Macdonald v R

1. [1]

   THE COURT: Mr Ian Michael Macdonald and Mr John William Maitland each stood trial before the Supreme Court constituted by the primary judge (Dhanji J), sitting without a jury pursuant to s 132 of the Criminal Procedure Act 1986 (NSW), on a single indictment dated 6 February 2017. Mr Macdonald was charged with two counts of wilful misconduct in public office (counts 1 and 3) and Mr Maitland was charged with two counts of being an accessory before the fact to those offences (counts 2 and 4). The trial occupied some five weeks in September, October and November 2022, and the primary judge produced a very substantial judgment of 705 paragraphs, with commendable promptness, on 20 December 2022: R v Macdonald; R v Maitland (No 10 – verdict) [2022] NSWSC 1765. Mr Macdonald was represented by counsel; Mr Maitland represented himself.

2. [2]

   Mr Macdonald was found to be guilty of both offences, and Mr Maitland was found not guilty of both offences. The findings of guilt have, by reason of s 133(1) of the Criminal Procedure Act, the same effect as a jury’s guilty verdict for all purposes, including the right of appeal under s 5 of the Criminal Appeal Act 1912 (NSW).

3. [3]

   Mr Macdonald’s notice of appeal was filed on 5 April 2024, and contains the following five grounds raised against his convictions.

4. [4]

   Grounds 3, 4 and 5 are not confined to questions of law alone, so that the appeal on those grounds lies only with leave: Criminal Appeal Act 1912 (NSW), s 5(1)(b). Grounds 1 and 2 are questions of law, but nonetheless leave is required because, as will be seen below, counsel who appeared for Mr Macdonald at trial adopted a stance opposite to that which was advanced in this Court, and expressly urged the primary judge to adopt the course which, it is now said, introduced error. Leave to appeal on those grounds is required by reason of r 4.15 of the Supreme Court (Criminal Appeal) Rules 2021 (NSW).

5. [5]

   Following a sentencing hearing in February 2023, his Honour imposed a sentence of imprisonment for eight years with a non-parole period of five years and six months on the first count, and six years and six months with a non-parole period of four years and six months on the third count, with the second sentence wholly subsumed within the first: R v Macdonald [2023] NSWSC 270.

6. [6]

   Grounds 6 and 7 of the notice of appeal seek leave to appeal against those sentences, pursuant to s 5(1)(c) of the Criminal Appeal Act, on the following grounds:

7. [7]

   The Court had the benefit of lengthy written submissions supplied in advance of the hearing, from Mr Macdonald and the Crown, of 48 and 52 pages respectively. When the appeal was heard, counsel for Mr Macdonald advised that he would rely on his written submissions in support of the appeal against sentence.

8. [8]

   Messrs Macdonald and Maitland had previously stood trial, on the same indictment, in the Supreme Court constituted by a different judge sitting with a jury. Both men were convicted, but this Court (differently constituted) allowed an appeal and quashed the convictions: Maitland v R; Macdonald v R (2019) 99 NSWLR 376; [2019] NSWCCA 32.

9. [9]

   That history is relevant for two reasons. The first is that in large measure testimonial evidence was adduced at the second trial by the tender of the transcript of each witness’s evidence at the first trial. That included the transcript of Mr Macdonald’s evidence in chief and cross-examination at the first trial. He did not give evidence at the second trial. Thus, the judge who found him guilty had not seen Mr Macdonald giving evidence on oath that the two decisions which gave rise to the prosecution were made for a proper purpose, nor had he seen Mr Macdonald being cross-examined on that evidence.

10. [10]

    The second reason is that this Court overturned the convictions because of a misdirection as to the elements of the offence. The first and second grounds of the present appeal likewise complain of the direction the primary judge gave himself, which had been the subject of argument at trial, and his Honour’s reasons naturally turned in part upon the reasons given by this Court. We shall return, shortly, to the reasoning of his Honour and the earlier Court of Criminal Appeal.

11. [11]

    The procedural history also explains why Mr Macdonald’s sentence was back-dated to 21 January 2020 (the details do not presently matter and are explained in R v Macdonald [2023] NSWSC 270 at [112]-[119]). However, to be quite clear about it, the fact that a jury found Mr Macdonald guilty of the same offences at a different trial, with different evidence and different directions, is irrelevant to all of the grounds of appeal.

