of the Department of Water and Energy” to attempt to establish volumetric control in respect of the water licences at Cherrydale Park. Mr Cherry was also told that Steve Dunn at the “Maritime Services Board” had examined the file and resolved the issue. Edward Obeid provided Mr Dunn’s telephone number to Mr Cherry. Mr Cherry then called Mr Dunn, who told him that there was no prospect of there being a reduction in the unlimited water supply at Cherrydale Park. ^[563]

641. An entry in Edward Obeid’s diary on 26 September 2007, the day of Mr Badenoch’s email enquiry, read “Ring Steve Dunn – Licence”. ^[564]

I am satisfied Mr Badenoch made the water licences enquiry at Mr Macdonald’s request

642. Whilst it is clear that Mr Macdonald was not the Minister with responsibility for the issue of water licences, the fact that an enquiry about water licences that indisputably attach to Cherrydale Park was made of the relevant ministry via Mr Badenoch, in my view, supports the Crown’s submission that the email enquiry Mr Badenoch made of Mr Gardoll was made at Mr Macdonald’s request. Furthermore, and despite Mr Badenoch’s inability to nominate Mr Macdonald as the person on whose behalf he made the enquiry, and despite the fact that there may be other people who may have made that enquiry of him given his reputation as the “go to” person when water issues were raised, in all the circumstances as I see them prevailing at the relevant time, I am satisfied there is a compelling inference that the enquiry Mr Badenoch made of Mr Gardoll was made on behalf of Mr Macdonald at Edward Obeid’s request. The question remains whether that finding allows for the further finding that as at September 2007, Mr Macdonald learnt that Cherrydale Park was situated near Mount Penny in the Bylong Valley.

643. Despite being satisfied that Mr Macdonald asked Mr Badenoch in September 2007 to make enquiries about the water licences that attached to Cherrydale Park on behalf of Edward Obeid, and despite being satisfied that, at that time, Mr Macdonald probably learnt that Cherrydale Park was in the Bylong Valley as a matter of fact incidental to Edward Obeid asking for Mr Macdonald’s assistance, neither that fact, nor the further fact that sometime in late February or early March 2008 Edward Obeid asked Mr Macdonald whether the Department had any knowledge of a mine being planned “in Bylong by Anglo,” ^[565] including inferences that might be legitimately drawn from that evidence, ^[566] persuades me that the Crown has proved beyond reasonable doubt that Mr Macdonald must also have learnt that Cherrydale Park was in the Bylong Valley situated near Mount Penny (emphasis added). That is significant.

644. That added feature of the state of knowledge the Crown seeks to attribute to Mr Macdonald is critical to the case the Crown prosecutes, in the sense that it is fundamental to proof of the Crown case that I am persuaded that Mr Macdonald agreed to misconduct himself as the Minister for Mineral Resources in connection with the granting of an EL at Mount Penny for the improper purpose of advancing the interests of Edward Obeid and/or Moses Obeid and/or their family members and/or associates, because he knew that the Obeids had rural landholdings in the area of Mount Penny.

What weight attached to the first and second acts of misconduct in proof of the Shepherd fact?

645. As I noted earlier, in proof of the Shepherd fact the Crown also relied on Mr Macdonald’s dealings with the DPI on 9 and 14 May 2008 where it was alleged he sought information via Mr Gibson about coal reserves in the Bylong Valley in the area of Mount Penny ^[567] (the conduct the subject of the first and second acts of misconduct), and the inference that might be drawn about Mr Macdonald’s knowledge of the precise location of Cherrydale Park from a consideration of what the evidence is capable of revealing about what motivated him to make those enquiries of the Department at that time and in those precise terms.

646. In the Crown’s submission, when the fact that Mr Macdonald’s made those enquiries of the DPI in May 2008 (a fact not in dispute) are considered together with the enquiries he made on behalf of Edward Obeid in September 2007 about water licences attaching to Cherrydale Park (a fact I have found proved), coupled with the enquiries Edward Obeid told the journalists he made of Mr Macdonald in early 2008 about the prospect of a mine in the Bylong Valley, ^[568] and the inferences legitimately drawn from that combination of primary facts, I will be persuaded that the Shepherd fact has been proved beyond reasonable doubt.

647. That submission has considerable force. I prefer, however, to reserve judgment on whether the Crown has proved the Shepherd fact as characterised by the Crown until I have considered the evidence adduced by the Crown in proof of the first and second acts of misconduct.

648. It is important to emphasise that it does not follow that proof of the Shepherd fact in the manner contended for by the Crown, including the evidence comprehended by the first and second acts of misconduct, leads inexorably to proof of the first and second acts of misconduct being acts committed by Mr Macdonald in furtherance of the conspiracy alleged. Neither does it follow, more generally, that proof of Mr Macdonald’s knowledge that the Obeids owned Cherrydale Park in the Bylong Valley near Mount Penny (that is, proof of the Shepherd fact) leads inexorably to proof of the existence of the conspiracy alleged. As noted earlier, the accused point to a number of what are said to be rational and innocent explanations arising from the evidence for Mr Macdonald, as the Minister for Mineral Resources, to have focused his enquiries of the DPI in May 2008 on coal reserves in an area in the Bylong Valley in which Mount Penny was mentioned, even were he aware that the Obeids owned property in the area by that time.

649. Before turning to consider whether the Crown has established the first and second acts of misconduct and, if so, whether proof of the facts foundational to proving those acts assist the Crown in proving the Shepherd fact beyond reasonable doubt, it is necessary to address the evidence which puts proof of those facts into context.

650. Both the Crown and the accused adduced compendious evidence concerning the historical and contemporary nature of coal exploration in New South Wales as at 2007 and 2008. From the Crown’s perspective, that evidence provided the necessary context in which the conspiracy was forged and executed and, from the accused’s perspective, as a basis for generating a doubt as to proof of that fact where, it is the accused’s case that Mr Macdonald’s conduct, as Minister for Mineral Resources, is capable of a rational explanation inconsistent with the improper purpose the Crown attributes to him.

651. The evidence as to what coal is and how it is mined was not in dispute. However, it will need to be addressed, at least in a summary way, in order to deal with the comprehensive submissions from Mr Martin and Mr Neil directed to undermining the Crown case that the conspiracy charged was in existence by 9 May 2008 and that each successive act of alleged misconduct after that date supports that conclusion.

652. The historical and contemporary nature of coal exploration in New South Wales also provides context for the submissions advanced by the Crown and the accused concerning the various departmental and government imperatives, current during the timeframe comprehended by the conspiracy, which focused on the DPI and the Minister forging and maintaining a proactive engagement with the coal industry, including, most particularly, the Minister’s policy initiatives, to which I have already referred, which were designed to promote the release of new small to medium coal exploration areas within the Western Coalfield at the very time when, on the Crown case, Mr Macdonald committed the first act of misconduct.

653. In addition, significant aspects of the evidence bearing both upon proof of the first, second and fifth acts of misconduct relied upon by the Crown to prove both the existence of the conspiracy and the criminal complicity of each of the accused in the conspiracy, also need to be analysed in the context of the institutional relationship between the Office of the Minister for Mineral Resources and the DPI.

The staff structures within the Minister’s office and the DPI

654. The relationship between the Minister’s office and the Department, including the protocols according to which requests for information about coal resources in New South Wales were made of the DPI at the Minister’s request, and the protocols according to which that information was provided to the Minister or his office included, most particularly, in so far as the events of the trial are concerned, the treatment of Ministerial Briefings and related and/or attached documents that were generated in the process of the Mount Penny Coal Release Area being designated by the Department and then included in the EOI process as one of the eleven areas for the grant of an EL. That evidence included whether those documents, or the information they contained, were confidential or treated as such by those who were privy to them, that is either in the hands of officers of the Department who were the source of that information or members of the Minister’s staff as the recipients of the information, including the Minister himself. I have already referred to that evidence at some length when addressing the issue between the parties as to the scope of Mr Macdonald’s Ministerial duty of confidentiality. ^[569]

655. In the immediate context of proof of the first and second acts of misconduct, those relationships and the protocols which underpin them might inform whether Mr Macdonald’s particular dealings with the Department in May and June 2008 in relation to his enquiry about coal reserves in the area of Mount Penny, were dealings in which he would not have engaged “but for” the improper purpose of advancing the private interests of the Obeid family (or their friends and associates) in furtherance of the conspiracy charged, and the challenge mounted by the accused to the evidence being probative of that fact.

656. The internal staff structures of the DPI and the Minister’s office and, so far as concerns the DPI, the relationship between the Sydney office of the DPI and the office at Maitland from which the Coal and Petroleum Development Group operated, were reproduced in a diagram and used throughout the trial as an aide memoire as below: ^[570]

657. Departmental officers, including Dr Sheldrake, the Director-General of the DPI, Alan Coutts, the Deputy-Director of the DPI with responsibility for the Mineral Resources Division, Mr Mullard as the Director of the Coal and Petroleum Development Group within the Mineral Resources Division of the DPI and officers in that Division who were directly responsible for the management coal resources, including Ms Wiles, Manager of the Coal Advice/Coal Geology Section (the author of Wiles Map 1 and Wiles Map 2), Mr Larkings, the manager of the Coal Resource Assessment Section (the recipient of Mr Gibson’s email of 9 May 2008) and Ms Moloney, Senior Project Officer of the Development Coordination section from 2008 to early 2009, ^[571] who was charged with the task of identifying the eleven coal release areas for inclusion in the EOI process in which the Mount Penny Coal Release Area was designated as Area 7, all gave evidence in the trial. I will consider their evidence presently.

658. Mr Badenoch, Mr Macdonald’s Chief of Staff from 2007 until December 2008, and Mr Gibson, Mr Macdonald’s Deputy Chief of Staff at that time, ^[572] gave evidence of the protocols according to which the relationship between the Minister’s office and the DPI, principally via Mr Gibson as the Minister’s Energy and Mining Policy Advisor, ^[573] was mediated, regulated and coordinated. As noted earlier, Mr Badenoch gave evidence that Mr Macdonald had Ministerial officers at Governor Macquarie Tower and at Parliament House. The office at Parliament House was only used during Parliamentary sitting times. ^[574] Meetings with Mr Macdonald and the DPI were scheduled by his secretary and convened at one or the other of his offices.

659. Mr Gibson had the responsibility of ensuring that the Minister’s express directions, requests or requirements of the DPI were satisfied.

660. Mr Gibson gave the following evidence:

Q. And was there a practice that you followed in terms of providing documents to Minister Macdonald in electronic or hard copy form?
A. Yes, there was.

Q. And what was that practice?
A. If a briefing note or an information brief had come up from the department, the general practice was to categorise it based on its level of importance or urgency, if you like, and then you would provide that directly to the Minister for his review and feedback.

Q. In that respect, the provision to the Minister, was there a practice in terms of whether that would be electronic or hard copy?
A. It was generally hard copy. The Minister used to have a large bag of files, again categorised to the level of importance, that he would review, write on and then return to the staff for appropriate action.

Q. Can I ask you about the way documents were handled when they came into the Minister's office. In terms of the role that you had and the documents that you dealt with, did you treat any document or category of document as being confidential or sensitive?
A. Yes, we did, and if I could just take a moment to explain that. The ministerial office and both the department had an electronic document monitoring system, if you like, called the TRIM system. I forget what the acronym stands for. But effectively it was an electronic record to record the comings and goings of all of those documents. And in relation to your question on sort of confidentiality, I myself received specific training in this when I was first appointed as a ministerial officer by the Department of Premier and Cabinet in the early part of that decade, I think 2003, 2004, and it was general practice that certainly Cabinet documents and any documents that contained commercially sensitive information or information not for the public were to be treated as such. ^[575]

661. Mr Craig Munnings was identified both in the evidence and in the Crown’s aide memoire as the Departmental Liaison Officer (Minerals) within the Minister’s office. Mr Gibson described Mr Munnings as “one of the main conduits between the Minister’s office and the Department” and explained that he would liaise with Mr Hawkes, his “counterpart” in the Department, in order to provide various materials including “briefing notes and requests” to the Minister. ^[576] Mr Badenoch gave evidence that Mr Munnings was not technically a member of Ministerial staff. ^[577] Mr Badenoch gave evidence that he terminated Mr Munnings’ employment in September or October 2008 because:

He was not efficient or effective in performance of his duties … He behaved in a manner that was not well-suited to being a representative of the Minister’s office … He had attended functions with people who were inappropriate to take to the types of functions that he attended … And generally he caused a level of unease within the office staff. ^[578]

662. Mr Badenoch went on to give the following evidence:

I think that Mr Munnings’ problem was that he misunderstood what his role was. He was not there to be a member of a political party. He was not there to be a Minister himself. He was there to facilitate the orderly running of the Minister’s office and the delivery of government business through the department. So, yes, he overreached would be my view. ^[579]

663. Mr Gibson gave the following evidence about the termination of Mr Munnings’ employment:

… we had some performance issues with Mr Munnings and it was a case where we had lost confidence in him because some of the things that he was telling us were not matching up with some of the things that he was doing and we felt that it would be better that he should move out of the ministerial office. ^[580]

664. Neither Mr Munnings, nor any Ministerial staff member other than Mr Gibson, gave evidence in the trial. ^[581]

The role of the Coal and Petroleum Group within the Minerals Division of the Department of Primary Industries

665. In 2004, the Department of Mineral Resources was amalgamated with the Departments of Agriculture, Forestry and Fisheries to form the Department of Primary Industries. At that time most of the Mineral Resources staff, including those involved in coal, were relocated to the Maitland office of the DPI. As Director of the Coal and Petroleum Development Group, Mr Mullard reported to Mr Coutts, the Deputy Director-General of the DPI with responsibility for the Mineral Resources Division. ^[582] Mr Coutts was based in the Sydney office of the DPI. ^[583]

666. Mr Mullard had responsibility for the day to day operation of the Coal and Petroleum Development Group at the Maitland office. Minerals staff also reported to him.

667. Mr Mullard was closely involved in the preparation and launch of successive EOI processes for the grant of coal ELs. Insofar as this trial is concerned, he was closely involved in the preparation and launch of the EOI Information Package for the grant of ELs over eleven coal release areas in the Gunnedah Coalfield, the Hunter Coalfield and the Western Coalfield in September 2008, including the Mount Penny Coal Release Area which was identified as “Area 7”. ^[584]

Communication between the DPI and the coal mining industry

668. Mr Coutts gave evidence that it was part of the DPI’s role to provide information about coal resources in New South Wales to the public and stakeholders. The DIGS website, containing a range of resources on geological and mining information, was one way in which that role was undertaken. ^[585]

669. Mr Mullard gave evidence that the DPI promoted the development of the State’s coal resources by making certain information publicly available about those resources. Information collected by the DPI comprised both company and departmental data. That information was available online databases known as MinView, DIGS and TAS Map, together with the DPI’s microfilm collection of borehole data, physical geological reports and other library materials. ^[586]

670. Mr Coutts and Mr Mullard also confirmed that the DPI engaged directly with the mining industry at conferences, forums, and in face to face meetings with mining companies seeking information about coal resources in New South Wales and areas that may be available for release. Mr Mullard gave evidence that in those settings the DPI would disclose general information about areas to be released, such as the Western Coalfield, or areas not under title which may become available in the future, ^[587] and that the DPI generally encouraged the communication of public information held by the Department to mining companies. ^[588]

671. Mr Mullard gave evidence that mining companies would not normally ask the DPI to identify or nominate areas that might be available for coal exploration but, rather, they would identify an area of interest and enquire of the DPI as to its availability. The DPI might respond by informing the mining company the area was or was not under consideration as a coal release area. ^[589] Mr Mullard also gave evidence that there was nothing untoward about the DPI informing members of the mining industry that an EOI process was pending or even its likely launch date but that “problems would arise” were the DPI to inform industry players of the precise areas due for release. ^[590]

672. Ms Moloney gave evidence in similar terms. She indicated that the Industry Coordination Team, later known as the Development Coordination Team, within the DPI, publicly promoted mineral resources in New South Wales that were, or might be, available for exploration in various ways, including by holding meetings with mining companies. ^[591]

673. By way of example, Mr De Ross, the General Manager of Tianda Resources P/L, gave evidence that his dealings with the DPI, on behalf of Tianda Resources P/L, included “meetings with various DPI officers” ^[592] and researching the publicly available information on the DPI’s website. He specifically recalled meeting with Mr Mullard. He gave evidence the DPI was “positive about encouraging investment in mining in New South Wales”. ^[593]

What is coal?

674. The nature of the coal mining industry in New South Wales in 2008 was the subject of extensive evidence in the trial, primarily through Mr Mullard.

675. In the discharge of his role and responsibilities as Director of the Coal and Petroleum Development Group in the DPI from 2004-2008, Mr Mullard drew heavily on his expertise as a geologist. He had previously held positions in the Coal Compensation Board and the Department of Mineral Resources, including as Chief Coal Geologist of that Department. In that role, he provided advice to the government from time to time about the availability of coal resources throughout New South Wales. He also provided information to mining companies who might wish to apply for a coal EL. ^[594] In November 2008, Mr Mullard was appointed Executive Director for Minerals, which by that time included the role of the Deputy Director-General of the DPI with responsibility for the Mineral Resources Division, a position previously held by Mr Coutts. In that role Mr Mullard had responsibility for all mineral operations in New South Wales including, in addition to coal and petroleum development, mineral titles, geological surveys, and development coordination which included mine safety.

676. Mr Mullard resigned from the DPI in September 2014. Since that time he has consulted generally in the related fields of coal, government relations, petroleum and land development.

677. Over the course of his career, Mr Mullard acquired extensive knowledge and experience in the area of mineral resources generally and coal in particular. His expertise included the following:

1. the location, nature, size and extent of coal deposits in New South Wales

2. the market for coal in New South Wales for both the domestic market and for export

3. the identity of companies engaged in both the exploration for and the mining of coal in New South Wales.

Coal mining methods and coal seams

678. Mr Mullard described a coal seam in the following way:

A coal seam is effectively a band of coal; the Americans call it coal bed. “Seam” is actually an English/Welsh term and effectively refers to the unit of coal that occurs beneath the ground (indicated). So if you can imagine the layers of rock (indicated), at the top level you might have sandstones and shales and so on, and then in the Sydney basin you reach coal seams, which is actually areas where you have plant material accumulate and form under heat and pressure to form these coal seams or coal beds which might range from less than a metre up to tens of metres in thickness that occur in a uniform layer. ^[595]

679. A collection of coal seams, which occur at various depths and which may overlap, is referred to as a “coal measure”. ^[596] Mr Mullard explained how coal seams intersect:

Q. And is it the case that those seams may start at different ‑ if you are looking topographically ‑ be located at different locations but that there may be intersection between those seams as you have just described which creates the situation of one seam occurring potentially above another?

A. That’s right. Well, the way it works, generally the deeper you are, the older the rocks are and the older the coal seams are. So as you go up, you tend to get younger and younger rocks or younger and younger coal seams. But some coal seams might occur in this location and then they will thin and cease to exist here but then another coal seam might thicken and come in at a different level. ^[597]

680. Mr Mullard gave evidence that there are two main methods for mining coal: open cut mining and underground mining. The choice between those methods, which deploy different mining techniques, depends on the location and depth of the coal seam being mined and the type and quality of the coal it contains.

681. Open cut mining is generally undertaken where coal seams are relatively close to the surface. This permits access to the coal by the creation of a large pit where all the overlying rocks are removed exposing the coal seam for extraction.

682. Underground mining is undertaken where the coal seams are deeper and access to the coal is provided via a shaft from which tunnels extend. Mr Mullard explained that open cut mining is generally regarded as more efficient because the technique of driving a shaft down to the seam makes it essential to leave coal behind to support the roof of the mine. ^[598]

Coal resources in New South Wales

683. Mr Mullard identified the Sydney and Gunnedah basins as the “main coal-bearing area in New South Wales”. ^[599] The Sydney and Gunnedah Basins are divided into a number of area-specific coalfields:

1. The Newcastle Coalfield produces thermal and soft coking coal. ^[600] Coking coal is used in the production of steel while thermal coal is used for electricity generation.

2. The Southern Coalfield produces largely hard coking coal with the steelworks established at Wollongong for that reason. ^[601]

684. Relevantly to the trial, the eleven small to medium coal release areas released as part of the EOI process in September 2008 were located in the Hunter, Gunnedah and Western Coalfields in the Sydney and Gunnedah basins:

1. The Hunter Coalfield is where most of the coal production in New South Wales occurs, comprising both open cut and underground mining. It is the main open cut mining area in the State. The coal it produces supplies coal-powered electricity stations at Mt Piper and Liddell and is also exported through the port of Newcastle.

2. The Gunnedah Coalfield (also referred to as the Gunnedah Basin) in the northern part of the State produces mainly thermal coal suitable for both domestic use and export. ^[602]

3. The Mount Penny Coal Release Area was located in the Western Coalfield which Mr Mullard described as encompassing an area “from Lithgow right up to Ulan” ^[603] with coal outcrops in the west and deeper coal seams in the area which extends to the east. It produces “medium-to-high ash, high-energy thermal coal” which occurs in the Katoomba, Lithgow and Ulan Seams, ^[604] some of which is utilised domestically by the power stations accessible from the Western Coalfield, including power stations at Vales Point and Munmorah which were specifically accessible from the Bylong Valley. ^[605] The balance is exported. In 2008, the coal reserves in the Western Coalfield were estimated to amount to 1793 million tonnes, an increase over previous years. ^[606]

4. More specifically, the northern sector of the Western Coalfield (in which Mount Penny is located) centres on the Ulan/Bylong area and the Coggan and Ulan coal seams. As at 2008, it contained the majority of the remaining unallocated and underdeveloped coal resources in the Western Coalfield. The 2008 Coal Industry Profile publication reported that those resources were being explored by the DPI, ^[607] having been identified as suitable for a mixture of underground and open cut extraction methods. ^[608]

5. That publication also included the following map of the Western Coalfield: ^[609]

Coal exploration activities

685. Mr Mullard gave evidence the location of coal reserves within a generalised coalfield is identified through “exploration activities”. ^[610] These include topographical mapping referrable to where the “coal seams outcrop” and drilling programs which involve a drilling rig boring through overlying rocks with a view to intersecting a coal seam from which samples are taken. ^[611] The sampling of coal via a drilling program allows for an assessment to be made of the quality of the coal resource and its suitability for either coking, which produces steel, or thermal coal for electricity, or “PCI coal which is pulverised injection coal that can actually assist in steel-making”. ^[612] The sampling of coal via a drilling program can also assist in determining how a coal seam is running directionally which in turn permits modelling to be undertaken with a view to the coal being mined. Ascertaining variations in the thickness and quality of an underground coal seam is an important source of exploration data.

686. Exploration activities are undertaken by the holder of an EL for coal. The DPI retained some coal resources under ELs held by the Department to undertake their own drilling and analysis before releasing those areas to tender. EL 6676 was one. It is significant for reasons which will become apparent when I deal with the first, second and fifth acts of misconduct.

The granting of an EL under the Mining Act

687. The DPI was responsible for implementing the regulatory regime for the granting of coal ELs and coal mining leases (both powers being vested in the Minister for Mineral Resources under the Mining Act ^[613] ) and for revising, updating and publishing the Coal Allocation Guidelines used by the DPI as part of that process. ^[614]

688. The holder of an EL is granted the right, in accordance with the conditions of the EL, to prospect on specified land for a specified mineral or minerals. ^[615] An EL does not entitle the licensee to mine for minerals. That involves a separate application for a mining lease that is ordinarily applied for by a person or company who holds either an EL or assessment lease, or with the consent of the Minister for Mineral Resources. ^[616]

689. An application for a mining lease would only be lodged once development consent was granted by the Minister for Planning following the preparation and submission of an Environment Impact Study or Assessment, typically taking into consideration groundwater issues and community concerns.

690. The Crown led extensive evidence, principally from Mr Mullard through whom the Crown tendered various documents about the process involved in the granting of an EL for coal in New South Wales in 2008. That evidence included the regime for the grant of ELs under the Mining Act and the policy that developed between the DPI and the Minister’s office used to implement that statutory regime, including the Coal Allocation Guidelines. ^[617]

691. It is clear to me from that complex of evidence that there is a relevant connection between the ultimate granting of the Mount Penny EL and the steps taken by the Department, with the knowledge and approval of the Minister for Mineral Resources, which preceded the preparation and launch of the EOI process. ^[618]

The statutory scheme in the Mining Act for the grant of an EL

692. As at 2008, the power to grant an EL in New South Wales was vested in Mr Macdonald as the Minister for Mineral Resources under s 22 of the Mining Act.

693. The particular process by which an EL was granted under the Mining Act was firstly determined by:

1. Whether the coal resource in respect of which the EL application was made was part of a Mineral Allocation Area for coal; and

2. Having regard to the Coal Allocation Guidelines, whether the EL would be granted via direct allocation or subject to the outcome of a competitive EOI process.

694. Where an EL was granted subject to the outcome of a competitive EOI process, as was the case with the Mount Penny EL, the EOI process involved:

1. The DPI collecting data about coal resources which coal mining companies were interested in exploring.

2. Recommendations by the DPI to the Minister with respect to the release of particular coal resources to tender.

3. The preparation and launch of an EOI process which was either open (any coal mining company could apply) or limited (restricted to companies the DPI invited to apply). The EOI process in which the Mount Penny Coal Release Area was included was a limited tender process.

4. The evaluation of the EOI applications received by the DPI by an independent Evaluation Committee and probity auditor.

5. The issue of a Ministerial Submission by the Evaluation Committee recommending the preferred applicant for the EL(s).

6. Upon the Minister accepting the Evaluation Committee’s recommendation, the Minister granting consent for the preferred company to apply for the EL pursuant to the regime in s 13(4) of the Mining Act.

7. The company making an application for the EL under s 13 of the Mining Act.

8. The grant of the EL to that company by the Minister under Division 3 of the Mining Act.

695. Each of those steps is set out as follows.

The designation of New South Wales as a Mineral Allocation Area for coal

696. In December 2007, the Governor of New South Wales ordered that all coal deposits in the State of New South Wales were to be designated as a Mineral Allocation Area (MAA) under the Mining Act, to allow for the “controlled and rational release of potential coal development areas and the setting of special conditions for each allocation”. ^[619]

697. Previously, the MAA for coal in the State of New South Wales only covered the Sydney and Gunnedah Basins.

698. Mr Mullard explained that when a mining company applied for an EL for a coal resource which was not designated as part of an MAA for coal, providing that the company fulfilled the relevant criteria set out in the Mining Act, there were “very limited grounds” for refusing the grant of that EL. ^[620] This led to coal mining companies effectively stockpiling unallocated coal resources outside the Sydney and Gunnedah Basins (already an MAA) by acquiring exploration rights over those areas, a process that became known as “land banking”. ^[621]

699. Designating the entire State as an MAA for coal had the effect that coal companies could no longer make an application for a coal EL in New South Wales “except with the consent of the Minister” pursuant to the regime under s 13(4) of the Mining Act. ^[622] It allowed the Minister and the DPI to exert greater control over the location and volume of coal reserves being designated for exploration, prevented the practice of land banking, and as Mr Coutts explained, reflected the increased domestic demand for coal in New South Wales following the withdrawal of a large amount of coal produced in China from the international market from 2004. ^[623]

Recommendations by the DPI to the Minister about releasing particular coal resources to tender

700. The usual process for the allocation of ELs for coal resources in New South Wales involved the Department identifying a particular coal resource, or a group of coal resources, and recommending to the Minister that those areas be made the subject of either a competitive process or, in certain circumstances, granted by direct allocation.

701. Between May and June 2008, officers of the DPI were involved and at the Minister’s request, in designating the boundaries of a number of new small to medium coal release areas in the Western, Hunter and Gunnedah Coalfields for inclusion in a proposed EOI process.

702. That process was undertaken by the DPI in accordance with the Coal Allocation Guidelines.

The Guidelines for Allocation of Future Coal Exploration Areas (Coal Allocation Guidelines)

703. Coal Allocation Guidelines operated to guide the DPI’s Coal Allocation Committee in the decisions it made concerning the nomination of future coal exploration areas. Various iterations of the Coal Allocation Guidelines were produced by the DPI and amended and adjusted over time for various purposes with the approval of the Minister. ^[624]

704. The Coal Allocation Guidelines dated January 2008 ^[625] were in place at all relevant times during the currency of the conspiracy, replacing replaced the Coal Allocation Guidelines issued by the DPI in March 2006. ^[626]

705. The Coal Allocation Guidelines were issued subsequent to the allocation of New South Wales as an MAA for coal for the “controlled and rational release of potential coal development areas and the setting of special conditions for each allocation”. ^[627] The Coal Allocation Guidelines confirm the statutory requirement for the Minister’s consent to the making of any application for an EL in respect of a coal resource in a MAA.

706. The Coal Allocation Guidelines do not apply to any existing coal titles but to only to “future coal exploration areas”. ^[628]

707. Mr Mullard gave evidence about the grouping of potential coal allocation areas into four subcategories:

1. Subcategory (i) concerns major standalone areas identified as areas containing sufficient coal to develop a “large” new mine.

2. Subcategories (ii) and (iii) concern, respectively, substantial additions to existing mines and minor additions to existing mines. The former are considered to have potential to be major standalone areas, being coal mined from a continuation of an existing mine over areas adjacent to an existing mine. The latter are not considered large enough to develop major standalone mines, being small areas adjacent to existing mines which could be mined for a continuation of existing operations.

3. Sub-category (iv) concerns the allocation of “small areas unrelated to existing mines,” including remnant coal resources left from previous mining operations” and “small deposits with some development potential”.

708. Allocation methods were nominated for each of the four subcategories. Two allocation methods are nominated: allocation by “priority of application or by some limited form of expression of interest”. ^[629]

709. The eleven small to medium coal release areas the subject of the EOI process launched on 9 September 2008 which included Mount Penny as “Area 7” concerned small areas within subcategory (iv), that is, remnant coal resources and small deposits with some development potential. ^[630]

710. In contrast to major standalone areas, or substantial/minor additions to existing mines (subcategories (i), (ii) and (iii) of the Coal Allocation Guidelines), under subcategory (iv) the minimum financial contribution of an applicant for the issue of an EL is “based on tonnages of saleable coal, as specified in the appendix attached to the Coal Allocation Guidelines, ranging from $250,000 for a saleable tonnage of coal less than 5Mt to greater than $20 million (as a minimum contribution) for saleable tonnage of coal greater than 100Mt. As the appendix to the Coal Allocation Guidelines makes clear, the minimum financial contributions are indicative only, with the contributions varying depending upon whether the mining method is underground or open cut; the quality of the coal; whether it is for domestic or export purposes; and the size of the resources. ^[631]

711. Mr Mullard gave evidence that for a mining company to lodge an EOI for the grant of an EL for any one of the four coal allocation categories in the Coal Allocation Guidelines, the company needed to have the capacity to assess the potential return from a successful mining of the coal resource, including the cost of establishing a mine, in order to assess the amount of coal that might be extracted under the terms of a mining lease. He also emphasised the need for the company to assess the cost of environmental studies and any other constraints that might impact on the company’s capacity to undertake mining activities in the area. To that end, borehole data together with geological or geophysical surveys are essential to the preparation of reliable modelling. That model also needs to take into account the method of extraction and other indices.

712. Mr Mullard gave the following evidence:

If you basically don’t have any information, there is no basis for the company ‑ it is very high risk. So a company really doesn’t have an understanding of what the coal is like, how deep it is, can it be mined by underground, what are the other geological constraints or other constraints that might apply. So you would be very reluctant to bid a substantial amount of money because the uncertainty was too high.

The more information you have on a coal deposit, the less uncertainty there is in terms of your ability to mine it and the potential cash flows from that mining operation and that enables companies then to formulate a bid or an offer with a relevantly high degree of certainty; there is no guarantee, but they would be prepared to give a much better offer, generally a substantial offer, than where they had no information. ^[632]

713. Mr Mullard made clear that while the DPI had information resources of various kinds including, relevantly, its own drilling data for the ELs that the Department held on behalf of the State of New South Wales, ^[633] a mining company would also need to critically assess its capacity to make an informed assessment of where the coal resources within a coal exploration area might be located, the thickness of the available and accessible coal seam, and the quality of the coal itself. He gave the following evidence as to the significance, as he saw it, of an applicant for a coal EL in a small-to-medium coal release area having access to that general body of information as to which he said:

Well, small to medium areas really were ‑ some of those were remnant areas, some of them were areas that didn’t really have a lot of interest and the additional information really wasn’t warranted by the Department to do a lot of work in those areas because they were never going to generate significant income.

… By way of additional financial contribution. And there was a risk, significant risk, that if the department drilled these areas they might find there wasn't anything there worthwhile. So by and large where the department did its drilling focused on the larger stand‑alone areas. ^[634]

714. The Coal Allocation Guidelines, in their various iterations, were available to the public on request. Mr Mullard gave the following evidence:

So all of that information essentially was public information and companies could go to the Department and obtain information on those areas. And, in fact, the Department used to say “we are looking at releasing areas in the Gunnedah Coalfield” or “we are looking at releasing areas in the Western Coalfield” … What was confidential was the very specific “this is the area that's going to be released”. ^[635]

Identifying coal resources for direct allocation and competitive tender

715. In the ordinary course of events, if a company wished to apply for an EL, it would write to the Minister or to the Department seeking the Minister’s consent to apply by direct allocation.

716. Preliminary to any application being considered by the Minister, applications for consent to apply for ELs were considered at meetings of the Department’s Coal Allocation Committee against, amongst other criteria, the Coal Allocation Guidelines. Departmental geologists on the Committee would verify the coal figures put forward by an applicant. Public interest considerations were also assessed, as was fairness to other applicants who had previously registered an interest or sought the Minister’s consent to apply for an EL in respect of a subject area.

717. If the Coal Allocation Committee determined that a company’s application for the direct allocation of an EL for coal was successful, the Committee would prepare a recommendation to the Minister so that he could, by way of invitation, provide his consent for that company to formally apply for the coal EL by direct allocation. In these circumstances, the Department would ordinarily draft a letter to the successful applicant which the Minister would sign. All unsuccessful applicants were informed by the DPI of that outcome.

718. A record of all applications for ELs by direct allocation and the outcomes of Coal Allocation Committee meetings, including successful and unsuccessful direction allocation applications, was maintained in the Coal Register in the form of a spreadsheet created and maintained by the DPI. ^[636]

719. Mr Mullard gave evidence that the DPI also used the Coal Register to collect information about which unallocated coal resources were attracting interest in the industry. Those areas were released by the DPI from time to time under competitive EOI processes. ^[637]

720. The inclusion of a particular coal resource in an upcoming EOI process was considered confidential information until such time as the EOI process was publicly released. ^[638] The Coal Register was not publicly available. ^[639] The information it contained was treated confidentially because, as Mr Mullard described it, “it may contain … expressions of interest by companies that may contain commercial-in-confidence information so we did not make [the Coal Register] publicly available”. ^[640]

721. The dual possibilities of assigning ELs via direct allocation or subject to competitive tender is particularly relevant to the fourth subcategory of potential coal allocation areas under the Coal Allocation Guidelines, namely “small areas unrelated to existing mines,” including “remnant coal resources left from previous mining operations” and “small deposits with some development potential” which, as noted above, are allocated via “priority of application or by some limited form of expression of interest”. ^[641]

A limited form of expression of interest

722. Mr Mullard explained that “all of the allocations within mineral coal allocation areas were subject to an EOI process... which effectively wasn’t a process that was defined in the [Mining Act] but it was a way of formalising the way the Minister made his decision to give consent” to a company to apply for an EL. EOI processes, including the EOI process launched in September 2008 in relation to eleven small to medium coal release areas including Mount Penny, were undertaken “as a precursor to the power that might be exercised by the Minister in section 13(4)” of the Mining Act where the Minister gave consent to a particular company to apply for an EL. ^[642]

723. That EOI process was limited in the sense that a limited number of companies, having been selected by the DPI referable to their expressions of interest in the types of coal resources being released to tender (as recorded on the Coal Register), were invited to participate and provided with an EOI Process Information Package prepared by the DPI.

724. While s 14 of the Mining Act provided for the allocation of ELs for allocated minerals in land within an MAA via a process of “invitations for tender”, Mr Mullard explained that provision was not used during his time at the DPI and that it was distinct from the EOI process with which the this trial was concerned.

The Evaluation Committee’s selection of a preferred mining company

725. Upon the receipt of expressions of interest from companies invited to participate in an EOI process, an independent Evaluation Committee and an external probity auditor were appointed to evaluate those applications against the criteria provided in the Coal Allocation Guidelines and elaborated upon in the EOI Process Information Package issued to invitee companies. Evaluation Committees and probity auditors were used in the Caroona and Watermark EOI processes ^[643] together with the EOI process in respect of eleven small to medium coal release areas including Mount Penny.

726. The Evaluation Committee would identify the preferred applicant for an EL to the Minister in writing and recommend that the preferred applicant be granted consent to apply for an EL. ^[644]

The granting of consent by the Minister for the preferred company to apply for the EL pursuant to the regime in s 13(4) of the Mining Act

727. Whether a coal resource was to be directly allocated or released as a result of a competitive process, the Minister was required to consent to the making of the application.

728. The Minister invited applicants to make the necessary application on the basis of the Evaluation Committee’s advice.

Application by the recommended company for the EL under s 13 of the Mining Act

729. If the successful applicant then wished to proceed with its application, it would apply to the Department using the forms supplied on the Department’s website, which require confirmation of certain administrative issues such as available financial resources, particulars of proposed program of work and a statement providing an estimate of the amount of money proposed to be spent on prospecting. Subject to adequate confirmation of these administrative issues by Departmental officers, an EL in the form of a deed would be prepared.

The grant of the EL by the Minister

730. Upon completion of the administrative tasks set out in the formal EL application, it was not unusual for the Minister to delegate the act of signing the EL to a Departmental officer, as this step was seen as an administrative exercise.

731. Section 22 of the Mining Act allows the Minister (or their delegate) to either grant or refuse an application for an EL:

22   Power of Minister in relation to applications

(1)  After considering an application for an exploration licence, the Minister:

(a)  may grant to the applicant an exploration licence over all or part of the land over which a licence was sought,

(b)  may refuse the application.

(2)  Without limiting the generality of subsection (1), an application may be refused on the ground that the applicant has been convicted of an offence against this Act or the regulations or any other offence relating to mining or minerals.

(3)  The Minister may grant a single exploration licence in respect of 2 or more applications or 2 or more exploration licences in respect of a single application.

732. Section 23 of the Mining Act allows the Minister to either grant or refuse a tender for an EL:

23   Power of Minister in relation to tenders

(1)  After considering a tender in respect of land in respect of which one tender only is lodged, the Minister:

(a)  may grant an exploration licence to the tenderer, or

(b)  may refuse the tender.

(2)  After considering all tenders in respect of land in respect of which more than one tender is lodged, the Minister:

(a)  may grant an exploration licence to any one of the tenderers and refuse the other tenders, or

(b)  may refuse all of the tenders.

(3)  Without limiting the generality of subsections (1) and (2), a tender may be refused on the ground that the tenderer has been convicted of an offence against this Act or the regulations or any other offence relating to mining or minerals.

(4)  For the purposes of this section, only one tender is lodged in respect of land if no other tender is lodged in respect of the land or any part of the land.

733. Section 26 of the Mining Act allows the Minister to impose conditions on an EL:

26   Conditions of exploration licence

(1)  An exploration licence is subject to such conditions as the Minister may, when granting the licence, impose.

(2)  Without limiting the generality of subsection (1), conditions of the following kind may be imposed on an exploration licence:

(a)  conditions requiring the holder of the licence to pay royalty to the Minister on any minerals recovered under the licence,

(b)  conditions requiring the holder of the licence to give and maintain security (in such amount and form, and on or before such date, as the Minister may determine) for the fulfilment of the obligations arising under this Act in respect of the licence.

(3)  Part 14 applies to royalty payable under a condition referred to in subsection (2) (a) in the same way as it applies to royalty payable on a mineral recovered under a mining lease.

(4)  A condition requiring security to be given and maintained by the holder of an exploration licence (the new exploration licence) may be expressed so as to require the security given and maintained in relation to some other exploration licence or licences, whether under this section or under section 29A, to be extended to the new exploration licence.

(5)  If the Minister proposes to grant an exploration licence to a person on the condition that the person gives and maintains security, the Minister may cause a written notice to be served on the person requiring the person to lodge the security with the Minister on or before the date specified in the notice.

The policy imperatives for the release of new small to medium coal release areas in the Western Coalfield in 2008

734. In closing submissions, the Crown accepted that in discharge of his Ministerial duties and responsibilities, (which I also take to include, in the context of the issues at trial, his statutory responsibilities under the Mining Act and his engagement with the DPI) Mr Macdonald was an energetic Minister with great enthusiasm for the New South Wales coal mining industry.

735. By “mid-2008”, ^[645] following the designation of the entirety of New South Wales as an MAA for coal and the publication of the DPI’s new Coal Allocation Guidelines in January 2008, it was well known ^[646] that Mr Macdonald had devised and was seeking to undertake a policy of releasing small to medium coal release areas in competitive tender processes. The Coal Allocation Guidelines defined a small to medium coal release area as containing less than 100Mt of coal.

736. Responsive to Mr Macdonald’s enthusiasm to see that policy implemented by the Department “as soon as possible”, ^[647] the DPI undertook the process of identifying suitable small to medium coal release areas for inclusion in a limited EOI process for the granting of ELs. It was accepted by the parties that Mr Macdonald’s focus on small to medium coal release areas policy was reflective of his concern, also well known by that time, to prevent the practice of land banking whereby large coal mining companies effectively stockpiled coal resources by acquiring ELs without taking steps to exploit the resources they encompassed. Mr Macdonald expressed his concern to a number of people in his capacity as the responsible Minister that smaller companies should be given an opportunity to enter the coal mining industry. It was also accepted by the parties at trial that Mr Macdonald was minded to release further high quality thermal coal resources at a time when New South Wales was a major supplier of that product and when international coal prices were at a premium.

737. Mr Macdonald’s policy was also implemented by the DPI in the context of his enthusiasm to release further coal exploration areas of all sizes across the State following the success of previous EOI processes which had culminated in the grant of the Caroona EL in January 2006 and the grant of the Watermark EL following an EOI process in October 2007. Both ELs were granted over very large coal resources near Gunnedah. The grant of the Caroona EL on 30 January 2006 generated a substantial financial return to the State of almost $1 million by way of payment of an AFC by Coal Mines Australia Ltd (a wholly owned subsidiary of BHP Billiton) as the successful tenderer. A financial return of $389,300,000, also by way of payment of an AFC, was ultimately paid by China Shenhua Energy Company Ltd, the company awarded the Watermark EL in August 2008 following a competitive EOI process. ^[648]

738. Mr Mullard also gave evidence that the Minister was very keen to release further areas for exploration after the granting of the Caroona and Watermark ELs and that around the time that the Watermark EL was granted the Minister enquired again as to “the next areas” for release. ^[649]

739. Mr Coutts gave similar evidence that that Mr Macdonald had spoken with him on a number of occasions about his desire to explore opportunities to release further large coal release areas to tender. ^[650]

The significance of Additional Financial Contributions

740. As noted earlier, under the Coal Allocation Guidelines, a company awarded an EL in respect of a coal resource was required to pay a minimum financial contribution to the DPI. That amount was calculated referable to the size, type, location and quality of the coal resource. In addition to the minimum financial contribution, a company could elect to nominate an AFC in its application for an EL.

741. It is clear that while Mr Macdonald’s enthusiasm for releasing more coal release areas for exploration in general was driven in part by the payment of AFCs by companies awarded ELs and the revenue it generated for the DPI, the extent to which that financial incentive motivated Mr Macdonald’s small to medium coal release areas policy was contentious in the trial.

742. The accused sought to emphasise that payment of AFCs enabled the DPI to meet the 2.5% efficiency dividend imposed on it due to the parlous financial position of the State budget in 2007/2008, thereby avoiding staff redundancies or the contraction of services or other programs the Department provided. ^[651]

743. The Crown accepted that Mr Macdonald, as the Minister responsible for the DPI’s budget, was motivated to meet the efficiency dividend in that way. However, the Crown sought to emphasise that ELs granted in respect of smaller coal resources would generate far smaller AFCs than was generated from the granting of ELs in respect of large coal release areas like Watermark and Caroona. It followed, in the Crown’s submission, that while the pursuit of a significant AFC as a source of revenue to assist the DPI to achieve the efficiency dividend might have motivated Mr Macdonald to make his directed enquiries of the DPI about coal reserves in the Mount Penny area in May 2008 (the subject of the first and second acts of misconduct), at least to the extent that one aspect of that enquiry was a request that the DPI consider opening up its holdings in the Bylong Valley under EL 6676 (which, referable to the Coal Allocation Guidelines would constitute a large coal release area), that motivation (assuming it was genuine) apparently fell away when the eastern portion of EL 6676 was excised, rendering the balance not only smaller but with reduced access to the mining amenities of the Coggan Creek railway. ^[652]

The DPI’s knowledge of coal in the Bylong Valley (in the area of Mount Penny) and the DPI’s holdings under EL 6676

744. The Mount Penny Coal Release Area was located in the Bylong Valley, falling within the northern part of Western Coalfield.

745. That area was also referred to in the evidence as the Mount Penny-North Bylong Area or the Wollar-Bylong Area. ^[653]

746. Coal reserves in the northern section of the Western Coalfield, including, specifically in the North Bylong-Mount Penny area (although not referred to in that way), had been the subject of Departmental assessment for many decades prior to the events the subject of the trial.

747. In 1991, the geologist EK Yoo produced a report titled “Geology and Coal Resources of the Northern Sector of the Western Coalfield” (the Yoo Report). ^[654]

748. The Yoo Report located the Bylong area within the norther sector of the Western Coalfield ^[655] as an area “bounded to the north by the Goulburn River National Park, to the east and south by the Wollemi National Park and to the west by the 1.5m seam isopach line”. ^[656] The Yoo Report also identified the “Coggan seam” as the only coal seam with a “working section in the Bylong area” with the 1.5m isopach running “in a north-south direction through Mount Penny and … gradually thickens to the east, reaching over 5m in thickness at the eastern boundary of Authorisation Nos 287 and 342”. ^[657] The Yoo Report noted that in 1973-1974, four bores were drilled in the Bylong area as part of the Goulburn River Drilling Programme. ^[658] In 1982-1984, Austen & Butta Pty Ltd drilled 50 bore holes in Authorisations 287 and 342 in the Bylong Area. ^[659]

749. The Yoo Report estimated the total underground coal resources in the Bylong area as 520.5Mt. ^[660] The study team considered that only the Coggan seam within the Bylong Valley had the potential for an economic return, largely because a large proportion of the area was inadequately tested. That is, additional data would need to be available in order to make an assessment of the potential for coal exploration in that area. The Yoo Report was publicly available. ^[661]

750. In 2005, the DPI commissioned a report titled “Strategic Study of the Coal Resource Potential from Hunter Valley West to Cobbora” by JG Dwyer et al (the Dwyer Report). ^[662] The Dwyer Report identified the “Wollar-Bylong area” as falling in what was described as the central part of the study area, extending for 17km from Bylong in the east to Wilpinjong in the west and 30km to the south with “potential for small to medium size open cut mines that will also provide access to associated, underground resources”. ^[663]

751. In the Dwyer Report, the Ulan seam in the Bylong Valley was the subject of an assessment in the following terms: “The main economic potential in the Wollar-Bylong area is contained within the upper, lower, and basal sections of the Ulan seam.” ^[664] Ultimately, the Dwyer Report recommended that “exploration programs be developed”, including relevantly for the Wollar-Bylong area, “in order to better assess the coal resources of the region” in order that timely and balanced decisions about the prospective coal resources might be made. ^[665] The Dwyer Report was publicly available. ^[666]

752. The Dwyer Report was ultimately the subject of a Departmental Minute dated 23 March 2006. The Minute recommended that the Titles Branch within the Coal and Petroleum Development Group of the DPI instigate a process by which the Minister would apply for an EL over unallocated coal resources in the Wollar-Bylong area. The purpose in seeking Ministerial approval for the grant of the EL to the DPI was to “conduct regional exploration which will involve low impact activities including wide spaced drilling”. ^[667] The Titles Branch produced the boundaries of EL 6676 ^[668] which was ultimately granted to the DPI on 21 November 2006. ^[669] Whilst, under EL 6676, the DPI could undertake exploration activities within the area comprehended by the licence, it was for the Minister to determine whether it, or any area comprehended by it, would be released to public tender. Mr Mullard gave evidence that as at May 2008 there had been little by way of a drilling program in EL 6676, the DPI instead focussing on exploration in the Cobbora Area. ^[670]

753. Ms Wiles gave evidence that EL 6676 was granted following publication of the Dwyer Report. ^[671] Mr Bowman gave evidence that EL 6676 included the area he knew as the “Wollar-Bylong area”, an area the Coal Compensation Board also knew by that name. ^[672]

Mr Macdonald’s enquiries of the DPI in 2008 about coal reserves in the Bylong Valley in the area of Mount Penny

754. What emerged as a critical issue in dispute in closing arguments was whether the Crown has established that Mr Macdonald’s enquiries of the Department about coal reserves in the “Mount Penny/North Bylong area” via Mr Gibson on 9 May 2008, with a follow-up enquiry by Mr Gibson on 14 May 2008, enquiries which generated the preparation of Wiles Map 1 ^[673] and later Wiles Map 2 ^[674] (facts which were not in dispute), were overt acts committed by Mr Macdonald in furtherance of the conspiracy.

755. The Crown accepted in its closing submissions that although Mr Macdonald’s specific enquiries of the Department at this time occurred in the context of his enthusiasm to release further coal exploration areas, ^[675] including the release of small to medium areas in the Western Coalfield, ^[676] what the Crown described as Mr Macdonald’s “left field” enquiry of the DPI about coal reserves in the “North Bylong/Mount Penny area” ^[677] supports the Crown case that he would not have made those particular enquiries at that time “but for” the improper purpose of advancing the interests of the Obeid family as the owners of Cherrydale Park in the Bylong Valley situated near Mount Penny (a state of affairs of which he was well aware at that time) in connection with the granting of an EL at Mount Penny.

756. Were I to make that finding, the related question that arises is whether I am also satisfied that on 6 June 2008 Mr Macdonald directed the Department that a coal release area in the area of Mount Penny be “split” from the large coal release area in the Bylong Valley (by that date graphically represented on Wiles Map 2) ^[678] to create a small area in order that it might be included in the EOI tender process for the granting of an EL (the conduct comprehended by the fifth alleged act of misconduct).

757. As noted above, the Crown accepted that, at the time of the events the subject of this trial, the evidence established sound public policy reasons for releasing large and small to medium coal exploration areas in the Western Coalfield in 2008, including frustrating what had been demonstrated as the concerted efforts of large mining companies to “land bank”. However, the Crown also submitted, albeit expressly for the first time in closing submissions, ^[679] that after considering all of the evidence informing the circumstances in which the Mount Penny Coal Release Area came to be designated by the DPI in mid-June 2008, I would be satisfied that Mr Macdonald “slipped” Mount Penny into an otherwise uncontroversial EOI process for the release of a number of new small to medium coal release areas. The Crown submitted that the EOI process was “the perfect vehicle” to conceal from scrutiny that the real object and purpose in directing that Mount Penny be included as a small coal release area was to advance the interests of the Obeid family in furtherance of the agreement he had reached with Edward Obeid and Moses Obeid that he would wilfully misconduct himself as Minister in connection with the granting of an EL at Mount Penny for the improper purpose alleged.

758. The Crown also submitted that after considering all the evidence I would be satisfied that Mr Macdonald would not have initiated the enquiries he had Mr Gibson make of the Department on 9 and 14 May 2008 (the first and second acts of misconduct) and he would not have directed that the Mount Penny Coal Release Area be designated for inclusion in an EOI process for the granting of an EL on 6 June 2008 (the fifth act of misconduct) “but for” that improper purpose.

The enquiries made by Mr Gibson on behalf of Mr Macdonald on 9 May 2008 and 14 May 2008 - particularised by the Crown as the first and second acts of misconduct

759. The Crown particularised the first and second acts of misconduct as follows:

FIRST MISCONDUCT: On or about 9 May 2008, Mr Macdonald sought information, via his chief of staff Mr Jamie Gibson, from the Department of Primary Industries (DPI) as to the volume of coal reserves in the area of Mount Penny (in the Bylong Valley, New South Wales) (Mt Penny). He did so in breach of his duty of impartiality as he knew the Obeid family owned property in this location.

SECOND MISCONDUCT: On or about 14 May 2008, Mr Macdonald sought further information, via his chief of staff Mr Jamie Gibson, from the Department of Primary Industries about coal reserves in the area of Mt Penny including whether it was possible for the DPI to open its holdings for tender. He did so in breach of his duty of impartiality as he knew the Obeid family owned property in this location.

The evidence relied upon to prove the first act of misconduct

760. Although the first and second acts of misconduct allegedly occurred on different days and are particularised in different ways, in the analysis which follows it will become clear that the enquiries made of the DPI are related, in the sense that the second act of misconduct is a follow-up enquiry after Mr Macdonald received the information generated from the first act of misconduct.

761. Mr Gibson gave evidence that on 9 May 2008 Mr Macdonald asked him for some information on the “Mount Penny, North Bylong Area … as soon as possible”. ^[680] Mr Macdonald did not tell Mr Gibson why he wanted the information and Mr Macdonald did not tell him anything about Mount Penny or North Bylong. Mr Gibson had not heard of Mount Penny before this conversation and had not discussed Mount Penny with Mr Macdonald before that day. ^[681]

762. Mr Gibson gave evidence that he telephoned Graham Hawkes, Principal Mineral Liaison Officer within the Ministerial and Executive Support Division of the DPI, directly. ^[682]

763. Mr Hawkes gave evidence that Mr Gibson requested “urgent information relating to … any coal reserves within the Mount Penny, region, area locality”. ^[683] The reference Mr Gibson made to “Mount Penny” was not an area with which Mr Hawkes was familiar. Mr Hawkes gave evidence that Mr Gibson did not tell him why he wanted the information and he did not ask. Mr Hawkes also gave evidence that Mr Gibson indicated to him that a response was needed “within an hour or just over an hour” - a degree of urgency he had not previously experienced in his dealings with the Minister’s office. ^[684]

764. Mr Hawkes conveyed Mr Gibson’s request by making a phone call to the Coal and Petroleum Geology area within the Maitland office of the Mineral Resources Division. ^[685] He could not recall who he spoke to but that person did ask him, “where is Mount Penny?” ^[686] and, since he did not know, a search of topographical maps of New South Wales he made to try and locate the Mount Penny was initiated. ^[687] He did not, however, provide any further information to the Coal and Petroleum Geology Division.

765. Mr Larkings gave evidence that either Ms Madden or Ms Hibbs from Mr Mullard’s office approached him and said that there was an enquiry from the Minister about “coal resources in the … Mount Penny area” ^[688] and that he was given to understand that Mr Hawkes had conveyed the request for that information.

766. Mr Larkings recalled asking Ms Wiles, Manager of the Coal Advice section, about the location of Mount Penny. Mr Larkings and Ms Wiles established from secondary materials that Mount Penny was “in the Bylong Valley”. ^[689]

The production of Wiles Map 1 and the Ministerial Briefing

767. Ms Wiles confirmed that she was the author of the map entitled “Mt Penny Area” (Wiles Map 1) ^[690] having been asked by Mr Larkings to identify the Mount Penny area because “the Minister was interested in some information about it”. ^[691] She gave the following evidence:

Q. Could you tell the Court the circumstances in which you came to create that document [Wiles Map 1]?
A. Mr Robert Larkings came around in early May and asked me to identify resources in the Mount Penny area. I asked him where Mount Penny was and he had to Google it to find out where the place was. We then identified the area and from there I prepared a map indicating the ELs and PLs over the area and authorisations and put on there the national park and put red dots to identify various localities within the boundary of that map.

The dot for Mount Penny is sort of made larger, purely and simply because that was the name I was given my Mr Robert Larkings.

Q. Did you use some form of computer program to create this document?
A. Yes, I did. There was a system within the department where you could call up all the authorisation, allocations that were made, exploration licences, which is shown there on the TAS map at the side there, the key, which shows what all of the things are that could fall on the map; and the ones that are shown here refer to national parks, authorisations, PEL and I think that's about it, and an EL that’s on there.

So they’re actually within the department's system, or back in those days they were things that were within the system of the department that you could call up through TAS and make maps. So everything is sort of pretty scheduled in there where you just put in what you want to show.

Q. So, ma’am, in general terms, does the program you have just described mean that a location in New South Wales can be focused upon and then, to the extent it is affected by authorisations or, as you say, PELs; that is a petroleum licence, isn’t it?
A. Yes, that’s correct. You can do that for any part of the State. It also shows exploration boreholes, coal boreholes, that fall within the area on this map as well. ^[692]

768. Wiles Map 1 was tendered as part of Exhibit A: ^[693]

769. Ms Wiles also gave evidence that she selected the title of “Mount Penny Area” for the map because Mr Larkings “referred” to that area when he made the request of her. ^[694] Ms Wiles gave evidence that she provided hard and soft copies of Wiles Map 1 to Mr Larkings.

770. Ms Wiles explained that she enhanced the size of the dot designated for Mount Penny on Wiles Map 1 so as to ensure that it could be readily identified by a person reading the map. She also explained that the TAS map system utilised by her allows a user to “adjust the size of the font … the size of dots so they’re more easily visible” but that it does not allow a user to “adjust boundaries” or “move the locality”. ^[695]

771. At 11:29am, Mr Larkings sent an email to Mr Hawkes copied to Mr Mullard to which he attached Wiles Map 1. That email read as follows: ^[696]

There are significant coal resources in the area of Mount Penny in the Bylong Valley.

We are unsure of the exact area of interest, however there are a number of coal titles in the area including EL6676, held by the Department of Primary Industries and Authorisation 287, held by Anglo Coal. There is also a Petroleum Exploration Licence, PEL 456, held by Macquarie Energy.

The Department holds a title so that it can carry out drilling and it is expected that this program will also include some drilling in the vicinity of Mount Penny to further delineate the resource, which is expected to consist mainly of thermal coal. This exploration may identify an area suitable for tender.

Several coal titles exist in the area, as shown in the attached map. Currently, the closest mining lease is at Wilpinjong.

772. Mr Larkings gave evidence that the information in the body of the email was prepared over a couple of hours with assistance from Ms Wiles. ^[697] He gave evidence that the reference to “drilling” was included in response to a telephone call from Mr Hawkes. He also said that the inclusion of the statement, “[t]his exploration may identify an area suitable for tender”, was not because he was told that the Minister wanted to release the area for tender but because he anticipated that the information might assist.

773. At 12:01pm, Mr Larkings’ email of 11:29am was forwarded by Mr Hawkes to Mr Gibson. ^[698] Mr Gibson gave evidence that he provided a copy of that email to Mr Macdonald. ^[699]

774. By reply email to Mr Hawkes at 12:06pm, Mr Gibson acknowledged receipt of Wiles Map 1 (a map which he described as “great”) but requested that the information in the email be put in the form of a Ministerial Briefing. ^[700] Mr Gibson indicated he had to “fax it to the boss [Mr Macdonald]” and that he had “bought us another hour”. ^[701]

775. At 12:57pm, Mr Hawkes sent a further email to Mr Gibson copied to Mr Coutts which attached the Ministerial Briefing ^[702] he had prepared responsive to Mr Gibson’s request together with Wiles Map 1. ^[703] The body of the email read:

Brief and diagram attached. Information approved by Brad Mullard, Director Coal and Petroleum Resources. Alan [Coutts, Deputy Director-General of the DPI] is not around to approve. ^[704]

776. The Ministerial Briefing reads as follows:

Issue:

Coal reserves and titles at Mount Penny.

Current Position:

Mount Penny is located approximately 3 km west north west of the town of Bylong.

There are significant coal resources within the general region of Bylong.

Mount Penny is located within coal Exploration Licence (EL) 6676 held by the Department of Primary Industries and shown by blue shading on the attached diagram.

There are a number of coal titles in the region including Authorisation 287 held by Anglo Coal located to the east of Mt Penny and shown by yellow shading on the attached diagram.

There is also a petroleum exploration licence, PEL 456, held by Macquarie Energy and shown by blue cross hatching covering the whole of this region.

DPI holds EL 6676 so that it can carry out exploration drilling to assess the coal reserves within the area of the title. It is expected that the drilling program will include some drilling in the vicinity of Mt Penny to further delineate the resource. The resource is expected to consist of mainly thermal coal. The exploration may identify an area suitable for tender.

The closest mining lease/mine is Wilpinjong.

Recommendation:

The Minister notes this Brief. ^[705]

777. Mr Mullard gave evidence that while the approval for documents to be provided to the Minister would “normally” be given by Mr Coutts, he gave the necessary approval for the Ministerial Briefing to be sent to the Minister’s office in Mr Coutts’ absence. ^[706] Mr Coutts gave evidence that because he was not “in the office at the time”, the contents of the email chain were brought to his attention by Mr Hawkes some time after the emails were sent. He gave evidence that Mr Hawkes “mentioned” that “he sent it [Mr Macdonald’s request] up to Brad [Mullard] to get some further information” and that he asked Mr Hawkes “what was Mount Penny or where was Mount Penny”. ^[707]

778. Mr Gibson gave evidence that he faxed the Ministerial Briefing that was provided by Mr Hawkes to Mr Macdonald who was by that stage en route to his home in Orange. He said that Mr Macdonald telephoned him to confirm receipt of the documents. Mr Gibson explained this was not an unusual manner of providing the Minister with a document and confirming its receipt where the Minister was not in the office. ^[708]

779. I am satisfied that at 9 May 2008, Mr Macdonald had in his possession information, including Wiles Map 1 which had been generated by the DPI at his request and which indicated that Mount Penny, or an icon designating it, was located within EL 6676. Mr Neil’s cross-examination of the mapping witnesses, being Mr Schiavo, ^[709] Ms Wiles and Mr Whiddon, about the lack of specificity in the appointment of the Mount Penny trig point relative to the boundary lines of EL 6676 and Authorisation 287 is not to the point.

The evidence relied upon to prove the second act of misconduct

780. At 11:02am on 14 May 2008, Mr Gibson sent an email to Mr Munnings marked “Importance: High”. ^[710] The subject line of the email read “Coal Reserves in Mt Penny area of Bylong Valley”. The body of the email read:

Mate – is there any possible way that we can get more details on this area? For example is it possible for DPI to open its holdings for tender? You’ll see from the map the area that DPI has, and are there any better assessments on how much coal might [be] there? We need it asap.

781. Attached to that email were Wiles Map 1 ^[711] and the Ministerial Briefing of 9 May 2008. ^[712]

782. Mr Gibson gave evidence this email was sent responsive to a further request from Mr Macdonald. ^[713] He gave evidence that Mr Macdonald said to him, “I’ve received the initial information and could I get more information about whether [EL 6676 is] available for tender and what its resource assessment is as quickly as possible.” ^[714] He said that Mr Macdonald did not give any reason for the request. In cross-examination Mr Gibson confirmed that he considered the email as a “routine” follow-up email and that it was customary for Mr Macdonald to make urgent requests for information. Mr Gibson also gave evidence that he was aware that Mr Macdonald was travelling to China and South Korea the following day and this may have had a bearing on the urgency of the request for further information. ^[715]

783. At 1:33pm on 14 May 2008, Mr Munnings forwarded the email he had received from Mr Gibson to Mr Hawkes asking that it be “actioned asap”. ^[716] Mr Hawkes recalled receiving that email which he then forwarded to Mr Mullard and copied to Mr Coutts. ^[717]

784. Mr Coutts gave evidence that he became aware of the request outlined in Mr Gibson’s email when Mr Hawkes brought to his attention that he was getting repeated requests from the Minister’s office for information that he considered the Department had already provided. ^[718] In the body of the email to Mr Mullard and Mr Coutts, Mr Hawkes wrote, “I don’t know what all this is about. [Gibson] seemed happy when we sent this initial info to him on Friday” ^[719] (a reference to the information he sent to Mr Gibson on 9 May 2008).

785. At 2:43pm, Mr Hawkes sent a reply email to Mr Munnings (apparently copied to Mr Coutts) requesting “more information on the background/reason for this information request”. ^[720] In the email, he went on to say:

The Department hasn’t done sufficient exploration drilling in the Mt Penny area to give a definitive estimate of the coal reserves.

If it was desired that the area be open to tender what time frame may we be looking at. ^[721]

786. Mr Hawkes did not recall receiving a response from Mr Munnings, Mr Gibson or anyone else responsive to his request for more information on the background or reason for the request for further information about coal reserves.

787. At 3:51pm, Mr Coutts replied to Mr Hawkes’ email to Mr Munnings from 2:43pm that day. In Mr Coutts’ email to Mr Hawkes, copied to Mr Munnings and Mr Gibson, he wrote:

We also need a bit more [information] on what is the area we are looking at--What do you mean by Mt Penny--it is not an area we recognise by that name as a potential allocation area. ^[722]

788. Mr Coutts gave evidence he sent the email because he was getting irritated that the Department was wasting time looking for information the Department did not have. He did not recall receiving a response to his request for more information and regarded his email as “the end of the matter”. ^[723]

789. In cross-examination by Mr Neil, Mr Coutts said that he would have recognised “Bylong Valley” or “Wollar-Bylong” if he had known that Mount Penny was within that geographical area. He agreed that some areas are known by reference to a dominant geographical feature. ^[724]

790. Mr Coutts also gave evidence that he was not aware of any other emails sent by him (on the topic of coal resources in the Mount Penny area) between 9 May 2008 (the email the subject of the first act of misconduct) and 14 May 2008 (the email the subject of the second act of misconduct). He explained that the email he sent at 3:51pm on 14 May 2008, extracted above, was as a result of continued requests from Mr Munnings to Mr Hawkes for “further advice over and above what we [the DPI] had already provided”. ^[725] Mr Coutts also gave evidence that he instructed a staff member from his office to attach Wiles Map 1 and the Ministerial Briefing of 9 May 2008 to his email to Mr Hawkes because he wanted Mr Hawkes to focus on that information when he was formulating his response for further information.

791. Mr Gibson recalled speaking to Mr Macdonald about the query from the Department seeking more information, saying words to the effect that “the Department needs some more information on this particular area before they can progress it further”. ^[726] He said that Mr Macdonald responded by asking him to “get the Department to see what else they can find”. ^[727]

792. Although Mr Gibson recalled communicating, either verbally or in writing, with the Departmental staff who were seeking further information in order to comply with the Minister’s request for information about whether EL 6676 could be opened up for tender and the coal resources in that area, he could not recall the precise terms of the response or who the response came from.

793. Ms Wiles gave repeated and consistent evidence that, in her view, the coal resources in the area the subject of Mr Macdonald’s request could not be meaningfully assessed without further exploration. ^[728]

794. Mr Mullard gave evidence that at 9 May 2008, that is, the date of Mr Macdonald’s first enquiry about Mount Penny, the creation of Wiles Map 1 and the ensuing email chain, the Department’s position as to the suitability of EL 6676 for release was:

It wasn’t suitable because we didn’t have enough information particularly in the Bylong area. That’s why we’re planning additional exploration. ^[729]

795. There is no evidence Mr Mullard’s views were communicated through to the Minister on 14 May 2008 or, for that matter, any evidence that the Minister’s enquiry of 14 May 2008 was the subject of any meaningful response from the Department before he departed for the trade mission in China and South Korea on 15 May 2008.

796. In short, there is no evidence that the request the subject of the second act of misconduct resulted in any additional information about coal reserves in the area of Mount Penny being conveyed to Mr Macdonald, whether in terms of the actual or potential tonnage of the coal resource or whether EL 6676 was available for tender. Neither is it any part of the Crown case, as particularised, that Mr Macdonald conveyed any additional information to the Obeids as a result of his additional request of the DPI. The Crown case as closed is that telephone communication between the accused on 14 and 15 May 2008 “provided opportunity for the three conspirators to update each other” but it is stated no more specifically than that. ^[730]

Is the first act of misconduct and/or the second act of misconduct proved?

797. Mr Neil submitted that the Crown has failed to establish the first act of misconduct as particularised because Mr Gibson’s evidence went no further than Mr Macdonald asking for information about the “Mount Penny, North Bylong area” ^[731] without Mr Macdonald giving him any explanation for requesting that information. The difficulty with that submission is that there was no challenge to Mr Hawkes’ evidence that the verbal request made directly of him by Mr Gibson was for “urgent information relating to… any coal reserves within the Mount Penny region, area, locality” (emphasis added). ^[732] Neither was it suggested to Mr Gibson in cross-examination that he did not convey that request on behalf of the Minister or that Mr Hawkes misinterpreted the enquiry made of him.

798. After taking into account all of the evidence relevant to proof of the first act of misconduct, and contrary to the submissions advanced by Mr Neil, I am satisfied that Mr Macdonald’s request for information from the Department via Mr Gibson on 9 May 2008 was to the clear and unmistakable effect that he was seeking information in the possession of the Department about the availability of coal reserves in the Bylong Valley, with specific reference to the area of the Bylong Valley situated near Mount Penny. I am also satisfied that the “follow-up” enquiries about the possibility of the DPI opening its holding under EL 6676 to tender are to be understood in the same way.

799. In making that finding, I note that it was not suggested to Mr Gibson or to the various Departmental witnesses who gave evidence of dealing with the request from the Minister’s office on 9 May 2008, or the follow-up request on 14 May 2008, and not suggested in the closing submissions by the accused’s counsel, that Mr Macdonald had no interest in the North Bylong/Mount Penny area as at May 2008. To the contrary. The accused submitted that Mr Macdonald’s enquiries of the Department were consistent with his settled policy agenda of releasing further areas for coal exploration and, for that reason, it is reasonably open for me to find that he initiated the enquiries of the Department on 9 May 2008 with a trade mission to China pending with a view to potentially attracting foreign investors.

800. I accept that the timing of Mr Macdonald’s enquiries of the Department in the week and then the day before he was due to travel to China on an official trade mission with the then Premier of New South Wales, Mr Iemma, is not insignificant. ^[733] That is, I accept that Mr Macdonald’s request for information from the Department about what Mr Martin described in his closing submissions as “unallocated large coal areas and the possibility of their release in the near future” might have been to generate interest in the coal industry in New South Wales with parties he met on the trade mission, including Mr Fang, a person already known to him.

801. In my view, what remains significant and unexplained is Mr Macdonald’s focused enquiries of the Department on what he referred to as the “North Bylong/Mount Penny” area, as distinct from other unallocated large coal release areas, including in the Western Coalfield, as to which the Department would have been able to provide information of interest to foreign investors.

802. In a sense, the specific and unusual focus of Mr Macdonald’s enquiry of the Department is revealed by a message from Mr Macdonald as Minister for Mineral Resources on the facing page of each of the 2005 and 2008 New South Wales Coal Profiles, ^[734] and in which he makes specific reference to the Bylong Valley in the Western Coalfield as a large unallocated coal resource without any reference to “North Bylong/Mount Penny” in either of those publications.

803. In short, I accept that although the evidence establishes that Mr Macdonald might have been motivated in May 2008 to make enquiries of the availability of unallocated coal reserves in the North Bylong/Mount Penny area, and the viability of opening areas for coal exploration in that area of the Western Coalfield for a number of reasons consistent with his multifaceted policy agenda and explicably referable to it (including attracting foreign investors), in my view, what is significant both in further proof of the Shepherd fact and the separate but related question whether the first and second acts of misconduct were in breach of his duty of impartiality and otherwise satisfy the “but for” test, is that the only enquiry Mr Macdonald made of the Department in May 2008, about the volume of coal reserves, whether by reference to the Western Coalfield in particular or in any of the other coalfields in New South Wales, concerned the “Mount Penny/ North Bylong” area.

804. Neither of the requests by Mr Macdonald of the DPI in May 2008, the subject of the first and second alleged acts of misconduct, respectively, provided Mr Macdonald with information about the actual volume of coal reserves in the North Bylong/Mount Penny area measured in millions of tonnes (Mt) or the location of any area adjacent or “contiguous” to any coal release area that might be designated by the Department. On the Crown case, the significance of an area contiguous to what was ultimately designated by the DPI as the Mount Penny Coal Release Area emerged later in the course of Moses Obeid’s (and Paul Obeid’s) dealings with Mr Brook in July 2008 when Wiles Map 2 was produced by Paul Obeid and discussed at the second Wentworth Hotel meeting. ^[735]

805. In considering whether the enquiries the subject of the first and second acts of misconduct have been shown to be in breach of his duty of impartiality and which were made for an improper purpose, established by reference to the “but for” test, the fact in issue is not, it seems to me, what motivated Mr Macdonald to make an enquiry of the Department about coal reserves in the North Bylong/ Mount Penny area on 9 May 2008, or for that matter the urgency that accompanied that request for information or, further still, why he sought further and better information from the Department on 14 May 2008 after being provided with the information in the Ministerial Briefing Note and Wiles Map 1. What I regard as significant, and what has ultimately satisfied me that the enquiry was made in circumstances where Mr Macdonald knew that Cherrydale Park was located near Mount Penny in the Bylong Valley and that it was made in breach of his duty of impartiality and for an improper purpose because it was informed by that knowledge, was Mr Macdonald’s specific reference to “Mount Penny” in his request for information.

806. What emerges from the evidence from all the Departmental witnesses whose evidence has been set out in detail above, including Mr Gibson as the Minister’s policy advisor, is that no-one had heard of Mount Penny either generally or in reference to coal reserves in the Bylong Valley before 9 May 2008. Mr Mullard described Mr Macdonald’s request for information as “a bit of a bolt [from the blue]” because of the reference to “Mount Penny”. ^[736] The evidence also makes clear that it was because the Minister had requested that specific information that Departmental officers set about undertaking their own researches to locate Mount Penny, with Ms Wiles enhancing the trig point of Mount Penny in producing Wiles Map 1 to comply with the Minister’s request.

807. It is not simply that Mount Penny was not a location that carried any significance to the Department which warrants Mr Macdonald’s enquiry via Mr Gibson being fairly described by the Crown in closing submissions as coming from “left-field”. ^[737] In my view, equal significance lies in the fact that no evidence was adduced in cross-examination of either the Departmental officers or Mr Gibson that it was commonplace, or at least not unusual, for Mr Macdonald to utilise a dominating topographical feature when seeking information about the availability of coal reserves in any of the coalfields in New South Wales.

808. While I note that in cross-examination Mr Mullard accepted that the terms “Mount Penny”, “North Bylong/Mount Penny”, “North Bylong” or “Wollar/Bylong” are general terms for the same geographical area described in different ways on different maps and not precisely defined on any of them, it is clear that insofar as there is a reference to Mount Penny, Mr Mullard was referring to the maps generated by the Department after May 2008, not that the Department used “Mount Penny” as a descriptor before that date. ^[738] Mr Mullard gave evidence in chief that his understanding of the name the Department used to describe the availability of coal within the Bylong Valley was according to a broad nomenclature of the various regions within the Valley including “Bylong, North Bylong and the Wollar regions. He went on to say:

There was a railway line that ran through the area and we were aware [through the Dwyer Report] there were substantial coal resources and they were of interest because they were very close to infrastructure; the rail which enabled the coal to be taken to port. ^[739]

809. I note the submission advanced by both Mr Neil and Mr Martin that the Mount Penny area might have been an apt way of describing the unallocated or “gap” area in the Bylong Valley between EL 7091 held by Wilpinjong to the west and Authorisation 287 held by Anglo Coal P/L to the east. ^[740] That submission is undermined by the fact that, as is clear from various maps tendered in the trial, Mount Penny was located at the eastern most edge of that area of land, near the western border of Authorisation 287. Moreover, what I regard as telling is that despite Mr Macdonald’s extensive knowledge as the Minister for Mineral Resources of the availability of coal resources in New South Wales and in the Western Coalfield in particular, inclusive of his express reference to those coalfields in successive publications of the Coal Profile, there is no evidence he had previously used “Mount Penny” or the “North Bylong/Mount Penny” area as a means of either describing an available coal resource or an area where a coal resource might be located, whether in the unallocated or “gap” area between EL 7091 and Authorisation 287 in the Bylong Valley or more generally.

810. It is clear beyond any question that Mount Penny is a dominating topographical feature at the eastern border of an extensive area encompassing what is known as the Bylong Valley. I also accept that the Atlas of New South Wales Mr Macdonald used as a reference from time to time showed Mount Penny by a cross (apparently part of the lexicon used by the cartographer) relative to the township of Bylong. ^[741] Mount Penny was not, however, marked or highlighted with any greater significance in the Atlas relative to the crosses marking the location of other mountains and mountain ranges across the State.

811. In my assessment, greater significance lies in the section committed to the Western Coalfield in the 2008 Coal Industry Profile (compiled by Mr Hughes and others in the period 2005 to 2008 ^[742] and a publication with which Mr Macdonald was well familiar as the responsible Minister). In that publication there is a detailed reference map (extracted below) showing the relative positions of the open cut mine at Wilpinjong and the underground mine forming part of the Moolarben proposal. That reference map also records what is described as the “Bylong Proposal” ^[743] where a proposed underground mine is noted, but where the topographical feature of Mount Penny is neither noted as part of the “Bylong Proposal” nor in the Bylong Valley more generally.

The Shepherd fact is proved beyond reasonable doubt

812. Having considered the evidence bearing upon proof of the Shepherd fact and the submissions of counsel directed to that issue, I am satisfied there is no rational explanation for Mr Macdonald to have asked Mr Gibson to make the focused enquiries of the DPI on 9 May 2008 or the follow-up enquiry he made on 14 May 2008, in both instances where Mount Penny was specifically referred to, other than because he knew not only that the Obeids owned the rural property Cherrydale Park, but that it was situated in the Bylong Valley near Mount Penny. Mr Macdonald’s reference in the enquiries he had Mr Gibson make to “North Bylong/Mount Penny as one area, as distinct from two geographically separate areas, is a further reflection of that state of knowledge or awareness.

813. In all those circumstances, and after taking into account the other evidence bearing upon proof of the Shepherd fact to which I have already referred, I am satisfied that fact is proved beyond reasonable doubt.

814. In proof of the related question as to whether, as the Crown contended, Mr Macdonald asked for those enquiries to be made of the DPI at Edward Obeid’s request or prompting, the Crown relied upon what were described as “multiple opportunities” for him to do so from the degree of contact between Mr Macdonald and Edward Obeid, including by telephone on the days preceding 9 May 2008:

1. On the weekend of 3-4 May 2008, Mr Macdonald and Edward Obeid attended the ALP Conference ^[744] and were in telephone contact multiple times. ^[745]

2. 5-8 May 2008 were Parliamentary sitting days. ^[746] There was telephone contact between Mr Macdonald and Edward Obeid, and Edward Obeid and Moses Obeid, throughout that period. ^[747]

3. On Thursday 8 May 2008:

1. Moses Obeid was in phone contact with Edward Obeid at 7:36am and Mr Macdonald called Edward Obeid at 8:37am. ^[748]

2. At 10am a meeting was attended by each of Edward Obeid, Mr Macdonald, James “Percy” Thompson, Beris Lang, Kim Lang and a member of staff from Mr Macdonald’s office to discuss the prospect of government funding for an abattoir at Mudgee. ^[749]

3. Edward Obeid called Mr Macdonald twice at 2:14pm and 4:51pm. ^[750]

4. At 5:30pm, a meeting was scheduled between Mr Macdonald and Edward Obeid. ^[751]

5. Edward Obeid called Mr Macdonald at 5:36pm and called Moses Obeid at 6:25pm. ^[752]

815. While this evidence is of some weight in establishing that it was Edward Obeid who asked Mr Macdonald to obtain information about coal reserves in the area of Mount Penny at this time (evidence relied upon by the Crown to prove the existence of the conspiracy as at 9 May 2008 and Edward Obeid’s participation in the conspiracy from that time) in my view, greater weight attaches to proof of that fact, although not determinative of it, given my finding that there is no rational reasonable explanation for Mr Macdonald to have made the specific and focused enquiries of the DPI on 9 and 14 May 2008 other than because he knew the Obeid family owned Cherrydale Park, a state of affairs which I am satisfied Mr Macdonald was well aware of from as early as September 2007 when he had Mr Badenoch make enquires about the water licences that attached to that property, enquiries I am well satisfied were made on Edward Obeid’s behalf.

The first and second acts of misconduct are established

816. I am satisfied for those related reasons that Mr Macdonald acted wilfully in breach of his duty of impartiality by making the specific and focused enquiries of the Department on 9 and 14 May 2008, enquiries which I am satisfied he would not have made were it not for the improper purpose of advancing the private interests of the Obeid family.

817. Those related findings of fact do not, however, compel the further finding that Mr Macdonald’s enquiries of the Department were acts of misconduct committed by him in furtherance of a conspiracy in existence at 9 May 2008. While I accept that proof of the Shepherd fact and proof of a wilful breach of his Ministerial duty and obligation of impartiality does add weight to proof of that issue, it is not determinative of it. If there remains a rational, and not simply a theoretical, possibility that in making those enquiries of the Department Mr Macdonald was either acting unilaterally (whether out of friendship for Edward Obeid or as an unsolicited act of favouritism) or that he made the enquiries at Edward Obeid’s request but without a pre-existing agreement with him (or Moses Obeid) of the specific kind the Crown prosecutes under the indictment, that is, if the Crown cannot exclude either or both motivation or explanation as a possible reason for Mr Macdonald’s misconduct, the Crown will have failed to prove that it is conduct available to it in proof of the existence of the conspiracy charged.

818. It is the Crown case that the first and second acts of misconduct committed in breach of Mr Macdonald’s Ministerial duty and obligations of impartiality (cf. in breach of his duty of confidentiality), in circumstances where he knew the Obeids owned Cherrydale Park in the Bylong area situated near Mount Penny, would allow me to readily infer that Mr Macdonald was “seeking the information” and at Edward Obeid’s request, not merely as a favour to assist him and his family ^[753] but because he was assembling information in furtherance of the conspiratorial arrangement he had forged with Edward Obeid and Moses Obeid by 9 May 2008 and, further, that “but for” his agreement with them that he would misconduct himself as Minister in connection with the granting of an EL at Mount Penny, he would not have sought specific information about coal reserves in the area of Mount Penny or the possibility of the DPI releasing its holdings under EL 6676 to tender at that time.

819. To express the issue another way, even were I satisfied that Mr Macdonald’s conduct on 9 and 14 May 2008 was in breach of his duty of impartiality because he had enquiries made of the DPI at Edward Obeid’s request, and that he would not have made those enquiries at all, or at that time, were it not for the improper purpose of advancing the private interests of the Obeid family as the owners of Cherrydale Park, if it is open for me to find that Mr Macdonald made those enquiries, or he might reasonably have done so, not because of having agreed to misconduct himself as alleged by the Crown but as a favour to Edward Obeid, knowing his family owned Cherrydale Park and they were keen to gather information about the potential coal reserves under their property and surrounds, or to gain some perceived political leverage or in the hope or expectation of a financial benefit if the Obeids were able to exploit the information (motivations which I note are not inconsistent with the nuanced motives the Crown attributed to Mr Macdonald in agreeing to participate in the conspiracy charged), ^[754] proof of the first and second acts of misconduct would not be probative of the ultimate fact in issue, namely whether the existence of the conspiracy framed in the indictment is proved beyond reasonable doubt.

820. In the Crown’s submission, Mrs Fitzhenry’s evidence that Moses Obeid told her husband that Mr Macdonald had told his father about the existence of “coal leases” at Cherrydale Park on an occasion that I would be satisfied was before 9 May 2008 was evidence supportive of proof of the first and second acts of misconduct, being acts in furtherance of an existing conspiracy.

The relevance of the evidence of Mr and Mrs Fitzhenry to proof of the Crown case

821. Peter and Nicole Fitzhenry and their family lived in a property in Elizabeth Bay next to Moses Obeid’s family home. Moses Obeid’s family and the Fitzhenry family enjoyed a close relationship as neighbours for a period of years prior to and after September 2007.

822. Mrs Fitzhenry confirmed that the two families formed a close friendship to the extent that they took the fence down between the two houses between six months to a year after Moses Obeid’s family moved in, estimating that to be “maybe” in 2006. ^[755]

823. Mr Fitzhenry gave evidence that he saw Moses Obeid and his wife “pretty well every day”, through combined social activity and the sharing of family meals. ^[756]

824. Mr Fitzhenry gave evidence that within six months of Moses Obeid’s family moving into the Elizabeth Bay property (maybe a little longer) Moses Obeid told him that he was “looking for a property for [his father] to go to on weekends like a holiday farm.” ^[757] He gave evidence that sometime after that initial conversation, Moses Obeid said to him “[w]e’ve found a property that belongs to Kerry Packer’s accountant, a property called Cherrydale.” ^[758]

825. Mrs Fitzhenry recalled a conversation she had with Moses Obeid in which Moses Obeid said that the Obeid family were in the process of purchasing ^[759] a property which, as she recalled, Moses Obeid referred to as “[t]he farm in the Bylong Valley”. ^[760] Mrs Fitzhenry recalled being shown images of the farm on a laptop by Moses Obeid, including photographs of the rose garden and the house. ^[761] Mrs Fitzhenry said this conversation occurred in “probably 2006, 2007”, and that by that time “the fence was down” between the neighbouring properties. ^[762] She said that Moses Obeid indicated that the Obeid family wanted to use the Bylong Valley property for the extended Obeid family to spend time together. Mrs Fitzhenry gave evidence that she had more than a dozen conversations with Moses Obeid about Cherrydale Park over “quite a period of time”. ^[763]

826. In cross-examination, Mrs Fitzhenry confirmed that the proposition put to her by Mr Neil that the Cherrydale Park settlement occurred on 15 November 2007 accorded with her recollection. Other evidence in the trial establishes that the conversation Moses Obeid had with both Mr Fitzhenry and Mrs Fitzhenry about the prospective purchase of Cherrydale Park must have taken place sometime in September/October 2007 with settlement having occurred on 17 November 2007.

827. That evidence, which was not the subject of contest, provides the context in which the Crown relied upon other aspects of the evidence of Mr and Mrs Fitzhenry in proof of its case, as follows:

1. Mr Macdonald being present at Moses Obeid’s properly on one occasion around the time of the settlement of the Cherrydale Park purchase.

2. Mr and Mrs Fitzhenry’s evidence that Moses Obeid proposed that Mr Fitzhenry purchase Coggan Creek.

3. In the course of that conversation, according to Mrs Fitzhenry, Mr Macdonald’s name was mentioned. ^[764]

828. In written submissions furnished in advance of the Crown’s closing submissions, ^[765] the Crown made clear the use to which it sought to put this evidence.

829. As to the direct evidence in (a) above, that was said be probative of the existence of the conspiracy and the participation of each of the accused it. In oral closing submissions however the Crown, retreated from that position. The Crown prosecutor accepted that the evidence in (a) went no higher than establishing an opportunity for the accused to meet and discuss the formation of the unlawful agreement that matured into the conspiracy charged. In the absence of any content to any discussions between the accused or even the context in which they were meeting, I do not regard that evidence as probative at the scope of conspiracy alleged and of marginal relevance only proving its existence.

830. Mr Fitzhenry gave evidence that Moses Obeid introduced him to Mr Macdonald as “Macca” a few weeks after a discussion he had with Moses Obeid about coal on Cherrydale Park (as to which see later) in the driveway area in the front of the house, which in another part of his evidence he said was after settlement of the purchase of Cherrydale Park. ^[766] He said he nodded and kept walking. He said he met Mr Macdonald on one further occasion although briefly. On neither occasion did they speak.

831. Mr Fitzhenry also gave evidence of a telephone conversation Moses Obeid was having with Mr Macdonald when Moses Obed said to him, “This is Macca, you can give him the tip.” ^[767] He then passed on a horse racing tip to Mr Macdonald. ^[768] He could recall no other instances where Moses Obeid said he was talking to Mr Macdonald when he was on his mobile phone.

832. Mr Fitzhenry recalled meeting Edward Obeid on several occasions including at Edward Obeid’s house, at Moses Obeid’s house and at a coffee shop on Darlinghurst Road. He gave evidence of anything said on those occasions.

