NSWNSWSC

R v Macdonald; R v Edward Obeid; R v Moses Obeid

[2021] NSWSC 858

Supreme Court of NSW|2020-04-06|Before: Fullerton J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2020-04-06

Before

Fullerton J

Catchwords

[1990] HCA 11 Barca v The Queen (1975) 133 CLR 82
[1993] HCA 63 Elomar v R [2014] NSWCCA 303 Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10
[1985] HCA 29 John L Pty Ltd v Attorney-General (NSW) (1987) 163 CLR 508
[1987] HCA 42 Jones v Dunkel (1959) 101 CLR 298

Source

Original judgment source is linked above.

Catchwords

[1990] HCA 11 Barca v The Queen (1975) 133 CLR 82[1993] HCA 63 Elomar v R [2014] NSWCCA 303 Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10[1985] HCA 29 John L Pty Ltd v Attorney-General (NSW) (1987) 163 CLR 508[1987] HCA 42 Jones v Dunkel (1959) 101 CLR 298[1959] HCA 8 Landini v State of NSW [2007] NSWSC 259 Mahmood v Western Australia (2008) 232 CLR 397[2008] HCA 1 Maitland v RMacdonald v R (2019) 99 NSWLR 376[2019] NSWCCA 32 Mulcahy v The Queen (1868) LR 3 HL 306 Nye v State of New South Wales (2002) 134 A Crim R 245[2002] NSWSC 1268 Obeid v R (2015) 91 NSWLR 226[2015] NSWCCA 309 Obeid v R (2017) 96 NSWLR 155[2017] NSWCCA 221 Optus Networks Pty Ltd v Telstra Corporation Ltd (2010) 265 ALR 281[2010] FCAFC 21 Peacock v The King (1911) 13 CLR 619[1911] HCA 66 Pereira v DPP (1989) 82 ALR 217[1988] HCA 57 Peters v The Queen (1998) 192 CLR 493[1998] HCA 7 Plus One International Pty Ltd v Ching (No 3) [2020] NSWSC 1598 Quaid v R (2011) 210 A Crim R 374

Judgment (288 paragraphs)

[1]

SC 1268 Obeid v R (2015) 91 NSWLR 226; [2015] NSWCCA 309 Obeid v R (2017) 96 NSWLR 155; [2017] NSWCCA 221 Optus Networks Pty Ltd v Telstra Corporation Ltd (2010) 265 ALR 281; [2010] FCAFC 21 Peacock v The King (1911) 13 CLR 619; [1911] HCA 66 Pereira v DPP (1989) 82 ALR 217; [1988] HCA 57 Peters v The Queen (1998) 192 CLR 493; [1998] HCA 7 Plus One International Pty Ltd v Ching (No 3) [2020] NSWSC 1598 Quaid v R (2011) 210 A Crim R 374; [2011] WASCA 141 R v Anderson [1986] AC 27 R v Barbouttis (1995) 37 NSWLR 256 R v Clout (1995) 41 NSWLR 312 R v Dolding (2018) 100 NSWLR 314; [2018] NSWCCA 127 R v Dytham [1979] QB 722 R v Freeman (1985) 3 NSWLR 303 R v Ghosh [1982] EWCA Crim 2; [1982] QB 1053 R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 1) [2019] NSWSC 322 R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 2) [2019] NSWSC 775 R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 3) [2019] NSWSC 898 R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 4) [2019] NSWSC 1286 R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 5) [2019] NSWSC 1489 R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 9) [2019] NSWSC 1785 R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 12) [2020] NSWSC 1946 R v Macdonald; R v Edward Obeid: R v Moses Obeid (No 13) [2020] NSWSC 1947 R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 14) [2020] NSWSC 1948 R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 15) [2020] NSWSC 1949 R v Macraild (Court of Criminal Appeal (NSW), 18 December 1997, unrep) R v McNamara (No 1) (1981) 56 CCC (2d) 193 R v Mills (1963) 47 Cr App R 49 R v Mok (1987) 27 A Crim R 438 R v O'Brien (1974) 59 Cr App R 222 R v Porter [1910] 1 KB 369 R v Quach (2010) 27 VR 310; [2010] VSCA 106 R v RK and LK (2008) 73 NSWLR 80; [2008] NSWCCA 338 R v Schipanski (1989) 17 NSWLR 618 R v Trudgeon (1988) 39 A Crim R 252 Shepherd v The Queen (1990) 170 CLR 573; [1990] HCA 56 Shum Kwok Sher v HKSAR [2002] 3 HKC 117; (2002) 5 HKCFAR 381 Standen v R (2015) 253 A Crim R 301; [2015] NSWCCA 211 The Commonwealth of Australia v John Fairfax & Sons Ltd (1980) 147 CLR 39; [1980] HCA 44 The King v Boston (1923) 33 CLR 386; [1923] HCA 59 The Queen v Apostilides (1984) 154 CLR 563; [1984] HCA 38 The Queen v Baden-Clay (2016) 258 CLR 308; [2016] HCA 35 The Queen v LK; The Queen v RK (2010) 241 CLR 177; [2010] HCA 17 Tripodi v The Queen (1961) 104 CLR 1; [1961] HCA 22 Trudgeon v R (1988) 39 A Crim R 252 Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317 Xu v Minister For Immigration and Multicultural Affairs (1999) 95 FCR 425; [1999] FCA 1741 Category: Principal judgment Parties: The Crown Ian Michael Macdonald (Accused) Edward Moses Obeid (Accused) Moses Edward Obeid (Accused) Representation: Counsel: S Callan SC / R Rodger (Crown) J Martin (Accused Macdonald) A Francis (Accused Edward Obeid) MJ Neil QC / M Kalyk (Accused Moses Obeid)