12. [12]

    In order to resolve the third, fourth and, especially, the fifth, grounds of appeal, it will be necessary to review in some detail the evidence adduced at trial and the reasons of the primary judge determining a circumstantial case. However, it is convenient first to provide the following overview, which is uncontroversial, of the background to this proceedings.

Factual overview

1. [13]

   Mr Macdonald held office as the Minister for Mineral Resources in the State of New South Wales. He was also a member of Cabinet. His office included responsibility for decisions under the Mining Act 1992 (NSW).

2. [14]

   The Mining Act defines “mineral” to include coal. In December 2007, the whole of the State was designated as a “mineral allocation area” with respect to coal. That had the consequence that before a person could apply for an exploration licence for coal, it was necessary first to obtain the consent of the Minister pursuant to s 13(4) of the Act (as it then stood). The power to grant an exploration licence was also conferred on the Minister, by s 22(1) of the Act. The grant of an exploration licence did not permit an applicant to mine; it only permitted the licensee to prospect the land for the specified mineral or groups of minerals. However, as a practical matter, the grant of an exploration licence, and the subsequent prospecting so as to confirm the nature and viability of a mineral resource, were the ordinary steps preceding the grant of a mining lease and the obtaining of development consent or project approval for a mine.

3. [15]

   Mr Maitland had been a senior union official in the mining industry, ultimately as the National Secretary of the Construction, Forestry, Mining and Energy Union (CFMEU). After he retired in 2006, Mr Macdonald appointed him as Chair of the Coal Competence Board, a body which oversaw the development of competence standards as well as advising the Minister. Mr Maitland also accepted a position as chair of a company, known as ResCo Services Pty Ltd (ResCo). Although ResCo was a labour hire company providing services to the mining industry, and provided engineering services for mine development, it had also identified an area of land at Doyles Creek in the Hunter Valley, near the small settlement of Jerrys Plains, with a resource of thermal and soft coking coal which had been the subject of some earlier exploration.

4. [16]

   ResCo propounded a plan to obtain access to the area in order to establish a commercial mine together with a training mine. Mr Maitland had long had an interest in establishing an underground training mine based on a genuine belief that such training would enhance safety in the industry. The training mine was also to be promoted on the basis that it would address a serious skills shortage in the industry.

5. [17]

   ResCo applied for Mr Macdonald’s consent to apply for an exploration licence for the area in February 2007. It sought a “direct allocation” of an exploration licence (ie without going to tender or expressions of interest or some other form of competitive process). At the time the Department’s guidelines provided that the allocation of a “major stand-alone area”, such as that sought by ResCo, would be allocated by some form of competitive process, possibly with a financial contribution. The tender processes in relation to applications for consent to apply in relation to some other coal resources had, around the relevant time, resulted in very substantial payments by mining companies, notably, $91,000,000 by a subsidiary of BHP Billiton in April 2006 (and as will be seen an even larger amount by a Chinese company in August 2008, shortly before Mr Macdonald granted consent to ResCo). ResCo proposed no financial contribution, but instead put forward the establishment of a training mine as the benefit which justified the allocation of the coal resource to it.

6. [18]

   ResCo’s February 2007 proposal was a letter of 2½ pages. It was not determined. In March 2007, following the State government election, the government was returned and Mr Macdonald retained his portfolio.

7. [19]

   A year later, on 18 March 2008, a significantly more comprehensive application for consent to apply was made by Doyles Creek Mining Pty Ltd (DCM) (to which in May 2007 ResCo had changed its name). Mr Macdonald gave consent to that application by letter dated 21 August 2008; his doing so was count 1 of the indictment.

8. [20]

   DCM thereafter applied for an exploration licence on 29 September 2008. Mr Macdonald granted Exploration Licence No 7270 on 15 December 2008; his doing so was count 3 of the indictment.

The elements of the offence

1. [21]

   The common law offence of wilful misconduct in public office involves the following elements:

2. [22]

   That formulation was given by the Victorian Court of Appeal in R v Quach (2010) 27 VR 310; [2010] VSCA 106 at [46] and was confirmed by this Court in Obeid v R (2015) 91 NSWLR 226; [2015] NSWCCA 309 at [133]-[142]. The formulation was not controversial either at trial or on appeal, although as will be seen below the content of the third element of wilful misconduct was in issue.