833. I am unable to afford Mr Fitzhenry’s evidence of a casual introduction to Mr Macdonald at Moses Obeid’s home on one occasion, or Moses Obeid casually introducing Mr Macdonald to him or Moses Obeid speaking on the phone to Mr Macdonald about horseracing, any weight on the question whether Crown has proved a conspiracy of the specific kind framed in the indictment. It does go to prove they had a relationship but it is limited to that issue.

834. The Crown relied upon the evidence of Mr and Mrs Fitzhenry in (b) and (c) above for the non-hearsay purpose of establishing, against each of the accused, the existence of the conspiracy and its scope and, as against Moses Obeid, evidence of his participation in the conspiracy on the basis that the conversations constitute admissions against interest under s 81 of the Evidence Act. The Crown made clear its position that this evidence was not relied upon in invocation of s 87(1)(c) of the Evidence Act to prove the participation of Edward Obeid or Mr Macdonald in the conspiracy alleged.

835. In those circumstances, it is not surprising that only Mr Neil addressed the evidence of Mr and Mrs Fitzhenry in any detail.

836. Before turning to those submissions and undertaking the necessary critical review of Mr and Mrs Fitzhenry’s evidence, I note that in the Crown’s oral closing arguments, the relevance of their evidence in (a) and (b) above (perhaps Mrs Fitzhenry’s evidence in particular) to proof of the Crown case crystallised in a way that was not obvious when the Mr and Mrs Fitzhenry gave evidence very early in the trial and not obvious from the Crown’s written submissions.

837. In closing oral submissions, the Crown placed significant reliance upon a construction of Mr Fitzhenry’s evidence that Moses Obeid suggested he purchase Coggan Creek, (a conversation overheard by Mrs Fitzhenry but very differently recounted by her) as probative of the existence of the conspiracy. As I understand the Crown’s submission, that conversation is not, however, said to be probative of the existence of the conspiracy at the time of the conversation. It is said to provide a factual underpinning to proof of the conspiracy by reflecting Moses Obeid’s keenness to exploit the knowledge he had by that date that there was a coal underlying Cherrydale Park and in that way providing the context in which the conspiracy was forged. ^[769]

838. I raised with the Crown in the course of closing submissions whether Moses Obeid’s approach to Mr Fitzhenry to purchase Coggan Creek as the property adjoining Cherrydale Park (because of what Moses Obeid represented was the potential financial return from coal exploration over land which would presumably encompass both properties) was, on the Crown case, to be understood as sourcing from Moses Obeid’s recently acquired knowledge of the proximity and encroachment of Authorisation 287 on Cherrydale Park and, more generally, from information he had gathered from legitimate sources about coal reserves in the Bylong Valley near Mount Penny, including the significance of the Coggan Creek Railway.

839. The Crown submitted that when Mrs Fitzhenry’s evidence as to what she recalled of overhearing a conversation or conversations between Moses Obeid and her husband is taken into account together with her husband’s evidence, the timing of the conversations about purchasing Coggan Creek aligns with the admissions made by each of Moses Obeid and Edward Obeid to journalists in 2012 that they became aware of coal beneath Cherrydale Park and had taken preliminary steps to look at purchasing neighbouring properties in late 2007 or the early part of 2008.

840. The Crown submitted, however, that I would be satisfied that it was not an “exit strategy” that was being discussed with Mr Fitzhenry (the explanation proffered by Edward Obeid and Moses Obeid in their conversation with journalists in 2012) ^[770] but evidence of a singular and driving disposition on Moses Obeid’s part (and on the part of his brothers and his father) to exploit the coal resource they had discovered underneath Cherrydale Park for financial gain by seeking investors into a scheme that would, or might, realise the value of that resource. The Crown submitted that the timing of Moses Obeid’s approach to Mr Fitzhenry in early 2008 and an email sent by Damian Obeid to Ross Triulcio, who purchased Donola, on 1 April 2008 attaching a map emailed by the vendor of Donola, ^[771] is consistent with that same strategy.

841. The Crown also placed reliance on the timing of the conversation between Moses Obeid and Mr Fitzhenry concerning the purchase of Coggan Creek, and the money to be made from the underlying unexploited coal resource in support of proposition that the Obeids’ enthusiasm for the coal they learnt was underlying the area of Mount Penny was what led to Mr Macdonald being approached by either or both of Edward Obeid and Moses Obeid to enter into an agreement with them that he would commit misconduct in public office in connection with the granting of an EL at Mount Penny which would encompass Cherrydale Park and the two neighbouring properties. As I understand it, that submission is pressed as a further basis upon which I would conclude that the conspiracy was in existence and on settled terms by the time Mr Macdonald committed the first act of misconduct on 9 May 2008, that is, when he made enquiries of the DPI about coal reserves in the area of Mount Penny.

842. Whether that submission is persuasive depends, very substantially, not only upon the timing of the conversation to which Mr Fitzhenry deposed and the timing of the multiple conversations Mrs Fitzhenry deposed to overhearing between Moses and her husband (she had no direct conversation with Moses Obeid about Coggan Creek) but also the content of those conversations which might shed some light on when they occurred.

843. On that issue, in closing submissions, the Crown accepted, both fairly and appropriately, that the evidence of both Mr and Mrs Fitzhenry was vague as to timing and, adopting my characterisation, also “opaque”. ^[772]

844. That concession was fairly made, if for no other reason, than Mrs Fitzhenry provided additional information in cross-examination that the conversation as she overheard it between her husband and Moses Obeid as it related to the purchase of Coggan Creek and “coal leases on the land” ^[773] (the conversation in which Mr Macdonald’s name was mentioned) may have taken place much later in 2008, namely in September or October 2008, that is, at a time when the evidence in the trial not only supports the proposition that Moses Obeid perceived the need to expand his search for other potential investors in a landholders alliance that might contract in a joint venture with the mining company (which, on the case he advanced, was something he was legitimately pursuing at that time as an “exit strategy”) ^[774] but also, and more critically, many months after the date before which the Crown contends the conspiracy that it prosecuted at trial was in existence.

Mr Fitzhenry’s evidence

845. Mr Fitzhenry gave evidence that “maybe a month” after the initial conversation with Moses Obeid about the family purchasing Cherrydale Park, Moses Obeid told him “there was coal underneath… Cherrydale [Park]” ^[775] and that Moses Obeid indicated to him that:

… if the coal was to be taken up there, that he said to me that it would be a life-changing experience to ‑ a life-changing situation that would just be fantastic, you know, money-wise. ^[776]

846. Mr Fitzhenry also gave evidence that “within weeks” of that conversation he accompanied Moses Obeid on a helicopter trip to Cherrydale Park. He said the issue of coal was not raised on the flight or on arrival at Cherrydale Park. ^[777]

847. Mr Fitzhenry estimated, although in very vague terms, that he “imagine[d]” ^[778] within a month of the helicopter trip Moses Obeid suggested, in what he described as a “very fleeting” conversation, ^[779] that Mr Fitzhenry mortgage his property in Sydney (the amount of $3 million was mentioned) and purchase the adjoining property to Cherrydale Park on the basis that, “if the whole coal thing went through, there was a substantial amount of money to be made out of it”. ^[780] In another part of Mr Fitzhenry’s evidence concerning Moses Obeid’s suggestion that he buy “the property next door”, he said that discussion was “some time later” ^[781] [after the helicopter trip] and in re-examination he said the “fleeting conversation” was what he described as “in the initial stages”, his best “guestimation” being after the Obeids had “settled on the farm”. ^[782]

848. Mr Fitzhenry was unable to recall the name of the adjoining property but he did recall that he was told by Moses Obeid that the proximity of a rail line made the property valuable to a coal mine. ^[783] He also said that Moses Obeid told him the family was currently making mortgage payments on the property which Moses had suggested he should purchase. ^[784]

849. In cross-examination by Mr Neil, Mr Fitzhenry was taken to some evidence he had given in June 2011 in the ICAC proceedings where he was asked questions about a syndicate that might pay interest on loan in the event that Mr Fitzhenry borrowed money to buy the next farm. He confirmed a memory of giving that evidence and that the company involved was “Cascade Mining or Cascade Coal”. ^[785] He gave the following evidence:

Q. At 131 to 2, were you asked this question:

“Q. Now, if we can come back to when he said certain things to you?
A. Yeah, he then explained to me about the coal amounts and how much would be, how much would come out of it and how much would have to be put in and the, the syndicate that was put together, or the Obeids, I'm not sure, would pay the interest on the loan. So if I borrowed the money to buy the next farm, which incidentally had the railhead coming to it, I would get a certain percentage out of it. He didn't ‑ I didn't get ‑ the discussion didn't get to the point where I got down to specifics.”

A. Correct.

Q. By that answer, were you meaning to convey that you thought that either the syndicate or the Obeids would pay interest on the loan?
A. The syndicate I have no knowledge of, about paying the interest on the loan. But the interest on the loan was directed from Moses Obeid to me. But at that stage I had no interest in it whatsoever. It was a passing conversation with no specifics.

Q. But you understood the syndicate to be Cascade Mining or Cascade Coal, is that right?
A. I understood the whole thing but I didn't want any part of it.

850. In re-examination at trial, Mr Fitzhenry was asked the following leading question (without objection):

Q. The conversation that you have been asked about with the syndicate and Cascade Coal, is your evidence that that was a different conversation to the conversation with Moses about the purchase of the property next door?
A. Yes. ^[786]

851. The source of Moses Obeid’s knowledge of “coal underneath Cherrydale [Park]”, ^[787] information he apparently openly shared with Mr Fitzhenry after Cherrydale Park was purchased, appears, even on the Crown case, to be information he likely acquired from his own enquiries of publicly accessed online resources which were motivated by learning of the encroachment of Authorisation 287 on Cherrydale Park. It would also appear that there were two conversations concerning the acquisition of the adjoining property with the second, as to which he gave more fulsome details of in his evidence in 2011, nine years before the trial, occurring many months after the date where on the Crown case the conspiracy was formed. That evidence and the specific reference he volunteered about Cascade Coal P/L or “Cascade Mining” would appear to me to be a conversation in early 2009 when Cascade Coal P/L was in negotiations with Mr Brook and Moses Obeid as to the basis upon which Monaro Mining NL’s application for the grant of the EL at Mount Penny would be withdrawn. ^[788] The timing of the earlier conversation where coal and the property adjoining Cherrydale Park (Coggan Creek) were mentioned in tandem, however, seems to me, on Mr Fitzhenry’s evidence, to be early in 2008.

Mrs Fitzhenry’s evidence

852. Mrs Fitzhenry gave evidence that she was present, but not participating in a conversation between her husband and Moses Obeid where, as she expressed it, “Moses said that Peter [Fitzhenry] should buy the adjoining property [to Cherrydale Park] because there would be money to be made out of it in the long term”. ^[789]

853. She was then asked the following question:

Q. Did Moses explain how there would be money to be made?
A. Yes, he referred to the leases on the land, the coal leases on the land.

Q. Did he refer to the coal leases as already existing or something in the future?
A. He referred to them as they ‑ meaning they already existed on the property, yes. ^[790]

854. She went on to give evidence that she did not hear her husband enquire as to how there would be money made from the purchase of the adjoining property, other than because of what she described as the “coal leases” ^[791] which, on one rendering of Mrs Fitzhenry’s evidence, was referable to a Google Earth search she saw Moses Obeid undertake. In contrast to the evidence of her husband, Mrs Fitzhenry said that Moses Obeid continued to talk about coal “in terms of us purchasing the property”. ^[792] She said there were two or three conversations which her husband “shut … down fairly swiftly”. ^[793]

855. Mrs Fitzhenry was then asked whether she recalled what, if anything, Moses Obeid said specifically about “coal and leases” in the overheard conversation as to which she gave the following answer:

A. So he referred to the fact that they knew that there was coal on the property, he referred to $100 million for the family and he referred to the fact that there was a Minister that was involved that had basically notified the family that that coal was on the property.

Q. Did he say the name of that Minister?
A. Ian Macdonald. ^[794]

856. That question was objected to on the basis that it was neither foreshadowed by the Crown as part of its disclosure obligations nor as part of the Crown’s particularised case that Mr Macdonald informed or notified any member of the Obeid family that there were “coal leases” ^[795] to which Cherrydale Park was subject.

857. After reviewing Mrs Fitzhenry’s statement and hearing argument from Mr Neil and Ms Francis in her absence, I accepted that Mrs Fitzhenry’s evidence that Mr Macdonald had not notified the Obeid family there was coal on the property was not strictly foreshadowed. However, I allowed the question to stand having regard to the more nuanced way in which I was satisfied this subject was covered in Mrs Fitzhenry’s served statement.

858. When Mrs Fitzhenry resumed her evidence the following questions were asked:

Q. In relation to the evidence you gave just before that break, you said, "So he referred to the fact that they knew that there was coal on the property". Understanding it is difficult, could you, to the best of your recollection, recount the conversation just on that issue of Moses referring to the fact that they knew that there was coal on the property?

A. The conversation surrounded us purchasing the adjacent property. So he was referring to the fact that there was money to be made, that there were coal leases on the property and that we would also be making money if we purchased the adjoining property. ^[796]

859. When asked by the Crown to recount that conversation in direct speech, she attributed to Moses Obeid the following words:

We’re going to make a lot of money out of the property. The family is looking at making $100 million and we'll basically be set for life. ^[797]

860. She was unable to attribute to Moses Obeid the words he used when nominating Mr Macdonald as “the Minister involved” other than to say Mr Macdonald’s name “was mentioned in relation to the coal leases on the property and that he had notified the family that there were the leases on that land.” ^[798]

861. In further legal argument as to whether Mrs Fitzhenry should be permitted to revive her memory from her statement, the Crown was permitted to ask who Mr Macdonald had notified that there were “leases on the land” in response to which she said “his [Moses Obeid’s] father”, ^[799] clearly a reference to Edward Obeid.

862. She was then asked the following question over objection:

Q. Did Moses Obeid tell you anything further about what Ian Macdonald notified Edward Obeid of in relation to Cherrydale?

NEIL: I object.

FRANCIS: I object.

HER HONOUR: I will allow that question.

WITNESS: It was basically regarding the coal leases at Cherrydale. That's all. Is that the answer to your question, or am I getting the question‑‑

CROWN PROSECUTOR RODGER

Q. Again, if you can remember the words said, that would be of great assistance or the best recollection of the words?
A. I can’t go there, no, it’s too far gone.

Q. In relation to when this conversation occurred and if I can ask you in terms of you are aware roughly of the time of the purchase of Cherrydale, how long after that, if indeed it was after, did this conversation occur?
A. I don’t think it was after the actual purchase had gone through. It was between the time of him first showing us the property and the subsequent purchase. ^[800]

863. In cross-examination, Mr Neil asked Mrs Fitzhenry whether in light of the fact that she knew in November 2008 that the Obeids had purchased Cherrydale Park and that she also knew that a contract for the sale of Coggan Creek was entered into on 7 November 2008 with the purchaser being a company associated with a person she knew, namely Mr Lewis, she accepted that the conversation she overheard her husband having with Moses Obeid about the purchase of Coggan Creek may have been “in the period September, October of 2008”. ^[801] She was then asked the following question:

Q. Would you agree that after Mr Moses Obeid or his family purchased Cherrydale, that the first time thereafter that there was any conversation between you and he or you and your husband and he on the topic of coal or the possibility of coal at Cherrydale was in about September, October 2008?

A. I can’t be certain of the months. ^[802]

864. She was then taken to evidence she gave at an ICAC hearing on 13 September 2012 in the context of having given some evidence in the trial about the figure of $100 million. In her evidence in those proceedings Mrs Fitzhenry referred to a figure of $20 million in relation to “a deal” involving the Obeid family, Cascade Coal P/L, White Energy P/L and Mr Richard Poole, director and chairman of Cascade Coal P/L. ^[803]

865. Mrs Fitzhenry gave evidence in the trial that Mr Poole was “putting [the deal] together” and that she knew Mr Poole. ^[804] This appears to be consistent with the evidence given by Mr Fitzhenry I referred to earlier. Mr Neil also put to Mrs Fitzhenry that “any discussion you had with Mr Moses Obeid about a deal was one involving Mr Poole [a person she said she knew] and/or the company Cascade or White Energy” ^[805] (a proposition which she accepted).

866. She was then asked the following questions and gave the following answers:

Q. I do want to suggest to you that Mr Obeid did not mention to you $100 million and I think you disagree with that, do you?
A. Absolutely.

Q. But what I am asking you is that to the extent that there was the prospect of money coming to Mr Obeid or his family from a deal, it was a deal involving Mr Poole, is that right?
A. Mr Poole was putting it together.

Q. And I want to suggest to you that any deal being put together with Mr Poole would have spanned the time between about May 2009 and early 2010?
A. That I can't be certain of. ^[806]

867. When Mrs Fitzhenry was invited to accept that Moses Obeid neither referred to existing coal leases on Cherrydale Park in any conversation she overheard him having with her husband, nor that he made any reference to Mr Macdonald in that connection, she said that she believed there were conversations of that kind and that the Minister was mentioned by name. ^[807]

868. In re-examination, Mrs Fitzhenry gave evidence that the figure of “20 million” which she mentioned in evidence before ICAC “was an instalment” of the “100 million” which Moses Obeid conveyed as being “expected” as a result of the mining leases. ^[808]

The weight to be afforded the evidence of Mrs Fitzhenry

869. The conversation Mrs Fitzhenry overheard her husband have with Moses Obeid about the purchase of Coggan Creek, in the course of which mention was made of Mr Macdonald as the source of information of “coal leases” on Cherrydale Park, might have occurred, as she conceded, in September or October 2008, well after the date when, on Crown case, the conspiracy was formed. After taking into account both the third-hand nature of Mrs Fitzhenry’s account of that conversation, and the understandable and entirely acceptable imprecision in her memory of what was said many years after she overheard the conversation, that aspect of her evidence is without any weight in proof of the facts in issue in the trial.

The weight to be afforded the evidence of Mr Fitzhenry

870. I am satisfied, however, of the force in the Crown’s allied submission that the timing of Moses Obeid’s initial approach to Mr Fitzhenry to purchase Coggan Creek in the early part of 2008 is significant in proof of the Crown case in two ways.

871. Firstly, it undermines the truth of the assertion made jointly by Moses Obeid and Edward Obeid in their conversation with the journalists, Mr Shanahan and Ms Jiminez in December 2012 that they were only ever interested in the acquisition of the properties neighbouring Cherrydale Park as a so-called “exit strategy” and that they had no interest in or engagement with any mining company to jointly exploit the coal resource they had learnt underlay Cherrydale Park.

872. Secondly, and more importantly, Moses Obeid’s expressed enthusiasm for the money to be made by exploiting the coal underneath Cherrydale Park is a source of direct evidence capable of supporting the Crown case that before 9 May 2008 he was determined to secure the best means by which the coal in the area of Mount Penny in the Bylong Valley could be “taken up” to secure the substantial profit that would be generated as a result. It is also a source of direct evidence probative of the fact that with that driving commercial motivation, he and his father approached Mr Macdonald to secure his assistance in achieving that objective, an approach which eventually matured into the unlawful agreement the subject of the conspiracy. Whether the Crown makes out that case must be determined having regard to all the evidence.

The events after 14 May 2008 up to and including the meeting on 6 June 2008

873. In my view, the question whether the Crown has established the existence of the conspiracy charged as at 9 May 2008 will also be informed by a close analysis of what was actually occurring in the Department while Mr Macdonald was overseas between 16 and 27 May 2008, and what steps, if any, Mr Macdonald took on his return to Australia to follow up the enquiries he made on 14 May 2008 (which went unanswered at that time) about the volume of coal reserves in the area of Mount Penny and the viability of opening up EL 6676 to tender.

874. As significantly, is the question whether the Crown can establish that in the course of the Minister’s meeting with Mr Mullard on 4 June 2008, he directed attention to the area of Mount Penny (by that time represented in Wiles Map 2) and whether the Crown can establish that at the further meeting on 6 June 2008 he directed the Department, through Mr Mullard, that the potential large open cut area depicted in Wiles Map 2 be reduced to comprise a smaller area to the east of the Bylong Valley (the conduct the subject of the fifth act of misconduct). That enquiry does, of course, need to be undertaken in the context of the finding I have already made, and for the reasons already given, that by no later than 9 May 2008 Mr Macdonald knew the Obeids owned Cherrydale Park in the Bylong Valley situated near Mount Penny.

875. It would seem to me that if I am satisfied that at the meeting on 6 June 2008 Mr Macdonald directed the Department that a smaller coal release area should be designated effectively so as to encompass Cherrydale Park, and if I am satisfied that was also an act of misconduct being in breach of his duty of confidentiality and which satisfies the “but for” test, that will add very considerable weight to that conduct being an overt act committed by Mr Macdonald in furtherance of a conspiracy not only in existence as at 6 June 2008 but, by inference, in existence by 9 May 2008 when, on the Crown case, he committed the first act of misconduct, not an act of misconduct extrinsic to the conspiracy charged but an act in furtherance of it.

876. In undertaking an examination of the evidence with that focus, the first question that immediately presents is whether there is an available inference that within days of Mr Macdonald’s return to Australia on 27 May 2008 he took the opportunity (even if covertly), in the course of pursuing his wider policy objectives of releasing further coal areas for exploration, to pursue with the DPI the availability of coal resources in the North Bylong/ Mount Penny area as a potential coal release area. An answer to that question may provide a factual foundation for a further finding that Mr Macdonald took the opportunity, at that time, to follow-up the enquiries had made before departing from Australia, with the objective he shared with Edward Obeid and Moses Obeid, as co-conspirators, that he would misconduct himself in connection with the granting of a EL at Mount Penny for the improper purpose of advancing their private interests, when the opportunity presented, in that instance by pursuing the possibility of the Department releasing EL 6676 to tender.

The third act of misconduct is abandoned by the Crown

877. In addressing that scenario, I should make reference to the fact that the third act of misconduct, as originally pleaded, was opened on by the Crown but subsequently abandoned in the course of the trial. ^[809]

878. As originally pleaded (as at 1 May 2019), the third act of misconduct alleged that:

THIRD MISCONDUCT: In late May 2008. Mr Macdonald directed that there be a coal mining exploration licence expression of interest process (EOI) targeting, inter alia, Mt Penny. At the time, the Mt Penny area was not suitable as a potential coal allocation area as further exploration was required. Mr Macdonald did so in breach of his duty of impartiality as he knew the Obeid family property in this location. ^[810]

879. As Mr Neil submitted, the Crown was forced to abandon that aspect of its case, because there was no evidence of any communication with the Department, whether by Mr Macdonald directly or indirectly from the Minister’s office, to the effect that the EOI process should include Mount Penny. Nor was there any evidence that on Mr Macdonald’s return from the trade mission to China and South Korea on the morning of 27 May 2008 he identified coal resources in any particular area that would indicate, or might indicate he had any continuing interest in the enquiry he made through Mr Gibson on 9 and 14 May 2008, much less that he gave any direction that there be an EOI process for the granting of an EL “targeting” Mount Penny.

880. Mr Neil submitted that although abandoning the third act of misconduct was a proper and fair reflection of the Crown’s prosecutorial obligations, it exposed a fatal forensic weakness in the maintenance of the Crown case. He submitted that abandoning the third alleged act of misconduct also reflects what the Crown was forced to concede in its closing submissions, namely, that as Minister for Mineral Resources, Mr Macdonald was actively promoting a broad-based policy of promoting coal exploration in New South Wales, including the utilisation of an EOI process for the release to tender of small to medium coal release areas, as a policy which had been promoted by him long before he sought information from the Department on 9 May 2008 and on 14 May 2008 about coal resources in North Bylong/Mount Penny area.

881. In Mr Neil’s submission, the factual contest between the parties that resulted from the Crown abandoning the third act of misconduct became not why the process for the release of small to medium areas was initiated in 2008 but why and how the Mount Penny Coal Release Area came to be included in that process. The accused submitted that by the Crown advancing the submission in closing that Mr Macdonald “slipped” Mount Penny into an otherwise uncontroversial EOI process so that its inclusion would be less likely to be scrutinised ^[811] revealed the truly speculative nature of the Crown case.

882. Mr Neil submitted that Mr Macdonald’s conduct in his meetings with Mr Mullard on 4 and 6 June 2008 not only failed to reveal a determination on Mr Macdonald’s part to “slip” the Mount Penny Coal Release Area into an EOI process for the release of small to medium areas to conceal his criminal conduct, it serves to demonstrate that the steps taken by the Department that resulted in the creation of the Mount Penny Coal Release Area within weeks of that meeting were independent of Mr Macdonald. Mr Neil also pointed to Wiles Map 2 having been prepared for the Minister’s consideration because of work done by the Department between 30 May and 2 June 2008 to include that area as a potential large coal release area. He submitted that it was only when the various practical obstacles to it being released as a large area were discussed with the Minister on 6 June 2008 that he enquired whether it could be made into a smaller area, without giving any direction to Mr Mullard that a smaller area should be in the eastern portion of Wiles Map 2 or that was the area where the Department should direct its focus.

883. These submissions raise critical questions, the answers to which will likely have a direct bearing on whether the Crown has proved its case.

The events leading up to the 4 June 2008 meeting

884. I have already noted that I am satisfied that prior to Mr Macdonald leaving for the trade mission to China and South Korea on 15 May 2008 (a mission also attended by Mr Coutts) he made it clear to the Department, through discussions with Mr Coutts and, in a sense, despite his opposition, that he was keen for the Department to identify both large and small areas for release as coal exploration areas. I am also satisfied that Mr Coutts instructed Mr Mullard to undertake those enquiries. Further, in an email sent by Mr Coutts to Mr Mullard on Sunday 1 June 2008, he refers to a conversation with Mr Macdonald the previous day, confirming that on Mr Macdonald’s return to Australia a few days earlier, he had raised with Mr Coutts the need to progress the agenda for the release of both small and large areas and, it must be inferred, that the Department should take the necessary steps to comply with his request.

885. The email sent by Mr Coutts to Mr Mullard was in the following terms:

Minister rang this morning to ask about future allocations. I said you would have something to him early next week. He indicated Watermark might go next week so don’t be surprised if it all happens

Good Luck ^[812]

886. At this point I digress slightly to elaborate further upon the significance of the Watermark EL earlier referred to.

The Watermark EL

887. The Watermark Exploration Area was a 270 km² coal resource containing more than 1 billion tonnes of domestic and export quality thermal coal situated adjacent to the Caroona Exploration Area ^[813] near Gunnedah in New South Wales. The EOI process in relation to Watermark was launched in October 2007 and closed on 4 February 2008. ^[814]

888. Mr Macdonald had indicated to the Expenditure Review Committee on 21 November 2007 that the DPI was undertaking a major EOI process (being Watermark) which would raise sufficient funds to meet the DPI’s budgetary commitments (namely a 2.5% efficiency dividend) and to raise further revenue for the State of New South Wales generally. On that occasion Mr Macdonald also indicated to the Expenditure Review Committee that the DPI expected to release further large ELs to tender in 2008-2010. ^[815]

889. An Evaluation Committee comprising Mr Mullard, Mr Zanella, Mr Homes and Mr Hughes assessed the seven EOI applications received and on 25 March 2008 issued a Ministerial Submission recommending that China Shenhua Energy Company Ltd be awarded the Watermark EL. That company’s application included an AFC of $389,300,000. In August 2008, Mr Macdonald approved the recommendation. ^[816]

890. The AFC of $389,300,000 generated by the award of the Watermark EL enabled the DPI to meet the efficiency dividend without redundancies or reducing services. ^[817]

891. Mr Coutts gave the following evidence:

Well, the Minister had spoken on a number of occasions about his desire to want to look at further opportunities for putting out areas for tender, given the success of the Caroona and Watermark EOIs. ^[818]

892. By April 2008, over $400,000,000 had been raised in State revenue from the AFCs for Caroona and Watermark.

893. The maps Ms Wiles created on 30 May 2008 for Ridgelands, Benelabri and North Bylong-Mount Penny (to which I will refer presently) were to be, per Mr Mullard’s instruction, for additional EOI processes roughly equivalent to Caroona and Watermark. ^[819]

894. The accused submitted that I would be satisfied that the success of Watermark was one of the reasons Mr Macdonald enquired about the possibility of the DPI releasing EL 6676 to market when he had Mr Gibson make the follow-up enquiries of the Department on 14 May 2008. ^[820] That may be so, but the fact remains that having regard to the enquiries on 9 May 2008 which preceded that enquiry and in light of my analysis of all the evidence bearing upon the question whether that conduct has been established as an act of misconduct, I am satisfied that “but for” the improper purpose of advancing the private interests of the Obeids, those enquiries, in the form in which they issued, would not have been made.

Further events preceding the 4 June 2008 meeting

895. There is no evidence that Mr Macdonald raised directly with Mr Coutts the prospect of the release of the Department’s holdings in the Bylong Valley under EL 6676 in the context of the prospective release of large and small areas, either before the trade mission or in the discussions with him which preceded Mr Coutts’ sending the email to Mr Mullard on 1 June 2008 on their return. The evidence does, however, support the proposition that Mr Macdonald raised that issue with Mr Mullard prior to Mr Mullard directing Departmental officers on 30 May 2008, and over the days that followed, to identify potential large and small areas for release. It is clear from Mr Mullard’s evidence that although he interpreted the email from Mr Coutts on 1 June 2008 as reflecting the Minister’s continuing keenness to release further areas because of the “very strong industry interest at that time,” ^[821] he also interpreted Mr Gibson’s email of 14 May 2008 as to the possibility “for the DPI to open its holdings for tender” ^[822] (a request he understood was sent on Mr Macdonald’s behalf) as a reference to the DPI’s holdings in the Bylong Valley under EL 6676; not as a request for a “small, [medium] or Mount Penny [area] to be released as such” but what Mr Mullard described as the DPI’s holdings in “the broader region”. ^[823]

896. Mr Mullard went on to explain that, in his understanding, that was why Wiles Map 2 was prepared by Ms Wiles, namely to cover “the broader region” ^[824] (by which I understand him to mean broader than the way Wiles Map 1 was mapped), by depicting on Wiles Map 2 a greater portion of the area lying to the west and the north of the icon designating the location of Mount Penny as within a potential open cut coal resource. Mr Mullard gave evidence that his general instruction to Ms Wiles was to look at “the large tender areas that would be… roughly equivalent to the type of allocations that [the DPI] had undertaken for [the] Caroona and Watermark [EOI processes]” ^[825] aware that “the Bylong area was the large area that [the DPI] had in the Western Coalfield”. ^[826]

897. In the accused’s closing submissions, significance is said to attach to Mr Mullard’s evidence that although he might have given Ms Wiles the email of 14 May 2008 when giving her that task, she gave evidence that she did not receive the email and did not recall its contents being brought to her attention.

898. For my part, I do not see that as carrying the significance contended for by the accused. Ms Wiles gave evidence that she did recall being asked (although she could not recall who asked her) to prepare any information she had with regards to the areas of Ridgelands, “North Bylong/ Mount Penny” and Benelabri with a view to seeing whether the DPI was going to undertake further exploration as to the available coal resources in those areas or release them to tender without undertaking further exploration. She gave evidence that, on 30 May 2008, she prepared Wiles Map 2 (and the other two maps relating to Ridgelands and Benelabri) responsive to that request. She said that the Ridgelands map (an area she identified as the “Ridgelands Potential Tender Area” ^[827] ), and the Benelabri map (an area which she identified as the “Benelabri Application Area” ^[828] ) were areas the Coal Advice section of the Department had identified as requiring further exploration. Ms Wiles was adamant she did not volunteer the potential coal resource area she identified as North Bylong/Mount Penny in Wiles Map 2 but that she included it because she was asked to identify information about it. ^[829]

899. I accept Mr Mullard’s evidence that neither before nor following the request from Mr Coutts in his email of 1 June 2008 did he direct officers of the Department that any particular area should be the focus of either locating potential large release areas, the task he allocated to Ms Wiles, or the identification of a list of small areas in the Western Coalfield referable to the Coal Register that might be suitable for release, the task he allocated to Ms Moloney. I also accept Mr Mullard’s evidence that the instructions he gave to Ms Moloney (importantly, instructions he gave prior to receiving the email from Mr Coutts on 1 June 2008) were to “[l]ook at the expressions of interest register [the Coal Register] and see whether [there are] areas that [industry] have nominated [an interest in] that we could put together as possible release areas”. ^[830]

900. He gave evidence that if the industry had not indicated any interest in a particular area that may mean the industry was not interested in attempting to develop that coal resource and, for that reason, it may not be included on the Coal Register. By contrast, if there were areas which had attracted industry interest then those areas might be likely to attract strong competition for the grant of an EL and attract regulation for that reason.

901. Mr Mullard was aware of the fact that the quantity or quality of information available to the Department about the small areas was less of a factor in the identification of small areas suitable for release. He also gave evidence that there were quite limited small areas available for release across the State and that those that were available were generally focused upon “the Western Coalfield margin”. ^[831]

902. In the result, while I accept Mr Mullard’s evidence that he at no time “directed” Ms Wiles to designate or create a coal release area in the North Bylong/Mount Penny area at the request of the Minister (whether it be a large area or a small area), I also accept Ms Wiles’ evidence that she was asked to collect and collate any information with respect to the areas of Ridgelands, “North Bylong/Mount Penny” and Benelabri with a view to seeing whether the Department was intending to undertake further exploration as to the available coal resources in those areas or to release the areas to tender.

903. Having regard to the email correspondence between Ms Wiles and Mr Mullard on 2 June 2008, including a Ministerial Briefing entitled “Potential Coal Tender Areas” prepared by Ms Wiles on 30 May 2008 and forwarded to Mr Mullard on 2 June 2008 ^[832] which included reference to all three areas, I am satisfied that the request which Ms Wiles responded to likely came from Mr Mullard, even if not directly from him, in part at least, although perhaps only in a general sense, as a result of the enquiries of the Department initiated by Mr Macdonald about coal reserves in the North Bylong/Mount Penny on 9 May 2008 and the follow-up enquiries on 14 May 2008, which remained unanswered before Mr Macdonald left for overseas on 15 May 2008.

The Ministerial Briefing of 2 June 2008 which included Wiles Map 2 and Ms Moloney’s six small areas

904. In the Ministerial Briefing prepared by Ms Wiles on 2 June 2008, “Ridgelands” was identified under the subtitle “Potential Coal Tender Areas^{” [833]} with exploration and current drilling said to be sufficient to “reasonably delineate the resource potential”. For that reason, no further exploration was recommended. By contrast both the “North Bylong - Mt Penny Area” and “Benelabri” were identified under a subheading as “Further Exploration currently pending and/or recommended”. ^[834]

905. Ms Wiles described the “North Bylong - Mt Penny Area” in the following way:

Currently undertaking exploration in the western coalfields, with exploration proposed in the area. Current estimates indicate open cut resources of ~200Mt in the Wollar – North Bylong area.

Resources are contained within the Ulan Seam, raw ash ranges from 15-27%. Immediately to the south of the area (Map attached shown in pink hatch ^[835] ) there is an underground resource also in the Ulan seam.

This area should not be tendered until further exploration is completed in the area. ^[836]

906. Ms Wiles described “Benelabri” in the following way:

Further Exploration is recommended for the Benelabri Area.

The area is not currently held under title by the Department.

An aero mag survey has recently been flown over the area (final results pending). Further drilling is required to more accurately define the open cut and underground resources. Resources are contained within the Hoskissons and Melvilles seams. The area contains both open cut and underground resources. (Emphasis added). ^[837]

907. Wiles Map 2, prepared on 30 May 2008, was also forwarded to Mr Mullard by email on 2 June 2008 together with maps of Ridgelands and Benelabri. ^[838]

The preparation of Wiles Map 2

908. Wiles Map 2 ^[839] was configured by Ms Wiles to identify, by a series of red cross-hatching in an irregular sideways S-shape, a potential large open cut coal resource area that might be suitable for release. The red cross-hatching corresponded with an entry on the Legend to the left side of the map which read “Potential Open cut Area”. That area was located entirely within EL 6676. Ms Wiles explained that Authorisation 287 to the east was “under a current mining title at that stage” and could not be encroached upon. ^[840] She also noted further Authorisations “to the south”. ^[841]

909. The map also recorded the location of Mount Penny within EL 6676 and the location of Mount Misery within the boundaries of the Goulburn River National Park to the north of Mount Penny. It also showed the township of Bylong located within Authorisation 287 to the southeast of Mount Penny.

Wiles Map 2

910. The irregular sideways S-shape, designating the potential open cut coal resource reflected Ms Wiles’ synthesis of a range of data and other information, including borehole data, national park boundaries, the direction and depth of underground coal seams and the boundaries of the existing EL 6676 and Authorisation 287. ^[842] Ms Wiles also took into consideration information from the Dwyer Report ^[843] which, at the time of publication in 2005, identified coal resources in an area extending from the western edge of the Hunter Valley in the east to Dunedoo in the west, and from the Liverpool ranges in the north to Rylstone in the south. The identification of these resources in the Dwyer Report was for planning purposes and to encourage stakeholder interests in the further evaluation and exploitation of coal resources. ^[844]

911. In the Dwyer report, an area described as the “Wollar-Bylong area” was identified as extending for 17 kilometres from Bylong in the east to Wilpinjong in the west, and 30 kilometres to the south. That area was also noted to encompass several localities with the potential for “small to medium size open cut mines” with three areas with “substantial open cut potential” identified in a “PLAN” annexed to the report. ^[845] Infrastructure was also assessed as reasonably well-established. ^[846] Finally, the Report also noted that what were described as “Anglo Coal Auth 287 and 342” at “Bylong” had been extensively drilled ^[847] with an estimated coal resource of 450Mt reported in the 2004 Coal Industry Profile.

912. Mr Mullard gave evidence that when he received Wiles Map 2 from Ms Wiles, he understood it to depict an area of substantially low-cost open cut coal associated with substantial underground coal that had been rendered in a two-dimensional form by Ms Wiles using mapping software. He also understood that in rendering it in that way that Ms Wiles had taken into account how the topography of the area interrelated with the direction of the coal seams and their depth beneath the surface of the valley floor. He also noted that the potential open cut area identified by Ms Wiles in the sideways S-shape, extended from the Wilpinjong mining lease in the west through to the Authorisation 287 held by Anglo Coal P/L in the east being, as he described it, “the unallocated area that existed between the two existing mining titles”. ^[848]

913. Mr Mullard gave evidence that he understood Ms Wiles included Wiles Map 2 as a potential large release area for the following reason:

Because it was a large area. There were substantial coal resources within an unallocated region. We had identified this as an area of future interest and we were planning to undertake additional drilling. It's really because of the amount of coal we believe potentially existed; we didn't know precisely. We needed to do more work, but we knew there was coal within this region. We knew that there were mining titles either side that had been explored and that showed substantial coal resources, so based on the size of the area, we knew that this had potential for a large coal allocation area. ^[849]

Ms Moloney’s identification of the “Six Small Areas”

914. On 30 May 2008 a document entitled “Small Areas in the Western Coalfield which may be suitable for a Competitive Expression of Interest” was prepared by Ms Moloney. That document was then provided to Mr Mullard by email on 2 June 2008. ^[850] In that document six small areas were identified from the Coal Register and all requiring formal titles identification. The areas varied in size from 12 km² (Area 4) to 140 km² (Area 6). Ms Moloney described each of the areas as “speculative” and having “no or limited existing coal exploration and generally considered as remnant resources”. ^[851] Described in that way, the areas coincided with subcategory (iv) of future coal allocations nominated in the Coal Allocation Guidelines of January 2008. ^[852]

The Ministerial Briefing of 3 June 2008

915. On 3 June 2008, in advance of the meeting with the Minister scheduled the following day, the work that had been done by Ms Moloney and Ms Wiles over previous days was consolidated in a Ministerial Briefing prepared by Mr Mullard and forwarded to the Minister’s office. ^[853] The Ministerial Briefing was headed “Potential Coal Allocation Areas in Western NSW”. ^[854] It identified the issue to be addressed as “Potential coal resources which may be suitable for a Competitive Expression of Interest”. ^[855] The background to that issue was described in the Ministerial Briefing by Mr Mullard in the following way:

A number of coal allocation areas have been identified across the state. These fall into two main groups:

1. Small areas in the Western Coalfield which would be suitable for smaller industry players.

2. Large Expression of Interest areas which would be expected to generate substantial return to the government ^[856]

916. The recommendation was, “The Minister notes this Brief”. ^[857]

917. Attachment A to the Ministerial Briefing included the work done by Ms Moloney. The six small areas she identified were again described as “generally considered [to be] remnant resources.” ^[858] Mr Mullard gave evidence that remnant resources were “leftover area[s] that had limited potential for major stand-alone mine development.” ^[859] Each of the six areas were identified by number (cf. by name) and represented on a map by a shape of the area. The shape was generated within the Department.

918. Attachment A also included Wiles Map 2 ^[860] as one of three potential large coal release areas together with Ridgelands in the Hunter Valley ^[861] and Benelabri, north west of Gunnedah. ^[862]

919. I note that Wiles Map 2 had by this time been renamed “North Bylong” and the reference to “Mt Penny” was removed. It is the only version of Wiles Map 2 in evidence in Exhibit A or Exhibit X (the maps seized during the execution of the Locaway P/L search warrant) which bears that title. All other versions of Wiles Map 2 which are in evidence bear the title “North Bylong – Mt Penny Area”. ^[863] Nothing turns on that fact.

920. Wiles Map 2 was included in Attachment A to the Ministerial Briefing alongside and associated with the following information (being different from the information Ms Wiles had attached to the map she had originally sent to Mr Mullard): ^[864]

North Bylong

The Department has contracted to drill a number of exploration wells for the area. The area is expected to contain substantial open cut resources close to existing rail facilities.

Current estimates indicate open cut resources greater than 200Mt in the Wollar – North Bylong area.

Resources are contained within the Ulan seam, raw ash ranges from 15-27%.

Further exploration is required to define a potential tender area.

921. Mr Mullard explained in his evidence that all three large areas identified by Ms Wiles and included in Attachment A were also not, in his assessment, ready for release as there was insufficient information available to the Department about the size of the coal resources and that further exploratory drilling was required to obtain that information. ^[865] He gave evidence that he held that view for the following reason:

… we didn’t really have enough information for these, being large areas, to be released and that there was insufficient information on which we could have an expectation that companies would wish to bid substantial additional financial contribution. There really wasn't enough information about the nature and the extent of the resource for companies to formulate a more detailed plan about how they would extract it or where the resources were and the quality and extent of those resources.

So for all of the larger areas, we always had a very significant database of existing drilling or departmental drilling that formed the basis that companies could actually put a tender in on. ^[866]

The 4 June 2008 meeting

922. At 11:15am on 4 June 2008, a meeting was convened in the Minister’s office at Parliament House attended by Mr Macdonald, Mr Mullard, Dr Sheldrake and Mr Gibson. ^[867] The content of the 3 June 2008 Ministerial Briefing, and the issues it raised, were discussed at that meeting. The meeting was not minuted.

923. Mr Mullard gave evidence that of the nine areas the subject of the Ministerial Briefing (the six small areas and the three large areas), the Minister showed particular interest in the Department identifying additional small areas in order to progress the prospect of an EOI process being released for those areas. As far as the large areas were concerned, the Minister wanted to accelerate exploration activities, including additional drilling.

924. At the end of the meeting it was resolved that the Department would prepare a submission to Treasury to fund a drilling rig to facilitate the exploration of the large areas. ^[868] The need for further information concerning the small areas identified by Ms Moloney did not arise in the meeting since, as noted above, being small areas within subcategory (iv) under the Coal Allocation Guidelines, they did not attract the same AFC as larger areas and, for that reason, undertaking exploration activities in small areas was a lower priority for the Department, not the least because it was uneconomic. ^[869]

925. There was no evidence adduced from either Mr Mullard or Mr Gibson that there was any particular focus by the Minister on what had been renamed by that point “North Bylong” on Wiles Map 2, or any discussion about or reference to whether the information in the Ministerial Briefing relative to that map addressed or satisfied the enquiries the Minister had made of the Department on 14 May 2008 about the possibility of the DPI opening up its holdings under EL 6676 for tender, following up on the enquiries he made on 9 May 2008 about coal reserves in the area of Mount Penny.

926. The fact that at the 4 June 2008 meeting the Minister did not focus on the information in the Ministerial Briefing as it related to North Bylong, or what was revealed in Wiles Map 2 as the potential large open cut coal resource area is not, in my view, necessarily fatal to what occurred at that meeting being capable of informing the question whether I am satisfied that the conspiracy charged was in existence by that date.

927. The accused submitted to the contrary. They emphasised the fact that the email Mr Gibson sent to Mr Mullard the following afternoon (5 June 2008) at 4:30pm where he requested “a full list of both big and small resource deposits across [New South Wales] and the potential timeframes for when we may be able to open them to a tender process”, together with the fact that Benelabri was specifically nominated in that email as the coal release area to which “absolute priority” was to be given in preparing that area “for competitive tender by February 2009”, ^[870] supported the accused’s case that the Minister’s dealings with the Department at this time were entirely consistent with his determination, and for sound policy reasons, to release a range of new areas, across the State for coal exploration. The accused submitted this email and the Minister’s policy agenda generally, was inconsistent with the Crown case that “but for” the improper purpose of advancing the financial interests of the Obeid family, Mr Macdonald would not have made enquiries of the Department about coal resources in the area of Mount Penny or the potential for the Department to release EL 6676 to tender (the conduct the subject of the first and second acts of misconduct). I have already dealt with and disposed of that argument in finding the first and second acts of misconduct established.

928. In its closing submissions, the Crown pointed to 4 June 2008 (being a Parliamentary sitting day) as providing an opportunity for Mr Macdonald to update Edward Obeid on the outcome of his meeting with Mr Mullard that morning as it impacted on their common conspiratorial objective.

929. The Crown submitted that “update”, insofar as it related to the coal resource in the Bylong Valley at or near Mount penny and including Cherrydale Park, would have been to the effect that the DPI were directed by him to continue to progress an EOI for “small/medium and large areas” and to prepare a submission to Treasury to secure funding for a drilling to enable the necessary exploration of “the potential large areas”. ^[871]

930. The Crown also invites focus on the telephone contact between the accused later that afternoon. Moses Obeid called his father at 2:38pm; Edward Obeid called Mr Macdonald at 4:29pm (for nine seconds); Edward Obeid contacted Moses Obeid at 5:16pm and Mr Macdonald contacted Edward Obeid 8:45pm. ^[872] Given the regularity of contact between Edward Obeid and Moses Obeid, as father and son, before, during and after the period of the conspiracy, and the regularity of contact between Edward Obeid and Mr Macdonald as Parliamentary colleagues, including on Parliamentary sitting days and at a time when the electricity privatisation issue was still contentious, evidence of the opportunity on 4 June 2008 to discuss the unfolding events as contended for by the Crown, adds little weight to the question whether I am satisfied that the conspiracy the Crown prosecutes was in existence at that time.

931. Of greater potential significance to that question is Mr Gibson’s email request of Mr Mullard at 5:06pm on 4 June 2008 (following an email at 4:26pm confirming 6 June 2008 as a follow-up meeting ^[873] ) requesting “all the maps that you showed Ian today blown up as big as you can and sent up tomorrow”. ^[874] Mr Gibson gave evidence that the Minister asked for a larger version of the maps because the maps embedded in the Ministerial Briefing were A4 size, the obvious inference being he wanted something bigger. ^[875] The Crown pointed to Mr Gibson’s request being sent following the nine second call between Edward Obeid and Mr Macdonald at 4:29pm as suggesting a connection between the two events. In the absence of any evidence of the content of the call and noting it was a Parliamentary sitting day where the evidence shows regular telephone contact between Mr Macdonald and Edward Obeid, the coincidence in timing of the call and Mr Gibson’s email request is not overly compelling but, as with the telephone contact summarised above, not relevant.

932. Mr Gibson gave evidence that the following day (5 June 2008) a large cardboard cylinder containing the maps in a larger format was hand-delivered Mr Macdonald’s Parliamentary office. Mr Gibson took receipt of it. ^[876] Mr Gibson recalled that the maps were “certainly bigger than A4 … [he said] you could unfurl them and they were quite a reasonable size”. ^[877]

933. The Crown does not advance the submission that the larger version of the maps were requested in order that Mr Macdonald might provide Wiles Map 2, in its larger paper format, to Edward Obeid or Moses Obeid or any other member of the Obeid family. Rather, it is the Crown case that upon Mr Macdonald’s receipt of the large formatted Wiles Map 2 (together with the large maps of Ridgelands and Benelabri) in preparation for the follow-up meeting scheduled for the following day, he took the opportunity at some convenient time after that meeting and before 7 July 2008 (when Wiles Map 2 was produced at the second Wentworth Hotel meeting with Mr Brook) to provide Wiles Map 2 (and Wiles Map 1) to either Edward Obeid or Moses Obeid or a member of the Obeid family. That conduct comprises the fourth act of misconduct also relied upon by the Crown to prove, by inference, the existence of the conspiracy and the participation of each of the accused in it.

Some preliminary observations with regard to the fourth act of misconduct

934. I will deal with the evidence relevant to proof of the fourth act of misconduct later. Suffice to note at this time that there is no evidence in the Crown case as to when or by what means or in what form either of Wiles Map 1 or Wiles Map 2 were provided by Mr Macdonald, or whether he arranged for them to be provided in paper or in a digital format. After an amendment in the course of the trial to the timeframe within which it was alleged that the fourth act of misconduct was committed, the timeframe within which the Crown alleges both maps came into the possession of the Obeids is said to be between 9 May 2008 (the date Wiles Map 1 was created and emailed to Mr Macdonald’s office in the form of a Ministerial Briefing ^[878] ) and 9 July 2008 (the date when Wiles Map 2 was produced to Mr Brook by Paul Obeid in Moses Obeid’s presence at the second Wentworth Hotel meeting ^[879] ). The Crown also relied upon the fact that both maps (or copies of the maps) were located at commercial premises following execution of a search warrant on 23 November 2011, being premises to which each of the accused Edward Obeid and Moses Obeid (and other family members including Paul Obeid and Gerard Obeid) had access. ^[880]

935. Although as a matter of numerical ordering of the eight acts of misconduct the Crown relied upon to prove the existence of the conspiracy, the fourth act of misconduct precedes the fifth act of misconduct, because the fourth act of misconduct is cast on a between dates basis, I propose to first consider the evidence bearing upon proof of the fifth act of misconduct. Although that act of misconduct was also cast on a between dates basis, the Crown case, as closed, was that the direction given by Mr Macdonald effectively to create the Mount Penny Coal Release Area occurred at a meeting on 6 June 2008.

936. Again, suffice to note at this point in my deliberations as concerns the fourth act of misconduct, that in the Crown’s submission I would be well satisfied that Mr Macdonald caused Wiles Map 2 to be provided to either of the accused or a member of their family some time after it was first provided to him as embedded in the 3 June 2008 Ministerial Briefing, on 4 June 2008; or after it was delivered to the DPI in a larger format on 5 June 2008; or after it was re-sent by email at Mr Gibson’s request after the meeting on 6 June 2008. ^[881] In the Crown’s submission, even if I am unable to make any finding as to when Wiles Map 2 was provided in breach of Mr Macdonald’s duty of confidentiality or when or how Mr Macdonald caused it to be provided, I would be left in no doubt that it was produced at the second Wentworth Hotel meeting with Mr Brook on 7 July 2008, and that it was used at that meeting as a point of reference to identify the location of Cherrydale Park and other properties making up what Mr Brook was told was the landholders alliance and the area which he was given to understand the Obeids believed might contain a resource of up to 100Mt of high-grade thermal coal. ^[882]

937. In the Crown’s submission, if I am satisfied that Wiles Map 2 was produced at the second Wentworth Hotel meeting on 7 July 2008, and I am also satisfied that on 6 June 2008 Mr Macdonald directed the Department to “break up” the available potential large open cut coal resource on Wiles Map 2 to create a smaller area to the east so as to encompass the Obeids’ rural holdings at Cherrydale Park, that would provide overwhelming support for the proposition, fundamental to proof of the Crown case, that the conspiracy was in existence by 6 June 2008 and, by logical and rational extension, by 9 May 2008 when Mr Macdonald first initiated an enquiry of the DPI about coal reserves in the area of Mount Penny. The Crown also submitted I will also be satisfied that Mr Macdonald would not have made those enquiries of the Department via Mr Gibson on 9 and 14 May 2008 and would not have given the direction to the Department through Mr Mullard on 6 June 2008 were it not for the improper purpose alleged.

938. In short, the Crown submitted that Mr Macdonald’s dealings with Department in May and June 2008 - the conduct particularised as the first, second and fifth acts of misconduct (in each case constituting a breach of his duty of impartiality), when considered together with the provision of Wiles Map 2 (the conduct particularised as the fourth act misconduct in breach of his duty of impartiality or confidentiality) I would be satisfied of the existence of conspiracy alleged beyond reasonable doubt.

939. Applying that analysis, it also follows that if I am not satisfied that the fifth act of misconduct as particularised is established, for whatever reason, the Crown may fail to prove the existence of the conspiracy predating 9 May 2008, even were I to find that Mr Macdonald provided or caused to be provided a copy of Wiles Map 2, prior to it being produced on 7 July 2008 at the second Wentworth Hotel meeting and used by Moses Obeid and Paul Obeid to promote the prospect of a coal mining venture, and even were I to find that Mr Macdonald’s provision of that map was an act of misconduct committed in breach of his duty of confidentiality and/or impartiality.

The significance of the fifth act of misconduct to proof of the existence of the conspiracy

940. As I have already sought to make clear in my deliberations to date, the first and second acts of misconduct as particularised provided the critical additional evidence enabling me to find as a fact and beyond reasonable doubt that Mr Macdonald knew by 9 May 2008 (and probably earlier) that the Obeids owned Cherrydale Park in the Bylong Valley situated near Mount Penny. Also, as I have made clear, I am satisfied that the enquiries Mr Macdonald made of the Department on 9 and 14 May 2008 were in breach of his duty of impartiality and otherwise satisfy the “but for” test so as to constitute a substantive act of misconduct in the legal sense. However, neither of those findings, nor a combination of them, allowed me to find the further and critical fact that those acts of misconduct were committed by Mr Macdonald in furtherance of the specific conspiracy alleged.

941. In my view, as I have endeavoured to make clear in my deliberations thus far, the evidence relevant to establishing that Mr Macdonald’s enquiries of the Department on 9 and 14 May 2008 constituted substantive breaches of his Ministerial duty of impartiality leaves open the reasonable possibility that those related acts of misconduct were, or might have been, preparatory to Mr Macdonald entering into a conspiracy of the specific kind charged, even if he made those enquiries at Edward Obeid’s invitation or even at his urging. The evidence also leaves open the reasonable possibility that Mr Macdonald committed those acts of misconduct unrelated to the conspiracy charged altogether in the sense that there was at that time no “meeting of the minds” that Mr Macdonald would commit misconduct in connection with the granting of an EL at Mount Penny.

942. I am of the view that, notwithstanding the inferences I have drawn adverse to Edward Obeid and Moses Obeid from the evidence of Mr Fitzhenry concerning Moses Obeid’s eagerness to interest Mr Fitzhenry in the purchase of Coggan Creek, ^[883] there is a lack of any direct evidence as to what actions Moses Obeid or Edward Obeid were taking or enquiries they were making proximate to 9 May 2008 to support the Crown’s submission that the first and second acts of misconduct were committed by Mr Macdonald in furtherance of a conspiracy already in existence by that date and in which each of the accused Edward Obeid and Moses Obeid had intentionally agreed to participate.

943. I note and accept that the Crown submitted that I should not view the conduct of Mr Macdonald vis a vis his dealings with the Department in May 2008 or in June 2008 in an evidential vacuum. The Crown submitted that although the eight acts of misconduct are particularised in the Revised Statement of Crown Particulars in chronological order (because on the Crown case they were committed from time to time in the process of the conspiracy being executed after its formation by 9 May 2008 and before it was fully executed by 31 January 2009), that does not, and should not, oblige the Crown to prove that each individual act of misconduct was committed by Mr Macdonald referable solely to the evidence referable to proof of that event.

944. The Crown submitted, and I accept, that each successive act of alleged misconduct has the capacity, as a matter of rational analysis in a circumstantial evidence case, to inform the question whether a particular act of misconduct is established by reference to the evidence directly bearing upon whether it constitutes misconduct in the legal sense, by being considered together with the events which give it context, including the alleged acts of misconduct which precede or follow it. As a matter of legal reasoning I accept the correctness of that approach and direct myself accordingly. I have already directed myself that the Crown is not obliged to prove each individual act of misconduct to any given standard of proof.

945. In this case, however, while I accept that the Crown is not obliged to satisfy me that each of the eight particularised acts of misconduct were committed pursuant to the conspiracy charged, because I do need to find that the conspiracy was in existence prior to 9 May 2008, ^[884] if I am not satisfied that the first and second acts of misconduct were committed in furtherance of the conspiracy, and there is a deficit in the evidence to otherwise prove that the conspiracy was in existence at that time referable to the other acts of misconduct I might find proved, the substantive acts of misconduct which I am satisfied were committed by Mr Macdonald on 9 and 14 May 2008 will be of little weight, if relevant at all, in proof of the Crown case.

946. I remain of the settled view I expressed earlier ^[885] and which I repeat now, that even if I am satisfied that Mr Macdonald committed multiple acts of wilful misconduct in his various dealings with the accused (and/or members of their family) in breach of his duty of confidentiality (or impartiality) after his dealings with the Department in May/June 2008 including, in particular, were I satisfied he provided Wiles Map 2 and the list of companies to be invited to participate in the EOI process (both documents being used by Moses Obeid in his dealings with Mr Brook and the subject of the fourth and seventh acts of misconduct) after that date, I must consider very carefully whether that finding informs the question whether Mr Macdonald’s earlier dealings with the Department in May/June 2008 were overt acts in furtherance of a conspiracy that was in existence at that time.

947. The need to exercise caution before drawing an inference adverse to the accused as concerns the time at which the conspiracy was forged, obliges me to give careful consideration to the case advanced in closing submissions by each of the accused, to the effect that Mr Macdonald’s dealings with the Department in May 2008 and/or June 2008 are capable of rational explanation inconsistent with the criminal purpose which the Crown attributes to him as a participant in the conspiracy alleged.

948. It is for that reason that in determining whether the Crown has proved its case beyond reasonable doubt, a disciplined and scrupulous approach to the question whether Mr Macdonald misconducted himself as particularised in the fifth act of misconduct in furtherance of the conspiracy, is critical.

949. That is in large part because the Crown does not seek to prosecute a case that the conspiracy was entered into after the Mount Penny Coal Release Area was designated by the Department in June 2008 such as might have put Mr Macdonald’s provision of Wiles Map 2 and its production at the meeting with Mr Brook starkly in the frame of conspiratorial criminality. If the Crown does not make out its case that the Mount Penny Coal Release Area was created at the direction of Mr Macdonald (the subject of the fifth act of misconduct), then despite my gravest suspicions that there was a conspiracy of the specific kind framed in the indictment in existence as at 9 May 2008, unless proof of the fourth, sixth, seventh, eighth or ninth acts of misconduct (or any one or more of them) is capable of supplying additional proof of that fact, I may be left with a reasonable doubt as to the guilt of any of the accused of the offence charged.

The fifth act of misconduct

950. The fifth alleged act of misconduct was particularised as follows:

FIFTH MISCONDUCT: Between 4 and 16 June 2008, Mr Macdonald directed that the “potential open cut area” depicted in Wiles Map 2 be reduced to a smaller area comprising the eastern portion only. He did so in breach of his duty of impartiality as he knew the Obeid family owned property in this location.

The 6 June 2008 meeting

951. On 6 June 2008, a further meeting was convened by Mr Macdonald and attended by Mr Mullard and Mr Gibson.

952. What occurred at the meeting was the subject of very considerable contest in the trial and the focus of detailed closing submissions by the parties. Both of the witnesses to that meeting, Mr Mullard and Mr Gibson, were challenged as to the accuracy of their recall of what was discussed at the meeting, including, in particular, what was said about or done at the meeting with Wiles Map 2.

953. To a limited but nonetheless emphatic degree, Mr Gibson’s evidence as to what Mr Macdonald said and did in relation to Wiles Map 2 was the subject of a specific challenge to the extent that I am invited by each of the accused to give his evidence on that issue no weight at all in considering whether the Crown has established the fifth act of misconduct.

954. The challenge to Mr Mullard’s evidence was mounted by the Crown by applying for and being granted leave under s 38 of the Evidence Act to cross-examine him in respect of a number of what were said to be, and what I was satisfied were, inconsistent statements made by him in the course of giving evidence in the public inquiry conducted by ICAC in November 2012 and witness statements he made after those proceedings in 2014 and 2019. ^[886]

955. Mr Gibson was cross-examined by counsel for the accused on the basis that significant aspects of his evidence as to what occurred in the course of the 6 June 2008 meeting were given for the first time, and without forewarning to the Crown, in the course of his evidence in chief, despite him having given evidence in the ICAC proceeding in November 2012 and having prepared his witness statements signed after that date. The accused submitted that Mr Gibson’s attempts to explain that state of affairs were not persuasive and that critical features of his evidence were wholly implausible for that reason.

Mr Gibson’s evidence in summary

956. So far as is directly relevant to proof of the fifth act of misconduct, Mr Gibson gave evidence that at the 6 June 2008 meeting, and referable to Wiles Map 2, Mr Macdonald directed that what became the Mount Penny Coal Release Area should be created by requesting (of the Department through Mr Mullard) that “the boundary” (or “the shape”) of what had been designated as the “North Bylong/ Mount Penny” large coal resource on Wiles Map 2 be “changed”.

957. Mr Gibson gave evidence that Mr Macdonald said:

Brad, the North Bylong tenement boundary should be changed to something like this because it would be more reflective of the resources in that area. ^[887]

958. Mr Gibson gave evidence that Mr Macdonald then drew onto Wiles Map 2 a basic sketch, in outline, as to where the new coal release area should be. ^[888] In cross-examination Mr Gibson said that his recollection was that Mr Macdonald was not asking whether the Department could “split” the North Bylong/ Mount Penny area into a small to medium resource, he was asking for a “change to the shape” of the area represented on Wiles Map 2 that was “more reflective of the resources in that area”. ^[889]

959. In circumstances where the Crown was taken by surprise by this evidence, whether Mr Gibson should be permitted to be invited by the Crown to replicate the area marked-up on Wiles Map 2 was the subject of objection and competing submissions. In the result, Mr Gibson was unable to replicate the markings he saw Mr Macdonald apply to the map ^[890] without, as he described it, “reference to other materials”. ^[891] What those other materials might be was not further explored by the Crown. Mr Gibson did give evidence in chief, however, that the outline or basic sketch he saw Mr Macdonald apply to the map was “very similar” to what was ultimately released as what Mr Gibson described as the “Bylong map” that was released as part of the EOI process. ^[892] In closing submissions, the Crown invited me to view Mr Whiddon’s map as representing what Mr Gibson was intending to convey by that evidence. ^[893] That map is reproduced at par 552 above.

960. Mr Gibson also gave evidence that what he described as the “basic sketch” was a “work in process [sic]” between the Minister’s office and the Department for several weeks after the 6 June 2008 meeting. ^[894]

Mr Mullard’s evidence in summary

961. When first asked by the Crown what was discussed at the meeting, Mr Mullard said that the Minister made it clear that he wanted the Department to designate small coal release areas additional to the six areas that had been identified by Ms Moloney and discussed at the 4 June 2008 meeting two days earlier. Mr Mullard gave evidence that although he suggested to Mr Macdonald that “would be difficult”, and although in that connection Mr Macdonald did refer to the large potential resource in the Bylong Valley on Wiles Map 2, he did not specify any particular area on that map as the source of an additional small area; nor did he define any boundaries of a small area referable to the sideways S-shape on Wiles Map 2. ^[895] Mr Mullard gave evidence that although it was his view at that time (as it had been for some time) that breaking up large areas might result in them being less attractive to industry, he did not express that view to the Minister at the meeting. ^[896] Instead, he told the Minister that “we [the Department] would look at it”. ^[897]

962. In cross-examination by Mr Martin, Mr Mullard confirmed that his recollection of the meeting was that he told Mr Macdonald that “I’ll see what we [the Department] can do”. He confirmed that he did not tell Mr Macdonald that the Department would “definitely” be able to split the Bylong area to create a smaller resource area but that “we [the Department] had to go back and look at it”. Mr Mullard confirmed that he did not express any negative opinion to Mr Macdonald as to the potential for a small area to be excised. He gave the following evidence:

Q. You did not, at this meeting on 6 June or later, raise any opposition on behalf of the department in respect of breaking up the larger North Bylong area or any other large area into a medium area?
A. Well, I should say the only one we were considering was North Bylong. I would have objected to the other large areas [Benelabri and Ridgelands] but that topic never came up, and I didn't raise any objections to looking at breaking up the Mount Penny‑Bylong area.

Q. Yes, more generally, you didn't mount any opposition at that 6 June meeting, or at all, to the Minister's desire to release medium or smaller areas?
A. No.

HER HONOUR

Q. Do I understand, Mr Mullard, that you would have objected to the other large areas being split or broken up; was that because it was the department's view that those two other areas should be preserved as a large potential coal resource for future direct allocation?
A. Yes. ^[898]

963. The Crown returned to this aspect of Mr Mullard evidence later the course of his evidence in chief and again before leave was given to cross-examine, by focusing his attention on Wiles Map 2 and the designation of Mount Penny on Wiles Map 2 by the icon Ms Wiles applied when preparing the map. He gave evidence that when the Minister questioned whether a large area might be “split up” to make a smaller area, they were both looking at the large version of Wiles Map 2 (one of the three larger maps the Minister had requested be provided and that the Department had provided the previous day). He said the Minister made no reference to Mount Penny and did not gesture to any particular area on the map. ^[899]

964. I asked the following questions:

Q. Can I have your assistance with this. When he said “can’t we split this up to make a smaller area?”, looking at the document on the screen, you understood him to refer to, or he in fact referred you to that S-shape on its side, that crosshatching?
A. Yes. Well, not so much the crosshatching because that’s just the open‑cut resources. There would have been other resources underground. But it was in reference to that map.

Q. And when he said “can't we split this area up?”, what did you understand him to mean when he said “this area”?
A. He was referring to the whole area and what he was saying was “can’t we create a smaller area from this large area?” This was the only large release area that we were planning for the Western Coalfield so it was the only area that we could potentially create a small area on. He didn't do it by referencing Mount Penny but, logically, the only area that we could have created it out of that was in the eastern part.

Q. And when you say “logically”, are you deploying your expertise as a geologist and a skilled coal resource man, or are you saying that that was a matter of the logical place to split because it was discussed or some version of that?
A. No, I’m employing my own expertise.

Q. Right, so he says “can’t we split it up?”; you may not have said anything out loud but, in your own mind, you're thinking, well, if that is going to be possible at all, it is going to be a split that will section off some part of the eastern area designated by some boundary to be fixed at some later time?
A. That’s correct. ^[900]

965. The Crown then asked following questions:

Q. When the Minister asked whether a split‑up was possible, was it apparent to you at that point, as you sat there in the meeting, that the logical way to do so was to make an area from the eastern end of that red crosshatched S?
A. I wouldn’t say I was necessarily convinced but I thought that would be the area. It certainly would ‑ it would either be the eastern side or the western side; it wouldn't be in the middle. But my view was, just knowing the resource, that the eastern side would likely be the area, but I wasn't going to rely on my ‑ purely my ‑ it had to be looked at by the geologist and Julie.

Q. Did you tell Minister Macdonald that was your preliminary view?
A. No. No. The only thing I communicated was that we’d look to see whether we could create a small area. My concern was, and why I didn’t give a definitive answer, I didn't want to compromise a potential large tender area by cutting a piece out of it so we’d end up with, effectively, a resource that was not going to be attractive as a larger area which would generate the significant returns to Government.

So that was my main concern. Could we create ‑ and that was my instructions to Julie when I went back. I said, “Can you look at preserving a larger resource that we could do as a large tender area while creating a small area?” So if Julie had come back to me and said “no, we can’t”, I would have gone back to the Minister. ^[901]

966. After leave under s 38 of the Evidence Act was granted, ^[902] Mr Mullard was taken to his statement of 20 May 2014. He confirmed his signature and initials on each page and the standard terms of the jurat, confirming his appreciation of the need for the statement to be accurate and truthful to the best of his knowledge and belief.

967. He was then taken to paragraph 12 of the statement which concerned the 6 June 2008 meeting and which reads, in part, as follows:

At this meeting [the meeting of 6 June 2008] the Minister told me that he wanted the North Bylong area broken up to make a smaller area in the east that could be released with the smaller Coal Release Areas under consideration at that time. He referred to this as ‘the Mount Penny area’. ^[903] (Emphasis added.)

968. The Crown then asked Mr Mullard whether what was recorded in the statement “accurately records what the Minister said at the meeting”. His response was as follows:

The problem I’ve got … is that you’re now 12 years after the event … When I wrote this, this is six years after the event. So my recollection today is I can’t specifically recall that, but I may have recalled that at that meeting, if you know what I mean, when I wrote that statement. It is very difficult for me to ‑ there is a degree of certainty, I think, that is being put on what was said at the meeting that in reality doesn’t exist. ^[904]

969. It was clear after cross-examination by Ms Francis that it is an overstatement for Mr Mullard to describe any part of his 2014 statement as having been written by him (as to which see later).

970. Mr Mullard went on to explain that he meant by the “degree of certainty being put on what was said at the meeting”, that there was “a degree of interpretation” being applied, creating the additional problem that there was what he described as “a degree of lack of clarity about exactly what Mount Penny is, namely whether it is a specific area or the whole area”. ^[905] It is unclear whether Mr Mullard was intending to convey that Mr Macdonald was unclear about what “the Mount Penny area” was, or whether he was attributing that “lack of clarity” and/or “interpretation” to the person who drafted the statement for his consideration.

971. Mr Mullard did, however, accept the Minister may have said what was attributed to him in his 2014 statement about making “a smaller area in the east” which the Minister referred to as “the Mount Penny area” but that with the passage of time he has forgotten that was said. ^[906] Mr Mullard ultimately volunteered that the Minister “definitely” told him to “make a smaller area” and that it was “very likely” in the east. ^[907] He did not, when giving that evidence, qualify the reference to the Minister “telling” him to make a smaller area, in the sense of “telling him” to see whether it was possible to do so, the resounding effect of his evidence both in his evidence in chief and under cross-examination by the accused. The Crown did not re-examine on this issue.

972. Mr Mullard also gave evidence in chief before being cross-examined by the Crown with leave, that after the 6 June meeting he spoke to Ms Moloney. Although he had no detailed recollection of the conversation with her, his best recollection was he asked her “whether or not we [the Department] could look at creating a small area [less than 100Mt] out of the Bylong area” making sure, “where possible”, to “preserve a potential larger tender area” so as not to “compromise the larger area as a future large tender area”. ^[908] As noted earlier, it was his evidence that he appreciated that there was “really only one way” to create that smaller area out of the Bylong area in circumstances where the “eastern area” was bounded by the existing titles, ^[909] such that “if you were creating a smaller tender area without compromising the larger resource it would be in the eastern side”. ^[910] In cross-examination by Mr Martin, Mr Mullard confirmed that the feasibility of creating a coal exploration area at North Bylong/Mount Penny, taking into account the area to the east, was something he was likely to have discussed with Ms Moloney when he asked her to look at creating a small to medium resource less than 100Mt. ^[911] Mr Mullard also confirmed in cross-examination that in his view the area ultimately designated as the Mount Penny EL 7406 was consistent with the value of the resource to the west being preserved. ^[912]

973. After the cross-examination with leave, the Crown took Mr Mullard to paragraph 23 of his 2014 statement which read:

When I returned to the Maitland office, I spoke to Ms Moloney, and possibly Ms Wiles, about the Minister’s instructions relating to North Bylong.

It was Ms Moloney that carried out the work to create a coal exploration licence area in the eastern side of North Bylong. ^[913]

(Emphasis added.)

974. Mr Mullard confirmed that “the work” he referred to Ms Moloney doing in his 2014 statement was reflected in her email to him on 16 June 2008 where “Area 7” was designated by her as “Mount Penny” on an updated map of the six small areas for possible allocation that she had prepared on 30 May 2008 and which had been the subject of discussion at the meetings with Mr Macdonald on 4 and 6 June 2008 by the inclusion of it as an additional area. Mr Mullard was not invited by the Crown to comment on the use of the word “instructions” and whether that was intended to convey a “direction” to create a small area to the east or an instruction in the form of a request that the Department look to see whether that was feasible.

975. Precisely how the fixed boundaries of the Mount Penny Coal Release Area came to be designated by Mr Schiavo will be considered later. ^[914] The “work” done by Ms Moloney is significant, for present purposes, by the shape file attributed to “Area 7 Mount Penny” in her email to Mr Mullard on 16 June 2008, and its coincidence with the precise boundaries of the Mount Penny Coal Release Area mapped by Mr Schiavo as “Diagram X” for inclusion as one of the eleven coal release areas included in the EOI process.

976. Mr Mullard was then taken by the Crown to some evidence he gave in the ICAC proceedings on 21 November 2012 where he was asked the following (leading) question by the Commissioner:

Well, I’m still trying to find out how it came about that this tenement [the Mount Penny coal release area] was created in the way it was created… It’s really important and you are the person who can tell us? … Well, I am clear that the Minister wanted a Mount Penny area created. I am clear that the area that he was referring to as Mount Penny was the eastern part of the Bylong area. … But I cannot recall that we have had specific directions as to precisely where the boundaries were. I believe my understanding and my recollection is that the department defined those boundaries. ^[915]

977. The Crown suggested that Mr Mullard gave this evidence because, “as set out in your [May 2012] statement, Mr Macdonald told you to make a smaller area in the east and he referred to this as ‘the Mount Penny area’”. ^[916] Mr Mullard responded to that question as follows:

Well, as I said, I accept that my recollection of that time, at the public hearing, is better than it is today. I mean, the critical thing is he may have referred to the Mount Penny area but what I am certain of is he didn’t define the boundaries. ^[917]

978. Mr Mullard again gave evidence in answer to the Crown’s question that his recollection in November 2012 was better than his recollection eight years later when giving evidence at the trial. He emphasised however was that whilst the Minister may have referred to the Mount Penny area (Mr Mullard certainly recalled the discussion about the breaking up of the “Bylong/Mount Penny” area into a smaller area) Mr Mullard was certain that the Minister “did not define the boundaries” [of the allocation area]. That was a matter for the Department’s expertise. ^[918] Furthermore, Mr Mullard was clear that in making that request, the Minister did not “specify any particular area or define any boundaries”. ^[919]

979. The Crown asked no further leading questions under the grant of leave.

980. In cross-examination by Mr Martin, Mr Mullard gave the following evidence:

Q. Just finally, going back to the ultimate point of the 6 June meeting, the Minister didn’t direct you in the 6 June meeting that an area be created that included the area Mount Penny, did he?
A. I can’t recall any direction as such. He certainly said, or strongly suggested, that we look at creating a small area, yes, but not to the extent of saying “you create a Mount Penny area”, no.

Q. He didn’t direct you in that way at all?
A. No.

Q. By that, I’m saying at any stage; he didn’t direct you to create an area that included the area Mount Penny outside of the 6 June‑‑
A. Not using those words, no.

Q. Ultimately the Minister accepted the Department’s conclusion as to the boundaries created for Mount Penny and all the other areas?
A. Yes, the Minister never directed us to say “this must be the boundary” or “this is where the boundaries be”. All the boundaries were actually developed by the Department. ^[920]

981. There can be no question that what Mr Mullard described as the Minister’s “strong suggestion” that the Department “look at creating a small area” in the above passage was what became “Area 7” and that it was excised from the area depicted on Wiles Map 2 by Ms Moloney. Mr Mullard gave evidence that he instructed Ms Moloney, inter alia, to “preserve a potential larger tender area [from Wiles Map 2]” because he did not want to “compromise the larger area as a future large tender area”. ^[921] Mr Mullard gave evidence that he did not convey his view to the Minister at the 6 June 2008 meeting that “breaking up the large areas might result in the large areas being less attractive… to the industry if we put it out for tender”, ^[922] by that point in time, he had discussed with the Minister “in general terms, that large areas attracted greater return”. ^[923]

The Crown’s position on how the Court should resolve conflict in the evidence

982. In addressing what I regard as a clear conflict between the evidence of Mr Gibson and Mr Mullard as to what was discussed at the 6 June 2008 meeting, in particular whether the Minister gave any directions as to where the boundaries of a new coal release area were to be excised from Wiles Map 2, the Crown submitted:

… [W]hile it is clear that Mr Mullard was reluctant to implicate his former boss, his evidence [as to what occurred the meeting] was ultimately and relevantly consistent with that of Mr Gibson. ^[924]

983. If by that submission the Crown is to be taken to mean that I should approach an assessment of Mr Mullard’s evidence on the basis that it reveals a deliberate “reluctance” on his part to implicate Mr Macdonald, in the sense that Mr Mullard’s evidence that he has an imperfect recall in 2020 of what was said at the meeting in 2008 concerning a smaller coal allocation area being created form the potential coal resource in Wiles Map 2 was a deliberate ruse, I reject that submission. It was not put to Mr Mullard, as it should have been, in compliance with the principle of fairness comprehended by the rule in Browne v Dunn, ^[925] if it were a submission intended by the Crown to undermine his credibility.

984. On the other hand, if the Crown is to be understood as submitting that in strict adherence to his affirmation Mr Mullard was “reluctant” to “implicate” Mr Macdonald, in the sense that he was being careful and considered in his evidence lest a ready and unqualified acceptance by him of propositions suggested to him by the Crown by leading questions asked with leave might suggest a recall of the course of the 6 June 2008 meeting in conflict with what remains his genuine recall of those events, then the Crown’s submission is well placed.

985. While there is a certain ambiguity in the Crown’s submission, I favour the view that it was not advanced to suggest that Mr Mullard was other than a truthful witness who endeavoured at all times during the course of his lengthy evidence, including under cross-examination with leave, to give accurate evidence in accordance in what he could genuinely and accurately recall of events (including, for present purposes, the 6 June 2008 meeting) in strict accordance with his obligations as a witness.

986. What remains of the Crown’s submission is whether, in my assessment, it is open to me to determine whether the fifth act of misconduct is established on the basis that Mr Mullard’s evidence was ”ultimately and relevantly consistent” with Mr Gibson’s evidence, such that I can and should, as the Crown submitted I would, accept Mr Gibson’s evidence that he saw Mr Macdonald marking up Wiles Map 2 so as to designate for the Department the smaller coal release area he wanted included in the EOI process ^[926] and that the marking up Mr Gibson saw applied to the map reflected the boundaries of the Mount Penny Coal Release Area over which the Mount Penny EL was ultimately granted, and reject Mr Mullard’s evidence that no boundaries were designated by Mr Macdonald at the 6 June 2008 meeting and no direction given for any particular area on Wiles Map 2 to be the subject of an additional small coal release area.

987. The Crown also submitted that although Mr Gibson has not previously given any evidence of Mr Macdonald marking up Wiles Map 2, he has consistently given an account in his previous statements and in his evidence before ICAC that at a meeting convened by the Minister, the Minister wanted or expressed a desire for Wiles Map 2 to be “changed” to be included in the EOI process. ^[927]

988. In the Crown’s submission, Mr Gibson gave an honest and rational explanation for the detail inherent in his revived memory of the 6 June 2008 meeting, in essence because the process of him giving evidence at trial was less stressful than his evidence at ICAC and because he was being stepped through his evidence in chronological order in the course of the Crown adducing evidence from him which assisted his recall. He also gave evidence that the so-called “2 things mate” email” ^[928] assisted his memory. He described that email in his evidence as an “aide memoire”.

989. Mr Gibson gave a lengthy explanation as to significance of the “2 things mate” email he sent at 3:05pm on 6 June 2008 (a few hours after the meeting) in assisting him to remember the Minister marking up Wiles Map 2. That email read:

… can you please get the latest Bylong Valley (Mt Penny) map emailed up on Tues. ^[929]

990. Mr Gibson gave evidence that Mr Macdonald asked him to get another “clean version” of the map (Wiles Map 2) which is why he sent the email.

And if I may take a moment to explain how this email relates to my answer. Look, I guess over the last few days, having been brought back to this period in time, you know, going through my evidence and so forth, I guess you could say this email for me has been an aide‑mémoire. It certainly has assisted my memory because I was recalling as to why in this particular case I am asking for another copy of the ‑ effectively, the Mount Penny map on the Friday. And it occurred to me, or it was recalled to me, that we received this, I guess, first version of it, this map for this area, on Tuesday 3 June in anticipation of a meeting with Mr Mullard on the 4th which we subsequently had.

Following that meeting on the 4th, I asked Mr Mullard for larger versions of the maps that were shown to us at that meeting, which he subsequently provided on the 5th, Thursday the 5th.

We then go to this meeting, Friday the 6th, in Governor Macquarie Tower and we meet him at midday. We talk about these areas. And then several hours afterwards, having met Mr Mullard and gone through these areas, here I am asking again for a copy of the same map that we in theory have now several of and, having just seen Mr Mullard, because it is my recollection that Mr Macdonald marked up one of the maps at this meeting and requested this area to be amended to Mr Mullard and that because a map had been marked up, he had requested me to get another copy, another clean version, if you like, an electronic version of this same map. I'm not asking for Benelabri or Ridgelands or any of the others; I'm just asking for this one. And that's my recollection of it.

And I think, further, when we see this area again later in the month, it's beginning to look like its final version and not the versions that are here on this map because the requests had been made here on this date in this meeting and that is my recollection. So you can put it to me as many times as you like and this will ‑ this is my answer. ^[930]

991. At 3:25pm that same afternoon Mr Mullard emailed to Mr Munnings, as attachments, copies of each of the three large area maps, including Wiles Map 2, together with Ms Moloney’s map of the six areas. ^[931] At 3:59pm Mr Munnings forwarded those documents to Mr Gibson. ^[932]

992. In the Crown’s submission, Mr Macdonald’s “specific direction” to the Department to create a new small area for release which he “sketched” on to Wiles Map 2 which just happened, as a matter of coincidence, to precisely overlayea Cherrydale Park (which on the Crown case, and which I accept, Mr Macdonald knew by 6 June 2008 was a rural property owned by the Obeid family in the Bylong Valley near Mount Penny) is “wholly incredible”. ^[933] It is clear that submission was based upon an acceptance of Mr Gibson’s evidence.

993. The Crown submitted, again in very substantial reliance upon Mr Gibson’s evidence, that the area sketched or marked-up by Mr Macdonald on Wiles Map 2, as representing where he directed the boundary be changed, was not due to a greater concentration of resources in the area (the justification he is said to have expressed when directing that the boundary be changed), there being no evidence adduced in the trial to support that proposition as an objective fact.

994. The Crown also emphasised the timing of the Minister’s request for the creation of a small release area from Wiles Map 2. In the Crown’s submission, ^[934] after the 4 June 2008 meeting in which Mr Mullard had made it clear that the Department’s view was that none of the three proposed large areas identified by Ms Wiles were suitable for release because further exploration was required, there was both time and opportunity for Mr Macdonald to discuss with his co-conspirators what the Crown described as “a solution” (which I take to mean “a solution” to what was perceived as an obstacle to the creation of an EL at Mount Penny encompassing all of the sideways S-shape) by creating a smaller area to the east but encompassing Cherrydale Park as a “small” coal release area to be included in a forthcoming EOI for an open competitive tender for an EL and without delay.

995. Finally, in support of its case that the fifth act of misconduct is established, the Crown emphasised the significance of Mr Macdonald giving no equivalent direction that a small area or areas be exercised out of Ridgelands or Benelabri, as might be expected were he generally desirous of creating small coal release areas from available coal resources at that time, rather than preserving the potential large coal release areas represented in each of Ridgelands, Benelabri and North Bylong/ Mount Penny for the potential and very significant financial return to the State via AFCs payable also under an EOI process for the release of large areas, with the additional benefit to the DPI in meeting the efficiency dividend.

996. The Crown went on to submit that even though, as it conceded elsewhere in its submissions, there were sound public policy reasons for Mr Macdonald to urge the release of large and small to medium coal exploration areas, I would be satisfied that the Mount Penny Coal Release Area would not have been created at Mr Macdonald’s direction or under his instruction on 6 June 2008 were it not for improper purpose of advancing the private interests of the Obeid family or their associates.

The position of the accused

997. The accused submitted the Crown’s submission set out at par 982 and following above cannot be sustained. The accused submitted I cannot, and should not, avoid dealing with the consequences of the diametrically divergent evidence of the only two witnesses to the 6 June 2008 meeting.

998. I propose to take that approach.

999. I am unable to treat the evidence of Mr Mullard as “relevantly consistent” ^[935] with Mr Gibson’s evidence as the Crown submitted I should. Mr Gibson adhered to his evidence, given for the first time in October 2020, that he saw the Minister mark-up Wiles Map 2 in June 2008 in a way that conforms with what was ultimately fixed as the boundaries to the Mount Penny Coal Release Area (as was expressly adopted by the Crown in closing arguments) ^[936] while Mr Mullard adhered to his evidence that the Minister neither directed that a smaller area be “split” from the larger potential coal resource in Wiles Map 2 nor designated its boundaries.

1000. In my view, addressing the conflict in their evidence is unavoidable.

1001. The accused submitted that because the Crown must be taken to have elected not to recall Mr Mullard or Ms Moloney, I have not been afforded the opportunity to hear further from Mr Mullard as to whether he has any recall of Mr Macdonald marking up Wiles Map 2 at the meeting, including whether the so-called marked-up map was something he took from the meeting as the template from which the Mount Penny Coal Release Area was ultimately designated by officers of his Department. ^[937] The accused submitted that being the case, I could not treat Mr Gibson’s account as “truthful, reliable and ultimately compelling” as contended for by the Crown.

1002. Independently of what the accused regarded as the failure of the Crown to recall relevant witnesses who could meaningfully address the existence of the marked-up map (more accurately, that the Crown made no application for leave to recall Mr Mullard or Ms Moloney), the accused submitted, for other reasons, that I should reject, as wholly unreliable, Mr Gibson’s evidence of seeing Mr Macdonald sketch an outline of the “split off” smaller area, in effect to formalise the direction the Minister was giving to Mr Mullard for the Department to execute.

1003. Mr Martin submitted that Mr Gibson’s “new” and unforeshadowed evidence about the sketch on Wiles Map 2 “lacks credit and cogency” and cannot be given weight given that it was not tested by presenting it to Mr Mullard “to either confirm or deny its veracity and reliability”. ^[938] Mr Martin further submitted that Mr Gibson’s evidence that the shape sketched by Mr Macdonald better reflected the resources in the Mount Penny area was “implausible and lacked logic or internal consistency” because there is no evidence Mr Macdonald has any geological knowledge of any resources in that area. ^[939]

1004. Ms Francis likewise emphasised that the Crown did not recall Mr Mullard to address Mr Gibson’s evidence as to a sketch drawn by Mr Macdonald on a copy of Wiles Map 2. In her submission, Mr Mullard’s account of the “content and context of [the 6 June 2008] meeting is inconsistent with the likelihood of Macdonald sketching upon a map”. ^[940]

1005. Mr Neil submitted that not only was this evidence as to a critical aspect of the meeting given for the first time and without advance notice but, when analysed referable to other evidence in the trial, including evidence in the Crown case, Mr Gibson’s evidence is both “implausible and unrealistic”. ^[941]

1006. In support of that submission, Mr Neil drew attention to the fact that in contrast to the maps of Ridgelands and Benelabri, Wiles Map 2 did not depict the “tenement boundary” of a known coal resource as described by Mr Gibson. Instead, it depicted a potential coal resource marked by a cross hatching in a sideways S-shape. He submitted that in circumstances where Mr Mullard was at the 6 June 2008 meeting to provide his expert advice as a geologist, Mr Gibson’s evidence that Mr Macdonald directed Mr Mullard that there be a change to the “tenement boundary” (where there was none)… in order to be “to be more reflective of the resources in that area” ^[942] (where the map did not differentiate between the east, the west or the centre of the sideways S-shape and where, as Mr Martin submitted, there is no evidence Mr Macdonald had any geological knowledge of where resources lay within EL 6676) did not withstand critical scrutiny.