[2]

Solicitors: Solicitor for Public Prosecutions (Crown) M Bowe (Accused Edward Obeid) Murphy's Lawyers Inc (Accused Moses Obeid) File Number(s): 2015/212910; 2015/214251; 2015/212851

[3]

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

[4]

JUDGMENT

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]
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.
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.
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]
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.)

[5]

The law of conspiracy

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]
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.
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]
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]
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.
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.

[6]

The conspiracy charged in this trial

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.
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.
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.

[7]

Controversies as to the elements of the conspiracy charged

Two related controversies as to the elements of the conspiracy charged were addressed by the parties in their closing submissions.
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.
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.
The following analysis addresses and resolves those controversies.
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.
That is a question as to which there is no binding or persuasive authority.
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.

[8]

The submissions of the Crown

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

[9]

The submissions of the accused

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.
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]
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.

[10]

The authorities

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.
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.
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]
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.

[11]

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

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

[12]

Is the conspiracy charged an offence known to the law?

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.
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]
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.

[13]

Is the failure to allege an "improper purpose" fatal to the indictment?

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.
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]
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.
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.

[14]

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

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.
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.
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.

[15]

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

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]
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.
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.
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).

[16]

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?

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.
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.
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.
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]

[17]

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

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

[18]

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

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.
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.
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.
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.
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.
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".

[19]

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

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.
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.
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.

[20]

The timeframe of the conspiracy alleged

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.
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.
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.
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.

[21]

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

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.
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.
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.
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.

[22]

The Crown case as particularised

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.
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.
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.
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]
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.

[23]

The eight acts of misconduct, as particularised

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

[24]

Proving the existence of the conspiracy by inference

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.
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.
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.

[25]

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

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]
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.
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]
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.
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).

[26]

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

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.
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.
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).
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.

[27]

The Ministerial Code of Conduct

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]
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.
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]
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]
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]

[28]

The DPI Code of Conduct

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

[29]

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

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.
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.
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.
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.

[30]

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

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]
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.
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.
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.

[31]

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

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.
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).
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.
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]
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.

[32]

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

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.
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]
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]
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]

[33]

Mr Iemma and Mr Gibson's evidence

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.
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.
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.
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]

[34]

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

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).

[35]

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

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.
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.
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.
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.
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.

[36]

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

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.
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.
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).
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.

[37]

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

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.
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.
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.
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.

[38]

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

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.
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.
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.
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.

[39]

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

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

[40]

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

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".

[41]

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

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;

[42]

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

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.
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]
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.

[43]

The documentary evidence tendered in the trial, in summary

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.
None of the accused went into evidence.
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.
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).
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.
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.

[44]

Witnesses called in the Crown case

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

[45]

Parliamentary witnesses

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.
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]
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.

[46]

Bylong properties witnesses

Peter Druitt [234] was the real estate agent who acted in the sale of Cherrydale Park to Locaway P/L.
John Cherry [235] was the vendor of Cherrydale Park.
John Rodd [236] was a stock and station agent who advised members the Obeid family on the purchase of Cherrydale Park. [237]
Stewart Adlington [238] was the real estate agent who acted in the sale of Coggan Creek.
Ted O'Brien [239] was the vendor of Coggan Creek.
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.

[47]

DPI witnesses

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.
William Hughes [249] was the Chair of the EOI Evaluation Committee in relation to the EOI process. [250]
Kevin Fennell [251] was the probity auditor for the EOI process.

[48]

Ministerial staff

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

[49]

Monaro Mining NL witnesses

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.
Mart Rampe [255] was the CEO and Executive Director of Monaro Mining NL in 2007 and 2008.
Warwick Grigor [256] was the Chairman and a director of Monaro Mining NL until his resignation in April 2009.
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.
Greg Barns [258] was a non-executive director of Monaro Mining from 30 July 2008 to 2 February 2012. [259]

[50]

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

Ultimately only three ICAC officers gave evidence in the trial.
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.
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]
Lisa Stockley [263] was an investigator who reviewed documents seized during the search warrant executed at the Locaway P/L premises.