3. [23]

   There was no issue that Mr Macdonald held a public office, and granted the consent and the exploration licence in the course of that office. Nor was there any issue that Mr Macdonald knew that he was obliged not to use his position to favour Mr Maitland, such that if he did so, his conduct was wilful. The primary judge described at [15] as the “central issue” whether Mr Macdonald engaged in misconduct.

4. [24]

   Enough has been said to turn to grounds 1 and 2, noting that in order to address the other grounds impugning the convictions it will be necessary to return in much greater detail to the evidence.

Ground 1 – the direction as to “misconduct”

1. [25]

   In order to understand this ground, it is necessary to return to the first trial.

2. [26]

   The trial judge presiding over the first trial had directed the jury that in order to prove that Mr Macdonald had misconducted himself:

3. [27]

   That direction was found to be erroneous. The central paragraphs of this Court’s decision allowing Mr Macdonald’s appeal are as follows:

4. [28]

   It will be seen that the Court’s reasoning contains two elements. The first, which is found in [84] and was reiterated in [87], rejected the aspect of the direction that involved a comparison of legitimate and illegitimate motivations in favour of a test that required the illegitimate motivation to have been a necessary condition to the exercise of the power. That is to say, on the test pronounced by this Court, the Crown had to establish that the power would not have been exercised but for the illegitimate purpose.

5. [29]

   The second element of the reasoning concerned the difficulty of using the word “motivation” to describe the factual inquiry on which this element of the offence turned. This is found in [85]-[87]. It was said that in the present context, “motivation” had the same meaning as “purpose”. We shall return to this when dealing with ground 2.

6. [30]

   Notwithstanding the earlier decision in allowing an appeal from convictions on the same indictment, the same issue arose at the retrial. Counsel who then appeared for Mr Macdonald opposed reliance upon the element as formulated at [84], and submitted that there should be an additional element that the Crown had to prove. Mr Macdonald’s written submissions at trial in support of that direction commenced:

7. [31]

   That submission proceeded explicitly on the bases that (a) the additional aspect of the direction imposed a further hurdle for the Crown to establish to the criminal standard, and (b) nothing turned on the difference between motive and purpose.

8. [32]

   The primary judge gave a separate interlocutory judgment accepting Mr Macdonald’s submission: R v Macdonald (No 8); R v Maitland (No 8) [2022] NSWSC 1421; 303 A Crim R 230, in which his Honour concluded at [47], that:

9. [33]

   In this Court, counsel now appearing for Mr Macdonald, who had not appeared at trial, submitted that the primary judge had been wrong to accede to the submission made by his predecessor. His reason for the submission turned on the inability of the trial judge to make a finding to the criminal standard as to motive. As will be seen in more detail below, the primary judge summarised his conclusion on this issue at [540]:

10. [34]

    In response to the Crown’s submission that r 4.15 of the Supreme Court (Criminal Appeal) Rules 2021 was engaged, it was accepted that leave was required, but contended that there was a substantial miscarriage of justice in the misformulation of one of the elements of the offence. Still further, in response to the Crown’s submission that the test in fact applied was more favourable to Mr Macdonald with the result that there could have been no miscarriage of justice, it was said that the test applied by the primary judge was unfavourable to Mr Macdonald.

11. [35]

    Rule 4.15 (which replaced r 4 of the Criminal Appeal Rules 1952) provides:

12. [36]

    The typical application of that rule is where no objection is made to a jury direction at trial, and then after a jury has convicted the appellant contends that the direction was erroneous. The rule also applies to the present case, which is much starker, where counsel at trial has, if the submissions advanced on appeal be accepted, led the trial judge into error. But even though parties are ordinarily bound by the forensic decisions made by those representing them (Nudd v The Queen [2006] HCA 9; (2006) 80 ALJR 614 at [9]), it is also well established that leave will generally be granted if there is a miscarriage of justice, such that Mr Macdonald has lost a real chance of acquittal, or if a necessary element of a fair trial has been overlooked: Scaysbrook v R [2022] NSWCCA 69; 297 A Crim R 176 at [122]; Obeid v R (2017) 96 NSWLR 155; [2017] NSWCCA 221 at [24]-[25].

13. [37]

    The essence of Mr Macdonald’s submissions was encapsulated in the following exchange.