1007. The challenge to the reliability of Mr Gibson’s account of the 6 June 2008 meeting mounted by the accused also focused on the fact that he could not recall whether the markings were made on Wiles Map 2 in the form embedded in the Ministerial Briefing of 2 June 2008 or the large formatted map hand delivered on 5 June 2008. Additionally, it was pointed out that Mr Gibson was unable to give any evidence as to what happened to the marked-up map (despite the significance of the markings apparently reflecting a Ministerial direction) beyond suggesting the possibility that Mr Mullard took the map with him, ^[943] again underscoring the significance of the Crown not recalling either Mr Mullard or Ms Moloney.

1008. Furthermore, after being taken in cross-examination to his evidence before ICAC in November 2012, when he was asked whether there was any discussion in his presence as to whether a particular part of the “shaded area on [Wiles Map 2] should form the Mount Penny tenement” Mr Gibson responded, “Not that I recall”. ^[944] He also gave the following evidence when asked by the Commissioner whether “the Mount Penny area as ultimately drawn [clearly a reference to the fixed boundaries of the Mount Penny coal release area drawn by the Department] could have fitted anywhere along that S [clearly a reference to Wiles Map 2]”:

Yes, Commissioner it could have. I’m not a geologist. I saw the map and I saw the original map which is this one. Mr Macdonald indicated he would like it to be changed. That was my recollection of it. ^[945]

1009. In the result, the accused submitted that I should give Mr Gibson’s evidence of seeing Wiles Map 2 marked-up to designate the boundaries of what ultimately became the Mount Penny Coal Release Area no weight at all in considering whether the Crown has established that Mr Macdonald’s conduct at the 6 June 2008 meeting constituted an act of misconduct in the relevant sense.

1010. Mr Neil submitted that even were I to treat Mr Macdonald’s conduct at that meeting as capable of being regarded as an act of misconduct in the legal sense (which was not conceded), Mr Gibson’s evidence was deserving of no weight on the related and important question whether the Crown has established Mr Macdonald’s dealings with the Department on that occasion was an act of misconduct committed in furtherance of the conspiracy charged.

1011. In substance, each of the accused submitted that in preference to the evidence of Mr Gibson, I would accept as both truthful and reliable Mr Mullard’s evidence that he was not directed by Mr Macdonald to create what ultimately became the Mount Penny Coal Release Area at the 6 June 2008 meeting, or at any other time, and that he was not directed, again either at the 6 June 2008 meeting or at any other time, as to where the boundaries of any small coal release area should be positioned relative to the potential large coal resource marked by the red cross-hatched sideways S-shape on Wiles Map 2. They submitted that was the position Mr Mullard adhered to in his evidence even after leave was granted to the Crown to cross-examine him on his prior inconsistent statements.

1012. Mr Martin submitted that Mr Gibson was an observer rather than an active participant in the 6 June 2008 meeting, and despite an understandable loss of perfect recall of the course of the meeting, Mr Mullard’s evidence was detailed, cogent and plausible.

1013. The accused submitted that while I would find that Mr Mullard was asked by Mr Macdonald to see whether it was possible to excise an additional smaller area for release, and that Wiles Map 2 was the reference point for that enquiry, I would also find as a fact that the Mount Penny Coal Release Area was ultimately designated by the Department as Area 7 (and later Diagram X) with the expertise of the Department’s highly skilled geologists and cartographers without them being given any template to map the boundaries of that area.

1014. The accused also emphasised that in circumstances where Wiles Map 2 was the only one of the three large areas identified by Ms Wiles where it was feasible or practical, for a wide range of policy reasons, to excise or create a smaller coal release area, the significance in the Minister’s focus on Wiles Map 2 (namely, as an act of misconduct in furtherance of the conspiracy in the sense that “but for” the improper purpose alleged, he would not have applied that focus) for which the Crown contends is not justified.

Is there common ground between the evidence of Mr Gibson and Mr Mullard as concerns the 6 June 2008 meeting?

1015. Despite the significant and material differences in the evidence of Mr Gibson and Mr Mullard as the only two witnesses who attended the 6 June 2008 meeting, the purpose of the 6 June 2008 meeting; the course of the meeting; what the Minister expected the Department would do after the meeting; and what the Department actually did as a consequence of what occurred at the meeting were not in issue.

1016. Whether that evidence is probative of the Crown case in another question. At the outset, I am satisfied that both Mr Mullard and Mr Gibson understood the meeting to be a follow-up meeting from the 4 June 2008 meeting. That fact, together with the Minister’s request for larger copies of the North Bylong/Mount Penny, Ridgelands and Benelabri in preparation for that meeting, set the tone of the meeting and what was discussed.

1017. I am also satisfied that in his discussions with Mr Mullard, Mr Macdonald expressed a desire for additional small areas to be identified by the Department for inclusion in the EOI process (that is, additional to the six areas that Ms Moloney had identified) and that Mr Macdonald raised the possibility (to express it at its most neutral) that the three large areas identified by Ms Wiles might be a source for additional small areas (that is, by the Department marking out of an area under 100Mt as per the Coal Allocation Guidelines). I also accept that of the three large area maps that had been sent to the Minister’s office on 5 June 2008, Wiles Map 2 was the focus of those discussions.

1018. I also accept that whatever the precise request Mr Mullard made of Ms Moloney after the meeting, it was sufficient for her to utilise a shape file and to apply the label “Area 7 Mount Penny” to it by 16 June 2008 when she emailed the “updated” (seven) small areas map to Mr Mullard. ^[946] Ms Moloney gave evidence that Area 7 was the next in the sequence of the six small areas identified by her on 30 May 2008. As to the shape file attributed to Area 7, she said she did not draw it and she had no specific memory of who did or who provided it to her. She gave evidence that she did not have computer skills to be able to compile the shape file. She believed the shape file came from “Coal Advice”. ^[947]

1019. There was no evidence in the Crown case as to who from that Department compiled the shape file of “Area 7 Mount Penny” between 6 June 2008 and 16 June 2008 when it was emailed to Mr Mullard, or the information the compiler or compilers might have used in that process. I am, however, satisfied that the shape file attributed to Area 7 is, on a broad visual comparison, coincident with Diagram X prepared later by Mr Schiavo to designate the fixed boundaries of what became the Mount Penny Coal Release Area.

1020. Mr Schiavo described the shape he attributed to Diagram X as a “polygon”. He gave the following evidence:

Q. And what process did you follow to create [Diagram X] and, in particular, the red lines which set out the proposed tender area?

A. Okay, so I would have either have been given a diagram or coordinates. To prepare that, I'd have to create a shapefile and within the shapefile ‑ a shapefile may consist of five to seven files and within those five to seven files you would have a database file which lists attributes regarding that shape and you would have a projection file. And I am not sure what the other files do, but they work together to create this polygon. That's called a polygon and you can place attributes on that polygon for the future. Once it is granted, you have got it sitting there already with ‑ you can put attributes to it straightaway. ^[948]

1021. I am further satisfied that there is common ground between the Crown and the accused that Mr Gibson was the only witness who gave evidence of a marked-up map, and that it has not been produced nor referred to in any correspondence between the Minister’s office and the Department at any time after 6 June 2008. I note that it is not the subject of any email correspondence between the Minister’s office and the Department in the immediate aftermath of the 6 June 2008 meeting, despite Mr Gibson’s evidence earlier referred to, that what he described as the “basic sketch” was a “work in process” (sic) between the Minister’s office and the Department for several weeks after the 6 June 2008 meeting. ^[949]

1022. What remains contentious between the Crown and the accused is whether I am satisfied that what Ms Moloney did in the process of including “Area 7 Mount Penny” in her updated map of small areas emailed to the Minister’s office on 16 June 2008 was done in accordance with a direction from Mr Macdonald at the 6 June 2008 meeting that it be created.

1023. In reliance upon Mr Gibson’s evidence, the Crown contended the directions Mr Macdonald gave were accompanied by him sketching the boundaries of the additional small area on Wiles Map 2. The alternate construction available on the evidence and advanced by the accused is that, at Mr Mullard’s request and referable to Wiles Map 2, “Area 7 Mount Penny” was designated by Departmental officers applying their skill and expertise to locate an available coal resource (under 100Mt) suitable for release as a small coal release area, in accordance with the Department responding to the Minister’s request for small coal release areas to be released to tender as part of his policy agenda.

1024. I am unable to accept the Crown’s submission that the evidence of Mr Mullard and Mr Gibson was “relevantly or meaningfully consistent”. Neither am I able to accept that, on a fair reading of the Crown’s closing submissions, the Crown did otherwise than to invite me to accept Mr Gibson as both a truthful and reliable witness who gave a compelling account of the 6 June 2008 meeting, despite the fact that his evidence that Mr Macdonald marked-up Wiles Map 2 to designate the area where he wanted a boundary change (coincident, as the Crown submitted, with what ultimately became the Mount Penny Coal Release Area) was given for first time at the trial in 2020 and not mentioned in his previous signed statements or in his evidence before ICAC.

1025. Although the Crown did not expressly abandon Mr Mullard’s evidence, preferring (as I indicated above) to describe it as reflecting “a reluctance” on his part to implicate Mr Macdonald, the Crown did not seek advance its case in proof of the fifth act of misconduct by relying on Mr Mullard’s evidence other than in one limited respect. That arose in the context of Mr Mullard’s evidence in cross-examination that he did not get the impression that Mr Macdonald was “super interested in Mount Penny” and that the only time he had any recall (albeit qualified) of the Minister mentioning Mount Penny was when he asked that the Bylong area be broken up. ^[950] The Crown submitted that I would find Mr Macdonald’s apparent attitude of indifference was to be expected in light of what I would be otherwise satisfied was the care he took to downplay his interest in Mount Penny, whilst covertly playing his part in furthering the object of the conspiracy. ^[951]

1026. Without intending any undue criticism of the Crown, that submission does not assist me in resolving what occurred at the 6 June 2008 meeting or whether, on the basis of the factual findings I am able make of those events, they establish an act of misconduct committed by Mr Macdonald in furtherance of the conspiracy.

1027. Neither, in my view, did the Crown satisfactorily address those aspects of Mr Mullard’s evidence which the accused relied upon as undermining proof of that fact. Those additional aspects include the following. Despite each of the three large areas identified by Ms Wiles being potentially highly sought after by foreign investors in China and South Korea and by “the big four” Australian-based mining companies ^[952] in a competitive open tender process, and despite the Department’s advice that further exploration was required before they would recommend any of those areas be released to tender (advice which the Minister accepted, albeit with some disappointment), ^[953] there remained sound reasons of policy and pragmatism not to defer the release of a smaller area excised from what Ms Wiles had designated as a potential open cut area in Wiles Map 2, in contrast to Benelabri and Ridgelands where a distinct coal release area was designated. The accused also emphasised that by the Minister inviting, requesting or suggesting that the Department should identify an additional small area in the North Bylong/Mount Penny area, the appetite of small companies for an entre into the market would be addressed.

1028. The accused also emphasised that once the potential open cut area identified by Ms Wiles on Wiles Map 2 had been reduced in size by the excision of a tenement to the east, no further exploration of that area would need to be undertaken at the Department’s expense. At the same time, the balance of the potentially more valuable coal resource to the west would be preserved for a large release in a competitive tender process in the future. As Mr Neil pointed out, ^[954] even when drilling rigs were available, Benelabri was to be the next large area for a prioritised release with Ridgelands to follow. Mr Neil submitted that breaking up the North Bylong/Mount Penny area was a practical compromise which allowed the State to obtain at least some revenue by way of an additional financial contribution from its release as a small area in a closed EOI process, accepting that it would be less than the revenue which might be generated from the release of large areas in accordance with the Coal Allocation Guidelines while satisfying the other policy initiatives of diversifying entre to the market by smaller coal mining companies.

1029. Mr Neil also submitted that were Mr Macdonald to have directed Mr Mullard to create a smaller area from the potential open cut area depicted on Wiles Map 2 referable to boundaries he specified, that would have been noted or recorded by Mr Mullard and reported to Mr Coutts, particularly where Mr Mullard was acting in Mr Coutts’ absence in June 2008, and it was not.

1030. I have given careful consideration to the evidence and the submissions of counsel concerning the evidence bearing upon the events of the 6 June 2008 meeting.

1031. There was what I regard as a sustained challenge to the reliability of a central component of Mr Gibson’s evidence concerning the marking up of Wiles Map 2.

1032. In those circumstances, and after giving full weight to Mr Mullard’s position as a senior executive officer of the Department and his knowledge and expertise, I make the following factual findings:

1. The 6 June 2008 meeting was convened at the Minister’s request as a follow-up meeting from the meeting on 4 June 2008.

2. Mr Macdonald’s request, via Mr Gibson, for larger versions of the three large areas mapped by Ms Wiles (including Wiles Map 2) after the meeting on 4 June 2008 was in order to discuss the potential for the release of those areas to tender or, in the alternative, to discuss with the Department whether one or more of them could be broken up to be released as a small to medium coal release area under category (iv) of the Coal Allocation Guidelines. These issues were discussed by a flow of ideas with the respective positions of the Minister and the Department articulated. ^[955]

3. The dominant focus at the 6 June 2008 meeting was the Minister’s keenness to have the Department identify additional small to medium coal release areas.

4. Upon the Minister accepting, through Mr Mullard, that the Department would not favour breaking up Ridgelands or Benelabri, the North Bylong/ Mount Penny potential open cut coal resources on Wiles Map 2 became the focus of those discussions in the course of which the Minister “strongly suggested” ^[956] the Department look at creating, or excising, a small coal release area from the sideways S-shape on Wiles Map 2 to the east.

5. In circumstances where I am satisfied that Mr Macdonald knew the Obeids owned Cherrydale Park situated near Mount Penny at this time, I am satisfied that when he referred to a smaller area “to the east”, he also referred to or made mention of “Mount Penny”.

6. I am further satisfied that when Mr Macdonald referred to Mount Penny in that context (knowing that the Obeids owned Cherrydale Park situated near Mount Penny), he must be taken to have had the expectation that if a small coal release area were to be excised by the Department from the sideways S-shape on Wiles Map 2 to the east, it would encompass Cherrydale Park.

7. However, I am not satisfied, having regard to all the evidence that is capable of bearing relevantly on whether the Crown has proved the fifth act of misconduct, as particularised, that Mr Macdonald “directed or instructed” Mr Mullard to have the Department create the boundaries of that smaller area to the east. That is, I am not satisfied that on 6 June 2008 Mr Macdonald directed or instructed that what became the Mount Penny Coal Release Area (included as Area 7 in the EOI process released publicly on 9 September 2008) should be created or designated by the Department. Neither am I satisfied that Mr Macdonald sketched a basic outline of the boundaries of that area on Wiles Map 2 as an effective template for the Department to follow in creating that smaller area.

1033. The Crown particularised its case in proof of the fifth act of misconduct by alleging that in his capacity as Minister for Mineral Resources Mr Macdonald directed the Department to excise the eastern portion of the potential open cut area depicted on Wiles Map 2 to create a smaller area to the east in wilful breach of his duty of impartiality because he knew the Obeids owned property in that area, and that he acted in that way in furtherance of the conspiracy alleged and for the improper purpose alleged.

1034. I have already noted that the Crown reframed its case in the course of the trial by amending some of the particulars of Mr Macdonald’s acts of misconduct and abandoning any reliance on the third act of misconduct altogether. ^[957] I also note that the Crown’s application to amend the particulars of its case was made after Mr Gibson’s evidence. However, in seeking leave to amend the particulars of its case in some respects, the Crown adhered to the way in which it particularised the fifth act of misconduct by maintaining the case that I would find, as a fact, that between 4 and 6 June 2008, as Minister for Mineral Resources, Mr Macdonald “directed” the DPI, in effect, to create a coal release area that encompassed a property he knew was owned by Edward Obeid (or his family), as an act of misconduct committed by him in wilful breach of his duty of impartiality and for the improper purpose alleged. This was the same case the Crown advanced in its closing submissions, by that time emboldened by the evidence of Mr Gibson upon which it placed great reliance.

1035. In those circumstances, the Crown must be taken to have appreciated that proof of the fifth of misconduct (as particularised) was not only important to proof of its case generally, but to proof of the specific case it prosecuted at trial, namely that the conspiracy as framed in the indictment was forged before 9 May 2008, being a conspiracy in which each of the accused agreed to intentionally participate by that date. ^[958]

1036. The Crown must also be taken to have accepted that if the evidence went no higher than establishing that the Minister made a “strong suggestion” that the Department “look to the possibility” of creating a small area in the eastern portion of the potential open cut resource depicted on Wiles Map 2 at the 6 June 2008 meeting, that may not be sufficient to constitute a breach of Mr Macdonald’s duty of impartiality, thereby undermining its case that Mr Macdonald’s engagement with Mr Mullard on 6 June 2008, which resulted in the creation of the Mount Penny Coal Release Area, was an act of misconduct wilfully committed by him in furtherance of the conspiracy. The Crown might also have considered that if the evidence went no higher than Mr Macdonald strongly suggesting (or requesting) that the DPI look at the possibility of creating a smaller area from Wiles Map 2, that may not have been sufficient to satisfy the “but for” test in the circumstances prevailing in June 2008, where the Crown accepted that the Minister was generally committed to diversifying entry to coal exploration in New South Wales by opening up additional small to medium areas for coal exploration.

1037. In closing arguments, responsive to a question I raised as to whether, were the fifth act of misconduct to be understood by me as a “direction” or a “request” on the part of the Minister, either would constitute an act of misconduct given Mr Macdonald’s knowledge of the Obeids’ ownership of Cherrydale Park, the Crown submitted that “the distinction between ‘direction’ and ‘request’ … is a nuance without difference”. ^[959]

1038. Were I to accept that submission, advanced only in response to a question asked by me, I would be effectively permitting the Crown to broaden its case in respect of the fifth act of misconduct in closing arguments. I am not prepared to take that approach. Neither do I accept the Crown’s submission that the difference between a Ministerial direction and request is immaterial when the Crown did not elect to particularise its case in that way or to address what it describes as that “nuance without difference” until I raised it.

1039. The Crown must be confined to proving the case it particularised, being the case each of the accused have sought to meet throughout the trial and in closing submissions.

1040. For those reasons, I accept and direct myself accordingly that it is not sufficient for the Crown to prove that Mr Macdonald requested or suggested that the DPI excise the eastern portion of the potential open cut area depicted in Wiles Map 2 in proof of the fifth act of misconduct. The fifth act of misconduct is particularised as a direction by the Minister and it must be proved by the Crown as such.

Is the fifth act of misconduct proved?

1041. In all the circumstances, and despite the findings of fact I have made arising out of the 6 June 2008 meeting as detailed above, I am not satisfied that the Crown has established the fifth act of misconduct, as particularised.

1042. There is a question as to whether the same fate attaches to the Crown’s submission that at the meeting on 6 June 2008 Mr Macdonald deliberately “slipped” the Mount Penny Coal Release Area into an otherwise uncontroversial EOI process for the release of small to medium areas in order to avoid the scrutiny of arranging for its release in a standalone process for the granting of an EL. Although that submission was advanced to support proof of what was said by the Crown to be Mr Macdonald’s improper purpose in “directing” that the Mount Penny Coal Release Area be created, ^[960] it may still have some currency in proof of the Crown case in the event that I am satisfied that the fourth and the sixth to ninth acts of misconduct are established.

1043. That said, because I am not satisfied that the fifth act of misconduct, as particularised, is made out, Mr Macdonald’s purpose or motivation in making what I have found was a “strong suggestion” or “request” that the Department should look to see whether a smaller area could be excised from the area depicted on Wiles Map 2 (the question posed by the application of the “but for” test) does not strictly arise.

1044. It must also follow that the Crown’s submission that Mr Macdonald would not have “directed” the inclusion of Cherrydale Park in a new coal release area without the knowledge and approval of Edward Obeid does not carry the same probative force it might otherwise have carried in proof of the existence of the conspiracy charged and Edward Obeid’s participation in that conspiracy were the fifth act of misconduct established. However, again depending on what view I take of the evidence in the Crown case in proof of the remaining acts of misconduct, that submission may still be persuasive.

1045. In closing its case, the Crown advanced no submission as to the approach I should take were I to give no weight to Mr Gibson’s evidence, or what approach I might take if, for other reasons, I was not persuaded that Mr Macdonald “directed” Mr Mullard to create a smaller coal release area in the east from Wiles Map 2. The Crown did not advance the submission that Mr Macdonald might have deliberately couched what he intended to be a “direction”, and what he intended Mr Mullard would understand was a “direction”, in the form of a “request” or a “strong suggestion” in the expectation that a more nuanced “direction” would as likely result in the outcome he sought to achieve (as a co-conspirator), without issuing a formal Ministerial direction which Mr Mullard might have queried, or which he might have recorded in writing and conveyed to Departmental officers as a “direction” from the Minister.

Other factual findings arising from the 4 June 2008 and 6 June 2008 meetings

1046. It is important at this time to emphasise, again, that it is not for me as the tribunal of fact to seek to model the Crown case or the Crown’s submissions in a way that might allow for me to find that a conspiracy of the specific scope and specific object as framed in the indictment is proved beyond reasonable doubt. I am obliged to consider the sufficiency of the evidence the Crown relied upon in proof of its case. I am not, however, strictly bound by the way in which the Crown invites me to use the facts I find established by the evidence for that purpose.

1047. Despite the failure of the Crown to prove the fifth act of misconduct with the resultant diminution in the persuasive force of aspects of its submitted position that the guilt of the accused has been proved beyond reasonable doubt, I am satisfied as a fact that after the 4 and 6 June 2008 meetings Mr Macdonald told Edward Obeid, and probably Moses Obeid, of the real possibility that Cherrydale Park would be incorporated in a new coal release area over which an EL might ultimately be granted, on the basis that I have found that, by that time, Mr Macdonald had the reasonable expectation that, by applying the skill and expertise of a range of its officers, the Department would excise from Wiles Map 2 a smaller area for release to the east, proximate to Mount Penny, which would inevitably include Cherrydale Park.

1048. That finding is informed by, but not limited to, the fact that I have found the Shepherd fact proved beyond reasonable doubt. It is also informed by the nature of the relationship Mr Macdonald shared with Edward Obeid as a close political ally, and the friendship he had with his son, Moses Obeid, coupled with the fact that, in reasoning to the conclusion that the Shepherd fact was proved beyond reasonable doubt and that the first and second acts of misconduct were established, I was satisfied that Mr Macdonald was not averse to seeking out and providing information of various kinds to Edward Obeid on request, even if, as occurred in May 2008, he did so in wilful breach of his duty of impartiality.

Despite the fifth act of misconduct not being proved, is the evidence otherwise capable of establishing proof of the existence of the conspiracy beyond reasonable doubt?

1049. Before undertaking an analysis of what the evidence proves, or is capable of proving, about the circumstances in which the Mount Penny Coal Release Area was created and its boundaries fixed by the DPI after the 6 June 2008 meeting, and before undertaking an analysis of what steps were taken by Moses Obeid (and other members of his family) to explore the potential to expand their rural holdings in the Bylong Valley after that date equipped with the knowledge Mr Macdonald shared with them following the 4 and 6 June 2008 meetings, it is necessary to return to the question that remained outstanding when I reasoned to the conclusion that the first and second acts of misconduct, as particularised, were established.

1050. That question concerned whether, after I had considered the events that followed the commission of those two related acts of misconduct (leading to and including the meeting of 6 June 2008 when the fifth act of misconduct was alleged to have been committed) I was able to reason to the conclusion that the first and second acts of misconduct were committed in furtherance of a conspiracy that existed as at 9 May 2008.

1051. I accept that the evidence establishes that Mr Macdonald’s dealings with the Department in May and June 2008 (and earlier) were, at a general level, co-ordinate with, and focused upon, the policy imperative of releasing additional areas for coal exploration. However, I have also found that Mr Macdonald’s dealings with the Department in May 2008, which involved the gathering of information about coal reserves specifically in the area of Mount Penny, were acts of wilful misconduct in the legal sense. I have also found that although Mr Macdonald’s dealings with the Department in the first week of June 2008 did not constitute acts of misconduct in the legal sense, they did involve Mr Macdonald strongly suggesting that the Department assess the viability of creating a new area for coal exploration situated near Mount Penny and releasing it as part of an EOI process for the granting of an EL, knowing of the Obeids’ ownership of Cherrydale Park, and that Mr Macdonald did share that information with at least Edward Obeid, and likely Moses Obeid, doubtless with a view to it being used by them to their advantage.

1052. Those findings alone give rise to a very powerful inference that Mr Macdonald shared that information in furtherance of a conspiracy of the scope and object alleged in the indictment, and a conspiracy that was in existence at 9 May 2008. I am not, however, prepared at this point in my deliberations to draw that inference. It is of some significance that the Crown does not allege that the sharing of the information with the Obeids about the inclusion of, or the likely inclusion of, Cherrydale Park in a new coal release area after 6 June 2008 was a wilful breach of Mr Macdonald’s duty of confidentiality, or that it was otherwise an act of misconduct from which the existence of the conspiracy might be inferred. That being the case, the parties did not address that scenario in submissions. The highest the Crown puts its case in closing submissions was the general submission that during multiple meetings and telephone calls with each of Edward Obeid and Moses Obeid between September 2007 and January 2009, “there is a strong inference as to communication regarding the object of the conspiracy” from which Mr Macdonald’s participation in the conspiracy should be inferred. ^[961]

1053. Additionally, in my assessment, the evidence that I have considered and reviewed thus far in my deliberations is not sufficient to discount the reasonable possibility that in committing the first and second acts of misconduct in May 2008 Mr Macdonald was merely responding to a request for information from Edward Obeid as a political ally and Parliamentary colleague and his volunteering of further information following the 4 and 6 June 2008 meetings was an extension of his willingness to bestow favours of that kind on Edward Obeid and on Moses Obeid as a person with whom he had a friendship.

1054. In those circumstances, proof of some or all of the remaining five acts of misconduct, as particularised, will likely prove critical to proof of the Crown case. The remaining acts of misconduct (being the fourth and the sixth to the ninth acts of misconduct inclusive) do not allege any misconduct in Mr Macdonald’s ongoing dealings with the DPI as the EOI process for the release of the eleven small to medium areas (including Mount Penny as Area 7) was progressing, a process which commenced with a meeting convened by Mr Macdonald on 17 June 2008 and culminated in a meeting on 9 September 2008 when the EOI Information Package was approved by him for public release. ^[962]

1055. In contrast to the first, second and fifth acts of misconduct, each of the remaining five acts of misconduct allege that Mr Macdonald provided the Obeids with various forms of confidential information, or he caused that information to be provided to them, in breach of his duties and obligations of impartiality and confidentiality. Aside from the fourth act of misconduct as particularised, the sixth to ninth acts of misconduct effectively allege the particular specie of the confidential information the subject of those particularised acts of misconduct, was provided by Mr Macdonald to allow the Obeids to exploit the commercial potential of the Mount Penny Coal Release Area having been designated by the Department pending its official inclusion in the EOI process for the grant of an EL (being the sixth, seventh and eighth acts of misconduct) with the ninth act of misconduct committed after the EOI process had launched. The particulars in each of the sixth to ninth acts of misconduct also allege a breach of Mr Macdonald’s duty of impartiality by providing the same information knowing that the Obeid family owned property in a location proposed to be included in the EOI (that is, Mount Penny).

1056. The confidential information Mr Macdonald allegedly provided (or caused to be provided) was alleged by the Crown to be aligned with the motivation and ambition of the Obeids to exploit the prospect of coal underlying Cherrydale Park (and in the area more generally) in a way that was made explicit in the Crown’s closing submissions. The Crown submitted that after the second Wentworth Hotel meeting with Mr Brook on 7 July 2008 there were communications between each of the three accused “updating” the results of that meeting and where what was discussed was “getting a list of companies to be invited to participate in the EOI process so as to enable Mr Brook to pursue a joint venture deal”. ^[963]

1057. To the extent that the Crown submitted there is a purposive link between Mr Macdonald’s commission of the sixth to ninth acts of misconduct (namely, the pursuit by members of the Obeid family of a “joint venture deal” ^[964] ), a further question arises. Even if I am satisfied that Mr Macdonald did commit successive acts of misconduct by providing, or causing Edward Obeid or Moses Obeid or family members to be provided with information concerning the EOI process in some way (including, necessarily, that the particular information conveyed, communicated or provided by him was confidential in the relevant sense) does that allow for a further funding that they were acts of misconduct committed in furtherance of the conspiracy alleged, so as to support proof of the existence of that conspiracy as at 9 May 2008 beyond reasonable doubt?

1058. In addressing that question I would need to discount any reasonable possibility that Mr Macdonald was misconducting himself in wilful breach of his duty of confidentiality and/or impartiality in the commission of those five acts of misconduct in furtherance of a different conspiracy altogether, namely a conspiracy that was forged after the 6 June 2008 meeting, when the DPI was in the process of designating what ultimately became the Mount Penny Coal Release Area for inclusion in the pending EOI process, and after Mr Macdonald had shared that information with Edward Obeid and Moses Obeid (as I have found he did). I would also need to discount any reasonable possibility that Mr Macdonald committed those acts of misconduct unilaterally, (whether his provision of the confidential information was motivated by friendship, political patronage or some other motivation personal to him) extrinsic to any agreement with either of the accused that he should do so.

1059. I also acknowledge the submissions advanced by Ms Francis and Mr Neil, and adopted by Mr Martin, that were I only to find that some or even all of the fourth and the sixth to the ninth acts of misconduct inclusive established, I would need to be satisfied that they were each committed in furtherance of a conspiracy of the same scope and object as that alleged in the indictment, and not a different conspiracy or a different Crown case theory as to the commission of the conspiracy alleged before I could take them into account as evidence probative of the Crown case. ^[965]

1060. Before turning to consider the sufficiency of the evidence to establish the remaining five acts of misconduct (being, out of chronological sequence, the sixth, then the fourth and the seventh to ninth acts of misconduct), it is important to emphasise again that Mr Mullard’s evidence, and to a lesser extent Mr Gibson’s evidence, concerning the meetings with Mr Macdonald on 4 and 6 June 2008 is of continuing relevance to proof of the Crown case, although not as evidence from which the existence of the conspiracy might be inferred, at least not in the particular way contended for by the Crown.

1061. That evidence gives context to the circumstances in which “Area 7 Mount Penny” was designated by Ms Moloney as the seventh small area for inclusion in the proposed EOI process by mid-June 2008 before that area was ultimately rendered as Diagram X by Mr Schiavo later that month and then formally incorporated as one of the eleven areas for the granting of an EL in the public launch of the EOI process on 9 September 2008. ^[966]

When was the “Mount Penny Coal Release Area” (encompassing Cherrydale Park, Coggan Creek and Donola) designated and when was it included as Mount Penny Coal Release Area in the closed EOI process for the grant of an EL?

1062. This question can be dealt with in a practical way by setting out a chronology of largely undisputed events and occurrences internal to the DPI (after the 6 June 2008 meeting) which culminated in the boundaries of the Mount Penny Coal Release Area being fixed by Mr Schiavo, the Senior Land Information Officer within the Titles and Systems section of the Coal and Petroleum Development Group of the Department of Primary Industries and reproduced in Diagram X extracted below at par 1079. One of the questions raised by this body of evidence is the chain of events within the DPI leading to that designation, in particular the source of the information which enabled Mr Schiavo to “map” the area of the proposed Mount Penny EL and to do so to scale.

1063. It is not in dispute that by 16 June 2008, the potential open cut coal resource represented by the sideways S-shape on Wiles Map 2 had been reduced in size to create a small to medium coal release area in the east of the Bylong Valley. At least from the Department’s perspective, it appears that Area 7 was “created” as part of the process of Ms Moloney identifying further small to medium release areas for inclusion in the proposed EOI process at Mr Mullard’s request in response to Mr Macdonald’s “strong suggestion” that the Department explore the possibility of excising a smaller area “to the east” of the potential open cut coal resource in Wiles Map 2.

1064. On 16 June 2008, Mr Mullard sent an email to Dr Sheldrake copied to both Mr Gibson and Mr Munnings. Attached to that email is a document entitled “EOI Areas” (the first 16 June EOI areas document). In the body of the email, Mr Mullard referred to the information in that document as “information for meeting with the Minister as requested”. That meeting was scheduled on 17 June 2008, as a follow-up meeting from the meetings on 4 and 6 June 2008.

1065. In an email from Mr Mullard to attendees on 16 June 2008 in advance of the meeting the following day with Mr Macdonald, ^[967] it is clear that the potential large open cut coal resource in Wiles Map 2 was no longer being treated as such by the DPI. Although Ms Moloney’s map of the Western Coalfield attached to the 16 June 2008 email as part of the Ministerial Briefing did not include the shape of Area 7, a coal release area headed “Mount Penny” ^[968] was described in the email as an “estimated open cut resource of 100Mt” ^[969] in the area “expected to contain open cut coal resources close to existing rail facilities”. ^[970] That information is set out in full below:

The Department has contracted to drill a number of exploration wells for the area. The area is expected to contain opencut resources close to existing rail facilities.

Estimated open cut resources Less than 100Mt in the Mt Penny area.

Resources are contained within the Ulan Seam, raw ash ranges from 15 – 27%.

Estimated Minimum Return $15 million

Possible Time Frame for MT Penny Expression of Interest (EOI):

EOI Information

and data package preparation   4 weeks   End July

EOI Period            8 weeks    End September

EOI Assessment         4 weeks   End October ^[971]

1066. In a follow-up email from Ms Moloney to Mr Mullard and copied to Ms Wiles six minutes later, “Mount Penny” is included as the seventh additional small area in an attached map. ^[972] The pink highlighting around Area 7 is added for emphasis:

1067. It is the Crown case that Mr Macdonald passed the information in the Ministerial Briefing to Moses Obeid at a scheduled dinner meeting at the Credo Restaurant in Cammeray that evening. ^[973] The discrete fact (in bold in the extract above) that “the EOI process was to commence at the end of July 2008” was said by the Crown to be confidential information. It is the subject of the sixth act of misconduct. I will return to consider whether that act of misconduct is established later in these deliberations ^[974] since the evidence relied upon by the Crown to establish it extends from 17 June 2008 to 23 July 2008 and where, on the Crown case, the fourth and seventh acts of misconduct were committed over the course of the same four weeks in the context of a rapidly evolving state of affairs in Moses Obeid’s dealings with Mr Rumore, solicitor, and Mr Brook.

1068. Ms Moloney gave evidence she was asked to prepare the map of the seven areas by Mr Mullard. She could not recall why Area 7 was called Mount Penny other than that the numerical designation “carries on” her numbering system”. Nor could Ms Moloney recall how the shape for Area 7 was arrived at, other than to say she believed it was provided to her. ^[975]

The 17 June 2008 meeting

1069. The 17 June 2008 meeting was held at the Minister’s office. It was attended by Mr Macdonald, Mr Gibson, Mr Mullard and Ms Romano.

1070. Mr Gibson gave evidence that “Mount Penny” was discussed at this meeting as “one of the areas” to be included in the EOI process for “small to medium” coal release areas. He said Mr Macdonald indicated that he wanted the process for the release of these areas to be prepared “as soon as possible”. ^[976]

1071. Under cross-examination by the Crown with leave, Mr Mullard gave evidence that it was at this meeting that he first spoke with Mr Macdonald about a specific EOI area named “Mount Penny”. Again under cross-examination with leave, he made it clear that the words “Mount Penny” and the geographical or cartographic icons designating the location of Mount Penny were, in any event, on maps including Wiles Maps 1 and 2. He said he did not have a conversation with Mr Macdonald about Ms Moloney’s map of the seven areas or the designation of the Mount Penny area on it. He also gave evidence that he had no recollection of directing Ms Moloney to create the area known as Mount Penny and nominated by her as “Area 7”. Mr Mullard said he had no discussion with Ms Moloney as to why she included the seventh area described in that way and had no dealings with Mr Schiavo in his designation of the Mount Penny Coal Release Area on the Mining ID template or its boundaries on Diagram X.

1072. On 17 June 2008, or shortly thereafter, responsive to a request from Mr Macdonald, Mr Mullard instructed Ms Moloney to set about compiling a list of companies to be invited to participate in the EOI process. An iteration of that list, being a list titled “Company EOI 2 July 2008”, or the information on that list, was said by the Crown to be confidential information. The Crown alleged Mr Macdonald caused that list, or the information on it, to be provided to Edward Obeid, Moses Obeid or a member of their family after 9 July 2008. It is the subject of the seventh act of misconduct.

1073. Before turning to consider the evidence relevant to proof of the sixth and seventh acts of misconduct (and for reasons which will become clear, why I propose to consider the evidence relevant to proof of the fourth act of misconduct out of chronological sequence by considering it after the sixth act of misconduct), it is useful to digress and deal with Mr Schiavo’s evidence as it relates to the preparation of Diagram X. It will be necessary to return to his evidence later since it is also relevant to proof of the eighth act of misconduct.

Mr Schiavo creates Diagram X encompassing Cherrydale Park, Donola and Coggan Creek

1074. Mr Schiavo gave evidence that his various tertiary qualifications equipped him to work in various capacities within the New South Wales Public Service since 1982 by drawing and preparing maps for a variety of different purposes. ^[977]

1075. Applying that accumulated expertise, in May and June 2008 he held the position of Senior Land Information Officer within the Titles and Systems section of the Coal and Petroleum Development Group within the DPI. ^[978]

1076. On 27 June 2008, Mr Schiavo received an email from Ms Moloney which read as follows:

Hi Fred

Coal Advice has created shape file for 5 areas in the western coalfield with potential for EOIs.

Could you please under take an titles id on each area for me.

There are an addition 2 areas which I will forward ASAP. ^[979] [sic]

1077. Mr Schiavo gave evidence that he could not recall complying with that request but he “probably did” ^[980] by completing what he described as a “mining ID template, identification template” ^[981] into which he included information in relation to the proposed coal area. ^[982] He described the purpose of a mining ID template as follows:

This document goes to various units within the department to just check and process to see if it’s ‑ if it can be granted as a whole or if it is affected by a national park and it would have to be trimmed, so it can be granted that way. ^[983]

1078. Mr Schiavo went on to give evidence that the completion of the template was to confirm that a contemplated area for release did not have “conflicting titles and applications” that may need to be taken into account. ^[984] The template is reproduced below: ^[985]

1079. Mr Schiavo confirmed that in relation to what ultimately became Diagram X, prepared by reference to the template, there were various existing licence holders to take into account (including but not limited to the DPI who held EL 6676 and Authorisation 287 to the east held by Anglo Coal P/L) together with additional information in relation to County and Parish identifiers which he described as “an older English system” which existed “prior to digital mapping” ^[986] and other information including “National Parks Estate and World Heritage Areas”. ^[987]

Diagram X

1080. Ultimately, he described following process in the creation of Diagram X:

Q. And what process did you follow to create this diagram and, in particular, the red lines which set out the proposed tender area?
A. Okay, so I would have either have been given a diagram or coordinates. To prepare that, I’d have to create a shapefile and within the shapefile ‑ a shapefile may consist of five to seven files and within those five to seven files you would have a database file which lists attributes regarding that shape and you would have a projection file. And I am not sure what the other files do, but they work together to create this polygon. That’s called a polygon and you can place attributes on that polygon for the future. Once it is granted, you have got it sitting there already with ‑ you can put attributes to it straightaway.

Q. What do you mean by “attributes”?
A. Attributes, what it’s going to be called, what new EL it is going to become. So it is all set up there ready for it to be named.

Q. Do you use a particular computer program to create a document such as this diagram X?
A. The department has got a GIS system called ArcMap.

Q. Yes.
A. And we utilise that system for all our mining and exploration titles and applications, and we register the shapes with the cadastre on the background there ‑ you see all the little lots?

Q. Yes.
A. So we register all the shapes, if it is falling on that cadastre, to the background.

Q. You said a few minutes ago that you would have been given a diagram or some coordinates?
A. I’m not sure because they came at different times to me, over a period of I think it was a couple of weeks.

Q. Yes, okay.
A. And I'm not sure whether they came ‑ whether this was coordinates that they had given me or it was just a map. It may have been a map and I’ve calculated the coordinates. ^[988]

1081. Mr Schiavo also made it clear that Diagram X is a “generic term” which is applied to an identification sheet when he is asked “to identify an area whether, it be for tender or… for some other [Departmental] purpose”. ^[989]

1082. Mr Schiavo gave evidence that he had no role at all in deciding the shape of the proposed Mount Penny EOI area, the way Diagram X was identified, or its name. He said he had “no idea of any [coal] resources within that area”. He said that information came from Coal Advice and, as he described it, the proposed Mount Penny EOI area was, to him, “just another shape”. ^[990] He went on to give evidence that after using the shape file he had created he then used a system called XTools Pro to calculate the number of hectares encompassed by that shape file.

1083. What did not emerge clearly from the evidence adduced by the Crown but what did emerge, with clarity, in cross-examination and what was confirmed further in re-examination, is that Diagram X (as fixed and configured by Mr Schiavo) was created, to the extent possible, by lining up the boundaries of existing Authorisation 287, Authorisation 342 and EL 6676, again using a software package the esoteric details of which it is not necessary for me to describe and as to which the parties made no submissions. Mr Schiavo gave evidence that he would have been provided by Coal Advice with either rough coordinates or a topographical map from which he calculated the GPS coordinates, effectively “massaging” or “adjusting” those coordinates referable to any “portion boundary or an intersection” onto which the boundary line would be “snapped” so as to avoid future boundary disputes. ^[991]

1084. Mr Schiavo was, however, unable to give any evidence as to what information, whether in the form of shape files or GPS coordinates he received from Coal Advice and, despite a comprehensive search of his records, including his email records undertaken in the course of the ICAC investigation and additional enquiries he was asked to make preparatory to trial, he could not identify who from Coal Advice provided that information or the precise form of that information other than it was information provided by either Ms Moloney or Mr Ruming. Ms Moloney gave evidence she did not provide that information. Mr Ruming did not give evidence in the trial.

1085. Mr Schiavo gave evidence that he had never seen Wiles Map 2, and was never asked to undertake a process where he checked to see whether a “red or pink crosshatched shape” intersected or overlaid Authorisation 287 to the east, nor was he informed of the extent to which he needed to take information of that kind into account in preparing Diagram X.

1086. It should be emphasised that although Cherrydale Park and the neighbouring rural properties of Donola and Coggan Creek are physically located within the boundaries of the Mount Penny Coal Release Area as is obvious from Mr Whiddon’s map at par 552 above, neither in Diagram X nor in the other renderings of the Mount Penny Coal Release Area included as “shape files” in DPI briefing notes or internal Departmental correspondence, was there any reference to or indication of the surveyed boundaries of the three rural properties. ^[992] Furthermore, there is also no evidence that the DPI formally advised the registered owners of Cherrydale Park, Donola or Coggan Creek that it was proposed that their properties would be included within a newly designated coal release area or that the Minister for Mineral Resources was considering incorporating a newly designated “Mount Penny Coal Release Area” in a closed tender process for the issue of a coal EL which would directly impact their properties.

1087. For completeness, I note that the registered proprietors of each of the three properties as at 16 June 2008 when Area 7 was identified by Ms Moloney and later that month when Diagram X was created were as follows:

1. Locaway P/L was the registered owner of Cherrydale Park (subject to mortgage).

2. Michael Gerard Stanmore and Graham Alexander Stanmore as the executors of the estate of the late Mr Kevin Stanmore were the registered owners of Donola. They did not give evidence in the trial. Mr Adlington, estate agent, gave evidence that prior to Mr Stanmore’s death he was engaged to list and market the property for sale around June of 2008. ^[993] Once the property was listed, Mr Adlington received an enquiry from Mr Rodd who asked to inspect the property on behalf of his client. ^[994] His client was Damian Obeid. Mr Rodd inspected the property with Mr Adlington some time before 23 June 2008.

3. Coggan Creek was comprised of two titled properties. ^[995] As at June 2008, the registered owners of the land comprising Coggan Creek were TE O’Brien (Merriwa) Pty Ltd (the director of which was Mr Terence O’Brien) and Mr Terence (Edward) O’Brien. ^[996] Mr O’Brien and his wife had attempted to sell Coggan Creek “several years” prior to 2008 but were unsuccessful due to the drought. ^[997] By 2008, Mr O’Brien was suffering financially from the effects of “the drought and low prices” ^[998] and was not able “to get the work done to keep the farm operating”. ^[999] His wife was also unwell. Following an approach from Mr Adlington, who informed the O’Briens he had successfully sold the adjacent property (which Mr O’Brien knew to be Donola), Mr Rodd inspected the property with Mr Adlington on two occasions before 23 June 2008. He did so at Damian Obeid’s request in order to provide advice on its “agricultural” worth. On 23 June 2008, Mr O’Brien offered to sell Coggan Creek (or parts thereof) for $3 million. ^[1000]

1088. On 6 August 2008, on instruction from Moses Obeid, Mr Rumore, solicitor, executed a contract for the purchase of Donola in the name of Geble P/L, as trustee for the Elbeg Unit Trust, as purchaser. ^[1001] The unit holders were UPG P/L as trustee for the Moona Plains Family Trust and Challenge Property Investment Group P/L as trustee for the Triulcio Family Trust. On the same date, also on instructions from Moses Obeid, Geble P/L entered into option agreements for the purchase of the properties comprising Coggan Creek.

1089. In the Crown’s submission, the timing of Moses Obeid’s instructions to Mr Rumore to acquire the two neighbouring properties to Cherrydale Park is significant, being co-ordinate with his dealings with Monaro Mining NL (via Mr Brook) as he continued to capitalise on his receipt of confidential information from Mr Macdonald in furtherance of achieving the object of the conspiracy. The evidence upon which that submission is based will be reviewed in detail when I turn to consider Mr Brook’s evidence of his dealing with Monaro Mining NL and Cascade Coal P/L, in each instance on behalf of Moses Obeid. ^[1002]

1090. Finally, despite what I have accepted was Mr Macdonald’s enthusiasm to have additional small to medium areas identified by the Department for release, and what I am satisfied was Mr Macdonald’s “strong suggestion” that the Department see whether it was possible to excise a smaller release area from Wiles Map 2, there is no evidence that he either asked for or was provided with Diagram X, or the GPS coordinates of the shapefile of Area 7, or any other document, diagram, or information which might have evidenced or visualised that the seventh small area for inclusion in the pending EOI process, named “Mount Penny” by Ms Moloney, actually encompassed Cherrydale Park and the neighbouring properties of Donola and Coggan Creek.

1091. Mr Martin relied upon that fact as undermining the Crown case that Mr Macdonald “directed” the excision of a small area to the east of the potential open cut area in Wiles Map 2 and undermining proof of the existence of the conspiracy as at 6 June 2008. He submitted that were Mr Macdonald to have effectively “directed” that the Mount Penny Coal Release Area be created as an act in furtherance of the conspiracy alleged, he would almost certainly have wanted the assurance that his direction had been complied with, if for no other reason than to relay that confirmation to his co-conspirators.

1092. At the time of Mr Martin’s closing submissions there was some force in that submission. However, in circumstances where I have not found the fifth act of misconduct proved, but I have found that Mr Macdonald relayed to either or both of Edward Obeid and Moses Obeid his reasonable expectation that a new coal release area would be created in the area of Mount Penny following the 6 June 2008 meeting, and where, for reasons I will come to presently, I am also satisfied Mr Macdonald relayed the results of the 17 June 2008 meeting, by which time “Area 7 Mount Penny” had been included as the seventh small area for inclusion in the pending EOI, the fact that Mr Macdonald did not seek visual confirmation of the boundaries of the new coal release area is not a matter I consider has any bearing on whether the Crown has established one or more of the five remaining acts of misconduct or, were I satisfied one or more is established, whether the Crown has proved the existence of a conspiracy predating 9 May 2008 beyond reasonable doubt.

The sixth act of misconduct

1093. The sixth act of misconduct is particularised by the Crown as follows: ^[1003]

Between 17 June and 23 July 2008, Macdonald communicated to Edward Obeid and/or Moses Obeid that the EOI process for Mt Penny was to commence at the end of July 2008. He did so in breach of his duty of impartiality, as he knew the Obeid family owned property in a location proposed to be included in the EOI (ie Mt Penny), and in breach of his duty of confidentiality as this information was confidential.

1094. It is also the Crown case that between 17 June and 23 July 2008, Edward Obeid and/or Moses Obeid received that information (the timeframe information) from Mr Macdonald.

1095. To establish the sixth act of misconduct, the following facts need to be established:

1. Mr Macdonald was provided with the timeframe information by the DPI.

2. Mr Macdonald provided that information to Moses Obeid (either directly or via Edward Obeid). The Crown seeks to establish that fact by proving the following:

1. Moses Obeid instructed Mr Rumore on 23 July 2008 that the EOI process was to commence on 29 July 2008.

2. Moses Obeid informed Mr Brook by 22 July 2008 that the EOI process was to commence by the end of July 2008. The Crown seeks to establish that fact by proving the following:

3. That Mr Brook told Mr Grigor the EOI would commence by the end of July 2008.

4. That Mr Grigor conveyed that information to Mr Irwin, solicitor, retained to act for Monaro Mining NL.

1096. The evidence relevant to establishing (1) above is relatively straightforward. As discussed below, Mr Rumore gave evidence that he was advised of that timeframe. However the evidence capable of establishing the facts embedded in (2) is infected by ambiguities and inconsistencies arising on the evidence, including by whom and to whom the timeframe information was provided, when that occurred, and the terms in which the information was communicated. Those issues were exacerbated by the fact that because there is no direct evidence as to when within the timeframe of 17 June to 23 July 2008, as the sixth act of misconduct as particularised, Mr Macdonald provided the information. The Crown relied on what it contends is information that was subsequently conveyed by Moses Obeid to Mr Rumore and Mr Brook, then by Mr Brook to Mr Grigor (the Chairman of Monaro Mining NL), and then by Mr Grigor to Mr Irwin (a solicitor retained by Monaro Mining NL) to establish, by inference, that Mr Macdonald was the source of that information.

The 16 June 2008 EOI Areas document

1097. As I have already noted, on 16 June 2008, Mr Mullard emailed ^[1004] Dr Sheldrake, Mr Gibson, and Mr Munnings a document titled “EOI Areas”. ^[1005] That document was prepared by Ms Moloney. ^[1006] It included the following:

Possible Time Frame for MT Penny Expression of Interest (EOI):

EOI Information and data preparation    4 weeks    End July

EOI Period               8 weeks   End September

EOI Assessment             4 weeks   End October ^[1007]

1098. I have again already noted that there is no clear evidence as to who in the DPI prepared the “possible timeframe” for Mount Penny. Mr Mullard gave evidence that Ms Moloney nominated the timeframe and that he approved it prior to emailing the EOI Areas document. ^[1008] However, Ms Moloney could not recall being involved in preparing the information. ^[1009]

1099. Mr Mullard explained in his evidence that the timeframes nominated in the EOI Areas document were “tight” because “there was urgency from the Minister’s office to release the areas”. ^[1010] He recalled speaking to Mr Gibson on the phone “every few days” in the period before the preparation of the EOI Areas document, with Mr Gibson seeking updates as to the progress of the DPI’s preparation in keeping with the Minister’s “goal” that “smaller areas” be released under an EOI process. ^[1011]

1100. On the Crown case, Mr Macdonald was provided with the EOI Areas document by Mr Gibson and, even if he was not given that particular document, its contents were discussed at the meetings on 16 and 17 June 2008 and he came to learn of the timeframe information in that way. It is the Crown case he then provided that information to either or both of Edward Obeid and Moses Obeid in breach of his duties of confidentiality and impartiality.

1101. Mr Gibson gave evidence that he provided a copy of the EOI Areas document he received by email to Mr Macdonald. ^[1012] There is no evidence as to when that occurred although it was Mr Gibson’s usual practice to provide documents from the DPI to the Minister “at the first available opportunity”. ^[1013] I note Mr Neil’s closing submission that the EOI Areas document was not initialled to indicate Mr Macdonald had reviewed it, although I do not regard that as definitive. ^[1014]

1102. Although Mr Gibson’s evidence that he gave Mr Macdonald the EOI Areas document is worthy of weight, I am not persuaded by his evidence alone that Mr Macdonald had possession of the document or, if he was given it, when that occurred. The resolution of that question will await the consideration of other evidence.

The 16 June 2008 meeting

1103. On 16 June 2008, a meeting was convened by Mr Macdonald and attended by Dr Sheldrake, Renata Brooks ^[1015] and possibly Mr Gibson. ^[1016]

1104. Dr Sheldrake prepared an agenda for the meeting, on which he recorded handwritten notes during the meeting. ^[1017] The third item on the agenda read “Coal Resource Identification Cabinet Minute”. A further bullet point aligned with that item read “New Release Areas”. Immediately adjacent to that note was another handwritten notation which Dr Sheldrake explained in his evidence:

So there is a dash and it says “small areas 4 weeks”. Then “‑ Benelabri February 2009” and I have written “Ridgeway soon” but it refers to the Ridgelands resource. And I have written “new release areas tomorrow”. ^[1018]

1105. Beyond interpreting his handwritten notes, which are opaque as to their meaning, Dr Sheldrake had no recall of what was discussed at the meeting.

1106. The Crown submitted I would infer from Dr Sheldrake’s notes that the timeframe for the EOI process, including Mount Penny, was discussed at the meeting. ^[1019]

1107. The difficulty I have with that submission is that there is no evidence the EOI Areas document emailed to Mr Gibson was produced or discussed at the meeting and, as the sixth act of misconduct is particularised, it was the information in that document that was identified as the confidential information which Mr Macdonald provided in breach of his duties of confidentiality and impartiality. Additionally, and in any event, there is no evidence that either Edward Obeid or Moses Obeid acted in a way that was consistent with being told, directly, or indirectly, that the EOI for Mount Penny would commence “4 weeks” from 16 June 2008. I note in that connection that at the conference with Mr Rumore on 23 and 30 June 2008 within the “4 week” timeframe he was not instructed of the need to act immediately to secure the Obeids’ interests as landowners in a prospective joint venture deal. The position was different in the 23 July 2008 conference as to which see later at par 1124 and following.

The 16 June 2008 Credo Dinner

1108. Mr Macdonald’s electronic diary recorded a 6:30pm dinner meeting with Anthony Cummings at Credo restaurant in Cammeray. That diary entry also contained a reference to “Moses Obeid” from which the Crown invited me to draw the inference that Moses Obeid also attended the dinner meeting probably at Mr Macdonald’s invitation. In the Crown’s submission, the Credo dinner meeting provided one of various opportunities (as to which see below) for Mr Macdonald to convey the timeframe information to Moses Obeid.

1109. As at June 2008, Anthony Cummings was a horse trainer involved at Randwick Racecourse. ^[1020] He was the son of Bart Cummings, a friend of Peter Fitzhenry who lived close to Moses Obeid’s and the Fitzhenry residences in Elizabeth Bay. Mr Fitzhenry introduced Anthony Cummings to Moses Obeid. ^[1021] As at June 2008, Mr Macdonald was involved as Minister in ongoing political negotiations concerning the interrelated issues of equine influenza, the redevelopment of Randwick Racecourse, and World Youth Day, which was proposed to be hosted at that venue. ^[1022]

1110. The accused submitted that the entry in Mr Macdonald’s diary was not a sufficient basis to infer that Moses Obeid attended the dinner meeting and further, even if he did attend, as the meeting was convened in order for the attendees to discuss issues pertaining to the Randwick Racecourse and equine influenza, it was unlikely that Mr Macdonald would provide confidential information to Moses Obeid in the company of others.

1111. Additionally, given the uncertainty attending when Mr Gibson gave Mr Macdonald a copy of the EOI Areas document which contained the timeframe information for the Mount Penny EOI (if he did), I am not able to reason to the confident conclusion that Mr Macdonald received or read the document prior to the Credo dinner meeting. It follows that the inference contended for by the Crown, namely that the Credo dinner meeting provided Mr Macdonald with an opportunity to inform Moses Obeid of the proposed timeframe for the Mount Penny EOI, does not have the force contended for.

The 17 June 2008 meeting ^[1023]

1112. Mr Mullard gave evidence that he “believe[d]” the EOI Areas document was discussed at this meeting. He also recalled discussing an area called “Mount Penny” with the Minister. ^[1024]

1113. Mr Gibson also gave evidence the content of the EOI Areas document was discussed at this meeting, as was “Mount Penny”, being one of the areas identified in that document. He gave the following evidence:

Q. That briefing document included, at page 946, area titled Mount Penny [in the EOI Areas document]. What, to your recollection, was discussed at the meeting on 17 June about the Mount Penny area?
A. That it was one of the areas going forward into the expression of interest process and it would be in the small to medium category.

Q. The document at 946 includes, as I took you to previously, the possible timeframe for the Mount Penny expression of interest. Was there discussion at the meeting about that timeframe?
A. Yes.

Q. And what was the discussion?
A. Just that could it be done as soon as possible.

Q. And who said that?
A. Mr Macdonald. ^[1025]

1114. On the Crown case, Mr Gibson’s evidence (extracted above) establishes that at the 17 June 2008 meeting Mr Macdonald was aware of and considered the Mount Penny EOI timeframe set out in the EOI Areas document. Mr Neil characterised Mr Gibson’s evidence as establishing only that in discussing the timeframes that Mr Macdonald requested that the Mount Penny EOI take place “as soon as possible”, not that the discussion was referable to the EOI Areas document or the timeframe nominated in it. Mr Neil submitted that there was a “clear inference” that Mr Macdonald would have relied upon the discussion at the 17 June 2008 meeting about the prospective time frames for release of the Mount Penny EOI process as part of the EOI process generally, rather than the EOI Areas document itself. ^[1026]

1115. In my view, that submission fails to confront the import of Mr Gibson’s evidence. Although I accept there is some latent ambiguity in his evidence as to whether the “timeframe” was discussed referable to the EOI Areas document or more generally, the Crown’s question of Mr Gibson did refer to a page of the EOI Areas document which “includes… the possible timeframe for the Mount Penny expression of interest”. ^[1027] The Crown asked Mr Gibson whether “that” timeframe was discussed at the meeting (that is, on one view of the question, the timeframe nominated in the EOI Areas document). Mr Gibson responded that it was discussed by Mr Macdonald confirming that “it” (again on one view of the question, the timeframe nominated in the EOI Areas document) “should be released as soon as possible”. ^[1028] Mr Gibson did not specifically say that discussion was referrable to the EOI Areas document itself, and the Crown did not seek to establish that fact (which, if established, would also have established that the EOI Areas document was discussed at the meeting).

1116. While I accept from Mr Gibson’s evidence that Mr Macdonald did request that the Mount Penny EOI be commenced “as soon as possible” it does not follow that in making that request Mr Macdonald was aware of, or appreciated, that the proposed timeframe for the Mount Penny EOI (as stated in the EOI Areas document) was the end of July 2008.

1117. Having considered all the evidence, I am not able to reach a level of comfortable satisfaction that the EOI Areas document was produced at the 17 June 2008 meeting and that the timeframe nominated in it for the Mount Penny EOI, namely “4 weeks end July”, ^[1029] was what was being discussed.

1118. The question remains whether the Crown has established that Mr Macdonald was in receipt of the confidential information particularised in the sixth act of misconduct as “the EOI process for Mt Penny was to commence at the end of July 2008” even if it did not source directly from the EOI Areas document. The further question whether he provided the timetable information to Edward Obeid or Moses Obeid in breach of his Ministerial duties and obligations of confidentiality and impartiality, and in furtherance of the conspiracy alleged, also remains to be considered.

1119. Were I to find that Edward Obeid or Moses Obeid had that specific information, and were I able to find, as a matter of inference, that it was Mr Macdonald who provided it to either or both of them, that might allow for the further finding that Mr Macdonald must have been in receipt of the timeframe information nominated for the Mount Penny EOI in the EOI Areas document from his discussion with the DPI at either or both of the 16 and 17 June 2008 meetings.

Was there the “opportunity” for Mr Macdonald to provide the “timetable information” to Edward Obeid or Moses Obeid?

1120. The Crown submitted there were “numerous opportunities” for Mr Macdonald to convey the timeframe information to either Edward Obeid or Moses Obeid. I have already concluded that the 16 June 2008 Credo meeting does not constitute opportunity evidence.

1121. In closing submissions, the Crown elected to set the opportunities Mr Macdonald had to convey the information to Edward Obeid or Moses Obeid by way of example from the following phone contact between the accused on 23 June 2008:

1. A call placed by Edward Obeid to Mr Macdonald at 7:03am (one minute).

2. Two calls placed by Moses Obeid to Edward Obeid at 8:08am, which lasted for ten seconds and thirteen seconds, respectively, followed by a further call at 8:09 (one minute and twenty seconds).

3. A call placed by Edward Obeid to Mr Macdonald at 9:28am (30 seconds) and a call from Edward Obeid’s office to Mr Macdonald’s office at 9:51am (53 seconds).

4. A call placed by Moses Obeid to Edward Obeid at 4:40pm (4 minutes and 41 seconds).

5. A call placed by Edward Obeid to Mr Macdonald at 4:50pm (1 minute).

6. A call placed by Moses Obeid to Edward Obeid at 5:57pm (1 minute and 12 seconds). ^[1030]

1122. The Crown’s emphasis on the phone contact between the accused on 23 June 2008 is problematic. It leaves only a five day interlude between the provision of the EOI Areas document to Mr Macdonald at the 17 June 2008 meeting (if it was in fact provided to or read by him on that occasion) and the relay of the timeframe information contained in that document to Edward Obeid or Moses Obeid, in circumstances where there is a month-long interlude between the alleged communication by Mr Macdonald of the timeframe information and that information being provided by Moses Obeid to Mr Rumore on 23 July 2008.

1123. I note that in the period 17 June to 23 July 2008, Mr Macdonald and Edward Obeid were in contact by phone on 43 occasions and that, during the same timeframe, Mr Macdonald and Moses Obeid were in contact by phone on 9 occasions. ^[1031] I also note that some of those occasions of phone contact lasted less than ten seconds. Edward Obeid and Moses Obeid were also in contact numerous times during the same time period. ^[1032] While I accept the Crown’s submission that the evidence establishes ample opportunities for the communication to Edward Obeid or Moses Obeid of the information the subject of the sixth act of misconduct, I am also of the view that the probative weight of that evidence diminishes, given that the timeframe for the Mount Penny EOI was altered on 7 July 2008, a matter Mr Macdonald was aware of (as to which see below).

The relevance of the 23 July 2008 Rumore conference to proof of the sixth act of misconduct

1124. On 23 July 2008, a month after Mr Rumore was retained by Gerard Obeid and Paul Obeid to act, inter alia, on the prospect of a mining deal, ^[1033] Mr Rumore convened a further client conference attended by Moses Obeid, Gerard Obeid and Paul Obeid. Mr Brook was in attendance at that conference at Moses Obeid’s invitation. ^[1034]

1125. Mr Rumore made a handwritten file note of that conference which included an entry which read:

-   Finalise Monaro
Option by 29/7/08 (as
Date for opening of
Govt’s E.O.I campaign) ^[1035]

1126. Mr Rumore gave evidence that entry reflected his instructions that the “government expressions of interest campaign was going to start on 29 July 2008 and we had to get the documentation [in relation to the option deed with Monaro Mining NL] done by that time”. ^[1036] In cross-examination, he rejected the proposition he had incorrectly recorded the date conveyed to him. ^[1037] Mr Rumore also gave evidence that it was likely that Moses Obeid provided him with those instructions because he was the person his brothers deferred to and “he did most of the talking most of the time”. ^[1038] Mr Rumore conceded in cross-examination, however, that he could not recall, with certainty, that it was Moses Obeid who instructed him on that particular issue. ^[1039]

1127. Mr Neil cross-examined Mr Brook with a view to establishing that he volunteered the information as to the launch date for the government’s EOI campaign. Mr Brook maintained he was a “minor” participant at the conference which he attended at Moses Obeid’s request. ^[1040] Furthermore, as the Crown submitted in closing and as Mr Rumore made clear in his evidence, Mr Brook was not Mr Rumore’s client and, for that reason alone, he was an unlikely source of instructions for the ongoing legal advice that by 23 July 2008 Mr Rumore had been providing to the Obeids for some weeks. ^[1041] For reasons I will detail later when considering the role Mr Brook played in his dealings with Moses Obeid from early July 2008 throughout and beyond the conspiracy period, I accept that submission.

1128. Despite what I am satisfied was Moses Obeid’s dominant role in providing instructions to Mr Rumore generally throughout the course of his provision of legal services from June 2008 through to September 2009, ^[1042] I am unable to find, to a comfortable level of satisfaction, that it was Moses Obeid, as distinct from one of his brothers, who informed Mr Rumore about the date for the opening of the EOI campaign. That leaves open the question whether Mr Macdonald provided Moses Obeid with that information and, foundational to that question, whether Mr Macdonald had possession of the EOI Areas document or appreciated the information it contained as to the proposed timeframe for the Mount Penny EOI. Those questions will need to be addressed after considering Mr Brook’s and Mr Grigor’s evidence.

1129. A separate issue arising from the conference with Mr Rumore and the Crown’s reliance on it in proof of the sixth act of misconduct is the information recorded in Mr Rumore’s file note. In Mr Martin’s submission, the note allows for the suggestion that “an EOI process would open at the end of July 2008 for two Exploration Licences” ^[1043] (emphasis added), giving rise to the possibility that the file note was intended to refer to Authorisation 287 and Authorisation 342 adjacent to (and encroaching on) Cherrydale Park, both of which were due to expire on 27 July 2008. ^[1044]

1130. Mr Rumore’s file note of the 23 July 2008 conference ^[1045] does not make any reference to “two Exploration Licences”. ^[1046] Neither is there any evidence capable of establishing that any of the attendees at that conference considering the possibility that Anglo Coal P/L’s holdings in the Bylong Valley would be released to tender via an “E.O.I campaign” ^[1047] once the relevant Authorisations expired. The submission has no force for that reason.

The letters by Mr Grigor and Mr Irwin

1131. Three letters jointly drafted by Mr Grigor and Mr Brook (but ostensibly with Mr Grigor as Chairman of Monaro Mining NL as the author) ^[1048] and a letter by Mr Irwin, solicitor, to Mr Grigor, are also relied on by the Crown in proof of the sixth act of misconduct. Each of those letters is said by the Crown to contain confidential information as to the timeframe for the Mount Penny EOI which, on the Crown case, was information conveyed to Mr Brook by Moses Obeid and which sourced from Mr Macdonald in breach of his duty of confidentiality.

Mr Grigor’s letters

1132. On 22 July 2008, Ms Adaley from Monaro Mining NL emailed a letter to Mr Brook in his capacity as a Senior Vice President at Lehman Brothers at Mr Grigor’s request. The letter, written by Mr Grigor, ^[1049] relevantly stated that “Monaro is seeking the support of Lehman Brothers to tender for certain thermal and coking coal tenements, which are expected to be promoted via a closed tender process within the next 30 days” (emphasis added). ^[1050]

1133. That letter was preceded by two drafts prepared earlier the same day. The first draft was sent by Mr Grigor to Mr Brook. The second draft was sent in response by Mr Brook. It incorporated various edits. ^[1051] The first draft referenced “coking and thermal coal licences” which were “to be made available for closed tender within the next month”. ^[1052] The second draft referenced “certain thermal and coking coal tenements which are expected to be promoted via a closed tender process within the next 30 days” (emphasis added). ^[1053]

1134. Mr Rumore’s file note of the 23 July 2008 conference contained a reference to that letter. ^[1054]

1135. Mr Grigor gave evidence that the information in the letter as to the timeframe for the release of “coal tenements” was provided to him by Mr Brook. ^[1055] Mr Brook confirmed that he provided Mr Grigor with that information, ^[1056] having received information from Moses Obeid that “there were tenders imminently going to be put up by the Government”. ^[1057] With respect to the reference in the first draft letter to a “closed tender within the next month”, Mr Brook gave evidence he “relayed that information to Monaro Mining on the basis of… what Moses Obeid had told” him. ^[1058] There is no evidence as to when Mr Brook was given that information by Moses Obeid.

Mr Irwin’s letter

1136. On 23 July 2008, at 9:08pm, Mr Irwin, solicitor, sent an email to Mr Grigor. Attached to the email was a letter confirming Mr Grigor’s instructions for Mr Irwin to act on behalf of Monaro Mining NL which included the following:

We understand that the NSW Government is planning to tender two exploration licences ^[1059] … in NSW by inviting expressions of interest during the week commencing 28 July 2008. ^[1060] (Emphasis added.)

1137. Mr Grigor gave evidence that the information he conveyed to Mr Irwin came from Mr Brook. ^[1061] Mr Brook gave no evidence about the provenance of that information.

The source of the information provided by Mr Brook

1138. Mr Neil submitted in closing that there was an available inference that Mr Brook was the source of the timeframe information in respect of Mount Penny, having received that information from his own contacts in the mining industry or another source altogether.

1139. Where the evidence of each of Mr Mullard, ^[1062] Dr Sheldrake, ^[1063] Ms Moloney ^[1064] and Mr Gibson ^[1065] was that they did not provide a copy of the EOI Areas document or the timeframe information it contained to anyone outside the Department or the Minister’s office, and where Mr Coutts gave evidence the timeframe for the EOI process was not publicly available, ^[1066] there is no evidential basis to support the drawing of that inference.

1140. The far more compelling inference remains, in my view, that it was Moses Obeid who was the source of the information Mr Brook relayed to Mr Grigor, despite there being no evidence as to when that occurred.

1141. The question remains whether that finding is capable of supporting the further finding that Moses Obeid provided Mr Brook with information that “the EOI process for Mount Penny was to commence at the end of July 2008”, ^[1067] the specific confidential information the subject as the sixth act of misconduct.

1142. Further doubt attends proof of the sixth act of misconduct by the various inconsistencies between the documents which contain information as to the timeframe for the Mount Penny EOI:

1. Mr Grigor’s letter to Mr Brook on 22 July 2008 referenced “thermal and coking tenements, which are expected to be promoted via a closed tender process within the next 30 days” (emphasis added). ^[1068]

2. Mr Rumore’s file note of the 23 July 2008 conference records that the “date of the opening” of the government’s “EOI campaign” was 29 July 2008 (emphasis added). ^[1069]

3. Mr Irwin’s letter to Mr Grigor on 23 July 2008 included information that the EOI invitation would be issued during the week commencing 28 July 2008 (emphasis added). ^[1070]

1143. Those inconsistencies necessarily raise doubts as to whether that information originated from the same source and, even if it did, whether the terms of the information conveyed by Moses Obeid to Mr Brook, then from Mr Brook to Mr Grigor and finally to Mr Irwin, sourced from the confidential information particularised as the subject of the sixth act of misconduct.

1144. As I have noted above, in the absence of any direct evidence that Mr Macdonald provided the timeframe information to Edward Obeid or Moses Obeid, the Crown relied necessarily on information conveyed by Moses Obeid to Mr Rumore and to Mr Brook, then by Mr Brook to Mr Grigor, then by Mr Grigor to Mr Irwin. The probative weight of that evidence in establishing that the information sourced from Mr Macdonald diminishes the wider the net of communication is cast. The inconsistencies that emerge in the substance of the information conveyed also raises questions as to the precise content of the confidential information which Mr Macdonald is alleged to have conveyed to Edward Obeid or Moses Obeid in breach of his duties and obligations of confidentiality and impartiality.

1145. In my view, the lack of specificity in Mr Grigor’s letter set out at (1) above is readily explained by the purpose for which I am satisfied that letter was prepared, namely to create the false impression that Monaro Mining NL approached Lehman Brothers, ostensibly to protect the Obeids’ desire to remain anonymous. However, the significance of the difference between the information captured in Mr Rumore’s file note in (2) above and Mr Irwin’s letter in (3) above deepens when Mr Martin and Mr Neil submitted that the timeframe nominated in the EOI Areas document for the Mount Penny EOI was inherently ambiguous, leaving open a construction that the EOI process would open at the end of September (2008) for a period of 8 weeks, which was broadly consistent with the start date for the EOI process which ultimately came to pass. ^[1071]

1146. Mr Martin and Mr Neil advanced the further submission that the inherent ambiguity in the EOI Areas document rendered the timeframe information so uncertain that Mr Macdonald would have been unlikely to have conveyed it with the certainty that is implicit in the Crown case, particularly in circumstances where the timeframe proposed was implausible and was extended by almost two months in any event. ^[1072]

Is the sixth act of misconduct established?

1147. As contended for by the Crown, I am satisfied that the EOI Areas document was intended to convey the views of the DPI as at 16 June 2008 that the “EOI Period” would commence at the end of July 2008, immediately following the four week period allocated for the preparation of “EOI information and data”. ^[1073]

1148. On the basis of Mr Gibson’s evidence, I am also satisfied that at the 17 June 2008 meeting, Mr Macdonald was seeking to expedite the EOI process for “Mount Penny”, ^[1074] assuming he knew that information was contained in the EOI Areas document, he must have considered it feasible for the Mount Penny Coal Release Area to be released to tender at the end of July 2008. ^[1075]

1149. What I consider to be fatal to proof of the sixth act of misconduct is that the information conveyed to Mr Rumore, Mr Brook, Mr Grigor and Mr Irwin in late July was not current information. On 7 July 2008, that is, prior to the 23 July Rumore conference, Mr Macdonald was provided with updated information from the DPI that the EOI package for small and medium areas, including Mount Penny, would be prepared by 21 August 2008 and that Mount Penny would be released to EOI in November 2008. ^[1076]

1150. Mr Neil submitted that:

[Mr] Macdonald would clearly have known well before Moses Obeid met Rumore on 23 July 2008 that the process was not going to be released at the end of July 2008. If there was a Crown conspiracy as alleged, Moses Obeid would have known on 23 July 2008 (if anything) that November 2008 was the contemplated release date. ^[1077]

1151. While the Crown does not seek to make the case that Mr Macdonald availed himself of every opportunity to provide Edward Obeid or Moses Obeid with every piece of confidential information pertaining to the upcoming EOI process in respect of Mount Penny, it does appear to me to be something of an anomaly that if he provided the DPI’s earlier (possible) timeframe for the Mount Penny EOI process he would not update that information when a new timeframe was proposed.

1152. It does not necessarily tell against proof of the conspiracy alleged that Mr Macdonald neglected to update the Obeids as to the amended timeframe. However, what does emerge clearly from the evidence directly bearing upon proof of the sixth act of misconduct is a lack of precision or consistency in the information the Crown alleged Mr Macdonald provided. While that does not necessarily undermine proof of the Crown case, the vast ambiguities in the evidence remain, in my view, deeply problematic in the Crown establishing the sixth act of misconduct, as particularised.

1153. In my view, the evidence at various critical points in the chain of communication set out above, together with the nature of the timeframe information itself, is such that I am unable to rely on that evidence to resolve the doubts that persist as to whether (and when) Mr Macdonald received the EOI Areas document and/or, if he did, whether he had any expectation that the information it contained meant that the “Mount Penny EOI” was to be released at the end of July 2008. Whether Moses Obeid did provide that same information to each of Mr Rumore and Mr Brook is another source of doubt as is the final and critical question, whether the evidence establishes, by inference, that Mr Macdonald provided that information to Edward Obeid or Moses Obeid in breach of his duties of confidentiality and impartiality.

1154. I am not satisfied that the sixth act of misconduct is established.

1155. I am satisfied, however, that at some time after 17 June 2008 Mr Macdonald did update the information that was at hand after the 6 June 2008 meeting by informing either or both of Moses Obeid and Edward Obeid that a new coal release area in the Mount Penny area had now been identified by the DPI and that it would be included in an EOI process for the granting of an EL. That information alone conferred a significant benefit to the Obeids. Although not particularised by the Crown as an act of misconduct from which the existence of the conspiracy might be inferred, ^[1078] I am satisfied that by Mr Macdonald effectively confirming to Edward Obeid or Moses Obeid that a coal release area at Mount Penny would be included in an upcoming EOI process (irrespective of the precise date on which that process would commence) he was providing, indeed continuing to provide, valuable information which, in the context of whether the remaining acts of misconduct alleged by the Crown are established, is probative of the critical question whether any one or more of the four remaining acts of misconduct (being the fourth and the seventh to ninth), taken together with the first and second acts of misconduct, allows me to find the existence of the conspiracy proved beyond reasonable doubt.

The timing and significance of Mr Rumore being retained to act for the Obeid family on 23 June 2008

1156. On 23 June 2008, Mr Rumore, solicitor, was retained, initially by Paul Obeid and Gerard Obeid, to advise on a suitable commercial structure for a joint venture in which “the Obeids”, as owners of Cherrydale Park, and “the Boyds”, as property developers associated with Pace Developments, would acquire the properties adjoining Cherrydale Park (clearly Donola and Coggan Creek) with a view to exploiting the possibility of “coal leases” being granted encompassing all three properties “once [an] EOI issues” (as to which no time frame was mentioned), and to enable them as parties to the joint venture to negotiate to sell the properties at a multiple of their value in the event a “coal lease” was granted. ^[1079]

1157. Although Moses Obeid was not present at that conference, by 30 June 2008 Mr Rumore regarded his clients as “the three Obeid brothers but predominantly Moses [Obeid]”. ^[1080] After the 23 June 2008 conference, additional conferences were convened on 30 June 2008, 2 July 2008, 18 July 2008, 23 July 2008, 25 July 2008, 11 August 2009, 24 September 2008, 6 November 2008, 7 November 2008, 8 December 2008 and 22 September 2009. ^[1081] All additional conferences were attended by Moses Obeid, with the exception of the conferences convened on 24 September 2008, 7 November 2008 and 8 December 2008. During that timeframe, Mr Rumore also prepared written advice from time to time which was largely incorporated in his email correspondence copied to each of Moses Obeid, Gerard Obeid and Paul Obeid. ^[1082]

1158. At the initial conference Mr Rumore was instructed that the properties to be purchased under a “Heads of Agreement” with the Boyds would be managed and operated as farming and grazing properties up to and including any mining being undertaken on the land, were that to occur in the future. ^[1083] Consistent with those instructions Mr Rumore’s file notes of the conference record “farming/rural (cattle + crops)”. That evidence appears to be consistent with the instructions Mr Adlington received on 23 June 2008 to prepare a contract for the sale of Coggan Creek by way of a $50,000 option to purchase part of that property for $3.25 million. ^[1084]

1159. Mr Rumore was also informed, told or advised at the initial conference (although he could not nominate who of Paul Obeid or Gerard Obeid provided instructions about any of the aspects of the arrangements under discussion) that it was their view that “once EOI issues re coal lease, land value increases many fold (3 or 4 times)”. ^[1085] Mr Rumore explained that aspect of his file note. He said that he was told that there was a possibility of coal leases being granted and that the property values would “significantly increase” were that to occur. ^[1086] Further, he said that he was told that in the event that a mining company took an interest in only one of the properties, his clients were interested in undertaking negotiations with that company for the sale of all three properties and, for that reason, they were keen to ensure that everything was handled “in concert”. ^[1087] Possible commercial structures to achieve that outcome were discussed, ^[1088] including the use of a special purpose vehicle to hold two-thirds of the value of the properties on trust for the Obeids; ^[1089] that “a unit trust would buy the properties”; and Equitexx Pty Limited (Equitexx P/L), an “Obeid company,” would hold the units in that trust for the Obeids. ^[1090]

1160. Mr Neil submitted that the inference to be drawn from Mr Rumore’s evidence and his file note of the 23 June 2008 conference was that the Paul (and Gerard Obeid) were at that time contemplating that Anglo Coal P/L might purchase the three properties, consistent with what Moses Obeid had told Mr Shanahan and Ms Jiminez, journalists, in December 2012 concerning what he described to them as a “real and present threat” to the family’s quiet enjoyment of Cherrydale Park should Anglo Coal P/L renew Authorisation 287. ^[1091] Not only does that submission fail to confront the fact that Mr Rumore gave categorical evidence that Anglo Coal P/L was not mentioned at the 23 June 2008 conference (which I should add is inconceivable if the threat were “real” and “present”), it is a submission that carries no weight at this point in my deliberations to verdict for other reasons. As I have already made clear, and for reasons already developed at length, I am well satisfied that by 23 July 2008 Mr Macdonald had informed either or both of Edward Obeid and Moses Obeid of the DPI’s designation of the Mount Penny Coal Release Area and its pending inclusion as Area 7 in an EOI process for the granting of an EL. ^[1092]

1161. Although (as I have noted at an earlier stage in my deliberations) the Crown does not allege that Cherrydale Park was purchased by the Obeid family as an act in furtherance of the conspiracy, there is very considerable force in the Crown’s submission that the renewed interest of Moses Obeid and his brothers in purchasing the neighbouring properties Donola and Coggan Creek in June 2008 and, in particular, Moses Obeid’s later instructions to Mr Rumore on 21 July 2008 to review the necessary contracts to facilitate that objective, ^[1093] was conduct in which he engaged in furtherance of the conspiracy and a source of direct evidence of Moses Obeid’s knowing participation in that conspiracy. ^[1094] The Crown also submitted that Edward Obeid’s knowledge of those arrangements (as he made clear in his interview with the journalists in 2012, albeit disclaiming at that time any plan to exploit the land for coal mining) together with his position as “the head” of the Obeid family constitutes compelling evidence of his participation in the conspiracy.

1162. The Crown advanced the further submission that steps were taken by both Edward Obeid and Moses Obeid in 2008 and 2009 to “distance” the Obeid family from any continuing association with land at Mount Penny or the Bylong Valley. Those steps included Moses Obeid’s pursuit of third party purchasers amongst his friends and associates to be the registered proprietors of each of those properties and the determined efforts by Edward Obeid to change the ownership of Cherrydale Park from Locaway P/L to UPG P/L.

1163. I will deal with the evidence relied upon by the Crown in support of those submissions later. ^[1095]

“Tianda” and Mr Fang are introduced to Moses Obeid who then introduces them to Mr Rumore

1164. On 30 June 2008, Moses Obeid attended a meeting with his brothers at Mr Rumore’s offices. As noted earlier, from that time Moses Obeid was also treated as Mr Rumore’s client in the sense that he treated instructions from one of the Obeid brothers as instructions from all three. Mr Fang of the Tianda Group also joined the conference after a preliminary conference between Mr Rumore and his clients.

1165. On that occasion, Mr Rumore was informed by Moses Obeid that the prospective arrangement with the Boyds, discussed with his brothers a week earlier, was not proceeding and that the Tianda Group would be the new contracting party. A new commercial structure was proposed. It included a special purpose vehicle incorporating a unit trust, under which a 40% interest in the two properties to be acquired would be held by the Obeids and 60% by Tianda Resources P/L. ^[1096] The purchase price for both properties was to be advanced by the Tianda Group. ^[1097] The agreement reflected an intention that, together with Cherrydale Park, the two additional properties purchased under the unit trust would be purchased by an “offshore company” ^[1098] and “developed together for coal” ^[1099] and that “Tianda Coal (Australia) P/L” would “bid for [a] coal lease”. ^[1100]

1166. Mr Fang’s unavailability as a witness to give evidence in the trial within the meaning of s 65 of the Evidence Act was the subject of an interlocutory ruling in which the Crown’s application to tender extracts from Mr Fang’s evidence in proceedings before ICAC on 3 February 2013 pursuant to ss 65(1) and 65(3) of the Evidence Act was refused. ^[1101] I remained satisfied, however, that the Crown should be permitted to advance the submission at trial that Mr Fang’s involvement with Moses Obeid, as at 30 June 2008, was because Mr Macdonald introduced them to each other to discuss the prospect of a coal mining project. At that time, I was not satisfied there was sufficient evidence to permit the inference to be drawn that Edward Obeid was the conduit through which that introduction took place. As I saw it, the comprehensive call charge records assembled in a schedule marked MFI 21 in the pre-trial hearing (the information ultimately tendered in the trial as Exhibit U) included direct telephone contact between Moses Obeid and Mr Macdonald before and after 30 June 2008, displacing the need for Edward Obeid to be directly involved in the negotiations or discussions about the potential for Tianda Resources P/L to engage in a joint venture with his family which, on the view I took of the evidence at that time, was almost exclusively Moses Obeid’s province.

1167. In light of that ruling, the Crown sought to establish through other evidence adduced at the trial that it was Mr Macdonald who introduced Mr Fang to Moses Obeid, an introduction that ultimately led to Mr Fang being included in the meeting at Mr Rumore’s office on 30 June 2008. ^[1102]

The initiation of contact between Mr Fang and Moses Obeid

1168. On 30 June 2008, Mr Fang attended a conference with Mr Rumore, Moses Obeid, Gerard Obeid and Paul Obeid. ^[1103]

1169. The Crown submitted that I would be satisfied as a matter of inference that, prior to that conference Mr Macdonald arranged to introduce Mr Fang to Moses Obeid in order that they might discuss the prospect of a mining project associated with the pending release of the Mount Penny Coal Release Area in an EOI process for the grant of an EL. In developing that submission, the Crown relied upon other evidence in the trial where Mr Macdonald had introduced Mr Fang to other coal mining companies who may wish to invest in coal mining in New South Wales, including in relation to the grant of the Watermark EL in 2008. ^[1104]

1170. Although not submitted expressly, as I understand the Crown case, Mr Macdonald introduced Mr Fang and Moses Obeid at a time when the Obeids’ interest in exploring the prospect of a joint venture with a mining company had been piqued by Mr Macdonald providing them with information about the creation of the Mount Penny Coal Release Area after the 6, 16 and 17 June 2008 meetings. The Crown relied on what it described as the “coincidence of contact” between Mr Macdonald, Mr Fang and Moses Obeid in this timeframe to support proof of the fact that it was Mr Macdonald who made the relevant introduction and for that purpose. ^[1105]

1171. The following periods of concentrated communication (or assumed communication) between each of the accused and Mr Fang during that period were relied on by the Crown. The entries in italics are, in my view, of particular relevance.

1. On 3 June 2008:

1. At 2:55pm, Mr Fang called Mr Macdonald (16 seconds) ^[1106]

2. On 4 June 2008 (the day of the 4 June 2008 meeting between Mr Macdonald and the DPI):

1. Moses Obeid called Edward Obeid at 10:09am (4 minutes and 1 second)

2. Moses Obeid called Edward Obeid at 2:38pm (20 seconds)

3. Edward Obeid called Mr Macdonald at 4:29pm (9 seconds)

4. Mr Macdonald had a scheduled meeting with Mr Fang at 5pm ^[1107]

5. Edward Obeid called Moses Obeid at 5:16pm (26 seconds)

6. Mr Macdonald called Edward Obeid at 8:45pm (2 minutes and 30 seconds) ^[1108]

3. On 6 June 2008 (the day of the 6 June 2008 meeting between Mr Macdonald and the DPI):

1. Edward Obeid left a voicemail for Moses Obeid at 7:55am (20 seconds)

2. Moses Obeid called Edward Obeid at 9:05am (11 minutes and 53 seconds) ^[1109]

3. Mr Macdonald had a scheduled meeting with Mr Fang at 11am ^[1110]

4. On Thursday 26 June 2008:

1. Moses Obeid called Edward Obeid at 8:09am (13 seconds)

2. Moses Obeid called Edward Obeid at 10:01am (20 seconds)

3. Mr Macdonald had a scheduled meeting with Mr Fang at 1pm ^[1111]

4. Moses Obeid called Edward Obeid at 5:48pm (30 seconds)

5. Mr Macdonald called Mr Fang at 5:49pm (30 seconds) ^[1112]

5. On Friday 27 June 2008:

1. Moses Obeid called Edward Obeid at 7:18am (39 seconds)

2. Moses Obeid called Edward Obeid at 8:59am (23 seconds)

3. Mr Macdonald called Mr Fang at 11:44am (30 seconds)

4. Edward Obeid called Mr Macdonald at 12:19pm (30 seconds)

5. Moses Obeid called Edward Obeid at 4:19pm (2 minutes and 5 seconds)

6. Moses Obeid called Edward Obeid 5:28pm (11 seconds)

7. Mr Macdonald called Mr Fang at 5:48pm (2 minutes and 30 seconds) ^[1113]

6. On Monday 30 June 2008:

1. Mr Fang attended a conference with Mr Rumore, Moses Obeid, Gerard Obeid and Paul Obeid. ^[1114] Although there is no evidence as to the time that conference was held, I assume it was after the calls in (b) and (c)(i) and probably (ii).