[51]

Expert witnesses

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]
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]

[52]

Others

Peter Fitzhenry [268] and Nicole Fitzhenry [269] were Moses Obeid's neighbours in 2007 and 2008.
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]
Rodney Pryor [272] was an analyst at Lehman Brothers and a colleague of Mr Brook.
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.

[53]

The primary issues in dispute arising from the evidence at trial

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]
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]
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.

[54]

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

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]
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.
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.

[55]

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

Historically and during the currency of the conspiracy, the Obeid family managed their business interests through a series of family trusts and companies.
The Crown tendered a document entitled "Trusts Summary". [280]
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]
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]
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.
The Crown also tendered a document entitled "Companies Summary". [288]
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.

[56]

Obeid Corporation Pty Ltd

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]

[57]

Locaway P/L

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]
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]
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]
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]

[58]

The relationship between Mr Macdonald and Edward Obeid as Parliamentary colleagues

Mr Macdonald and Edward Obeid were both longstanding members of the New South Wales branch of the Australian Labor Party. [303]
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]
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]
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.
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]

[59]

Mr Macdonald and Edward Obeid: Factional allies

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.
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.
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]
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.
Mr Iemma gave evidence about the emergence of factions within the New South Wales Labor Party.
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]

[60]

Budgetary challenges facing the Labor government in 2007-2008

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]
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.
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]
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]
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]

[61]

Mr Macdonald and Edward Obeid: Electricity privatisation

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.
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]
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]
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.
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]

[62]

Mr Macdonald and Edward Obeid: Personal relationship

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]
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]
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]
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.

[63]

Mr Macdonald's use of the Obeids' Jindabyne apartment

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]
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]
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]

[64]

Edward Obeid and Moses Obeid

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]
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]
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]

[65]

The relationship between Mr Macdonald and Moses Obeid

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]
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.
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]
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.
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]

[66]

Other relationships: Mr Macdonald, Mr Fang and Moses Obeid

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.
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]
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.
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.
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]
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.
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]

[67]

Occasions where the accused are in each other's physical presence

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.
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]
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.
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]
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.
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.

[68]

The Telephone Summary

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).
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.
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.
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.
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.

[69]

Submissions of the Crown

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]
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.
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]
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.

[70]

Submissions of the accused

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.
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]
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]
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.

[71]

Crown Case

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]

[72]

Edward Obeid and Mr Macdonald's Parliamentary diaries

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]
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]

[73]

Parliamentary sitting days

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.
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]

[74]

The probative value of the Telephone Summary and Parliamentary diaries

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.
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.

[75]

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?

[76]

The acquisition of Cherrydale Park

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.
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]
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.
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]
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]
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.

[77]

The location of Mount Penny adjacent to Cherrydale Park

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.
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]
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]
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]
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.
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]

[78]

Edward Obeid negotiates for the purchase of Cherrydale Park

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]
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]
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]
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.

[79]

Cherrydale Park is settled

The purchase of Cherrydale Park was settled on 15 November 2007. [493]
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]
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]
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]
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]
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.

[80]

The significance of Authorisations 287 and 342

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]
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.
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]
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.
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]
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]

[81]

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"?

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.
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]
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.
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.
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.

[82]

Mr Macdonald's knowledge of the ownership of Cherrydale Park as a fact indispensable to proof of the guilt of each of the accused

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]
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.
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".
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]
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]

[83]

Sources of evidence relied upon by the Crown to prove Mr Macdonald's knowledge beyond reasonable doubt

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.
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.
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.
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]

[84]

The submissions of the accused directed to proof of the Shepherd fact and its relationship with the "but for" test

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.
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.
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.
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.

[85]

The question when Mr Macdonald learnt of the Obeids' purchase of Cherrydale Park (if he did)

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.
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.
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.

[86]

What does the water licences issue reveal about Mr Macdonald's knowledge of the ownership of Cherrydale Park?

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.
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.
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).
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.
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.

[87]

Mr Badenoch's evidence concerning the water licences

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]
There is no evidence that the email was responded to by return email. Mr Gardoll was not called in the Crown case.
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]
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]
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]
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.
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]

[88]

I am satisfied Mr Badenoch made the water licences enquiry at Mr Macdonald's request

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.
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.
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.

[89]

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

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.
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.
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.
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.

[90]

The staff structures within the Minister's office and the DPI

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]
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.
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]
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.

[91]

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

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]
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.
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]

[92]

Communication between the DPI and the coal mining industry

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]
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]
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]
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]
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]

[93]

What is coal?

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.
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.
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.
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.

[94]

Coal mining methods and coal seams

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]
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?

[95]

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]

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.
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.
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]

[96]

Coal resources in New South Wales

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]
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] 1. That publication also included the following map of the Western Coalfield: [609]

[97]

Coal exploration activities

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.
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.

[98]

The granting of an EL under the Mining Act

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]
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]
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.
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]
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]

[99]

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

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.
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.
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.
Each of those steps is set out as follows.

[100]

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

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]
Previously, the MAA for coal in the State of New South Wales only covered the Sydney and Gunnedah Basins.
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]
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]

[101]

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

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.
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.
That process was undertaken by the DPI in accordance with the Coal Allocation Guidelines.