14. [38]

    Leave should not be granted to raise this ground, for the following reasons.

15. [39]

    First, contrary to Mr Macdonald’s submissions, the direction given by the primary judge to himself was more favourable to Mr Macdonald than the direction for which he now contends. That is close to self-evident, despite counsel’s sustained submission to the contrary.

16. [40]

    It is close to self-evident simply from looking at the wording. The direction applied by the primary judge requires the Crown to prove not merely that the decision would not have been made but for the improper purpose, but also that the improper purpose was the “driving force” behind the decision. That imposes an additional burden upon the Crown, without extending the scope of offending conduct to any conduct that would fall outside of the test formulated by this Court at [84] of its earlier decision. It remains necessary for the Crown to establish to the criminal standard that the power would not have been exercised but for the illegitimate purpose, but in addition the Crown must prove that that improper purpose was the driving force.

17. [41]

    It is also close to self-evident that that was how the position was viewed at trial. The additional qualification sought on behalf of Mr Macdonald was sought by his counsel precisely because it was perceived to be more favourable to him. It is trite that the fact that no objection is taken to a particular direction is, in most cases, cogent evidence that counsel, absorbed in the atmosphere of the trial, saw no injustice or error in what was said or done: Aravena v R (2015) 91 NSWLR 258; [2015] NSWCCA 288 at [121]; the same is true when counsel for the accused positively contends for a direction.

18. [42]

    It follows that there has been no miscarriage of justice, and any error as to the formulation of the elements of the offence was one which was favourable to Mr Macdonald. Accordingly, no basis has been made out to grant leave to permit Mr Macdonald with new representation to contend that the course adopted by his counsel at trial was one which led the trial judge into error.

19. [43]

    That is sufficient to dispose of this ground, without expressing views on whether a test of “driving force” (as opposed to some more diluted test) was correct in this case, or in other cases of this offence. But we would add that the “but for” test in [84] of this Court’s earlier decision was not expressed to be, and should not be regarded as, a test which was either necessary or sufficient to establish the element of misconduct in every case. The nature of the offence is that it is capable of applying to a wide range of conduct by public officials, and in many cases there will be multiple factors contributing to the decision. Take the example noted in Obeid at [335] of a decision to build a new train line or hospital, which will affect land in which the public officer has an interest. The officer might genuinely believe that the train line or hospital should be built in the best interests of the State, but even so his or her predominant purpose may be to obtain a benefit from his or her interest in the land. Alternatively, that improper benefit may be a contributing cause, to a greater or lesser extent, but nonetheless such that the decision would not have been made save for the improper purpose. We agree with the primary judge that there will be cases where in order to make out the offence, the Crown must establish that the improper purpose was the “driving force” of the decision. However, it does not follow that in all cases of this offence it is necessary to establish as much. On this point, this Court was taken, albeit briefly, to the discussion in Macdonald, Ian v R; Edward Obeid v R; Moses Obeid v R (2023) 112 NSWLR 402; [2023] NSWCCA 250 at [61]-[70]. However, neither side advanced submissions squarely directed to that reasoning. In circumstances where, by reason of the absence of any demonstrated miscarriage of justice, there is no basis for the grant of leave to advance a submission in the teeth of what was put at trial, it is unnecessary to take this any further, and in the absence of full submissions on the point, it would be inappropriate to do so.

20. [44]

    For those reasons, we would not grant leave to raise ground 1.

Ground 2: motivation as opposed to purpose

1. [45]

   This ground impugns the passages in the reasons of the primary judge in which his Honour found that there was misconduct. On the first count, his Honour said at [543]:

2. [46]

   In relation to the third count, his Honour said at [561]:

3. [47]

   The references to “driving force” and “motivation” were said to be erroneous, because they were distinct from the correct test, which was Mr Macdonald’s purpose.

4. [48]

   Mr Macdonald submitted that:

5. [49]

   We do not agree. On a fair reading of the reasons, the primary judge applied the test his Honour said he would apply in his interlocutory ruling, namely, an improper purpose which was the driving force behind the decision such that the decision would not have been made but for that improper purpose.

6. [50]

   First of all, there is no reason to doubt that the primary judge in fact applied the test which had been the subject of argument and an earlier decision, which is expressed in terms of “purpose”. In particular, there is nothing to suggest that the primary judge when using the word “motivation” intended to depart from the test stated in his earlier decision.