2. Moses Obeid called Edward Obeid at 8:29am (12 seconds)

3. The following concentrated communication occurred:

1. Moses Obeid sent a text message to Mr Fang at 8:30am. On Crown case, this is the first instance of phone contact between Moses Obeid and Mr Fang. There is no direct evidence of how he had Mr Fang’s telephone number and no evidence of the content of the text message.

2. Mr Fang called Moses Obeid at 10:38am (1 minute and 42 seconds)

3. Half an hour later, Mr Fang called Mr Macdonald at 11:18am (1 minute and 43 seconds)

4. Edward Obeid called Moses Obeid at 11:52am (4 seconds)

5. Within an hour, Edward Obeid called Mr Macdonald at 12:40pm (1 minute and 13 seconds)

6. Edward Obeid called Moses Obeid at 12:59pm (7 seconds)

7. Mr Macdonald called Edward Obeid at 1:46pm (30 seconds)

8. Moses Obeid called Edward Obeid at 2:06pm (15 seconds) and at 2:28pm (26 seconds)

9. Mr Macdonald called Mr Fang at 4:10pm (30 seconds) and at 5:30pm (30 seconds)

10. Moses Obeid called Edward Obeid at 5:41pm (41 seconds)

11. Edward Obeid called Mr Macdonald at 7:05pm (30 seconds) ^[1115]

7. On 1 July 2008:

1. Edward Obeid left a voicemail for Moses Obeid at 7:32am (16 seconds)

2. Moses Obeid called Edward Obeid at 7:33am (3 minutes and 46 seconds)

3. Within ten minutes, Edward Obeid called Mr Macdonald at 7:39am (30 seconds) and at 8:28am (1 minute and 34 seconds)

4. Moses Obeid called Edward Obeid at 9:07am (12 seconds)

5. Edward Obeid called Moses Obeid at 10:28am (30 seconds)

6. The following concentrated communication occurred:

1. Mr Macdonald called Mr Fang at 1:21pm (30 seconds)

2. Less than ten minutes later, Edward Obeid called Mr Macdonald at 1:29pm (30 seconds)

3. Less than five minutes later, Edward Obeid called Moses Obeid at 1:33pm (1 minute)

4. Moses Obeid called Edward Obeid at 3:28pm (47 seconds)

5. Within fifteen minutes, Moses Obeid called Mr Fang at 3:42pm (1 minute and 11 seconds)

6. Mr Fang called Mr Macdonald at 5:23pm (15 seconds)

7. Mr Macdonald called Mr Fang at 5:34pm (30 seconds), at 5:55pm (30 seconds) and at 5:58pm (30 seconds)

8. Within ten minutes of the latest of those calls, Mr Macdonald called Edward Obeid at 6:05pm (30 seconds)

9. Less than half an hour later, Moses Obeid called Mr Fang at 6:20pm (4 minutes and 16 seconds)

7. Just over an hour later, Moses Obeid called Edward Obeid at 7:35pm (14 seconds) and at 9pm (53 seconds)

8. 16 minutes later, Mr Macdonald called Edward Obeid at 9:16pm (1 minute) ^[1116]

8. On 2 July 2008:

1. Edward Obeid called Moses Obeid at 6:50am (1 minute)

2. Mr Fang called Moses Obeid at 12:26pm (2 minutes and 22 seconds) and at 5:09pm (14 seconds)

3. Mr Fang left Moses Obeid a voicemail at 5:12pm (18 seconds)

4. Moses Obeid called Mr Fang at 5:13pm (5 minutes and 41 seconds) ^[1117]

9. On 3 July 2008 (the date of the first Wentworth Hotel meeting):

1. Moses Obeid called Edward Obeid at 7:17am (52 seconds)

2. One minute later, Moses Obeid sent a text message to Mr Fang at 7:18am

3. Edward Obeid called Mr Macdonald at 9:26am (30 seconds) and at 11am (35 seconds)

4. Mr Fang called Moses Obeid at 11:13am (4 minutes and 52 seconds), the call of the longest duration

5. Moses Obeid called Mr Fang at 11:36am (1 minute and 45 seconds)

6. Three minutes later, Moses Obeid called Edward Obeid at 11:39am (16 seconds) and again at 11:40am (1 minute)

7. One minute later, Moses Obeid called Mr Fang at 11:41am (2 minutes and 51 seconds)

8. Edward Obeid called Mr Macdonald at 11:51am (30 seconds)

9. Approximately 15 minutes later, Edward Obeid called Moses Obeid at 12:07pm (20 seconds) and again at 12:11pm (1 minute and 9 seconds) and 12:23pm (30 seconds)

10. Within half an hour, Moses Obeid sent a text message to Mr Fang at 12:49pm

11. Just over ten minutes later, Moses Obeid called Edward Obeid at 1:01pm (37 seconds)

12. Edward Obeid called Moses Obeid at 2:06pm (28 seconds)

13. Mr Fang called Moses Obeid at 2:18pm (2 minutes)

14. Mr Macdonald called Edward Obeid at 2:56pm (30 seconds) and at 3pm (6 minutes and 30 seconds)

15. Within an hour, Edward Obeid called Moses Obeid at 3:55pm (30 seconds)

16. Mr Macdonald called Mr Fang at 4:02pm (1 minute and 30 seconds) and 5:32pm (30 seconds)

17. Edward Obeid called Mr Macdonald at 5:54pm (1 minute)

18. Edward Obeid called Moses Obeid at 7:24pm (1 minute)

19. Mr Macdonald called Edward Obeid at 10:27pm (30 seconds) ^[1118]

10. On 4 July 2008:

1. Edward Obeid left Moses Obeid a voicemail at 7:51am (20 seconds)

2. Moses Obeid called Edward Obeid at 7:53am (56 seconds)

3. Mr Macdonald called Edward Obeid at 7:56am (9 minutes)

4. Edward Obeid called Mr Macdonald at 8:43am (30 seconds)

5. Mr Macdonald called Edward Obeid at 8:48am (2 minutes and 30 seconds)

6. The following concentrated communication occurred:

1. Mr Fang called Moses Obeid at 9:02am (2 minutes and 7 seconds) and at 9:52am (1 minute and 42 seconds)

2. A few minutes later, Moses Obeid called Edward Obeid at 9:55am (24 seconds)

3. Moses Obeid then immediately called Mr Fang at 9:56am (1 minute and 11 seconds)

7. Mr Macdonald called Edward Obeid at 10:15am (1 minute)

8. Moses Obeid called Mr Fang at 10:59am (46 seconds)

9. Edward Obeid called Moses Obeid at 11:45am (30 seconds)

10. Moses Obeid called Edward Obeid at 11:52am (1 minute and 1 second)

11. Edward Obeid left Moses Obeid a voicemail at 12:36pm (21 seconds)

12. Moses Obeid called Edward Obeid at 1:17pm (20 seconds) and at 1:36pm (12 seconds)

13. Mr Macdonald called Edward Obeid at 1:43pm (30 seconds)

14. Mr Macdonald called Mr Fang at 3:06pm (1 minute and 30 seconds)

15. Mr Fang called Mr Macdonald at 3:55pm (1 minute and 11 seconds)

16. Mr Macdonald called Mr Fang at 4:16pm (30 seconds)

17. Edward Obeid left voicemails for Moses Obeid at 8:36pm (16 seconds) and 9:45pm (20 seconds)

The submissions of the accused

1172. In closing submissions, both Mr Martin and Mr Neil advanced alternate (and innocent) explanations for the degree of contact between Mr Fang and Moses Obeid and Mr Macdonald that was given emphasis by the Crown.

1173. Mr Martin submitted that no adverse inference should be drawn from the regular phone contact between Mr Fang and Mr Macdonald where the evidence established that they regularly collaborated in relation to the Sydney Symphony Orchestra and fundraising for earthquake relief in China. ^[1119]

1174. Mr Neil submitted that the evidence of contact between Mr Fang and Moses Obeid should be disregarded in circumstances where Mr Fang is “unavailable to be called as a witness and there is no evidence from him about his relationship with Moses Obeid, the extent of any phone contact and his phone numbers used from time to time”. ^[1120] Referring to R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 4) [2019] NSWSC 1286 at [76], Mr Neil also submitted that in circumstances where the Crown only relied on Mr Fang’s phone records for 2008, the Crown cannot make good the submission that the first telephone contact between Moses Obeid and Mr Fang was on 30 June 2008, that is, the Crown cannot exclude the possibility that they already knew one another prior to 2008. ^[1121]

1175. Mr Neil also submitted that the Crown’s contention that Mr Macdonald introduced Mr Fang and Moses Obeid should be rejected as contrary to the evidence. In his submission, Mr Fang’s prominence in the Sydney business community gave rise to the obvious and competing possibility that “any number of people” could have facilitated the introduction. ^[1122] Mr Neil further submitted that the initiation of contact between Mr Fang and Moses Obeid on 30 June 2008 was “easily explicable”, absent any introduction by Mr Macdonald, on the basis that the arrangement contemplated by the Obeids with the Boyd family was, at least by 30 June 2008, if not earlier, unlikely to proceed and that Moses Obeid was seeking out other potential contracting parties. ^[1123] Mr Neil further submitted that even were I to draw the inference that it was Mr Macdonald who made the relevant introduction, there is no evidence as to the context in which that introduction occurred and, that being the case, the Crown could not exclude the reasonable possibility that it was made by Mr Macdonald on the basis of his perception of a common personal or professional interest shared by Mr Fang and Moses Obeid, completely independent of the pending EOI process for the release of Mount Penny for coal exploration.

1176. In my view, Mr Neil’s submissions as to what he contended was the reasonable possibility, not excluded by the Crown, that Mr Fang and Moses Obeid knew each other prior to 2008 or that they could have been introduced by someone other than Mr Macdonald do not adequately address the significant increase of closely timed phone contact between the accused and Mr Fang in late June and early July 2008 in circumstances where Mr Fang and Moses Obeid continued to engage in commercial negotiations from 30 June 2008. ^[1124]

1177. Significantly, on the day of the 30 June 2008 conference with Mr Rumore, Mr Fang, Mr Macdonald and Moses Obeid were variously in telephone contact, with the SMS sent by Moses Obeid to Mr Fang, followed by a phone call from Mr Fang to Moses Obeid two hours later, being the first recorded instance of telephone contact between them in the Telephone Summary. ^[1125] Mr Macdonald and Moses Obeid were also both variously in contact with Edward Obeid that day. ^[1126]

1178. On the evening of 2 July 2008, a further conference was convened at Mr Rumore’s offices attended by Moses Obeid, Gerard Obeid, Paul Obeid and Mr Fang. Mr Rumore was informed that it had been agreed that Great Western Coal Pty Ltd (GWC P/L) would be a new company set up by “Unen Coal” (sic) ^[1127] to “bid for the mining tenements” (as Mr Rumore expressed it in his evidence), ^[1128] with the Obeids being granted the option to take up 30% of GWC P/L were it to secure the right to mine for coal. ^[1129]

1179. The contractual terms and the structure contemplated by this new arrangement with Tianda Resources P/L remained outstanding at the end of the 2 July meeting. ^[1130] Mr Rumore noted in his follow-up email the next morning ^[1131] that the Obeids were to obtain the “purchase contracts” for Coggan Creek and Donola, it being Mr Rumore’s understanding that contracts for the sale of those properties had issued in the context of the potential for the Boyds to acquire the properties as part of what had been the Heads of Agreement with the Obeids, an arrangement that had since lapsed.

1180. Negotiations between Mr Fang on behalf of Tianda Resources P/L and the Obeids continued through the first half of July 2008. ^[1132] Ultimately, on 18 July 2008, at a further conference attended by Mr Rumore, Moses Obeid and Gerard Obeid, Mr Rumore was informed that the contemplated deal with “Tianda” was “off”. ^[1133]

Mr Fang’s further dealings in relation to the Mount Penny area

1181. For completeness, although not as I see it probative of the facts in issue in the trial, I note that Mr De Ross, General Manager of Tianda Resources P/L, gave evidence that in October 2008, prior to Tianda Resources P/L submitting an application for the grant of an EL at Spur Hill, Goonbri and Vickery South, under the same EOI process that included Mount Penny, Mr Fang asked him to “have a closer look at Mount Penny”, indicating that “it might be possible to purchase the land of that area which might make a difference to the ability to mine the area”. ^[1134] Mr Fang did not explain to Mr De Ross why that possibility arose at that time and did not provide any information as to the identity of the landowners from whom the land around Mount Penny might be purchased.

1182. In response to Mr Fang’s request, Mr De Ross reviewed the information relating to the Mount Penny Coal Release Area but did not change his original assessment that it was of “less value” than the areas already selected by Tianda Resources P/L as suitable areas for coal exploration under licence. ^[1135]

1183. On 21 October 2008, a conference was scheduled with Mr Rumore, Moses Obeid and Warwick Lui of Tianda Resources P/L. ^[1136] After the conference, Mr Lui sent an email to Mr Rumore asking for a copy of a document in relation to the “extension of [the] call option period and revised settlement date” (clearly a reference to Coggan Creek). ^[1137]

1184. On 22 October 2008, Mr Lui sent an email to Moses Obeid which read as follows:

Further to our phone conversation today morning [sic], please advise me if Monaro Mining has formed a joint venture (or any entity) with other 3^rd party to submit bid for the coal mine in Mt. Penny? If not yet, when will it be formed?

If possible, please send me the valuation report of the land by email. ^[1138]

1185. On 23 October 2008, Tianda Pharmaceuticals Pty Ltd instructed the law firm Shaw Reynolds Bowen and Gerathy Lawyers in a matter described in the records of that firm as “Option – O’Brien” and “Property Coggan Creek Wollar Road”. The file was archived on 22 September 2009 and marked as completed/settled on 9 December 2009. ^[1139]

Did Mr Macdonald introduce Mr Fang and Moses Obeid?

1186. The Crown accepted that the evidence comprising the Telephone Summary, including the evidence of phone contact between the accused and Mr Fang in late June and early July 2008 set out above, went no higher than presenting the opportunity for the relay of information. While there is some weight in Mr Martin’s submission that Mr Macdonald would have been, at that time, communicating about their collaborations with the Sydney Symphony Orchestra and earthquake relief in China, in my view, even if the overall frequency of communication between Mr Fang and Mr Macdonald is capable of being partially explained in the way contended for by Mr Martin, given the timing of the commencement of communication between Moses Obeid and Mr Fang, together with the frequency of communication between Mr Macdonald and Mr Fang, Mr Macdonald and Edward Obeid, and Edward Obeid and Moses Obeid, and where calls between those pairings were on multiple occasions coterminous, there is a compelling inference that the prospect of a mining project was being discussed, in at least some of those calls.

1187. With respect to Mr Neil’s submission that the Crown could not exclude the possibility that Mr Fang and Moses Obeid already knew one another prior to 2008, ^[1140] again given the timing and frequency of telephone contact between the accused and Mr Fang in late June and early July 2008, the far more compelling inference is that they were introduced to each other for the first time, in that timeframe, by Mr Macdonald.

1188. To put it another way, it is difficult to conceive of the rational possibility that around the time that Mr Fang attended a conference with Mr Rumore at Moses Obeid’s invitation and where Mr Rumore was instructed that Tianda Resources P/L was to “bid” for a “coal lease” relative to the three properties, including Cherrydale Park, Moses Obeid would not have discussed that potentiality with at least Edward Obeid, and probably Mr Macdonald, at a time where, as I have already found, the Obeids’ interest in exploring the prospect of a joint venture with a mining company had been piqued by Mr Macdonald providing information concerning the creation of the Mount Penny Coal Release Area.

1189. I am satisfied that the confluence of the rapid upswing in communication between the accused and Mr Fang in late June and early July 2008; Mr Macdonald’s direction to the DPI that Tianda Resources P/L be invited to participate in the EOI process which would include the Mount Penny Coal Release Area, ^[1141] and Mr Macdonald’s provision of the list of companies including Tianda Resources P/L to Moses Obeid, ^[1142] is highly probative of Mr Macdonald’s appreciation that Moses Obeid was intent on pursuing the commercial advantage from the Mount Penny Coal Release Area being included in the pending EOI process.

1190. As the Crown submitted in closing:

The point, your Honour, in terms of what the Crown says is available in support of proof of Ian Macdonald's appreciation, for instance, of improper purpose, is that from time to time the Crown says there is evidence of Ian Macdonald going further than just committing those acts of misconduct and demonstrating an appreciation that commercial advantage was being sought to be pursued from the prospective Mount Penny Coal Release Area. ^[1143]

1191. I am satisfied that the strong probabilities favour me finding that Mr Macdonald did introduce Mr Fang to Moses Obeid prior to the conference Mr Fang attended with Mr Rumore, Moses Obeid, Gerard Obeid and Paul Obeid on 30 June 2008. ^[1144] I am also satisfied that the introduction was for the purpose of the two men discussing the prospect of a mining project in relation to the EOI process which, by that date, Mr Macdonald had informed the Obeids would include a coal release area in the area of Mount Penny and in which, at Mr Macdonald’s direction, Tianda Resources P/L would be invited to participate. ^[1145]

1192. On 2 July 2008, Mark Morgan, solicitor for the Boyds, forwarded to Moses Obeid various documents relating to the sale of Coggan Creek, including the two call option agreements and pages 1-2 of each Contract for Sale. Moses Obeid forwarded that email to Mr Rumore the following day. ^[1146]

1193. In the contract for sale for Donola executed on 6 August 2008, the words “M MORGAN OR NOMINEE” appear crossed out next to the space for “Purchaser” and are replaced by the handwritten text “GEBLE PTY LIMITED AS TRUSTEE FOR ELBEG UNIT TRUST”. ^[1147]

The first Wentworth Hotel meeting between Mr Brook and Moses Obeid: 3 July 2008

1194. On 3 July 2008, Moses Obeid was introduced to Mr Gardner Brook by Mr Arlo Selby at a scheduled meeting at the Wentworth Hotel in the Sydney CBD (the first Wentworth Hotel meeting). This was the first of two meetings convened at that hotel within a week. Moses Obeid and his brothers, Gerard Obeid and Paul Obeid, attended the second meeting with Gardner Brook on 7 July 2008 (the second Wentworth Hotel meeting). Mr Selby was present throughout both meetings. He was not called by the Crown. That being the case, there is no evidence as to when Mr Selby approached Moses Obeid or Mr Brook to schedule the first meeting, or what he believed, or was given to understand by either of them, might be to their mutual advantage in meeting each other.

1195. What is clear, however, is that Moses Obeid was evidently willing to meet with Mr Brook (at Mr Selby’s invitation) at a time when the potential for a structured deal with the Tianda Group, through Moses Obeid’s dealings with Mr Fang, were the subject of continuing consideration, presumably by both parties, albeit at a time when the problematics of a successful project with Tianda Resources P/L had been identified by Mr Rumore is an email sent to Moses Obeid and his brothers on 3 July 2008 ^[1148] after conferring with them the previous day. It is also clear that despite the difficulties attending the structure of the deal with the Tianda Group, and Mr Rumore’s advice to Moses Obeid identifying those difficulties, under Moses Obeid’s instructions Mr Rumore continued to pursue the contracts for the sale of Coggan Creek after he was advised that the Boyds were no longer involved in the proposed acquisition of Coggan Creek or Donola. ^[1149]

1196. As at 3 July 2008, Mr Brook was a Senior Vice President of the Asia Special Situations Group of Lehman Brothers, working from the Sydney office. He was first employed in that capacity in August 2007. The Sydney office was established as part of the expansion of Lehman Brothers’ global business when it acquired Grange Securities, a Sydney-based fixed income business and former client of Lehman Brothers.

1197. Mr Brook’s role at Lehman Brothers was, inter alia, to identify either high yield transactions in which Lehman Brothers’ might invest their own capital (as opposed to a traditional investment banking model where finance was arranged for client investors), or high yield transactions which might involve a combination of investor funds and capital from Lehman Brothers’ balance sheet. ^[1150]

1198. Mr Brook continued in that role until Lehman Brothers “collapsed” on 15 September 2008 upon the filing of a Chapter 11 petition for bankruptcy under the United States Bankruptcy Code. From 23 September 2008 he was engaged as a consultant to Monaro Mining NL ^[1151] as they pursued their tender for the grant of an EL at Mount Penny, amongst other ELs it tendered for as part of the EOI process.

1199. I am satisfied that the evidence establishes that after Mr Brook introduced himself and Lehman Brothers to Moses Obeid as a bank open to any transaction that was “financially viable” and that “nothing [was] too big”, ^[1152] and after Moses Obeid was invited by Mr Selby to tell Mr Brook about “the farm”, Moses Obeid spoke of a project which included what he described as “an alliance of landowners” in the Bylong Valley interested in the potential for an enhanced financial return by engaging (in some contractual arrangement yet to be formalised) with a coal mining company who would, or might, apply for the right to mine for coal over their land.

1200. What is in issue is whether by Moses Obeid agreeing to meet with Mr Brook (at Mr Selby’s invitation) and upon meeting with him and opening discussions about the “project” and “the farm”, preliminary to a second meeting in which Paul Obeid led those discussions, is evidence of his participation in a conspiracy that was in existence at that time, having been forged on the Crown case no later than 9 May 2008. ^[1153]

1201. In the detailed submissions advanced by Mr Neil (which were in significant respects adopted by Ms Francis and Mr Martin), I was invited to find that other evidence in the Crown case admits of a competing explanation for Moses Obeid not only meeting with Mr Brook on 3 July 2008 and discussing the “project” with him, but also for Moses Obeid to have commenced negotiations with Mr Fang along similar lines. That explanation is comprehended by what Moses Obeid (in the presence of Edward Obeid) described in the Shanahan/Jiminez interview in December 2012 as the “exit strategy”.

1202. I have already discussed whether, in light of the various factual findings I have made in my deliberations thus far, the so-called “exit strategy” might provide a competing explanation for the Obeids’ apparent interest in exploring the potential for engaging with the Boyds in a joint venture that contemplated the granting of mining leases under an EOI process and retaining Mr Rumore to advise. It is implicit in the findings I have already made that by mid-June 2008, any basis for Moses Obeid or Edward Obeid to have held any continuing concerns about the Anglo Coal P/L “threat” had been effectively displaced upon learning from Mr Macdonald that a new coal release area had been designated at Mount Penny for inclusion in an EOI Process. To the extent that it is necessary to do so, I will add the further observation that learning of that fact was clearly not treated as a “threat” to the continued utility of Cherrydale Park as a rural retreat and cattle farming property; instead it was embraced by Moses Obeid (and his brothers) in their sustained pursuit of a joint venture with a mining company, first with Mr Fang, then with Monaro Mining NL and later with Cascade Coal P/L.

1203. However, given the primacy given to the so-called “exit strategy” by Edward Obeid and Moses Obeid in their interview with journalists and the use to which that interview is put by the parties (Edward Obeid and Moses Obeid relying upon it as giving rise to a reasonable explanation inconsistent with guilt, and the Crown relying upon various of the representations made to the journalists as constituting admissions against interest), ^[1154] I will refer to that aspect of the evidence in the trial at this point in my deliberations in some greater detail.

My ultimate rejection of the “exit strategy” as an innocent explanation

1204. The “exit strategy”, so-called, concerned what Moses Obeid represented to the journalists was a “real and present threat” that Anglo Coal P/L would seek to renew Authorisation 287, which was due to expire in July 2008, or, worse still, that Anglo Coal P/L would actually seek a mining lease over the area covered by Authorisation 287, including the land that encroached on the most fertile pastures on Cherrydale Park. Moses Obeid told the journalists that the family had learnt from their own researches, including gossip in the valley, that a mine in the Bylong Valley was proposed. Moses Obeid explained to the journalists that by his family pursuing the possibility of a joint venture with another mining company who might acquire the EL, they could frustrate or ultimately thwart entirely Anglo Coal P/L’s plans to mine the land and, in the event that the threat from Anglo Coal P/L did not materialise, they would continue to pursue and develop both Cherrydale Park and the adjoining properties, Donola and Coggan Creek, as a large agricultural and cattle holding.

1205. As I acknowledged earlier, ^[1155] in its closing submissions the Crown accepted that even if, at one time in early 2008, the Obeids might have had a legitimate concern that Anglo Coal P/L might pursue a mining lease under Authorisation 287, and might seek to renew the Authorisation as a preliminary step to commencing mining operations, they had been told, via Edward Obeid’s enquiries of Mr Macdonald in April 2008, that there was no plan for an “Anglo Mine”. The Crown also submitted that the so called “Anglo threat” does not accord with the evidence of either Mr Brook or Mr Rumore where, in their dealings with Moses Obeid, it was patent that the focus was on the Obeids actively participating as landowners in a mining venture with a mining company for commercial purposes.

1206. The Crown also submitted that the proposition that the Obeids’ motivation in purchasing or arranging for the purchase of the neighbouring properties of Donola and Coggan Creek was to secure leverage for the so-called “exit strategy”, does not withstand scrutiny given the wealth of evidence probative of the fact that the real motivation was to ultimately control the three properties in order to capitalise on the benefits generated by Mr Macdonald’s successive acts of misconduct from 9 May 2008 up to that date, including, as the Crown saw it, most critically, the fifth act of misconduct which resulted in the creation of the Mount Penny Coal Release Area and its inclusion in a pending EOI process. While the force of that aspect of the Crown’s closing submission is diminished because I have not found the fifth act of misconduct established, on the basis of the facts as I have found them established as concerns the 6 and 16 June 2008 meetings with the DPI, the point is still well made that it was Mr Macdonald’s provision of information about the creation of the Mount Penny Coal Release Area that motivated the Obeids to move to acquire control of the rural properties within or at least proximate to Cherrydale Park where they were given to understand the new coal release area had been designated given Cherrydale Park’s proximity to Mount Penny.

1207. Where, for the reasons which follow, I am satisfied Mr Macdonald provided either or both of Moses Obeid and Paul Obeid (and perhaps Edward Obeid) with Wiles Map 2 (the conduct the subject of the fourth act of misconduct), I am able, at this time, to make an allied finding of fact that it was referable to that map that Mr Macdonald identified where he had “strongly suggested” to the DPI that a new coal release area should be created, that is, to the east of the potential coal resource encompassed within the sideways S-shape near Mount Penny. With that information I am firmly of the view the Obeids would have been in no doubt that the proposed new coal release area would include Cherrydale Park and the neighbouring properties of Donola and Coggan Creek even if, as I have accepted, there is no evidence that Mr Macdonald asked for or was supplied with the boundaries of the Mount Penny Coal Release Area in the form of Diagram X.

1208. As will become obvious from the review of Mr Brook’s evidence of what occurred at the first and second Wentworth Hotel meetings which follows, I am also satisfied that it was this knowledge that motivated Moses Obeid’s simultaneous engagements, first with Mr Fang sometime prior to 30 June 2008 conference with Mr Rumore and then Mr Brook as and from 3 July 2008 before Mr Brook’s engagement with Monaro Mining NL from 15 July 2008 on his behalf took precedence.

1209. I will reserve consideration of the Crown’s allied submission that this same body of evidence allows for the inference to be drawn that Moses Obeid would not have initiated or pursued those commercial engagements (which necessarily impacted upon the ongoing utility of Cherrydale Park as a rural retreat and idyllic place to retire) without the sanction of his father, and that this is a source of evidence proving Edward Obeid’s participation in the conspiracy. As I have emphasised on multiple occasions, the question whether the Crown has proved the participation of any of the accused in the conspiracy alleged only arises if I am satisfied beyond reasonable doubt that the existence of the conspiracy is proved.

1210. Mr Brook’s evidence as to representations by Moses Obeid during the first Wentworth Hotel meeting in relation to coal resources in the vicinity of the “family farm” was also in dispute.

1211. Mr Brook gave evidence that Moses Obeid told him that the reason the family had bought Cherrydale Park was because they believed there was a “very large coal resource” underneath the land. ^[1156] Since it is no part of the Crown case that Cherrydale Park was purchased because the Obeids had a belief about a coal resource under the land, I place no weight on this aspect of Mr Brook’s evidence. In any event, in large part because of the concessions Mr Brook made in cross-examination, I am satisfied that at least at the first Wentworth Hotel meeting, Moses Obeid spoke in qualified terms about the potential success of the proposed project, in the sense that “they [members of his family] had reason to believe that there may be coal under the property and were keen to capitalise on that if that was true”. ^[1157] Mr Brook also gave evidence that he was told by Moses Obeid that “they [members of his family] believed there were government tenders coming out” and that “they suspected the property [being ‘the farm’] … would be within the area of the exploration licence coming forward for tender” (emphasis added). ^[1158]

1212. While I accept that Moses Obeid told Mr Brook that the source of his knowledge or belief concerning the timing of the tenders was derived from speaking to “locals and mining professionals”, ^[1159] it is at least implicit in the way the Crown puts its case that amounted to deliberate dissembling. Given the various factual findings I have made in my deliberations thus far about Mr Macdonald’s relay of information concerning the creation of the Mount Penny Coal Release Area, I am firmly of the view Moses Obeid was in fact deliberately dissembling, being concerned (at least at that time) not to reveal that his information sourced in large part from information provided by a New South Wales government Minister about the pending release of the Mount Penny Coal Release Area as part of an EOI process for the grant of an EL.

The significance of Moses Obeid’s representation concerning a landholders alliance in his contractual dealings

1213. It is also of significance in refusing to give any credence to the “exit strategy” that at the first Wentworth Hotel meeting Mr Brook was led to believe by Moses Obeid (and later by Paul Obeid in the second Wentworth Hotel meeting) that there was an existing landholders alliance of which their family were members. Despite the closing submissions advanced on behalf of Moses Obeid that the evidence reveals that in early July 2008 the family was only considering purchasing Donola and Coggan Creek and that Mr Brook should not be believed when he referred to Moses Obeid speaking about an existing alliance, I accept as both truthful and accurate his evidence that Moses Obeid told him that:

… they had formed a landholders alliance … and his intention was, as he saw it, based on his investigations with consultants and geologists, that he wanted, or his family wanted, rather, to participate not only as landholders and receiving some level of compensation for people mining their land but also to participate at the mining level with respect to the exploitation of the resource. ^[1160] (Emphasis added.)

1214. While these representations were themselves neither accurate nor truthful (Donola and Coggan Creek having not been “acquired” until 8 August 2008 when Mr Rumore, on behalf of Geble P/L, executed a Contract for Sale for the purchase of Donola and call options to acquire Coggan Creek) the relevance resides in Moses Obeid’s representation that the landholders alliance was in existence as bolstering the prospect of Lehman Brothers being attracted to the proposal.

1215. These representations were also made, of course, at a time when the Special Purpose Vehicle which was to acquire the three properties under a Unit Trust, as contemplated by the arrangement with Tianda Resources P/L, was still under discussion and review by Mr Rumore (and presumably still under consideration by Mr Fang). It was only when that arrangement did not come to pass and Mr Rumore was instructed on 18 July 2008 that the “Tianda” deal was “off” ^[1161] that on 6 August 2008, Mr Rumore was given firm instructions by Moses Obeid to acquire Donola and Coggan Creek, together with instructions that Geble P/L, which was registered on 28 July 2008, was to be used for that purpose. ^[1162]

1216. As will be obvious from what follows later, I am also satisfied that in Moses Obeid’s dealings with Monaro Mining NL via Mr Brook from mid-July 2008, a relationship which was formalised by 20 August 2008 upon the execution of the Share Option Deed between Monaro Mining NL and Voope P/L, ^[1163] the concept of a landholders alliance was consistently deployed.

1217. In summary, I am satisfied that at the first Wentworth Hotel meeting on 3 July 2008, Moses Obeid was interested to learn from Mr Brook whether Lehman Brothers had clients in the natural resources or mining sector with whom they might participate in a joint coal mining venture of some kind or whether, in the alternative, Lehman Brothers had a client that would be interested in partnering with the so called landholders alliance, again in a joint venture of some kind, including by applying for a coal EL over a coal release area which would include the family’s landholdings in the Bylong Valley (and other property held by the landholders alliance) and that by the second Wentworth Hotel meeting on 7 July 2008 it was that strategy that was developed.

The acquisition of Donola and Coggan Creek and the question of the existence of a landholders alliance

1218. The Crown also submitted that I would be satisfied from combination of all the facts and circumstances adduced in evidence in its case that it was Mr Macdonald’s ultimate relay of the information about the designation of a new coal release area encompassing Cherrydale Park, that was the “real reason” for what the Crown described as the steps taken by the Obeid family first to acquire and then later to “disguise” their interest in Donola and Coggan Creek by the various mechanisms that ultimately resulted in the title to both properties being held by friends and associates of the Obeid family. ^[1164]

1219. Donola was purchased by Geble P/L on trust for the Elbeg Unit Trust with the 10% deposit on the purchase price of $600,000 paid using funds provided by the Obeid Family Trust No 1. ^[1165] The beneficiaries of the Elbeg Unit Trust were UPG P/L as trustee for the Moona Plains Family Trust and Challenge Property Investments Group Pty Ltd (Challenge Property Investments Group P/L), a company owned by the Triulcio family, as trustee for the Triulcio Family Trust. Members of that family enjoyed a close relationship with members of the Obeid family. ^[1166]

1220. In particular, Edward Obeid’s diary recorded various meetings with Rocco Triulcio on 1 May, 7 May and 18 July 2007; 4 June, 14 November and 16 December 2008; and 22 May, 4 June, 29 July, and 10 September 2009, ^[1167] together with a meeting with Rocco Triulcio and Mr Macdonald at the Wentworth Hotel on 1 June 2009. ^[1168]

1221. I also note that the general ledger for Locaway P/L listed a debit in the amount of $300,000 dated 14 November 2007 bearing the description “loan rocs dad for Cherrydale”. ^[1169]

1222. The purchase of Donola was settled on 22 October 2008. The balance of the purchase price was paid using funds loaned to Geble P/L by the Triulcio Family Trust ($162,994); Moona Plains Family Trust ($92,170) and $420,000 advanced by the Westpac Banking Corporation secured by a registered first mortgage over the property. ^[1170]

1223. On 18 November 2008, ownership of Geble P/L passed to Mr Campo, the Triulcios’ accountant. ^[1171]

1224. On 6 August 2008 Geble P/L (as trustee for the Elbeg Unit Trust) was granted two Call Option Agreements for the purchase of the properties comprising Coggan Creek. ^[1172] The two option fees paid by the Obeid Family Trust No 1 to TE O’Brien ($53,859) and Terrance O’Brien ($1,037) (via CBP Lawyers) on 5 August 2008 totalled $54,896. ^[1173] The option periods expired on 6 October 2008, at which point both options had lapsed. ^[1174] On 6 October 2008, at Mr Rumore’s request, the option period in respect of each call option was extended via two Deeds of Variation of Option. ^[1175] Both option periods were extended to 7 November 2008. ^[1176] On 6 November 2008, Geble P/L nominated Coopers World P/L as trustee for the Justin Kennedy Lewis Family Trust as its nominee to exercise the call options. ^[1177]

1225. Meanwhile on 5 November 2008, the transfer of Donola to Geble P/L (by a transfer dated 22 October 2008) was recorded in the Land Titles Office. ^[1178] Mr Rumore acknowledged receipt of the cheques to effect settlement from “Ross” (Triulcio, it can be readily inferred) by email on 22 October 2008. ^[1179] On 17 November 2008, Mr Rumore ceased to be a director of Geble P/L and the following day ceased to be a shareholder of that company. ^[1180] The new director/shareholder of Geble P/L, Mr Campo, was an accountant for the the Triulcio family. Geble P/L continued to operate as trustee for the Elbeg Unit Trust.

1226. Mr Lewis was introduced to Mr Rumore by Moses Obeid in a client conference on 6 November 2008. ^[1181] Mr Lewis and Moses Obeid are friends of long standing. ^[1182] Mr Rumore acted as Mr Lewis’ solicitor on the purchase of Coggan Creek. ^[1183]

1227. On 6 November 2008, the option deeds for Coggan Creek were assigned to Coopers World P/L ^[1184] and a contract for the sale of Coggan Creek was executed the following day naming Coopers World P/L as trustee for the Justin Kennedy Lewis Family Trust as purchaser. ^[1185]

1228. On 7 November 2008 Mr Rumore recorded a file note detailing an “Agreement between Lewis and Obeids” that Mr Lewis was to “sell land, take out costs and 30% of profits are to go to Obeid interests as a fee, but only [if] Monaro Coal is the party that wins the coal concessions over the properties.” ^[1186] Two Contracts for Sale dated 7 November 2008, each naming Coopers World as trustee for the Justin Kennedy Lewis Family Trust as the purchaser, were entered into for the purchase of Coggan Creek. ^[1187] On 10 November 2008, the name of Coopers World P/L was changed to Justin Kennedy Lewis P/L. ^[1188]

1229. The following table is extracted from the expert report of Mr Temple-Cole, forensic accountant, illustrating the payments relating to the call options to purchase Coggan Creek. ^[1189]

Table 5 Payments related to options to purchase Coggan Creek Bylong
Component	Date	Amount	Paid from Account	Paid to Account
Call Option Agreement fee	Unknown	53,859.30	Obeid Family Trust No.1	CBP Lawyers
Call Option Agreement fee	05-Aug-08	53,859.30	CBP Lawyers	T E O’Brien
Second Call Option Agreement fee	Unknown	1,037.00	Obeid Family Trust No.1	CBP Lawyers
Second Call Option Agreement fee	05-Aug-08	1,037.00	CBP Lawyers	Terence O’Brien

 

1230. Settlement of the purchase of Coggan Creek for $3.5 million was extended on various occasions between 7 November 2008 and 2 November 2009 by executed Deeds of Variation of Contract. ^[1190] The transfer of the titles to Coggan Creek dated 2 November 2009 ^[1191] was recorded in the Land Titles Office on 6 November 2009. ^[1192]

1231. These various arrangements are objectively established by the documentary evidence tendered at trial and not in dispute. Many of them were the subject of a statement of agreed facts. ^[1193]

1232. What was in dispute was the significance of the arrangements to proof of the facts in issue. In particular, the timing of the steps taken to acquire control of the two properties neighbouring Cherrydale Park in August 2008; the timing of the steps taken in November 2008 to transfer the shareholding and directorship of Geble P/L as registered proprietor of Donola; and the steps taken by Geble P/L to nominate Coopers World P/L (later renamed Justin Kennedy Lewis P/L) as trustee for the Justin Kennedy Lewis Family Trust as its nominee to exercise the call option for the purchase of Coggan Creek.

1233. In the Crown’s submission, these multiple and convoluted arrangements undertaken on Moses Obeid’s instructions were motivated by a strong desire on his part to ensure that the benefits it was anticipated would flow from the inclusion of the Mount Penny Coal Release Area in an EOI process for the granting of an EL through continued and coordinated use of confidential information provided by Mr Macdonald, would not be jeopardised, as it might be were the Obeids’ ownership and control of the properties within the Mount Penny Coal Release Area a matter of public record.

1234. In the Crown’s submission, the conduct of Edward Obeid and Moses Obeid in endeavouring to distance the Obeid family name from ownership of Cherrydale Park in various ways and the convoluted way in which both Donola and Coggan Creek were acquired, with third parties financing the acquisitions under the guise of acquiring rural land for recreational farming purposes, also guaranteed that their participation in the conspiracy, which they expected would generate a significant financial advantage, would neither be exposed nor jeopardised. ^[1194]

1235. Counsel for all three accused submitted that the same body of evidence relied upon by the Crown as probative of their guilt supports a number of alternative hypotheses inconsistent with the Crown case, as concerns both the timing of Moses Obeid’s instructions to Mr Rumore to secure the acquisition of Donola and Coggan Creek through Geble P/L (including Mr Rumore’s evidence of his understanding of why the properties were purchased through third party entities); Moses Obeid’s introduction of Mr Lewis to Mr Rumore as the purchaser of Coggan Creek on 6 November 2008, ^[1195] and the arrangements which were later put in place, in November 2008 when, under instructions from Moses Obeid, Mr Rumore drew up the Tripartite Landowners Deed ^[1196] by which each of the owners of Cherrydale Park, Donola and Coggan Creek agreed, inter alia, to sell their properties to the mining company that might be granted an EL at a multiple of four times the value of each property, and the Profit Sharing Deed under which, upon the sale of Coggan Creek, Justin Kennedy Lewis P/L agreed to pay 30% of the profit on the sale to UPG P/L. As to the structure and execution of the Tripartite Landowners Deed and the Profit Sharing Deed see later at par 1924 and following.

1236. Essentially, those submissions were based upon what counsel for Edward Obeid and Moses Obeid submitted was the entitlement of their clients to maintain privacy in their commercial dealings in circumstances where, at least Edward Obeid (and through him the family more generally), was a prominent figure as a member of the Australian Labor Party and a prominent parliamentarian.

1237. It was also submitted that, having not called either Mr Lewis or any member of the Triulcio family in this case, the Crown could not discount the reasonable possibility that those family friends and associates did not genuinely agree to join with the Obeid family in an agricultural enterprise in which the properties they acquired or controlled (namely, Donola and Coggan Creek) would be utilised to develop an extended cattle farming operation, simultaneously providing a basis for their continuing extended and ongoing friendship as neighbouring property owners in an area not far distant from Sydney.

1238. For reasons which will follow later in my deliberations to verdict, I do not propose to draw an inference adverse to the Crown from not having called either Mr Lewis or any member of the Triulcio family in its case.

1239. In those circumstances, and taking into account what I regard as the overwhelming evidence of the pursuit by the Obeid family of a mining deal over which they could exercise control and from which they hoped to secure a significant financial benefit, principally through the agency of Moses Obeid (as will be obvious from the review of the evidence which follows), I regard the interposition of third party purchasers of the adjoining properties of Donola and Coggan Creek as being some evidence of the existence of the conspiracy and the desire of Moses Obeid and Edward Obeid to conceal their participation in it (assuming, of course, that I find the existence of the conspiracy proof reasonable doubt).

The first Wentworth Hotel meeting concludes

1240. I accept as both truthful and accurate that Mr Brook told Moses Obeid that as he did not have any experience in natural resources and that he knew of only one company in Lehman Brothers’ portfolio that operated as a “mining” company, he would make enquiries both “in Australia” and “elsewhere within the Asia Pacific region” for a mining company that might be willing to become involved. I am able to make that finding on the basis of Mr Brook’s email of 4 July 2008 to Mr Dunlop ^[1197] (a person known to him as associated with a stockbroking and corporate firm advising on natural resources) in which he seeks Mr Dunlop’s advice as to a company (preferably a private company) who has a coal mining licence as he (Mr Brook) “want[s] to bid on a govt tender”. Mr Brook also informed Mr Dunlop that the “timing is tight”.

1241. Mr Brook gave evidence, which I also accept as truthful, that the reason he indicated a preference for a private company’s in his email to Mr Dunlop was as follows:

At the time I really wasn’t sure whether or not private or public. That was - I wasn’t - that wasn’t an educated question on my part to Mr Dunlop, to be honest. I didn’t really know whether we wanted a public or a private company but it was in time that I realised that there were virtues on both to either have a public or private company. But in the context of that email, I thought at that time that perhaps a private company that had a coalmining licence would be easier to potentially form a joint venture with a landholders alliance such as the Obeids’ landholder alliance. ^[1198]

1242. I also accept that Mr Brook told Mr Dunlop that “timing” was “tight” ^[1199] because Moses Obeid had emphasised that if Lehman Brothers was interested in working with his family in a joint venture of some kind (in a structure yet to be settled upon) but with a view to securing a coal EL over land held by members of the “landholders alliance”, Mr Brook understood he had to “identify a potential mining joint venture partner as soon as possible”. ^[1200]

1243. The first Wentworth Hotel meeting on 3 July 2008 concluded with it being left to Mr Selby to arrange a subsequent meeting or meetings, potentially including Moses Obeid’s brother, Paul Obeid. ^[1201]

The second Wentworth Hotel meeting

1244. Mr Brook gave evidence that he was introduced to Paul Obeid and Gerard Obeid by Moses Obeid at the second Wentworth Hotel meeting on 7 July 2008.

1245. Mr Brook gave evidence that after being introduced to Moses Obeid’s brother he restated, for Paul Obeid’s benefit, Lehman Brothers’ capabilities as a merchant bank, his role within Lehman Brothers and what he was “looking for with respect to the characteristics of a potential transaction”. ^[1202]

1246. Mr Brook gave evidence that Moses Obeid then said “Paul, I mentioned to Gardner in our first meeting about our property and, you know, that we have a coal ‑ we think we have a coal resource there” after which Paul Obeid confirmed that “they had every reason to believe that there was a large coal resource underneath their property”. ^[1203] The meeting which followed was led by Paul Obeid, but Moses Obeid was an active participant. Gerard Obeid contributed very little to the meeting.

Paul Obeid provides a cardboard cylinder containing “maps”

1247. Mr Brook gave evidence that at this point Paul Obeid produced a number of maps from a cardboard tube. Whether the Crown would be permitted to adduce evidence from Mr Brook to seek to establish that Wiles Map 2 was one of the maps was the subject of legal argument in the trial.

1248. The issue was foreshadowed prior to Mr Brook giving evidence. ^[1204] It ultimately arose in the course of Mr Brook’s evidence in chief. By that time, Mr Brook had given evidence in chief, without objection, that the “two” or “three” maps produced from a cardboard tube were spread out on a “very large oval wooden table”. ^[1205] Mr Brook identified one of those maps as being “A3 or maybe larger” and the second map as being “a little bit bigger than A4”. ^[1206] He had no certain recall of the third map, if there was a third map.

1249. The Crown prosecutor informed me that the production of the maps from the cylinder and the size of those maps were foreshadowed as evidence the Crown proposed to adduce from Mr Brook. ^[1207] His evidence that some of the maps were in colour, including one map (the larger of the two) which depicted a red cross-hatched area was also foreshadowed. ^[1208]

1250. It was those particular features of the larger map, together with Paul Obeid pointing out the location of the Obeids’ property on it, and what was said by Paul Obeid to be the coal-rich area adjacent to their property, which the Crown submitted supports a finding that Wiles Map 2 was the larger map Mr Brook was shown at that meeting. ^[1209]

1251. Mr Neil objected to the admission of that evidence, broadly on the ground that it would be productive of unfairness to the accused since it would be inevitably “tainted” by Mr Brook having been shown Wiles Maps 1 and 2 and given information about them during the course of the ICAC proceedings. ^[1210]

1252. During legal argument, I observed that it could not be disputed that Mr Brook’s evidence in the trial in 2020 was given in the context of a raft of leading questions asked of him in the ICAC proceedings in 2012, and information about the provenance of Wiles Maps 1 and 2 which was given to him at that time, and later in interviews with ICAC investigators where he was “led” to confirm his evidence and to elaborate upon it.

The voir dire on the issue of the “maps”

1253. In those circumstances, I convened a voir dire to determine whether Mr Brook should be permitted to give evidence concerning the maps he said he saw at the second Wentworth Hotel meeting.

1254. On the voir dire, Mr Brook’s evidence given in both the public and private hearings before ICAC in 2012, and his various dealings with ICAC investigators both before and after that time, and as his exposure to Wiles Map 2 (and Wiles Map 1) in the course of those engagements, enabled me to make a number of findings of fact material to the issues raised on the voir dire:

1. On 12 March 2012, Mr Brook participated in a private hearing before ICAC. Extracts of the transcript of that private hearing were marked MFI 130 on the voir dire and were subsequently tendered as part of Exhibit 40 by Mr Neil for a limited purpose under s 136 of the Evidence Act. ^[1211] The balance of the transcript remained marked for identification. ^[1212]

2. During the private hearing, Mr Brook was asked whether he met with Moses Obeid on an occasion on which Moses Obeid “had mining maps”, which he answered in the affirmative. ^[1213] Mr Brook did not mention any red shading or the nomination as maps of North Bylong/Mount Penny on either of the “mining maps” he was shown by Moses Obeid. Neither did he provide any other identifying features of any of the “mining maps”. ^[1214]

3. Later in the same private hearing, Mr Brook was shown Wiles Map 1 and Wiles Map 2 by counsel assisting the Commissioner. Mr Brook was asked by counsel assisting to “assume [he] could prove that some people went in to the office of Paul Obeid with an appropriate warrant and scooped up a manila folder off his desk and they found four documents”, including two maps which counsel assisting then indicated he would show to Mr Brook. ^[1215]

4. Mr Brook gave evidence that the map dated “30 May 2008” (Wiles Map 2) was shown to him by a member of the Obeid family “not long” after he first met Moses Obeid. ^[1216] He said that Wiles Map 2 was “definitely” shown to him. ^[1217] He was not asked about the circumstances in which he was shown the map or by whom. Wiles Maps 1 and 2, along with two other documents which counsel assisting indicated were also contained in a manila folder seized from Paul Obeid’s office in the Locaway P/L premises, were admitted as Exhibit 2 in the ICAC proceedings. Those documents were tendered as Exhibit X in the trial. ^[1218]

1255. The Crown submitted, and I accepted, that when Mr Brook was first asked, on 12 March 2012, to assume Wiles Maps 1 and 2 had been validly seized by ICAC, he gave evidence that he had seen Wiles Map 2 ^[1219] not long after meeting Moses Obeid for the first time. On the undisputed evidence in the trial, that was at the first Wentworth Hotel meeting on 3 July 2008. At that point on the voir dire I expressed the preliminary view that there seemed to be probative value in what appeared to be an unrehearsed response to a question whether he was shown Wiles Map 2 by a member of the Obeid family. ^[1220]

1256. Although I note Mr Brook proceeded to give evidence in the same private hearing before ICAC that Moses Obeid showed him “a printout of a tenement” which “showed the boundaries”, ^[1221] I did not then, and do not now, accept that evidence was given referable to “a map” as distinct from what he described as “a printout”. ^[1222] That being so, the first time Mr Brook gave evidence about having been shown Wiles Map 2 by a member of the Obeid family (as opposed to “a printout” showing a “tenement”) was the evidence he gave when he was shown both Wiles Map 1 and Wiles Map 2 by counsel assisting during the private hearing before ICAC. ^[1223] That is, I am satisfied there was no occasion prior to being shown both maps by counsel assisting on 12 March 2012 when Mr Brook said he was shown “a map” by a member of the Obeid family which resembled Wiles Map 2, referable to the colours on it, its date, title or the red/pink hatched sideways S-shape depicted on the map.

1257. The evidence on the voir dire allowed for the following further findings of fact:

1. On 13 March 2012 (the following day), Mr Brook participated in a record of interview with Chief Investigator Fox also attended by Paul Grainger from ICAC. The transcript of that record of interview was marked for identification in the trial. ^[1224] On that occasion, Mr Brook accepted a series of propositions put to him by Mr Fox, including that “map two” (being the map labelled “North Bylong, Mt Penny” - clearly Wiles Map 2) was shown to him by Moses Obeid at the Wentworth Hotel. ^[1225]

2. Mr Brook then proceeded to give an unprompted account to Mr Fox that Moses Obeid showed him Wiles Map 2 because “his property” was located in an area depicted on the map and that the map also depicted a “contiguous area” which was “pointed to” (by Moses Obeid) as containing “a much bigger [coal] resource”. ^[1226] During legal argument I accepted that Mr Brook’s use of the term “contiguous area” in that interview was his description of what he was shown (he said by Moses Obeid) as distinct from something he was told when the map was shown to him. ^[1227]

3. Eight months later, on 27 and 28 November 2012, Mr Brook participated in a public hearing before ICAC. The transcript of that public hearing was marked for identification in the trial. ^[1228] On that occasion, he was again shown Wiles Map 1 and Wiles Map 2 by counsel assisting. By that time, both maps had been marked MFI 5 and MFI 6, respectively, in those proceedings. ^[1229] Those maps, or copies of them, had already been admitted as Exhibit 2 in the ICAC proceedings on 12 March 2012 during Mr Brook’s private hearing. ^[1230]

4. Counsel assisting again asked Mr Brook to accept that the maps were seized under warrant from Paul Obeid’s office. ^[1231] Mr Brook gave evidence that Wiles Map 2 definitely “looked familiar”. On this occasion, he told the Commissioner that he was shown the map by Moses Obeid and Paul Obeid. ^[1232] Mr Brook mentioned the presence of Paul Obeid and “possibly” Gerard Obeid at the meeting where the map was produced. ^[1233] Counsel assisting also put to Mr Brook that Wiles Map 2 contained what counsel described variously as “a rather distinctive pink hatched area… which we’re calling an S on its side” ^[1234] and a “red hatched area which we describe as the S” ^[1235] which Mr Brook also confirmed was familiar to him. ^[1236] In response to counsel’s question whether “the Obeids” indicated to him “whether it was likely that [the contiguous area] would ever be opened up or what they knew about that”, Mr Brook gave evidence that he was told that the “likelihood of being granted the contiguous area” to a particular mining area is “very high” and that, in addition to the “initial… EL” or “tenement” (which Mr Brook said he was told comprised “100 million tonnes [of coal]”), the contiguous area brought the entire available coal resource to “700 to a billion tonnes”. ^[1237]

5. Mr Brook was invited by counsel assisting to mark with a pencil what Mr Brook had described as “the approximate [boundaries of the] initial EL area” on a copy of Wiles Map 2, ^[1238] by which I take counsel assisting to be asking Mr Brook to mark what he later came to learn was the Mount Penny Coal Release Area. A copy of the map marked by Mr Brook was tendered in the ICAC proceedings as J-42. ^[1239] That document was not tendered in the trial, unless it is the copy of Wiles Map 2 tendered in Exhibit X. At that point during legal argument I observed there was “nothing to suggest that Wiles Map 2, marked for identification 6 before the Commission, had any markings on it at the time it was shown to Mr Brook”. ^[1240]

6. Nine months later, on 15 August 2013, Mr Brook participated in the first of four further Records of Interview with Mr Fox. ^[1241] Those interviews were convened after the ICAC proceedings had concluded. ^[1242] The transcript of the interview conducted on 15 August 2013 was marked MFI 138, MFI 138/1 and MFI 138/2 in the trial. Those transcripts remained marked for identification. The transcripts of the balance of those interviews were not produced in the trial.

7. In the 15 August 2013 interview, Mr Brook said that at the “Wentworth Lounge”, at an “oval shaped table”, ^[1243] Paul Obeid, “not Moses”, ^[1244] produced from what Mr Brook accepted from Mr Fox was a “cardboard tube”, ^[1245] “two, possibly three maps” which were “geological map size”. ^[1246] At that point Mr Brook was shown Wiles Map 2 by Mr Fox who drew Mr Brook’s attention to the heading “North Bylong Mount Penny area” on the map. ^[1247] Mr Brook indicated “this looks like the map they showed me”. He said that it was a map he had marked (clearly a reference to having been asked during the public hearing in November 2012 to mark with a pencil on a copy of Wiles Map 2). ^[1248] Mr Brook went on to say that Paul Obeid identified on that map that the Obeids’ property was in the vicinity of where the words “Mount Penny” appear on the map ^[1249] together with the area to the “south, south west and directly north” (presumably of Cherrydale Park), over which “they had formed a land alliance” ^[1250] and the location of the “adjacent area” or “contiguous area”. ^[1251] In that interview, Mr Fox again confirmed with Mr Brook that Wiles Map 2 was recovered during the execution of the search warrant. ^[1252]

8. On 20 August 2013, Mr Brook signed a sworn statement. The statement was prepared during the interviews conducted at ICAC premises with Mr Fox on 15, 16, 19 and 20 August 2013. Mr Brook’s statement was marked MFI 141 in the trial. In the statement, Mr Brook provided a further account of what transpired at the second Wentworth Hotel meeting in that he said that Paul Obeid produced “at least two, possibly three maps… from a tube”. ^[1253] The maps were “bigger than A4”. ^[1254] Mr Brook recalled Paul Obeid gesturing on Wiles Map 2 to the words “Mount Penny” and saying “that’s where our farm is”, describing the “red cross-hatched area directly north and south of the words ‘Mount Penny’” as the subject of the “land alliance” and the “‘adjacent (red cross hatched) area’ to the West” as “thermal coal rich”. ^[1255]

The voir dire concludes

1258. At the conclusion of legal argument I dealt with the admissibility of Mr Brook’s evidence by allowing the Crown to ask non-leading questions to seek to establish whether Wiles Map 2 was produced and discussed at the second Wentworth Hotel meeting; what was said (if anything) about what the map that was produced at that meeting depicted, including the location of Cherrydale Park and the red cross-hatched area adjacent to the property. I proposed that course of action on the basis that Mr Brook’s evidence would be received provisionally with a view to ruling on admissibility after his evidence concluded. ^[1256] The question of admissibility was not revisited. Accordingly, his evidence in the trial was admitted. The evidence on the voir dire was, however, available to the parties when addressing the credibility and reliability of Mr Brook’s evidence.

Mr Brook’s evidence about the “maps”

1259. On the resumption of his evidence in chief, the Crown elected not to show either of Wiles Map 1 or Wiles Map 2 to Mr Brook, whether in the form of copies of those documents that were tendered as part of Exhibit A, or in the form of the maps at that time marked MFI 39 as the documents seized, under warrant, from the Locaway P/L premises, (and which ultimately were admitted as part of Exhibit X after the ruling on admissibility ^[1257] ), or in any other form. ^[1258]

1260. When his evidence in the trial resumed, Mr Brook had already given evidence, without objection, that Paul Obeid produced “two” or “three” maps from a “cylinder” and that the maps were placed on a “very large oval wooden table”, ^[1259] that one of the maps was “A3 or maybe larger” and the second map was “a little bit bigger than A4”. ^[1260]

1261. When his evidence resumed, Mr Brook gave evidence that the map that was “a little bigger than A4” ^[1261] was “in black and white”. ^[1262]

1262. Mr Brook described the black and white map as:

… more of a close‑up image of his immediate property area [Cherrydale Park], and then the other two properties which formed part of his alliance… it also showed that there was a railway line going to the north of their property of one of their partners and they described how valuable that is with respect to having a railway link adjacent to a potential mining resource. ^[1263]

1263. It was not suggested by the Crown that this was Wiles Map 1.

1264. Mr Brook then gave evidence referable to that map, that Paul Obeid “also mentioned that [Cherrydale Park] had water and water rights, which would be vital for any future type of exploration and mining activity”. ^[1264] In cross-examination, Mr Brook confirmed that Paul Obeid said that “access to water rights would or could be crucial for mining operations” and that the railway line north of Cherrydale Park “was good logistically for a mining operation”. ^[1265] Other evidence in the trial demonstrates the railway line as intersecting Coggan Creek.

1265. Mr Brook then gave evidence that the larger map had “some green areas towards the top of the map and there was like a red or pink hatched area”. ^[1266] He gave evidence that the “red or pink hatched area” was discussed during the second Wentworth Hotel meeting. ^[1267] Mr Brook recalled that he thought there were words on the map which “definitely” included “Mount Penny” and “Bylong”. ^[1268] He went on to say he was certain of the words “Mount Penny”. ^[1269]

1266. He gave evidence that Moses Obeid “handed” the conversation about the map to Paul Obeid who “went into depth with respect to where his property was located on the map”, ^[1270] indicating an area “pretty much in the middle of the map”. ^[1271] Mr Brook went on to say that Paul Obeid told him that:

… based on their investigations, due diligence, consulting with specialists in the area, and also he referred to some old miners in the area and that sort of thing, that they believed, firmly, that there was maybe up to 100 million tonnes under that particular part of the Mount Penny area of which his property sat on top of. ^[1272]

1267. With respect to the “colour hatched area” on the larger map, Mr Brook said that Paul Obeid said “very clearly” that:

… the adjacent area is where the large coal - they believed, based on their investigations and due diligence, they believed that the adjacent area was where the real high quality coal was and much more than the area that is immediately under their land, and also the land to which made up the property alliance that they had put together that they had described to me. ^[1273]

1268. Mr Brook gave evidence that Paul Obeid indicated the adjacent area, referable to the red hatched area, was north-west of their property:

Q. The adjacent area, were you given information as to where that was?
A. Well, he indicated it directly on the map and it followed a sort of a north, north‑west trajectory from where his property is up around, I believe, a ridge line and then back around again, best described as a wiggly line, up and around sort of a ‑ maybe, I don't know, maybe half of an infinity symbol or maybe half an S or something like that. You know, like an S on its side or ‑ it went up and around and he believed that was where the main ore body was with respect to the overall opportunity for them.

Q. How, if at all, did that part that you have just described relate to the red hatched area?
A. Well, that was the red hatched area that he pointed out. He said that where his property was and that of the other property in his alliance, he said that would be stage one. But then he told me that in the event they started mining on that, that it's very, very likely that if they could prove a resource there and start mining that they would be given permission to then exploit the adjacent area which I afterwards learnt in technical terms. ^[1274]

1269. It is the Crown case that the larger map (in colour) taken to the second Wentworth Hotel meeting by Paul Obeid and produced by him was a copy of Wiles Map 2. It is also the Crown case that Mr Macdonald caused that map to be provided to Edward Obeid, Moses Obeid or a member of their family in breach of his Ministerial duties of confidentiality and/or impartiality, and in furtherance of the conspiracy alleged, being the conduct particularised as the fourth act of misconduct.

1270. Mr Neil cross-examined Mr Brook extensively on his identification of maps he was shown during the second Wentworth Hotel meeting. Mr Neil showed Mr Brook three maps, identified in these proceedings as MFI 142-144. These maps were not tendered in the trial. ^[1275] Mr Brook gave evidence he was not shown any of the maps in MFI 142-144, or any part of those documents, at the second Wentworth Hotel meeting. ^[1276]

1271. Before considering Mr Neil’s submissions directed to whether the Crown has proved the fourth act of misconduct, as ultimately particularised, ^[1277] given the specific challenge he mounted to the reliability of Mr Brook’s description of the larger map produced at the second Wentworth Hotel meeting (which Mr Neil submitted undermined the Crown case that what was produced was a copy of Wiles Map 2) it is necessary to consider whether what Mr Brook described in his evidence as the “adjacent area” ^[1278] (that is, an area within the red hatched area on the larger map produced at the second Wentworth Hotel meeting) is what other witnesses in the trial have referred to interchangeably as a “contiguous zone”, “contiguous area” or an “adjacent area” referable to the Coal Allocation Guidelines.

The significance of the “contiguous” or “adjacent” area to the question whether Wiles Map 2 was produced at the second Wentworth Hotel meeting

1272. The Coal Allocation Guidelines, ^[1279] to which reference has already been made at par 703 and following above, provide for the direct allocation of “substantial additions to existing mines” described as “adjacent to existing mining projects” in certain circumstances, without competitive tendering but with minimum financial contribution to be negotiated. ^[1280]

1273. The Crown submitted the following: ^[1281]

The DPI’s approach to such adjacent areas, as explained by Mr Coutts ^[1282] and Mr Mullard ^[1283] , was as outlined in the Guidelines… Namely, if existing mine reserves were nearly depleted and granting the adjacent area would ensure the continuation of mining (with attendant benefits such as continued employment opportunity in the area); the avoidance of duplication of infrastructure and/or if geological constraints meant that no other mine could develop the resource. The addition of a contiguous zone would ordinarily be considered toward the end of the life of a mine, eg 20 years. (Emphasis added.)

1274. I accept the concept of an “adjacent area” was generally known in the coal mining industry as a “contiguous zone”.

1275. Mr Bowman, a consultant to Monaro Mining NL prior to their application for an EL at Mount Penny, gave evidence of his familiarity with the term “contiguous” including the commercial significance of “contiguous zones”:

Generally it had quite a significant commercial application because if you had a resource, a mine of a certain size, and you added a significant resource to it, you had a far more valuable property.

On the other hand, too, there were sometimes games played where you got allocated an area and then you argue that no‑one else could mine it because it was contiguous with your area, so you then got it added to your area. So… you can block [another potential applicant]. ^[1284]

1276. Mr Grigor, as Chairman of Monaro Mining NL, gave the following evidence about a “contiguous right”:

Well, if you own a licence already and the ore body that you’re mining or working on continues over the boundary, there’s some - I understand there is some priority of preference; that if you apply for that, to enable the mining to continue on a contiguous block, or a tenement, that there’s some concessions in costs and approval processes. ^[1285]

1277. The Crown submitted that Mr Macdonald was well aware of the method of making a direct allocation of an adjacent area, having done so earlier in 2008 for EL 7091 granted to Wilpinjong Coal Pty Limited on 3 March 2008. ^[1286] Mr Macdonald had consented to that allocation on 20 June 2007. ^[1287]

1278. The Crown did not, however, seek to prove that Mr Macdonald was told by Mr Mullard that the excision of the eastern portion of the potential open cut area depicted on Wiles Map 2 to create the Mount Penny Coal Release Area would also create a contiguous zone (or an adjacent area) in the west. Nor did the Crown seek to prove that that potentiality was the subject of any discussion or commentary in either of the meetings on 4 or 6 June 2008. Rather the Crown submitted in closing that:

Reducing the larger North Bylong area to the smaller Mount Penny area had the effect of creating an obvious contiguous zone – namely the coal in the western portion of the “potential open cut area” in Wiles Map 2”. ^[1288]

1279. Neither did the Crown advance any submission that the potential increase in the commercial value of the Mount Penny EL 7406, by reason of it being adjacent or contiguous to an unallocated large coal resource in the Bylong Valley to the west, was information Mr Macdonald provided to the Obeids. It is the Crown case, however, that Mr Macdonald caused either Edward Obeid or Moses Obeid or another member of the Obeid family to be provided with a copy of Wiles Map 2 in breach of his duties of impartiality and/or confidentiality and as an act in furtherance of the conspiracy alleged. That is, it is the Crown case that Mr Macdonald caused Wiles Map 2 (and Wiles Map 1) to be provided having agreed with Edward Obeid and Moses Obeid, no later than 9 May 2008, that he would commit acts of misconduct in connection with the granting of an EL at Mount Penny for the improper purpose of advancing their private interests or the interests of their family or associates. It is also the Crown case, as I understand it, that in furtherance of achieving that objective, Mr Macdonald provided Wiles Map 2 (or caused it to be provided) in order that it might be used by Moses Obeid (or his brothers) in their dealings with Mr Brook (assuming that Mr Macdonald was informed that discussions with Lehman Brothers were on foot, either when he made the map available as to which there is no direct evidence) or that it was made available, in Moses Obeid’s dealings with Mr Fang (also as to which there is no direct evidence).

1280. As I have already discussed, although there is evidence that the proposed arrangement with Tianda Resources P/L was current at about the same time as the second Wentworth Hotel meeting, and although I have found as a fact that it was Mr Macdonald who introduced Mr Fang to Moses Obeid as a potential contracting partner in a mining deal before Moses Obeid met with Mr Brook for the first time, there was no evidence that Wiles Map 2 was provided to Moses Obeid or his brothers for that purpose. Mr Fang was not called in the trial. Mr Rumore gave no evidence that he was shown the map at any time.

1281. In the Crown’s submission, for the purposes of resolving the issues at trial, it is not to the point whether at any time in the future the area adjacent or contiguous to what became the Mount Penny EL 7406 would be granted by direct allocation to the holder of that EL. What is relevant is that, as at 7 July 2008, Moses Obeid (and Paul Obeid) obviously appreciated the value of the coal adjacent to or contiguous to what they gave Mr Brook to understand was the coal beneath the land held by the landholders alliance, and that their understanding was informed directly by reference to the larger of the maps produced at the meeting held that day. In the Crown’s submission, this supports a finding that the larger of the two maps produced by Paul Obeid from the cardboard cylinder was in fact a copy of Wiles Map 2, and that the contiguous or adjacent area which Mr Brook said he was told was adjacent to “the farm”, and the other two properties making up the landholders alliance, was the coal in the western portion of the “potential open cut area” on that map. ^[1289]

The relationship between the contiguous/adjacent zone and “Stage 2” of the project as advanced by Mr Brook in his dealings after 7 July 2008

1282. Mr Brook also gave evidence that Moses Obeid subsequently provided him with more information about the volume and quality of coal in the contiguous zone, and that references to “Stage Two” of the Mount Penny project in documents prepared by him in the process of seeking financial backing from Lehman Brothers for Monaro Mining NL’s application for the grant of an EL at Mount Penny and later in negotiating a joint venture with Cascade Coal P/L, were informed by what he had been given to understand, at the second Wentworth Hotel meeting, was the location of the full complement of coal resources available as part of a prospective mining project.

1283. On 18 July 2008, Mr Brook sent an email to Mr Marten Touw, head of fixed income at Lehman Brothers, copied to Mr Rodney Pryor, a Lehman Brothers analyst, informing him, inter alia, of the Mount Penny project. In the body of that email, Mr Brook described the Mount Penny coal resource as consisting of 90Mt of thermal coal “plus” an “adjacent 600 m/t” (emphasis added) of “high grade” coal. ^[1290] Mr Brook gave evidence that the “adjacent 600m/t” of coal in the email was a reference to the area pointed out to him on the larger map at the second Wentworth Hotel meeting as the contiguous area. ^[1291] He went on to give evidence that the detail as to the volume of coal in the contiguous area was provided to him by Moses Obeid “after the second [Wentworth Hotel] meeting at subsequent meetings” ^[1292] “around about the date” he sent the email. He gave the following evidence:

In meeting with Moses Obeid on one of our catch-ups over coffee, he gave me progressively more detail about what he thought the resource under his properties looked like and so I had new information which I was communicating with Mr Touw and Mr Pryor. ^[1293]

1284. In cross-examination, Mr Brook suggested that Moses Obeid provided that information to him in “written form” in “notes” he could no longer locate. ^[1294] Ultimately, he accepted it was possible he obtained that information from the research he “was able to obtain by public access”. ^[1295]

1285. On 22 September 2008, Mr Brook sent an email to Mr Yin of Tianci Inc attaching Schiavo Map 3 and indicating that “Stage One” of the Mount Penny project related to “100 Mt High Grade Thermal Coal” followed by “Stage Two” which related to “700 Mt High Grade Thermal Coal”. ^[1296] Mr Brook gave evidence that Moses Obeid provided him with that information “over coffee”. ^[1297] He adhered to that evidence in cross-examination. ^[1298] He said he was given to understand “Stage one was in reference to the anticipated initial exploration licence which was imminently going to be put up for tender … Stage two was with reference to the anticipated contiguous area adjacent to the first stage”. ^[1299]

1286. On 18 October 2008, in an email to Mr Rampe, CEO of Monaro Mining NL, copied to Mr Grigor, Chairman of Monaro Mining NL, Mr Brook again referred to “Stage Two of Mount Penny” ^[1300] as a “reference to the anticipated contiguous area adjacent to stage 1”. ^[1301]

1287. Email correspondence between Mr Brook, Mr Rampe and Mr Grigor on 24 October 2008 again refers to “Stage one” and “Stage two” of the Mount Penny project. ^[1302] In that email, Mr Brook said, “The concept of Stage 2 is based on the expectation of a large continuation of the ore body”. ^[1303] Mr Brook gave evidence that was a reference to the same concept of “stage two”, namely the exploitation of the coal resource in the contiguous zone. ^[1304]

1288. Mr Rampe gave the following evidence about Mr Brook’s reference to “Stage 2”:

I believe he is referring to obtaining additional mining rights adjacent to areas of interest that have already been identified and as part of any agreement. So what I think they’re saying is that if you have an agreement on a particular resource that has been identified, then there is some sort of contiguous extension of that agreement to resources that may be found nearby or adjacent to the principal one that can be secured by title. ^[1305]

1289. In the correspondence between Mr Brook, Mr Rampe and Mr Grigor on 24 October 2008, Mr Brook also indicated to Mr Rampe and Mr Grigor that he had “been in contact with the parties who control the subject land for what I call Stage One”. ^[1306] Mr Brook gave evidence that was a reference to his contact with Moses Obeid. ^[1307]

1290. By reply email, Mr Grigor indicated to Mr Brook, “We must stop short of say[ing] there is a guarantee of a contiguous right … We need to make sure that any contiguous licence comes under an area of influence clause so we don’t get cut out”. ^[1308] Mr Grigor gave the following evidence about that email:

A. Well, if you own a licence already and the ore body that you’re mining or working on continues over the boundary, there’s some ‑ I understand there is some priority of preference; that if you apply for that, to enable the mining to continue on a contiguous block, or a tenement, that there’s some concessions in costs and approval processes.

Q. When you refer in your evidence to “apply”, you're talking about to the department?
A. Yes.

Q. At that point in time, being 24 October 2008, what, if anything, was your understanding as to a contiguous area in relation to Mount Penny?...
A. I didn’t really have any understanding. Ore bodies continue going. I didn't have any geological knowledge or information as to whether it is realistic to expect that mining could continue in that direction. That contiguous right was something raised in the discussions with the Chinese because they just wanted to get things as big as possible, but it was never something that came up for discussion except to do with the discussions around the possibility of those Chinese parties coming in. ^[1309]

1291. On 26 October 2008, Mr Brook sent an email to Mr Yin of Tianci Inc which he then forwarded to Moses Obeid. ^[1310] Attached to that document was a document titled “Draft - Mt Penny MOU - GB rev”, styled as a Memorandum of Understanding between “Monaro Mining NL” and an unspecified “Chinese Partner”. ^[1311] Under the title of “Background”, the following was indicated by Mr Brook:

Monaro recognises that areas outside the boundaries of the Project may also contain coal resources. These areas are to be defined by an Area of Influence (“AOI”), dealings on which will also be incorporated into this MOU. The location and boundaries of the AOI are attached as Annexure 1. ^[1312]

1292. Annexure 1 is not part of the available evidence in Exhibit A.

1293. Mr Brook gave evidence he was “the main author of that document” and that he forwarded it to Moses Obeid to keep “him abreast” of “progress with respect to representing Monaro and trying to attract a financial or strategic investor” to support Monaro Mining NL’s application for the grant of an EL at Mount Penny EL. ^[1313] Mr Brook had by that time told Moses Obeid that with the collapse of Lehman Brothers he would “continue acting as an intermediary to try and broker a deal” between the landholders alliance and Monaro Mining NL and would keep Moses Obeid “abreast of [his] activities” in carrying out the consultancy agreement with Monaro Mining NL. ^[1314]

1294. Mr Brook also gave evidence about a draft Memorandum of Understanding between Monaro Mining NL and Shenyang Tianci Yulong Industrial Inc. dated 10 November 2008. ^[1315] Again under the title of “Background”, the following was indicated:

Monaro recognises that areas outside the boundaries of the [Mount Penny Coal Release Area] Project may also contain coal resources. These areas are to be defined by an Area of Influence (“AOI”), dealings on which will also be incorporated into this MOU. The location and boundaries of the AOI are attached as Annexure 1. ^[1316]

1295. Again, Annexure 1 is not part of the available evidence in Exhibit A. Mr Brook gave evidence that it depicted the location and boundaries of the project and the area of influence referred to in the MOU. ^[1317]

1296. Mr Rampe confirmed that document bore his signature. He gave evidence the document was drafted “to secure funding” for Monaro Mining NL’s EOI application for the Mount Penny Coal Release Area. ^[1318]

1297. The concept of the “area of influence” was referred to again on 16 May 2009 in an email from Mr Rampe to Mr Brook. ^[1319] Mr Rampe proposed various amendments to the agreement between Voope P/L and Monaro Mining N/L, including that the agreement “encompass an ‘Area of Influence’ (AOI) for each licence awarded to [Monaro Mining NL]”, the boundary of which “will be 100km from any boundary of the awarded licence”. ^[1320]

1298. The contiguous area was ultimately the subject of the Letter of Joint Venture Agreement between Cascade Coal P/L and Buffalo Resources P/L dated 5 June 2009. That document stated the following:

In addition the JV will pursue the grant and issue of relevant Exploration Licences and Mining Approvals over the area contiguous to the [Mount Penny Coal Release Area] and detailed on the attachment hereto currently known as EL 6676 or any portion thereof (“Contiguous Area”). ^[1321]

1299. Mr Brook gave the following evidence:

Q. What conversation, if any, did you have in negotiations with representatives from Cascade on this topic of contiguous area?
A. I had a conversation with Richard Poole where I insisted that the definition of the contiguous area was specific and to that end I insisted that they use the database. I cannot recall the name of the database or the industry database that they were able to retrieve the information, but I insisted that we had that it be clear and no ambiguity that we were referring to the contiguous area adjacent to the exploration licence to which was the main subject as in stage 1 of this joint venture, so I had a very specific and direct conversation with Richard Poole about that and he agreed.

Q. What, if anything, had you discussed with Moses Obeid about insisting on this topic being addressed in the letter of agreement?
A. I told Moses that I would ensure it was my job, I told him that I would ensure that the agreement included the contiguous area and that it was defined clearly so that there couldn't be any misunderstandings with respect to the agreement being forward.

Q. What discussion, if any, did you have with Moses Obeid about why this would or should be included in the letter of agreement?
A. I told Moses that my experience in business is that if you leave anything opaque, it can bite you down the path, so it was my role, and I took it seriously, to ensure that the Obeids' interests were preserved and that because the commercial objective here was not just the first exploration licence, but it was the contiguous exploration licence which was believed to hold more coal, so I told Moses I would do my best to ensure that the agreement with Cascade included the evolution of the mine, including the contiguous area.

Q. What discussion, if any, did you have with representatives from Cascade about the potential resource in the contiguous area?
A. I don't I do not recall having a conversation talking about the potential in situ size and resource of the contiguous area. ^[1322]

1300. In cross-examination, Mr Brook gave evidence that the document which appears in Exhibit A ^[1323] as an attachment to the agreement with Cascade Coal P/L was not the map which was originally attached to the agreement. ^[1324] He recalled that the map originally attached to the agreement was in colour, that it contained “red and yellow” shading, and that it showed “the S on its side shape type area”. ^[1325] As submitted by Mr Neil in closing, the Crown did not produce that map. Neither did the Crown discount the reasonable possibility that it was that map that was shown to Mr Brook at the second Wentworth Hotel meeting. ^[1326]

Is the fourth act of misconduct established?

1301. Following an amendment to the fourth act of misconduct in the course of the trial (the Crown accepting that the case it opened could not be made out) the fourth act of misconduct, as amended, is in the following terms:

FOURTH MISCONDUCT: In the period 9 May to 9 July 2008, Mr Macdonald caused Mr Edward Obeid, Mr Moses Obeid or another member of the Obeid family, to be provided with a copy of:

(i) a map titled ‘Mt Penny’ area, prepared by Ms Leslie Wiles dated 9 May 2008 (Wiles Map 1); and

(ii) a map titled ‘North Bylong – Mt Penny Area’ prepared by Ms Leslie Wiles dated 30 May 2008 (Wiles Map 2).

He did so in breach of his duty of impartiality as he knew the Obeid family owned property in this location, and in breach of his duty of confidentiality as both maps were confidential.

(Emphasis added.)

1302. In making that amendment, the Crown must be taken to have accepted that it could not prove that the large copies of Wiles Map 1 and Wiles Map 2 Mr Gibson requested Mr Mullard supply to the Minister’s office after the 4 June 2008 meeting (which were provided the following day), were A3 in size (the size nominated in the unamended fourth act of misconduct). Mr Gibson’s evidence was that the large maps he took receipt of on 5 June 2008 were “about a metre” in length, ^[1327] larger than the A3 copy of Wiles Map 2 in Exhibit X, the version of Wiles Map 2 located during the execution of the Locaway P/L search warrant in November 2011. The Crown must also be taken to have accepted that it could not make a case that the maps were provided by Mr Macdonald on or after 5 June 2008, the date particularised in the unamended fourth act of misconduct.

1303. The Crown case as closed (after leave was granted to amend the fourth act of misconduct) extends the timeframe within which it was alleged Mr Macdonald “caused” a copy of both maps to be provided to the accused (or either of them or a member of their family) to a period of two months between 9 May 2008 and 9 July 2009. That timeframe was fixed referable to first date when Wiles Map 1 was available to Mr Macdonald, ^[1328] and the second date to encompass the second Wentworth Hotel meeting when Wiles Map 2 was produced.

1304. The Crown also advanced its case in closing that I would be satisfied that in the period 9 May to 9 July 2008, Edward Obeid, ^[1329] Moses Obeid, ^[1330] or another member of the Obeid family received from Mr Macdonald a copy of Wiles Map 1 and Wiles Map 2 as an overt act by either or both of Edward Obeid and Moses Obeid in furtherance of the same conspiracy.

1305. Neither in the particulars served on the accused in the course of the trial or in closing submissions did the Crown seek to make a case that the maps, or either of them, were received by Edward Obeid or Moses Obeid directly from Mr Macdonald, as distinct from either of the accused receiving the maps indirectly via another member of their family to whom the maps were directly provided by Mr Macdonald.

1306. In addition, neither in the Crown case as particularised nor in closing submissions was it clear whether, were a member of the Obeid family other than Edward Obeid or Moses Obeid the person who Mr Macdonald caused to be provided with the maps (for example, Paul Obeid who, on the Crown case, had possession of Wiles Map 2 at the second Wentworth Hotel meeting on 7 July 2008 and in whose physical possession both maps were located in November 2011) how, why and by what means that person provided the maps to either or both of Edward Obeid and Moses Obeid, and whether that would be sufficient to amount to Mr Macdonald “causing” the maps to be provided to either or both of them.

1307. It is the Crown case, however, that at least by 7 July 2008, Moses Obeid was familiar with Wiles Map 2 and what it depicted when, according to Mr Brook, he confirmed what Paul Obeid was explaining was the significance of the map by animatedly pointing to it and the contiguous area depicted on it. ^[1331]

1308. It also remained the Crown case that both Wiles Map 1 and Wiles Map 2 were subsequently located during the execution of the Locaway P/L search warrant in Paul Obeid’s office. ^[1332] The maps seized under warrant were exhibited in the trial as part of Exhibit X after a ruling of the legality of the search and the admissibility of a number of documents seized under the warrant, including the maps. ^[1333]

1309. The Crown advanced the following submission:

As to how the maps came to be there [at the Locaway P/L premises in November 2011] and when the documents came into the Obeids' possession, the Crown refers, in particular, to the evidence of Gardner Brook that at his meeting with Moses, Paul and Gerard Obeid at the Wentworth Hotel in early 2008, Paul Obeid unfurled several maps, including one with a red crosshatched S which is a very distinctive shape appearing on Wiles Map 2.

The Crown recognises that it is and can only be a matter of available inferences but submits that there is a strong inference available that these maps, which had been created by the DPI and emailed to Mr Macdonald's office in May 2008, were provided by Ian Macdonald to the Obeids about that time, certainly by early July 2008 when Mr Brook saw [Wiles Map 2]. ^[1334]

1310. The Crown prosecutor also accepted in closing arguments that the Crown could not prove the medium or format in which Mr Macdonald caused either of the maps to be provided, or the circumstances in which that occurred. The Crown did not, however, expressly abandon the submission, advanced in its written closing submissions that, given Mr Macdonald’s computer illiteracy, “it would have been relatively straightforward for [him] to obtain administrative assistance in order to get copies of the maps (in electronic or hard copy form), which he then conveyed to the Obeids”. ^[1335] While that might be a submission worthy of some consideration given that the maps were ultimately located at the Locaway P/L premises on 23 November 2011 with no explanation as to how they got there, I note that Mr Gibson, as Mr Macdonald’s Deputy Chief of Staff, was not asked whether he facilitated the provision of the maps or their transmission electronically to anyone, much less to an email address associated with a member of the Obeid family. The Crown has produced no email trail of that kind and has called no one else from within the Minister’s administrative staff to give evidence that they received a request or direction to render that assistance to the Minister or that they copied or printed maps for the Minister. ^[1336]

1311. Mr Neil submitted that it is matter of pure speculation that Mr Macdonald or anyone on his behalf arranged for the electronic transmission of the maps (or either of them) or that he arranged for (or caused) hard copies of the maps in A4, A3 or larger size to be provided to the accused or a member of the accused’s family.

1312. Mr Martin’s submissions focused on the Crown’s failure to establish that Mr Macdonald was ever in physical possession of Wiles Map 1. In his further submission, he emphasised that the only hard (paper) copy of Wiles Map 2 provided to Mr Macdonald was, according to Mr Gibson, “about a metre long” ^[1337] and that it was marked up at the 6 June 2008 meeting (that is, larger than the A3 map seized under warrant at the Locaway P/L premises). Mr Martin also emphasised that Mr Macdonald lacked the technological skill to print or otherwise electronically transfer the version of Wiles Map 2 emailed to Mr Gibson after Mr Gibson sent the “2 things mate email” after the meeting on 6 June 2008. ^[1338]

1313. As is obvious from the way the fourth act of misconduct is particularised, the Crown also alleged that Mr Macdonald provided Wiles Map 1, or caused it to be provided to the accused or a member of their family, also in breach of his duty of confidentiality. It was, however, no part of the Crown case that Wiles Map 1 was produced at the second Wentworth Hotel meeting. The Crown case, so far as concerns Wiles Map 1, is that it was located with Wiles Map 2 during the execution of the search warrant at the Locaway P/L premises in November 2011, and that I would infer from that fact that it was provided (or Mr Macdonald caused it to be provided) within the same timeframe as Wiles Map 2. I was invited by Mr Neil in his closing submissions to revisit the circumstances in which I was satisfied that Wiles Maps 1 and 2 were located and seized in the execution of the search warrant from the Locaway P/L premises in November 2011. I decline that invitation. For the reasons set out in detail in the interlocutory judgment, ^[1339] I am satisfied that an A3 copy of each of Wiles Map 1 and Wiles Map 2 were located together with various other documents in a yellow manila folder marked “Dulux” within a yellow envelope marked “To be collected Gerard Obeid” from a desk located at the rear of Paul Obeid’s office at the Locaway P/L ^[1340] premises on 23 November 2011. Accordingly, I am satisfied that both Wiles Maps 1 and 2 were in the physical custody and control of Paul Obeid as at November 2011.

1314. While that is some evidence from which to infer that at least Wiles Map 2 was in Paul Obeid’s physical custody and control on 7 July 2008 at second Wentworth Hotel meeting (given that he arrived and left with a map that conforms visually with what I am satisfied is the somewhat unique configuration and colour of Wiles Map 2) that fact will be established as a matter of overwhelming inference if I am satisfied that Mr Brook was in fact shown Wiles Map 2 in the course of his discussion with Paul Obeid and Moses Obeid concerning 100Mt of coal beneath Cherrydale Park and the adjoining properties ^[1341] and the more valuable coal resource in the adjacent (or contiguous) zone.

Was Wiles Map 2 produced to Paul Obeid at the second Wentworth Hotel meeting?

1315. During the Crown’s closing arguments, the Crown prosecutor relied upon the way in which Wiles Map 2 was deployed in the course of the second Wentworth Hotel meeting in support of the Crown case that Wiles Map 2 was provided by Mr Macdonald to the Obeids at or close to that date, in order that they might attract a potential investor in Lehman Brothers or an equity partner to a coal mining project that had the potential to confer a very substantial financial benefit on the Obeid family. That being the case, in the Crown’s submission it did not matter whether Paul Obeid’s nomination of the adjacent or contiguous area to Mr Brook enthusiastically promoted by Moses Obeid and the meeting and, on Mr Brook’s evidence, in his dealings with Moses Obeid that followed it, was “speculative”. ^[1342]

1316. It is of some significance that in resolving the question whether Mr Brook was shown Wiles Map 2 (or a copy of it) at the Wentworth Hotel meeting that he was not invited by the Crown to look at any of the tendered copied of Wiles Map 2 or the copies of those documents that were at that point in the trial marked MFI 39 (and which ultimately were admitted as part of Exhibit X), as the documents seized under warrant from the Locaway P/L premises, or in any other form. ^[1343] Instead, the Crown relied upon Mr Brook’s description of the map, most particularly the red or pink coloured area, inviting me to find that despite the fact that he had been shown Wiles Map 2 previously, I would be comfortably satisfied that his evidence in the trial was detailed and free of any suggestion or taint from his previous exposure to the maps in the ICAC or from his dealings with investigative officers after that date.