[102]

The Guidelines for Allocation of Future Coal Exploration Areas (Coal Allocation Guidelines)

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]
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]
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.
The Coal Allocation Guidelines do not apply to any existing coal titles but to only to "future coal exploration areas". [628]
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".
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]

[103]

Identifying coal resources for direct allocation and competitive tender

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.
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.
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.
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]
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]
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]

[104]

A limited form of expression of interest

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]
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.
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.

[105]

The Evaluation Committee's selection of a preferred mining company

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.
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]

[106]

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

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.
The Minister invited applicants to make the necessary application on the basis of the Evaluation Committee's advice.

[107]

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

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.

[108]

The grant of the EL by the Minister

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.
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.
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.
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.

[109]

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

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.
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.
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.
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]

[110]

The significance of Additional Financial Contributions

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.
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.
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]
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]

[111]

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

The Mount Penny Coal Release Area was located in the Bylong Valley, falling within the northern part of Western Coalfield.
That area was also referred to in the evidence as the Mount Penny-North Bylong Area or the Wollar-Bylong Area. [653]
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.
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]
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]
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]
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]

[112]

Mr Macdonald's enquiries of the DPI in 2008 about coal reserves in the Bylong Valley in the area of Mount Penny

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.
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.
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).
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.

[113]

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

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.

[114]

The evidence relied upon to prove the first act of misconduct

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.
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]
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]
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]
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.
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.

[115]

The production of Wiles Map 1 and the Ministerial Briefing

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]
Wiles Map 1 was tendered as part of Exhibit A: [693]
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.

[116]

The evidence relied upon to prove the second act of misconduct

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.
Attached to that email were Wiles Map 1 [711] and the Ministerial Briefing of 9 May 2008. [712]
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]
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]
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).
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]

[117]

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

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.
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.
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.
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.

[118]

The Shepherd fact is proved beyond reasonable doubt

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.
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.
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]
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.

[119]

The first and second acts of misconduct are established

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.
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.
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.

[120]

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

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.
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]
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]
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]
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]
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.

[121]

Mr Fitzhenry's evidence

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]
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]
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]
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]
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.

[122]

Mrs Fitzhenry's evidence

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]
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]
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]
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]
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.
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.

[123]

The weight to be afforded the evidence of Mrs Fitzhenry

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.

[124]

The weight to be afforded the evidence of Mr Fitzhenry

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.
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.
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.

[125]

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

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.
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.
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.
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.

[126]

The third act of misconduct is abandoned by the Crown

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]
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]
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.
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.
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.

[127]

The events leading up to the 4 June 2008 meeting

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.
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]
At this point I digress slightly to elaborate further upon the significance of the Watermark EL earlier referred to.

[128]

The Watermark EL

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]
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]
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]
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]
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]
By April 2008, over $400,000,000 had been raised in State revenue from the AFCs for Caroona and Watermark.
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]
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.

[129]

Further events preceding the 4 June 2008 meeting

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]
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]
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.

[130]

The Ministerial Briefing of 2 June 2008 which included Wiles Map 2 and Ms Moloney's six small areas

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]
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]
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]
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]

[131]

The preparation of Wiles Map 2

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]
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.

[132]

Wiles Map 2

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]
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.
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]
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]

[133]

Ms Moloney's identification of the "Six Small Areas"

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]

[134]

The Ministerial Briefing of 3 June 2008

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]
The recommendation was, "The Minister notes this Brief". [857]
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.
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]
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.
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.

[135]

The 4 June 2008 meeting

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.
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.
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]
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.
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.

[136]

Some preliminary observations with regard to the fourth act of misconduct

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]
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.
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]

[137]

The significance of the fifth act of misconduct to proof of the existence of the conspiracy

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.
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.
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.

[138]

The fifth act of misconduct

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.

[139]

The 6 June 2008 meeting

On 6 June 2008, a further meeting was convened by Mr Macdonald and attended by Mr Mullard and Mr Gibson.
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.
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.
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]
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.

[140]

Mr Gibson's evidence in summary

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".
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]
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]
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.
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]

[141]

Mr Mullard's evidence in summary

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]
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]

[142]

The Crown's position on how the Court should resolve conflict in the evidence

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]
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.
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.
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.
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.

[143]

The position of the accused

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.
I propose to take that approach.
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.
In my view, addressing the conflict in their evidence is unavoidable.
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.
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.
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]

[144]

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

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.
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.
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.
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]
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.

[145]

Is the fifth act of misconduct proved?

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.
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.
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.
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.
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.

[146]

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

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.
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.
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.

[147]

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?

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.
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.
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.

[148]

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?

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.
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.
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.
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]

[149]

The 17 June 2008 meeting

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.
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]
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.
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.
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.

[150]

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

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]
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]
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]
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]
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]
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]

[151]

Diagram X

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]
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]
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.