7. [51]

   Secondly, Mr Macdonald’s submissions to the contrary contemplate a material difference between “purpose” and “motivation”. But in the present context, there is no such difference. The difference which matters, and of which the primary judge was acutely aware, was the difference between purpose and motive.

8. [52]

   As a matter of ordinary English, the words “motivation” and “purpose” are, in this context, synonymous. The primary judge evidently was of the same view. That appears on a natural reading of the concluding two sentences in [543]:

9. [53]

   We add that this Court had observed, in its reasons for allowing Mr Macdonald’s appeal from the first trial, that “[m]otivation has the same meaning as purpose when used in this particular context”: at [86].

10. [54]

    It is pellucidly clear from the reasons of the primary judge that he was conscious that the Crown had not established a motive. Three paragraphs prior to that which is the subject of this ground of appeal, his Honour had noted the insufficiency of evidence of motive: at [540]-[541]. The only way of reading his Honour’s reasons is the natural one, in which motivation is synonymous with purpose, and distinct from motive.

11. [55]

    Once again, rule 4.15 applies, because the submission is to the contrary of what was put on Mr Macdonald’s behalf at trial. For the reasons given above, there is nothing in the point. It follows that there is no basis for granting leave.

Grounds 3 and 4 – errors in fact finding

1. [56]

   Separately from his complaint that the findings of guilt were unreasonable in ground 5, Mr Macdonald identified two particular findings that were said to be flawed. The first emerged from [517], which provided:

2. [57]

   Ground 3 contended that the primary judge erred in finding that the failure to seek advice from various bodies regarding the proposal was significant because Mr Macdonald determined the proposal without being fully informed in circumstances where the trial judge conceded that the Minister had complete discretion.

3. [58]

   The second emerged from [527]-[528], which are as follows:

4. [59]

   Ground 4 asserted error in the finding that “the training mine and tender process were not mutually exclusive in circumstances where the departmental recommendation did not include that as an option”.

5. [60]

   The respondent queried the utility of either ground in circumstances where Mr Macdonald also maintained that the verdict was unreasonable, noting what had been said on this point in Mohana v The King [2023] NSWCCA 61 at [14]; EE v The King [2023] NSWCCA 188 at [39] and Macdonald v R; Obeid v R; Obeid v R (2023) 112 NSWLR 402; [2023] NSWCCA 250 at [379]. The Crown submitted that properly understood these grounds were merely particulars of the unreasonable verdict ground.

6. [61]

   As the Crown submitted, if either of these grounds is established, it does not follow that the appeal will be allowed. As will be seen when dealing with ground 5, the primary judge relied upon a large number of considerations in concluding, to the criminal standard, that Mr Macdonald’s purpose was improper. It does not follow from a conclusion that one of a number of factors relied upon are erroneous that the conclusion is to be set aside, it is necessary also to show that the erroneous finding deprived Mr Macdonald of a reasonable possibility of acquittal: Filippou v The Queen (2015) 256 CLR 47; [2015] HCA 29 at [89]; EE v The King at [39]. Conversely, in determining whether the (deemed) verdicts of the trial judge were unreasonable and cannot be supported having regard to the evidence, it will be necessary to have regard to the criticisms made by Mr Macdonald under grounds 3 and 4. We respectfully agree that these grounds are no more than particulars of ground 5.

7. [62]

   In relation to ground 4, Mr Macdonald acknowledged (by not separately dealing with this ground) the force of what had been said by the Crown. Nonetheless Mr Macdonald maintained that there was separate error in ground 3. We do not accept that submission. However, nothing turns on this, because, for the reasons which follow, neither of these alleged errors in fact finding is made out.

8. [63]

   The point in ground 3 was that the primary judge was wrong to find that Mr Macdonald’s failure to seek advice regarding the training mine proposal was significant.

9. [64]

   There is no dispute that the Minister’s discretion, either under s 13(4) or under s 22(1) of the Mining Act, was relevantly unfettered. There was no legal requirement to obtain advice from various bodies before granting consent or granting an exploration licence, just as there was no dispute that the training mine proposal might have been referred to the Ministerial Advisory Council or to the Mine Safety Advisory Council, especially in circumstances where the predecessor of the latter body had previously given advice on a proposal for a training mine.