1317. It is, however, of equal significance that Wiles Map 2 was not produced during the course of Mr Brook’s lengthy cross-examination by Mr Neil. ^[1344] Mr Neil relied instead upon what he submitted was Mr Brook’s failure to refer to a number of critical and obvious features of Wiles Map 2, including the legend on the side of the map on which the red hatched area was depicted as a “potential open cut area” or the fact that the map was dated 30 May 2008 and headed in bold “Map 1”. Mr Neil also drew to attention to the fact that in cross-examination Mr Brook said the map he was shown at the meeting had “no measurements with respect to the resource or anything about mining that I could tell”, ^[1345] despite the red/pink hatched area showing, to scale, a very significant potential coal resource.

The issue of Mr Brook’s credibility on the question whether Wiles Map 2 was produced at the second Wentworth Hotel meeting and more generally

1318. As the only witness to give evidence of seeing Wiles Map 2 at any time earlier than the execution of the Locaway P/L search warrant in November 2011, and the only witness to give evidence of the use to which that map was put by Moses Obeid and his brothers at the second Wentworth Hotel meeting (inter alia to describe the proximity of the area they anticipated would be covered by the grant of an EL relative to the adjacent or contiguous area that they understood to contain a potentially more valuable coal resource) Mr Brook’s evidence was critical to proof of the fourth act of misconduct.

1319. His evidence was also critical, but not essential, to proof of the seventh, eighth and ninth acts of misconduct. On the Crown case, he was the recipient of the confidential information the subject of each of those acts of misconduct (in each instance information he said was given to him by Moses Obeid). He also gave detailed evidence as to how the information the subject of the those acts of misconduct was deployed by him (as he claimed on Moses Obeid’s behalf) in his dealings with Monaro Mining NL.

1320. Mr Brook gave evidence in the trial over seven days. He gave evidence via audio visual link from a hotel in Batam, Indonesia over objection. ^[1346] Although Mr Brook was a competent and compellable witness if he were within the jurisdiction, if he had not agreed to cooperate with the ODPP and the Court by making himself available to give his evidence via audio visual link, he would not have been available to be called as a witness in the Crown case.

1321. In closing submissions, the Crown invited me to be “cautious” in my assessment of Mr Brook’s credibility and reliability. ^[1347] In that connection, the Crown referred, in particular, to the effects of a frontal lobe contusion as the result of a head injury Mr Brook suffered in 2010 which he claimed had caused issues with his memory in the past but from which he had completely recovered by the time he gave his evidence. The Crown also referred to Mr Brook’s use and abuse of alcohol which continued through to 2016. The Crown also accepted that, in the course of giving evidence in the Federal Court in April 2016, Mr Brook admitted he was prepared to lie when it suits his purposes to do so.

1322. In the ultimate, however, the Crown resisted the submission advanced by defence counsel that I should give myself a warning under s 165 of the Evidence Act (in the manner provided for in s 133 of the Criminal Procedure Act where I am sitting without a jury). The Crown submitted that what I would find as generalised concerns about Mr Brook’s reliability, and the need for caution in determining whether to accept his evidence did not ultimately diminish the weight I should give his evidence in circumstances where it was, in large part, independently supported by the evidence in Exhibit A.

1323. The Crown also resisted the submission advanced by defence counsel that I should give myself a direction akin to a warning about the unreliability associated with identification evidence in s 165(1)(b) of the Evidence Act (in this case the identification of an inanimate object) as concerns Mr Brook’s evidence about the larger map he said he was shown at the second Wentworth Hotel meeting, despite his description of that map being critical to the Crown case that the larger map was Wiles Map 2, a finding of fact critical to proof of the fourth act of misconduct. ^[1348]

1324. As I observed from time to time during the course of the trial, the parties have had to contend with the fact that there was an extensive investigation by ICAC of Mr Macdonald’s conduct as Minister and the conduct of Edward Obeid and Moses Obeid as landowners by at least November 2011 when the search warrant was executed by ICAC investigators at the Locaway P/L premises. That investigation ultimately culminated in both public and private hearings in 2012 presided over by the Hon David Ipp AO QC as the ICAC Commissioner. In those proceedings the rules of evidence did not apply. In the result there was no prohibition on counsel assisting asking leading questions or inviting witnesses to comment upon the evidence of other witnesses or indeed asking a witness to direct their attention to what the Commissioner wanted a particular witness to give evidence about. I have had occasion to remark upon the impact of those proceedings upon curial trial process in the Crown’s application to tender the evidence of Mr Fang. ^[1349] I have also noted the content of some of the leading questions asked by counsel assisting the Commissioner and the Commissioner himself when considering the weight to be attributed to the Crown’s cross-examination of Mr Mullard with leave under s 38 of the Evidence Act referable to evidence he gave before ICAC.

1325. There can be no doubt that on 8 March 2012 when Mr Brook was served with a summons to attend a compulsory examination at ICAC he was aware that he was under investigation. He gave evidence of that fact and the fact that he saw Mr Fox as someone who had the capacity to influence the outcome of what he described as “his future” with respect to how the Commission viewed his evidence. ^[1350] Although Mr Brook claimed no recollection of a telephone conversation with Mr Fox on 18 May 2012 (after he had given evidence in the private hearing) in which he enquired whether he was in ICAC’s “gunsights” and where he offered himself as an “ally”, ^[1351] I accept that conversation occurred.

1326. The evidence also establishes that on 6 August 2012 Mr Brook again spoke with Mr Fox indicating that he had further information to assist the Commission, in the course of which he described the Obeids as “corrupt” and that “they knew the ‘Cascade guys’” ^[1352] and, further, that on 15 December 2012 Mr Brook emailed Mr Fox stating, “I want to help as much as I can to nail these crooks”. ^[1353]

1327. I am of the view that Mr Brook’s “improved” memory of the second Wentworth Hotel meeting, in particular between giving evidence in the private hearing in March 2012 and giving evidence in the public hearing in November 2012 in circumstances where, in the interim, he was interviewed by Mr Fox at length, does warrant giving myself a warning of the risks that are attendant upon an investigator, even with the best intentions, suggesting to a prospective witness the information that person might provide. That applies most obviously in the case of a witness who is either vulnerable to suggestion or inclined to take up a suggestion offered to them, whether in doing so they are motivated by a genuine desire to assist investigators or to ingratiate themselves with investigators. Each of those scenarios was potentially at work in Mr Brook’s dealings with Mr Fox.

1328. Having given myself that warning, what seems to me to be significant in determining the weight to be given to Mr Brook’s evidence concerning the “larger map” produced at the second Wentworth Hotel meeting, is his unprompted reference to the “contiguous area” on the map when he was interviewed by Mr Fox, after the private hearing and before that issue was pursued by counsel assisting in the public hearing some months later. The evolution of that aspect of his evidence, without any prompting or suggestion from Mr Fox, in my view, goes some considerable distance in resolving the concerns I would otherwise have had about the way Mr Brook’s evidence concerning Wiles Map 2 was gathered during the course of the investigation, including various promptings given both by the investigators and later by counsel assisting the Commissioner about that map and its distinctive features, and the impact of their promptings upon the reliability of Mr Brook’s evidence at the trial concerning the map.

1329. In the result, while there was a real risk of Mr Brook’s memory being contaminated by what he was told about the larger map, including, most critically, being told by counsel assisting that both Wiles Maps 1 and 2 were located in the course of the execution of a search warrant at the Obeids’ commercial premises in 2011 and that, in the view of counsel assisting, there were distinctive features of the larger map, coupled with the particular danger that Mr Brook’s memory of having seen the map was promoted by those suggestions or even a false memory asserted, I regard his evidence of what was said at the second Wentworth Hotel meeting about the contiguous or adjacent area or zone referable to the red coloured hatching in the shape of the sideways S-shape as reliable and ultimately compelling evidence probative of the fact that he was shown Wiles Map 2 at the second Wentworth Hotel meeting.

1330. Mr Neil also cross-examined Mr Brook at length about his dealings with Moses Obeid from 3 July 2008 when they were first introduced by Mr Selby, a mutual business contact, through the course of his dealings with Monaro Mining NL from 16 July 2008 until May 2009 (as he claimed in his evidence effectively on behalf of Moses Obeid) and in the course of his dealings with Cascade Coal P/L (also as he claimed in his evidence on behalf of Moses Obeid); and ultimately the terms upon which he divested his interest in Buffalo Resources P/L in the transactional phase of the Cascade Coal P/L joint venture. In the course of Mr Neil’s extensive cross-examination of Mr Brook, his veracity and his reliability was frequently under challenge. I will reserve considering those challenges until I have reviewed and analysed Mr Brook’s evidence in the context of other facts in issue in the trial.

1331. Having accepted as reliable Mr Brook’s description of the larger map as containing the distinctive red cross-hatched sideways S-shape and, on that basis, having reasoned to the conclusion that it was in fact Wiles Map 2 which was produced at the second Wentworth Hotel meeting, I am able to make the further finding, as a matter of overwhelming inference, that it was Mr Macdonald who provided or caused to be provided Wiles Map 2 to Edward Obeid, Moses Obeid or another member of their family, there being, in my view, no evidence to support a finding that it was in Paul Obeid’s possession from any other primary source.

1332. The question which next presents is whether confidentiality relevantly attached to either or both of Wiles Map 1 and Wiles Map 2. That question, in turn, requires a review of the circumstances the maps were produced by Ms Wiles and for what purpose. That issue was addressed by me in detail earlier in this judgment, as to which see par 767 and following in respect of Wiles Map 1 and par 897 and following in respect of Wiles Map 2 above.

Submissions of the Crown on the confidentiality of Wiles Map 1

1333. The Crown submitted that Wiles Map 1 was confidential, as and from 9 May 2008, because it was incorporated as part of a Ministerial Briefing. ^[1354] The Crown advanced the general submission in closing that I would be satisfied that all “material from the DPI to the Minister’s office” (including Wiles Map 1 and Wiles Map 2) was inherently confidential both in fact and as a matter of law. ^[1355]

1334. In respect of Wiles Map 2, the Crown submitted that it was confidential because it was also part of a Ministerial Briefing and was a “working document for a potential coal release area”. ^[1356]

1335. Mr Mullard gave evidence that he did not provide the email chain of 9 May 2008, Wiles Map 1, or the Ministerial Briefing in which Wiles Map 1 was embedded, to anyone outside the Department because those documents were as he described as “part of a ministerial enquiry”. ^[1357] He said that although:

… there was nothing fundamentally confidential in terms of the information that is shown on [Wiles Map 1], because it is all available publicly. But, because it was the basis of a ministerial submission, we would not make it available to people outside unless the Minister had approved it, or it could be subject to a freedom of information request and that could very well be successful because fundamentally there is nothing on the map that couldn't be accessed by anyone.

1336. In cross-examination by Mr Neil, Mr Mullard agreed that the information per se in Wiles Map 1 was not confidential, neither was the information on the map sensitive, and that the map contained “purely factual material”. ^[1358] He gave evidence that the map “possibly” lost its quality of confidentiality when the EOI process concluded at the earliest, or later when EL 7406 (the Mount Penny EL) was granted in October 2009. ^[1359]

1337. Ms Wiles gave evidence that she did not provide a copy of “Wiles Map 1” to anyone outside the Department “because it’s confidential data within the Department”. ^[1360] In cross-examination, Ms Wiles again gave evidence that “because [Wiles Map 1] was being created for the Department, it was in-house, it was confidential”. ^[1361] However, she accepted with respect to the information contained in Wiles Map 1 that “everything on this map would be publicly available for anybody that wanted to pull up the map, but not this actual map”. ^[1362]

1338. Mr Hawkes gave evidence that, in respect of requests from the Minister’s office generally:

Appropriate confidentiality and replies or responses of information should only go to the person that requested the information; and I’m talking about the person that requested the information, whether it be in the department or the Minister's office, plus any appropriate higher level or delegated officers that should be also aware of the information. ^[1363]

1339. In respect of Ministerial Briefings, Mr Hawkes gave evidence that:

… each of those documents was a template and there was a signature path and a final recipient as such. Then those documents were signed off by appropriate delegation and then the document was sent to the Minister's office for appropriate use within the Minister's office. ^[1364]

1340. Mr Larkings gave evidence that he did not provide a copy of his email of 9 May 2008 or its contents Wiles Map 1 to anyone outside of the Department or outside the Minister’s office because he understood them to be confidential or sensitive.

1341. Mr Gibson gave evidence that the Ministerial Briefing was “a commercially sensitive document and therefore … it should not be made available to the public” ^[1365] . In respect of Wiles Map 1, he gave evidence that “it should be afforded the same protection” as the Ministerial Briefing. ^[1366] He did not provide copies of either the Ministerial Briefing or Wiles Map 1 to anyone outside the Minister’s office.

Submissions of the Crown on the confidentiality of Wiles Map 2

1342. The Crown also relied on the following evidence in regard to the confidentiality of Wiles Map 2:

1. Mr Mullard gave evidence that the information depicted on Wiles Map 2, including the potential open cut area, was not confidential information per se. ^[1367] However, he explained that because of the purpose for which Wiles Map 2 was prepared, namely a Ministerial meeting, the map itself was confidential. In cross-examination, he accepted the proposition that a person who did not understand the context in which Wiles Map 2 was created would not understand that confidentiality attached to it. ^[1368] He conceded that it “possibly” lost its confidential status once the EOI process concluded. ^[1369]

2. Ms Wiles also considered Wiles Map 2 to be confidential essentially for the same reason as Mr Mullard explained. She gave evidence that she did not provide the map to anyone outside the DPI for that reason. ^[1370]

3. Mr Gibson likewise did not provide a copy of Wiles Map 2 to anyone outside the Minister’s office because he considered it to be “commercially sensitive and not for public consumption”. ^[1371]

Submissions of the accused as to whether Wiles Map 1 and/or Wiles Map 2 were confidential

1343. Without conceding that Mr Macdonald provided or caused to be provided either of the maps the subject of the fourth act of misconduct, Mr Martin submitted that s 365(1)(e) of the Mining Act permitted Mr Macdonald to release confidential information in connection with the administration and execution of the Act. He submitted it was “reasonable” for the Minister to release information (pursuant to s 365) where, for example, that information was provided to a global investment bank to pursue joint ventures with companies who might invest in mining or exploration in New South Wales. ^[1372]

1344. Having cross-examined Mr Mullard with a view to establishing that anyone in receipt of Wiles Map 2 would need to understand the context in which that map was prepared, namely as part of a Ministerial Briefing, in order to appreciate the confidentiality which attached to it, Ms Francis submitted that there was a paucity of evidence that Edward Obeid did anything with any documents alleged to be confidential, including, relevantly, Wiles Map 1 and Wiles Map 2. ^[1373]

1345. Mr Neil submitted that, in circumstances where there was no written policy to determine which information could be publicly disclosed about the upcoming EOI process, and where the scope of any obligation of confidence on Ministerial and Departmental staff was not established by the evidence in any event, ^[1374] the ambiguity in the evidence as to what could and could not be disclosed is patent and, for that reason, no adverse inferences could be drawn from the provision of the information in question to Moses Obeid ^[1375] and that, in any case, the Crown had not established the scope of Mr Macdonald’s obligation of confidentiality as it arises under the Ministerial Code of Conduct.

1346. The Crown accepted that if, after considering all the evidence, there remains, in my assessment, a reasonable possibility that even if Mr Macdonald caused Wiles Map 1 and Wiles Map 2 to be provided to Edward Obeid, Moses Obeid, or another member of their family, it was not as an act in furtherance of the conspiracy charged but for some other reason or motivation (including, I interpolate, as an act in furtherance of a different conspiracy), that conduct would carry no weight in proof of the existence of the conspiracy. Neither would it allow for a finding that the receipt of the maps, or either of them, by Edward Obeid or Moses Obeid was evidence capable of establishing their participation in the conspiracy. ^[1376]

Is the fourth act of misconduct established and, if so, was it committed in furtherance of the conspiracy?

1347. In circumstances where I am unable to comfortably reason to a finding that Wiles Map 1 was provided by Mr Macdonald to Edward Obeid, Moses Obeid, or another member of their family during the currency of the conspiracy, it is unnecessary to consider whether the necessary quality of confidence attached to that document when it was provided by Mr Macdonald (as I am confident it was) whenever that occurred. That the Crown has not proved the provision of Wiles Map 1 as an act of misconduct committed in furtherance of the conspiracy is not fatal to proof of the fourth act of misconduct.

1348. In considering whether the information embedded in Wiles Map 2 or the map itself is confidential, two questions arise:

1. Does Mr Macdonald’s duty of confidentiality as it arises under the Ministerial Code of Conduct alone render that information confidential?

2. If not, does the map have the necessary quality of confidence when the Ministerial Code of Conduct is considered together with the principles which inform:

1. the equitable duty of confidence; and

2. the general duty of confidence owed by Ministers of the Crown in the way I have considered those principles earlier. ^[1377]

1349. In analysing the question that way, if I am satisfied Wiles Map 2 was confidential in the hands of Mr Macdonald as the Minister for Mineral Resources when it was provided to Edward Obeid, Moses Obeid or another member of their family (that is, on some date between 1 June and 7 July 2008), it will not strictly be necessary to consider whether that information was also communicated in breach of Mr Macdonald’s Ministerial duty of impartiality, since a wilful breach of his Ministerial duties and obligations will be made out in any event.

1350. If, on the other hand, it is necessary to consider whether Mr Macdonald breached his duty of impartiality as I have interpreted that duty in the Ministerial Code of Conduct, ^[1378] breach of that duty may also be informed by the fact that in providing the information, Mr Macdonald, in the language of Clause 4.2 of the Ministerial Code of Conduct, conferred a “private advantage” ^[1379] on the recipient of the information in circumstances where the evidence establishes that Wiles Map 2 was provided to Mr Macdonald in the office he held as Minister for Minister Resources and where the map, in specie, was not otherwise publicly available, even if at the time it was provided (again, as late as 7 July 2008) it did not retain the quality of confidence in the strict sense.

1351. Similarly, if I am not satisfied that Wiles Map 2 was confidential in the hands of Mr Macdonald as the Minister at the time it was provided to Edward Obeid, Moses Obeid or another member of their family, again in the strict sense of the information having the necessary quality of confidence before a breach of a duty of confidentiality is made out, I will need to consider whether the provision of that information is capable of constituting, and in fact constitutes, a breach of Mr Macdonald’s Ministerial duty of impartiality.

1352. To restate it, the Ministerial Code of Conduct provides as a general obligation:

1. Ministers will perform their duties impartially, disinterestingly [sic] and in the best interests of the people of New South Wales (emphasis added). ^[1380]

1353. The Crown advanced no submission as to how I should reason to a finding that of the five acts of misconduct alleged to have been committed in breach of both the duties of confidentiality and impartiality (the fourth and the sixth to the ninth) any was committed in breach of the duty of impartiality only, that is, what approach I should take if I find the relevant information does not have the necessary quality of confidence to inform a finding that the provision of the information was in breach of Mr Macdonald’s duty of confidentiality.

1354. That is a question which I have resolved can only be meaningfully answered referable to the circumstances in which the particular information was provided, again assuming that fact is established.

1355. The lack of clarity in the evidence as to when Wiles Map 2 was provided by Mr Macdonald and the reason he provided it, creates in my mind a measure of uncertainty as to whether the information in Wiles Map 2 was confidential at the time it was provided by Mr Macdonald (whenever that was prior to 7 July 2008) referable to the purposive test in Clause 4.2 of the Ministerial Code of Conduct (on the Crown case the source of the duty of confidentiality). That clause provides that information in the possession of a Minister must not be “used” to gain a private advantage. I am left with that residual degree of uncertainty despite the use which was made of the map at the second Wentworth Hotel meeting to promote the commercial viability of a coal mining project to Mr Brook.

1356. I am however of the firm and settled view that Mr Macdonald’s provision of Wiles Map 2 to a member of the Obeid family for their private use was contrary to the disinterested and impartial way in which he was obliged to deal with information he obtained from time to time as the Minister for Mineral Resources in circumstances where he knew from his dealings with the DPI from as early as 4 June 2008 through to and including 17 June 2008, and in any case well in advance of 7 July 2008 (the latest date by which Wiles Map 2 could have been provided), that the Obeids owned property in the area of Mount Penny in the Bylong Valley, the area depicted on Wiles Map 2 as incorporated within the available coal resource. I am further satisfied Mr Macdonald’s provision of Wiles Map 2 was a wilful breach of his duty of impartiality, it being provided in the knowledge that land at Mount Penny which included their rural holdings in that area, was or was likely to be released as a new coal release area and where the map visualised that coal resource as part of a larger coal resource.

1357. It is clear beyond question, in my view, that conduct contravenes Mr Macdonald’s general obligation to exercise his Ministerial powers impartially and in the public interest, since by the provision of the map it is patent he was acting partially in order to advance the private interests of the Obeids and not in the public interest.

1358. Accordingly, I am satisfied the fourth act of misconduct is established. I am also satisfied that Mr Macdonald would not have misconducted himself in that way were it not for the improper purpose alleged by the Crown.

The second Wentworth Hotel meeting concludes

1359. In cross-examination, Mr Brook said while Moses Obeid was his “main liaison” and the only member of the Obeid family with whom he had ongoing commercial dealings after the second Wentworth Hotel meeting, at that meeting, it appeared to him that Paul Obeid was the “senior figure” who “understood the issue better than anyone else”. ^[1381] However, he went on to give the following evidence:

… my impression was that Moses very much took the lead of his brother with respect to which direction to go and which direction they wished me to go with respect to my negotiations and activities in so forth as Monaro is concerned. ^[1382]

1360. Mr Brook confirmed that at the second Wentworth Hotel meeting, after the conversation focussing on the larger map, there was further discussion during which Moses Obeid and Paul Obeid effectively jointly requested him to see whether one of Lehman Brothers’ clients that might be in the coal business might enter into a joint venture with “the landholders” to tender for an EL or, if not, whether he knew of another company that may wish to do so. He said that Paul Obeid and Moses Obeid were both “very enthusiastic” about the potential involvement of Lehman Brothers in a coal mining venture. ^[1383]

1361. At the conclusion of the meeting, Mr Brook said Paul Obeid “rolled” up the maps and “put them back in his cylinder”. ^[1384]

Mr Brook’s actions after the second Wentworth Hotel meeting

1362. On 7 July 2008, following the second Wentworth Hotel meeting, ^[1385] Mr Brook emailed Mr Wong, his superior based in the Hong Kong office of Lehman Brothers, enquiring about “clients” of Lehman Brothers who might be “interested in securing off-take of high grade thermal coal”, in respect of a coal resource “thought to be circa 100m/t” with “Government tenders coming up”. ^[1386] Mr Brook gave evidence that he made that enquiry on the basis of information he had been given by Paul Obeid and Moses Obeid at the meeting that day and that he made the approach to Mr Wong following through with his undertaking to the Obeids that he would take up enquiries with Lehman Brothers with a view to identifying whether any of Lehman Brothers’ customers might be interested in a joint venture of the kind contemplated. ^[1387]

1363. It was never made clear in the evidence the basis upon which Mr Brook also represented in the email to Mr Wong that it was proposed that Lehman Brothers form a “partnership with an established Aussie coal miner” ^[1388] when, as I understand the way the Crown puts its case, no Australian coal mine was nominated or mentioned in the second Wentworth Hotel meeting. It may be that this is simply an indication of Mr Brook’s capacity to endeavour to sweeten up a proposal for the consideration of his superiors at Lehman Brothers, or a reflection of his tendency to hyperbole or because he has, for other reasons, not given an entirely truthful account of everything he was told at the meeting or a combination of all three motivations. These are questions I do not need to resolve.

The seventh alleged act of misconduct

1364. The seventh act of misconduct is particularised by the Crown as follows: ^[1389]

On or after 7 July 2008, Macdonald caused Edward Obeid, Moses Obeid or another member of the Obeid family, to be provided with:

(i) a document titled ‘Company EOI 2 July 2008’ containing a list of companies proposed to be invited to participate in the EOI; or

(ii) information as to the companies on that list.

He did so in breach of his duty of impartiality, as he knew the Obeid family owned property in a location proposed to be included in the EOI (ie Mt Penny), and in breach of his duty of confidentiality as the list was confidential.

1365. It was the Crown case as particularised in the Revised Statement of Particulars that on or after 7 July 2008 Edward Obeid, ^[1390] Moses Obeid ^[1391] or another member of the Obeid family either received the document titled “Company EOI 2 July 2008” containing a list of companies proposed to be invited to participate in the EOI (the 2 July 2008 list) from Mr Macdonald, or he provided them with the information on that list.

1366. It was the Crown case in closing that the 2 July 2008 list was information Moses Obeid provided to Mr Brook on 9 July 2008 in a handwritten list (the handwritten list). ^[1392] It was also the Crown case that the timing of Moses Obeid’s provision of that information to Mr Brook permits me to find, as a matter of inference, either that the 2 July 2008 list was in Moses Obeid’s possession by 9 July 2008 or that the form and content of the handwritten list, in his handwriting, allows me to draw the further inference that either that list, or the information it contained, sourced from Mr Macdonald.

1367. It was not the Crown case that Mr Macdonald provided Moses Obeid with the final, settled list of the 44 companies ultimately invited to participate in the EOI process, or the identity of the companies on that list. The composition of the list of 44 companies ultimately invited to participate in the EOI process was refined by the DPI over several months ^[1393] and finalised by 9 September 2008. On that date, Mr Macdonald approved the release of EOI packages for the eleven coal allocation areas ^[1394] and letters of invitation were sent to those companies invited to participate in the EOI. ^[1395]

1368. The seventh act of misconduct, as particularised, is that the 2 July 2008 list contained a list of companies proposed to be invited to participate in the EOI process, not that those companies, would, in fact, be invited to participate.

1369. The Crown accepted that if, after considering all the facts and circumstances relevant to proof of the seventh act of misconduct, there remains, in my assessment, a reasonable possibility that Mr Macdonald provided the list of companies or information on that list, not as an act in furtherance of the conspiracy alleged but for some other reason or motivation, even were I satisfied that it constituted an act of misconduct in the legal sense, it would carry no weight in proof of the existence of the conspiracy. Neither would it allow for a finding that the receipt of that information by either the accused would be capable of establishing the participation of either or both of them in the conspiracy. ^[1396]

The evidence relevant to the preparation of the 2 July 2008 list

1370. At, or shortly after, ^[1397] a meeting at Parliament House on 17 June 2008 convened by Mr Macdonald ^[1398] and attended by Mr Gibson and Mr Mullard, Mr Macdonald asked Mr Gibson to have the DPI prepare a list of mining companies who might be suitable to be invited to participate in the EOI process ^[1399] for the release of a number of small to medium coal release areas, including what had come to be described, by that date, as “Area 7”, the coal release area described in the Ministerial Briefing prepared for that meeting as “Mount Penny”. ^[1400]

1371. In cross-examination by Mr Martin, Mr Mullard accepted that Mr Macdonald, possibly through Mr Gibson, asked him “to ask the [D]epartment to compile a list of all interested companies known to the [D]epartment that met the criteria of small companies being interested in coalmining in general”. ^[1401]

1372. At Mr Mullard’s request, various iterations of that list were prepared by Ms Moloney utilising the Coal Register. ^[1402]

The Coal Register as the primary source from which the list was compiled

1373. Ms Moloney gave evidence she prepared and maintained the Coal Register, ^[1403] a spreadsheet in which she recorded companies which had expressed an interest in coal resources in New South Wales, areas and coalfields in which those companies had expressed interest (and other indicia), including whether a company was ultimately allocated any of the coal resources in which it had expressed interest. ^[1404] The Coal Register was also used by Ms Moloney to record the date and outcomes of meetings of the Coal Allocation Committee, an internal DPI committee which assessed the expressions of interest recorded on the Coal Register. Mr Mullard gave evidence that various people within the Department had access to the Coal Register, including members of the Coal Allocation Committee, Mr Agnew and other members of the Titles Section, Mr Holmes of the Mineral Development Group and Ms Moloney.

Was the Coal Register confidential?

1374. Ms Moloney gave evidence the outcome of Coal Allocation Committee meetings were “confidential”, as was the Coal Register itself. ^[1405] Information as to the areas in which coal companies had expressed interest was also “considered… confidential”. ^[1406] Mr Mullard confirmed that the Coal Register was not publicly available because it contained “expressions of interest by companies that may contain commercial in confidence information”. ^[1407] Mr Mullard also gave evidence that the DPI did not provide the Coal Register to the Minister’s office in specie, but that the Department did utilise the Coal Register to “brief” the Minister by informing him, from time to time, that particular companies had expressed an interest in particular coal resources in particular areas. ^[1408]

The earlier draft lists of companies created by the DPI

1375. On 19 June 2008 the first two iterations of the list of companies proposed to be invited to participate in the EOI were prepared by Ms Moloney. Ms Moloney emailed both lists to Mr Mullard that day. ^[1409] She gave evidence that the information contained in those lists was derived from the Coal Register. ^[1410]

1376. The first version of the list of companies (comprising 19 companies) reads as follows:

Companies which have registered [with the DPI] an interest in a coal allocation in the Western Coalfield:

●   Enhance Place Pty Ltd

●   White Mining

●   Kimba Resource

●   Shield Energy Ltd

●   Monaro Mining NL

●   Bloomfield Collieries Pty Ltd

●   Xstrata

Coal Companies with current titles in the Western Coalfields

●   Centennial Coal

●   Wallerawang Collieries

●   Anglo Coal

●   Boulder Coal

●   Clarence Colliery Pty Ltd

●   Lithgow Coal Company

●   Coalpac Pty Ltd

●   Enhance Place Pty Ltd

●   Genders Mining (Oakbridge)

●   Xstrata

●   Moolarben Joint Venture (White Mining)

●   Peabody ^[1411]

1377. A second (updated) version of that list (comprising 14 companies) was sent by email to Mr Mullard by Ms Moloney half an hour later. It reads as follows:

Companies which have registered [with the DPI] an interest in a coal allocation in the Western Coalfield:

●   Enhance Place Pty Ltd

●   White Mining

●   Kimba Resource

●   Shield Energy Ltd

●   Monaro Mining NL

●   Bloomfield Collieries Pty Ltd

Coal Companies with current titles in the Western Coalfields

●   Centennial Coal

●   Wallerawang Collieries

●   Boulder Coal

●   Clarence Colliery Pty Ltd

●   Lithgow Coal Company

●   Coalpac Pty Ltd

●   Enhance Place Pty Ltd

●   Genders Mining (Oakbridge) ^[1412]

1378. Xstrata, which was included in both sub-categories in the first list, was not included in either subcategory in the second (updated) list. Anglo Coal, Moorlarben Joint Venture (White Mining) and Peabody, which were included in the second category in the first list, were not included in the second list. Mr Mullard gave evidence that the “large” companies included in the first draft of the list (namely Anglo Coal, Xstrata, Moolarben Joint Venture (White Mining) and Peabody) were removed because the Minister wanted to “restrict” the EOI process as it related to the eleven small to medium coal release areas to the smaller to medium sized mining companies. ^[1413]

The 2 July 2008 list

1379. On 2 July 2008, responsive to Mr Gibson’s request of Mr Mullard to “expand the list” ^[1414] to include more small companies, a third version of the list of companies was prepared by Ms Moloney and emailed to Mr Mullard. ^[1415]

1380. The updated version of the list was titled “Company EOI 2 July 2008”. It expanded the list of 14 companies prepared by Ms Moloney on 19 June 2008 to a list of 38 companies by the inclusion of a third category of 24 companies namely “Other small companies which have expressed an interest elsewhere in the State” (companies which had expressed interest in the Gunnedah Basin or the Hunter Coalfield ^[1416] ). It is this list of 38 companies that is the subject of the seventh alleged act of misconduct.

1381. Ms Moloney gave evidence that she prepared the 2 July 2008 list with reference to the Coal Register.

1382. The 2 July 2008 list reads as follows:

Companies which have registered an interest in a coal allocation in the Western Coalfield:

●   Enhance Place Pty Ltd

●   White Mining

●   Kimba Resource

●   Shield Energy Ltd

●   Monaro Mining NL

●   Bloomfield Collieries Pty Ltd

Coal Companies with current titles in the Western Coalfields

●   Centennial Coal

●   Wallerawang Collieries

●   Boulder Coal

●   Clarence Colliery Pty Ltd

●   Lithgow Coal Company

●   Coalpac Pty Ltd

●   Enhance Place Pty Ltd

●   Genders Mining (Oakbridge)   

Other small companies which have expressed [an] interest elsewhere in the State.

●   Whitehaven Coal Mining

●   Gloucester Coal

●   Tianda Resources

●   PalarisMining Total Mining Management Services.

●   Gunnedah Resources Limited

●   Creek Resources Pty Ltd

●   Independent Coal Pty Ltd

●   Hunter Valley Mining Corporation

●   Atlas Coal Enterprises Pty Ltd

●   Manata Resources Pty Ltd

●   Earth Technics Pty Limited

●   Simitar Resources Pty Ltd

●   ResCo Services P/L

●   Dellworth Pty Ltd

●   Mirrabooka South Pty Limited

●   White Mining

●   Spur Hill Joint Venture

●   Kemmis Coal Pty Ltd

●   Newcastle Coal Company

●   Hydromining Coal Australia

●   Caloon Mining Pty Limited

●   Gujarat NRE Australia

●   Gallipoli Mining

●   RMI (Resource Management International) ^[1417]

1383. Tianda Resources P/L was included in the 2 July 2008 list under the new subheading “other small companies which have expressed interest elsewhere in the State”. ^[1418] It was not included in either of the first list or the updated list prepared on 19 June 2008. The inclusion of the third category of companies in the 2 July 2008 list was at Mr Macdonald’s direction. The inclusion of Tianda Resources P/L, specifically, was also at his direction although there is no evidence as to precisely when that direction was given. ^[1419]

1384. In chief, Mr Mullard explained he was given to understand by Mr Gibson that “the Minister wanted to open [the EOI process] up to virtually all small companies, not necessarily those who had just registered an interest in the Western Coalfield”. ^[1420] In cross-examination by Mr Neil, Mr Mullard agreed the “evolution” of the list of companies “was driven by the Minister” who wanted “more [coal exploration] areas” and “more companies” to be reflected in the list. ^[1421]

The form in which the 2 July 2008 list was provided to the Minister

1385. Mr Gibson gave evidence that the 2 July 2008 list was “provided to the Minister’s office in a form of a ‘briefing note’ from the [D]epartment”. ^[1422]

1386. Mr Neil submitted that “the only Ministerial Briefing containing a version of the list was the briefing prepared on 23 July 2008,” ^[1423] that is, after 8 July 2008 when on the Crown case Mr Macdonald provided Moses Obeid with the 2 July 2008 list or the information on it, the conduct the subject of the seventh act of misconduct.

1387. I do not accept that submission for the following reasons:

1. The terms “Ministerial Briefing”, “Information Brief” and “Briefing Note” were used, to some extent, interchangeably and imprecisely throughout the trial.

2. Mr Gibson explained that a “briefing note” was distinct from an “information brief” but did not otherwise explain their distinguishing features. ^[1424] The Ministerial Briefings which appear throughout Exhibit A are headed with a page titled “NSW DPI-MR Ministerial Briefing”. ^[1425] Dr Sheldrake gave evidence that a Ministerial Briefing Note or Ministerial Letter took the form of a document headed “DPI – Minerals Ministerial Letter”. ^[1426]

3. It appears that the term “briefing note” may be used to describe documents which were provided to the Minister which were not formatted as a formal Ministerial Briefing.

4. The Ministerial Briefing dated 23 July 2008 ^[1427] to which Mr Neil referred was formatted as a Ministerial Briefing as distinct from the “briefing note” ^[1428] described by Mr Gibson.

1388. In circumstances where I am otherwise satisfied from Mr Gibson’s evidence that the 2 July 2008 list was provided to the Minister’s office and to the Minister at the first available opportunity, ^[1429] the precise form that the document took is immaterial.

The 7 July 2008 meeting with the Minister

1389. Mr Mullard gave evidence that, on 7 July 2008, (incidentally the same day as the second Wentworth Hotel meeting), at a meeting at the Minister's office attended by Messrs Macdonald, Coutts, Mullard and Gibson together with Dr Sheldrake, ^[1430] a “list” of companies proposed to be invited to express interest in the proposed EOI process was discussed. ^[1431]

1390. There is no evidence from the attendees of that meeting that it was the 2 July 2008 list which was produced at that meeting, ^[1432] or that that list was under discussion at the meeting. However, Mr Mullard’s evidence in cross-examination with leave, ^[1433] taken together with his evidence in chief that he provided the 2 July 2008 list to the Minister’s office, ^[1434] Mr Gibson’s evidence that he provided that list to Mr Macdonald, ^[1435] and Mr Mullard’s further evidence that the list of companies which was produced at that meeting was discussed among the attendees, allows me to find as a fact that Mr Macdonald saw the 2 July 2008 list and discussed its contents with those in attendance at the meeting.

Opportunity for Mr Macdonald to provide the 2 July 2008 list or the information on it to the Obeids

1391. On 7 July 2008, Moses Obeid contacted (or attempted to contact) Mr Macdonald by telephone on three occasions: the first call, to Mr Macdonald’s mobile phone, at 11:42am, was 7 seconds; the second call, to Mr Macdonald’s mobile phone at 2:19pm, was for 6 seconds; the third call, to Mr Macdonald’s office at 2:30pm, was for 1 minute and 13 seconds. ^[1436]

1392. More significantly, on 8 July 2008, the day after the second Wentworth Hotel meeting, a meeting with Moses Obeid at Sydney Hospital Cafe was scheduled in Mr Macdonald’s electronic diary for 12:30-1pm. ^[1437] That meeting, as scheduled, was preceded by three telephone calls Moses Obeid made to Mr Macdonald between 8:04am and 10:38am. The first call was to Mr Macdonald’s mobile phone and the second and third calls were to Mr Macdonald’s office. The first call was for 2 minutes and 30 seconds; the second call for 31 seconds; and the third call for 1 minute and 51 seconds. ^[1438] Moses Obeid also placed a call to Edward Obeid’s mobile at 12:03pm. That call extended over 17 seconds. Moses Obeid placed a further call to Edward Obeid’s mobile at 2:24pm for 1 minute and 36 seconds. ^[1439]

1393. The Crown submitted it is open for me to find that it was at the Sydney Hospital Cafe, as scheduled in Mr Macdonald’s diary (a meeting preceded by three telephone calls), that Mr Macdonald provided Moses Obeid with the 2 July 2008 list, or information as to the identity of the companies on that list, from which Moses Obeid compiled a handwritten list which he provided to Mr Brook the following day. ^[1440]

1394. That submission gathers force in the context of other facts which I am satisfied are established by the evidence. They include the following:

1. By 16 June 2008, ^[1441] well in advance of 8 July 2008, the Mount Penny Coal Release Area had been designated by the DPI as “Area 7” for inclusion in the proposed EOI process for the release of small to medium coal resources with a view to attracting small to medium coal mining companies into the industry. The structure and content of the EOI process and its projected release date had been the subject of discussion with Mr Macdonald between 16 June and 8 July 2008.

2. The larger map produced by Paul Obeid at the second Wentworth Hotel meeting on 7 July 2008 and discussed with Mr Brook with the active participation of Moses Obeid was Wiles Map 2. For the reasons already given, I am satisfied Mr Macdonald provided Wiles Map 2 or caused it to be provided in breach of his duties of confidentiality and/or impartiality.

3. Mr Rumore had been retained to act for Moses Obeid and his brothers Paul Obeid and Gerard Obeid on 23 June 2008. The instructions he was given at that time and in the weeks that followed before Monaro Mining NL was introduced to him via Mr Brook as a contracting party on 30 July 2008, supports the fact that after the second Wentworth Hotel meeting, Moses Obeid and his brothers continued to actively pursue a deal with a mining company for the potential exploitation of what they understood to be a substantial coal resource underlying Cherrydale Park and the neighbouring properties of Donola and Coggan Creek, with a view to entering into a joint venture with that company.

4. By 30 June 2008, Moses Obeid instructed Mr Rumore that it was intended that the Tianda Group would replace the Boyds, a company Mr Rumore’s conference notes record that Moses Obeid described as “associated with one of [the] ultimate bidders for coal development/lease of mining tenement”. ^[1442] Mr Fang attended client conferences with Moses Obeid, Gerard Obeid and Paul Obeid and Mr Rumore on 30 June 2008 ^[1443] and 2 July 2008 at which the terms of a potential joint venture were discussed. ^[1444] The 2 July 2008 list included Tianda Resources P/L at Mr Macdonald’s request. Although by 18 July 2008 Mr Rumore was instructed that the “deal” contemplated with “Tianda” was “off”, ^[1445] that does not undermine my finding that Mr Macdonald introduced Mr Fang and Moses Obeid, most likely during June 2008, and, having facilitated that introduction, he directed that Tianda Resources P/L be included on the list of companies proposed to be invited to participate in the upcoming EOI process.

The handwritten list

1395. Mr Brook gave evidence that on 9 July 2008, either in a coffee shop in Darlinghurst ^[1446] or later at a hotel in Kings Cross, ^[1447] Moses Obeid “handed” ^[1448] him a handwritten list of 15 mining companies, on the Crown case a subset of the 2 July 2008 list provided to Mr Macdonald and discussed at the 7 July 2008 meeting. ^[1449] The handwritten list is formatted as follows:

* ENHANCE PLACE PTY LTD

* FELIX RESOURCES

* KIMBA RESOURCES

* SHIELD ENERGY LTD

* MONARO MINING, NL

* BLOOMFIELD COLLIERIES

* CENTENNIAL COAL

* WALLERAWANG COLLIERIES

* BOULDER COAL

* CLARENCE COLLIERY P/L

* LITHGOW COAL COMPANY

* COALPAC PTY LTD

* GENDERS MINING (OAKBRIDGE)

* TIANDA RESOURCES

* DONALDSON COAL P/L ^[1450]

Was the handwritten list in Moses Obeid’s writing?

1396. Putting to one side the provenance of the information on the handwritten list, the question which immediately presents is whether I am satisfied the handwritten list was in Moses Obeid’s handwriting.

1397. Ms McKerrell, a handwriting expert, undertook a forensic document and handwriting examination at the request of ICAC and prepared a report dated 30 January 2013. ^[1451] Mr Fox provided Ms McKerrell with two “questioned documents”. The first questioned document, Q1, was referred to in Ms McKerrell’s report as “the list”. The second questioned document, Q2, was referred to as the “memorandum of understanding”. Q1 is the scanned handwritten list which Mr Brook emailed to himself on 10 July 2008.

1398. At the outset of her analysis, Ms McKerrell was provided with various specimen handwritten documents she compared to the handwriting on Q1 and Q2. Due to what she regarded as deficiencies in the specimen documents which were initially made available to her, she requested additional specimen documents from ICAC. She confirmed that for the purposes of her ultimate opinion the only specimen documents used for comparative purposes are the documents S1 to S5 in Annexure B of her report, each is a confirmed example of Moses Obeid’s handwriting.

1399. Ms McKerrell explained that her analysis began by examining S1 through to S5. She proceeded on the assumption that, in respect of each specimen document, a single writer completed the entire document. She examined the reproduced specimen documents macroscopically and the original specimen documents both macroscopically and microscopically. She concluded that there was “no evidence of multiple writers within that specimen base”. ^[1452] She then undertook comparative examinations of the handwriting in the questioned documents and the handwriting in the specimen documents, including “the direction and the number of the pen strokes, the shape of the letters, the relative placement, size and height relationships, the spacing, the slant, apparent fluency, pen pressure and its variation”. ^[1453]

1400. In an email to Mr Fox dated 27 November 2012, Ms McKerrell offered the preliminary view that it was “probable that the questioned handwriting on [the handwritten list] was written in original form by the writer of the Moses Obeid specimen [documents]”. ^[1454]

1401. In re-examination, Ms McKerrell explained that the conclusion reached in her report, that it was “highly probable” (emphasis added) that the handwriting on the list was Moses Obeid’s, was on the basis of a more detailed analysis ^[1455] as follows:

Q. Can you help me understand how you went from one level of satisfaction to an elevated level of satisfaction?
A. So considerable more comparative examinations were done. So the more detailed examinations looked at the direction of the pen strokes in the specimens, how they were formed, the shapes of them and then going through and comparing every single letter in the questioned handwriting to the question ‑ to the specimen handwriting and determining whether or not the similarities fell within the range of variation of the specimens and whether any differences observed were significant differences or whether they could be just falling outside of the range of variation that was observed within the specimen base.

Q. But you were still examining the documents macroscopically, because it was a copy, and you were still appointing your analysis to the pictorial form of the letters in each of the documents ‑ the specimen documents plural and the questioned document singular?
A. Yes, the comparison was on the pictorial features. I did examine the specimens microscopically to determine what the structure of the letters was.

Q. Yes?
A. And then the comparison with the questioned was based on the pictorial features of the questioned and the specimen. ^[1456]

1402. In cross-examination by Mr Neil, Ms McKerrell rejected the proposition that she was influenced by unconscious bias because she understood that Mr Fox had asked her to “determine whether or not [Moses] Obeid wrote the [questioned] document”, because Moses Obeid was named in the instruction letter and because the name “Moses Obeid” appeared in the handwritten text of the specimen documents. ^[1457]

1403. Ultimately, Ms McKerrell confirmed in her evidence that she remained of the opinion that it was “highly unlikely” that the handwriting on the handwritten list was that of a person other than Moses Obeid. ^[1458]

1404. Having considered the evidence of Ms McKerrell, and taking into account and accepting Mr Brook’s evidence that he was given the list by Moses Obeid, I am satisfied that Moses Obeid is the author of the handwritten list. ^[1459] That question leaves open the related and critical question whether I am satisfied that Mr Macdonald provided the 2 July 2008 list or the information on it to Moses Obeid from which he created the handwritten list and, if he did, whether he breached either or both of his duties of impartiality or confidentiality in doing so.

What is the significance, if any, of the variations between the 2 July list and the handwritten list as concerns the provenance of the handwritten list?

1405. The 15 companies on the handwritten list replicated the companies in the first and second categories of the 2 July 2008 list. Enhance Place Pty Ltd, which was listed in each of the first and second categories of 2 July 2008 list, was only listed once in the handwritten list. The handwritten list also included Tianda Resources P/L which one of the companies in the third category in the 2 July 2008 list at Mr Macdonald’s direction. It also included two companies, Felix Resources and Donaldson Coal P/L, neither of which were included on the 2 July 2008 list or the earlier drafts of that list.

1406. Donaldson Coal and Felix Resources were the subject of limited evidence in the trial.

1407. Donaldson Coal was identified by Mr Coutts as a smaller but successful mining company. ^[1460] Mr Coutts also gave evidence that Felix Resources started out as a small mining company ^[1461] and grew into a “medium to large company”. ^[1462] In December 2007, Felix Resources was granted two mining leases in respect of the Moolarben coal mine project. ^[1463]

1408. Mr De Ross, General Manager of Tianda Resources P/L, gave evidence that Mr Macdonald facilitated an introduction between Tianda Resources P/L and Felix Resources P/L. Those companies discussed the possibility of a “joint venture” on the Watermark EOI process in 2007. ^[1464] Tony Hewson, Mr Macdonald’s former Chief of Staff, was also a consultant to Tianda Resources P/L and Felix Resources P/L in 2008. ^[1465]

1409. There is no evidence as to why “Felix Resources” and “Donaldson Coal” were included by Moses Obeid in the handwritten list when neither was included in the 2 July 2008 list and where there is no evidence as to why the remaining companies on the 2 July 2008 list were not included in the handwritten list.

The form and content of the various lists of companies in evidence

1410. The first three draft lists ^[1466] of companies prepared by the DPI set out at par 1376 and following above bear stylistic and formatting consistencies both with each other and with the handwritten list. ^[1467]

1411. The first three DPI draft lists and the handwritten list are each presented in bullet point form in a single column. All four documents commence with a bullet point which reads “Enhance Place Pty Ltd”. In the first three DPI documents, the second bullet point reads “White Mining”. In the handwritten list, the second bullet point reads “Felix Resources”. At all relevant times during the currency of the alleged conspiracy, White Mining Ltd was a member of the Felix Resources group. ^[1468]

1412. The third bullet point in each of the first three DPI drafts and in the handwritten list reads “Kimba Resources”, followed by “Shield Energy Ltd”, “Monaro Mining NL” and, in sixth place, in the first three DPI drafts by “Bloomfield Collieries Pty Ltd” and in the handwritten list by “Bloomfield Collieries PL”. The next bullet point in the first DPI draft, “Xstrata”, is omitted from the subsequent DPI drafts and the handwritten list, consistent with the manner in which the list was progressively refined by the DPI.

1413. The next bullet point in each of the four documents reads “Centennial Coal”, followed by “Wallerawang Collieries”. The first DPI draft then lists “Anglo Coal”, which was omitted from the subsequent DPI drafts and the handwritten list, again consistent with the manner in which the list of companies was refined by the DPI.

1414. The next bullet point listed in the three DPI drafts and the handwritten list reads “Boulder Coal”, followed by “Clarence Colliery Pty Ltd” in the three DPI drafts and “Clarence Colliery P/L” in the handwritten list, followed by “Lithgow Coal Company”, then “Coalpac Pty Ltd”. The next company listed in the three DPI drafts, “Enhance Place Pty Ltd”, is not repeated in the handwritten list, it being the first company already included on that list. The three DPI drafts and the handwritten list then list “Genders Mining (Oakbridge)”.

1415. At this point, the content of the handwritten list departs from the format and content of the three DPI drafts. The next bullet point in the handwritten list reads “Tianda Resources”, followed by the last bullet point on that list which reads “Donaldson Coal P/L”.

1416. The handwritten list does not include the subheadings from each of the initial three DPI drafts, namely “Companies which have registered an interest in a coal allocation in the Western Coalfield” and “Coal Companies with current titles in the Western Coalfields”, ^[1469] nor does it include the third subheading from the 2 July 2008 list, namely “Other small companies which have expressed [an] interest in elsewhere in the State”. ^[1470]

1417. The next several lists of companies prepared by the DPI (the list emailed to Mr Mullard by Ms Moloney on 18 July 2008, ^[1471] the lists emailed between Ms Moloney, Mr Mullard, Ms Madden and Mr Munnings on 23 July ^[1472] and the Ministerial Briefing dated 23 July 2008 ^[1473] ) were formatted in substantively the same way as the preceding draft lists.

1418. The final list of companies prepared by the DPI appears as part of the Director-General Briefing dated 9 September 2008 in a page headed “Potential Listing of Companies to be Invited to Submit an Expression of Interest in the Small and Medium Coal Allocation Areas”. ^[1474] In that list, 38 companies are again listed in a single column in bullet point form, albeit listed in alphabetical order without the subheadings used in the previous iterations of the list.

1419. Where the form and content of the handwritten list of companies closely mirrors the form and content of each of the draft lists, and where the inconsistencies between the 2 July 2008 list and the handwritten list are, in my view, capable of being explained by the relationship between Felix Resources and White Mining and by the evolving nature of the list as Mr Macdonald’s requests were factored into the proposed list of invitee companies, there is a compelling inference that the information contained in the handwritten list was compiled by Moses Obeid with reference to the 2 July 2008 list or the information on it, likely with some input from Mr Macdonald. Since the first list on which Tianda Resources P/L appears is the 2 July 2008 list, and Tianda Resources P/L then appears on the handwritten list of companies, that provides a further basis for finding that it was compiled with reference to the 2 July 2008 list, as opposed to the two earlier iterations of the list produced by Ms Moloney on 19 June 2008.

The submissions of the accused

1420. Mr Martin submitted that the evidence did not allow for a finding that Mr Macdonald either directly or indirectly provided Moses Obeid with the 2 July 2008 list as a document, there being no evidence that Moses Obeid was in possession of the document at any relevant time. ^[1475] Mr Martin also submitted that even were I satisfied that Mr Macdonald provided the 2 July 2008 list to Moses Obeid because I was satisfied the handwritten list was prepared referable to it, the Crown has not established that the handwritten list Mr Brook emailed to himself (or the information on it), was confidential in the relevant sense. Mr Martin submitted that the information contained in the handwritten list, namely the identity, by name, of some small to medium coal mining companies in New South Wales, was not confidential, given the discrepancies between the various draft lists and that the Crown only nominates the 2 July 2008 list as the version Mr Macdonald provided Moses Obeid in breach of his Ministerial duties of confidentiality and impartiality.

1421. Mr Martin further submitted that Mr Macdonald was, in any event, entitled to release information pursuant to s 365 of the Mining Act and that there was a reasonable possibility the list related to Authorisation 287 and Authorisation 342 held by Anglo Coal P/L which was due to expire in July 2008 and “the very real prospect that they may go to an expression of interest or other tender”. ^[1476]

1422. I have already dealt with the construction and operation of s 365 of the Mining Act contended for by Mr Martin and Mr Neil when dealing with what is comprehended by the duty of confidentiality in the Ministerial Code of Conduct. ^[1477] Insofar as Mr Martin suggested the list of companies was in some way relevantly connected with Anglo Coal P/L’s Authorisations, or might have been, there is no evidence in the trial to support that proposition.

1423. Without conceding the Crown had established the seventh act of misconduct, Mr Neil submitted that no inferences can be drawn adverse to Moses Obeid from his preparation of the handwritten list from any list Mr Macdonald made available to him or any information Mr Macdonald had provided in some other form. Mr Neil submitted that providing a list of small or medium companies who might be interested in mining in New South Wales (what Mr Neil submitted was a proper characterisation of the 2 July 2008 list) would not be a breach of Mr Macdonald’s Ministerial duties and obligations of confidentiality and impartiality. Even providing a list of companies who might be invited to tender in any EOI process might have been nothing more than “a misguided attempt by the Minister to promote the EOI process”. ^[1478]

1424. Mr Neil also submitted that the 2 July 2008 list “was never considered by [Mr] Macdonald to be a list of companies to be invited to tender [in the EOI process]”. ^[1479] He submitted that the discrepancies between the 2 July 2008 list and the handwritten list allow for the inference that the handwritten list was prepared for a purpose other than as a list of companies Moses Obeid understood (from what he was told by Mr Macdonald) were proposed to be invited to participate in an upcoming EOI process, and that in any case the 2 July 2008 list was a “starting point” rather than a settled list of invitees. ^[1480]

1425. I do not accept that submission. As I have also observed, it is not, and could not be, the Crown case that Mr Macdonald provided Moses Obeid with the final, settled list of companies invited to participate in the EOI process, since that list was not finalised until 9 September 2008 when the EOI process was launched. The Crown case, as particularised, is that Mr Macdonald provided a particular list, or information on that list, of the companies proposed to be invited to participate in the EOI process and which was confidential information since the mining companies, at that point, were being assessed for their suitability to be invited to participate in the pending but unannounced EOI process.

1426. The Crown also submitted that each of the draft lists of companies prepared by the DPI, including relevantly the 2 July 2008 list, was directed to the same purpose, namely to compile a list of companies proposed to be invited to participate in the upcoming EOI process.

1427. Mr Neil further submitted that, upon receipt of the 2 July 2008 list or the information it contained, Moses Obeid did not act in a manner consistent with having been provided with a “list of tenderers”. ^[1481]

1428. Again, that submission misrepresents the Crown case as particularised. The Crown does not allege that Moses Obeid was provided with a settled list of invitee companies who might submit an EOI in relation to one or more EL, only that he was provided with a particular list, or information on that list, of companies proposed to be invited to participate in the EOI process. It is not indispensable to proof of the seventh act of misconduct that each of the companies on the handwritten list, and only those companies, were ultimately invited to participate; that case was never put by the Crown.

1429. Mr Brook gave evidence he was told by Moses Obeid on 9 July 2008 that “one” or “some” of the companies on the list were those who “may be invited to tender for an exploration licence by the Government shortly”. ^[1482] In cross-examination, Mr Brook conceded that the effect of the words Moses Obeid in fact said was that “companies on the list might be suitable companies to use to joint venture with on any tenders that might come up”. ^[1483]

1430. Finally, Mr Neil submitted that the 2 July 2008 list was “no more than a list of small and medium companies in NSW interested in mining.” ^[1484] In his submission, Mr Macdonald directed the DPI to create a list of companies to be invited to participate in the EOI process which was limited only “in the sense that the people to be invited were small to medium companies”, ^[1485] not in the sense that “only some small companies would be invited”. ^[1486] The unstated conclusion is presumably that an “outsider”, the term repeatedly used in closing submissions to describe Moses Obeid, ^[1487] could undertake their own research to compile a list of small to medium coal mining companies operating in New South Wales.

1431. In my view, it defies rational analysis that were an “outsider” to undertake their own research for that purpose, that person would be able to create a list so closely resembling the form and substance handwritten list (which itself closely resembled the 2 July 2008 list) for the following reasons.

1432. Firstly, notwithstanding Mr Macdonald’s desire that the list of companies invited to participate in the EOI process be “expansive and inclusive rather than exclusive” ^[1488] (as submitted on behalf of Moses Obeid), what constitutes a small to medium coal mining company is plainly not a matter capable of being objectively determined by an “outsider”, particularly in circumstances where the EOI process was ultimately reopened to more companies who complained of having been excluded from the initial EOI process.

1433. Secondly, the 2 July 2008 list was prepared with reference to the confidential Coal Register. Information as to which companies had registered an EOI in a coal resource was treated confidentially by the DPI and was not accessible to the public.

1434. I am well satisfied that the information in the handwritten list could only have originated from the Coal Register or from one of the draft lists which the DPI prepared at Mr Macdonald’s request using the Coal Register. I am also satisfied there is no evidence capable of raising the reasonable possibility that Moses Obeid compiled a handwritten list of companies directly referencing the confidential Coal Register.

1435. Thirdly, the 2 July 2008 list included companies such as Monaro Mining NL and Tianda Resources P/L which did not have an established reputation as coal mining companies operating in New South Wales and would not be readily identified by an “outsider” as likely contenders for the EOI process. Mr Brook’s research into Monaro Mining NL revealed to him that it was “publicly known” that Monaro Mining NL was “lobbying the DPI and interested in coal” ^[1489] but that in terms of that company’s infrastructural capacity to establish a coal mine, it had been spread “very thin with respect to managing multiple uranium mining projects around the world”. ^[1490] Mr De Ross, General Manager of Tianda Resources P/L, gave evidence that when he joined the company it had “a number of mining tenements, principally exploration tenements, mainly for uranium scattered around Australia” with an additional focus on “iron ore and coal”. ^[1491] He also gave evidence that the company had no mining “experience or infrastructure within the organisation to call on to actually create a mining company”. ^[1492]

1436. In any event, a prerequisite to an “outsider” conducting their own research to compile a list of companies proposed to be invited to participate in the upcoming EOI process would be that person’s knowledge of the upcoming EOI process.

1437. I regard Mr Brook’s evidence as consistent with the Crown case as particularised, that is, that the list of companies from which Moses Obeid compiled the handwritten list contained potential invitee companies.

Did Mr Macdonald provide the 2 July 2008 list (or the information it contained) to Moses Obeid?

1438. Having regard to the time at which I am satisfied Moses Obeid supplied the handwritten list to Mr Brook, namely on 9 July 2008 two days after the second Wentworth Hotel meeting, and having regard to what occurred at that meeting, I am comfortably satisfied that it was provided to assist Mr Brook to identify and approach a mining company which might be a suitable candidate to enter into a joint venture with the “landholders alliance” in order to secure what Moses Obeid knew or believed was the potential for an EL at Mount Penny to be released via a closed tender process encompassing rural land which the Obeid family owned or were in the process of acquiring or controlling.

1439. The related issue of Moses Obeid’s state of knowledge as to whether the tender would be open, limited, or closed is also in contest. Mr Brook gave evidence that at the first Wentworth Hotel meeting, Moses Obeid gave him to understand that “an open public tender” would be taking place. ^[1493] Mr Brook gave further evidence in cross-examination that by the time of his initial discussions with Mr Grigor (Chairman of Monaro Mining NL) in mid-July, he had formed the view “based on [his] conversations in the industry and [his] analyst’s work, that it seemed to be that the term ‘open’ was not correct and… it was to be a limited tender”. ^[1494]

1440. Taken together with Mr Brook’s evidence that Moses Obeid told him that the handwritten list contained companies which “may be invited to tender for an exploration licence”, ^[1495] the question whether Moses Obeid represented to Mr Brook that the tender process would be open or limited is immaterial. In my view Mr Brook’s actions upon receipt of the handwritten list are the most telling evidence as to why the handwritten list was compiled and given to him and what Moses Obeid understood was the nature of the 2 July 2008 list from which I am satisfied he prepared the handwritten list.

1441. On 10 July 2008, Mr Brook emailed to himself a scan of the handwritten list. ^[1496] He then said he undertook his own “desktop due diligence” of the 15 companies on the list from which he identified Monaro Mining NL as the most appropriate candidate to approach. ^[1497]

1442. On 15 July 2008, Mr Brook attended upon Mr Rampe, CEO of Monaro Mining NL, at Monaro Mining NL’s Sydney office (unannounced). ^[1498] He told Mr Rampe inter alia, that Monaro Mining NL was a company that he understood might be a potential candidate to be invited to tender for a coal EL. It was the only company on the handwritten list that Mr Brook approached.

1443. Mr Brook’s evidence of what Moses Obeid told him about the content of the handwritten list and the representations he made to Mr Rampe on 15 July 2008 are consistent with the Crown case that the handwritten list included 13 of the companies the DPI proposed to invite to participate in the EOI. Mr Brook’s evidence, couched in terms of probability, in particular that Monaro Mining NL was a potential candidate which, according to Moses Obeid, may be invited to tender, reflects the status of the 2 July 2008 list from which the handwritten list was compiled.

Was the provision of the 2 July 2008 list (or the information on it) in breach of Mr Macdonald’s duties of confidentiality and/or impartiality and, if so, was that act of misconduct committed in furtherance of the conspiracy?

1444. The Crown alleged that the seventh alleged act of misconduct constituted a breach of Mr Macdonald’s Ministerial duties and obligations of impartiality “as he knew the Obeid family owned property in a location proposed to be included in the EOI process” and a breach of Mr Macdonald’s Ministerial duties and obligations of confidentiality because the list of companies contained in the document titled “Company EOI 2 July 2008” was confidential. ^[1499]

1445. Mr Mullard gave evidence that the version of the list included in the Director-General Briefing of 9 September 2008 included companies “who had spoken to the Minister or the Minister's office saying they would like to be on the list”. ^[1500] Mr Mullard’s evidence indicates that although the imminent release of the eleven coal release areas to tender had, by that stage, come to be known, expected, or anticipated at a general level within the coal mining industry, there is no evidence capable of establishing the reasonable possibility that the same level of industry-wide knowledge of the prospective EOI process was known by the time Mr Brook emailed himself the handwritten list on 10 July 2008.

1446. To the contrary. On 7 July 2008, Ms Hibbs sent an email on Mr Mullard’s behalf to Mr Bowman, responsive to Mr Bowman’s enquiry on behalf of Monaro Mining NL about the outcome of its EOI in a coal resource in what Mr Mullard described as “the Lithgow region, the Western Coalfield”. The email stated the following:

The department is in the process of undertaking a review of the geology and coal resource potential of the area. Hence no further action will be taken until these results are finalised. ^[1501]

1447. Mr Mullard gave evidence that the email sent on his behalf did not disclose that Monaro Mining NL was “under consideration to be invited” to participate in the upcoming EOI process for eleven small to medium coal release areas in the Western Coalfield because “it wasn’t public [information] at that time” and “until a decision had been made, [the DPI] wouldn’t have conveyed that”. ^[1502]

1448. In contrast to Wiles Maps 1 and 2, I am satisfied the 2 July 2008 list was confidential in the hands of DPI officers and the Minister’s staff because at the time I am satisfied Mr Macdonald provided the information to Moses Obeid, it related to a pending EOI process. I am of that view notwithstanding the possibility that some of the information on that list, as with some of the information in Wiles Map 1 and Wiles Map 2, could, theoretically, have been gleaned from publicly available information and resources.

1449. For completeness I also note the following:

1. Mr Gibson gave evidence he did not provide the 2 July 2008 list to anyone outside of the Minister’s office because he considered it to be “a commercially sensitive document and it should be protected as such”. ^[1503]

2. Ms Moloney gave evidence the 2 July 2008 list contained information from the Coal Register which she considered to be confidential and that in the “context” of what the DPI was “working on,” namely a “possible expression of interest which would have been a competitive release”, information as to which would have been highly valuable, the list of companies was “confidential”. ^[1504]

3. Mr Mullard gave evidence the 2 July 2008 list “was part of the working papers for the EOI and I regarded that as not publicly available”. ^[1505]

4. Mr Coutts gave evidence the list of companies was confidential up until the public launch of the EOI process because the very fact the DPI was considering launching an EOI process was confidential.

1450. As to the confidentiality of the 2 July 2008 list of companies in the hands of the Minister at the time he provided it (or the information on it) to Moses Obeid, I am well satisfied at that time and in those circumstances, that information was confidential. It is clear to my mind beyond question that in the densely concentrated period of activity between Mr Macdonald’s receipt of the 2 July 2008 list (during the 7 July 2008 meeting) and Moses Obeid’s compilation of a handwritten copy of a subsection of the companies on that list which he provided to Mr Brook on 9 July 2008, that, in breach of his obligations under Clause 4.2 of the Ministerial Code of Conduct, Mr Macdonald used information he obtained in the public office he held as Minister to confer a private interest on Moses Obeid and his family. I am also in no doubt that the information in the 2 July 2008 list of companies conferred a significant benefit on the Obeids as the owners of Cherrydale Park (a fact of which Mr Macdonald was aware) when allied with the fact that when he received the information Moses Obeid was already aware that a coal release area was to be released to tender at Mount Penny.

1451. Moses Obeid immediately capitalised on the benefit conferred by his receipt of that information by providing the handwritten list to Mr Brook who then approached Monaro Mining NL on the Obeids’ behalf, equipped with the additional bargaining power of “sharing” with Monaro Mining NL knowledge about the upcoming EOI process and Monaro Mining NL’s status as a potential invitee, even if as Mr Brook claims, he was not told by Moses Obeid the information was confidential. The point is I am satisfied Moses Obeid knew the list of companies was confidential and that it was provided in breach of Mr Macdonald’s Ministerial duties and obligations. His concealing of the source of his information from Mr Brook is eloquent of that fact.

1452. Regardless of the confidential status of the 2 July 2008 list, I am also well satisfied that the provision of that information to Moses Obeid, at a time when the EOI process had not been publicly announced, was in breach of Mr Macdonald’s Ministerial duty of impartiality. In circumstances Mr Macdonald knew of the Obeids’ ownership of Cherrydale Park and that a new coal release area named Mount Penny had been identified by the DPI at Mount Penny excised from the eastern portion of the potential open cut resource depicted on Wiles Map 2, the provision of the list of companies was clearly inconsistent with Mr Macdonald’s obligation to exercise his office honestly and impartially and in the public interest. For those reasons, I am also satisfied that Mr Macdonald committed the seventh act of misconduct in furtherance of the conspiracy, that is, he would not have committed it were it not for the improper purpose alleged by the Crown.

Dealings between Mr Brook (including as on behalf of Lehman Brothers), the Obeid family, and Monaro Mining NL

1453. Following the second Wentworth Hotel meeting on 7 July 2008 and the third meeting between Moses Obeid and Mr Brook on 9 July 2008 (when, as I have found as a fact, Moses Obeid provided Mr Brook with the handwritten list of mining companies) Mr Brook dealt extensively with Moses Obeid, on behalf of the Obeid family, in pursuit of a deal with a mining company. This was at a time when there is every indication that negotiations with Tianda Resources P/L had not progressed and where, with the provision of confidential information from Mr Macdonald in the form of the list of companies (or the information on that list), Moses Obeid was in a position, using Mr Brook as an intermediary, to approach a company (other than Tianda Resources P/L) who he understood was to be invited to participate in the EOI process for the granting of an EL at Mount Penny.

1454. I note that Mr Rumore’s continued enquiries of Moses Obeid and his brothers by emails on 4 July 2008 ^[1506] and on 14 July 2008 ^[1507] as to the progress of negotiations with Mr Fang and Tianda Resources P/L went unanswered ^[1508] until 18 July 2008 when Mr Rumore was instructed in a client conference with Moses Obeid and Gerard Obeid that the “deal with Tianda is off”, ^[1509] coincident with Mr Brook’s approach to Monaro Mining NL and the positive reception he received first from Mr Rampe, the CEO, and then Mr Grigor, the Chairman.

1455. As will be obvious from the chronological unfolding of Mr Brook’s dealings with Moses Obeid from 7 July 2008, those dealings extended beyond the collapse of Lehman Brothers on 15 September 2008 ^[1510] and beyond 31 January 2009, when on the Crown case, the conspiracy had been fully executed, through to September 2010 when Mr Brook divested himself of his interest in the joint venture agreement with Cascade Coal P/L. ^[1511]

1456. Mr Brook’s evidence as to the various entities on whose behalf he acted at particular times over that extended period, the capacity in which he acted, and representations he made to those entities (ostensibly to advance their interests) ^[1512] necessitates taking a cautionary approach before accepting his evidence where it is contradicted by other evidence. Where his evidence is objectively supported by other evidence which I do accept, or inferences that might be drawn from that evidence, that cautionary approach can be relaxed.

1457. The concerns I have about Mr Brook’s reliability and credibility, ^[1513] additional to those already considered in the context of his evidence relating to Wiles Map 2, will emerge in the course of the narrative of his various dealings with representatives of Monaro Mining NL which follows and, later, with representatives of Cascade Coal P/L on behalf of Moses Obeid.

Mr Brook undertakes “desktop due diligence” of the handwritten list of companies

1458. Having received the handwritten list of companies from Moses Obeid on 9 July 2008, Mr Brook gave evidence that he conducted what he described as “desktop due diligence” as he “googled” each company on the list and conducted searches on the Lehman Brothers database. ^[1514] He gave evidence that he “formed views” about which of the listed companies might be of interest to Lehman Brothers to approach. ^[1515] Using his self-styled “desktop due diligence” into Monaro Mining NL’s “business, their exploration activities, their prior press releases and statements, annual statements, and also their financial position”, ^[1516] he determined that Monaro Mining NL was “financially weak” and for that reason they would likely be receptive to “a knock on the door from a bank like Lehman Brothers who, he would be able to represent, were “working with a landholders alliance with respect to a forthcoming Government tender”. ^[1517]

Mr Brook approaches Monaro Mining NL

1459. Having identified Monaro Mining NL as the most viable candidate, Mr Brook telephoned Monaro Mining NL’s office to arrange an appointment. On 15 July 2008 he met with Mr Mart Rampe, CEO of Monaro Mining NL, at their Sydney office. ^[1518]

1460. Mr Brook gave evidence (largely confirmed by Mr Rampe) that he told Mr Rampe that Lehman Brothers had been approached by a landholders alliance, who believed that there was coal beneath their properties. He said he told Mr Rampe that the landowners had learnt that there was “a Government tender coming up for the application for exploration licences” and that Monaro Mining NL had “come up” as a “potential candidate to be invited to tender by the Government”. ^[1519] He said he told Mr Rampe that the “landholders were very prominent, high profile New South Wales, Sydney business people” and that they wanted to “remain anonymous”. ^[1520]

1461. Mr Brook gave evidence he was under strict instructions from Moses Obeid that his family’s identity in its involvement in any transaction was to be completely anonymous at all times. ^[1521] He gave evidence that Moses Obeid told him his family “are a high profile, wealthy family [and] that his father is a high profile figure in Australian politics in New South Wales, and they preferred… to keep a low profile … with respect to their commercial dealings”. ^[1522]

1462. The Crown submitted that Moses Obeid’s insistence on anonymity to Mr Brook, together with the fact that his family was not named in the agreements prepared by Mr Rumore on his instruction, may, in other circumstances, have been legitimate. The Crown submitted, however, that I will be satisfied, in the circumstances of this trial, that the primary reason for Moses Obeid’s insistence on anonymity was to conceal the fact Mr Macdonald was the source of information (he knew was confidential information) which had identified Monaro Mining NL as a potential invitee in a closed tender process for the granting of an EL at Mount Penny, and that Mr Macdonald was also the source of other “inside information” about the designation of the coal release area and the land it encompassed, including Cherrydale Park. Since I am satisfied that Moses Obeid sought and received the confidential information in the handwritten list from Mr Macdonald and that he used that information to pursue a business relationship with Monaro Mining NL, the Crown’s submission carries force.

1463. Mr Brook gave further evidence (also confirmed by Mr Rampe) that Mr Rampe was apparently not surprised to be told that Monaro Mining NL was on “the list to receive an invitation to apply for an exploration licence” because, according to Mr Rampe, Monaro Mining NL had been lobbying the DPI for some time for that very purpose. ^[1523]

Monaro Mining NL’s dealings with the DPI in 2007 and 2008

1464. Mr Martin submitted that Monaro Mining NL’s dealings with the DPI in 2007 and 2008, as confirmed in Mr Mullard’s evidence, Ms Moloney’s evidence and the correspondence between Monaro Mining NL and the DPI tendered in the trial, raised the reasonable possibility that the DPI was the source of information about the upcoming release of the Mount Penny area of the Bylong Valley to tender and that Monaro Mining NL was aware of that fact in that way, thereby undermining the Crown’s submission that Mr Macdonald’s enquiries of the DPI in May and June 2008 came from “left field”. ^[1524]

1465. In advancing that submission, Mr Martin relied in particular on Mr Bowman’s evidence. Mr Bowman was engaged by Monaro Mining NL in May 2007 as a consultant to prepare a report addressing the prospect of Monaro Mining NL extending its corporate interests into coal exploration. ^[1525]

1466. On 19 May 2008 ^[1526] a meeting was held at the DPI attended by Mr Mullard, Ms Moloney, Mr Rampe and Mr Bowman at which Monaro Mining NL gave a presentation ^[1527] in relation to their interest in securing seven remnant areas in the Western Coalfield near Lithgow based upon Mr Bowman’s report.

1467. It was a matter of dispute at trial whether the evidence established that the Bylong Valley and/or Mount Penny were discussed at that meeting. The evidence relevant to that issue can be summarised as follows:

1. The written text of Monaro Mining NL’s presentation did not mention the Bylong Valley or Mount Penny.

2. The report prepared by Mr Bowman summarising the meeting did not mention the Bylong Valley or Mount Penny. ^[1528]

3. Mr Mullard gave evidence that Monaro Mining NL’s “expressions of interest” at that time did not “relate to the Bylong Valley” and rejected the proposition that the conversation at the meeting “drifted on to the topic of the unallocated area in the Bylong Valley”. ^[1529]

4. Mr Bowman gave evidence that he would be “very surprised” if the Bylong Valley was discussed given the report he had furnished to Monaro Mining NL. ^[1530]

5. Mr Rampe accepted that the Bylong Valley was discussed. ^[1531]

6. Ms Moloney accepted that the Bylong Valley was “one of the areas being tossed around” at the meeting. ^[1532]

1468. The Crown submitted I would give no weight to the proposition, accepted by Mr Rampe and Ms Moloney in cross-examination, that the Bylong Valley was discussed at the meeting. The Crown submitted that the passage of time since 19 May 2008, coupled with the risk that their evidence was subject to the suggestion put by the leading questions asked in cross-examination undermined the weight of that evidence. The Crown submitted the fact that Mr Mullard had no recollection of the Bylong Valley being mentioned and that Monaro Mining NL’s seven areas of interest were in the Lithgow area (many miles from the Bylong Valley) and, further, that in May/June 2008 when the DPI commenced identifying small/medium areas suitable for release at the request of Mr Macdonald, the Bylong Valley was not in the DPI’s contemplation because “it was a large area requiring further exploration” is evidence deserving of far greater weight. ^[1533] The Crown placed additional reliance on Mr Rampe’s letter to Mr Mullard of 2 June 2008 confirming Monaro Mining NL’s interest in the allocation of ELs for coal in remnant areas in the Western Coalfield around Lithgow. ^[1534]

1469. Mr Martin also relied on a report produced by Mr Rampe’s consulting company Harvest Scientific Services Pty Ltd (Harvest Scientific Services P/L) for Monaro Mining NL in November 2008. ^[1535] In Mr Martin’s submission, the Harvest Scientific Services P/L report revealed that, in April 2008, that is, prior to the commission of the first and second acts of misconduct, Monaro Mining NL was commissioning research on environmental impediments to exploration and mining in the area which came to be designated at the Mount Penny Coal Release Area. ^[1536] He submitted that those searches were conducted utilising information provided by the DPI. ^[1537]

1470. For reasons already discussed when considering the evidence relevant to proof of the first and second acts of misconduct, I am not persuaded that the Bylong Valley was an area the DPI was discussing with Monaro Mining NL in early May 2008, or that the inferences for which Mr Martin contended were open. In coming to that conclusion, I have given particular weight to Mr Bowman’s evidence. Although he was in direct dialogue with the DPI (as a former employee of the Department and having a retained friendship, of sorts, with Mr Mullard after his retirement) he had no confidence in Monaro Mining NL’s capacity to participate in an EOI tender process for the exploration of a small to medium coal release area given the company’s lack of expertise and capital. He described Monaro Mining NL as a “Mickey Mouse company”. ^[1538] He also made it clear, to my mind beyond any question, that none of the seven areas that he identified as potential remnant areas for direct allocation by the Department related to Mount Penny or were located in the North Bylong area. ^[1539]

1471. For that reason, I regard Mr Rampe’s comment to Mr Brook in July 2008 that he was not surprised to learn that Monaro Mining NL was on “the list” ^[1540] to mean a notional list he understood was prepared or maintained by the DPI, ^[1541] it being no part of the Crown case that he was shown any DPI list which included Monaro Mining NL or that he was shown the handwritten list of companies Moses Obeid provided to Mr Brook. ^[1542]

Mr Brook’s further dealings with Monaro Mining NL

1472. On 16 July 2008, the day after Mr Brook’s initial meeting with Mr Rampe, Mr Brook met with Mr Grigor in his capacity as the Chairman of Monaro Mining NL. Mr Grigor gave evidence that he arranged the meeting “as soon as possible” after Mr Rampe informed him of Mr Brook’s approach. ^[1543] The meeting was convened at Lehman Brothers’ Sydney office.

1473. Mr Brook summarised the meeting with Mr Grigor as follows:

When I first met Mr Grigor, I relayed to him that I had been approached by a landholders alliance who believed there was coal underneath their land potentially and there was potentially going to be tenders coming up for exploration licences and they, through their sources and research, had reason to believe that Monaro may be approached and, to that extent, the landholders alliance wanted Lehman Brothers to see if we could support some type of joint venture with respect to the landholders participating with respect to the outcome of the bid and at an operational level of a potential mine in the future. ^[1544]

1474. Mr Brook said that Mr Grigor was “genuinely enthusiastic” about the opportunity to have Lehman Brothers financially support Monaro Mining NL’s entry to the New South Wales coal market, in circumstances where Mr Grigor knew the company had no prospect of tendering for a coal EL without almost 100% financial backing. Mr Brook said that during the meeting he reaffirmed the landholders’ insistence on anonymity. ^[1545]

1475. Mr Grigor agreed Mr Brook told him that he represented landowners that owned rural property that was prospective for coal and they were interested in “teaming up with a coal… company with the view to that company putting in bids for coal licences”. ^[1546] He also gave evidence of various other representations Mr Brook made during the meeting, including that he gave Mr Grigor to understand that he had approached Monaro Mining NL because he had “been in contact with the Mines Department” and that Mr Brook could confirm that the DPI saw Monaro Mining NL as a “respectable company to deal with so, hence, he contacted Monaro Mining”. ^[1547] Mr Grigor also gave evidence Mr Brook told him that “if Monaro Mining was to bid and be successful in its application, he was looking at angles to make sure that his client [the landholders] would participate in the development … of any mine that may come out of that in the future”. ^[1548]

1476. Mr Grigor said that although he had some contact with Mr Brook following the meeting on 16 July 2008, on his instruction as Chairman, most of the responsibility for developing the project was left with Mr Rampe. ^[1549] This is in contrast with Mr Rampe’s evidence that, after initially meeting with Mr Brook he left Mr Grigor to deal with Mr Brook.

1477. I gained the distinct impression that from time to time, in the course of Mr Rampe and Mr Grigor giving evidence at the trial, they both sought to downplay their respective roles in the developing relationship between Mr Brook and the company and what they knew (or did not know because they did not ask) about the EOI process which they were given to understand was pending before it was publicly launched on 9 September 2008, and how Mr Brook’s clients had come to learn that their land was within a new coal release area which was to be included as one of the areas for release in that process.

The 18 July 2008 conference with Mr Rumore and the first mention of Mr Brook and Monaro Mining NL

1478. On 18 July 2008, Mr Rumore was instructed at a conference attended by Moses Obeid, Gerard Obeid and Paul Obeid, that the “deal with Tianda” was “off”. ^[1550] Mr Rumore’s handwritten file note of the conference also records Mr Brook’s contact details and Monaro Mining NL as the mining company Lehman Brothers was proposing to support financially in a mining project with the Obeids.

1479. Mr Rumore’s file note of the 18 July 2008 conference also refers to Lehman Brothers having been granted an option of 60% in “Monaro Coal” (the wholly owned subsidiary of Monaro Mining NL in whose name it was proposed the applications for the grant of an EL would be lodged) which was available to be exercised on condition that:

1. Monaro Coal P/L “wins [right] to mine pursuant to [winning the] EOI [process]”. ^[1551]

2. The three “Obeid” properties were purchased at a multiple of three or four times the valuation of those properties at the time the option was exercised. ^[1552]

3. Lehman Brothers “directs” Monaro Coal P/L to “issue 15% shares” to Lehman Brothers and “45% shares to Obeid”. ^[1553]

1480. The source of that information was not the subject of any evidence. I proceed, however, on the assumption it came from Mr Brook. He was not questioned as to the basis upon which he replied that “Lehman Brothers had been granted an option” in Monaro Mining NL’s wholly owned subsidiary when, as other evidence shows, Mr Brook had not consulted with his superiors at Lehman Brothers as at 18 July 2008 about that.

1481. Mr Brook was, however, in the process of informing his superiors within Lehman Brothers about the progress of various discussions he was having with various parties in New South Wales including, relevantly so far the trial is concerned, what he described in correspondence as the “second deal” (being a joint venture with Monaro Mining NL ^[1554] concerning “90MT of thermal coal… + adjacent 600MT”). ^[1555]

The “false” paper trail is created

1482. On 22 July 2008, a number of emails were exchanged between Mr Brook and Mr Grigor attaching drafts of a letter ostensibly written by Mr Grigor and addressed to Mr Brook but amended by Mr Brook. ^[1556]

1483. In the first email from Mr Grigor to Mr Brook, ^[1557] Mr Grigor attached a draft letter addressed to Mr Brook ^[1558] which contained details of a proposal whereby Lehman Brothers would act “not in its capacity as a corporate advisor, [but] as an associate” ^[1559] to assist Monaro Mining NL in an upcoming “closed tender” for “the granting of [ELs]” in which Monaro Mining NL would bid via a wholly-owned subsidiary. ^[1560] The letter goes on to propose that in the event that the tender is successful Lehman Brothers would secure equity by obtaining shares in the subsidiary.

1484. By return email, ^[1561] Mr Brook attached an amended version of that letter. ^[1562] The letter reads, in part, that “Monaro is seeking the support of Lehman Brothers to tender for certain thermal and coking coal tenements, which are expected to be promoted via a closed tender within the next 30 days”. Mr Brook gave evidence that he included that information in the amended letter having been provided the information from Moses Obeid. ^[1563]

1485. The amended letter went on to seek Lehman Brothers’ participation as a principal with Monaro Mining NL in the tender process in exchange for which it would be issued an option “for 60% of the issued shares in the bid company Special Purpose Vehicle… exercisable upon a bid being successful”. ^[1564] That proposal is broadly consistent with Mr Rumore’s instructions in the 18 July 2008 conference with Moses Obeid and Gerard Obeid where he was informed that Lehman Brothers would be granted an option in respect of “60%” of “Monaro Coal” (a wholly owned subsidiary of Monaro Mining NL) which was only exercisable once Monaro Coal P/L were granted the right to mine pursuant to the EOI process. ^[1565]

1486. The final version of the amended letter included minor amendments to the previous drafts and concluded by making clear that no assistance of any kind would be provided by Lehman Brothers until the proposed Share Option Deed proposed was finalised. ^[1566]

1487. Mr Grigor confirmed that Monaro Mining NL instructed solicitors from Clayton Utz (namely, Felicity Cuthbertson and Barry Irwin) to draft a Share Option Deed. Mr Grigor agreed that Monaro Mining NL sought this advice because Mr Brook had indicated that Lehman Brothers’ financial support was conditional on an executed Share Option Deed.

1488. Mr Brook rejected the proposition that he created a “false paper trail” by his “authoring” of the 22 July 2008 letter in order to misrepresent the provenance of the proposed transaction with Monaro Mining NL to his superiors at Lehman Brothers, ^[1567] by claiming that Monaro Mining NL had approached Mr Brook rather than the other way around. Mr Brook was also questioned on the apparent contradiction between his actual role as the instigator of the proposed arrangements and the representation in the amended letter that Monaro Mining NL’s proposal was as follows:

In return for Lehman Brothers participation with MRO through the tender process, we propose that Lehman Brothers would be issued an option for 60% of the issued shares in the bid company Special Purpose Vehicle (SPV). The option would be issued to Lehman Brothers for $1 and would only be exercisable upon a bid being successful. Lehman Brothers would have the right to transfer all or part of its option or shares post conversion.

The option could also be exercisable over a direct equity in the licence as opposed to shares in the subsidiary company, at your election.

At all times, including once a bid is won, Lehman Brothers would maintain the right of first refusal to provide or arrange capital for the purpose of developing a mine asset. Lehman Brothers will be under no obligation to provide any capital or advice at any time. ^[1568]

1489. He gave evidence that he made the amendments to the letter drafted by Mr Grigor because it was his view that “it would be best if we had a paper trail that showed that the origination of this conversation came from them to us, instead of us soliciting a conversation with them, given that the landholders were not actually clients of Lehman Brothers at that stage”. ^[1569]

1490. Mr Brook went on to say:

The Obeids wanted their involvement to be confidential. It made more sense that a junior miner, which was publicly known to be lobbying the DPI and interested in coal and migrating from uranium exploration to coal exploration, would initiate a conversation with an international investment bank, so for the purposes of window dressing, more or less, because this was not material to the outcome, or any outcome potentially anyway, this just made more sense to me, in my experience, and it was something that people within the firm were complicit with. And it had no bearing on the integrity of the approach, who knocked on whose door first, sir. ^[1570]

1491. Despite Mr Brook’s evidence to the contrary, I am satisfied that he deliberately misled Lehman Brothers as to the circumstances in which he promoted Monaro Mining NL as a mining company who were seeking financial backing from Lehman Brothers, in what Lehman Brothers was told was Monaro Mining NL’s application to the New South Wales government for the grant of a coal EL. The fact that this was done with Mr Grigor’s complicity does not minimise the impact of the letter on Mr Brook’s credibility.

1492. In my view, none of the explanations Mr Brook gave for asking Mr Grigor to endorse that false representation were credible. On the other hand, his real motivation in falsely representing the circumstances of Monaro Mining NL seeking the financial backing of Lehman Brothers is opaque, to say the least. It might be thought he was concerned to conceal from his employers that he had been approached by some anonymous “landowners” who had given him “the insight” to approach Monaro Mining NL in advance of the public launch of the closed tender process for the grant of a coal EL at Mount Penny, lest he be pressed to explain the actual circumstance in which that approach was made. I regard Mr Brook’s somewhat disingenuous evidence that Moses Obeid “gave” him the handwritten list of companies to “research” to see who might fit Lehman Brothers’ profile to approach, ^[1571] his use of “desktop due diligence” to identify Monaro Mining NL as the only suitable candidate as highly questionable. However, it was no part of the Crown case that Mr Brook knew either the provenance of the list or that the “inside” information came from a government Minister. It is also possible that Mr Brook was motivated to conceal from Lehman Brothers that he had formed a relationship with “the landowners”, or Moses Obeid for other reasons, including a private financial motive in keeping his employers “in the dark” about the closeness of that developing relationship.