[152]

The sixth act of misconduct

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.
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.
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.
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.

[153]

The 16 June 2008 EOI Areas document

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]
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]
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]
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.
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]
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.

[154]

The 16 June 2008 meeting

On 16 June 2008, a meeting was convened by Mr Macdonald and attended by Dr Sheldrake, Renata Brooks [1015] and possibly Mr Gibson. [1016]
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]
Beyond interpreting his handwritten notes, which are opaque as to their meaning, Dr Sheldrake had no recall of what was discussed at the meeting.
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]
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.

[155]

The 16 June 2008 Credo Dinner

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.
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]
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.
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.

[156]

The 17 June 2008 meeting [1023]

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]
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]
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]
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).

[157]

Was there the "opportunity" for Mr Macdonald to provide the "timetable information" to Edward Obeid or Moses Obeid?

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.
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]
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.
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).

[158]

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

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]
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]
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]
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.
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.

[159]

The letters by Mr Grigor and Mr Irwin

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.

[160]

Mr Grigor's letters

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]
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]
Mr Rumore's file note of the 23 July 2008 conference contained a reference to that letter. [1054]
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.

[161]

Mr Irwin's letter

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.)
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.

[162]

The source of the information provided by Mr Brook

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.
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.
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.
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.
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]
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.

[163]

Is the sixth act of misconduct established?

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]
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]
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]
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]
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.
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.

[164]

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

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]
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]
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]
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]

[165]

"Tianda" and Mr Fang are introduced to Moses Obeid who then introduces them to Mr Rumore

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.
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]
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.

[166]

The initiation of contact between Mr Fang and Moses Obeid

On 30 June 2008, Mr Fang attended a conference with Mr Rumore, Moses Obeid, Gerard Obeid and Paul Obeid. [1103]
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]
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]
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] 1. 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] 1. 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] 1. 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] 1. 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] 1. 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) 1. Edward Obeid called Moses Obeid at 11:52am (4 seconds) 2. Within an hour, Edward Obeid called Mr Macdonald at 12:40pm (1 minute and 13 seconds) 3. Edward Obeid called Moses Obeid at 12:59pm (7 seconds) 4. Mr Macdonald called Edward Obeid at 1:46pm (30 seconds) 5. Moses Obeid called Edward Obeid at 2:06pm (15 seconds) and at 2:28pm (26 seconds) 6. Mr Macdonald called Mr Fang at 4:10pm (30 seconds) and at 5:30pm (30 seconds) 7. Moses Obeid called Edward Obeid at 5:41pm (41 seconds) 8. Edward Obeid called Mr Macdonald at 7:05pm (30 seconds) [1115] 1. 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) 1. Just over an hour later, Moses Obeid called Edward Obeid at 7:35pm (14 seconds) and at 9pm (53 seconds) 2. 16 minutes later, Mr Macdonald called Edward Obeid at 9:16pm (1 minute) [1116] 1. 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] 1. 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] 1. 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) 1. Mr Macdonald called Edward Obeid at 10:15am (1 minute) 2. Moses Obeid called Mr Fang at 10:59am (46 seconds) 3. Edward Obeid called Moses Obeid at 11:45am (30 seconds) 4. Moses Obeid called Edward Obeid at 11:52am (1 minute and 1 second) 5. Edward Obeid left Moses Obeid a voicemail at 12:36pm (21 seconds) 6. Moses Obeid called Edward Obeid at 1:17pm (20 seconds) and at 1:36pm (12 seconds) 7. Mr Macdonald called Edward Obeid at 1:43pm (30 seconds) 8. Mr Macdonald called Mr Fang at 3:06pm (1 minute and 30 seconds) 9. Mr Fang called Mr Macdonald at 3:55pm (1 minute and 11 seconds) 10. Mr Macdonald called Mr Fang at 4:16pm (30 seconds) 11. Edward Obeid left voicemails for Moses Obeid at 8:36pm (16 seconds) and 9:45pm (20 seconds)

[167]

The submissions of the accused

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.
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]
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]
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.

[168]

Mr Fang's further dealings in relation to the Mount Penny area

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.
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]
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]
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 3rd 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]
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]

[169]

Did Mr Macdonald introduce Mr Fang and Moses Obeid?

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.
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.
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.
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.

[170]

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

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.
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]
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.
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]

[171]

My ultimate rejection of the "exit strategy" as an innocent explanation

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.
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.
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.

[172]

The significance of Moses Obeid's representation concerning a landholders alliance in his contractual dealings

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.)
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.
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]
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.

[173]

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

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]
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]
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]
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]
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]
On 18 November 2008, ownership of Geble P/L passed to Mr Campo, the Triulcios' accountant. [1171]
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]

[174]

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]
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]
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.
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.
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]
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.

[175]

The first Wentworth Hotel meeting concludes

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".
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]
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]
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]

[176]

The second Wentworth Hotel meeting

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.
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]
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.

[177]

Paul Obeid provides a cardboard cylinder containing "maps"

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.
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.
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]
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]
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]
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.