10. [65]

    None of those uncontroversial legal conclusions detracted from the force of the reasoning of the primary judge that the failure to obtain such advice was one of a number of considerations which contributed to the conclusion that Mr Macdonald’s purpose was improper. It is to be borne in mind that the Crown case was a circumstantial one and many considerations bore upon whether it had established beyond a reasonable doubt that Mr Macdonald’s purpose was improper.

11. [66]

    The reasoning of the primary judge on this point was clear. His Honour said at [521]:

12. [67]

    That is to say, his Honour proceeded on the basis that there was readily available advice, from persons independent of the proponent, which could usefully have informed the exercise of power by Mr Macdonald. Mr Macdonald was advised to obtain such advice. The fact that he did not do so is supportive of the conclusion that his motive was not to make decisions in the best interests of NSW but instead to make decisions favouring Mr Maitland’s company. Not only is this ground not made out, but the primary judge was plainly correct on this point.

13. [68]

    Mr Macdonald’s submissions in support of ground 4 must also be rejected. The submission was that the primary judge erred in finding that the training mine and tender process were not mutually exclusive, in circumstances where the departmental advice did not include an option for a tender involving a training mine.

14. [69]

    It is trite – and Mr Macdonald readily conceded as much in cross-examination at the first trial (which was evidence before the primary judge in the second trial) – that he was not confined to the options put forward in his Department’s recommendation. It would have been straightforward for a tender process to include as a condition of a complying tender or expression of interest that an applicant include a proposal for a training mine.

15. [70]

    Against this, Mr Macdonald contended that there was no obligation on the Minister to consider options beyond those set out in the departmental briefing note. So much may, for present purposes, be accepted. But Mr Macdonald’s submission misses the point. Although it was open to the Minister not to look beyond the recommendations made by the Department when determining DCM’s applications, it is clear that the unrecommended option of a tender process, a condition of which was a training mine, was available. As will be seen in more detail below, that matter was properly available as part of the Crown’s circumstantial case.

16. [71]

    Although there should be a grant of leave because these grounds are cognate with the unreasonable verdict ground, grounds 3 and 4 are not made out.

Ground 5 – unreasonable verdict

1. [72]

   Mr Macdonald accepted that in order to establish that the findings of guilt (which by reason of s 133(2) of the Criminal Procedure Act were deemed to be guilty verdicts) were unreasonable, he had to satisfy what had been said in Dansie v The Queen (2022) 274 CLR 651; [2022] HCA 25 at [15]-[16]:

2. [73]

   An appellate court’s review of the totality of the evidence is informed by the submissions made by the appellant in support of his or her appeal. In the present case, Mr Macdonald’s attack was confined to a single issue – which was, to be fair, the main issue at trial – namely, whether it should have been found to the criminal standard of proof that the driving force behind both decisions, without which neither decision would have been made, was an improper purpose of benefiting Mr Maitland or DCM. Our reasons are much shorter than those of the primary judge because there was little challenge to the findings of the primary judge. Instead, Mr Macdonald contended that the primary judge should not have inferred, to the criminal standard, that his granting of consent and granting of an exploration licence had constituted misconduct.

3. [74]

   The starting point is the uncontroversial documentary background to each of the impugned decisions. None of the following (which substantially derives from paragraphs 43-96 of Mr Macdonald’s written submissions) was controversial.

4. [75]

   In June 2005, the Minister for Mineral Resources at the time (Mr Hickey) announced plans for the release of a new coal area in the Gunnedah Basin in northwestern NSW, known as Caroona. Expressions of interest were lodged and evaluated, following which the Department recommended that consent be given to Coal Mines Australia Ltd, a wholly-owned subsidiary of BHP Billiton, to apply for an exploration licence. That company had offered an additional amount of some $91 million payable on the grant of an exploration licence. Later, on 12 April 2006, Mr Macdonald who by then had become Minister, granted an exploration licence in respect of Caroona to Coal Mines Australia, on terms which included an obligation to make payment of $91 million.

5. [76]

   On 3 May 2006, Mr Macdonald approved the “Coal Allocation Guidelines” applicable to the grant of exploration licences, which provided that:

6. [77]

   The guidelines also provided that standalone mines would be allocated by tender or expressions of interest. The guidelines also made provision for “minimum financial contributions” and “additional financial contributions”, with the latter being paid at the time of the grant of an exploration licence or shortly thereafter.