1493. For reasons likely inherent in electing to prosecute the three accused for the conspiracy and without framing the indictment as including “divers others”, the Crown did not seek to make the case that Mr Brook was in a conspiratorial relationship with Moses Obeid, at least not a co-conspirator in the conspiracy it elected to prosecute. The accused, for obvious reasons, did not explore that question. Nor did they seek a direction in respect of Mr Brook under s 165(1)(d) of the Evidence Act.

1494. Neither did the Crown seek to make the case that any member of the Board of Monaro Mining NL or its CEO, Mr Rampe, were criminally complicit, either in the conspiracy charged or in some other criminal enterprise as might be suggested by the uncritical alacrity with which they accepted Mr Brook’s unsolicited overtures that Monaro Mining NL, a company with no established reputation as a coal mining company and no capital base to support an enterprise of that kind, might consider making an application for an EL before the EOI process for the grant of that EL was publicly announced, and to engage in detailed contractual negotiations with an alliance of unnamed landowners for a joint venture before that date.

1495. I note in that connection that there is no evidence that Mr Brook, Mr Grigor or Mr Rampe knew any of the accused as at 9 May 2008, the date by which I am satisfied the conspiratorial agreement was forged.

1496. Despite some misgivings that I held in the trial as to the full extent of Mr Rampe and Mr Grigor’s relationship with Mr Brook, where neither the Crown nor the accused sought to agitate what might have been their actual state of their knowledge about the circumstances in which Mr Brook approached Monaro Mining NL and the reason for their ready and uncritical engagement with him on behalf of unnamed “landowners” thereafter, that issue went unaddressed.

1497. In the result, an enquiry I might have undertaken into the full complex of Mr Brook’s motivations in his dealings with both Moses Obeid and Mr Rampe and Mr Grigor over the course of many months from mid-2008, and what Mr Brook actually knew about the source of the information Moses Obeid was progressively providing him with from early July 2008, became an arcane exercise. I am able to find as a fact, however, that Mr Brook was driven at all times to extract from his dealings with Moses Obeid, Monaro Mining NL and later Cascade Coal P/L the best possible financial outcome for himself. The potential for these motivations to impact adversely on his credibility will be discussed later in my deliberations to verdict. ^[1572]

23 July 2008: The initial Brook-Rumore-Obeid meeting and Lehman Brothers’ rejection of Mr Brook’s proposal

1498. On 23 July 2008, Mr Brook attended a meeting with Mr Rumore, Moses Obeid, Gerard Obeid and Paul Obeid followed by a teleconference with Mr Pryor and Mr Wong. These events are outlined below.

1499. Relevantly for present purposes, at that conference Mr Rumore was given instructions about a proposed arrangement involving Lehman Brothers, by this time reflected in the letter of 22 July 2008 that Mr Grigor had ostensibly drafted for Lehman Brothers’ consideration. ^[1573] That letter was apparently tabled at the conference.

1500. Mr Rumore was also advised that Clayton Utz had been retained to act for Monaro Mining NL. ^[1574] He was instructed to vet the Share Option Deed proposed in the letter between Monaro Mining NL and Lehman Brothers to ensure the Obeids’ interests as landowners were protected. Mr Rumore’s file note reads:

Finalise Monaro option by 29/7/08 (as date for opening of Govt’s E.O.I campaign). ^[1575]

That entry is relied upon by the Crown as evidence in proof of the sixth act of misconduct with which I have already dealt.

1501. I also note at this point that whatever urgency attached to the preparation of the Share Option Deed as at 23 July 2008, if indeed there was any urgency to it at all at that time, must have been relaxed because it was ultimately not finalised for another month. However, and in circumstances where I am not satisfied the sixth act of misconduct is proved, I am of the view that the essence of Mr Rumore’s instructions was that the Deed was to be finalised prior to the public announcement of the EOI process. That is consistent with the information in Mr Grigor’s letter on 22 July 2008, which stated that that Monaro Mining NL proposed “to draft the necessary Option Agreements as soon as possible in anticipation of tenders opening”, ^[1576] that is, prior to the EOI process commencing. As it happened, the Share Option Deed was finalised prior to the public announcement of the EOI process on 9 September 2008 by a period of almost three weeks.

1502. Mr Rumore’s file note of the 23 July 2008 conference also recorded the following:

[Lehman Brothers are] likely to accept Monaro’s offer tomorrow; will then send me copies + get preparation of option started. ^[1577]

1503. Of significance so far as the unfolding structure of the mining project is concerned (a project which I am satisfied was initiated when Mr Brook made the unsolicited approach to Monaro Mining NL), is the creation of a special purpose vehicle which it was proposed would be used as the contracting entity with Monaro Mining NL. That Special Purpose Vehicle was Voope P/L.

1504. Mr Rumore also prepared detailed conference notes headed “Notes re arrangement with respect to Monaro Coal (Aust) and three properties at Bylong Valley”. The conference notes make it clear, in respect of the proposed Share Option Deed between Monaro Mining NL and Lehman Brothers, that Monaro Coal P/L was the wholly owned subsidiary which would bid for the Mount Penny EL. ^[1578]

1505. The conference notes also record the terms upon which it was contemplated, at that date, that the option for 60% of the shares in Monaro Coal P/L was exercisable as following:

1. Once Monaro Coal P/L wins the right to mine on, inter alia, the three Bylong Valley properties (Cherrydale Park, Donola and Coggan Creek).

2. Once there is an agreement to purchase those properties at a multiple of the valuation at the time the mining lease is granted to Monaro Coal P/L.

3. When the option is exercised Lehman Brothers direct Monaro Mining NL to issue 15% of the shares in Monaro Coal P/L to Lehman Brothers or its nominee and 45% of the shares to the SPV. ^[1579]

1506. The conference notes also record that the agreement between Lehman Brothers and the “landholders” provided that if Monaro Mining NL were granted the right to mine over the three Bylong Valley properties, Lehman Brothers or its nominee would acquire those properties at the agreed consideration. ^[1580]

1507. The Crown relied upon a number of telephone calls passing between Moses Obeid and Mr Brook and between Moses Obeid and Mr Macdonald on 23 July 2008. ^[1581] The calls between Moses Obeid and Mr Brook appear to have been in advance of meeting with Mr Rumore and do not seemingly advance proof of the Crown case. On the other hand, the calls between Moses Obeid and Mr Macdonald, one of which was at 10:43am for a duration of 2 minutes and 22 seconds, and between Moses Obeid and his father, one of which was at 4:52pm for 5 minutes, and later that evening a 14 minute call followed by an 11 minute call between Edward Obeid and Mr Macdonald (initiated by Edward Obeid) are relied upon as evidence of an opportunity for the accused to update each other as to the outcome of the conference with Mr Rumore that day and/or to discuss his ongoing advice after Lehman Brothers was introduced as the entity to finance Monaro Mining NL’s bid.

1508. Over the next month, there was what the Crown described in its submissions as “back and forth” ^[1582] between Mr Rumore and Mr Irwin as the Share Option Deed between Monaro Mining NL and Voope P/L was progressively prepared. Four drafts of that document, prepared between 25 July and 12 August 2008, were tendered in the trial. A final Share Option Deed, replicating the fourth draft, was executed on 20 August 2008. ^[1583]

1509. A great deal of evidence was adduced in what can only be described as painstaking detail by the Crown in proving the various iterations of that agreement. It is necessary to set out that evidence, albeit in summary, and its significance to the Crown case. Before doing so, however, it is important to note Mr Brook’s dealings with Lehman Brothers after the 23 July 2008 conference with Mr Rumore.

The Brook-Wong teleconference on 23 July 2008

1510. After the conference with Mr Rumore, Mr Brook forwarded to Mr Wong (his superior in Hong Kong) a proposal, prepared with the support of his Sydney-based colleague Mr Pryor, according to which Lehman Brothers would support Monaro Mining NL’s bids for “certain tenements that are expected to come up for closed government tender in the next few days”. ^[1584] The proposal, which extended over many pages, records the following:

Monaro has also (unofficially) identified a party whom is currently the holder of land parcels which are anticipated to be crucial to the successful development of coal tenements. The “land related” party is seeking to participate in the ownership of a mine and accordingly provide favourable to terms to any land reclamation in the event a mining license is awarded. To this end, it is proposed that Lehman Brothers would receive a 20% option over the shares in a successful JV bid SPV with Monaro, and a further option for 40% of the SPV shares would be issued to the land related party. ^[1585]

1511. Mr Brook was questioned extensively about Mr Wong’s rejection of the proposal and what he (Mr Brook) did in response to that rejection.

1512. Mr Brook gave evidence that Mr Wong rejected “that version of the proposal” ^[1586] because he was concerned that Monaro Mining NL did not have the expertise to undertake coal exploration. That being the case, Mr Brook said that he set about “trying to find a party that had the expertise” to “partner with Monaro”. ^[1587] He explained in cross-examination that he was learning very quickly that unlike other projects in which he had been involved, “mining and exploration… are very highly dependent, not just on the resource but also the expertise and the experience of the management”, hence Mr Wong’s “concerns that Monaro had no experience with respect to coal and no experience with respect to developing a mine”. ^[1588]

1513. Mr Brook gave evidence that he understood his role with respect to further development of the proposal as being to use his position as a senior person at Lehman Brothers to identify potential financial partners and strategic partners for the Monaro Mining NL transaction and to also assist the Obeids. ^[1589] He said that, in that capacity, he was acting for “one hundred per cent Lehman Brothers”. ^[1590] He said he “made no secret” either “internally or externally” of his continued efforts in relation to the deal following Mr Wong’s rejection of it. ^[1591]

1514. Mr Brook said he saw Lehman Brothers’ role in the potential transaction as being either “a funder” or “an intermediary arranger”. ^[1592] He said that his role at Lehman Brothers was to “originate” transactions “for all parts of the bank, not just the Asia Special Situations Group”, headed by Mr Wong, and that he “saw there was a potential opportunity there for the bank to make fees, if not in brokering a deal between parties, including bringing in a financial party or another mining interest”. ^[1593]

1515. In cross-examination, Mr Brook maintained that Mr Wong had “full knowledge” of his continued efforts in that respect. ^[1594] In re-examination, Mr Brook was taken to a series of emails exchanged, with the first email in the series sent at 5:33pm on 23 July 2008 from Mr Brook to Mr Wong. ^[1595] Mr Brook confirmed that the emails related to the proposal Mr Brook had outlined to Mr Wong earlier that afternoon. In particular, Mr Brook was taken to extracts in the emails where he indicated to Mr Wong that he would “meet these guys and dig further” and Mr Wong’s response indicating, “Don’t worry, I remain open-minded.” ^[1596]

1516. On 29 July 2008, Moses Obeid forwarded Mr Brook a letter of advice from Mr Rumore dated 28 July 2008. The letter was addressed to Moses Obeid and Gerard Obeid and was headed “Purchase two farms (three vendors) at Bylong Valley”. ^[1597] Mr Brook gave evidence that, at that point in time he regarded himself and his role as the “nexus” between Monaro Mining NL and “the Obeid land alliance” but that he was acting in that capacity as an employee of Lehman Brothers. ^[1598]

1517. Mr Brook agreed that “at least from 23 July through to the time of the collapse of Lehman Brothers” on 15 September 2008, he did not inform anyone at Monaro Mining NL, nor any member of the Obeid family, that Mr Wong had rejected the version of the proposal put to him on 23 July 2008 and that, apparently, Mr Wong did not embrace the proposal in any reformulated sense after that date to the extent that he was invited to, as to which there was no evidence. ^[1599] He also agreed that it would have been “misleading” were he not to inform any partner or client of Lehman Brothers that Mr Wong had rejected the proposal as he and Mr Pryor had structured it. ^[1600] He maintained that, despite Monaro Mining NL’s clear interest in Lehman Brothers’ “financial capability to assist them”, ^[1601] he was not obligated to inform Mr Grigor of that development because Monaro Mining NL was not his client or a client of Lehman Brothers. ^[1602]

1518. The Crown submitted that the failure to inform Monaro Mining NL of Lehman Brothers’ attitude to the proposal is not reflective of any dishonesty on Mr Brook’s part or even any lack of transparency. The Crown submitted I would simply accept that Mr Brook was entitled to treat Mr Wong’s reluctance as obliging him “to figure out a way of doing the deal”. ^[1603] The difficulty with that submission is, as I have noted, no reformulated funding proposal was produced before Lehman Brothers collapsed on 15 September 2008, that is, a week after the public launch of the EOI process on 9 September 2008.

The Share Option Deed between Voope P/L and Monaro Mining NL

1519. Despite Lehman Brothers having not confirmed its preparedness to finance Monaro Mining NL’s bid, the Share Option Deed was being progressively prepared, with four drafts produced between 25 July and 12 August 2008.

The first draft of the Share Option Deed ^[1604]

1520. On 25 July 2008, the first draft of the Share Option Deed between a Monaro Mining NL entity as “vendor” and a Lehman Brothers entity as “purchaser” was prepared by Monaro Mining NL’s solicitors at Clayton Utz. That document was emailed by Mr Irwin to Mr Grigor, ^[1605] who forwarded it to Mr Brook, ^[1606] who forwarded it to Mr Rumore, ^[1607] who provided a copy to Moses Obeid. ^[1608]

1521. The definition of Shares did not specify a percentage of the ordinary shares in the Monaro entity as the subject of the Share Option Deed. ^[1609]

1522. At a conference with Moses Obeid and Gerard Obeid held on that day, Mr Rumore was instructed to review that draft of the Share Option Deed. ^[1610]

1523. Also on 25 July 2008, in an email to Mr Rumore, Mr Sassine (the Obeid family’s commercial accountant) advised that, “[w]ith respect to the SPV(s) you intend setting up, which I understand to be Unit trusts [sic] with a corporate trustee” (a clear reference to the company ultimately registered as Voope P/L) “all units on issue are to be owned by ‘Equitexx Pty Ltd ATF Obeid Family Trust No 2’.” ^[1611]

1524. Two special purpose vehicle companies, Voope P/L and Geble P/L, were registered on 28 July 2008. ^[1612] Mr Rumore advised Moses Obeid, Paul Obeid and Gerard Obeid of that fact on 30 July 2008. ^[1613]

1525. Mr Rumore also advised in writing ^[1614] his concern that, having received instructions that “Monaro Coal (Aust)” would require “a further party to support its application for the coal licence in [the] Bylong Valley” (clearly a reference to Monaro Mining NL, as the parent company, having no capital to finance the application for the Mount Penny EL itself), the Obeid interests may not be sufficiently protected. He observed as follows:

Our concern is that Monaro Coal may become a minor participant in the mining lease operations and by having an option to acquire, for nominal consideration, a significant part of the share capital in Monaro Coal (Aust), you will not achieve a significant interest in the overall coal operations.

You need to further think this through to see how your position will be protected as it may well be that even having an option over 80% of the shares in Monaro Coal (Aust) may not yield the end participants with any equity like the equity stake that they originally thought as this company becomes the “junior player” in the entity which ultimately wins the coalmining lease concessions.

1526. On 31 July 2008, Monaro Coal P/L was registered. ^[1615] Mr Brook was advised of that fact by Monaro Mining NL. ^[1616] In his evidence, Mr Grigor described Monaro Coal P/L as “a specific purpose vehicle to bid for licences from the Government”. ^[1617] Mr Brook forwarded an email containing the certificate of registration to Mr Rumore. ^[1618] On 1 August 2008, Mr Rumore forwarded that email to Moses Obeid, Gerard Obeid and Paul Obeid. ^[1619]

1527. Meanwhile, throughout July and August 2008, Mr Rumore continued to act for the Obeid brothers in relation to the purchase of Donola and the options to purchase the two parcels of land comprising Coggan Creek.

The second draft of the Share Option Deed ^[1620]

1528. On 5 August 2008, having redrafted the Share Option Deed prepared by Clayton Utz, Mr Rumore circulated a second draft to Mr Irwin and Mr Brook. ^[1621] Mr Brook forwarded that draft to Mr Grigor, ^[1622] who also forwarded it to Mr Irwin. ^[1623]

1529. Consistent with instructions Mr Rumore received from Gerard Obeid and Moses Obeid on 25 July 2008 and his advice of 28 July 2008 responsive to those instructions, ^[1624] in the second draft of the Share Option Deed the parties were listed as Monaro Mining NL (Grantor) ^[1625] (replacing “Monaro entity” (Vendor) ^[1626] ) and Voope P/L (Grantee) ^[1627] (replacing “Lehman Brothers entity” (Purchaser) ^[1628] ). Those details remained the same in the third ^[1629] and fourth ^[1630] drafts and the executed Share Option Deed. ^[1631]

1530. Mr Grigor was given to understand that Voope P/L, the Grantee, was controlled by the anonymous landholder interests Mr Brook was representing. ^[1632]

1531. Mr Brook denied telling Mr Rumore that Voope P/L was being inter-positioned because of Lehman Brothers’ reluctance to enter into the transaction and that Voope P/L was incorporated as a special purpose vehicle specifically for use in the transaction with Monaro Mining NL. ^[1633] He denied that he was playing the parties against one another or using Moses Obeid and Mr Rumore for his own purposes to “bring about situations” he was “seeking to develop”. ^[1634] He insisted that he continued to act referable to his fiduciary obligations to Lehman Brothers as his employer. ^[1635]

1532. Consistent with instructions Mr Rumore received on 25 July 2008, ^[1636] “Shares” was defined in the second draft as “80% of the fully paid ordinary shares issued in [Monaro Coal P/L] at the Satisfaction Date”. ^[1637] That definition was not amended in subsequent drafts or the executed Share Option Deed. ^[1638]

1533. The second draft also included, for the first time, definitions of “Consideration” ^[1639] ($100) and “Tenement” (a mining lease, EL or any other mining interest granted pursuant to the [Mining] Act in the State for the mining of coal). ^[1640] Those definitions were subject to further negotiation in subsequent drafts.

1534. Clauses 2 and 3 of the second draft of the Share Option Deed provided the details of how the option to take the shares in Monaro Coal P/L was to be granted to Voope P/L.

1535. Clause 2 provided:

By virtue of payment of the Consideration, the Grantor [Monaro Mining NL] grants to the Grantee [Voope P/L] or its nominee or assignee an option to have transferred to the Grantee or its nominee or assignee the Shares [80% of the fully paid ordinary shares issued in Monaro Coal Pty Limited at the Satisfaction Date (the date that company is granted a Tenement or an interest in a Tenement)]. ^[1641]

1536. Clause 3 provided:

Exercise of Option

The Grantee [Voope P/L] can exercise the option by notice in writing to the Grantor [Monaro Mining NL] given at any time during the period commencing on the Satisfaction Date and expiring two years after the Satisfaction Date.

If the option is not exercised in accordance with clause 3(a), the option shall lapse, the Consideration shall be the property of the Grantor and this document shall be at an end. ^[1642]

1537. Clauses 2 and 3 were only subject to minor amendment in subsequent drafts and in the final version of the Option Agreement executed on 20 August 2008.

1538. More critical to the facts in issue in the trial were the clauses which Mr Rumore included in the second draft responsive to concerns Moses Obeid raised with him about the need to control Monaro Coal P/L’s applications for “tenements”.

1539. On 5 August 2008, Mr Rumore advised Gerard Obeid, Moses Obeid and Paul Obeid by email that he had provided the second draft of the Share Option Deed to Clayton Utz. ^[1643] He advised that various queries which Moses Obeid had raised about “various obligations” under the Share Option Deed had been resolved in Clauses 8(a) to 8(e) of that draft. ^[1644] Those clauses broadly concerned the control the Obeids would be able to exert over Monaro Coal P/L’s applications for “tenements”. The clauses provide, inter alia, that all applications for “tenements” are to be made through Monaro Coal P/L; that Monaro Coal P/L will lodge a timely application for “tenements” referable to the timeframe set out in the invitation issued by the Department; that the Grantor (Monaro Mining NL) will keep the Grantee (Voope P/L) apprised of all information and developments with respect to applications and the considerations of applications for “tenements”, including by providing the Grantee with a copy of any application made; and that prior to lodging any application the Grantor must confer with the Grantee and act in accordance with its directions and suggestions. ^[1645]

1540. Mr Rumore gave evidence he included those clauses in accordance with his instructions that the Obeids wanted to be kept involved “throughout the whole course of the [EOI] process” to ensure the success of Monaro Coal P/L’s application for the grant of the EL. ^[1646]

1541. Meanwhile, on 6 August 2008, the contract for sale for Donola was executed with Geble P/L as the purchaser of that property ^[1647] and the call option agreements were executed by Geble P/L in respect of the purchase of Coggan Creek. ^[1648] Mr Rumore informed Moses Obeid, Gerard Obeid and Paul Obeid of those developments. ^[1649]

The third draft of the Share Option Deed ^[1650]

1542. On 7 August 2008, the third draft of the Share Option Deed was emailed to Mr Rumore from Clayton Utz. ^[1651] That draft included comments on the definitions of “consideration” and “tenement”.

1543. Clayton Utz suggested that “Consideration”, defined by Mr Rumore in Draft 2 as $100, ^[1652] should be defined as $100 together with assistance in obtaining the tenements. ^[1653]

1544. Against the definition of “Tenement”, a Clayton Utz note read, “it would be advisable to give a more detailed definition if further information about the tenement[s] applied for is known”. ^[1654]

1545. Clauses 8(a) to 8(e), drafted by Mr Rumore in response to concerns raised by Moses Obeid, were not relevantly amended. ^[1655]

1546. On 8 August 2008, Mr Rumore provided Paul Obeid, Gerard Obeid and Moses Obeid with the third draft of the Share Option Deed, noting the amendments outlined above, and advising that he would need to discuss with them several of those amendments, including the revised definition of “tenement”. ^[1656]

1547. A further conference with Mr Rumore was convened on 11 August 2008 and attended by Moses Obeid and Gerard Obeid at which the third draft was discussed. ^[1657] Mr Rumore was instructed, inter alia, to include the detail “issued prior to 1/1/09” in the definition of “tenement” in the Share Option Deed. ^[1658] Mr Rumore explained that 1 January 2009 was “the date by which [the Obeids] were hoping to have some definitive answer [as to the identity of the tenement] and that’s the further detail that should be given in response to Clayton Utz’s query” with respect to the definition of “tenement”. ^[1659]

The fourth draft of the Share Option Deed ^[1660]

1548. Subject to instructions obtained in the 11 August 2008 conference, ^[1661] on 12 August 2008, Mr Rumore sent the fourth draft of the Share Option Deed to Ms Cuthbertson and Mr Irwin at Clayton Utz ^[1662] and to Moses Obeid and Gerard Obeid. ^[1663]

1549. In accordance with Mr Rumore’s instructions, the fourth draft contained further amendments to the definitions of “Consideration”, “Condition Precedent” and “Tenement”.

1550. Consideration was defined as:

…the provision of consultancy, general assistance and advisory services by or on behalf of the Grantee [Voope P/L] or at the direction of the Grantee for the benefit of the Grantor [Monaro Mining NL] and [Monaro Coal P/L]. ^[1664]

1551. Tenement was defined as:

…the mining lease, exploration licence or any other mining interest applied for pursuant to the invitation to tender issued by the Department [of Primary Industries] at any time after the date of this document but prior to 1 January 2009 and granted pursuant to the [Mining] Act in the State for the exploration or mining of coal. ^[1665]

The executed Share Option Deed ^[1666]

1552. On 16 August 2008, Moses Obeid instructed Mr Rumore that 20 August 2008 was an appropriate date for the exchange of the executed Share Option Deed. ^[1667] It was executed on 20 August 2008 by Mr Grigor and Ms Adaley from Monaro Mining NL and Mr Skehan as the sole director of Voope P/L. ^[1668]

1553. The structure of the Share Option Deed was largely, if not entirely uncontested in the trial. It was summarised in the tendered expert report of Mr Temple-Cole as follows: ^[1669]

1554. Notably, none of the versions of the Share Option Deed, either in draft or as executed, mentioned Mount Penny, the Bylong Valley, Cherrydale Park, Donola or Coggan Creek. ^[1670] Yet the parties to that arrangement plainly understood that it was directed to the eventual grant of an EL in that location, referable either to “Mount Penny” itself or the properties adjoining it. Mr Grigor gave evidence that he understood the first draft of the Share Option Deed related to Mount Penny. ^[1671] Mr Rumore gave evidence to the effect that he understood from his clients that the tenement in contemplation in the successive drafts was to underlie the properties at Cherrydale, Donola and Coggan Creek. ^[1672] The reason that each draft of the Share Option Deed contemplated the application by Monaro Coal P/L for one or more unspecified “tenements” remained unexplained. ^[1673]

1555. In closing submissions, Mr Neil did not address the progression of the option deed or Moses Obeid’s role in instructing Mr Rumore as to its form or content.

1556. As put by the Crown in closing submissions, the Share Option Deed was pursued by Moses Obeid “on the basis of confidential information [Mr] Macdonald gave to the Obeids that Mount Penny would be included in the EOI [process], that Monaro [Mining NL] would be invited to participate [in that process], and as to timing of the EOI launch. It was plainly directed toward an application by Monaro Mining for the Mount Penny exploration area”. ^[1674]

1557. The significance of the evidence as to the evolution of the Share Option Deed as evidence of Moses Obeid’s participation in the conspiracy and in support of proof of the existence of the conspiracy was Moses Obeid’s involvement in the progress of the contractual arrangements between Monaro Mining NL and Voope P/L and the finalisation of those arrangements in August 2008 prior to the public launch of the EOI process almost three weeks later. Moses Obeid was closely involved throughout that process, from instructing Mr Rumore to review the terms proposed in the initial draft prepared by Monaro Mining NL’s solicitors; raising his own concerns about whether the first draft adequately protected the Obeids’ interests; overseeing the introduction of a raft of clauses drafted by Mr Rumore and directed to that purpose (Clause 8 in the second draft); through to instructing Mr Rumore as to an appropriate date for exchanging the final Share Option Deed. ^[1675]

1558. I am satisfied that body of evidence establishes that by 20 August 2008 when the Share Option Deed was executed, that is, almost three weeks before the public launch of the EOI process in respect of eleven coal release areas, including Mount Penny, on 9 September 2008, Moses Obeid had succeeded in positioning his family, under contract, to control what he anticipated would be the financial benefits which would flow from the granting of the EL at Mount Penny to Monaro Mining NL were it the successful tenderer. It is equally clear that Moses Obeid was able to navigate his way into that position by his use of various forms of confidential information communicated in breach of Mr Macdonald’s duties and obligations and other valuable information furnished by Mr Macdonald.

1559. It is also clear to me that not only was the executed Share Option Deed prepared referable to that information and based on an expectation that Monaro Mining NL would be the preferred applicant for the grant of an EL at Mount Penny, but each of the drafts of that agreement, including as early as the first draft prepared on 25 July 2008, over six weeks before the public launch of the EOI process on 9 September 2008 when the DPI invited nominated mining companies, including Monaro Mining NL, to participate in that process, reflected that same scenario.

1560. I am left in no doubt that the executed Share Option Deed reflected Moses Obeid’s desire to secure the financial benefits which would flow to his family were Monaro Mining NL to be the preferred applicant for the grant of the EL at Mount Penny.

1561. In my view, the fact that the deal with Monaro Mining NL was ultimately unwound when Monaro Mining NL resolved to abandon its bid in May 2009 (as to which see below) does nothing to diminish the probative weight of the evidence as to the circumstances in which it was drafted and executed in proof of the existence of the conspiracy and Moses Obeid’s participation in it.

1562. Once the EOI process formally commenced under the aegis of the Evaluation Committee and overseen by Mr Fennell, the probity auditor, the currency with which the Obeids had effectively traded with Monaro Mining NL, namely by the use of confidential information provided to them by Mr Macdonald, diminished in value since Mr Macdonald could not exert any influence over the outcome.

Meanwhile at the DPI: The production of the documents the subject of the eighth act of misconduct from late July 2008

1563. As the preceding analysis makes clear, late July 2008 and the months that followed was a period of intense activity for Mr Brook, as he continued to search for a financial partner for the proposed deal between the Obeids as landholders and Monaro Mining, while simultaneously Moses Obeid (together with his brothers) was instructing Mr Rumore on the execution of the Share Option Deed. In the same period, the DPI continued its preparations for the launch of the EOI Information Package ahead of the public announcement of the EOI process on 9 September 2008.

1564. From 21 July 2008 onwards, Mr Schiavo, Senior Land Information Officer within the Titles and Systems section of the DPI, ^[1676] was tasked with preparing various maps in relation to the EOI process.

1565. The Crown invited Mr Schiavo’s attention to a number of iterations or drafts of a map titled “Proposed EOI Areas” dated variously July, August and September 2008 in which a number of areas (including the area designated as “Mt Penny”) were nominated for release. As other evidence makes clear, maps of that kind were incorporated as “drafts” in a number of Ministerial Briefing documents, as the documentation for the public release of the EOI Information Package was in the process of being settled. ^[1677]

1566. The provenance of these documents, the order in which they were prepared and the reasons for the variation in their preparation was examined in detail in the course of lengthy cross-examination. In the result, however, the only relevance of that cross-examination to the issues that presented in the Crown case as closed, and the case each of the accused advanced in closing arguments, was whether what the Crown described as Mr Schiavo’s “third draft” of the “Proposed EOI Areas” map and which comprised, by 21 July 2008, “14 areas [for release]” (including Mount Penny which had been included in the same format as Area 7 without variation), was confidential information and, if so, whether it was provided to Edward Obeid, Moses Obeid or another member of the Obeid family in breach of Mr Macdonald’s Ministerial duties and obligations in furtherance of the conspiracy alleged. That conduct is the subject of the eighth act of misconduct.

The eighth act of misconduct

1567. The eighth act of misconduct, as particularised, was also subject to amendment in the course of the trial. It was ultimately particularised as follows:

EIGHTH MISCONDUCT: On or after 23 July 2008, Macdonald caused Edward Obeid, Moses Obeid or another member of the Obeid family, to be provided with

1. the page with the heading ‘MEDIUM COAL ALLOCATION AREAS’; and

2. a map titled “Proposed Coal Release Areas for EOIs” prepared by Fred Schiavo dated 21 July 2008 (Schiavo Map 3).

He did so in breach of his duty of impartiality, as he knew the Obeid family owned property in a location proposed to be included in the EOI (ie Mt Penny), and in breach of his duty of confidentiality, as the information in the document was confidential. ^[1678]

1568. As originally particularised, the eighth act of misconduct alleged that on or after 14 August 2008 Mr Macdonald caused Edward Obeid and/or Moses Obeid or another member of the Obeid family to be provided with a Memorandum entitled “Coal allocation” dated 5 August 2008 (the Coutts Memorandum), ^[1679] including the page of the memorandum with the heading Medium Coal Allocation Areas and a map titled “Proposed Coal Release Areas for EOIs” (Schiavo Map 3). As originally particularised, it was also the Crown case that on or after 14 August 2008 Edward Obeid, Moses Obeid or another member of their family received that information from Mr Macdonald as an act in furtherance of the conspiracy and as evidence of their participation in the conspiracy. ^[1680]

1569. After leave was sought and granted to amend the eighth act of misconduct, the Revised Statement of Particulars alleged that the eighth act of misconduct was committed “on or after 23 July 2008”. ^[1681] It also deleted any reference to Edward Obeid or Moses Obeid, or another member of the Obeid family, being provided by Mr Macdonald with the Coutts Memorandum or any part of that document, whilst retaining the allegation that a page “with the heading Medium Coal Allocation Areas and a map titled “Proposed Coal Release Areas for EOIs” (Schiavo Map 3) were provided in breach of Mr Macdonald’s duties of confidentiality and impartiality. The Revised Statement of Particulars makes the corresponding altered allegation that Edward Obeid and Moses Obeid received a document with the heading “Medium Coal Allocation Areas” and a map titled “Proposed Coal Release Areas for EOIs” (Schiavo Map 3), deleting any reference to the Coutts Memorandum (or any part of that document) as the source of the documents allegedly provided by Mr Macdonald and received by either Edward Obeid or Moses Obeid or another member of the Obeid family.

1570. It remained the Crown case, however, that sometime after 23 July 2008 Mr Macdonald caused Schiavo Map 3, together with another page of the Ministerial briefing document in which it was included, being a document headed Medium Coal Allocation Areas, to be provided to Edward Obeid and/or Moses Obeid or another member of their family, both documents containing confidential information.

1571. On 23 July 2008 (coincidentally, the date when Mr Rumore was introduced to Mr Brook by Moses Obeid) a version of the Departmental working papers were sent by Mr Mullard to Ms Moloney. ^[1682] The Departmental working papers included Mount Penny as one of the four “medium coal allocation areas” with the other categories including “large expression of interest areas” and “small” allocation areas. ^[1683] Mount Penny was the only one of the four medium coal release areas in the Western Coalfield. ^[1684] Of the seven small allocation areas Long Mountain, Ben Bullen, Long Road, Melrose, Cameron Road and Illford are in the Western Coalfield. Those eleven areas (that is, four medium and seven small coal allocation areas) became the eleven small to medium areas ultimately released for tender on 9 September 2008.

1572. On the same date, a Ministerial Briefing was created by Ms Madden entitled “Coal Allocation Proposal”. ^[1685] The issue the subject of this Ministerial Briefing was to seek the Minister’s approval to “release EOI packages for coal allocation areas”. ^[1686] Attached to that document was what the Crown described in its closing submissions as “a copy of Schiavo Map 3 (showing 14 areas) with [a] compass symbol, identical” ^[1687] to the version of Schiavo Map 3 which Mr Brook later emailed to himself on 22 September 2008 (as to which see par 1589 and following below). That draft was referred to in the trial as Schiavo Map 3. ^[1688] It is reproduced below.

1573. That Ministerial Briefing was emailed to Mr Gibson on 28 July 2008. ^[1689]

1574. Mr Mullard gave evidence that when a Ministerial Briefing was sent (as this one was) to the Minister’s office from the Department, he would customarily see a copy before it was sent. He could not say whether he saw the Ministerial Briefing of 23 July 2008 in hard copy or in electronic format. Mr Mullard gave evidence that he treated this document, among others which comprised the working documents for the proposed coal release areas, as confidential and that he did not provide a copy of it to anyone outside the Department, other than to the Minister’s office.

1575. Mr Macdonald’s receipt of the Ministerial Briefing of 23 July 2008, which included Schiavo Map 3, was challenged by the accused. However, in circumstances where it was described as “the other one that the Minister is awaiting” by the Departmental officer who emailed it to Mr Gibson ^[1690] and where Mr Gibson gave evidence that it was his practice to provide Ministerial Briefings to Mr Macdonald “at the first available opportunity”, ^[1691] I am comfortably satisfied that Mr Macdonald was provided with the Ministerial Briefing including, relevantly, Schiavo Map 3. ^[1692]

1576. In an email to Mr Mullard on 30 July 2008, Mr Gibson noted the “short descriptions” for each coal release area and enquired whether there was:

…any further detail or narrative on these areas in particular? We’re keen to see some more info on each of the areas if we can. ^[1693]

1577. That request was actioned by Ms Madden the following day. She sent an email to Mr Gibson which included documents she described as “the latest information on areas that is available to the Department with research continuing”. In that document Mount Penny is described consistently as containing 100Mt of open cut, export thermal grade coal at a depth of 300m. ^[1694] There is no qualification on the potential tonnage as being less than 100Mt.

1578. The next iteration of the DPI’s working papers was Mr Coutts’ memorandum to Dr Sheldrake of 5 August 2008 (the Coutts Memorandum). ^[1695] In that document, specific reference was made to the estimated potential financial return from the release of the large areas. They were of direct interest to Dr Sheldrake as the Director-General of the Department given the interrelationship between the statutory requirements under the Mining Act, the Department’s relationship with Treasury and the Department’s governance of the funds deposited in the Coal Allocation Fund. Although the Coutts Memorandum placed great emphasis on the proposed release of the large areas (Ridgelands, East Bargo and Benelabri) these were not ultimately the subject of an open (competitive) tender process. Of apparently secondary interest in the Coutts Memorandum was the potential for a number of smaller companies who had expressed their interest in entering the coal market to apply for eleven small to medium areas being the subject of a competitive tender process.

1579. The final iteration of the working papers is in the form of a further briefing note dated 9 September 2008 prepared by Ms Madden seeking the approval of the Minister to release the EOI package for the eleven small to medium coal release areas. ^[1696] This Briefing note is signed by Mr Mullard as Director of Coal and Petroleum Development. Mr Coutts’ signature is included against his handwritten notation “discussed with Director and Minister and approved”. ^[1697] In the final iteration of the working papers the same information is included concerning the historically high prices for coal and strong market prices for coal as in previous Ministerial Briefings. Additionally, the background narrative refers to the need to provide for the inclusion of smaller mining companies and their attraction to the smaller remnant coal deposits with a view to those smaller companies committing resources to exploration to optimise the prospect of coal recovery and to generate a financial return to Government. Mr Mullard gave evidence that Mount Penny was not technically a remnant area but more accurately described as a medium-sized area originally “part of a larger one [area] but made into a medium sized area”. ^[1698] He gave further evidence that under the Coal Allocation Guidelines, Mount Penny was more accurately described as a “smaller area unrelated to an existing mine”. ^[1699] He further observed that none of the four medium sized areas of the eleven areas was in a “remnant” category.

1580. A list of 43 companies was included as the potential listing for companies who would be invited to submit an EOI for the small to medium coal allocation areas.

1581. Reference was also made to the Coal Allocation Guidelines with respect to “small areas unrelated to existing mines” and ultimately it was recommended that there be a limited EOI for the release of the eleven areas. Mount Penny is described consistently with alterations to the timeframe for the release of the EOI package.

The Coutts memorandum of 5 August 2008

1582. The Coutts Memorandum included an annotated duplicate of Schiavo Map 3 ^[1700] together with a page titled “Medium Coal Allocation Areas”. ^[1701]

1583. That page read as follows:

MEDIUM COAL ALLOCATION AREAS

GOONBRI: Gunnedah Coalfield

The Goonbri area is located east of Whitehaven Coal’s Tarrawonga mine and Idemitsu’s Boggabri mine. There is limited existing borehole data. Future exploration may identify an export thermal open cut resource estimated to be less than 10Mt insitu. The area may contain some underground resources.

SPUR HILL: Hunter Coalfield

The Spur Hill area, located to the east of the Hunter River and the village of Denman, may contain 20 Mt of open cut and 80 Mt of underground coal. The area maybe (sic) adversely affected by a major north-south fault system and re-evaluation and remodelling are required prior to the consideration of further exploration.

GLENDON BROOK: Hunter Coalfield

Located 12km east of Singleton and south of Mitchells Flat, the Glendon Brook area is expected to contain around 150Mt of thermal coal. The area is likely to have steeply dipping coal seams and fault zones. The area has previously been allocated and some initial exploration has been undertaken however the company had financial difficulties and the project did not advance. The area is not currently held under any coal title.

MT PENNY: Western Coalfield

The area is expected to contain opencut (sic) and underground resources close to existing rail facilities. Estimated open cut resources are expected to be around 100Mt in the Mt Penny area with additional underground coal potential. Resources are contained within the Ulan Seam and would be suitable for export thermal and domestic thermal markets. Raw ash ranges from 15 – 27%.

Time Frame for all medium Expression of Interest (EOI):

   EOI Information

and data package preparations   4 weeks    End September

EOI Period            8 weeks   End December

EOI Assessment         4 weeks    End January ^[1702]

1584. Neither Dr Sheldrake ^[1703] nor Mr Gibson ^[1704] could recall seeing the Coutts Memorandum or discussing it with the Minister. Mr Schiavo gave evidence that he had “no idea” how Schiavo Map 3 came to be included in it. ^[1705]

1585. Neither the EOI package published on 9 September 2008 nor the updated package published in January 2009 contained Schiavo Map 3. ^[1706]

1586. Mr Mullard recalled that the subject matter of the Coutts Memorandum was discussed at a meeting attended by himself together with Dr Sheldrake and Mr Coutts and convened by Mr Macdonald on 14 August 2008. ^[1707] Later that day, a meeting with Edward Obeid is noted in Mr Macdonald’s diary. ^[1708] Another meeting between Edward Obeid and Mr Macdonald is recorded on 20 August 2008. ^[1709] A further meeting was scheduled in Edward Obeid’s diary between the three accused at Sydney Hospital Cafe the following day. ^[1710] It is the Crown case that those meetings provided an opportunity for Mr Macdonald to provide Edward Obeid (or Moses Obeid) with Schiavo Map 3 and the page of the Coutts Memorandum headed “Medium Coal Allocation Areas”. ^[1711]

Is the eighth act of misconduct established and, if so, was it committed in furtherance of the conspiracy?

1587. There can be no dispute that Schiavo Map 3, prepared on 21 July 2008, was attached to a Ministerial briefing document dated 23 July 2008 ^[1712] which was emailed to Mr Gibson in the Minister’s office on 28 July 2008. ^[1713] In addition, for reasons already given, I am satisfied that Mr Macdonald was in possession of Schiavo Map 3 after a copy of that map was emailed to Mr Gibson on 28 July 2008. ^[1714]

1588. On 22 September 2008, at 4:54PM, Mr Brook sent an email ^[1715] to Mr Yin of Tianci Inc, ^[1716] attaching a document which contained Schiavo Map 3. ^[1717] Mr Brook gave evidence that this map was given to him by Moses Obeid in “late July, early September”. ^[1718] The second attachment to the email was an elaborated rendition of a document which Mr Brook again said had been provided to him by Moses Obeid and which detailed “Stage One” and “Stage Two” of the Mount Penny project. ^[1719]

1589. At 4:57pm on the same day Mr Brook emailed to himself both documents. ^[1720] Mr Brook gave evidence that he instructed Amanda Turner, a personal assistant at Lehman Brothers, to transcribe the document titled “MEDIUM COAL ALLOCATION AREA”. ^[1721] Mr Brook amended the document by deleting the reference to Goonbri and adding to the sections on Spur Hill, Glendon Brook and Mount Penny an assessment of the tonnage of high grade thermal coal in those coal release areas. Mr Brook gave evidence that information was provided to him verbally by Moses Obeid around that time. ^[1722]

1590. In cross-examination, Mr Brook accepted the possibility that Schiavo Map 3 was given to him by someone at Monaro Mining NL. ^[1723] Mr Neil submitted I would be satisfied there was a reasonable possibility that both documents the subject of the eighth act of misconduct sourced from Monaro Mining NL, given Monaro Mining NL’s established and ongoing working relationship with the DPI.

1591. Having considered and accepted the evidence of the DPI witnesses that they did not provide either of the documents to anyone outside the Department, and in the absence of any evidence capable of establishing the reasonable possibility that they were leaked by a Ministerial staff member to Monaro Mining NL personnel, the overwhelming inference is that both documents were provided by Moses Obeid and that Mr Macdonald “caused” them to be provided to him either directly or via another member of his family.

1592. That finding is further supported by Mr Schiavo’s evidence that he did not recognise the handwriting on the face of the annotated version of Schiavo Map 3. ^[1724] He did not have any knowledge of the map having been sent as an attachment to an email by Mr Brook. ^[1725] He gave evidence that he did not know Mr Brook. ^[1726] It is also supported by the fact that, as the Crown submitted in closing, there is no evidence to suggest that anyone at Monaro Mining NL (most relevantly Mr Rampe and Mr Grigor) ever had copies of Schiavo Map 3 or the page of the Coutts Memorandum. ^[1727]

1593. Although there is no direct evidence that Mr Macdonald was in physical possession of the relevant page of the Coutts Memorandum, and since there is nothing in the evidence to suggest that Mr Brook was provided with the documents separately or by different people, I am able to comfortably make the further finding that Mr Macdonald was provided with the relevant page of the Coutts Memorandum during the 14 August 2008 meeting.

1594. I am also able to find that Mr Macdonald used the information in those documents, which he had obtained in office, in order to confer a private advantage to the Obeids by causing those documents to be provided to Edward Obeid, Moses Obeid or another member of their family in breach of his Ministerial duties of confidentiality.

1595. Regardless of the confidential status of those documents, the provision of that information to the Obeids at a time when the EOI process had not been publicly announced, was also a clear breach of his Ministerial duties and obligations of impartiality to act disinterestedly in the public interest in circumstances where Mr Macdonald knew the Obeids owned Cherrydale Park and where he knew by 17 June 2008 a new coal release area named Mount Penny had been identified by the DPI which would inevitably include Cherrydale Park given the proximity of that property to Mount Penny.

1596. I am also satisfied that the information in Schiavo Map 3 and the page of the Coutts Memorandum conferred a consequential benefit which Moses Obeid sought to exploit by providing that information to Mr Brook, who then approached potential investment partners for Monaro Mining NL to peruse their application for the granting of an EL at Mount Penny, equipped with the additional bargaining power of information concerning the upcoming EOI process and the size and scope of the medium coal release areas to be included in that process.

1597. In my view, there is no evidence capable of establishing the reasonable possibility that either or both of those documents were provided by anyone other than Mr Macdonald. I also accept the Crown’s closing submission that there was “ample opportunity” for Mr Macdonald to do so in late August 2008 given the three scheduled meetings with the accused at that time. ^[1728] For those reasons, I am also satisfied that Mr Macdonald committed the eighth act of misconduct in furtherance of the conspiracy. That is, he would not have committed that act were it not for the improper purpose alleged by the Crown.

The impact of the fact the Coutts Memorandum was not signed by the Minister upon proof of the eighth act of misconduct

1598. Mr Martin submitted that, in light of Mr Badenoch’s evidence that “the only way” to determine that Mr Macdonald had seen and read a document such as a Ministerial Briefing or the Coutts Memorandum was if the Minister’s signature was on the document, the “unsigned digital copies of Ministerial Briefings” in evidence “do [not] establish that Mr Macdonald saw and read them, absent credible and reliable sworn evidence of this fact”. ^[1729]

1599. Mr Martin did not elaborate on which documents he referred to in that submission. Nor did he explain the impact ultimately on proof of the facts in issue of the status of certain unsigned documents.

1600. As I see it, the gravamen of that submission seems to be that the Coutts Memorandum dated 5 August 2008 which contained the confidential information the subject of various of the eight acts of misconduct cannot be taken to have been provided to and read by Mr Macdonald where Mr Macdonald’s signature does not appear in the version of those documents tendered in the trial.

1601. I am not able to accept that submission.

1602. The Crown did not seek to prove Mr Macdonald’s receipt of official documents by reference to TRIM, the electronic document management system used by the Department and the Minister’s office which was described by Mr Gibson as “an electronic record to record the comings and goings of all of those documents”. ^[1730]

1603. Mr Badenoch gave the following evidence:

Q. Just as far as you have mentioned that the Minister would read the documents even late at night during parliamentary sittings, just about the proportions of briefs, is it the case that the Minister would sign to indicate that he approved in 95% of cases of these briefings?

A. I think so, yes. I think that would probably be an accurate number. You have got to understand that any sort of issues have been ironed out between the policy adviser and the department prior to then so that hopefully what goes forward to the Minister is an appropriate reflection of Government policy and the desires that the Minister has communicated in the first instance. So, yes, 95% would be correct. ^[1731]

1604. The absence of Mr Macdonald’s signature on those documents is readily explained by the fact that as they appear in their tendered form as attachments to emails, for example, to Mr Gibson, in that form they had not yet been provided to Mr Macdonald.

1605. Insofar as Mr Gibson gave evidence of having provided various documents, including the Coutts Memorandum dated 5 August 2008, to Mr Macdonald in accordance with his duties as Mr Macdonald’s Deputy Chief of Staff, I am well prepared to accept that evidence as credible and reliable.

1606. With respect to the eighth act of misconduct, Mr Martin submitted the evidence cannot establish that Mr Macdonald received the Coutts Memorandum dated 5 August 2008. That submission is not strictly to point in light of the Crown’s amendment to that particular. I am satisfied, for the reasons provided above, that Schiavo Map 3 was provided to Mr Macdonald by Mr Gibson as part of a Ministerial Briefing document on 28 July 2008 and that the relevant page of the Coutts Memorandum was discussed at the 14 August 2008 meeting attended by Mr Macdonald.

1607. That being the case, for the reasons set out comprehensively above, I am satisfied the eighth act of misconduct is established.

The public launch of the EOI process and Monaro Mining NL is invited

1608. On 9 September 2008, Monaro Mining NL received a letter from the DPI enclosing the EOI Information Package and inviting Monaro Mining NL to participate in the EOI process. ^[1732] The following eleven small to medium coal release areas were included, being coincident with the areas included in Ms Moloney’s and Mr Schiavo’s maps:

1. Goonbri

2. Vickery South

3. Spur Hill

4. Mt Penny

5. Yarrawa

6. Glendon Brook

7. Long Mt

8. Ilford

9. Melrose

10. Cameron Road

11. Ben Bullen

1609. Mr Brook gave evidence that Mr Rampe informed him that Monaro Mining NL had received the invitation.

1610. The following day, the Monaro Mining NL monthly directors meeting was convened. Mr Rampe furnished an exploration report in advance of the meeting in which he informed the directors of “an approach by an employee of Lehman Brothers” who “purported to represent a group of Chinese coal companies who wished to acquire coal properties in the Hunter Valley region in New South Wales and is looking for an Australian company to tender for the projects on their behalf”. ^[1733] Mr Rampe also informed the directors that a new company, Monaro Coal P/L, had been incorporated and registered. ^[1734]

1611. The parties at trial did not explore with Mr Brook, Mr Rampe or Mr Grigor why the Board of Monaro Morning NL were informed, apparently for the first time, of Mr Brook’s “approach”, despite it being in mid-July 2008, or the basis for Mr Rampe’s reference to the group of “Chinese based coal companies”.

Dealings between Mr Brook, Monaro Mining NL and the Obeids following the collapse of Lehman Brothers

1612. On 15 September 2008, less than a week after the EOI process was publicly launched, Lehman Brothers entered Chapter 11 insolvency as a consequence of which Mr Brook’s employment was terminated. ^[1735]

1613. On 16 September 2008, Mr Brook met with Moses Obeid and informed him of the collapse of Lehman Brothers, explaining that he remained confident he could find a financial partner to support Monaro Mining NL’s bid for Mount Penny. ^[1736]

1614. On 22 September 2008, Mr Brook sent an email ^[1737] to Mr Yin of Tianci Inc, which contained the confidential information the subject of the eighth act of misconduct (which I have found is established – see pars 1588-1598 above). The second attachment to the email was an elaborated rendition of a document which Mr Brook again said had been provided to him by Moses Obeid. The document referred to the Mount Penny coal project as comprising in two stages. Stage One was expected to yield 100Mt of “high grade thermal coal”. Stage Two was expected to yield an additional 700Mt of “high grade thermal coal”. ^[1738]

1615. Mr Brook identified Stage One as “the anticipated initial exploration licence which was imminently going to be put up for tender, or had been, invited to by the DPI to Monaro” and Stage Two as “the anticipated contiguous area adjacent to the first stage”. ^[1739] He gave evidence that he had further dealings with Mr Yin after sending him that email including during his travels to Beijing in the following month.

1616. On 23 September 2008, Mr Brook, via his company Oregon Standard P/L, was appointed as consultant to Monaro Mining NL. The letter of appointment outlined Mr Brook’s role as providing the following services: to “identify suitable parties to joint venture with Monaro on tendering bids” to “assist with the negotiation of joint venture terms with each party” and to “oversee the tender process of each bid in co-ordination with Monaro and the joint venture parties”. ^[1740]

1617. Mr Brook explained the circumstances in which he negotiated with Monaro Mining NL for the appointment of Oregon Standard P/L as a consultant as follows:

When the news of Lehman Brothers entering into Chapter 11 became public, I met with Monaro and we agreed that obviously I was going to be out of a job but they wanted me to continue to work with the land alliance and them to try and find a financial partner because they had been invited to tender on the exploration licences. ^[1741]

1618. Mr Brook confirmed that under the consultancy agreement he was paid $25,000 per month for a period of three months. ^[1742]

1619. The letter of appointment also contained an exclusivity clause which I am satisfied was not honoured by Mr Brook in any respect. Mr Brook informed Moses Obeid that he intended to fulfil his obligations to Monaro Mining NL under the consultancy agreement but he would continue to act as an intermediary to try to broker a deal between the two parties and that he would keep him abreast of his activities under the agreement with Monaro Mining NL. Moses Obeid responded by indicating to Mr Brook if he was successful in finding a financial partner and consummating a deal with Monaro Mining NL, he would be “reward[ed] with a percentage of the transaction”. ^[1743] Mr Rampe and Mr Grigor gave evidence that they were unaware that Mr Brook was sending internal Monaro Mining NL communications to Moses Obeid or that he was offered “a reward” from the landowners behind Voope P/L.

1620. From 15 to 28 October 2008, Mr Brook travelled overseas to various destinations including Beijing. ^[1744] In a series of emails between Mr Brook, Mr Rampe and Mr Grigor between 16 to 18 October 2008, Mr Brook advised that “the bones of the deal will provide Monaro with enough money to pay the first $1m [part of the funding criteria under the EOI Process Information Package – see later at par 1673], the drilling program (circ $4m) and the land at circ $4m”. ^[1745] He gave evidence that the parties to the deal discussed in that email were Tianci Inc, Monaro Mining NL and the Obeid land alliance. ^[1746]

1621. Mr Brook also gave evidence that during that trip, he was in daily communication with Moses Obeid, updating him on his progress in endeavouring to attract potential Chinese joint venture partners. ^[1747]

1622. On 24 October 2008, in an email to Mr Rampe, Mr Brook wrote the following:

I have been in contact with the parties who control the subject land for what I call Stage One. It turns out that they are determined to acquire the remaining land under their own steam in anticipation of our project proceeding. Perhaps we should simply refer to the requirement to take an option over the land in the future (there are three owners by the way). ^[1748]

1623. Mr Brook rejected the proposition put to him by Mr Neil that it was not until 24 October 2008 that he was given information that any land not already owned by the “land alliance” would be purchased.

1624. On 26 October 2008, Mr Brook sent an email to Mr Xie copied to Mr Yin attaching the draft Memorandum of Understanding between Monaro Mining NL and an as yet unspecified “Chinese Partner” for the Mount Penny project. ^[1749] Mr Brook the forwarded that email and the attachment to Moses Obeid. ^[1750] He gave evidence that he did that consistent with his agreement with Moses Obeid that he would keep him informed of his progress in “trying to attract a financial or strategic investor” to support Monaro Mining NL’s application for the Mount Penny EL. ^[1751] He also evidence that he was the “main author of that document”. ^[1752]

1625. On 28 October 2008, Mr Brook sent an email to Moses Obeid which attached a document entitled “Mt Penny [MRO].pdf”. On the Crown case, that document is Monaro Mining NL’s draft EOI application for the Mount Penny Coal Release Area dated 10 October 2008. ^[1753] Mr Brook confirmed that he received the document from Mr Rampe and that he forwarded it to Moses Obeid, consistent with his agreement with him that he would keep him informed. ^[1754] Mr Rampe gave evidence that Mr Brook did not inform him of his intention to forward the draft application to anyone outside of Monaro Mining NL. ^[1755]

1626. On 19 November 2008, the Memorandum of Understanding with Tianci Inc was executed by Mr Rampe on behalf of Monaro Mining NL. ^[1756] Mr Brook gave evidence that the document was executed by an unknown person on behalf of Tianci Inc in his presence. ^[1757]

1627. Monaro Mining NL submitted its EOI application for the Mount Penny Coal Release Area on 21 November 2008. ^[1758] The application included an Additional Financial Contribution of $25 million. Mr Brook gave evidence that he was not involved in its drafting; nor was he involved in preparing earlier iterations of the EOI application. ^[1759]

1628. The (initial) EOI process closed on 24 November 2008. ^[1760]

1629. On 25 November 2008, Mr Rampe sent an email to Mr Grigor, copied to Mr Brook and Mr Bowman, which included a table identifying the applicants for each of the eleven coal release areas which had by that date been published by the DPI in accordance with EOI protocols. ^[1761] The Jain Group was identified as the only other applicant for Mount Penny. Approximately 30 seconds after receiving this email, Mr Brook forwarded it to Moses Obeid. In cross-examination Mr Brook confirmed that he did not seek permission from Monaro Mining NL to forward the email to Moses Obeid. He explained that “it was understood that I was relaying the information to the landholders”. ^[1762] Neither Mr Rampe nor Mr Grigor was aware that Mr Brook was communicating that information to the landholders alliance. ^[1763] Mr Rampe gave evidence that he knew Mr Brook was promoting “the project” to investors but that it was his expectation at the time that internal company documents would remain confidential. ^[1764]

1630. Also on 25 November 2008, Mr Brook prepared a document headed “Financing Partners’ Update”. ^[1765] He gave evidence that he prepared the document consistent with his obligations under the consultancy agreement with Monaro Mining NL to find potential financial or strategic partners to support Monaro Mining NL’s application for ELs under the EOI process and that he was updating his “client” as to his progress “with respect to each particular licence which was being put up by the DPI”. ^[1766] He gave evidence the financing partners at the time, for whom the document was prepared, were “a number of Chinese parties” including Tianci Inc. ^[1767] Mr Brook gave copies of the document to Monaro Mining NL and Moses Obeid. ^[1768] He attributed the reference in the document to “initial discussions with the three individual owners that make up between them circa 75% of the subject area” to information provided to him by Moses Obeid that the “initial discussions with three individual owners indicated they will form a land alliance”. ^[1769]

1631. On 26 November 2008, another Monaro Mining NL directors meeting was convened. ^[1770] The directors were advised, inter alia, of the nonbinding Memorandum of Understanding with Tianci Inc. The file note of the meeting indicated that it was represented to the directors that Mr Brook was “very confident” that Monaro Mining NL would be “granted an exploration licence for the Mt Penny release area”. ^[1771]

1632. On 8 December 2008, Mr Rampe sent Mr Grigor and Mr Brook a file note of a meeting convened at Monaro Mining NL on 3 December 2008. ^[1772] Mr Brook confirmed that he attended that meeting with Mr Kaidbay. He said that prior to the meeting, he met with either Moses Obeid or Paul Obeid. Mr Rampe’s file note indicates that Mr Brook advised Monaro Mining NL that he would assess the Jain Group’s suitability for a joint venture with Monaro Mining NL and that “one or more of the Mt Penny property owners, together with other 3^rd parties are interested in providing Monaro with the initial DPI funding”. ^[1773] Mr Brook gave evidence he made that offer on the strength of Moses Obeid’s suggestion that, in the event that Monaro Mining NL was unable to fund the entirety of the Additional Financial Contribution of $25 million, ^[1774] he and his “associates” might be able to provide that funding. ^[1775]

1633. On 9 December 2008, Mr Brook prepared a document headed “Investment Opportunity” which stated that Monaro Mining NL was “shortlisted for Mt Penny and an EL is expected to be granted in January 2009”. ^[1776] Mr Brook gave evidence that he authored the first three paragraphs, with the balance of the document being “extracted with permission” from Monaro Mining NL’s EOI for Mount Penny. ^[1777] Mr Brook showed the document to prospective financial partners.

1634. In January 2009, an internal Monaro Mining NL “Monthly Exploration Status Report’ was prepared by Mr Rampe and distributed to the Board. ^[1778] The Report indicated Mr Brook had advised Monaro Mining NL that its proposed Additional Financial Contribution was “on track” and was “significantly ahead of its competitors”. ^[1779] Mr Brook further advised that Monaro Mining NL was “likely to be advised of the result of its application within approximately two weeks”. ^[1780] Mr Brook gave evidence he had not seen other applicants’ bids and that he did not recall telling Monaro Mining NL that its proposed Additional Financial Contribution was “significantly ahead” of other bids. ^[1781]

1635. From 4 to 27 January 2009, Mr Brook visited various overseas destinations, including India and London, continuing his efforts (unsuccessful in the end result) to secure financial backing for Monaro Mining NL’s bid for the EL at Mount Penny. ^[1782]

The reopening of the EOI process and the ninth act of misconduct

1636. On 9 January 2009, the Department formally reopened the EOI process, with the updated closing date of 16 February 2009. ^[1783] The events which followed are relevant to the ninth act of misconduct which was particularised as follows: ^[1784]

Between 27 November 2008 and 13 January 2009, Macdonald communicated to Edward Obeid and/or Moses Obeid that the EOI process was to be (or was) reopened to allow the ‘White Group’ of companies (including Cascade Coal) to apply. He did so in breach of his duty of impartiality, as he knew the Obeid family owned property in a location included in the EOI (ie Mt Penny), and in breach of his duty of confidentiality as this information was confidential.

1637. It is also the Crown case that between 27 November 2008 and 13 January 2009, Edward Obeid and/or Moses Obeid received information from Mr Macdonald that the EOI process was to be (or was) reopened to allow the “White Group” of companies (including Cascade Coal P/L, the company with which the Obeids ultimately entered a joint venture) to apply, ^[1785] information which was then communicated by Moses Obeid to Mr Brook, then by Mr Brook to Mr Rampe, on or about “13 January 2009”. ^[1786]

The extension of the EOI process

1638. The circumstances surrounding the reopening of the EOI process was the subject of an interlocutory judgment in which I was satisfied the EOI process should be treated as a continuous event from 9 September 2008 (when it was publicly launched) to 16 February 2009 (when the reopened process closed), notwithstanding that the process was initially closed on 24 November 2008. ^[1787]

1639. It was reopened on 9 January 2009 after a number of companies who had not been invited to participate in the initial process had approached Mr Macdonald’s office and/or the DPI indicating their interest in submitting an application for the grant of an EL in respect of one or some of the eleven small to medium coal release areas. ^[1788] Dr Sheldrake and Mr Mullard both gave evidence to the effect that the request to reopen the EOI process came from Mr Macdonald and was not initiated by the DPI. ^[1789]

1640. On 21 and 25 November 2008, Mr Mullard sought Mr Fennell’s advice, as the external probity auditor, concerning reopening the EOI process. ^[1790] In the letter of 25 November 2008, Mr Mullard clarified that it was the Minister’s intention that the EOI process remain restricted to small or medium companies but opened up to allow more small to medium companies to apply. ^[1791]

1641. On 28 November 2008, in a letter to Mr Mullard, Mr Fennell approved the reopening of the EOI process. ^[1792] He also reviewed the revised EOI documentation. ^[1793]

1642. On 8 January 2009, a Ministerial Briefing ^[1794] was prepared by Mr Mullard. ^[1795] It addressed the following issue:

The initial Expression of Interest (EOI) for 11 coal areas closed on 24 November 2008. Prior to the closure of the EOI process the Minister was approached by additional small to medium companies that had not been invited to submit an EOI seeking an invitation to apply. ^[1796]

1643. The Ministerial Briefing recommended that the Minister note that the DPI was intending to exercise a delegation under the Mining Act to reopen the EOI process. ^[1797] A list of companies who had requested invitations for the extended EOI process was prepared by Ms Moloney ^[1798] and included as an annexure to the Ministerial Briefing: ^[1799]

List of companies requesting invitations to apply for the 11 Coal Release Areas Expression of interest

Mr Paul Page
Director
Arthur Phillip Pty Ltd
GPO Box 2537
SYDNEY NSW 2000

Mr Phil Suriano
Director
Real Brand Holdings
GPO Box 2537
SYDNEY NSW 2000

Mr Robert Crossman
Director
Griffin Coal
GPO Box G474
PERTH Western Australia 6000

Mr John Atkinson
White Energy Company Limited
PO Box 422
NORTH SYDNEY NSW 2059

Mr Neil Whittaker
Amerod Resources Limited
Level 5 Grafton Bond Building
201 Kent Street
SYDNEY NSW 2000

Mr Peter Meers
Chief Executive Officer
Tiaro Coal Limited
131 Macquarie Street
SYDNEY NSW 2000

Mr James McGuigan
Exploration Manager
Redman Mining Pty Ltd
GPO Box 2537
SYDNEY NSW 2000

Mr Richard Poole
Director
Cascade Coal
GPO Box 2537
SYDNEY NSW 2000

Mr A J Lodge
Consulting Mining Engineer
25 Glensanda Way
MINDARIE WA 6030

Mr Alan Hansen
Project Geologist
Resolve Geo Pty Ltd
PO Box 15723
CITY EAST QLD 4002

Mr Osamu Tano
Senior Manager
ITOCHU Mineral & Energy of Australia P/ L
GPO Box 4271
Sydney NSW 2001

Mr Geoff Stewart
GM Business Development
Hillgrove Resources Limited
Level 41 Australia Square Tower
264 – 278 George Street
SYDNEY NSW 2000

Ray Slater
Principal
Ray Slater & Associates P/L
9 Princeton St
KENMORE QLD 4069

1644. On 9 January 2009, the Department formally reopened the EOI process with Mr Macdonald’s approval. ^[1800]

1645. On that day, Mr Mullard sent a letter to Mr Rampe, as he did to other companies who had lodged an application under the initial EOI process, stating the following:

Prior to the closure of the original Expression of Interest process the Government and Department of Primary Industries had been approached by additional small to medium companies that had not previously contacted the Department of Primary Industries.

As a result the Government has made a change in policy relating to this current Coal Release Areas Expression of Interest and has decided to reopen the Expression of Interest to allow additional small to medium companies who have written to the Department of Primary Industries or the Minister to lodge an Expression of Interest for any of these eleven areas. ^[1801]

1646. Mr Mullard’s letter to Mr Rampe outlined the following options available to applicants in the original EOI process:

(a) maintain their original EOI for competitive evaluation

(b) revise/replace their original EOI with no additional lodgement fee required

(c) recall their original EOI with full refund of lodgement fee. ^[1802]

1647. The letter appointed the closing date for expressions of interest as “12 noon on Monday 16 February 2009”. ^[1803]

1648. Letters of invitation in the same terms were sent to each of the companies listed in the Ministerial Briefing. ^[1804]

1649. In email correspondence between James McGuigan (with an email signature bearing the name of the company Arthur Phillip Pty Ltd), John Atkinson (with an email signature bearing the name of the company White Energy Pty Ltd) and others on 14 January 2009, James McGuigan outlined the information contained in the invitation he received from the Department to participate in the reopened EOI process. By reply email, Mr Atkinson informed James McGuigan that “White Energy received an identical communication/invitation from the Department”. ^[1805]

1650. On 12 January 2009, in an email to Mr Grigor and other board members of Monaro Mining NL at 2:50pm, Mr Rampe (having apparently by that date been made aware of Mr Mullard’s letter of 9 January 2009) advised that the “Government has decided to re-open the tender process to accommodate additional players” with “[t]enders [to] close on 16th February”. ^[1806] Mr Rampe gave evidence he sent that email shortly after reading the letter from Mr Mullard in which he was informed that the EOI process had reopened. Although the letter was sent three days earlier, it appears he did not read it until 12 January 2009.

1651. In the ensuing correspondence with the Board, Mr Rampe indicated he expected to hear from Mr Brook in the next few days about the reopening of the EOI process.

1652. At 6:05pm that day, Mr Brook, who was in India exploring the prospect of the Jain Group as a potential investor in Monaro Mining NL’s bid for Mount Penny, ^[1807] indicated in an email to Mr Rampe (copied to Mr Grigor) “I have some colour surrounding the DPI letter”. ^[1808] He suggested that the matter be discussed on a conference call.

1653. Mr Brook gave evidence that the reference in his email to having “some colour surrounding the DPI letter” referred to the fact that he had called Moses Obeid and asked him whether he (Moses Obeid) knew “anything about” the reopening and, if not, whether he could “find out”. ^[1809] He said Moses Obeid responded by saying that “he didn’t know anything about it but he will reach out to his contacts and try and find out for me and get back to me”. ^[1810]

1654. Assuming Moses Obeid was telling him the truth when he said that he was unaware as at 12 January 2009 that the EOI process had been reopened, Mr Brook’s evidence undermines proof of the ninth act of misconduct in the sense that it cannot be the Crown case that Mr Macdonald informed Moses Obeid or Edward Obeid at any time between 27 November 2008 and 12 January 2009 that the EOI process was to be reopened to allow the “White Group” of companies to apply. If that was the case, Moses Obeid would have had that information to impart when Mr Brook made the enquiry of him on 12 January 2009.

1655. The only remaining basis upon which proof of the ninth act of misconduct might be open, is the alternate basis as particularised, namely that Mr Macdonald communicated to Edward Obeid or Moses Obeid that the EOI process was or had been reopened to allow the White Group in.

1656. As I understand the way the Crown puts its case on either of the alternate bases (that is, that the EOI process either would be or was reopened), it is not that Mr Macdonald provided the unsolicited information to Edward Obeid and Moses Obeid that the EOI process was to be reopened because he had asked that it be done, or that it had been reopened at his request. Rather, the significance of this act of misconduct is that Mr Macdonald provided what the Crown submitted was confidential information as to why the EOI process had reopened (namely to allow the White Group of companies, which included Cascade Coal P/L, to apply).

1657. According to Mr Brook, within 24 hours of him calling Moses Obeid on 12 January 2009, Moses Obeid told him “either by phone or Skype” that the EOI process had been reopened to “enable” a “party called the White Group” to “put in an offer, an expression of interest for the exploration licence over Mount Penny”. ^[1811]

1658. Mr Brook gave evidence that soon after that conversation a conference call was convened with Mr Grigor and Mr Rampe in which he explained that he had learned “via the landholders alliance… the party they knew as Voope” that “the DPI had reopened the expression of interest process for the ELs on Mount Penny to a party called the White Group”. ^[1812]

1659. Sometime in January 2009, Mr Rampe made an undated handwritten file note of a conference call with Mr Brook. ^[1813] There is a compelling inference the file note related to the call about which Mr Brook gave evidence. The final bullet point in Mr Rampe’s file note read “DPI wanted to extend bid time to allow “White Group””. ^[1814] Mr Rampe gave evidence that information came from Mr Brook and that it related “to the department's rejig of the expression of interest, as indicated on their letter of 9 January”. ^[1815] He also gave evidence that at the time of the phone call, he had not heard of the White Group. ^[1816]

1660. Mr Grigor recalled that, either during a phone conference with Mr Brook or on another occasion around that time, Mr Brook informed him that:

… there were a small number of loyal New South Wales based coal companies that for some reason, whether it be administrative error, whatever, didn't get an opportunity, they weren't informed of the bid process and they weren't invited to attend…

Q. … What did you know or understand to be the connection between those people or those companies not being invited to tender and the reopening of the tender, if anything, if those two things are connected in your memory and understanding?
A. It was a limited tender initially; you had to be invited to attend. ^[1817]

1661. Mr Grigor could not recall with any precision the identity of any of the companies invited to participate in the extended EOI process beyond the name “White River”. ^[1818]

Is the ninth act of misconduct established?

1662. Although I am satisfied that the lines of communication enquiring as to the reason for the reopening of the EOI process discussed above (including an enquiry Mr Brook made of Moses Obeid) provides the basis for a compelling inference that the information Moses Obeid relayed to Mr Brook sourced from Mr Macdonald, several problems attend proof of the ninth act of misconduct as particularised.

1663. Mr Rampe’s evidence was to the effect that he read the letter from the DPI advising of the reopening of the DPI on 12 January 2009 and that Mr Brook made his enquiry of Moses Obeid about the reopened EOI process after being informed of that development by Mr Rampe. By 6.05pm that day, Mr Brook indicated to Mr Rampe and Mr Grigor he had information about the reopening of the EOI process, information which, in his evidence, he said came from Moses Obeid. ^[1819]

1664. Accepting that evidence, there was a very narrow window of opportunity on 12 January 2009 for Mr Macdonald to have provided the information (either solicited or unsolicited) about the reason for the reopening of the EOI process to Moses Obeid, in order for Moses Obeid to have relayed that information to Mr Brook, and finally for Mr Brook to have relayed that information to Mr Rampe and Mr Grigor.

1665. There is no evidence of email or phone contact between Moses Obeid and Mr Brook on 12 January 2009. ^[1820] Although Mr Brook gave evidence that Moses Obeid typically contacted him “either by phone or Skype” to inform him about the EOI process reopening, ^[1821] the Telephone Summary tendered by the Crown does not include data as to Skype communication. ^[1822] Furthermore, Mr Brook had a “UK number” in 2009. ^[1823] The four phones owned and operated by Mr Brook (data about which is included in the Telephone Summary) were part of Australian mobile networks and had Australian subscriber addresses. ^[1824] It follows that, as Mr Brook was in India during the relevant period in January 2009, ^[1825] he may have used a mobile phone in his communications with Moses Obeid at that time which was not included in the Crown’s Telephone Summary.

1666. Even were the necessary communications between Mr Brook and Moses Obeid on 12 January 2009 established, the evidence as to contact between the accused on that date presents a separate challenge to proof of the ninth act of misconduct. On 12 January 2009:

1. Edward Obeid called Moses Obeid at 6:57am for 30 seconds.

2. Mr Macdonald called Edward Obeid at 7:10am for 1 minute.

3. Edward Obeid called Mr Macdonald at 7:11am for 30 seconds.

4. Edward Obeid left a voicemail for Moses Obeid at 6:08pm for 19 seconds.

5. Moses Obeid sent Edward Obeid a text message at 7:16pm. ^[1826]

1667. Although there is an available inference that Moses Obeid conveyed to Edward Obeid Mr Brook’s enquiry about the reopening of the EOI process, and that Edward Obeid had the opportunity to convey that enquiry to Mr Macdonald ((1) to (3) above), there is no evidence of direct contact between Mr Macdonald and Moses Obeid and there is no evidence that Edward Obeid could have conveyed the information the subject of the ninth act of misconduct (having been provided that information by Mr Macdonald) to Moses Obeid such that he could have conveyed that information to Mr Brook prior to Mr Brook’s email to Mr Rampe and Mr Grigor at 6:05pm, Mr Brook’s email preceding that voicemail message by three minutes.

1668. In those circumstances I am unable to reason confidently to the conclusion that there was sufficient opportunity for information as to why the EOI process was reopened to travel along the line of communication contended for by the Crown. In the result, I am not satisfied that the ninth act of misconduct, as particularised, is established.

1669. Having found that the ninth act of misconduct as particularised by the Crown is not established, the question whether it constituted a breach of Mr Macdonald’s duties and obligations of confidentiality and impartiality do not arise.

1670. The evidence adduced in support of the ninth act of misconduct remains significant in proof of the Crown case. It provides the context in which Moses Obeid commenced negotiations with Cascade Coal P/L in circumstances where, to that point, he had doggedly pursued a joint venture with Monaro Mining NL, the company Mr Brook had identified as the most viable corporate candidate for a mining deal with the Obeid family and the company Moses Obeid had the gathering expectation would be awarded the EL for Mount Penny having utilised confidential information provided by Mr Macdonald in breach of his Ministerial duties and obligations to advance that prospect, including, perhaps most significantly, the uses to which Mr Brook sought to put the information the subject of the eighth act of misconduct.

1671. Moses Obeid’s direct approach to Cascade Coal P/L in 2009 was not made solely in the context of the EOI process reopening, but in circumstances where it had become increasingly clear that Mr Brook had failed to attract investors, with the result that Monaro Mining NL would be unable to meet its obligations to pay the Additional Financial Contribution of $25 million in accordance with the EOI criteria, were it the preferred applicant for the grant of an EL at Mount Penny.

Monaro Mining NL’s Additional Financial Contribution (AFC)

1672. The Mount Penny Coal Allocation Area was, by reason of its size, location and potential coal resource, a “small area unrelated to existing mines”, within the fourth subcategory under the Coal Allocation Guidelines. ^[1827] The Coal Allocation Guidelines provided indicative financial contributions referable to the type (open cut or underground), quality (export or domestic) and size of coal deposit. ^[1828]

1673. The EOI Information Package publicly released on 9 September 2008 replicated the indicative financial contributions in the Coal Allocation Guidelines, specifying the requirements for a “one off payment by the successful applicant/s” ^[1829] for each of the eleven small to medium coal allocation areas the subject of the EOI process. ^[1830] A minimum financial contribution of $1 million was indicated for the Mount Penny Coal Release Area as a contribution to the Department’s Coal Development Fund. It was required to be paid within 30 days of the Minister granting consent to apply for a new EL. ^[1831]

1674. The EOI Information Package also included the evaluation process and the role of the Evaluation Committee in that process:

The Director-General of the Department of Primary Industries will make recommendations to the Minister in relation to the awarding of exploration licences following completion of the evaluation process for the eleven (11) release areas.

The Department of Primary Industries will establish an evaluation team from experts on its staff and elsewhere in government. The team will evaluate the Expressions of Interest using a consistent process approved by an independent probity auditor. The auditor will review compliance of the evaluation process by the evaluation team prior to the submission of recommendations to the Director-General. This process will ensure the highest levels of consistency, fairness and probity are achieved. ^[1832]

1675. The Evaluation Committee was comprised of Mr William Hughes, Ms Julie Moloney and Mr Ado Zanella. There is some opacity in the evidence about the precise process by which the Evaluation Committee was appointed. Mr Kevin Fennell was the appointed External Probity Officer.

1676. The EOI Information Package also provided that the “evaluation team’s assessment will be based on the Evaluation Criteria”. ^[1833] The “Evaluation Criteria” were identified under the following subheadings:

1. Exploration, Mine Development, Infrastructure and Financial Contribution

2. Overall Benefits

3. Programs of Work

4. Indicative Timeframe

5. Technical Competence

6. Financial Qualifications

7. Other ^[1834]

1677. In reference to “Financial Contributions”, the Information Package provided that in addition to the “one off” financial contribution the successful applicant was required to pay ($1 million for Mount Penny), “applicants may nominate additional financial contributions”. ^[1835] Mr Hughes gave evidence that AFCs were “one of the more important” criteria the Evaluation Committee considered. ^[1836]

1678. Monaro Mining NL’s application for the Mount Penny Coal Release Area on 13 February 2009 included the following costs to be paid “upon granting of consent”: ^[1837]

Assessment Fee         $10,000

EL Application Fee         $51,000

Security Bond            $10,000

DPI Development Fund      $1,000,000

Added Financial Contribution      $25,000,000

Total               $26,071,000

1679. The application went on to note:

The financial obligation upon the granting of development approval for any future mine proposal cannot be determined at this stage. However, the Company and its partners are aware of the provisions of Clause 8 of the tender information provided by the Department of Primary Industries. ^[1838]

1680. The application also stated that Monaro Mining NL relied on an executed Memorandum of Understanding with Tianci Inc, described as “a large industrial energy end-user” located in China, for funding, together with “strong support” from Far East Capital Limited and BGF Capital Group Limited who, it was stated, would “provide funding if necessary”. ^[1839]

1681. How the figure of $25 million was arrived at for the AFC was the subject of limited evidence in the trial, including whether it was an ambit offer or a figure conscientiously calculated by Mr Rampe or Mr Grigor with the knowledge and approval of the Monaro Mining NL Board. Mr Bowman gave evidence he advised Mr Grigor that an AFC of $20 million “would win” the Mount Penny EL for Monaro Mining NL. ^[1840] He did not give evidence as to how the final figure of $25 million was reached.

1682. Mr Brook gave evidence that either Mr Grigor or Mr Rampe sought his advice as to the quantum of the AFC which should be offered but which he was unable to provide. Mr Brook gave the following evidence as to how the figure of $25 million was fixed:

My recollection is there was further conversation about the financial contribution and it was either Mr Rampe or Mr Grigor were basing their numbers, to my recollection, on a precedent set by a mine or a resource called Watermark that had transpired in the previous, I think, 18 to 24 months and they were basing their numbers on what occurred in that transaction and that was not a transaction to which I was familiar. ^[1841]

1683. In cross-examination, Mr Rampe gave the following evidence:

Q. Did Mr Brook provide you with any advice as to the amount of the additional financial contribution that was offered in respect of Mount Penny, namely $25 million?

A. I’m not sure that came from him anyway… My recollection is that the Government issued a number of… principles for which included contributions to be made, whether it was fees or rents or contributions, and that larger contribution was based on our understanding of what the project might be worth after it was developed or during the course of its being developed. ^[1842]

1684. As to Monaro Mining NL’s capacity to pay the AFC, Mr Grigor gave evidence he was satisfied the Monaro Mining NL was capable of raising the $25 million, albeit over time. ^[1843] Mr Brook gave evidence he “expressed confidence” to Mr Grigor that he “could raise money”, and that he expressed the same level of confidence to Moses Obeid and Paul Obeid. ^[1844]

1685. Mr Rampe gave the following evidence:

Q. Did you have any understanding with Mr Brook as to whether it was part of his role to try and find finance for the project, including the additional financial contribution?
A. Correct, yes.

Q. But he failed, did he not?
A. Yes.

Q. He initially, did he not, represented to you that he could raise some money from Lehman Brothers?
A. Correct.

Q. And that failed, correct?
A. Correct.

Q. Did he then say he could get some money from the Chinese?
A. Correct.

Q. And he went off to China, correct?
A. Correct.

Q. That failed, correct?
A. Correct.

Q. And did he say he could do a joint venture in India?
A. Correct.

Q. And that failed?
A. Correct.

Q. And he came up empty‑handed every time, correct?
A. Correct.

Q. Did you form a view, after he had come up empty‑handed every time, that he had misled you from time to time?
A. Perhaps he was a supreme optimist. ^[1845]

1686. That evidence does not provide a satisfactory answer to the question why Monaro Mining NL’s AFC for Mount Penny was so large, particularly taking into consideration the fact that its offer was well in excess of the AFCs it nominated for other small to medium coal release areas in relation to which it also submitted EOI applications.

1687. Monaro Mining NL was recommended by the Evaluation Committee as the preferred applicant for the allocation of Yarrawa, Long Mountain and Ben Bullen, together with Mount Penny. ^[1846] Monaro Mining NL nominated AFCs in respect of those areas in the following terms:

1. In respect of Yarrawa, a minimum financial contribution of $150,000 was required to be paid by the successful applicant. ^[1847] Monaro Mining NL’s EOI application provided for an AFC in the amount of $2 million. ^[1848]

2. In respect of Long Mountain, a minimum financial contribution of $100,000 was required to be paid by the successful applicant. ^[1849] Monaro Mining NL’s EOI application provided for an AFC in the amount of $300,000. ^[1850]

3. In respect of Ben Bullen, a minimum financial contribution of $300,000 was required to be paid by the successful applicant. ^[1851] Monaro Mining NL’s EOI application provided for an AFC in the amount of $150,000. ^[1852]

1688. When that evidence is considered, it is clear beyond question that the AFC of $25 million nominated by Monaro Mining NL for the Mount Penny Coal Allocation Area is anomalous, being 25 times the minimum financial contribution of $1 million nominated for that area.

Cascade Coal P/L submits an application for Mount Penny in the reopened EOI process

1689. As noted earlier, the initial EOI process closed on 24 November 2008 ^[1853] but reopened on 9 January 2009 ^[1854] with 16 February 2009 specified as the new closing date. ^[1855]

1690. On 13 February 2009, Monaro Mining NL confirmed it relied upon its application for “Mount Penny” as previously submitted which included the $25 million AFC. ^[1856]

1691. On 16 February 2009, Cascade Coal P/L submitted an application for the grant of an EL at Mount Penny. ^[1857] It confirmed its preparedness to pay the Minimum Financial Contribution of $1 million. As concerns an AFC, Cascade Coal P/L’s application read as follows:

In addition to the above financial obligations once the relevant mine development plans have been determined the proponent will commit to negotiate with the government in relation to an additional contribution which will be dependent on the scale and scope of the resource and mine development. These negotiations would be in accordance with the Departments “Guidelines for Allocation of Future Coal Exploration Areas” as described in Table 2 of the EOI Information Package. ^[1858]

1692. As with the initial EOI process, the DPI published the applicants for each of the eleven areas. The applicants for Mount Penny were Monaro Mining NL, the Jain Group, Cascade Coal P/L and Breaksphere Coal Mines P/L. ^[1859]

1693. The Evaluation Committee did not convene prior to the conclusion of the extended EOI process. ^[1860]

Post-conspiracy period

1694. It is the Crown case that although the object of the conspiracy had been fulfilled by 31 January 2009 as framed in the indictment, Mr Brook’s dealings with members of the Obeid family and Monaro Mining NL continued after that time.

1695. On 13 March 2009, in an email to Mr Rampe, Mr Brook advised that Monaro Mining NL should write to the Department to request that, should Monaro Mining NL be successful in respect of its bid for Mount Penny, the EL should be issued to Monaro Coal P/L. ^[1861] Mr Brook gave evidence that a “cleanskin SPV vehicle under the name of Monaro Coal” would be a more appropriate entity to hold any EL that might be granted to Monaro Mining NL in order to ensure the corporate integrity of that entity and avoid “legacy problems or activities” associated with Monaro Mining NL. ^[1862]

1696. On 25 March 2009, Mr Brook forwarded to Moses Obeid an email sent to him by Mr Rampe which contained drill hole data for the Mount Penny Coal Release Area. ^[1863] Mr Rampe’s email was responsive to a request from Mr Brook for that information. Mr Brook gave evidence that he provided that information to Moses Obeid because he had asked Mr Brook if he “could ask Monaro if they had such data”. ^[1864]

1697. On 29 April 2009, at a Monaro Mining NL directors meeting, Mr Grigor was removed as Chairman. He immediately resigned as Director. ^[1865]

1698. According to the minutes of the directors meeting, ^[1866] Mr Grigor’s removal as Chairman occurred in the context of discussion by the directors as to the issue of capital raising. Mr Grigor reported that he was not confident that Mr Brook could complete the necessary capital raising to meet “the DPI licence fees” and that, on that basis, the Board could not leave the solvency and fate of Monaro Mining NL in Mr Brook’s hands. Mr Grigor also expressed the view that Monaro Mining NL needed to urgently raise funds and could not act on the assumption that the coal ELs would be granted. Shortly thereafter, Mr Malone proposed that Mr Grigor be removed as Chairman because, inter alia, he (Mr Malone) had not been “kept properly informed on the coal issues throughout the process by Mr Grigor and Mr Rampe”. ^[1867]

1699. Mr Brook gave evidence that he learnt of Mr Grigor’s removal as Chairman via an alert on Reuters or Bloomberg while he was in London. He immediately contacted Moses Obeid and said “Warwick’s been axed” to which Moses Obeid replied with “an expletive… and we both expressed concern”. ^[1868]

Moses Obeid meets with representatives of Cascade Coal P/L

1700. On Mr Brook’s return to Australia, he met with Moses Obeid who informed him that he had “met the people from Cascade Coal”. ^[1869] Mr Brook said that Moses Obeid named Travers Duncan, John McGuigan and Brian Flannery in that connection. He said Moses Obeid described them as “billionaires” who are “experts in coal”. ^[1870] It is clear from other evidence that by 20 May 2009 Moses Obeid already knew John McGuigan (who had been appointed as a director of Cascade Coal P/L on 19 February 2009 ^[1871] ) with whom he had discussed an unrelated venture. ^[1872] Mr Brook gave evidence Moses Obeid told him “he had already spoken with them, he was dealing with Mr Brian Flannery directly and that they had pretty much nailed out the broad terms of their participation at the mining level on a potential resource at Mount Penny” and had “in principle agreed” to a “25/75” or “30/70” split. ^[1873]

1701. Mr Brook gave evidence that he was “pleased” that Moses Obeid had “found [in Cascade Coal P/L] a financial partner with substance”, especially as Moses Obeid knew that Monaro Mining NL, “despite [Mr Brook’s] efforts, did not have the financial capacity”, ^[1874] and that with Mr Grigor’s removal as Chairman, there was concern about Monaro Mining NL’s ongoing viability as a joint venture partner. Mr Brook said Moses Obeid instructed him to “speak to” Monaro Mining NL and “see if they were willing to assign their EOI at the DPI to an entity that we could control or we could buy that entity”. ^[1875] Mr Brook also said that Moses Obeid wanted him to act for his family and that, under that instruction, he undertook to “speak to the Monaro directors immediately”. ^[1876]

The Evaluation Committee identifies an ambiguity in Monaro Mining NL’s application

1702. Meanwhile, on 29 April 2009, in an email to Mr Fennell, Mr Hughes indicated that the Evaluation Committee had met on 28 and 29 April 2009 and had completed its evaluation. Mr Hughes indicated he would prepare the report and recommendations for 12 May 2009. ^[1877]

1703. That process was interrupted by the Evaluation Committee’s detection of what was described in the evidence as an ambiguity in Monaro Mining NL’s application for Mount Penny with respect to the timing for the payment of the AFC of $25 million.