[178]

The voir dire on the issue of the "maps"

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.
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]

[179]

The voir dire concludes

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.

[180]

Mr Brook's evidence about the "maps"

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]
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]
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]
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]
It was not suggested by the Crown that this was Wiles Map 1.
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.
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]

[181]

The significance of the "contiguous" or "adjacent" area to the question whether Wiles Map 2 was produced at the second Wentworth Hotel meeting

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]
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.)
I accept the concept of an "adjacent area" was generally known in the coal mining industry as a "contiguous zone".
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]
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]

[182]

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

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.
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]
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]
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]

[183]

Is the fourth act of misconduct established?

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.)
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.
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.
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.

[184]

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

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]
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.
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.

[185]

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

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.
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.
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.
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.

[186]

Submissions of the Crown on the confidentiality of Wiles Map 1

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]
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]
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.
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]
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]

[187]

Submissions of the Crown on the confidentiality of Wiles Map 2

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]

[188]

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

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]
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]
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.
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]

[189]

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

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.
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]
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.
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.

[190]

The second Wentworth Hotel meeting concludes

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]
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]
At the conclusion of the meeting, Mr Brook said Paul Obeid "rolled" up the maps and "put them back in his cylinder". [1384]

[191]

Mr Brook's actions after the second Wentworth Hotel meeting

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]
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.

[192]

The seventh alleged act of misconduct

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.
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.
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.
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]
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.

[193]

The evidence relevant to the preparation of the 2 July 2008 list

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]
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]
At Mr Mullard's request, various iterations of that list were prepared by Ms Moloney utilising the Coal Register. [1402]

[194]

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

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.

[195]

Was the Coal Register confidential?

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]

[196]

The earlier draft lists of companies created by the DPI

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]
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]
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]
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]

[197]

The 2 July 2008 list

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]
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.
Ms Moloney gave evidence that she prepared the 2 July 2008 list with reference to the Coal Register.
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]
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]

[198]

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

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]
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.
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.
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.

[199]

The 7 July 2008 meeting with the Minister

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]
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.

[200]

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

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]
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]
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]
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.

[201]

The handwritten list

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]

[202]

Was the handwritten list in Moses Obeid's writing?

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.
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.
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.
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]
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]

[203]

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?

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.
Donaldson Coal and Felix Resources were the subject of limited evidence in the trial.
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]
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]
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.

[204]

The form and content of the various lists of companies in evidence

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]
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]
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.
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.
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)".
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".

[205]

The submissions of the accused

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.
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]
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.
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]

[206]

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

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.
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]
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.
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]
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.

[207]

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?

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]
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.
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]
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]
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.

[208]

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

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.
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.
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]
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.

[209]

Mr Brook undertakes "desktop due diligence" of the handwritten list of companies

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]

[210]

Mr Brook approaches Monaro Mining NL

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]
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]
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]
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.

[211]

Monaro Mining NL's dealings with the DPI in 2007 and 2008

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]
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]
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.
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]
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]

[212]

Mr Brook's further dealings with Monaro Mining NL

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.
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]
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]
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]

[213]

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

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.
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]
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.
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]

[214]

The "false" paper trail is created

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]
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.
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]
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]
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]
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.

[215]

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

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.
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.
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.
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.
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]
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.

[216]

The Brook-Wong teleconference on 23 July 2008

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]
Mr Brook was questioned extensively about Mr Wong's rejection of the proposal and what he (Mr Brook) did in response to that rejection.
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]
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]

[217]

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

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.

[218]

The first draft of the Share Option Deed [1604]

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]
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]
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]
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]
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]
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.

[219]

The second draft of the Share Option Deed [1620]

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]
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]
Mr Grigor was given to understand that Voope P/L, the Grantee, was controlled by the anonymous landholder interests Mr Brook was representing. [1632]
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]
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]
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.
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.

[220]

The third draft of the Share Option Deed [1650]

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".
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]
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]
Clauses 8(a) to 8(e), drafted by Mr Rumore in response to concerns raised by Moses Obeid, were not relevantly amended. [1655]
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]
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]

[221]

The fourth draft of the Share Option Deed [1660]

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]
In accordance with Mr Rumore's instructions, the fourth draft contained further amendments to the definitions of "Consideration", "Condition Precedent" and "Tenement".
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]
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]

[222]

The executed Share Option Deed [1666]

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]
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]
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]
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.
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]
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]

[223]

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

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.
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.
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]
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.

[224]

The eighth act of misconduct

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]
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]
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.

[225]

The Coutts memorandum of 5 August 2008

The Coutts Memorandum included an annotated duplicate of Schiavo Map 3 [1700] together with a page titled "Medium Coal Allocation Areas". [1701]
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]
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]
Neither the EOI package published on 9 September 2008 nor the updated package published in January 2009 contained Schiavo Map 3. [1706]
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]

[226]

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

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]
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]
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]
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.
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.