7. [78]

   In December 2006, Mr Macdonald appointed Mr Maitland to chair the Coal Competence Board. The following month, on 19 January 2007, Mr Maitland went to Mr Macdonald’s ministerial office. Ms Tan, who was Mr Macdonald’s Department Liaison Officer, gave evidence that she recalled Mr Maitland raising the idea of a training mine in the Hunter Valley. The following Monday 22 January 2007, Mr Maitland sent a two-page letter to one of Mr Macdonald’s staff (Mr Hewson). The letter said that there was a lack of semi-skilled and skilled workers, that a training mine would be financially supported by industry and the federal government and would receive union support, that it should be in a new area, rather than in an existing mine, and that training would commence in a few years.

8. [79]

   Later in January, Ms Tan corresponded and spoke with Mr Coutts, the Deputy Director-General of the Department, who told her that the training mine had been canvassed before but did not go ahead for various reasons. However, around this time, Mr Macdonald instructed his staff to write to Mr Maitland to say that the proposal was being considered, as long as it was going ahead on a commercial basis.

9. [80]

   On 30 January 2007, Mr Coutts sent an email to Mr Maitland, requesting further details of the proposal, and in particular how the proposed mine would operate on a commercial basis and what, if any, support would be required from government.

10. [81]

    On 1 February 2007, Mr Coutts received an email from the Department which tracked the history of consideration of the idea of a training mine, including its previous consideration by the Mine Safety Council in 1999 and 2000, when that body had agreed that the training mine concept no longer be pursued.

11. [82]

    On 6 February 2007, Mr Maitland wrote an email to Mr Coutts in response to the latter’s request for further details. Mr Maitland’s letter indicated that ResCo sought a direct allocation. A response drafted by another departmental officer (Mr Mullard), was sent to Mr Coutts and said “if the area were to be tendered it is expected that there would be a number of interested parties seeking access to this resource”.

12. [83]

    On 9 February 2007, Mr Macdonald granted consent under s 13(4) to an exploration licence in a different area (the Oakland Basins area) via a direct allocation to Shield Energy Ltd.

13. [84]

    On 14 February 2007, Ms Tan sent an email to Mr Hewson (Mr Macdonald’s chief of staff) and included the following summary:

14. [85]

    On 15 February 2007, ResCo sent an application for consent to the Minister. In response to a request from Ms Tan for a formal brief, the Department provided a briefing note which stated:

15. [86]

    There was testimonial evidence that the departmental officers had never included a reference to “potential probity issues” in a briefing note to the Minister. The reference was to the fact that a Labor Minister was contemplating granting consent to a company associated with a former leader of a major union without undertaking any competitive process.

16. [87]

    The Labor Party was returned to government following the election on 24 March 2007. Mr Macdonald continued as Minister for Mineral Resources.

17. [88]

    On 7 May 2007, ResCo Services Pty Ltd changed its name to Doyles Creek Mining Pty Ltd.

18. [89]

    On 26 July 2007, there was a meeting over lunchtime attended by Mr Macdonald, Ms Tan, Mr Maitland and one or possibly two other directors of DCM. There was evidence that there was discussion of the training mine.

19. [90]

    On 20 August 2007, Ms Tan wrote to Mr Maitland asking whether the letters from the relevant institutions supporting the training mine which had been discussed at the meeting had been followed up.

20. [91]

    On 5 September 2007, Atlas Coal wrote to the Department expressing interest in the Jerrys Plains area. Mr Coutts said that he was not impressed with that proposal, describing it as “pretty mickey mouse” in the sense that “they were trying to fly a kite in NSW and see if they could get some excess resource for a project that didn’t look like it had much going for it”.

21. [92]

    In September 2007, Mr Macdonald received letters of support from the Hunter Valley Training Company, the Westpac Rescue Helicopter Service and the University of Newcastle. Two of those letters referred to there being a skills shortage.

22. [93]

    In October 2007, the Department released information concerning expressions of interest for the “Watermark” resource (an area adjacent to Caroona). To anticipate what follows, a Chinese company promised to pay a very substantial additional financial contribution within 30 days of an exploration licence being granted in respect of Watermark. Mr Macdonald participated in the joint press conference with the Premier in connection with that grant on 14 August 2008. That was one week before consent was granted pursuant to s 13(4) of the Mining Act to DCM, being the conduct giving rise to count 1 of the indictment.