1704. On 14 May 2009, the Evaluation Committee was convened. ^[1878] Mr Hughes gave evidence that during that meeting, the Evaluation Committee identified that “ambiguity” which he described in the following terms:

Well, the ambiguity was we weren’t sure whether the words “upon granting of consent” meant upon the invitation to apply for the exploration licence as outlined in the booklet or whether they meant on grant of consent of the exploration licence itself. ^[1879]

1705. Mr Hughes’ understanding of the “ambiguity” is reflected in Mr Fennell’s handwritten file note of the 14 May 2009 meeting ^[1880] which reads relevantly as follows:

One problem with Monaro was discussed with Brad Mullard and Richard [Sheldrake] (CEO). Monaro claims to Will [Mr Hughes] that they assume that payment time for additional financial contributions can be negotiated with Govt – not so. The EOI document does not allow for any negotiation. It requires payment within 30 days of the award of a license [sic].

Brad [Mullard] and Richard [Sheldrake] agreed that the offers should go out as recommended by the Panel. Should Monaro renege on any of their 6 recommended areas, then Panel can reconvene and if appropriate, recommend the next ranked company. ^[1881]

1706. Mr Fennell gave evidence that the “ambiguity” was raised and discussed at the 14 May 2009 meeting as recorded in his handwritten note.

1707. Also on 14 May 2009, Mr Rampe sent an email to Mr Hughes stating Monaro Mining NL had assumed “that the added financial contribution of $25 million would be paid to the Government over a negotiated time frame”. ^[1882] Later that afternoon Mr Rampe advised the Board that he had been asked to attend a meeting with the DPI on 21 May 2009. ^[1883]

1708. Mr Brook confirmed that, around that time, he became aware “that there was at least some difference of views between Monaro and the DPI as to when the additional financial contribution would be payable”. ^[1884]

1709. After the Evaluation Committee’s meeting on 14 May 2009, Mr Hughes created a draft report entitled “Coal Release Areas Evaluation of Expressions of Interest” marked “confidential” and dated “May 2009”. ^[1885] The draft report stated the following:

An evaluation team from experts on the staff of the Department of Primary Industries and elsewhere in government has evaluated the EOI’s according to evaluation criteria specified in the Coal Release Areas EOI Information booklet, and using a consistent process approved by an independent probity auditor.

The Evaluation Team has examined the EOI’s in detail and has reached clear conclusions and recommendations in the presence of the independent probity auditor on 14 May 2009. ^[1886]

1710. The draft report indicated that of the four EOIs submitted in relation to Mount Penny, Monaro Mining NL’s submission was considered by the Evaluation Committee to be “far superior”. ^[1887] The draft report noted that the AFC of $25 million by Monaro Mining NL in relation to Mount Penny “far exceeded those of other EOI proposals”. ^[1888]

1711. The draft report recommended that “the Minister for Mineral Resources selects the above mentioned companies [including, relevantly, Monaro Mining NL in relation to Mount Penny] as the successful EOI applicants for the awarding of new Exploration Licences over the coal release areas for which they lodged a successful EOI”. ^[1889]

1712. The draft report did not mention the ambiguity detected by the Evaluation Committee in Monaro Mining NL’s application. The AFC nominated by Monaro Mining NL was described as being payable “on grant of an Exploration Licence”. ^[1890]

1713. On 15 May 2009 Mr Fennell issued further probity advice to Mr Hughes. ^[1891] Mr Fennell advised:

[T]he Evaluation Team followed approved procedures in its treatment of each expression of interest for the Various Coal Exploration Areas. Again, in my opinion each of the proponent’s [sic] submission was treated in a fair, equitable and impartial manner before the framing of the Team’s report and recommendation. ^[1892]

1714. Mr Mullard gave evidence that after the Evaluation Committee generated its draft report, the Committee raised with him “an ambiguity” in Monaro Mining NL’s EOI application ^[1893] relating to “the timing of payment of the additional financial contribution”. ^[1894] In particular, Mr Mullard recalled Mr Hughes telling him that Monaro Mining NL’s AFC “which is beyond the minimum … could be paid over a period of time”, not within “30 days of the part transfer for the release area”. ^[1895]

1715. Mr Mullard explained that the task then fell to the Evaluation Committee, deploying his advice, to “assess” whether Monaro Mining NL’s bid was “compliant… in the sense they hadn’t committed to paying the moneys within 30 days” as required in the EOI Process Information Package issued to Monaro Mining NL in September 2008. ^[1896]

1716. On 21 May 2009, a meeting was held at the DPI attended by Mr Mullard, Mr Hughes, Mr Rampe (and possibly Mr Brook, though none of the other attendees recalled his presence at that meeting). ^[1897]

1717. Mr Mullard gave evidence that the DPI “clarified” with Mr Rampe that the AFC would need to be paid within 30 days of granting consent and that the DPI needed Mr Rampe to confirm whether or not that was to be the case as soon as possible because otherwise its tender may prove to be “noncompliant”. ^[1898]

1718. Mr Hughes did not have a clear recall of this meeting but said the meeting would have been held to reinforce or restate the need for compliance with the EOI process. He gave further evidence that neither he nor Mr Mullard told Mr Rampe (or anyone else) where the Evaluation Committee had ranked the applications (including for Mount Penny) and confirmed that it would have been “quite wrong” to have revealed the Evaluation Committee’s consideration of the ranking of competitive tenders. ^[1899]

1719. After the meeting with the DPI, ^[1900] Mr Rampe emailed Mr Brook:

We need to nominate which projects we want to run with on the basis that all fees are paid in one lump sum… they want to be convinced we are serious contenders… If we say yes, we will get an official letter shortly thereafter inviting us to apply for a licence over the relevant area. The letter will advise us that we have 30 days to put up the cash. ^[1901]

Monaro Mining NL abandons its application

1720. On 22 May 2009, during the monthly Board meeting, the Board of Monaro Mining NL resolved to abandon the New South Wales Coal project, ^[1902] contingent upon Voope P/L outlining a “satisfactory mechanism for transferring any licences that may be awarded away from Monaro Mining”. ^[1903]

1721. Mr Rampe recalled participating in negotiations with Voope P/L, via Mr Brook, including that, as recorded in the minute of the 22 May 2009 directors meeting, that Voope P/L was to “reimburse Monaro’s expenses should it [Monaro Coal P/L] be successful in securing a coal licence”. ^[1904]

1722. A series of significant meetings were convened, variously attended by Mr Brook, Moses Obeid (and his brother), Mr Rampe on behalf of Monaro Mining NL, and the McGuigans on behalf of Cascade Coal P/L.

The Swissôtel Meeting

1723. Mr Brook recalled a meeting held with Mr Rampe at the Swissôtel. Mr Brook explained that this meeting was “fairly significant” ^[1905] and took place under “reasonably unusual circumstances” because “Moses and Paul Obeid wanted to observe me meeting with Mr Rampe so they sat within eyeshot, not earshot” in the lobby. ^[1906] He said that the Obeids met with him prior to Mr Rampe’s arrival. Moses Obeid instructed him to make an “offer of compensation” to Monaro Mining NL which could comprise either transferring the shares in Monaro Coal P/L or agreeing to sell the shares. Mr Brook understood he was to make it clear that Voope P/L was willing to compensate them for the costs they had incurred in applying for the EL at Mount Penny. ^[1907]

1724. Mr Brook gave evidence that he conveyed the offer of compensation in those terms to Mr Rampe, which he was “pleased” to hear. ^[1908] Mr Brook and Mr Rampe discussed the fact that “nothing could happen without the consent of the DPI”, so Mr Rampe indicated that he would “reach out” to the Department. ^[1909]

1725. Ultimately, after ongoing negotiations with Voope P/L including Monaro Coal P/L’s name change notionally to Royal Coal Pty Ltd, then Loyal Coal Pty Ltd (Loyal Coal P/L), ^[1910] on 9 June 2009, Mr Brook wrote to Mr Hughes on behalf of Loyal Coal P/L formally withdrawing Loyal Coal P/L’s application for the granting of an EL at Mount Penny, Glendon Brook and Spur Hill. ^[1911]

1726. In cross-examination, Mr Brook gave the following evidence about that company’s withdrawal:

Cascade knew we were going to pull out. I need to be clear about that. I didn't tell Monaro but Cascade knew that we would pull out. That if we got control of the Monaro expression of interest, that a condition of the Cascade/Buffalo transaction was that we would pull out and we would notify the DPI. So Cascade were aware… That was the basis to which we were meeting with Cascade in the first place, that we would ‑ that we would want ‑ we wanted ‑ myself and the Obeids wanted to do a deal with Cascade and we had to get control of the bid. And so Cascade were aware that we were going to get control of the bid. ^[1912]

1727. The Mount Penny EL was ultimately granted to Mt Penny Coal P/L, a wholly owned subsidiary of Cascade Coal P/L, on 21 October 2009. ^[1913] That evidence is set out at par 1754 and following below.

Were there further meetings between Mr Brook and Mr Rampe?

1728. Mr Brook gave evidence that another meeting could have occurred “before or after” the Swissôtel meeting, or indeed that it “may have been that conversation at the Swissôtel”. ^[1914]

1729. At the meeting so described by Mr Brook, Mr Brook explained to Mr Rampe that the landowners represented by Voope P/L still wanted to pursue the grant of an EL at Mount Penny and that Monaro Mining NL wanted to “withdraw any further participation or any further endeavours to achieve an exploration licence”. ^[1915] Mr Brook confirmed he had been unsuccessful in raising any money or finding a strategic partner ^[1916] and that he discussed with Mr Rampe the mechanism for Voope P/L to preserve its interest in the “Mt Penny project”, namely by taking over the bid which Mr Rampe made clear would have to be approved by the DPI It was agreed that an approach would be made to the DPI to see if that would be possible. ^[1917]

The first Cascade Coal P/L meeting

1730. On 18 or 19 May 2009, ^[1918] Mr Brook was introduced by Moses Obeid to John McGuigan and James McGuigan. Mr Brook gave evidence that “immediately before” the meeting commenced, Moses Obeid told him that he wanted him to negotiate the terms of the 25/75 or 30/70 split “to make sure” that the Obeids’ “interests were preserved in the joint venture agreement” with Cascade Coal P/L. ^[1919]

1731. At the meeting, Mr Brook represented, falsely, that he would be working with Monaro Mining NL as he had had “an element of success” in finding them a financial partner. ^[1920] Mr Brook also gave evidence that he represented, also falsely, that he had arranged a financial partner who was poised to support Monaro Mining NL’s bid, although for obvious reasons, since there was no partner, he did not disclose its identity. He also represented that he would also be representing the interests of Voope P/L, who would prefer to deal with Cascade Coal P/L than with Monaro Mining NL because, as he explained it, “from a potential suitor perspective”, Voope P/L preferred to work with a domestic company as opposed to a “foreign investor”, a necessary element of an arrangement with Monaro Mining NL. ^[1921]

1732. Mr Brook also represented that Voope P/L was prepared to offer Cascade Coal P/L the land that comprised the Mount Penny Coal Exploration Area in return for which it would expect a percentage of the future mining operation. Mr Brook gave evidence that John McGuigan took notes of the matters under discussion, which, in addition to those outlined above, included whether contributing equity or free carried equity would be embraced by the deal on the basis of a potential 100Mt coal resource.

1733. As noted earlier, as these negotiations progressed Monaro Mining NL was in the process of clarifying the AFC ambiguity with the DPI, the resolution of which would dictate whether its application for the grant of the EL at Mount Penny was compliant.

The second Cascade Coal P/L meeting

1734. Around 23 May 2009, a second meeting was convened, attended by Moses Obeid, Mr Brook and John and James McGuigan. ^[1922]

1735. Mr Brook gave evidence that at the end of that meeting it was agreed that he would orchestrate the withdrawal of Monaro Mining NL’s application for the Mount Penny EL. ^[1923]

1736. On 29 May 2009, in an email to Mr Brook copied to Moses Obeid, Mr Sindone provided a draft Deed of Release between Monaro Mining NL and Voope P/L dated June 2009. ^[1924] Moses Obeid forwarded that document to John McGuigan. ^[1925] Under the Deed of Release, Voope P/L and Monaro Mining NL mutually agreed to release each other from their obligations under the Share Option Deed (as varied). ^[1926]

1737. On 1 June 2009, the Deed of Release was partially executed between Monaro Mining NL and Voope P/L ^[1927] and the name of Monaro Coal P/L was changed to Loyal Coal P/L. ^[1928]

The third Cascade Coal P/L meeting

1738. Also on 1 June 2009, ^[1929] a third meeting was convened, also attended by Moses Obeid, Mr Brook, and John and James McGuigan. It is the Crown case that, at or after this meeting, John McGuigan drafted a document titled “Key principles” ^[1930] which outlined the broad terms of an agreement under which Cascade Coal P/L would acquire land from “the landowners” at a premium under a proposed “Landowners Agreement” in a joint mining venture. ^[1931]

1739. After the meeting, Mr Brook emailed James McGuigan to provide an email address to which Mr McGuigan could send the first draft of the joint mining agreement between the Obeid family and Cascade Coal P/L. ^[1932] He also outlined in the email what had transpired in the interim, namely, the steps he had taken to orchestrate the withdrawal of Monaro Mining NL’s bid for the Mount Penny EL.

1740. On that day, Moses Obeid and Mr Brook were in telephone contact at 7:50am (SMS) and 7:59am. Moses Obeid and Edward Obeid were in contact at 8:08am and 8:34am. Then Mr Brook and Moses Obeid were in contact at 8:59am (SMS), 9:55am, 10:14am (SMS) and 10:34am. Subsequently, Moses Obeid and Edward Obeid were in contact at 12:37pm and 1:50pm. ^[1933] The strong inference is that these communications concerned the currency of negotiations with Cascade Coal P/L.

1741. On 2 June 2009, an email exchange between Moses Obeid and James McGuigan, into which Mr Brook and others were copied, Buffalo Resources P/L was nominated as the entity to be used for the forthcoming joint venture. ^[1934] Mr Brook gave evidence that he and Moses Obeid discussed the incorporation of a new entity to enter into the agreement with Cascade Coal P/L on the basis that once Voope P/L had control of Monaro Mining NL’s (Loyal Coal P/L’s) application for the Mount Penny EL, they would withdraw the application and that “the cleanskin SPV” would be the entity who would contract with Cascade Coal P/L in the proposed joint venture. ^[1935]

1742. Together with Mr Brook, Mr Kaidbay and Mr Sindone were appointed Directors of Buffalo Resources P/L upon its registration on 3 June 2009. Eighty-eight of the 100 issued shares were held by Equitexx P/L (as Trustee for the Obeid Family Trust No 2). The balance of the shares was held by Mr Brook’s company, Warbie Pty Limited (Warbie P/L). Mr Brook gave evidence that he became a Director of Buffalo Resources P/L at the request of Moses Obeid and on the understanding that, in his capacity as Director, he would continue to “take instructions” from Moses Obeid. ^[1936] He also gave evidence that Moses Obeid nominated that he would be given a 12% entitlement “of the Buffalo Resources share in the joint venture with Cascade Coal”. ^[1937]

1743. James McGuigan’s return email to Moses Obeid on the same day at 3:09pm attached the Draft Letter of Agreement between Cascade Coal P/L and the landowners, named as UPG P/L (the putative owner of Cherrydale Park), Geble P/L (the owner of Donola), Coopers World P/L (the owner of Coggan Creek, as written) and a Letter of Agreement between Cascade Coal P/L and Buffalo Resources P/L (the Joint Venture agreement). I note that the name of Coopers World P/L was changed to Justin Kennedy Lewis P/L on 10 November 2008. ^[1938]

1744. Moses Obeid and Mr Brook were then in telephone contact at 3:26pm, 3:32pm and 4:52pm. Moses Obeid then contacted Edward Obeid at 5:08pm; on the Crown case, to update him on the negotiations with Cascade Coal P/L. Mr Brook contacted Moses Obeid at 5:14pm. Edward Obeid contacted Mr Macdonald at 5:34pm; ^[1939] on the Crown case, providing an opportunity to update Mr Macdonald as the negotiations with Cascade Coal P/L progressed.

1745. On 5 June 2009, a Letter of Joint Venture Agreement ^[1940] between Cascade Coal P/L and Buffalo Resources P/L was executed by Mr Brook (as Director of Buffalo Resources P/L ^[1941] ) and John McGuigan (as Director of Cascade Coal P/L ^[1942] ) setting out the terms of a joint venture between the two companies for the purpose of “exploring and developing the Mount Penny Coal Release Area”. ^[1943]

1746. As noted earlier, the agreement required that related parties of Buffalo Resources P/L (including Mr Brook and Loyal Coal P/L) withdraw existing applications over the Mount Penny Coal Release Area, in exchange for which, subject to the grant of the Mount Penny EL to Cascade Coal P/L or an affiliate company, Cascade Coal P/L agreed to vest 100% of its interest in the Mount Penny EL in the Joint Venture between Cascade Coal P/L and Buffalo Resources P/L. This ultimately occurred via the company Mt Penny Coal P/L which was intended to be the incorporated joint venture company contemplated in that letter. Cascade Coal P/L also agreed to grant Buffalo Resources P/L a 25% interest in the joint venture. The JV Agreement expressly contemplated the exploitation of the “contiguous area”. ^[1944]

1747. Pursuant to a Bare Trust Deed dated 5 June 2009, Buffalo Resources P/L (the Trustee) agreed to hold any interest it acquired in the Joint Venture with Cascade Coal P/L for the beneficiaries Warbie P/L (12% share) and Equitexx P/L (88% share). ^[1945]

1748. Also on 5 June 2009, the Landowners Letter of Agreement ^[1946] was signed by John McGuigan on behalf of Cascade Coal, Mr Kaidbay on behalf of UPG P/L (ostensibly as the owner of Cherrydale Park), Mr Campo on behalf of Geble P/L (owner of Donola), and Mr Lewis on behalf of Justin Kennedy Lewis P/L (owner of Coggan Creek). Mr Brook was not involved in negotiating this document. The evidence indicates it was negotiated by Moses Obeid with the Cascade Coal P/L representatives.

1749. The Landowners Agreement provided that subject to the grant of the Mount Penny EL, Cascade Coal P/L would purchase the three properties for four times their value, based upon the respective improved value of each property as at 1 June 2009. This was the subject of a detailed Put and Call Agreement in November 2009.

1750. On 9 June 2009, Mr Brook emailed Mr Hughes at the Department requesting that the Loyal Coal P/L’s application for the EL at Mount Penny be withdrawn. The email attached an unsigned letter “for and on behalf of” Loyal Coal P/L. On the same day, Mr Brook forwarded a copy of that letter to Cascade Coal P/L’s directors stating “please see below and attached withdrawal in accordance with our agreement”. ^[1947]

1751. On 10 June 2009, Mr Brook emailed Mr Hughes at the DPI, copying Mr Rampe, advising that Loyal Coal P/L had withdrawn its application due to its inability to confirm the requisite level of financing to meet its obligations to pay the AFC. ^[1948]

1752. Following the withdrawal of Loyal Coal P/L on 9 June 2009, on 10 June 2009, in an email to Mr Zanella and Ms Moloney, Mr Hughes advised that the Evaluation Committee would need to reconvene “in light of the withdrawal of submissions by one of the participants in the process”. ^[1949] In a separate email to Mr Fennell, Mr Hughes advised “[i]t appears one of the parties recommended, by the panel in its report, has withdrawn some of its submissions”. ^[1950] He suggested the panel reconvene on 18 June 2009.

1753. On 18 June 2009, the Evaluation Committee reconvened. ^[1951] Mr Fennell made a handwritten file note that meeting. ^[1952] He gave evidence that, in the Evaluation Committee’s assessment, referable to the evaluation criteria, the “next best” applicant for Mount Penny was Cascade Coal P/L. ^[1953] Cascade Coal P/L had submitted its EOI for Mount Penny on 16 February 2009. ^[1954]

The Evaluation Committee’s decision in respect of the Mount Penny Coal Release Area and the grant of the EL

1754. The final report of the Evaluation Committee was dated June 2009. ^[1955] The final report lists four companies as having submitted an EOI in relation to Mount Penny:

1. Jain Group

2. Cascade Coal Pty Limited

3. Breakspheare Coal Mines Ltd

4. Monaro Mining NL ^[1956]

1755. Under the heading “Conclusion and Recommendation”, the final report stated that the EOI received from Cascade Coal P/L was selected as the successful EOI applicant for Mount Penny, being “clearly superior to the other EOIs received in terms of the evaluation criteria”. ^[1957]

1756. Mr Hughes gave evidence he prepared and signed the Evaluation Committee’s final report, ^[1958] “taking into account events which had occurred in the interim”. ^[1959]

1757. On 18 June 2009, a Director-General Submission entitled “Coal Release Exploration Areas – Expression of Interest Recommendation” prepared by Mr Hughes was issued to Dr Sheldrake. ^[1960] The Submission states, inter alia, that the EOI application received from Cascade Coal P/L for Mount Penny, “including additional financial contributions proposed on grant of an Exploration Licence”, was “clearly superior to the other EOIs received in terms of the evaluation criteria”. ^[1961]

1758. Dr Sheldrake’s handwritten note on the face of the document, dated 19 June 2009, stated the following:

Recommendations of the Evaluation Team are accepted. Accordingly letters are to be despatched to the successful + unsuccessful tenderers. ^[1962]

1759. On 19 June 2009, in a letter from Dr Sheldrake, Cascade Coal P/L was informed that it was the successful application for the Mount Penny EL. ^[1963]

1760. At 11:24am on 25 June 2009, James McGuigan advised Mr Brook by email that the DPI had advised by letter that Cascade Coal P/L was successful in respect of the tender for the Mount Penny (and Glendon Brook) Coal Release Areas ^[1964] and invited them to apply for an EL over those areas. Mr McGuigan sent the same letters by email to Moses Obeid at 11:30am. The body of the email read: “Mo, As discussed. Good work. Look forward to a beer tomorrow.” ^[1965]

1761. On 22 July 2009, Dr Sheldrake exercised the delegated power under s 13 of the Mining Act to grant consent to Cascade Coal P/L lodging an application for the issue of an EL at Mount Penny. ^[1966]

1762. On 21 August 2009, Mt Penny Coal P/L was registered. Richard Poole, John McGuigan and John Atkinson were appointed directors. Cascade Coal P/L held 100% of the shares issued in Mount Penny Coal P/L. ^[1967]

1763. On 24 August 2009, Cascade Coal P/L submitted an application for the Mount Penny EL, requesting that it be granted to the entity Mt Penny Coal P/L, a wholly owned subsidiary of Cascade Coal P/L. ^[1968] The Mount Penny EL was issued to Mt Penny Coal P/L on 21 October 2009. ^[1969]

1764. In September 2009, Mr Brook began negotiating his divestment from the Mount Penny joint venture by the sale of Warbie P/L’s 12% interest. Following a series of emails with Mr Poole, the Chairman of Cascade Coal Pty Ltd, and a meeting on 8 September 2009, ^[1970] a figure of $1.75 million was agreed to. ^[1971]

1765. By late September 2010, an undated but otherwise executed Deed of Release between Warbie P/L, Mr Brook, Southeast Investment Group Pty Limited (Southeast Investment Group P/L) and Coal & Minerals Group Pty Limited (Coal & Minerals Group P/L), of which Mr Poole was director, divested Mr Brook from the balance of his interest in the joint venture with Cascade Coal P/L. ^[1972] As to the details of those contractual arrangements see par 1781 and following below.

1766. Mr Brook’s divestment from the joint venture brought an end to his dealings with Moses Obeid and the mining companies.

Mr Brook’s credibility and reliability

1767. I return to the concerns I have earlier expressed about Mr Brook’s reliability and credibility.

1768. In his cross-examination of Mr Brook, Mr Neil sought to characterise him as a notoriously dishonest individual. Mr Brook accepted that he dishonestly misrepresented the quality of his tertiary qualifications to Moses Obeid by claiming he was a graduate of the University of Chicago Booth School of Business. ^[1973] He also accepted he published a false curriculum vitae and would, on occasions, make false statements in the context of trying to persuade a person or organisation to do business with him. ^[1974]

1769. He also admitted that he (more than likely) told deliberate lies to the Winslow Clinic when he told them he had stopped drinking alcohol as at 13 October 2012 since his problematic drinking continued well after that date. ^[1975] He also agreed that whilst he was under the influence of alcohol (which he accepted was frequent to the point of chronicity during the course of his dealings with Moses Obeid - and it must be assumed in the course of his dealings with Mr Rampe, Mr Grigor and Cascade Coal P/L) he quite often told deliberate lies.

1770. He also agreed in cross-examination that he might have been drunk during the course of at least one of the Wentworth Hotel meetings. He did not, however, admit to telling any lies in either of the meetings; neither was it put to him that he did.

1771. Mr Brook claimed in his evidence that at least until the collapse of Lehman Brothers in September 2008 he was acting at all times consistently with his fiduciary obligations as a senior employee of that company. However, despite his proposal that Monaro Mining NL and Lehman Brothers engage in a joint venture being soundly rejected by Lehman Brothers as at 23 July 2008 ^[1976] and, as I have observed, it was neither reformulated nor resubmitted, he proceeded to continue to deal with Monaro Mining NL after that date, ostensibly on Lehman Brothers’ behalf, without informing Monaro Mining NL that Lehman Brothers had rejected his proposal. ^[1977] I note he also introduced himself as a representative of Lehman Brothers when he was invited by Moses Obeid to attend the meeting with Mr Rumore on 23 July 2008. ^[1978] While that was obviously done with Moses Obeid’s knowledge, it does, to my mind, raise questions as to the capacity in which Mr Brook continued to act in brokering an arrangement between Moses Obeid (ostensibly representing the “landowners alliance” but in reality representing the Obeid family) on one hand and Monaro Mining NL as the applicant for the grant of an EL at Mount Penny on the other, from that date until 15 September 2008 when Lehman Brothers collapsed.

1772. I have very considerable difficulty accepting the truth of Mr Brook’s account that he was at all times until Lehman Brothers collapsed acting within the scope of his authority as Senior Vice President and not positioning himself to secure a secret commission (promised or not) from Moses Obeid without informing his employers.

1773. In my view, Mr Brook was, at all times in his dealings with various individuals and entities the subject of his evidence at the trial, motivated to secure the best possible financial outcome for himself as he endeavoured first to broker an arrangement between Moses Obeid (ostensibly representing “the landowners”) and Monaro Mining NL despite the obvious and dwindling prospects of attracting a financial investor to back Monaro Mining NL’s bid, and then as he negotiated the withdrawal of Monaro Mining NL’s bid and the entre of Cascade Coal P/L as the contracting party with Buffalo Resources P/L. That is not to suggest his financial motives make him an unreliable witness. Rather, it was his steadfast refusal to admit the venality of his motivations and his duplicity in his dealings that is adverse to his credit.

1774. I am also satisfied that Mr Brook continued to repeatedly and deliberately misled the executives of Monaro Mining NL and through them the Board of Monaro Mining NL after Lehman Brothers collapsed and after he persuaded the company to enter into an exclusive consultancy agreement with him so that he might continue to work to attract the necessary financial backing from foreign investors to enable Monaro Mining NL to pursue its application for an EL at Mount Penny. It is adverse to his credit that throughout the term of that consultancy agreement he again positioned himself to maximise the continuity of his relationship with Moses Obeid, and what I am satisfied must have been Moses Obeid’s promise of a financial stake in the outcome, even if there is no direct evidence of it, at the expense of Monaro Mining NL to whom he owed contractual fealty under the consultancy agreement.

1775. The impact upon Mr Brook’s credibility of that behaviour and what I am satisfied is related behaviour which shows his capacity for mendacity in his dealings with the various business entities and individuals who either gave evidence in the Crown case or, in the absence of witnesses to attest to those dealings (as was the case with respect to Cascade Coal P/L) on the basis of what the documentary evidence reveals about those dealings.

1776. While Mr Brook’s conduct was in many related respects professionally disreputable and, insofar as his refusal to admit what I consider was the patent evidence of his duplicity, an attitude which was adverse to his credit, in resolving the issues in dispute in this trial, those findings, ironically, have proved to be of only marginal relevance.

1777. That is principally because in proof of the facts that are in issue in the trial, namely the existence of the conspiracy and the participation of each of the accused in that conspiracy, the Crown only relied upon aspects of Mr Brook’s evidence which I am satisfied are sufficiently supported by evidence, largely documentary evidence, independent of his testimony. That is not to say the Crown did not adduce evidence from Mr Brook where the documentary evidence would have been a sufficient basis to establish a course of contractual negotiations in which either or both of Monaro Mining NL or Cascade Coal P/L were engaged. It is merely to emphasise that his evidence was of critical importance to the Crown case where the documentary evidence, for one reason or another, did not reveal the complete course of the dealings in which Moses Obeid was intimately involved from mid-July 2008 with Monaro Mining NL, through to and extending beyond the timeframe of the conspiracy, as Moses Obeid continued to pursue the financial rewards he must be taken to have expected were inherent in the granting of an EL at Mount Penny to a mining company with whom he and his family would be contractually bound, even if at that time the quantum and the realisation of those rewards were contingent upon coal being discovered after the granting of a licence to that mining company.

1778. As I have already emphasised, Mr Brook’s evidence was critical in proof of a number of other critical issues, including:

1. His evidence concerning the large map that was produced at the second Wentworth Hotel meeting on 7 July 2008, on the Crown case Wiles Map 2, and which was the subject of animated discussion in which Moses Obeid actively participated. That evidence was critical in proof of the fourth act of misconduct which, for the reasons given, I found established.

2. His evidence that Moses Obeid provided him with the handwritten list of companies two days after that meeting which facilitated his approach to Monaro Mining NL, on the Crown case a list that was compiled by Moses Obeid after having been provided with the list (or the information on it) by Mr Macdonald. That evidence was critical in proof of the seventh act of misconduct which I also found established.

3. His evidence that Moses Obeid provided him Schiavo Map 3 and on the page with the heading Medium Coal Allocation Areas, critical to proof of the eighth act of misconduct which I also found established.

4. His evidence that Moses Obeid was the source of information that the EOI process was being reopened to allow the “White Group” of companies (including Cascade Coal P/L) in proof of the ninth act of misconduct. Although I did not find that act of misconduct established, Mr Brook’s evidence provided the context in which I am satisfied Cascade Coal P/L entered into the EOI process for the grant of an EL at Mount Penny and the basis upon which I am satisfied Moses Obeid initiated commercial dealings with them.

1779. The Crown also relied on Mr Brook’s evidence to establish that in his dealings with Monaro Mining NL he was acting at all times responsive to Moses Obeid’s requests for information, in order that he retain control over Monaro Mining NL and their tender for the Mount Penny EL. On the Crown case, that control was most evident by May 2009 when Monaro Mining NL had officially abandoned its application for the grant of the Mount Penny EL and negotiations with Cascade Coal P/L were conducted, initially under a Landowners Agreement and then the Joint Venture agreement with that company.

1780. Since no witnesses from Cascade Coal P/L were called in the Crown case, Mr Brook’s evidence concerning the terms upon which Monaro Mining NL disengaged from the EOI process, and the circumstances in which Moses Obeid re-engaged with Cascade Coal P/L, was important as providing context for the documents generated at that time being tendered by the Crown as part of the “entrepreneurial phase” in proof of the existence of the conspiracy and Moses Obeid’s participation in it.

Sale of the Joint Venture

1781. From the various arrangements set out at length above at pars 1731-1350, I am satisfied the following state of affairs existed as at June 2009: ^[1979]

1. Mt Penny Coal P/L was intended to be the incorporated joint venture company in which Cascade Coal P/L would vest 100% of its interest in the Mount Penny EL as contemplated by the Letter of Joint Venture of 5 June 2009 and the Letter of Amendment of the following day.

2. Buffalo Resources P/L, of which Mr Brook was director and shareholder, was entitled, at any time, to acquire a 25% interest in Mt Penny Coal P/L in the form of 25% of the shares in that company, that interest being beneficially held for Warbie P/L (12% share) and Equitexx P/L (88% share). ^[1980] Mr Sassine, the Obeids’ accountant, was the director, secretary and sole shareholder of Equitexx P/L. ^[1981] Equitexx P/L was the trustee of the Obeid Family Trust No 2 from 14 May 2002 to 10 November 2010. ^[1982]

1782. The analysis which follows is drawn from the expert report of Mr Temple-Cole, a forensic accountant. His report was tendered without objection on the basis that his analysis and the conclusions he reached were based on documents tendered in the trial. He was not required by the accused for cross-examination.

1783. On 24 November 2009, a Deed of Put and Call Option was executed between Locaway P/L, Geble P/L and Justin Kennedy Lewis P/L (Vendors) and Mt Penny Properties Pty Limited (Mt Penny Properties P/L) (Purchaser). John McGuigan and Mr Poole were both directors of Mt Penny Properties P/L. The Deed of Put and Call Option provided for Mt Penny Properties P/L to simultaneously purchase Cherrydale Park, Donola and Coggan Creek (with contracts for sale of each property annexed to the Landowners Agreement). ^[1983]

1784. I note in that connection that pursuant to the Profit Sharing Deed, upon the sale of Coggan Creek, Justin Kennedy Lewis P/L agreed to pay 30% of the profit on the sale to UPG P/L. ^[1984]

1785. The Deed of Put and Call Option also provided for access to Cherrydale Park, Donola and Coggan Creek in the meantime. ^[1985] Annexed to the Deed was an “interdependent” Rural Land Access Agreement for Mineral Exploration. ^[1986] That agreement was also executed on 24 November 2009. ^[1987]

1786. The Access Agreement provided for the payment of monthly access fees by Mt Penny Properties Pty Ltd to the owners of each of the three properties in the following amounts:

Property	Sale price	Access fee
Cherrydale	$17 million [1988]	$14,875/month [1989]
Donola	$2.4 million [1990]	$3,000/month
Coggan Creek	$14 million [1991]	$13,825/month

1787. Access fees were paid from an account in the name of Cascade Coal P/L into an account in the name of Mt Penny Properties P/L and ultimately into accounts in the names of the Moona Plains Family Trust Account ($476,000), Geble P/L ($96,319) and Justin Kennedy Lewis P/L ($442,400) between 21 December 2009 and 20 July 2012. Those moneys totalled $1,014,719. ^[1992]

1788. On 7 May 2010, Southeast Investments Pty Limited was registered. Mr Chalabian, a solicitor who was retained by the Obeid family, was the director and sole shareholder of that company. On 28 May 2010, the name of the company changed to Southeast Investment Group P/L, effective from 10 May 2010. ^[1993] That company was used by the Obeids in negotiating and executing the sale of the 25% interest in the Joint Venture with Cascade Coal P/L.

1789. On 11 May 2010, by Deed of Appointment of Trustee between Buffalo Resources P/L (Retiring Trustee) and Southeast Investments P/L (New Trustee), ^[1994] Southeast Investments P/L ^[1995] replaced Buffalo Resources P/L as the trustee of the trust reflected in the Bare Trust Deed of 5 June 2009 and as the joint venture partner with Cascade Coal P/L. From that point, the rights and obligations held by Buffalo Resources P/L in the Joint Venture were assumed by Southeast Investments P/L.

1790. By Southeast Investments P/L agreeing to act as trustee, it held the right to acquire 25% of the shares in Mount Penny Coal P/L (the joint venture company) on behalf of Warbie P/L (12%), being Mr Brook’s company, and Equitexx P/L (88%), being a company controlled by the Obeids’ accountant and the Trustee of the Obeid Family Trust No 2. As noted earlier, in September 2010, the 12% interest in the Mount Penny Joint Venture held by Warbie P/L (Mr Brook’s company) was sold ^[1996] to Coal & Minerals Group P/L for $1.75 million. ^[1997] Warbie P/L was deregistered on 18 December 2011. ^[1998]

1791. Coal & Minerals Group P/L was registered on 16 June 2010. ^[1999] Mr Poole, the Chairman of Cascade Coal P/L, was the director of that company. On 17 July 2012, 717,748 ordinary shares in Cascade Coal P/L were issued to Coal & Minerals Group P/L. ^[2000] In effect, Cascade Coal P/L used Coal & Minerals Group P/L, with Mr Poole as its representative, to negotiate and effect the sale of the Obeids’ share in the Joint Venture.

1792. Pursuant to a Deed of Transfer executed on 20 October 2010 between Coal & Minerals Group P/L and Southeast Investment Group P/L, ^[2001] Southeast Investment Group P/L agreed to sell the right (for a fee of $1) to be issued 25% of the shares in Mt Penny Coal P/L, which it held as trustee for Equitexx P/L, to Coal & Minerals Group P/L for a purchase price of $60 million. ^[2002]

1793. Relevantly, the Deed of Transfer provided that the purchase price was to be paid in two tranches:

1. Tranche 1, totalling $30,000,000, to be paid as follows:

1. $5,000,000 on the date of the Deed of Transfer

2. $2,500,000 no later than 25 October 2010

3. $7,500,000 no later than 28 February 2011

4. $15,000,000 no later than 30 June 2011.

2. Tranche 2, totalling $30,000,000, to be paid in one of three alternate methods:

1. Payable by the issue or transfer of Public Company shares to the value of $30,000,000

2. Payable in three equal instalments of $10,000,000 each payable on 30 June 2011, 31 August 2011 and 31 October 2011 with interest payable at 12% per annum

3. Payable by a lump sum of $40,000,000 no later than 15 December 2011. ^[2003]

1794. The Deed of Transfer also provided that all cash instalments of the purchase price were to be paid to the Lands Legal Trust Account, ^[2004] the law firm of Mr Chalabian, a solicitor retained by the Obeids.

1795. The Crown produced the following aide memoire to illustrate the sale of the 25% interest in the joint venture. ^[2005]

1796. Before tracing the receipt of Tranche 1 and Tranche 2 payments pursuant to the Deed of Transfer, it is necessary to set out the terms of two other agreements executed on 20 October 2010 together with the Deed of Transfer. The first was the Rights Termination Agreement (referenced in the Deed of Transfer) between Coal & Minerals Group P/L, Cascade Coal P/L and Mount Penny Coal P/L (the wholly owned subsidiary of Cascade Coal P/L which held the entire interest in the Mount Penny EL). ^[2006] The second was a Deed of Charge between Coal & Minerals Group P/L and Southeast Investment Group P/L. ^[2007]

The Rights Termination Agreement

1797. Pursuant to the Rights Termination Agreement, ^[2008] Coal & Minerals Group P/L and Mount Penny Coal P/L agreed, by the execution date, to terminate the Rights Interest (that is, the right to be issued 25% of the shares in Mount Penny Coal P/L for $1.00 and all other rights and obligations held by Coal & Minerals Group P/L in relation to the Mount Penny Project) held by Coal & Minerals Group P/L subject to the following conditions:

(a) any consent or approval required under the Mining Act to the termination of the Rights Interest being obtained from the Minister or from an officer of the Department acting with authority of the Minister; and

(b) the Coal and Minerals [Group Pty Ltd] obtaining all other necessary third party consents to the termination of the Rights Interest. ^[2009]

1798. Consideration totalled $62 million:

1. Cascade Coal P/L would pay $32 million as a “Termination Price” to Coals & Minerals Group P/L as follows:

1. $17 million on or before 20 February 2011; and

2. $15 million on or before 20 June 2011.

2. Coal & Minerals Group P/L would be issued 9.3% of the shares in Cascade Coal P/L as “Consideration Shares” with a value of $30 million.

1799. Ultimately, following from the events set out below, the “Consideration Shares” (that is, 717,748 beneficial ordinary shares issued to Coal & Minerals Group P/L) were transferred pursuant to a change of company details form dated 13 October 2010. ^[2010]

The Deed of Charge

1800. Pursuant to the Deed of Charge, ^[2011] Southeast Investment Group P/L was given a fixed charge and step in rights over the shares in Cascade Coal P/L to be issued to Coal & Minerals Group P/L and that company’s interest in the Rights Termination Agreement. The effect was that, in the event the Deed of Transfer was breached by Coal & Minerals Group P/L, Southeast Investment Group P/L would step into the position of Coal & Minerals Group P/L. ^[2012]

1801. Mr Temple-Cole provided the following diagram to illustrate the financial arrangements and contractual obligations in place at the end of October 2010: ^[2013]

1802. The sale of the Obeid family’s interest under the joint venture with Cascade Coal P/L in October 2010 for $60 million is relied upon by the Crown as evidence of the culmination of the determined steps taken by Moses Obeid (on behalf of his family) after the conspiracy had been executed to achieve the maximum return possible from the “value” of Mr Macdonald’s multiple acts of misconduct committed during the currency of the conspiracy in which Moses Obeid and Edward Obeid were active participants, as the Crown expressed it in closing submissions, by “cashing in… the financial benefits of the conspiracy”. ^[2014]

1803. The Crown went on to submit that this is not a case where there is any room for doubt about the monetary value of Mr Macdonald’s successive acts of misconduct. The undisputed evidence is that it was converted (ultimately) into $60 million, of which $30 million is shown to have been received by solicitors retained by the Obeid family which, less fees paid to that firm, was distributed to companies controlled by members of the Obeid family between 20 October 2010 and 4 May 2012, in particular to Obeid Corporation P/L and Calvin Holdings Pty Limited (Calvin Holdings P/L) as successive trustees of the Obeid Family Trust No 2. ^[2015]

Payment of Tranche 1

1804. The following table, extracted from Mr Temple-Cole’s expert report, ^[2016] sets out the payments made under Tranche 1 of the Deed of Transfer into Lands Legal Trust Account from Coal & Minerals Group P/L (with funds from Cascade Coal P/L) totalling $30 million. After the deduction of legal fees, these funds were disbursed to companies controlled by members of the Obeid family.

Date	Amount	Paid from Account	Paid to Account
1A – $5 million on date of Deed (20 October 2010)
20-Oct-10	5,000,000	Amanda Poole NAB Classic Account	Lands Legal Trust Account
21-Oct-10	5,000,000	Lands Legal Trust Account	Obeid Corporation Business Cash Account
1B – $2.5 million no later than 25 October 2010
25-Oct-10	2,500,000	Amanda Poole NAB Classic Account	Lands Legal Trust Account
01-Nov-10	2,160,000	Lands Legal Trust Account	Obeid Corporation Business Cash Account
01-Nov-10	50,000	Lands Legal Trust Account	Shop Easy Lockers Account
01-Nov-10	234,800	Lands Legal Trust Account	Lands Legal Trust Account
04-Nov-10	24,514	Lands Legal Trust Account	PKF
08-Mar-11	10,000	Lands Legal Trust Account	Shop Easy Lockers Account
14-Mar-11	20,487	Lands Legal Trust Account	PKF
Tranche 1C - $7.5 million no later than 28 February 2011
28-Feb-11	7,500,000	CMG Account	Lands Legal Trust Account
04-Mar-11	7,450,000	Lands Legal Trust Account	Obeid Corporation Business Online Saver Account
04-Mar-11	50,000	Lands Legal Trust Account	Shop Easy Lockers Account
Tranche 1D - $15 million no later than 30 June 2011
14-Jun-11	1,000,000	Amanda Poole NAB Classic Account	CMG Account
16-Jun-11	9,000,000	CMG Business Maximiser Account	CMG Account
16-Jun-11	10,000,000	CMG Account	Lands Legal Trust Account
17-Jun-11	9,926,660	Lands Legal Trust Account	Calvin Holdings in trust for Obeid Family Trust No. 2 Accont
17-Jun-11	73,335	Lands Legal Trust Account	Shop Easy Lockers Account
Tranche 1D(2)
03-May-12	1,100,000	Amanda Poole NAB Classic Account	CMG Account
03-May-12	3,900,000	Cascade Coal Account	CMG Account
03-May-12 \	5,000,000	CMG Account	Lands Legal Trust Account
04-May-12	77,000	Lands Legal Trust Account	State Capital
04-May-12	4,923,000	Lands Legal Trust Account	Calvin Holdings in trust for the Obeid Family Trust Account No. 2

1805. The payment of Tranche 1 in its entirety was also reflected in the Lands Legal Trust Account Statement dated 4 May 2012. ^[2017]

Tranche 2

1806. With respect to the payment of Tranche 2, by letter of 28 February 2011, Richard Poole (director of Coal & Minerals Group P/L) confirmed to the Directors of Southeast Investment Group P/L that Coal & Minerals Group P/L elected to pay Tranche 2 by the issue or transfer of Public Company shares to the value of $30 million (Alternate 1). ^[2018]

1807. In a letter to Mr Poole dated 2 May 2011, ^[2019] Mr Chalabian, writing in his capacity as sole director of Southeast Investment Group P/L, notified Coal & Minerals Group P/L that it had defaulted on its obligation with respect to the payment of Tranche 2 under the Deed of Transfer to “procure to be issued or transferred for the benefit of South East shares to a value of $30 million based on the share price on which the majority of Cascade or Mount Penny shares or the Mount Penny Project is sold to the Public Company (as defined in the Deed) no later than 30 April 2011”, described as the “Event of Default”. ^[2020]

1808. Mr Chalabian also provided notice that unless Coal & Minerals Group P/L remedied that Event of Default by 5:00pm 15 June 2011, Southeast Investment Group P/L “will terminate the Deed,” pursuant to which “all due and outstanding payments of the Purchase Price … become immediately due and payable together with all costs and expenses incurred by Southeast”. ^[2021] Mr Chalabian also indicated that “Southeast will to the full extent available enforce the securities provided pursuant to clause 4 of the Deed and any supporting or ancillary security”. ^[2022]

1809. In a further letter to Mr Poole dated 6 July 2011, Mr Chalabian notified Coal & Minerals Group P/L that it had “failed to remedy the Event of Default” stipulated in the letter of 2 May 2011, acknowledged acceptance of “part payment of $10,000,000 towards the balance of the Purchase Price on 17 June 2011”, and confirmed that that payment “does not waive our right to immediately terminate the Deed”. ^[2023]

1810. In a letter to the Directors of Southeast Investment Group P/L dated 3 August 2011, Mr Poole, in his capacity as director of Coal & Minerals Group P/L, acknowledged that it had been “unable to complete its obligations under the Transfer Deed”. ^[2024] Mr Poole also confirmed that “all of Southeast’s powers and rights to enforce its position under the Transfer Deed are not affected in any way”. ^[2025]

1811. In a further letter to Mr Poole dated 5 April 2012, ^[2026] Mr Chalabian indicated that the balance of $30 million relating to Tranche 2 remained outstanding.

1812. On 1 May 2012, Mr Poole resigned as the director of Coal & Minerals Group P/L. ^[2027] On 27 September 2010, Mr Poole had transferred his shareholding in Coal & Minerals Group P/L to Arthur Phillip Nominees P/L, a company of which he was a director. ^[2028] Also on 1 May 2012, Arthur Phillip Nominees P/L, in its capacity as sole shareholder of Coal & Minerals Group P/L, consented to the appointment of Mr Chalabian, solicitor for the Obeid family’s interests, as the sole director of Coal & Minerals Group P/L. ^[2029]

1813. An undated but otherwise executed Power of Attorney granted a transfer of all and any shares owned by Coal and Minerals P/L in Cascade Coal P/L to Mr Chalabian. ^[2030] Coal & Minerals Group P/L had been issued 717,748 ordinary shares in Cascade Coal P/L for $0.00001 per share on 13 October 2010. The Crown Companies Summary does not indicate that the status of those shares had altered since that date. ^[2031]

1814. On 4 May 2012, Mr Chalabian wrote to Mr Poole in Mr Poole’s capacity as sole director of Coal & Minerals Group P/L (despite Mr Poole’s resignation three days prior), confirming:

1. All securities provided to Southeast pursuant to Clause 4 of the Transfer Deed dated 20 October 2010 ^[2032] are now released in full; and

2. Upon receipt of clean and clear legal title to the Coal and Minerals Shares … or the exercise and completion of the option contained in clause 3.10 of the Deed of Variation of the Transfer Deed, Coal and Minerals obligations to Southeast will [be] completely discharged and at an end. ^[2033]

1815. On 9 July 2012, in an email to Ron Heinrich, solicitor, Mr Chalabian noted that the transfer of shares under Tranche 2 was still outstanding. ^[2034] He demanded that Coal & Minerals Group P/L transfer to Southeast Investment Group P/L the “Coal and Minerals Shares” ^[2035] by 5 pm on 12 July 2012. He advised that if the shares were not received, “Southeast will execute (pursuant to the Power of Attorney granted by Coal and Minerals) and lodge with the Company Secretary of Mount Penny a duly executed Share Transfer for registration”. ^[2036]

1816. By letter dated 17 July 2012, Mr Chalabian, in his capacity as “Solicitor Director” of Lands Legal, provided the Company Secretary of Cascade Coal P/L an “executed Share Transfer for transfer of 717,748 shares [in Cascade Coal P/L] owned by Coal and Minerals Group Pty Limited to South East Investment Group Pty Limited”. ^[2037] The Share Transfer document is not in evidence. Mr Temple-Cole noted that the Share Transfer was dated 17 July 2012 and included signatures next to placeholders labelled “Richard J. Poole as director of [Coal & Minerals Group P/L], and Sevag Chalabian as director of Southeast”. ^[2038] Mr Poole had resigned as director of Coal & Minerals Group P/L on 1 May 2012. ^[2039]

1817. Mr Temple-Cole noted that the Share Transfer stated the following:

Upon registration of the transfer, the Buyer [Southeast Investment Group P/L] will hold all of the Shares beneficially. The Seller [Coal & Minerals Group P/L] transfers the Shares to the Buyer [Southeast Investment Group P/L] for the consideration stated [$1] subject to the conditions on which the Seller holds the Shares as at the date of this transfer. The Buyer accepts the Shares subject to the same conditions. ^[2040]

1818. Mr Temple-Cole also noted that, contrary to the terms of the Share Transfer outlined above, an “ASIC Comprehensive Company Title Search for Cascade Coal P/L dated 16 April 2018 records that… no transfer of shares in Cascade Coal P/L between [Coal & Minerals Group P/L] and [Southeast Investment Group P/L] took place”. ^[2041]

1819. Thus, Mr Temple-Cole was not able to confirm that the Tranche 2 payments (totalling $30 million) were paid pursuant to the Deed of Transfer.

1820. Ultimately, Mr Temple-Cole summarised the position as at 17 July 2012 as follows: ^[2042]

1. Coal & Minerals Group P/L had acknowledged that it had been unable to complete its obligations under the Deed of Transfer, including the payment by Coal & Minerals Group P/L of the Purchase Price of $60 million to Southeast Investment Group P/L. Only $30 million had been paid.

2. Coal & Minerals Group P/L and Southeast Investment Group P/L had agreed to vary the Deed of Transfer.

3. Coal & Minerals Group P/L had agreed to hold as bare trustee for Southeast Investment Group P/L that part of the Rights Interest for which the Purchase Price had not been paid. The parties agreed that proportion was 50% of the Rights Interest ($30 million).

4. Coal & Minerals Group P/L could, at its election, purchase that part (50%) of the Rights Interest it held as bare trustee for Southeast Investment Group P/L by paying $32 million to Southeast Investment Group P/L (no earlier than 1 July 2012, no later than 7 July 2012). If not paid, this option would lapse.

5. In the event the Deed of Transfer was breached by reason of a breach by Coal & Minerals Group P/L, Southeast Investment Group P/L would step into the position of Coal & Minerals Group P/L by acquiring the company’s 717,748 ordinary shares in Cascade Coal P/L.

6. Southeast Investment Group P/L agreed that upon receipt of “clean and clear” legal title to the 717,748 shares Coal & Minerals Group P/L held in Cascade Coal P/L pursuant to the Rights Termination Agreement executed on 20 October 2010 or the exercise and completion of the option contained in clause 3.10 of the Deed of Variation of Transfer Deed, Coal & Minerals Group P/L’s obligations to Southeast Investment Group P/L would be discharged.

7. Notwithstanding an executed Share Transfer dated 17 July 2012, recording that Southeast Investment Group P/L had become, or was to become, the owner of 717,748 shares in Cascade Coal P/L which were previously owned by Coal & Minerals Group P/L, this share transfer did not, according to the information available to Mr Temple-Cole, occur.

8. This left Coal & Minerals Group P/L as the holder of the 717,748 shares in Cascade Coal P/L, for which Coal & Minerals Group P/L had paid $30 million. ^[2043]

1821. Mr Temple-Cole illustrated the position as at 17 July 2012 as follows: ^[2044]

Is the existence of the conspiracy established beyond reasonable doubt?

1822. In my deliberations to verdict I have reviewed and carefully analysed the compendious body of evidence upon which the Crown relied to prove its case, together with the evidence tendered by the accused, where relevant, to either supplement or, as the accused would submit, contradict significant aspects of the Crown case.

1823. In the course of that exercise, I have made various factual findings on the basis of which I concluded that of the eight acts of misconduct upon which the Crown relied to prove the existence of the conspiracy, the Crown had established Mr Macdonald wilfully breached his duties of confidentiality and/or impartiality on five discrete occasions between May 2008 and September 2008, those occasions corresponding with five of the eight acts of misconduct particularised by the Crown. ^[2045]

1824. In finding the first and second acts of misconduct established, I was satisfied that in May 2008 Mr Macdonald wilfully breached his Ministerial duty and obligation of impartiality by seeking information he knew or expected would be held by the DPI, with the knowledge or expectation that in gathering that information and sharing it, he would assist Edward Obeid and Moses Obeid and their family in their pursuit of the possibility of a coal release area being designated in the Bylong Valley near Mount Penny which would include Cherrydale Park.

1825. In finding the fourth, seventh and eighth acts of misconduct established, I was satisfied that Mr Macdonald wilfully breached his Ministerial duties and obligations of confidentiality and/or impartiality in the knowledge or expectation that the particular information he provided to Moses Obeid and/or a member of his family (including Edward Obeid), from time to time between July and September 2008, would be used to either pursue a joint commercial venture with a mining company who might apply for the EL at Mount Penny (the Mount Penny Coal Release Area having been designated by the DPI by that time) or to further progress a settled contractual arrangement with a mining company with that same objective.

1826. Having found those five acts of misconduct established, and after taking into account all of the evidence that places those discrete acts of misconduct into the context of Mr Macdonald’s pre-existing and continuing relationship with Edward Obeid and Moses Obeid, the question is whether I am able to make the further critical finding of fact that Mr Macdonald committed those acts of misconduct in furtherance of a conspiracy that was in existence as at 9 May 2008, the date the first act of misconduct was committed.

1827. If I am unable to reason to that conclusion, it follows that despite being satisfied that Mr Macdonald committed five successive acts of wilful misconduct as the Minister for Mineral Resources in his dealings with the Obeid family (conduct which would otherwise render him liable to be found guilty of the substantive offence of misconduct in public office), I would be unable to find the existence of the conspiracy proved beyond reasonable doubt. Were I of that view, the question whether the Crown has established the participation of each of the accused in that conspiracy would not arise.

1828. In addressing that question, and to make clear my reasoning in resolving it, I propose to review the reasoning process in which I have already engaged in the course of finding each of the first, second, fourth, seventh and eighth acts of misconduct proved.

1829. In reasoning to the conclusion that the first and second acts of misconduct were established (in the process of which I was also satisfied beyond reasonable doubt the Crown had proved the Shepherd fact) ^[2046] there was, at that point in my deliberations, insufficient evidence to allow me to make the further finding that Mr Macdonald’s enquiry of the Department on 9 May 2008 about the volume of coal resources in the Bylong Valley in the area of Mount Penny (the first act of misconduct) and then, upon receipt of that information, his further enquiry on 14 May 2008 as to the willingness of the Department to release its holdings under EL 6676 to tender (the second act of misconduct) was conduct in furtherance of an existing agreement, with either or both of Edward Obeid and Moses Obeid, that he would wilfully commit acts of misconduct in connection with the granting of an EL at Mount Penny and in connection with their interests (and/or those of their family and/or associates) for the improper purpose the Crown alleged.

1830. As I saw it, at that point in my deliberations, it was possible that Mr Macdonald made the enquiries of the DPI on 9 and 14 May 2008 as a favour to Edward Obeid, in much the same way as he had been asked by Edward Obeid earlier in 2008 whether a mine was planned for the Bylong Valley, an enquiry which, according to Edward Obeid’s account to journalists in December 2012 which was apparently accepted by the Crown as truthful (although, for reasons I will turn to later, I query ^[2047] ), Mr Macdonald fielded those enquiries of the DPI to a member of his staff who then conveyed the answer to Edward Obeid at Mr Macdonald’s direction. ^[2048]

1831. To be clear, although I was satisfied that Mr Macdonald made the enquiries of the Department on 9 and 14 May 2008 in breach of his duty of impartiality and for the improper purpose of advancing the private interests of the Obeid family, knowing that they owned property in the area of Mount Penny and, further, although I was also satisfied, given the nature of the enquiries, that he must also be taken to have known that the Obeid family were, to put it neutrally, interested in having a better understanding of the actual volume of coal resources in an area proximate to their existing landholding in Cherrydale Park, including the likelihood (or not) of the Department releasing its holdings under EL 6676 to tender, I was not persuaded that the evidence directly bearing upon proof of those facts supported the further finding that Mr Macdonald acted in that way because, by that time, the conspiracy had been forged.

1832. Doubt about proof of that fact was clearly not determinative of whether the Crown had proved the existence of the conspiracy beyond reasonable doubt. The Crown was entitled to seek to prove the existence of the conspiracy referable to all the evidence adduced in the trial, including, in particular, the evidence it relied upon to prove the remaining six acts of misconduct which, on the Crown case, were successively committed by Mr Macdonald after 14 May 2008, namely between 6 June 2008 and 13 January 2009 (the fourth to the ninth acts of misconduct inclusive).

1833. I next revisited the question whether the Crown had proved the existence of the conspiracy after considering the evidence bearing upon proof of the fifth act of misconduct, including the 4 and 6 June 2008 meetings, the events leading up to those meetings and, in particular, the course of the 6 June 2008 meeting at which the Crown alleged the fifth act of misconduct was committed.

1834. For the reasons set out at length earlier, ^[2049] I was not persuaded that the Crown had established the fifth act of misconduct, as particularised. That being the case, the evidence of what occurred preliminary to and in the course of both the 4 and 6 June 2008 meetings was not probative of the existence of the conspiracy in the way contended for by the Crown, that is, as evidence of a discrete act of wilful misconduct from which the existence of the conspiracy might be inferred. That body of evidence was, however, of continuing relevance to proof of the Crown case. In particular, it was an important part of the evidence relevant to proof of the unfolding narrative of events culminating in Mount Penny being designated by the DPI as a coal release area by 16 June 2008, and the subsequent inclusion of that area as one of the eleven areas in the EOI process for the granting of ELs which was publicly launched on 9 September 2008.

1835. In considering the evidence of the 4 and 6 June 2008 meetings in that context, I was satisfied that Mr Macdonald informed either or both of Edward Obeid and/or Moses Obeid after the 4 June 2008 meeting of the prospect of a new coal release area being designated in the Bylong Valley near Mount Penny, a prospect which, by the 6 June 2008 meeting, had crystallised into the very real potential that the family’s landholdings in the Bylong Valley in the area of Mount Penny (at that time limited to Cherrydale Park) would become part of a designated coal release area over which an EL might be granted.

1836. In making that factual finding, I discounted as a reasonable possibility that Mr Macdonald provided that information simply because of his friendship with Edward Obeid as a Parliamentary colleague or his friendship with Moses Obeid through their shared interest in horseracing. While the nature and extent of Mr Macdonald’s relationship with Edward Obeid and Moses Obeid was not irrelevant to what might have motivated Mr Macdonald to provide that information, I was ultimately satisfied that he did so on the basis of a number of primary facts which revealed that his motivation was directly allied with what he knew or believed by early June 2008 would be the value to Edward Obeid and Moses Obeid in knowing of the very real potential that Cherrydale Park would be included in a new coal release area.

1837. Those primary facts included the following:

1. The enquiries Mr Macdonald had made of the Department on 9 and 14 May 2008 would not have been made were it not for the interest either or both of Edward Obeid and Moses Obeid had expressed in exploring the prospect of exploiting the coal resources they knew or believed were beneath Cherrydale Park and likely in the Bylong Valley more generally.

2. The possibility of the DPI’s release of EL 6676 to tender was the subject of Mr Macdonald’s enquiry of the Department on 14 May 2008.

3. The small coal release area in the eastern part of the Bylong Valley near Mount Penny discussed at the June 2008 meetings was part of the Department’s holding under EL 6676.

4. By the 6 June 2008 meeting, that small coal release area was identified referable to Wiles Map 2 (a map which visualised the potential large open cut coal resource in that area in a sideways S-shape) which located Mount Penny and, by extension, Cherrydale Park, within EL 6676.

1838. In combination, those primary facts enabled me to find that by informing Edward Obeid and/or Moses Obeid of the outcome of the 6 June 2008 meeting, Mr Macdonald was intentionally providing them with information he knew or believed was, or might be, to their commercial advantage or potential commercial advantage, despite that conduct not being relied upon by the Crown as a discrete act of misconduct from which I was invited to find the existence of the conspiracy proved.

1839. While I was satisfied that the information Mr Macdonald shared with the Obeids after the 6 June 2008 meeting was likely to be what ultimately motivated Moses Obeid and his brothers to seek to form a landholders alliance with the Boyds as a first step in their pursuit of exploiting the value of that information, and while I accepted that Mr Macdonald relayed the information generated from that meeting with that knowledge and for that reason, there was no direct evidence to support him having done so. There was, however, in my view, a compelling inference he did and that the Boyds were approached by members of the Obeid family with that knowledge.

1840. I am able to find that connection established as a matter of fact at this point in my deliberations, in large part because of what I am satisfied the Crown has established by Mr Macdonald’s commission of the fourth, seventh and eighth acts of misconduct and the use to which Moses Obeid put the information generated from those acts of misconduct.

1841. In concluding that it was Mr Macdonald’s communication of the information emerging from the 6 June 2008 meeting that motivated the formation of a landholders alliance with the Boyds, I was satisfied that Moses Obeid and his brothers were not motivated by what Edward Obeid and Moses Obeid told the journalists in December 2012 was the threat associated with the pending expiration of Authorisation 287 held by Anglo American P/L to the east of Cherrydale Park or, in the event that the Authorisation was not renewed, that it may be released to public tender. Neither was I satisfied that concern about Authorisation 287 was what motivated Moses Obeid to attempt to attract Mr Fitzhenry as a purchaser of Coggan Creek. To the contrary, I was satisfied that Moses Obeid and his brothers were motivated in both those endeavours by what was initially a belief that an area encompassing Cherrydale Park and Coggan Creek might be released by the DPI for coal exploration under licence, which crystallised into a state of expectation and then, by mid-June 2008, ultimately into knowledge of the likelihood that it would happen.

1842. In closing, the Crown submitted that after what it described as “confirmation from [Mr Macdonald] that the Mount Penny area would be included in a forthcoming EOI process”, steps were taken “in earnest” to purchase Donola and Coggan Creek. ^[2050] In the way the Crown’s written closing submissions were structured, that proposition was advanced on the assumption that I would find the fifth and the sixth acts of misconduct proved, there being no discrete particularised act of misconduct which alleged that Mr Macdonald communicated that particular information in breach of either or both of his duty of impartiality or confidentiality. The Crown supported its submission by reference to Mr Rodd’s inspection of both properties no later than 23 June 2008, at which time Mr Rumore was retained to advise on the mining aspect of what was described in Mr Neil’s submissions as the “dual strategy” in the proposed arrangement with the Boyds. ^[2051]

1843. There was no evidence adduced at the trial that would allow me to make any finding as to when the Boyds were first approached by members of the Obeid family with a view to exploring the prospect of a strategy of that kind or, for that matter, who approached them or what the Boyds were told. No member of Pace Developments Group P/L, the property development group associated with the Boyd family, was called in the Crown case. Neither Paul Obeid nor Gerard Obeid was called to give evidence as to how, by whom, with what legal advice (if any) and on what terms the Heads of Agreement under which Coggan Creek and Donola would be purchased was formulated. The Heads of Agreement with the Boyds was not tendered in evidence. The only evidence (independent of Mr Rumore’s instructions) associating the Boyds with the “dual strategy” was that the Boyds’ solicitor was named on the initial Contract for Sale of Donola. ^[2052]

1844. That said, from what Mr Rumore was given to understand by Paul Obeid and Gerard Obeid at the initial conference on 23 June 2008, I was satisfied that the Heads of Agreement contemplated a mining aspect, in the sense that Mr Rumore was instructed in the event that the three properties were the subject of an “EOI process” following which “coal leases” were to be granted to a mining company over that area, they would be “bought out” by the mining company and at a multiple of their value. ^[2053] I was also satisfied the allied aspect of the Heads of Agreement with the Boyds contemplated the extension or continuation of the use of Cherrydale Park for agricultural purposes, with the neighbouring properties of Donola and Coggan Creek adding acreage and amenity to the pursuit of those agricultural endeavours, in the interim, before the mining aspect of that strategy materialised (if it did).

1845. There is no evidence as to the source of any knowledge that either or both of Paul Obeid or Gerard Obeid had about an “EOI process” that might include Cherrydale Park and the neighbouring properties. Mr Rumore did not enquire as to the source of their information and, as noted, neither Paul Obeid nor Gerard Obeid was called as witnesses in the Crown case. I do note, however, that there is no evidence in the trial of any relationship of any kind between Paul Obeid and/or Gerard Obeid and Mr Macdonald. That said, since I am satisfied as a fact, having regard to all the evidence in the Crown case, that Mr Macdonald informed either Edward Obeid or Moses Obeid or both of them after the 6 June 2008 meeting that the Department was exploring the potential for the excision of a small area for release near Mount Penny, I am satisfied, as a matter of compelling inference from Mr Macdonald’s dealings with the Department to that date (including, but not limited to, my finding that the first and second acts of misconduct would not have been committed by him “but for” favouring the interests of the Obeids as landowners), that Mr Macdonald was the source of the knowledge Paul Obeid and Gerard Obeid had as at 23 June 2008, and that they acquired that knowledge from either or both of Edward Obeid and Moses Obeid who received the information from Mr Macdonald.

1846. The Heads of Agreement was not sighted by Mr Rumore before he was advised by Moses Obeid at the next conference on 30 June 2008 (also attended by his brothers, Paul Obeid and Gerard Obeid) that the agreement would not proceed but that the family were in discussions with Tianda Resources P/L as a new contracting party.

1847. I also found as a fact that Mr Macdonald introduced Mr Fang, the founder and chairman of the Tianda Group (which included Tianda Resources P/L), to Moses Obeid, prior to 30 June 2008 when Mr Fang was introduced to Mr Rumore by Moses Obeid as a potential partner in a mining joint venture. In making that finding, I rejected the submission advanced by Mr Neil that it was reasonably possible that Mr Fang was introduced to the Obeid family by somebody else within the business community. ^[2054] It is necessary to re-emphasise, however, that what was said in the course of that introduction, including what information was shared between Mr Fang, Mr Macdonald and Moses Obeid at that time, is not the subject of any evidence in the trial. ^[2055] I was prepared to find, however, again having regard to all of the evidence, that the introduction was made by Mr Macdonald in order that Mr Fang and Moses Obeid might discuss the prospect of a joint mining project, either at the same time as the Heads of Agreement was under negotiation with the Boyds or at a time when it was clear that those arrangements were unlikely to proceed. To be clear, it was that scenario that I was satisfied was a source of added weight in concluding that Mr Macdonald was pivotal in the steps taken by Moses Obeid, on behalf of his family, to explore and then exploit the prospect of a coal mining deal over land that included the family’s rural holdings in Cherrydale Park.

1848. It was also clear to me that by 30 June 2008 (a week after the so-called “dual strategy” was under discussion in the context of the proposed arrangements with the Boyds) that the agricultural potential in the acquisition of the three properties had all but fallen away. In the structure of the proposal with Tianda Resources P/L, unconditional primacy was given to the development of the three properties for coal exploration, with the Obeids acquiring 30% equity in the entity that would tender for what was described in Mr Rumore’s notes as “the coal lease”. ^[2056]

1849. To the extent that Mr Neil submitted that the “dual strategy” remained extant at all times ^[2057] as telling against the existence of the conspiracy alleged, that submission is not persuasive. I accept the Obeids may have seen the potential for Donola and Coggan Creek to be utilised, together with Cherrydale Park, as agricultural land while the EOI process was under consideration by the DPI, that is, before the public launch of that process and ultimately before any EL at Mount Penny was granted (if it were granted) and before any mining lease issued (if it issued). I also accept that might also have been the basis upon which Mr Lewis represented his interest in purchasing Coggan Creek to Mr O’Brien, ^[2058] although, as Mr O’Brien made clear in his evidence, he did not meet Mr Lewis prior to settlement of the sale of Coggan Creek in November 2009. ^[2059] With reference to the statement he made in 2011 in the course of the ICAC investigation, Mr O’Brien confirmed that the settlement of Coggan Creek was delayed until November 2009 because the sale of Mr Lewis’ property in Balmain had failed to settle, and that he considered Mr Lewis to be a genuine buyer. ^[2060] However, in circumstances where other evidence suggests that by the time Mr Lewis signed the contracts for the purchase of Coggan Creek in November 2008 and when he executed the Profit Sharing Deed that Mr Rumore was instructed to prepare at that time, I was satisfied that a desire to farm or embrace an idyllic rural lifestyle was not what motivated Mr Lewis to acquire Coggan Creek or what motivated Moses Obeid to introduce him to Mr Rumore. ^[2061]

1850. Despite Mr Lewis not being called as a witness in the Crown case and, in those circumstances, although I am not able to determine Mr Lewis’ actual motivation in having the call options for the purchase of Coggan Creek assigned to him (and then contracting to purchase Coggan Creek), I was satisfied, having regard to all the evidence, that he was not motivated to buy Coggan Creek for its farming and lifestyle potential, given that Coggan Creek was encompassed within the Mount Penny Coal Release Area, a state of affairs of which Moses Obeid was aware when he introduced Mr Lewis to Mr Rumore in November 2008, after the launch of the EOI process.

1851. Furthermore, it became clear, in my view beyond any doubt, that in Moses Obeid’s dealings with Monaro Mining NL via Mr Brook from 15 July 2008, and in his direct dealings with Cascade Coal P/L from May 2009, the three rural properties were promoted as being held by a landholders alliance, with whom both mining companies were invited to contract, under either the Landowners Agreement between Buffalo Resources P/L and Cascade Coal P/L or the Landowners Deed when the arrangement with Monaro Mining NL and Voope P/L was extant. Neither cattle farming nor agricultural production featured as any part of those arrangements.

1852. It was in the context of the various factual findings I have summarised above, together with the separate and discrete finding that the first and second acts of misconduct were established, that I moved to consider whether the fourth, sixth, seventh and eighth acts of misconduct were established and, if so, whether any one or more of them addressed the concerns I had earlier expressed about the existence of the conspiracy as at 9 May 2008 being proved beyond reasonable doubt.

1853. I focused my consideration of that question on those four acts of misconduct. In the event that I found none were established, the ninth act of misconduct allegedly committed between 27 November 2008 and 13 January 2009, more than five months after the Crown alleged the conspiracy was forged, would have been unlikely to support a finding of the existence of the conspiracy as at 9 May 2008, even if allied with proof of the first and second acts of misconduct. I was also of the view that in the event that I found that each of the fourth, sixth, seventh and eighth acts of misconduct established (or sufficient of them to support a finding by inference of the existence of the conspiracy by 9 May 2008), the ninth act of misconduct would simply add additional weight to proof of that fact. As it transpired, while I was not satisfied the ninth act of misconduct was established, the events the subject of that act of misconduct provided proof of the Crown case in a different way, namely by contextualising the circumstances in which Moses Obeid approached Cascade Coal P/L.

1854. Whether the fourth, sixth, seventh and eighth acts of misconduct were available as proof of the existence of the conspiracy required, first and foremost, a careful analysis of the evidence directly bearing on whether any of those four acts of misconduct, as particularised, were established. It also required consideration of what I was satisfied the evidence was capable of proving about Mr Macdonald’s state of mind at the time it was alleged he provided the confidential information the subject of any one of those four acts of misconduct, and the knowledge or belief Edward Obeid and/or Moses Obeid had at the time they received that information (if they did) about the prospect of an EL being granted at Mount Penny and the use to which they put that information in that connection.

1855. If those four acts of misconduct were established, or sufficient of them when coupled with proof of the first and second acts of misconduct, to enable me to find the existence of the conspiracy proved by inference beyond reasonable doubt, the only remaining question in proof of the guilt of the accused was whether I was satisfied beyond reasonable doubt that, at the time the agreement was forged, they each agreed to participate in that conspiracy.

1856. Given the nature of the conspiracy alleged and its scope and object, were I satisfied at the end point of that analysis and beyond reasonable doubt of the existence of the conspiracy, Mr Macdonald would, inevitably, be liable to be convicted of that offence, conditional only upon me being satisfied, and beyond reasonable doubt, that at least one of either Edward Obeid or Moses Obeid agreed to participate with him in that conspiracy, because I was satisfied of that fact by the evidence of what they said or did in furtherance of the conspiracy or by application of the co-conspirators rule as embodied in s 87(1)(c) of the Evidence Act, or both.

1857. I was not persuaded that the sixth act of misconduct as particularised was established. However, having regard to all of the evidence, including the fact that I was satisfied that Mr Macdonald relayed information to the Obeids after the 6 June 2008 meeting of the potential at that time for Cherrydale Park to be included in a new coal release area, I was satisfied that he also relayed the critical and additional information which emerged from the 16 and 17 June 2008 meetings with the DPI that Mount Penny had been designated by the Department as a small coal release area for inclusion in the EOI process for the grant of an EL. I was also satisfied that it was this information that finally motivated Moses Obeid and his brothers to take determined steps to acquire the neighbouring properties of Donola and Coggan Creek, and to seek Mr Rumore’s advice about the prospect of an arrangement with a mining company, firstly with the Boyds and then, when that did not proceed, with Tianda Resources P/L and then ultimately with Monaro Mining NL.

1858. Again, it is important to emphasise that Mr Macdonald’s relaying of that information was not particularised by the Crown as an act of misconduct in breach of his duties of confidentiality or impartiality. It was, however, the factual premise for the breaches of impartiality particularised by the Crown in the Revised Statement of Particulars as the sixth, seventh and eighth acts of misconduct, in the alternate to the allegation that in providing the information the subject of each of those acts of misconduct Mr Macdonald wilfully breached his duty of confidentiality.

1859. At the endpoint of the analysis of the evidence relied upon in proof of the sixth act of misconduct, I was faced with the situation where the Crown had not advanced a submission as to what findings I might make about the existence of the conspiracy alleged, in the event that, as transpired, I was not persuaded that the fifth or the sixth acts of misconduct were established. I was also without any focused submission from the Crown as to how a finding that Mr Macdonald relayed or communicated critical information to the Obeids after the 6, 16 and 17 June 2008 meetings might have addressed that question.

1860. Neither did submissions from defence counsel deal with that eventuality. Mr Neil’s submissions, in particular, were directed to raising a doubt about the guilt of at least Moses Obeid (and, by implication, a doubt about Mr Macdonald’s guilt) by seeking to persuade me that the Crown had failed to establish any of the eight acts of misconduct upon which the Crown relied to prove the existence of the conspiracy as at 9 May 2008. Mr Neil also submitted that were I only persuaded that Mr Macdonald relayed the confidential information the subject of the fourth and the sixth to ninth acts of misconduct inclusive, that was a conceptually different conspiracy to the conspiracy the Crown sought to prosecute at trial, and that verdicts of not guilty should be returned for that reason. ^[2062]

1861. It was in those circumstances, and acutely conscious of the force of that submission, that I then turned to consider whether the fourth, seventh and eighth acts of misconduct were established.

1862. With respect to the fourth act of misconduct, I considered whether Wiles Map 1 and Wiles Map 2 bore the necessary quality of confidence when those maps were alleged to have been provided by Mr Macdonald to Edward Obeid, Moses Obeid or another member of the Obeid family. After considering all the evidence bearing upon those related questions of fact and law, I was satisfied that by no later than 7 July 2008 Mr Macdonald provided (or caused to be provided) to Edward Obeid, Moses Obeid or Paul Obeid a copy of Wiles Map 2 in wilful breach of his duty of impartiality and for the improper purpose of advancing the private interests of the Obeid family. I was also satisfied that “but for” that improper purpose he would not have provided the information embedded in that map by providing the map in specie.

1863. Although there was no evidence as to when Mr Macdonald provided Wiles Map 2 or to whom, and no evidence as to the means by which it was provided, I found as a fact that it was provided by Mr Macdonald (or that he caused it to be provided) before the second Wentworth Hotel meeting with Mr Brook on 7 July 2008, because I was satisfied Wiles Map 2 was in Paul Obeid’s physical possession on that day. That finding did not oblige me to find as a fact that Mr Macdonald was aware of, or needed to be aware of, the use to which the recipient of Wiles Map 2 would put the information it contained, although I have no doubt he came to learn that it had been used at a meeting with a representative of Lehman Brothers, given what I was satisfied were the circumstances in which he committed the seventh act of misconduct.

1864. Although I was satisfied the fourth act of misconduct, as particularised, was established by Mr Macdonald’s provision of Wiles Map 2 in breach of his duty of impartiality, I was unable to make any finding that Wiles Map 1 was produced at the second Wentworth Hotel meeting on 7 July 2008, or at any other time during the currency of the conspiracy, despite it being found with Wiles Map 2 and other documents in an envelope in Paul Obeid’s office on execution of a search warrant at the Locaway P/L premises on 23 November 2011. That fact did not disturb my finding that the fourth act of misconduct was established.

1865. With respect to the seventh act of misconduct, I was further satisfied that within two days of the use to which Wiles Map 2 was put by Moses Obeid (and his brother Paul Obeid) at the second Wentworth Hotel meeting on 7 July 2008, Mr Macdonald provided or caused to be provided to Moses Obeid a list of the companies (or the identity of those companies) the DPI was considering as potential invitees to the EOI process. I was satisfied that was a further act of misconduct, on this occasion committed in wilful breach of Mr Macdonald’s duties of confidentiality and impartiality and for the improper purpose of advancing the private interests of the Obeid family. I also found that the “but for” test was satisfied. Those findings established the commission of the seventh act of misconduct.

1866. I was also able to make a further factual finding as to Mr Macdonald’s purpose in providing Wiles Map 2 and the list of companies, in light of my earlier findings that, at least by the time he introduced Mr Fang to Moses Obeid by the end of June 2008, he knew that the Obeids were pursuing a mining deal with a suitable mining company or investor in respect of what, by that time, Mr Macdonald had every reason to expect would ultimately be the inclusion of Mount Penny (encompassing at least Cherrydale Park, if not the neighbouring properties of Donola and Coggan Creek) as a new coal release area in an EOI process for the granting of an EL. Mr Macdonald’s engagements with the DPI from mid-June 2008, as the Information Package for the public launch of that process was prepared, exemplified that fact.

1867. Finally, I was satisfied that the eighth act of misconduct, as particularised, was established. That entailed me finding that Mr Macdonald caused Schiavo Map 3 and a page with the heading “Medium Coal Allocation Areas” to be provided to Moses Obeid on or after 23 July 2008 and before 22 September 2008 (when both documents, or the information in them, were in Mr Brook’s possession) in breach of his duty of impartiality and in breach of his duty of confidentiality for the same improper purpose and that the “but for” test was satisfied for that reason.

1868. Upon reviewing that compendious body of evidence, and the factual findings I have made based upon that evidence, I reached a point of satisfaction that between 9 May 2008 (when the first act of misconduct was committed) and, at the earliest 23 July 2008 and at the latest 22 September 2008 (when the eighth act of misconduct was committed), in his capacity as Minister for Mineral Resources, Mr Macdonald wilfully committed five discrete and related acts of misconduct in breach of his duties and obligations of impartiality and confidentiality for the improper purpose alleged, and that each act of those acts of misconduct satisfied the “but for” test.

1869. As I have stated repeatedly, within that timeframe there are extended periods of weeks where there are no proven acts of wilful misconduct committed by Mr Macdonald referable to the way the Crown has sought to prove its case in the Revised Statement of Particulars.

1870. To be precise, and confining myself to the way the Crown sought to prove the existence of the conspiracy by inference from Mr Macdonald’s acts of misconduct, I have found no acts of wilful misconduct were committed by Mr Macdonald between 14 May 2008, when the second act of misconduct was committed, and 7 July 2008, by which date I was satisfied the fourth act of misconduct had been committed.

1871. However, as I have also stated repeatedly, I was satisfied that Mr Macdonald relayed information to either or both of Edward Obeid or Moses Obeid after the 6 June 2008 meeting concerning, at that time, the potential creation of a coal release area in the area of Mount Penny, and after the 16 and 17 June 2008 meetings when that area was designated for inclusion in the EOI process for the grant of an EL. I am also satisfied that Mr Macdonald conveyed that information to assist his alleged co-conspirators (and/or their family and associates) to exploit the fact that land that he knew Edward Obeid had acquired in the Bylong Valley near Mount Penny had a potentially valuable coal resource underneath it, and to allow them to exploit the fact that that resource (and the likelihood of coal resources underneath the adjacent properties) would be released for coal exploration following an EOI process for the grant of an EL.

1872. To repeat, again for emphasis, I did not find that Mr Macdonald’s sharing of that information constituted a wilful act of misconduct from which the existence of the conspiracy might be inferred. The Crown did not advance the case that I should. I was, however, satisfied that the evidence was probative of the Crown case in other ways, including by providing the context in which the fourth, seventh and eighth acts of misconduct were committed.

1873. In resolving the critical question whether I am satisfied that Mr Macdonald’s commission of each of the first, second, fourth, seventh and eighth acts of misconduct were acts committed in furtherance of a conspiracy that was in existence by no later than 9 May 2008 (both by reference to the evidence bearing directly upon proof of those acts and by the combined weight of that evidence and the various allied factual findings I have made), it is necessary to reflect on the nature of the agreement the Crown seeks to prove as fundamental to that fact beyond reasonable doubt.

1874. As the Crown made clear in the course of the trial, the indictment upon which the accused were ultimately arraigned alleges a conspiracy that was framed in order to make it clear that the case the Crown had resolved to prosecute at trial was not that the accused agreed that Mr Macdonald would commit separate acts of misconduct of a discrete kind or character or in any particular sequence, or, for that matter, that they agreed Mr Macdonald would wilfully misconduct himself as the Minister for Mineral Resources to achieve the discrete objective that an EL would be granted at Mount Penny by a particular time, or at all. It is also clear from the framing of the indictment that the agreement did not contemplate that Mr Macdonald would arrange for or ensure that an EL would be granted at Mount Penny or that he would do anything, in particular, to achieve that objective.

1875. I also remind myself that in the course of argument directed to the challenge by the accused to the indictment as framed, and in the course of argument in the trial more generally as to the way the indictment was framed, the Crown advanced and maintained the submission that the indictment was framed to reflect the fact that the Crown sought to prove the guilt of each of the accused on the basis that, as at 9 May 2008 when the first act of misconduct was committed, there was no EL at Mount Penny under consideration by the DPI. In fact, there was no designated coal release area in the Bylong Valley at all over which the DPI was actively considering that an EL might be applied for or granted under the statutory regime in the Mining Act at that time.

1876. The Crown urged me to approach the question whether I was satisfied of the guilt of the accused beyond reasonable doubt on the basis that the case prosecuted at trial was that each of the accused agreed, at least as and from 9 May 2008, that Mr Macdonald as Minister for Mineral Resources would do what he could, if and when the opportunity presented in connection with the granting of an EL at Mount Penny and in connection with the interests of Edward Obeid, and/or Moses Obeid and/or their family and/or associates for the improper purpose of advancing their interests and, as comprehended by that agreement, that he agreed to act in that way, knowing he would wilfully breach his Ministerial duties and obligations of impartiality and/or confidentiality without reasonable cause or excuse.

1877. Accordingly, I consider it implicit in the way the indictment was ultimately framed and explicit in the way the Crown sought to prosecute its case at trial, that the object of the unlawful agreement was intentionally described at that level of generality, in contrast to the acts of misconduct carefully particularised in the Revised Statement of Particulars to provide what the Crown submitted was a sound evidential basis upon which I would find the existence of the conspiracy proved to the criminal standard by a process of inferential reasoning.

1878. The stark question remains, however, whether I am satisfied beyond reasonable doubt that the unlawful agreement of the scope and object alleged in the indictment was an agreement that was forged on or before 9 May 2008 since, as is clear as a matter of law, it is only if I am satisfied of that fact beyond reasonable doubt that I need to consider whether that is the agreement in which each of the accused agreed to participate as at that date.

1879. In reviewing again all the evidence that I have extensively analysed in my deliberations concerning that question, and after taking into account and giving full weight to finding that the first, second, fourth, seventh and eighth acts of misconduct as particularised are established and, further, after taking into consideration the events the subject of the meetings on 6, 16 and 17 June 2008 and what I am satisfied Mr Macdonald communicated to either or both of Edward Obeid and Moses Obeid about the outcome of those meetings as part of the complex of evidence I took into account in ultimately determining that the five acts of misconduct, as particularised, were established, I am ultimately satisfied beyond reasonable doubt they were all acts of misconduct committed by Mr Macdonald in furtherance of the specific conspiracy alleged.

1880. Although I am unable to determine when the agreement was reached, or the circumstances in which it was reached, including the time or place when that occurred or what was discussed at that time, I am satisfied the Crown has proved the existence of the conspiracy charged on the indictment beyond reasonable doubt having regard to all the facts I have found proved and the inferences drawn from those facts. That is, I am satisfied, and beyond reasonable doubt, that the agreement of the scope and object alleged by the Crown, and framed in the terms of the conspiracy charged on the indictment, was in existence when the first act of misconduct was committed by Mr Macdonald on 9 May 2008.

1881. In making that finding, I have given careful consideration to whether there is any competing explanation for the five successive acts of wilful misconduct I have found established, including the context in which I am satisfied those acts of misconduct were committed. I have also considered whether there is any competing explanation for what I am satisfied Moses Obeid did in his deployment of the information Mr Macdonald provided to him or to his father, in particular the information the subject of the fourth, seventh and eighth acts of misconduct. Although those three acts of misconduct, considered individually, may admit of other explanations for their commission (even other criminal conduct in which either or both of Edward Obeid or Moses Obeid may have participated), when the full weight of the available evidence is considered, including the evidence that established Mr Macdonald’s commission of the first and second acts of misconduct, I am satisfied beyond reasonable doubt that the conspiracy the Crown charged in the indictment and prosecuted at trial was formed on or before 9 May 2008.

Money and motivation

1882. It is the Crown case that after the full complement of the evidence is reviewed and scrutinised, and after it is accorded the full weight it deserves, in particular the probative weight of the evidence establishing Mr Macdonald’s successive acts of misconduct as Minister for Mineral Resources committed in connection with the granting of an EL at Mount Penny and the financial benefit the Obeid family derived from the granting of the EL to Cascade Coal P/L after the conspiracy had been fully executed, I will be satisfied that there remains no reasonable explanation for the conduct of each of the accused other than that they acted, in concert, with the shared intention that Mr Macdonald would knowingly breach his Ministerial duties and obligations and for the improper purpose of advancing their financial interests and/or those of their family and/or associates.

The financial motives the Crown attributes to Edward Obeid and Moses Obeid

1883. The Crown attributes a financial motive to each of the accused Edward Obeid and Moses Obeid for agreeing to participate in the conspiracy alleged. Consistent with fundamental principles of criminal liability, the attribution of motive to either or both of Edward Obeid or Moses Obeid for participating in the conspiracy is not to be confused with the Crown’s obligation to prove that at the time they agreed to enter into the conspiracy, they each knew and intended that Mr Macdonald would commit misconduct in the office he held as Minister for Mineral Resources by doing acts in connection with the granting of an EL at Mount Penny for the improper purpose of benefitting them and/or their family and/or associates, acts which he and they knew would be committed by him wilfully in breach of his Ministerial obligations of impartiality and/or confidentiality without reasonable cause or justification.

1884. Similarly, the attribution of a motive to Mr Macdonald for agreeing to participate in the conspiracy is also not be confused with the Crown’s obligation to prove that at the time he intentionally entered into the conspiracy, he agreed with at least one of Edward Obeid or Moses Obeid that he would wilfully misconduct himself as Minister for Mineral Resources with the same object and for the same improper purpose.