[227]

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

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]
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.
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.
I am not able to accept that submission.
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]
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]
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.

[228]

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

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
Mr Brook gave evidence that Mr Rampe informed him that Monaro Mining NL had received the invitation.
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]
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".

[229]

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

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]
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]
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]
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.
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]
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]

[230]

The reopening of the EOI process and the ninth act of misconduct

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.
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]

[231]

The extension of the EOI process

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]
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]
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]
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]
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]
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

[232]

Mr Paul Page Director Arthur Phillip Pty Ltd GPO Box 2537 SYDNEY NSW 2000

[233]

Mr Phil Suriano Director Real Brand Holdings GPO Box 2537 SYDNEY NSW 2000

[234]

Mr Robert Crossman Director Griffin Coal GPO Box G474 PERTH Western Australia 6000

[235]

Mr John Atkinson White Energy Company Limited PO Box 422 NORTH SYDNEY NSW 2059

[236]

Mr Neil Whittaker Amerod Resources Limited Level 5 Grafton Bond Building 201 Kent Street SYDNEY NSW 2000

[237]

Mr Peter Meers Chief Executive Officer Tiaro Coal Limited 131 Macquarie Street SYDNEY NSW 2000

[238]

Mr James McGuigan Exploration Manager Redman Mining Pty Ltd GPO Box 2537 SYDNEY NSW 2000

[239]

Mr Richard Poole Director Cascade Coal GPO Box 2537 SYDNEY NSW 2000

[240]

Mr A J Lodge Consulting Mining Engineer 25 Glensanda Way MINDARIE WA 6030

[241]

Mr Alan Hansen Project Geologist Resolve Geo Pty Ltd PO Box 15723 CITY EAST QLD 4002

[242]

Mr Osamu Tano Senior Manager ITOCHU Mineral & Energy of Australia P/ L GPO Box 4271 Sydney NSW 2001

[243]

Mr Geoff Stewart GM Business Development Hillgrove Resources Limited Level 41 Australia Square Tower 264 - 278 George Street SYDNEY NSW 2000

[244]

Ray Slater Principal Ray Slater & Associates P/L 9 Princeton St KENMORE QLD 4069

On 9 January 2009, the Department formally reopened the EOI process with Mr Macdonald's approval. [1800]
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]
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]
The letter appointed the closing date for expressions of interest as "12 noon on Monday 16 February 2009". [1803]
Letters of invitation in the same terms were sent to each of the companies listed in the Ministerial Briefing. [1804]
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]
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.

[245]

Is the ninth act of misconduct established?

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.
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]
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.
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.
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]

[246]

Monaro Mining NL's Additional Financial Contribution (AFC)

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]
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]
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]
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.
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]

[247]

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

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]
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]
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]
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]
The Evaluation Committee did not convene prior to the conclusion of the extended EOI process. [1860]

[248]

Post-conspiracy period

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.
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]
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]
On 29 April 2009, at a Monaro Mining NL directors meeting, Mr Grigor was removed as Chairman. He immediately resigned as Director. [1865]
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]
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]

[249]

Moses Obeid meets with representatives of Cascade Coal P/L

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]
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]

[250]

The Evaluation Committee identifies an ambiguity in Monaro Mining NL's application

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]
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.
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]
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]
Mr Fennell gave evidence that the "ambiguity" was raised and discussed at the 14 May 2009 meeting as recorded in his handwritten note.
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]
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]

[251]

Monaro Mining NL abandons its application

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]
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]
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.

[252]

The Swissôtel Meeting

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]
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]
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]
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]
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.

[253]

Were there further meetings between Mr Brook and Mr Rampe?

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]
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]

[254]

The first Cascade Coal P/L meeting

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]
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]
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.
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.

[255]

The second Cascade Coal P/L meeting

Around 23 May 2009, a second meeting was convened, attended by Moses Obeid, Mr Brook and John and James McGuigan. [1922]
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]
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]
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]

[256]

The third Cascade Coal P/L meeting

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]
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.
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.
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]
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]

[257]

The Evaluation Committee's decision in respect of the Mount Penny Coal Release Area and the grant of the EL

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]
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]
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]
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]
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]
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]
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]
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]

[258]

Mr Brook's credibility and reliability

I return to the concerns I have earlier expressed about Mr Brook's reliability and credibility.
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]
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.
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.
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.

[259]

Sale of the Joint Venture

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]
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.
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]
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]
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]
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

[260]

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]
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.
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.
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]
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.
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]

[261]

The Rights Termination Agreement

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]
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. 1. 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.
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]

[262]

The Deed of Charge

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]
Mr Temple-Cole provided the following diagram to illustrate the financial arrangements and contractual obligations in place at the end of October 2010: [2013]
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]
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]

[263]

Payment of Tranche 1

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

[264]

The payment of Tranche 1 in its entirety was also reflected in the Lands Legal Trust Account Statement dated 4 May 2012. [2017]

[265]

Tranche 2

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]
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]
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]
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]
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]
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.

[266]

Is the existence of the conspiracy established beyond reasonable doubt?

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.
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]
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.
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.
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.

[267]

Money and motivation

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.

[268]

The financial motives the Crown attributes to Edward Obeid and Moses Obeid

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.
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.
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.
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.

[269]

The accused's submissions concerning motive

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.
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.
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.
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.

[270]

The motives the Crown attributed to Mr Macdonald

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.

[271]

Mr Martin's submissions on the question of motive

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.
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.
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.
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.
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.

[272]

Change of ownership of Cherrydale Park

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.
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.
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]
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]
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.
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.

[273]

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

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]
UPG P/L, (then called Kingsleys Chophouse P/L) was registered in September 2007.
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]
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]
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]
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]
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.

[274]

The Tripartite Landowners Deed

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.
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.
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]
That clause was included subject to instructions from Gerard Obeid [2100] and was retained in the document which was ultimately executed. [2101]
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.

[275]

The Profit Sharing Deed

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]
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.
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]
Again, that clause was included subject to instructions from Gerard Obeid. [2109]
I note that the name of Coopers World P/L was changed to Justin Kennedy Lewis P/L on 10 November 2008. [2110]
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.
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.

[276]

Moses Obeid's further role in distancing the Obeid family from ownership of Cherrydale Park

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.
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.
As stated above, Mr Kaidbay was the appointed director and sole shareholder of UPG P/L from 15 February 2008. [2115]
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]
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]
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]
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.

[277]

Is Moses Obeid's participation in the conspiracy proved beyond reasonable doubt?

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.
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.
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.
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.
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.

[278]

The lies Moses Obeid told to Ms Davies

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.
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]

[279]

The lies Moses Obeid told to Mr Shanahan and Ms Jiminez

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.
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]

[280]

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

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.
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.

[281]

Is Edward Obeid's participation in the conspiracy proved beyond reasonable doubt?

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.
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]

[282]

The co-conspirators rule

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.
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.
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.
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.
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.

[283]

The Jones v Dunkel direction sought by the accused

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]
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]
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]
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]

[284]

Ultimate findings

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.
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.
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.

[285]

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

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]
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]
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.
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.

[286]

Verdicts

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.
I direct that a conviction against each of them be entered.

[287]

Annexure 1 - Dramatis Personae (502812, pdf) Annexure 1 - Dramatis Personae (6110892, rtf)

[288]

Endnotes

On 12 December 2019, I made an order pursuant to s 132 of the Criminal Procedure Act 1986 (NSW) that the trial proceed in that way (see R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 9) [2019] NSWSC 1785).
The conspiracy alleged is itself a common law offence.
Pursuant to s 29(1) of the Mining Act 1992 (NSW), the holder of an exploration licence (EL) is entitled to prospect on specified land for a specified mineral or minerals. On 21 October 2009, EL 7406 for coal was granted over an area of 8,370 hectares in the Bylong Valley. That area included Mount Penny, a prominent topographical feature located adjacent to three properties owned either by the Obeid family (Cherrydale Park) or by associates of that family (Donola and Coggan Creek). The events leading to the grant of that EL, including Mr Macdonald's role as the responsible Minister, are the subject of extensive analysis throughout the judgment.
The Crown case, as ultimately particularised, was that the meaning of the words "concerning the interests of" in the indictment "does not require particularisation beyond the ordinary meaning of the words". It was the Crown case that Mr Macdonald agreed to misconduct himself with the improper purpose of advancing the interests (primarily financial) of Edward Obeid, Moses Obeid and/or their family members and/or associates. See MFI 134/1 p 9.
The Crown case, as ultimately particularised, was that the "family members" referred to in the indictment are Edward Obeid, his wife Judith Obeid and their descendants. See MFI 134/1 p 9.
The Crown case, as ultimately particularised, was that the "associates" referred to in the indictment included Justin Kennedy Lewis, Ross and Rocco Triulcio, Giovanni (John) Campo, Tina Chalabian, Sevag Chalabian, Sid Sassine and Andrew Kaidbay. See MFI 134/1 p 10.
T 1-2.
R v Quach (2010) 27 VR 310; [2010] VSCA 106 at [46]. The analysis of the elements of the offence of misconduct in public office in Quach is referred to, without criticism, in Obeid v R (2015) 91 NSWLR 226; [2015] NSWCCA 309 at [133] and Maitland v R; Macdonald v R (2019) 99 NSWLR 376; [2019] NSWCCA 32 at [67]-[84].
Ahern v The Queen (1988) 165 CLR 87; [1988] HCA 39.
In Peters v The Queen (1998) 192 CLR 493; [1998] HCA 7 at [51] McHugh J (Gummow J agreeing) expressed the view that although that is a definition that finds its source in Mulcahy v The Queen (1868) LR 3 HL 306 at 317, it was not clear what the second limb of the definition adds, given that both limbs require an agreement to do an unlawful act.

R v Macdonald; R v Edward Obeid; R v Moses Obeid

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