1885. While the Crown is not obliged to prove what motivated any of the accused to agree to intentionally participate in the conspiracy, much less to any standard of proof, the Crown attributed to Edward Obeid and Moses Obeid, as landowners, financial motives in their pursuit of exploiting the value of the coal resource underlying Cherrydale Park. The Crown submitted those motives are patent, not only from the nature of the agreement into which each of Edward Obeid and Moses Obeid agreed to enter, but what they each did in furtherance of achieving the object of the conspiracy.

1886. On the Crown case, those financial motives derive elementally from what each of Edward Obeid and Moses Obeid anticipated would be the potential value to them (and/or their family and/or associates) in Mr Macdonald agreeing to act in connection with the granting of an EL at Mount Penny, for the improper purpose of generating for them and/or their family and/or associates a financial benefit in the event that an EL was granted over land they owned and over land they arranged for their friends or associates to acquire.

1887. In proof of that aspect of its case, the Crown relied in very large part upon Mr Brook’s dealings, first with Monaro Mining NL from July 2008 and then, after Mr Grigor’s departure from Monaro Mining NL, with Cascade Coal P/L. The Crown also relied, again in very large part, upon Mr Brook’s evidence that he was acting at all relevant times responsive to the way in which Moses Obeid wanted the arrangements with each of the mining companies to be structured, to ensure that his family (and his friends and associates) were at all times in a position of high leverage in their contractual dealings to ensure the maximum financial return to them.

1888. The Crown accepted that, at the time they entered into the agreement, none of the three accused could have known the quantum of the profit that would be ultimately generated from those structured arrangements. Nevertheless, the Crown submitted that the very fact and scope of the unlawful object of the agreement, and the various ways Edward Obeid and Moses Obeid have been shown to have participated in it, with Moses Obeid, either by design or by aptitude, acting in more overt ways than his father, is patent evidence that they were both motivated to enter into the conspiracy with Mr Macdonald (and with each other) by the prospect of a significant financial return, however speculative that was when the agreement was forged when there was no area at Mount Penny under consideration for release as a coal exploration area.

The accused’s submissions concerning motive

1889. Mr Neil advanced detailed submissions ^[2063] seeking to persuade me of the reasonable possibility that the various contractual and other arrangements in which Moses Obeid was directly involved from July 2008 ^[2064] were a series of ordinary commercial transactions unrelated to the conspiracy alleged. Mr Neil also submitted that Moses Obeid’s various contractual dealings (which he submitted only commenced in earnest from 3 July 2008 upon Mr Selby’s introduction of Mr Brook) were themselves highly speculative, indeed risk-laden, despite what Mr Neil accepted was the enthusiasm and optimism Moses Obeid expressed in his dealings with Mr Brook that an EL would be granted at Mount Penny, and his strong belief that there would be an exploitable coal resource to be realised by the entity granted an EL at Mount Penny.

1890. Mr Neil also submitted that I would have very grave doubts about Mr Brook’s credibility for a range of reasons and, that being the case, I would not accept his evidence that Moses Obeid was at all times driving the dealings with the mining companies for the purposes attributed to him by the Crown, as distinct from Mr Brook having his own venal agenda for the interpositional role he assumed.

1891. Finally, Mr Neil submitted that the fact that by September/October 2008 Moses Obeid (apparently with the concurrence of his brothers) had allowed the two options held by Geble P/L over Coggan Creek to lapse, in circumstances where, as Mr Rumore was instructed, they were unable to find an investor until Mr Lewis was introduced, tells strongly against the conspiracy and what the Crown attributes to Moses Obeid (and Edward Obeid) as the financial motives for their participation in it. Mr Neil submitted that I would accept that the Obeids were a very wealthy family with ample funds to purchase Coggan Creek to secure for the family the benefit of holding that property and Donola, rather than to divide the profits with others upon learning that the EL at Mount Penny encompassed, or would be likely to encompass, all three properties.

1892. Each of those submissions was deserving of careful consideration. However, in light of the various factual findings which culminated in me being satisfied of the existence of the conspiracy alleged proved beyond reasonable doubt, and in light of the factual findings I propose to make in considering whether Moses Obeid’s participation in the conspiracy alleged is also proved beyond reasonable doubt, it will be clear that Mr Neil’s submissions have no ultimate traction in raising a reasonable doubt as to Moses Obeid’s guilt.

The motives the Crown attributed to Mr Macdonald

1893. The Crown attributed to Mr Macdonald what it described as a more nuanced set of motives for what might have persuaded him to agree to commit misconduct in the public office he held as Minister for Mineral Resources for the improper purpose of financially benefitting his co-accused and/or their family and/or their associates. Those motives include the repayment of a debt of gratitude Mr Macdonald was said to have owed to Edward Obeid for his political patronage over the years. The Crown also submitted it was open to me to find that by Mr Macdonald agreeing to enter into the conspiracy in his last term of office, and at a time when I would be satisfied he was subject to personal financial pressures, ^[2065] he may have been motivated by the hope or the expectation of receiving a financial benefit (presumably by way of a gratuity) were the EL at Mount Penny granted, and were the Obeids successful in deriving substantial profits from owning land within the coal release area.

Mr Martin’s submissions on the question of motive

1894. Mr Martin submitted that the Crown was forced to attribute motives to Mr Macdonald cast entirely on the basis of speculation, since no evidence was adduced in the trial that Mr Macdonald derived any tangible benefit from the Obeids or the companies or entities they controlled at any time or that he sought to do so. That being the case, Mr Martin submitted I would have grave doubts that Mr Macdonald would have agreed to wilfully misconduct himself in the public office he held as Minister for Mineral Resources at all, even less for the improper purpose of benefiting others from whom he had no promise of reward and from whom he derived no reward.

1895. Those submissions were also deserving of careful consideration. However, in light of the factual findings I have made in finding the existence of the conspiracy proved beyond reasonable doubt, including but not limited to finding that Mr Macdonald committed five successive acts of wilful misconduct between May and September 2008, Mr Martin’s submissions have no traction.

1896. Having found the existence of the conspiracy proved beyond reasonable doubt, I have resolved to treat the issue of motive of secondary significance in resolving whether I am satisfied beyond reasonable doubt of the participation of each of the accused in that conspiracy. In the event that I am satisfied that there is either overwhelming evidence of the participation of each of the accused in the conspiracy (a conclusion that is inevitable so far as Mr Macdonald is concerned, having regard to the way the indictment is framed, the way the Crown has particularised its case and the finding I have made in finding the conspiracy proved beyond reasonable doubt) Edward Obeid and Moses Obeid’s motives in agreeing to participate with Mr Macdonald in the conspiracy, even if their motives can be discerned, are likely to add little additional weight to proof of that fact.

1897. Although I propose to treat the issue of motive in that way, before turning to consider whether I am satisfied that each of Edward Obeid and Moses Obeid participated in the conspiracy, I propose to deal with a discrete aspect of the evidence relied upon by the Crown to prove the participation of each of Edward Obeid and Moses Obeid beyond reasonable doubt.

1898. It is the Crown case that Edward Obeid and Moses Obeid sought to conceal their participation in the conspiracy by taking steps to distance their family’s ownership of Cherrydale Park, each of them making concerted efforts in achieving that objective in 2008 and 2009. It is also the Crown case that Moses Obeid sought to distance his family from the ownership of the adjacent properties Donola and Coggan Creek and that I would find, as a matter of overwhelming inference, that he did so with the knowledge and encouragement of Edward Obeid as a co-conspirator.

Change of ownership of Cherrydale Park

1899. Cherrydale Park was purchased in September 2007 by Locaway P/L as trustee for the Moona Plains Family Trust. ^[2066] As at the date of settlement, the identity of the purchaser remained unchanged.

1900. As noted earlier, the Moona Plains Family Trust was settled by a Trust Deed executed by Locaway P/L as trustee on 25 October 1994. ^[2067] The primary beneficiaries under the trust were each of Edward Obeid’s sons: Damian Obeid, Paul Obeid, Moses Obeid, Gerard Obeid and Edward Obeid Jr. Discretionary beneficiaries include the primary beneficiaries and their parents, children, siblings and spouses. Edward Obeid was the appointer.

1901. Of the two shares Locaway P/L issued as trustee of the Moona Plains Family Trust, one was held by Paul Obeid and the other by the Obeid Corporation P/L as trustee for the Obeid Family Trust No 1. ^[2068]

1902. In an interview with journalists, Mr Shanahan and Ms Jiminez, on 18 December 2012, Locaway P/L was described by Moses Obeid, in Edward Obeid’s presence, as his family’s “rural property entity [through which] we had purchased all of our rural properties”. On that occasion, Moses Obeid went on to say:

If there was anything that was meant to be secretive about us buying Cherrydale Park or we had some prior knowledge, why would of all entities you would go and buy it in your main family rural company… my mother, my brothers were all directors of the company. ^[2069]

1903. It is the Crown case that initially in October 2008 (during the currency of the conspiracy) and then again in February and March 2009 (after the conspiracy had been fully executed) Edward Obeid made various attempts, through his solicitors, to change the legal ownership of Cherrydale Park to create “distance” between his family’s ownership of land within the Mount Penny Coal Release Area, including divesting or attempting to divest Locaway P/L of its legal ownership of Cherrydale Park.

1904. It is the Crown case that Edward Obeid took those steps fully aware that Moses Obeid had been successfully and progressively implementing the strategy of controlling Monaro Mining NL’s bid for the Mount Penny EL. The Crown relies on those steps as having been taken by him in furtherance of the conspiracy and, in that way, as a source of evidence of his participation in the conspiracy.

The appointment of UPG P/L as the new trustee company for the Moona Plains Family Trust

1905. The various attempts to change the legal ownership of Cherrydale Park between October 2008 and March 2009 included the proposed appointment of UPG P/L as the new trustee company for the Moona Plains Family Trust, of which Moses Obeid and his brothers were primary beneficiaries and Edward Obeid was appointor. ^[2070]

1906. UPG P/L, (then called Kingsleys Chophouse P/L) was registered in September 2007.

1907. On 14 February 2008, in a letter to Edward Obeid, Mr Cordato, the solicitor who acted for Locaway P/L on the purchase of Cherrydale Park, advised “we refer to our telephone conversation and confirm that you desire to appoint UPG P/L as the new trustee of the [Moona Plains Family Trust] to replace Locaway P/L” (emphasis added). ^[2071]

1908. On 15 February 2008, the shares in Kingsleys Chophouse P/L, later renamed UPG P/L, were transferred to Mr Kaidbay, an associate of the Obeids, who was also appointed as its sole director. ^[2072]

1909. In an unexecuted Deed of Appointment of New Trustee also dated 15 February 2008, Edward Obeid, as Appointor of the Moona Plains Family Trust, removed Locaway P/L as Trustee and appointed UPG P/L as Trustee. ^[2073] This proposed change was also reflected in a draft application to record new registered proprietors, also unexecuted. ^[2074]

1910. Mr Cordato’s letter of 14 February 2008 was attached to an email sent by Mr Cordato to Mr Sassine (a chartered accountant who acted from time to time on behalf of members of the Obeid family including on behalf of the Obeid Family Trusts 1 and 2 ^[2075] ) on 15 October 2008 responsive to a request from Mr Sassine that Mr Cordato attend to changing the trustee of the Moona Plains Family Trust. ^[2076]

1911. The nature of Mr Sassine’s dealings with members of the Obeid family and from whom he obtained or sought instructions were the subject of limited evidence in the trial. ^[2077] Mr Sassine did not give evidence. I note, however, that on 26 September 2007, the day before the purchase of Cherrydale Park, a handwritten entry in Edward Obeid’s diary recorded the name “Sid Sassine” ^[2078] and on 1 April 2008, a handwritten entry in Edward Obeid’s diary read “ring Sid Sassine re Tony”, ^[2079] the readily available inference being that was a reference to Mr Cordato.

1912. In order for UPG P/L to be appointed as the new trustee company, the assignment of the first registered mortgage to the Cherry Superannuation Fund from Locaway P/L to UPG P/L was necessary, requiring the consent of Mr Cherry on behalf of the Cherry Superannuation Fund as mortgagee.

1913. On 2 October 2008, Mr Sassine sent an email to Mr Cordato attaching the Trust Deed of the Moona Plains Family Trust and instructing Mr Cordato that the new trustee as from February 2008 should be UPG P/L, and the sole director Mr Kaidbay. ^[2080]

1914. On 15 October 2008, Mr Cordato sent a letter to Langes Lawyers (solicitors for Mr Cherry) requesting “the mortgagee’s consent to the substitution of United Pastoral Group Pty Ltd [as the trustee for the Moona Plains Family Trust] for Locaway Pty Ltd as mortgagor and registered proprietor of [Cherrydale Park]”. ^[2081] The letter further stated the following:

We are instructed that our client has spoken to your client concerning this request, and that the substitution has been agreed to in principle, subject to documentation. ^[2082] (Emphasis added).

1915. In the body of the letter, Mr Cordato indicated that two documents entitled “Application to Record New Registered Proprietor” and “Deed of Appointment of New Trustee” were enclosed. ^[2083]

1916. In a further letter to Langes Lawyers dated 9 February 2009, Mr Cordato wrote:

We refer to our telephone discussion this morning and confirm that our client desires to proceed without delay to record the appointment of United Pastoral Group Pty Limited as the new trustee of the Moona Plains Family Trust on the title to the property.

We confirm that we now hold the documents enclosed under cover of our letter to you of 15 October, 2008, duly executed.

Subject to your clients’ instructions, we would be pleased if you were to submit an Acknowledgement of Debt for the new trustee to execute and advise your other requirements by return. ^[2084]

1917. In a letter to Cordato Partners dated 12 February 2009, Richard Joice, Partner at Langes Lawyers, wrote:

John Cherry has confirmed that Mr Eddie Obeid has spoken to him in regard to changing the trustee of the Moona Plains Family Trust. However, he had indicated to Eddie Obeid that the reasons for the change would need to be provided before the request would be considered.

…

Subject to your confirming the purpose behind the change of trustee to the satisfaction of our client mortgagee, we shall prepare and submit a Deed for execution by your clients. ^[2085]

1918. On 3 March 2009, after Mr Cherry was informed on 16 February 2009 by Mr Cordato that the assignment was “to protect the privacy of our clients” and that UPG P/L “was a nominee company which has been incorporated for that purpose”, ^[2086] a Deed of Consent to Assignment of Mortgage between Mr and Mrs Cherry (mortgagee), Locaway P/L (assignor), UPG P/L (assignee) and the beneficiaries of the Moona Plains Family Trust (guarantor) was partially executed on behalf of Locaway P/L by Paul Obeid and Damian Obeid, on behalf of UPG P/L by Mr Kaidbay and by Moses Obeid and his brothers as guarantors as beneficiaries under the Moona Plains Family Trust. ^[2087] The Deed of Consent and an Application to Record New Registered Proprietor signed by Mr Kaidbay ^[2088] were forwarded to Mr Cherry’s solicitors. ^[2089]

1919. On 6 March 2009, Mr Cherry’s solicitors advised that he was not prepared to agree to the change of trustee. ^[2090] Accordingly the Deed of Consent to Assignment of Mortgage was unexecuted and ineffective.

1920. Mr Cherry gave evidence that he spoke to Edward Obeid about the reason he wanted to change the ownership of Cherrydale Park. Mr Cherry gave the following evidence:

Eddie Obeid said that what he really wanted to do was to remove him and the family name from coal; there was a lot of fuss going on in the valley at that particular point in time, so wanted to hide that factor, because he was interested in coal. ^[2091] (Emphasis added.)

1921. In cross-examination by Ms Francis, Mr Cherry gave the following evidence referable to his statement of 7 July 2014:

Q. It is not the case, is it, that Mr Obeid said to you that he was in fact interested in coal?
A. He wasn’t ‑ I don’t know what Mr Obeid was involved in at the time, because he didn't want his family to be connected with coalmining. It was all negative, as I said, I am sure, and that “we are really against coalmining in the Bylong Valley”.

…

Q. Yes, and is it the case that Mr Obeid conveyed to you that he didn’t want his name associated with coalmining in the Bylong Valley?
A. That’s right. ^[2092]

1922. Notwithstanding that state of affairs, Locaway P/L and UPG P/L continued to act as if the transfer of legal ownership of Cherrydale Park had been legally affected, as evidenced in a number of Deeds, many of which are in draft, principal among them a Call Option Deed executed on 5 January 2009 by Moses Obeid and Damian Obeid for Locaway P/L and Mr Kaidbay for UPG P/L. ^[2093] On the Crown case that Call Option Deed was designed to ensure that the anticipated and significant profit on the sale of Cherrydale Park to Cascade Coal P/L under the Letter of Agreement between Cascade Coal P/L, UPG P/L, Geble P/L and Justin Kennedy Lewis P/L dated 5 June 2009 (which would have seen Cherrydale Park transferred to Cascade Coal P/L at a multiple of four times its value) devolving to Locaway P/L since, if the sale of Cherrydale Park had come to pass under the Call Option Deed, UPG P/L would have been obligated to pay to Locaway P/L the purchase price (as defined in the Call Option Deed) of $5 million plus 50% of any figure over $5 million (which was $12 million) within ten years of the Call Option being exercised. ^[2094]

1923. In the Crown’s submission, these various documents, apparently drawn in anticipation of Mr Cherry’s consent as mortgagee to the transfer of legal ownership of Cherrydale Park to UPG P/L, are what underpinned instructions from Moses Obeid on 6 November 2008 ^[2095] and from Gerard Obeid on 7 November 2008 ^[2096] to Mr Rumore to draft two agreements (detailed below). Both of those agreements ultimately named UPG P/L as a contracting party, reinforcing, in the Crown’s submission, the inference that Moses Obeid and Edward Obeid were motivated to ensure that the anticipated benefits that would flow to them and their family members and associates from their coordinated misuse of the information Mr Macdonald had provided to them would not be lost and that their ownership and effective control of the three rural properties within the boundaries of the Mount Penny Coal Release Area would not be exposed, thereby ensuring that their participation in the conspiracy would not be revealed.

The Tripartite Landowners Deed

1924. The first of two agreements drafted by Mr Rumore was a Landowners Deed. That Deed, as ultimately executed, provided that the owners of Cherrydale Park (stated to be UPG P/L), Donola (Geble P/L) and Coggan Creek (Justin Kennedy Lewis P/L), agree to sell the nominated properties to the mining company (defined as the entity which is granted a coal EL (over land) incorporating the properties), at a multiple of at least four times the value of each property. The Deed also provided that one representative of the landowners is to negotiate with the mining company for the sale of the properties.

1925. The Landowners Deed passed through various drafts. In the first draft, dated 11 November 2008, ^[2097] Locaway P/L was named as a party and as the registered proprietor of Cherrydale Park. In the second draft, dated 8 December 2008, ^[2098] UPG P/L was named as a party in the same capacity.

1926. The second draft included a new clause which provided that:

UPG has disclosed, prior to the date of this document, to the Owners [of the three properties] that UPG will enter into a consultancy agreement with the Miner and will receive compensation and remuneration for such consultancy arrangement which will be separate from the Mining Interests [an interest in or granted by the Miner to the parties to the Landowners Deed in consideration of the sale of the Properties by the parties to this document to the company granted the exploration licence or other mining interests]. No Owner will object to or have any claim to any benefits of this consultancy arrangement involving UPG. ^[2099]

1927. That clause was included subject to instructions from Gerard Obeid ^[2100] and was retained in the document which was ultimately executed. ^[2101]

1928. In the final, partially executed version of the Deed, dated 15 December 2008 ^[2102] (but on the Crown case likely to have been partially executed on or about 10 March 2009 ^[2103] ), UPG P/L was named as Trustee. ^[2104] Mr Kaidbay was named as the parties’ representative, replacing Paul Obeid who had been nominated in that role in the previous drafts.

The Profit Sharing Deed

1929. The second agreement prepared by Mr Rumore was a Profit Sharing Deed. ^[2105] Two drafts were prepared by Mr Rumore. ^[2106] A fully executed version of that agreement did not form part of the evidence at trial. ^[2107]

1930. Under the Profit Sharing Deed, upon the sale of Coggan Creek to Monaro Coal P/L (in the event it was granted the EL), Justin Kennedy Lewis P/L agreed to pay UPG P/L 30% of the profit generated by the sale as a fee.

1931. The second draft of the Profit Sharing Deed included a new clause providing that:

[UPG P/L] has disclosed, prior to the date of this document, to Coopers that the Company will enter into a consultancy agreement with Monaro [if Monaro is granted the Mining Concession], and will receive compensation and remuneration for such consultancy arrangement, which will be separate from the Fee. Coopers will not object to or have any claim to any benefits of this consultancy arrangement involving [UPG P/L]. ^[2108]

1932. Again, that clause was included subject to instructions from Gerard Obeid. ^[2109]

1933. I note that the name of Coopers World P/L was changed to Justin Kennedy Lewis P/L on 10 November 2008. ^[2110]

1934. I also note Moses Obeid’s ongoing role in reviewing the draft agreements. In a conference held on 8 December 2008, Gerard Obeid advised Mr Rumore that UPG P/L was the “new trustee” to replace Locaway P/L as owner of Cherrydale Park. ^[2111] That change was reflected in the draft of the Landowners Deed prepared by Mr Rumore later that day. ^[2112] In an email copied to Moses Obeid following that conference, Mr Rumore requested that Gerard Obeid “go through the changes” reflected in the second draft of the Landowners Deed and the Profit Sharing Deed and “confirm with your brothers that these are acceptable”. ^[2113] Those changes were apparently approved prior to the production of the final versions of the Landowners Deed and the Profit Sharing Deed.

1935. The Crown relied on these documents as evidence of the steps taken by Moses Obeid to ensure the landowners (identified in Mr Rumore’s file note of 22 September 2009 as the “Obeid”, “Justin Lewis” and “Triulucio” (sic) interests ^[2114] ) were united in their negotiation with a mining company for maximum financial return, and the (unexecuted) Profit Sharing Deed a source of evidence as to the circumstances in which Mr Lewis purchased Coggan Creek.

Moses Obeid’s further role in distancing the Obeid family from ownership of Cherrydale Park

1936. It is the Crown case that Moses Obeid also attempted to conceal his family’s ownership of Cherrydale Park through the interposition of Mr Kaidbay and UPG P/L and by his insistence in Mr Brook’s dealings with Monaro Mining NL that he preserve the Obeid family’s anonymity as the landowners.

1937. The Crown also relied upon correspondence between Mr Kaidbay, on behalf of UPG P/L, and Moses Obeid, on behalf of Locaway P/L, as evidence of Moses Obeid’s attempts to distance his family from ownership of Cherrydale Park in a series of “constructed” letters.

1938. As stated above, Mr Kaidbay was the appointed director and sole shareholder of UPG P/L from 15 February 2008. ^[2115]

1939. On 7 October 2008, in a letter to Locaway P/L (addressed “Dear Sir”), Mr Kaidbay, on behalf of UPG P/L, proposed that UPG P/L enter into a put and call option for the purchase of Cherrydale Park for a 12-month period for $4.5 million with an option fee of $45,000. Mr Kaidbay expressed confidence that “you will find our offer acceptable” and sought a response “as a matter of urgency”. ^[2116] As at that date, Damian Obeid, Paul Obeid, Moses Obeid and Edward Obeid Jr were the Directors of Locaway P/L. ^[2117]

1940. On 10 October 2008, in a letter sent to UPG P/L on Locaway P/L letterhead, Moses Obeid acknowledged receipt of the offer to purchase Cherrydale Park and reported he had spoken with “[his] brothers” and that “our family” would be prepared to sell Cherrydale Park for $5 million. ^[2118] The letter included the following:

As discussed with you and your colleague Mr Brook, Cherrydale Park was purchased as a family retreat with the view of having the property being able to pay for itself through cattle and lucerne hay operations. We have committed considerable funds to establishing these operations. ^[2119]

1941. On 13 October 2008, in a letter to Locaway P/L (addressed “Dear Moses”), Mr Kaidbay confirmed UPG P/L would enter into a put and call option for the purchase of Cherrydale Park at a purchase price of $5 million purporting to “understand and respect [the Obeid] family’s position”. ^[2120]

1942. Not only did Mr Brook give evidence that he was not involved as a colleague of Mr Kaidbay in negotiations for UPG P/L to purchase Cherrydale Park but, as is obvious from other evidence in the trial which I accept, Cherrydale Park was not by this date a family retreat paying its way through cattle and crop farming. It was a property that was contemplated would ultimately be sold for its value to a mining company.

1943. I am in no doubt that this correspondence was designed to give the appearance of an arm’s length transaction ^[2121] whereas it was in truth a construct to attempt to distance the Obeid family from the direct ownership of Cherrydale Park through the interposition of UPG P/L as Trustee for the Moona Plains Family Trust.

1944. It was also the Crown case that Mr Kaidbay was used by Moses Obeid as a “frontman” for UPG P/L and for other companies he later utilised as he sought to capitalise on the various benefits the Obeid family had received from Mr Macdonald’s successive breaches of his Ministerial duties and obligations, committed by him in furtherance of the conspiracy in what has been described as the “entrepreneurial phase” of the conspiracy. They include:

1. On 3 June 2009, Mr Kaidbay was appointed as a director of Buffalo Resources P/L, the entity which entered into the Joint Venture Agreement with Cascade Coal P/L. ^[2122]

2. On 4 June 2009, Mr Kaidbay was appointed as the sole director of Loyal Coal P/L (replacing Mr Rampe and Mr Malone from Monaro Mining NL) as part of the dissolution of the landowners’ arrangement with Monaro Mining NL. ^[2123]

3. On 10 December 2009, Mr Kaidbay was appointed as director, secretary and shareholder of Voope P/L (taking over from Mr Skehan, the former director) although by that time Voope P/L was redundant. ^[2124] Moses Obeid instructed Mr Rumore of the change of directorship on 4 June 2009. ^[2125]

1945. Mr Kaidbay did not give evidence in the trial.

1946. In the Crown’s submission, whether I regard the attempts by Edward Obeid and Moses Obeid in October 2008 to change the family’s legal ownership of Cherrydale Park as acts done by each of them in furtherance of the conspiracy and in that way as evidence of their participation in the conspiracy, is a matter that falls to be considered in the context of the circumstances in which Donola was purchased on 22 October 2008 by Geble P/L as trustee for the Elbeg Unit Trust, and the agreement pursuant to which Coggan Creek was to be purchased by Justin Kennedy Lewis P/L, Mr Lewis being a friend and associate of Moses Obeid. The unit holders of the Elbeg Unit Trust, settled on 6 August 2008 with Geble P/L as trustee, were UPG P/L as trustee for the Moona Plains Family Trust and Challenge Property Investment Group P/L as Trustee for the Triulcio Family Trust. ^[2126] Rocco and Ross Triulcio were business associates of Edward Obeid and Moses Obeid.

1947. It forms no part of the Crown case that the purchase of Coggan Creek, by Justin Kennedy Lewis P/L as trustee for the Justin Kennedy Lewis Family Trust, was financed by Edward Obeid or Moses Obeid or any of their family members. Neither is there any evidence that Mr Rumore, who controlled Geble P/L as the registered proprietor of Donola on settlement (and later Mr Campo, the Triulcios’ accountant, as the sole director and shareholder of that company) was financed by Edward Obeid or Moses Obeid or entities associated with them to acquire Donola, with the exception of a payment of $60,000 from the Obeid Family Trust No 1 account on 5 August 2008 to an account in the name of Colin Biggers and Paisley then paid from that account to an account in the name of Elders Real Estate, the agency engaged in the sale of Donola, on 13 August 2008. ^[2127] It is the Crown case that with the acquisition of both properties adjoining Cherrydale Park owned or controlled by individuals or entities who were the accused’s friends or associates, a unified approach by them as landowners would ultimately lead to their mutual advantage under the terms of landowners agreements, first with Monaro Mining NL and then with Cascade Coal P/L, with a very significant dividend on the sale of the three properties devolving to Obeid family interests through Locaway P/L (or UPG P/L) as trustee for the Moona Plains Family Trust and through a 50% interest as unit holder of the Elbeg Unit Trust.

1948. Finally, I note that on 25 July 2008, in an email to Mr Rumore, Mr Sassine advised that Equitexx P/L was “acting as trustee for Obeid Family Trust No 2” and that he was the sole director and shareholder of that company. He also advised that “[w]ith respect to the SPV(s) you intend setting up, which I understand to be Unit trusts [sic] with a corporate trustee” (a clear reference to the company ultimately registered as Voope P/L) “all units on issue are to be owned by ‘Equitexx Pty Ltd ATF Obeid Family Trust No 2’.” ^[2128] On 28 July 2008, in an email to Gerard Obeid and Moses Obeid copied to Paul Obeid, Mr Rumore advised that Geble P/L (a company of which he would be the sole director and shareholder) would acquire “the properties” as trustee for Equitexx P/L as trustee for OFT No 2. ^[2129]

1949. I am satisfied that the various steps taken by solicitors acting on behalf of Edward Obeid or acting on behalf of Locaway P/L as purchaser of Cherrydale Park, directed to changing the legal ownership of Cherrydale Park, initially in October 2008 and reignited in early 2009, in the context of all of the evidence in the Crown case, is probative of the fact and degree of control Edward Obeid, and through him Moses Obeid, exercised over the entity who would be the registered proprietor of Cherrydale Park. I am also satisfied of the steps taken by Moses Obeid to ensure that his friends and associates acquired the properties adjacent to Cherrydale Park and within the boundaries of the Mount Penny Coal Release Area in order to maximise both the interest in the EL they expected would issue to a mining company with whom they would contract in a joint venture and the increased value of their landholdings.

1950. I am also satisfied that the evidence establishes that the steps taken to change the ownership of Cherrydale Park were taken with the involvement of both Edward Obeid and Moses Obeid. Those steps are a source of evidence of their participation in the conspiracy alleged, as steps taken coordinate with the acquisition of the adjacent properties by their friends or associates.

Is Moses Obeid’s participation in the conspiracy proved beyond reasonable doubt?

1951. I propose to deal first with the question whether, independent of the co-conspirators rule embodied in s 87(1)(c) of the Evidence Act, I am satisfied that the evidence directly admissible against Moses Obeid establishes his intentional participation (with Mr Macdonald) in the conspiracy beyond reasonable doubt.

1952. The fact that there is no direct evidence that Moses Obeid intentionally agreed to enter into the conspiracy as at the date I am satisfied it was forged (that is, no later than 9 May 2008), does not undermine the conclusion that I have ultimately reached, and beyond reasonable doubt, that he did so.

1953. In finding the first, second, fourth, seventh and eighth acts of misconduct established (on the basis of which I was ultimately satisfied beyond reasonable doubt of the existence of the conspiracy), I made various factual findings that provide, in my view, a sound evidential basis upon which to find, as a fact, that Moses Obeid agreed to participate in the conspiracy with Mr Macdonald at the time that it was forged (that is, no later than 9 May 2008), and that he actively participated in the conspiracy after that date by committing a range of overt acts in furtherance of that agreement.

1954. The various factual findings I have made in the context of all of the evidence in the Crown case (and the inferences drawn from that evidence) also provide, in my view, a sound evidential basis upon which to find as a fact that in agreeing to enter into the conspiracy, Moses Obeid knew and intended that Mr Macdonald would wilfully misconduct himself in the office he held as Minister for Mineral Resources in connection with the granting of an EL at Mount Penny and for the improper purpose alleged, and that he knew by Mr Macdonald agreeing to act in that way, he would wilfully breach his duties and obligations as a Minister without reasonable cause or excuse.

1955. In finding Moses Obeid’s knowing participation in the conspiracy proved beyond reasonable doubt, I have relied principally, but not exclusively, on what I have found were his direct dealings with Mr Macdonald in July and August 2008, as he sought to secure a mining deal with a mining company that would best position his family to take advantage of their ownership and/or control of the three rural properties within the Mount Penny Coal Release Area, pending the ultimate release of that area for coal exploration at the conclusion of the EOI process for the granting of an EL at Mount Penny.

1956. I also rely on what I am satisfied are the direct steps Moses Obeid took to introduce the Triulcios to Mr Rumore to facilitate a change in the directorship of Geble P/L as the registered owner of Donola and for Mr Lewis to be introduced to Mr Rumore as a client, and for him to be assigned the call options over Coggan Creek, also held by Geble P/L, steps which I am satisfied Moses Obeid took in order to distance himself (and his family) from ownership or control of the properties encompassed within the Mount Penny Coal Release Area.

1957. Moses Obeid’s conduct from June 2008 extending through to the end of the conspiracy on 31 January 2009, and his conduct in what I have described as “the entrepreneurial phase” of the conspiracy, leaves me in no doubt that, as at 9 May 2008, he had intentionally entered into an agreement with Mr Macdonald that Mr Macdonald would knowingly breach his Ministerial obligations of confidentiality and/or impartiality in connection with the granting of an EL at Mount Penny to advance the Obeid family’s interests (and the interests of their associates).

1958. Moses Obeid’s participation in that agreement is proved to my satisfaction, and beyond reasonable doubt, in a multiplicity of ways. That evidence includes, but is not limited to, the steps he took to implement and exploit the value or benefit of the successive acts of misconduct Mr Macdonald committed in furtherance of the conspiracy, and the steps he took to implement and exploit his receipt of other valuable information disseminated by Mr Macdonald during the currency of the conspiracy, information which he either received directly from Mr Macdonald or via members of his family, including his father, concerning the creation of the Mount Penny Coal Release Area and its inclusion in the EOI process for the grant of an EL. Evidence in that category includes the following:

1. His dealings first with Mr Fang as the Chairman of the Tianda Group (as I have found, on Mr Macdonald’s introduction and recommendation) ^[2130] no later than 30 June 2008 and then his meetings with Mr Brook as a Senior Vice President of Lehman Brothers on 2 and 7 July 2008 (the Wentworth Hotel meetings), in pursuit of a “mining deal” after having learnt from Mr Macdonald, sometime after 17 June 2008 at the latest, that Cherrydale Park would be included in a newly created coal release area over which an EL would be granted following a closed tender process.

2. His use of Wiles Map 2 in the second Wentworth Hotel meeting which he knew contained confidential information that had sourced from Mr Macdonald to designate the area contiguous or adjacent to the area he learnt (again from Mr Macdonald) was to be the newly created Mount Penny Coal Release Area encompassing Cherrydale Park (again referable to that map).

3. His provision to Mr Brook of a confidential list of companies Mr Macdonald informed him the DPI was proposing to invite to participate in a closed tender process for the granting of an EL at Mount Penny in order that Mr Brook might approach a mining company on his family’s behalf with a view to forging a mining deal with one of those companies.

4. His dealings (through Mr Brook) with Monaro Mining NL (as one of the invitee companies) from 15 July 2008 and thereafter through the interposition of Voope P/L (a company controlled by the Obeid family) and his concern, as evidenced in the instructions he gave to Mr Rumore, throughout the course of those dealings to ensure effective control over Monaro Mining NL’s application for the grant of an EL at Mount Penny and the grant of the EL were it the successful tenderer, in particular, his instructions to Mr Rumore as to the content of the Share Option Deed to ensure control was maintained over Monaro Mining NL’s application for the grant of an EL at Mount Penny.

5. His introduction of both Mr Fang and later Mr Brook to his solicitor, Mr Rumore, in the course of receiving ongoing legal advice from Mr Rumore as to the structure of a potential joint venture mining deal with a third party entity or entities.

6. His instructions to Mr Rumore to acquire the neighbouring properties to Cherrydale Park (Donola and Coggan Creek), initially through Geble P/L, to ensure control over the land that he understood would be encompassed by the newly created Mount Penny Coal Release Area, and later the convoluted interposition of third parties to take legal ownership of those properties and the introduction of Mr Lewis to Mr Rumore as a client in that connection.

7. Following the public launch of the EOI process which included the Mount Penny Coal Release Area overlaying Cherrydale Park, the coordinated steps he took (with his father Edward Obeid) to attempt to change the legal ownership of Cherrydale Park from Locaway P/L to UPG P/L.

8. His request for and receipt of information about the progress of the preparation of Monaro Mining NL’s application for the grant of an EL at Mount Penny from Mr Brook (who he had effectively engaged to act as his “unpaid” intermediary), including his request for information about the prospects of Mr Brook securing financial support for Monaro Mining NL’s bid for Mount Penny after Mr Brook was engaged to act as a consultant for Monaro Mining NL following the collapse of Lehman Brothers.

9. His receipt of a draft of Monaro Mining NL’s application for the grant of an EL at Mount Penny from Mr Brook on 28 October 2008. ^[2131]

10. His receipt of a Memorandum of Understanding between Monaro Mining NL and Tianci Inc, a potential Chinese partner (later found during the execution of the Locaway P/L search warrant together with Wiles Map 1 and Wiles Map 2 in Paul Obeid’s office). ^[2132]

11. His provision of further confidential information to Mr Brook in August 2008, the subject of the eighth act of misconduct, including with a view to Mr Brook continuing to pursue capital backing for Monaro Mining NL’s application for the grant of the EL at Mount Penny.

12. Following Mr Grigor’s resignation from Monaro Mining NL and amidst growing doubts as to Monaro Mining NL’s capacity to pay the $25 million AFC which was integral to its application for the EL at Mount Penny, his change of focus from Monaro Mining NL to Cascade Coal P/L and the process in which he was involved (through Mr Brook as an intermediary vis a vis the Board of Monaro Mining NL) to preserve Voope PL’s position by gaining control of Monaro Mining NL’s bid and the ultimate vesting of control over Monaro Mining NL’s bid (via Loyal Coal P/L) in Voope P/L as leverage for his pursuit of a substitute mining deal with Cascade Coal P/L.

13. His direct involvement with Mr Brook in the negotiations for and the ultimate structuring of two agreements with Cascade Coal P/L executed on 5 June 2009, coordinate with Loyal Coal P/L withdrawing its application for the grant of the EL at Mount Penny: the first, the Letter of Joint Venture Agreement between Cascade Coal P/L and Buffalo Resources P/L, amended by way of Letter of Amendment of the Joint Venture Agreement the following day; and the second, the Letter of Landowners Agreement between Cascade Coal P/L and the owners and ostensible owners of Cherrydale Park (UPG P/L) signed by Mr Kaidbay, Donola (Geble P/L) signed by Mr Campo, the Triulcio’s accountant, and Coggan Creek (Coopers World P/L) signed by Mr Lewis.

14. The profits that were generated from sale of a 25% share in the joint venture agreement with Cascade Coal P/L in October 2010 for $60 million of which $30 million was disbursed to companies controlled by various members of Moses Obeid’s immediate family, in particular to the Obeid Corporation P/L and then to Calvin Holdings P/L as successive trustees of the Obeid Family Trust No 2 of which he was a named beneficiary.

1959. In addition to what I am satisfied is the demonstrable and, in my view, overwhelming evidence of Moses Obeid’s participation in the conspiracy in the various steps outlined above, I am fortified in making that finding to the criminal standard of proof beyond reasonable doubt by what I am satisfied were a number of deliberate and material lies he told to a number of journalists on various dates between May 2009 and December 2012, at a time when I am also satisfied he was conscious of having agreed with and participated in a conspiracy of the scope and object of the conspiracy alleged, and where I am satisfied that he told those lies in order to attempt to conceal that fact. I am also satisfied that in the course of those interviews he made a number of admissions against his interest in the outcome of the trial proceedings as provided for in s 81 of the Evidence Act.

1960. The interview with Ms Davies (a journalist with the Sydney Morning Herald) was conducted by telephone on 14 May 2010. ^[2133] Ms Davies made contemporary handwritten notes. ^[2134] The interviews with Mr Shanahan and Ms Jiminez were conducted on 18, 20 and 21 December 2012. Those interviews were audio-recorded. ^[2135] Edward Obeid was present at the 18 December 2012 interview only.

1961. Moses Obeid objected to the admission of this evidence as failing to meet the test of relevance in s 55 of the Evidence Act (in the sense that it was not probative of proof of his alleged participation in the conspiracy) as inadmissible hearsay not governed by the exception in s 81 of the Evidence Act and as failing to meet the common law preconditions to the admissibility of out-of-court statements as capable of constituting a “consciousness of guilt” lie.

1962. Edward Obeid also objected to the tender of the interview with Mr Shanahan and Ms Jiminez in which he participated, together with what the Crown contended were lies he told Ms Davies in a separate telephone interview and further admissions allegedly made to another journalist, Ms Ong, in October 2009. ^[2136]

1963. For completeness, in its case against Mr Macdonald, the Crown tendered an article ^[2137] published in the Australian Financial Review on 28 October 2009 by Ms Ong following the interview with Edward Obeid for a non-hearsay purpose, namely to prove, as a matter of inference, that the publication of the article prompted Mr Macdonald to make various false claims to Mr Mullard and Mr Gibson which the Crown contends were lies told by him with a consciousness of guilt. ^[2138] The tender of that evidence for that purpose was not opposed by Mr Macdonald. Having found the existence of the conspiracy proved beyond reasonable doubt, and having made the allied finding of Mr Macdonald’s participation in the conspiracy also proved beyond reasonable doubt, I have not found it necessary to determine whether what Mr Macdonald said to either or both of Mr Gibson and Mr Mullard about the location of Edward Obeid’s property were “consciousness of guilt” lies told by him from which an inference of guilt might be drawn.

1964. In the course of the trial, after lengthy oral argument and the furnishing of detailed written submissions from the Crown and from counsel for Edward Obeid and Moses Obeid, I published a judgment ruling on the admissibility of this body of evidence in the Crown case against each of them.

1965. The interlocutory judgment also considered lies and admissions said by the Crown to have been made by Edward Obeid and Moses Obeid in the video recording of the execution of the search warrant at the Locaway P/L premises on 23 November 2011.

1966. I annexed a Schedule to that judgment in which the lies and admissions I admitted were identified by a line entry, referable to Ms Ong’s statement, Ms Davies’ handwritten notes of interviews with Moses Obeid and Edward Obeid and the audio recorded interview with Mr Shanahan and Ms Jiminez. ^[2139] Ms Davies was the only journalist who gave evidence in the trial.

1967. In the course of publishing that judgment, I made it clear that whilst I was satisfied that 10 of the 36 lies the Crown sought to attribute to Moses Obeid as lies told with a consciousness of guilt were capable of constituting an implied admission of guilt, in my deliberations to verdict I would direct myself in accordance with settled principle, ^[2140] as to whether I was ultimately satisfied that the inference of guilt for which the Crown contended is an inference that can be properly and safely drawn.

1968. Having regard to all the evidence in the trial and in light of the various factual findings I have made in the course of my deliberations to date, I am satisfied that each of the ten lies attributed to Moses Obeid was a deliberate misstatement of the truth. I am also satisfied that each lie was material to the issues in dispute in the trial and each was told by Moses Obeid in an attempt by him to conceal both the existence of a conspiracy in which Mr Macdonald as the Minister for Mineral Resources agreed to breach his Ministerial duties and obligations in connection with the granting of an EL at Mount Penny for the improper purpose alleged, being an agreement into which Moses Obeid had intentionally entered and in which he actively participated throughout its currency.

1969. I am further satisfied, and direct myself accordingly, that it is safe to draw an inference of guilt adverse to Moses Obeid from having told each of those ten deliberate lies, in circumstances where I am satisfied that had he truthfully answered the questions put to him and/or volunteered information to the journalists about the acquisition of the properties adjoining Cherrydale Park and the circumstances in which he and members of his family became involved with mining companies who had applied for an EL at Mount Penny including Cascade Coal P/L, the mining company ultimately granted that EL, he would, unquestionably, have been at risk of implicating himself as a co-conspirator in the conspiracy charged.

The lies Moses Obeid told to Ms Davies

1970. On 20 May 2010, Ms Davies published an article in the Sydney Morning Herald entitled “Coal down below: how rich is his valley”. ^[2141] Having regard to the overwhelming weight of the evidence, I am satisfied that Moses Obeid told two deliberate lies to Ms Davies:

1. He did not “get” Mr Lewis to purchase Coggan Creek.

2. He did not know Mr Lewis had purchased Coggan Creek until January 2010.

1971. I accept the Crown’s submission that the deliberation with which he told those lies is accentuated by what Ms Davies described in her evidence as Moses Obeid’s outrage at the implication that he would have orchestrated the purchase of properties neighbouring Cherrydale Park. ^[2142]

The lies Moses Obeid told to Mr Shanahan and Ms Jiminez

1972. At the time these interviews were conducted in December 2012, ICAC had commenced a public inquiry on 12 November 2012 with the stated scope that included, relevantly so far as the issues at trial are concerned, the following: ^[2143]

1. The circumstances under which, in 2007 and 2008, Cherrydale Park, Coggan Creek and Donola were acquired, and the actual and potential financial consequences of those acquisitions to those parties who were affected thereby.

2. The ownership of Cherrydale Park, Coggan Creek and Donola.

3. The circumstances surrounding Mr Macdonald’s decision to open a mining area in the Bylong Valley for coal exploration, including whether that decision was influenced by Edward Obeid or members of his family, whether on Mr Obeid’s behalf or otherwise.

4. The circumstances under which the DPI called for expressions of interest, confined to junior miners, for the awarding of exploration licences in respect of the coal mining allocation area known as Mount Penny and Mr Macdonald’s role in the decision so to call for expressions of interest.

5. The actual and potential financial benefits of the award of the Mount Penny tenement to those parties who have or have had a direct or indirect interest in that tenement, whether by way of a holding of shares or as a trust beneficiary or otherwise.

6. Whether Mr Macdonald, any member of his staff or any DPI employee (whether instructed by Mr Macdonald or otherwise), in breach of their duties, provided confidential information relating to the EOI process in respect of the Mount Penny tenement to members of the Obeid family or persons associated with Cascade Coal P/L.

7. Whether such confidential information was used by members of the Obeid family or persons associated with Cascade Coal P/L.

8. The unincorporated joint venture between Cascade Coal P/L and Buffalo Resources P/L and the shareholding in and ownership of Buffalo Resources P/L and any dealings involving Buffalo Resources P/L’s interest in that joint venture.

9. The circumstances surrounding an agreement made in about 2010 between Coal & Minerals Group P/L and Southeast Investment Group P/L and the financial consequences of that agreement to those companies and to those persons or entities directly or indirectly interested in them.

1973. Evidence had been given in the ICAC public hearing from 13 November to 14 December 2012 by a large number of witnesses, many of whom gave evidence for the Crown in the trial. ^[2144]

1974. I am satisfied that, in the course of the interview with Mr Shanahan and Ms Jiminez, Moses Obeid told a large number of “half-truths” in addition to deliberate lies in the course of constructing a deliberately false narrative concerning his family’s motivations for the pursuit of, and ultimately their involvement with, Monaro Mining NL and later Cascade Coal P/L as mining companies at one time committed to exploiting the potential for coal mining in the Bylong Valley situated near Mount Penny. In the published judgment ^[2145] I sought to disentangle from the narrative the lies which were capable of constituting implied admissions of guilt and the representations which constituted admissions against interest.

1975. Having reasoned to the conclusion that Moses Obeid was a participant in the conspiracy charged, including, but not limited to, what he has been shown to have said and done as overt acts in furtherance of the conspiracy, it is sufficient to emphasise what I consider to be the most egregious lies told by him, lies which I am satisfied were told with a “consciousness of guilt” and a fear of the truth being revealed. Those lies principally concern his dealings with Monaro Mining NL and the involvement of Mr Brook and include the following:

1. Monaro Mining NL, via Mr Brook, was the source of the information about the EOI process commencing in late July or early August 2008.

2. He met Mr Brook because he wanted someone to assist with the negotiations with Anglo American P/L as to the “exit strategy”. Meanwhile, separately, Mr Brook was speaking to Monaro Mining NL.

3. The Obeids had nothing to do with Monaro Mining NL or their EOI application or with the tender process as they wanted to “remain out of it”.

4. The Obeids told Mr Brook that they were happy to remain as landowners and wait for him to return with a deal and if Mr Brook could not pay for the land then the Obeids would do a deal in relation to the land in order to get equity in the deal.

1976. It is clear beyond question that Moses Obeid was aware of an imminent EOI process which would include Mount Penny before his first meeting with Mr Brook on 3 July 2008. It is equally clear that Moses Obeid’s dealings with Mr Brook were in relation to a joint venture, first with Monaro Mining NL and then Cascade Coal P/L, and that Moses Obeid provided the list of companies to Mr Brook which facilitated his approach to Monaro Mining NL.

1977. I am also satisfied that until the first Wentworth Hotel meeting Mr Brook was ignorant of the forthcoming EOI process. I am also satisfied that he had no relevant experience in the mining sector in New South Wales, and no knowledge of coal companies in New South Wales who might apply for the grant of an EL until Moses Obeid provided him with the list of companies the DPI proposed as invitees to that process. Furthermore, the evidence that Mr Brook kept Moses Obeid apprised of all his dealings with Monaro Mining NL, and that Moses Obeid instructed Mr Rumore in relation to the Share Option Deed between Voope P/L and Monaro Mining NL (pursuant to which the Obeid family via the interposition of Voope P/L, a company the Obeid family controlled, sought a share in the mining venture) clearly establishes Moses Obeid was concerned to ensure that control over Monaro Mining NL’s successful tender for the Mount Penny Coal Release Area would vest in his family.

1978. I am satisfied that the lies listed above were deliberately told by Moses Obeid to conceal his family’s interests in the Mount Penny EL; their dealings with Monaro Mining NL in that connection; the role Mr Brook played in those dealings; his knowledge of Monaro Mining NL’s application for the grant of an EL over the Mount Penny Coal Release Area; and the source of that knowledge.

The guilt of Mr Macdonald and Moses Obeid is established beyond reasonable doubt

1979. Having found the existence of the conspiracy charged proved beyond reasonable doubt, and having made the inevitable and allied finding, also beyond reasonable doubt, that in the way the Crown has pleaded and particularised its case that Mr Macdonald was a party to the agreement alleged and, also for the reasons set out at length above, that Moses Obeid was a party to that same conspiracy, subject only to being satisfied of the final “element” of the offence charged concerning the seriousness of the offending, I am satisfied beyond reasonable doubt of the guilt of both Mr Macdonald and Moses Obeid.

1980. That finding does not lead, inevitably, to a finding that Edward Obeid is also guilty of the offence charged. He is entitled to the benefit of any reasonable doubt I have as to whether the Crown has proved his participation in the conspiracy beyond reasonable doubt.

Is Edward Obeid’s participation in the conspiracy proved beyond reasonable doubt?

1981. In finding the first, second, fourth, seventh and eighth acts of misconduct established (in the course of which I was ultimately satisfied beyond reasonable doubt of the existence of the conspiracy), I made a number of factual findings which are probative of the question whether the Crown has proved beyond reasonable doubt that Edward Obeid also intentionally entered into the conspiracy at the time that I am satisfied it was forged, that is, prior to 9 May 2008. Those findings include, for the reasons already given, that the strong probabilities favour a finding that it was Edward Obeid who asked Mr Macdonald for the information the subject of the first and second acts of misconduct knowing, in doing so, that Mr Macdonald would be breaching his duty of impartiality by providing “inside information” about the available coal reserves in an unexploited area of the Bylong Valley near Cherrydale Park to the potential detriment of other landowners in the area and, more generally, contrary to the public interest.

1982. I also accept, in part, the Crown’s submission that Edward Obeid’s enquiry of Mr Macdonald about any knowledge of a mine being planned “for Bylong by Anglo” (a matter he volunteered in the Shanahan/Jiminez interview on 18 December 2012 ^[2146] ) shows a preparedness to seek information from a Parliamentary colleague, in keeping with what I have found as the strong probability that Edward Obeid was the direct source of the enquiries made of the DPI by Mr Macdonald in May 2008, the subject of the first and second acts of misconduct. However, on a careful review of the way in which that information was volunteered, I consider Edward Obeid’s answer to a very direct question asked of him carries greater probative weight than what is contended for by the Crown. That evidence is extracted as follows:

Shanahan: Eddie, if I might ask just on the record any involvement, any discussions you had with the former Minister, Ian [Macdonald] about this, this tender process. Either in, in general terms or directly about Mt Cherry [Penny] or any of the property that was owned by the Obeid family?

Obeid E: Probably having looked at… the sequence of events, we spent the summer of 2008 up on the farm [Cherrydale Park] and the rumours were rife about a mine for Bylong Valley by Anglo and when I went back to Parliament and it’s on record that I asked Ian [Macdonald] if the Department has any knowledge of a mine being planned for Bylong by Anglo. Within six or seven days one of his staffers called on my office and said to me that there was no plans, known… ^[2147]

1983. In my view, that answer is capable of being understood as an attempt on Edward Obeid’s part to deflect the import of the question. On one view, his unguarded initial answer, “probably”, reveals more than the balance of his answer, which is largely unresponsive. I note the enquiry about any mine being planned by Anglo American P/L in the Bylong Valley is not an enquiry that the Crown has any evidence was “on record” in contrast to Mr Gibson’s emails to the DPI of the 9 and 14 May 2008, which were.

1984. Additionally, on the basis of the various factual findings I have made in the context of all of the evidence adduced in the Crown case (and the inferences I have drawn from that evidence), I am satisfied there is reasonable evidence to support a finding that Edward Obeid agreed to enter into the conspiracy (in which I am satisfied Moses Obeid and Mr Macdonald were intentional participants). I am also satisfied that evidence supports the further finding that Edward Obeid knew that by Mr Macdonald agreeing to misconduct himself as Minister for Mineral Resources and for the improper purpose of advancing Edward Obeid’s financial interests and/or those of his family and/or associates, he would breach his duties and obligations as a Minister without reasonable cause or excuse.

1985. That evidence comprises the following facts and the inferences I have drawn adverse to Edward Obeid from those facts.

1986. I am satisfied of Edward Obeid’s coordinated and persistent efforts to “distance” ownership of Cherrydale Park from Locaway P/L (described by Moses Obeid to journalists in Edward Obeid’s presence as “the [family’s] rural property entity”) ^[2148] to UPG P/L during the currency of the conspiracy, first via separate solicitors and then directly with an approach to Mr Cherry as mortgagor and for no apparent or declared commercial purpose. That conduct, the Crown submitted, and I accept, is demonstrative of Edward Obeid’s desire to keep from public gaze or scrutiny what he knew by October 2008 was Mr Macdonald’s progressive dissemination of information in breach of his Ministerial duties of impartiality (if not confidentiality) in order that Moses Obeid might pursue (with his knowledge and active encouragement) a mining deal that would encompass Cherrydale Park.

1987. The Crown also relied on the degree of telephone contact between Edward Obeid and Moses Obeid to support the inference that Edward Obeid was in fact being kept informed of the unfolding prospect of the progressive steps taken in execution of the conspiracy generating a very significant financial benefit for his family. The Crown submitted that the evidence in the Telephone Summary established the overwhelming opportunity for communication between the accused and that the most direct line of communication was between Mr Macdonald and Edward Obeid. ^[2149] In the Crown’s submission, the state of that evidence supported an inference that Mr Macdonald conveyed the conspiratorial and other information to Edward Obeid, who then conveyed it to Moses Obeid to use in pursuit of realising the commercial value of that information. In my view, the inference contended for by the Crown is made out, although as I have emphasised, and the Crown has accepted, in the absence of the content of any of those communications the weight of that evidence goes no higher than to establish the opportunity for the relaying of information in that way. In my view, that fact is worthy of some additional weight as reasonable evidence of Edward Obeid’s participation in the conspiracy, albeit as reflecting a role that was “hands off” as compared to the “hands on” role Moses Obeid performed.

1988. It is clear to me, having regard to the full complement of the evidence that I have reviewed and considered in finding the conspiracy proved beyond reasonable doubt, and in finding that Moses Obeid participated in the conspiracy and the inferences I have drawn from that evidence, that Moses Obeid took a “hands on” approach to implementing and exploiting the information generated by Mr Macdonald’s successive acts of misconduct committed in connection with the granting of an EL at Mount Penny.

1989. On the basis at this stage of there being reasonable evidence of Edward Obeid’s participation in the conspiracy, I am unable to determine whether there was an apportionment of roles and responsibilities between Edward Obeid and Moses Obeid which might explain why Moses Obeid’s role as a co-conspirator was “hands on”. For example, on the available evidence I am unable to determine whether Moses Obeid’s responsibility to instruct commercial solicitors as he negotiated a range of commercial contracts, first with Monaro Mining NL and then with Cascade Coal P/L, to achieve the best possible commercial outcome for his family (and their friends and/or associates), was a role he assumed because he had or was perceived to have the necessary business acumen or time or both, or because that role was designated for him in order to ensure there was a measure of distance between Edward Obeid and Mr Macdonald as his Parliamentary colleague. ^[2150]

1990. What I am satisfied of, however, is that what Moses Obeid did as a co-conspirator in concert with Mr Macdonald, together with the many independent steps Mr Macdonald took in his capacity as Minister for Mineral Resources to position the Obeid family to seek out and secure the commercial advantage of a mining deal over land they owned or controlled (some, but not all of which involved the communication of confidential information as a discrete act of misconduct on which the Crown relied in proof of its case), would be unlikely to have occurred without the knowledge and sanction of Edward Obeid as the head of the Obeid family, in particular in circumstances where, on Edward Obeid’s own account, he was deeply attached to Cherrydale Park and where he intended to live in his retirement. ^[2151]

1991. I do accept, however, and direct myself accordingly, that knowledge of the existence of a conspiracy in which others are complicit (even Edward Obeid’s son and Mr Macdonald, his Parliamentary colleague) is not enough to attract criminal liability as a co-conspirator. If Edward Obeid is to be convicted, it is essential that I am satisfied that the evidence allows me to find, to the criminal standard of proof beyond reasonable doubt, that he also intentionally entered into an unlawful agreement with Mr Macdonald of the scope and object of the conspiracy charged, no later than 9 May 2008 when the agreement the Crown determined to prosecute at trial was forged.

1992. Finally, but no less importantly, in the Crown case that Edward Obeid was a knowing participant in the conspiracy, the Crown also relied upon a wide and diverse range of admissions against interest (some of them internally inconsistent) Edward Obeid made to the journalists Ms Ong and Ms Davies and then Mr Shanahan and Ms Jiminez, after the conspiracy had been fully executed, as further proof of his participation in the conspiracy alleged.

1993. Not all of what I have ruled admissible as admissions against interest pursuant to s 81 of the Evidence Act in the interlocutory judgment published during the course of the trial ^[2152] carry the same weight in proof of the fact of Edward Obeid’s participation in the conspiracy. However, in combination, they are of considerable probative force.

1994. I regard Edward Obeid’s interview with Ms Ong on about 27 October 2009 where he asserted he would fight any mine effecting Cherrydale Park, his insistence in the Shanahan/Jiminez interview in December 2012 that “Cherrydale Park was everything we wanted for the home, for the family, and [he] wanted to retire there” ^[2153] and, to a lesser extent, what he said to ICAC officers in the execution of the search warrant in November 2011 (in each forum expressing a strong emotional attachment to Cherrydale Park) as further support for the conclusion I have reached that Edward Obeid would not have been kept ignorant of arrangements made by Moses Obeid for Cherrydale Park to be part of a so-called landholders alliance, where the very object of that alliance was to monetise the prospects of contracting in a joint venture with the mining company for the exploitation of coal under the property, including, if necessary, the sale of Cherrydale Park as contemplated under the Landowners Deed.

1995. I am also satisfied that Edward Obeid’s claim when interviewed by Ms Ong that “his family had not been contacted by Cascade Coal” in the same category, namely, as an admission against interest in the sense that it is capable of supporting proof of his participation in the conspiracy.

1996. I also regard Edward Obeid’s assertion to Ms Davies in May 2010 that he was “not interested in the [identity of the people] who are buying [properties]” as an admission against interest, given that by December 2012 he was present when Moses Obeid freely volunteered information to Mr Shanahan and Ms Jiminez about the keenness with which his family introduced Mr Lewis to the prospect of acquiring Coggan Creek and where Edward Obeid freely volunteered the identity of “Rocco” (Triulcio) as the person who was to acquire Donola, albeit that in both scenarios the acquisition of those properties was described as a strategy to block the danger posed by the Authorisations held by Anglo American P/L. ^[2154] I also note Edward Obeid’s diary recorded various meetings with Rocco Triulcio on 1 May, 7 May and 18 July 2007; 4 June, 14 November and 16 December 2008; and 22 May, 4 June, 29 July, and 10 September 2009, ^[2155] including a meeting with Rocco Triulcio and Mr Macdonald at the Wentworth Hotel on 1 June 2009. ^[2156]

1997. In the interlocutory judgment which dealt with the admissibility of the Shanahan/Jiminez interview, I dealt with a submission advanced by the Crown that some of the statements made constituted “joint admissions” against interest by Edward Obeid and Moses Obeid. I rejected that submission. I was, however, satisfied that the interview was an environment in which both of the accused actively and freely participated in volunteering an unfolding dialogue in the course of which, from time to time, they each added content to what the other was saying. It was in that sense that I was satisfied in the context of the language of s 87 of the Evidence Act that what they each intended to assert about a fact or a state of facts was informed by that level of engagement. In that limited sense I resolved to admit a number of discrete previous representations as constituting admissions against each of Edward Obeid and Moses Obeid. They were clearly identified in the interlocutory judgment by various line entries. They included representations about the deployment of the so-called “exit strategy” about which I have already made various findings adverse to both Edward Obeid and Moses Obeid; the claim they each made that they had no knowledge of and were shocked to learn about the existence of EL 6676, as they described it, “coming on the left side of us” (clearly a reference to the new Mount Penny Coal Release Area) and the various references where Edward Obeid acknowledges the potential to capitalise on the value of the land as landowners by the application of so-called “multiples”.

The co-conspirators rule

1998. Upon finding the existence of the conspiracy proved beyond reasonable doubt, in large part because of the probative force of Mr Macdonald’s five related acts of misconduct and the use to which Moses Obeid put the information generated directly from three of those acts of misconduct, (including the information I was satisfied Mr Macdonald shared more generally as the prospect of a new coal release area at Mount Penny became a reality), I was also able to reason confidently to a finding that each of Mr Macdonald and Moses Obeid were active participants in that conspiracy, a finding I also made beyond reasonable doubt.

1999. On that analysis, I did not find it necessary to invoke the common law co-conspirators rule, ^[2157] the operation of which is now reflected in s 87(1)(c) of the Evidence Act 1995 (NSW), ^[2158] as an additional source of evidence in proof of the participation of Mr Macdonald and Moses Obeid in the conspiracy.

2000. However, given that the evidence capable of establishing Edward Obeid’s participation in the conspiracy reflects (for whatever reason) a less overt role than the role played by Moses Obeid and, for that reason, the Crown seeks to prove Edward Obeid’s participation largely, although not exclusively, as a matter of inference from the combined force of all the evidence adduced in the Crown case in the trial in the way that I have described, to the extent that gives rise, or might give rise to a reasonable doubt as to his participation in the conspiracy, and in that way a reasonable doubt as to his guilt, I propose to give consideration to the operation of the inclusionary rule in s 87(1)(c) of the Evidence Act as a further source of evidence in proof of Edward Obeid’s participation.

2001. Section 87(1)(c) of the Evidence Act provides:

87   Admissions made with authority

(1) For the purpose of determining whether a previous representation made by a person is also taken to be an admission by a party, the court is to admit the representation if it is reasonably open to find that—

...

(c)  the representation was made by the person in furtherance of a common purpose (whether lawful or not) that the person had with the party or one or more persons including the party.

2002. The Crown submitted that in the context of this trial, s 87(1)(c) provides a statutory basis for the operation of the co-conspirators rule at common law, a rule which provides that the acts and declarations of an individual accused are an available source of evidence of the participation of others alleged to be complicit with the accused in the conspiracy alleged, where there is reasonable independent evidence of that accused’s participation in the conspiracy.

2003. That rule is embodied in s 87(1)(c) of the Evidence Act by providing that there must be reasonable evidence, extraneous to the representations sought to be relied upon as an admission by a party, of both the existence of a common purpose and that the “representation” sought to be admitted was made in furtherance of that common purpose. ^[2159]

2004. In R v Dolding, ^[2160] Simpson AJA analyses what is meant by the concept of a “representation” as that word appears in s 87(1)(c) and in s 59 of the Evidence Act and where the word “admission” appears in the Dictionary to the Act. Although, the point was not argued at length in the closing submissions of either the Crown or Ms Francis, I set out the following passages to make clear the basis upon which I propose to treat what the Crown relied upon as the “representations” of Moses Obeid and Mr Macdonald as admissions against Edward Obeid in further proof of his participation in the conspiracy:

[41] A number of observations about the relevant legislation need to be made.

[42] First, the word “representation” appears in s 59, s 87, and in the definition of “admission” in the Evidence Act. Its meaning is central to the issues involved in this appeal. The Dictionary (which is usually taken to define terms) to the Evidence Act contains an entry under “representation”, but it is an entry that does not have the usual indicia of a definition. It provides:

“representation includes:

(a) an express or implied representation (whether oral or in writing), or

(b) a representation to be inferred from conduct, or

(c) a representation not intended by its maker to be communicated to or seen by another person, or

(d) a representation that for any reason is not communicated.”

[43] This entry leaves open the meaning of the word “representation”. In Lee v The Queen (1998) 195 CLR 594; [1998] HCA 60, the High Court said:

“21. ’Representation’ is often used in the law to refer to words that are intended to induce action or inaction by the person who hears or reads them. It may, therefore, seem to be an unusual word to use in this context [s 59 of the Evidence Act]. But it is clear from the Interim Report of the Law Reform Commission on evidence that, in the proposals that were later formulated in the [Evidence Act], the term ‘representation’ was used to apply to statements and to conduct and was used to encompass all that those statements or that conduct would convey to the observer. It is also clear that the proposal was intended to resolve:

‘the issue of whether the proposed rules should apply to implied assertions as well as express assertions, by recommending that a distinction be drawn between intended and unintended implied assertions, with the latter outside any hearsay rule’.

In its Interim Report, the Commission went on to state why it excluded unintended implied assertions from the operation of a hearsay rule and its exceptions. Chief among those reasons was the conclusion that it is unlikely that the person making some implied assertion would deliberately attempt to mislead if the implied assertion was not intended.

22. Section 59 must be understood in this light. The rule’s operation requires consideration first of why it is sought to lead evidence of something said or done out of court (a previous representation). What is it that that ‘previous representation’ is led to prove? In particular, is it sought to lead it to prove the existence of a fact that the person who made the representation intended to assert by it? The fact that the statement or the conduct concerned might unintendedly convey some assertion is not to the point. The inquiry is about what the person who made the representation intended to assert by it.”

[44] In Australian Competition and Consumer Commission v Pratt (No 3) [2009] FCA 407; (2009) 175 FCR 558 Ryan J noted the Evidence Act Dictionary entry with respect to “representation” and turned to dictionary definitions to ascertain its meaning as used in the Evidence Act. Referring to the second edition of the Oxford English Dictionary, he quoted:

“4.a The action of placing a fact etc. before another or others by means of discourse or account esp. one intended to convey a particular view or impression of a matter in order to influence opinion or action.”

and, from the third edition of the Macquarie Dictionary:

“14 a description or statement of things true or alleged.”

[45] To my mind, subsections (1) and (2) of s 59 make reasonably plain that the concept underlying “representation” as used in the Evidence Act is that the existence of a fact or state of facts is asserted. The entry in the Dictionary is designed to broaden the means by which, for the purpose of the admissibility or otherwise of evidence of the representation, the assertions of the existence of a relevant fact may be conveyed. Indeed, the entry allows for “representation” to include the assertion of the existence of a fact that is not conveyed or communicated. There is an important, though subtle, distinction between what was intended to be asserted, and what was conveyed, or intended to be conveyed, by the person who made the “representation”. But the hallmark of the concept is the assertion of a fact or a state of facts.

[46] As the Dictionary entry makes clear, it is not necessary that the existence of a fact intended to be asserted by the maker of the representation was also intended to be conveyed by that person. Paragraph [22] of Lee makes the same point.

[47] There can be little doubt that “representation” was intended to have the broadest application. It includes non-verbal representations to be inferred from conduct, and representations not intended to be, and not, communicated.

2005. It follows that before utilising the representations of either or both of Moses Obeid and Mr Macdonald which I am satisfied were made by each of them in furtherance of the conspiracy (and where appropriate the statements that can be attributed to each of them as accompaniments to their conduct), as an available source of evidence to supplement proof of the participation of Edward Obeid in the conspiracy, I would first need to be satisfied there is reasonable evidence of his participation, that is, independent of the participation of either or both of Moses Obeid and Mr Macdonald.

2006. Ms Francis submitted that the Crown had not established a sufficient basis to invoke s 87(1)(c) in proof of its case against Edward Obeid and, accordingly, he is entitled to the benefit of the reasonable doubt I must have as to the sufficiency of the evidence to prove his participation in the conspiracy alleged.

2007. For the reasons already given in considering the evidence probative of Edward Obeid’s participation, I reject that submission.

2008. Ms Francis submitted that even were I satisfied that there is reasonable evidence of Edward Obeid’s participation, the agreement the subject of the conspiracy is so amorphous that I could not be satisfied that the conduct of Moses Obeid and Mr Macdonald is evidence of their participation in the same criminal conspiracy, as distinct from some other unlawful or even lawful arrangement, including a conspiracy that was entered into at a date other than the date the Crown specifies as fundamental to proof of the conspiracy alleged.

2009. In circumstances where, again for the reasons set out at length above, I am satisfied beyond reasonable doubt of the existence of the conspiracy the Crown has elected to prosecute at trial, including that it was an agreement forged no later than 9 May 2008, and in circumstances where at the outset of my deliberations to verdict I addressed and rejected Ms Francis’ various challenges to the indictment as defective in law, inter alia, because of the lack of specificity in the scope and object of the conspiracy as framed, the second basis upon which Ms Francis challenged the Crown’s reliance on s 87(1)(c) of the Evidence Act is not sustained.

2010. Finally, Ms Francis submitted that even were I satisfied that the inclusionary rule in s 87(1)(c) is available as a matter of law, none of the previous representations by either or both of Moses Obeid or Mr Macdonald in furtherance of the conspiracy alleged (that is, what are understood under the common law rule as the acts or declarations by a conspirator committed in furtherance of the conspiracy) can elevate the independent evidence of Edward Obeid’s participation to proof of that fact beyond reasonable doubt where the conduct of both Moses Obeid and Mr Macdonald postdates any conduct of Edward Obeid which might constitute independent evidence of his participation.

2011. Ms Francis developed that submission by advancing the argument that since there is no evidence that Edward Obeid knew that Mr Macdonald was providing the information the subject of the fourth, seventh and eighth acts of misconduct, ^[2161] or any evidence that he knew that Moses Obeid received that information, even if those acts are properly described as acts in furtherance of the conspiracy and admissible against each of Moses Obeid and Mr Macdonald as evidence of the existence of the conspiracy and their participation in it, those same acts cannot provide any evidence of Edward Obeid’s complicity when those specific acts were beyond the contemplation of all of the parties at the time the agreement was forged.

2012. I did not regard that analysis as a precondition to the admission of the “representations” made by each of Moses Obeid and Mr Macdonald (a concept, as Simpson AJA identified it, of the broadest application under the Evidence Act) as capable of constituting an admission against Edward Obeid. What is important, however, is that I am satisfied that those representations were made in furtherance of advancing or achieving the object of the conspiracy (the common purpose) so as to attract the operation of s 87(1)(c) in this case.

2013. Again as noted by Simpson AJA in R v Dolding, ^[2162] the concept of what might constitute acts or statements made in furtherance of the common purpose in s 87(1)(c) is informed by the operation of the co-conspirators rule stated distinctly in Ahern v The Queen, ^[2163] at 94-95, as:

…when two or more persons are bound together in the pursuit of an unlawful object, anything said, done or written by one in furtherance of the common purpose is admissible in evidence against the others. The combination implies an authority in each to act or speak on behalf of the others: … thus anything said or done by one conspirator in pursuit of the common object may be treated as having been said or done on behalf of another conspirator. That being so, once participation in the conspiracy is established, such evidence may prove the nature and extent of the participation. The principle lying behind the rule is one of agency and the closest analogy is with partners in the partnership business. Indeed, conspirators have been described as partners in crime. The principle of agency has a particular application in cases of conspiracy where preconcert is the essence of the crime” (internal citation omitted).

2014. In Landini v State of NSW ^[2164] (also referred to by Simpson AJA in Dolding) Hall J noted the fourth precondition to the operation of s 87(1)(c) as follows:

(d) The phrase ‘in furtherance of’ carries with it the ordinary English Dictionary meaning encapsulated in the word ‘furtherance’, namely, the fact of being helped forwards; the action of helping forwards; advancement, aid, assistance … in the context of s 87(1)(c), it denotes an act done to advance, aid or help a common purpose whether that purpose is a lawful or not.

2015. In the result, I am satisfied, and direct myself accordingly, that there is reasonable evidence that Edward Obeid (and Mr Macdonald and Moses Obeid) were parties to the conspiracy alleged (that is, put simply, an agreement that Mr Macdonald would commit wilful acts of misconduct in connection with the granting of an EL at Mount Penny for the improper purposes alleged) and that there is also reasonable evidence that each of Moses Obeid and Mr Macdonald made “representations” in furtherance of achieving that common objective.

2016. The “representations” made by Mr Macdonald in furtherance of achieving the object of the conspiracy include the following:

1. His conduct in committing the first, second, fourth, seventh, and eighth acts of misconduct.

2. His conduct in communicating to either or both of Edward Obeid and Moses Obeid, on or after 6 June 2008, that a new coal release area in the area of Mount Penny was likely to be designated by the DPI and then, no later than 17 June 2008, communicating to either or both of them that the Mount Penny Coal Release Area had in fact been designated by the DPI.

3. His introduction of Mr Fang to Moses Obeid in order that they might discuss the prospect of a mining project.

2017. The “representations” made by Moses Obeid in furtherance of achieving the object of the conspiracy include:

1. Moses Obeid’s use of the information in the form of Wiles Map 2, the subject of the fourth act of misconduct, to seek to attract Lehman Brothers as an investor or broker in a mining deal.

2. Moses Obeid’s receipt of the information comprising the seventh and eighth acts of misconduct from Mr Macdonald and his furnishing of that information to Mr Brook in his dealings with Monaro Mining NL.

3. Steps taken by Moses Obeid to secure ownership or control of Donola and Coggan Creek.

2018. In ultimately reasoning to the conclusion that Edward Obeid’s participation in the conspiracy is proved beyond reasonable doubt (both on the basis of the evidence I have reviewed in proof of that fact and upon application of the co-conspirators rule in s 87(1)(c) of the Evidence Act), I am unable to countenance as a reasonable or rational possibility that the conspiracy would have been forged between Moses Obeid and Mr Macdonald, and progressively executed by each of them from May 2008 through to and including January 2009, so as to strategically position the Obeid family to seek to exploit the monetary value of the coal underlying Cherrydale Park and to the detriment of its appointment as a fine piece of agricultural land purchased at considerable expense by the family as a rural retreat, without Edward Obeid’s intentional participation with them in an agreement of the scope and object alleged.

2019. I also accept the Crown’s submission that it is implausible that Mr Macdonald would make what I was satisfied was a “strong suggestion” that the DPI designate a new coal release area in the precise location where he knew that Edward Obeid, a friend and Parliamentary colleague, had recently acquired a significant rural property, without Edward Obeid’s knowledge and express approval, and without a preparedness on Edward Obeid’s part to sacrifice the beauty and amenity of the property in pursuit of the profit on its sale to a mining company.

2020. I am also unable to countenance as a reasonable or rational possibility that the mining deal, so vigorously pursued by Moses Obeid from July 2008 (enabled by Mr Macdonald’s provision of confidential information on multiple occasions at that time), would have occurred at the pace at which it did, at the presumed expense that it entailed and with the potential commercial outcome of those arrangements that were settled, first between Voope P/L and Monaro Mining NL within the currency of the conspiracy, and then between Buffalo Resources P/L and Cascade Coal P/L after the conspiracy had been executed, without Edward Obeid being kept informed as to the progress of those arrangements as they were unfolding or, I am also prepared to infer, without with his active input and express sanction.

The Jones v Dunkel direction sought by the accused

2021. Mr Martin sought a Jones v Dunkel ^[2165] direction in relation to Mr Munnings. ^[2166] Mr Neil also sought that direction. ^[2167] The same direction was sought by Mr Neil in relation to:

1. Paul Obeid and Gerard Obeid, Moses Obeid’s brothers who attended various conferences with Mr Rumore.

2. Mr Selby, who introduced Mr Brook and Moses Obeid at the first Wentworth Hotel meeting on 3 July 2008.

3. Mr Fang, the Chairman of the Tianda Group and an associate of Mr Macdonald who attended a conference with Mr Rumore and Moses Obeid.

4. Mr Hewson, a consultant for Tianda Resources P/L who was previously Mr Macdonald’s Chief of Staff.

5. Witnesses who were speaking to Mr Brook in July 2008, including BBY and Tasmania Mines.

6. Witnesses from any of the other companies invited to express interest in the eleven coal release areas, including the “Jain Group” and “Breaksphere”.

7. Any of the potential investors who Mr Brook spoke to prior to September 2008.

8. Hemantha de Silva, Steven Dunn and Brian Gardoll, who were involved in answering enquiries about the water licences at Cherrydale Park.

9. Selina Rainger, Mr Macdonald’s personal assistant.

10. Patricia Madden, Kevin Ruming and other DPI witnesses.

11. Annmarie Robinson, the ICAC investigator who shared a storage locker with Ms Stockley.

12. Mr Lewis, the purchaser of Coggan Creek.

13. Ross and Rocco Triulcio, the purchasers of Donola.

14. Mr Kaidbay, an associate of Moses Obeid.

15. Mr Sassine, a chartered accountant who acted from time to time for members of the Obeid family.

16. Mr Poole, John and James McGuigan, Travers Duncan and other individuals associated with Cascade Coal P/L.

17. Unspecified individuals associated with the White Group. ^[2168]

2022. Earlier in my deliberations to verdict, I indicated that I would deal with the direction sought by the accused in respect of those individuals when considering whether the Crown has proved its case. That approach is in accordance with Mahmood v Western Australia. ^[2169]

2023. Mr Neil submitted that the Crown’s failure to call “numerous significant and important witnesses” whose evidence would have covered a “range of important topics” leaves critical gaps in the Crown case to the effect that there must be a reasonable doubt as to the guilt of the accused. ^[2170]

2024. In respect of those witnesses the Crown classified as “close associates” of an accused person, Mr Neil submitted that it was insufficient that the Crown merely suspected that those witnesses may be unreliable for that reason; there must be “identifiable circumstances which clearly establish” unreliability. ^[2171]

2025. Mr Neil advanced the further submission that the Crown’s reliance on s 18 of the Evidence Act in not calling either of Gerard Obeid or Paul Obeid was “misguided”, particularly in the case against Moses Obeid.

2026. The Crown submitted that the Court would not regard it as appropriate to give a Jones v Dunkel direction because the Crown’s failure to call those witnesses does not give rise to a reasonable doubt about the guilt of the accused. In respect of those witnesses it identified as “close associates” of the Obeids, the Crown submitted that the nature of their involvement in relevant events would render their evidence unreliable. The Crown also submitted that the Cascade Coal P/L witnesses were, from their perspective, involved in “a series of legitimate arm’s length commercial transactions” and, for that reason, “their understanding and involvement is not material to determination of the offence charged”. ^[2172]

2027. The Crown also submitted that, in any case, the appropriate direction would be that the Court, sitting as the tribunal of fact, would not speculate as to why the witnesses had not been called, or what their evidence might have been, and to decide the case on the evidence before the Court.

2028. I decline to make a direction either in the terms accepted by the Crown or as a Jones v Dunkel direction.

2029. As noted by the Crown in closing submissions, Mahmood sets out the test for whether a Jones v Dunkel direction is appropriate in a criminal trial:

[W]here a witness, who might have been expected to be called and to give evidence on a matter, is not called by the prosecution, the question is not whether the jury may properly reach conclusions about issues of fact but whether, in the circumstances, they should entertain a reasonable doubt about the guilt of the accused. ^[2173]

2030. Having already found the existence of the conspiracy and the participation in it of each of the accused proved beyond reasonable doubt and having regard to all of the evidence which was probative of those facts, it is clear beyond question, to my mind, that none of the witnesses in respect of whom a Jones v Dunkel direction was sought could have given evidence which was capable of raising a reasonable doubt about the guilt of the accused.

Ultimate findings

2031. For the avoidance of doubt, I am satisfied the Crown has proved beyond reasonable doubt that each of the accused intentionally entered in an agreement with Mr Macdonald that:

1. in the public office he occupied as Minister for Mineral Resources in the Executive Government of the State of New South Wales; and

2. in the course of or connected with that public office;

3. he would misconduct himself by doing acts in connection with the granting of an EL at Mount Penny for the improper purpose of benefiting Edward Obeid and/or Moses Obeid and/or members of their family and/or their associates; and, further, that

4. each of the accused knew and intended that by Mr Macdonald agreeing to act in that way, he would be acting wilfully, that is that he would act knowing that he was breaching the duties and obligations of impartiality and confidentiality by which he was bound as a Minister in the Executive Government of the State of New South Wales; and

5. that he would act in that way without reasonable excuse or justification.

2032. I am also satisfied the Crown has proved beyond reasonable doubt that at the time the conspiracy was forged each of the accused knew that Mr Macdonald was subject to a duty of confidentiality and a duty of impartiality in the discharge of the public office he held as the Minister for Mineral Resources, and that they each knew that what he agreed that he would do in that public office would constitute a breach of either or both of those duties and obligations.

2033. I turn now to consider whether I am also satisfied that the seriousness of that offending merits criminal punishment, as to which it is necessary for me to make an affirmative finding before a guilty verdict could be entered against each accused.

Am I satisfied of the seriousness of the offending and that it merits criminal punishment?

2034. The Crown submitted that I would be satisfied beyond reasonable doubt that the misconduct each of the accused intended that Mr Macdonald would commit pursuant to the agreement into which they each intentionally entered has the requisite quality of seriousness having regard to the responsibilities of the Office of Minister for Mineral Resources Mr Macdonald occupied throughout the conspiracy period, his responsibilities as the holder of that Office and the importance of the public objects which that Office and its Officeholder served, including the nature and extent of the departure from those objects, such as to merit criminal punishment. ^[2174]

2035. In its written submissions the Crown developed that submission referable to the following factors:

a. the gravity of the breach of the duties of impartiality and confidentiality which are intrinsic to appropriate Ministerial conduct constituted a most significant departure from the public objects which the Office and the Officeholder serve;

b. the misconduct was planned and the execution of the conspiracy was protracted involving multiple acts of misconduct;

c. the Minister’s responsibility to act in the best interests of the people of NSW was completely abrograted;

d. the value of the commercial advantage that the misconduct conveyed was significant ($60 million, plus the sale of Cherrydale Park, Donola and Coggan Creek at a significant profit - albeit incompletely realised); and

e. the effect is to undermine the importance of the public objects of Ministerial Office and to bring the Office into disrepute. ^[2175]

2036. I regard that submission, in part at least, as an overstatement of what is available to me to inform the qualitative assessment which it is for me to undertake at this stage of my deliberations to verdict, where I am satisfied the conspiracy is proved beyond reasonable doubt and where I am satisfied, also beyond reasonable doubt, that each of the accused intentionally participated in that conspiracy.

2037. In one part of its closing submissions the Crown appeared to accept that, having regard to the framing of the indictment, the quantitative assessment of the seriousness of the misconduct is to be undertaken referable to the misconduct which was the subject of the agreement, namely that Mr Macdonald would wilfully misconduct himself without reasonable cause or justification in breach of his Ministerial duties and obligations in connection with the granting of an EL at Mount Penny and concerning the interests of his co-conspirators and/or members of their family and/or their associates. By that submission, I take the Crown to submit that the assessment of seriousness must be made referable to acts of misconduct which were necessarily described in the indictment at a high level of generality because, while the object of the agreement was clear and unambiguous, the particular ways Mr Macdonald would misconduct himself in executing the agreement could not be presaged by the accused at the time the agreement was reached.

2038. However, in relying on the fact that the execution of the conspiracy was protracted and involved multiple acts of misconduct (in (b) above); and in focusing on the very significant, albeit incompletely realised, value of the commercial advantage that the misconduct generated in (d) above; is to focus, in my view impermissibly, on the manner in which the conspiracy was executed and not on the scope or object of the conspiracy at the time the agreement was forged and the seriousness of the acts of misconduct which it was agreed would be committed by Mr Macdonald as Minister for Mineral Resources in wilful breach of his Ministerial obligations and duties.

2039. Although, for the purposes of concluding my deliberations to verdict and making the requisite assessment of the seriousness of what was comprehended by the conspiracy, I do not propose to focus upon the multiple ways in which Mr Macdonald executed the agreement, that does not diminish, in any way, the gravity of the agreement which had as its object that Mr Macdonald would misconduct himself as the Minister for Mineral Resources in connection with the granting of an EL at Mount Penny for the improper purpose of advancing, promoting or securing the private interests of his co-conspirators or those associated with them. In fact, on one view, the open-ended nature of that agreement and the breadth of its scope, which I interpret as allowing for Mr Macdonald to do what he could when the opportunity presented itself as Minister for Mineral Resources in connection with the granting of an EL over land he knew was owned or controlled by his co-conspirators or those associated with them, makes what he and Edward Obeid and Moses Obeid agreed to do serious in the extreme.

2040. As I have set out at some length in the course of my deliberations to verdict, as the Minister for Mineral Resources Mr Macdonald had significant powers under the Mining Act, the exercise of which were necessarily subject to the implied obligation that they are exercised for legitimate purposes in the public interest. As Minister for Mineral Resources he also exercised supervisory control over the DPI from whose officers and executives he took advice and to whom he gave directions in their management of coal resources in New South Wales.

2041. It follows, without the need for further elaboration, that the scope and object of the agreement comprehended by the conspiracy constituted a gross departure from Mr Macdonald’s responsibilities as the Minister for Mineral Resources. Those responsibilities included ensuring that the exploitation of coal resources in New South Wales did not advantage one stakeholder over other potential stakeholders and that the processes designed to ensure that objective were at all times transparent and the highest standards of probity strictly adhered to.

2042. By agreeing to act in wilful breach of his Ministerial duties and obligations in connection with granting of an EL at Mount Penny for the improper purpose of conferring an advantage on a cohort of private people, including the co-conspirators themselves, self-evidently denigrates the public objects which the Office of the Minister for Mineral Resources is designed to serve and the objects which Mr Macdonald was obliged to serve in the public interest.

2043. It is fundamental to our system of government that Ministers who occupy office as Members of the Executive Government are entrusted with powers, duties and responsibilities exclusively for the public benefit. That is not simply an arcane feature of the Westminster system as we have inherited it. The people of New South Wales are entitled to expect that, in the Office of a Minister in the Executive Government of New South Wales, consistent with the oath or affirmation that their elected representatives take when admitted to that Office, that he or she will act as a Minister of the Crown at all times conscientiously and honestly in the public interest. The very solemnity of that promise recognises that the exercise of Ministerial powers, duties and responsibilities in the public interest will be rendered nugatory if a Minister is motivated by personal interests or, as is the case here, where Mr Macdonald, in his capacity as Minister for Mineral Resources, agreed with another member of Parliament and a member of that person’s family that he would deliberately breach his duties and obligations to advantage, favour or promote their personal financial interests.

2044. Counsel for the accused advanced no submissions to how the requisite assessment of seriousness might be made or whether the seriousness of the misconduct which I might find they each intended that Mr Macdonald commit merited criminal punishment.

2045. In all the circumstances, and in concluding my deliberations to verdict, I am satisfied beyond reasonable doubt that the misconduct each of the accused intended that Mr Macdonald would commit pursuant to the agreement into which they each intentionally entered as framed in the indictment, has the requisite quality of seriousness such as to merit criminal punishment for each of them.

Verdicts

2046. On the charge of conspiracy to commit misconduct in public office upon which each of the accused was arraigned on 12 February 2020, I find each of the accused guilty.

2047. I direct that a conviction against each of them be entered.

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Annexure 1 - Dramatis Personae (502812, pdf)

Annexure 1 - Dramatis Personae (6110892, rtf)

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Decision last updated: 19 July 2021