23. [94]

    Returning to 2007, on 5 November 2007, there was a meeting in the Minister’s office attended by Mr Macdonald, Mr Maitland, Mr Coutts and representatives from the University of Newcastle, concerning the possibility of a training mine.

24. [95]

    On 12 December 2007, Mr Macdonald made a declaration, on departmental advice, declaring the whole of the State of New South Wales a “mineral allocation area”, with the consequence that ministerial consent under s 13(4) was required before any exploration licence could be applied for.

25. [96]

    On 18 March 2008, DCM wrote to Mr Coutts seeking the Minister’s consent to apply for an exploration licence. Their letter attached a condition concerning a training mine, the letter from ResCo to Mr Macdonald of 15 February 2007, and stated that Doyles Creek hosted a “resource estimated at 91 million tonnes, capable of supporting coal mining operations over a life of 35 years”. It stated that there was an absence of JORC data (being a reference to a standard of assessing the reliability of the size and recoverability of the resource). It also stated that from the fourth year of the mine’s operation, the proposal was for there to be 104 trainees comprising 72 trade positions and 32 mining positions.

26. [97]

    The Department’s brief in response to the application was dated 27 May 2008. Its substance was as follows:

27. [98]

    On 14 August 2008, the same day as the press conference concerning Watermark, there were emails seeking from the Department the relevant documentation or template for an invitation to apply for an exploration licence. On 19 August 2008, Mr Agnew, who worked in the Department’s Maitland office, sent to Mr Hawkes (who worked in the Minister’s office) a template which contained the draft ministerial briefing, including sections on issue, background, comment and recommendations, s 51(4) of the Mining Act, and a draft letter of consent to apply for a mining lease. Subsequently Mr Hawkes forwarded it to Mr Munnings in the Minister’s office.

28. [99]

    At 11:52am on 21 August 2008, Mr Munnings sent an email to Mr Gibson containing a draft letter of consent to DCM and a copy of s 51(4) of the Mining Act.

29. [100]

    On 21 August 2008, an email was sent to Mr Gibson, the minerals policy adviser in the Minister’s office, which said “Hi, Allan Coutts said you might be looking for a copy of this…call me if it’s not what he was referring to”, attaching a copy of the application for consent dated 18 March 2008. This draft was subsequently amended in the Minister’s office and sent on that date to DCM. Mr Macdonald made some changes, including a reference to the fact that the NSW Minerals Council was currently considering the proposal. The letter contained the following:

30. [101]

    It was common ground that this letter constituted consent under s 13(4) of the Mining Act.

31. [102]

    A fortnight after the events mentioned above, on 5 September, a new premier, Mr Nathan Rees, was sworn in to lead the government. According to the conventions applicable in New South Wales, that caused all Ministers’ offices to be vacated: see A Twomey, “Changing the Leader – The Constitutional Conventions Concerning the Resignation of Prime Ministers and Premiers” (2011) 39 Federal Law Review 329 at 337; cf B Selway, The Constitution of South Australia (Federation Press, 1997), p 44. However, on 8 September 2008, Mr Macdonald was reappointed as Minister for Mineral Resources.

32. [103]

    By letter dated 29 September 2008, DCM submitted an application for an exploration licence. The application included the completed form as required under the Mining Act, a cheque for $22,800 (which was the requisite fee), and a map setting out the proposed area. There was also evidence of financial capacity in the form of a letter from Paradigm Capital indicating its support for DCM’s proposed equity-raising together with the steps taken in that regard, and a document setting out the proposed program of work.

33. [104]

    The letter also enclosed the submission of 18 March 2008 and Mr Macdonald’s letter of consent of 21 August 2008. The letter then stated, “in addition, as requested by the Minister we enclose letters of support from the following” before listing various letters. The letter concluded by saying “we understand there is also overwhelming community support from the Jerrys Plains community demonstrated by previous communications from the community to the Minister”. The letters were as follows:

    1. (1)

       Michael Buffier on behalf of Xstrata Coal, emailed on 26 June 2008;

    2. (2)

       Brian Flannery on behalf of Felix Resources Ltd dated 30 June 2008;

    3. (3)

       Peter Murray on behalf of United Collieries (on CFMEU Mining and Energy letterhead) dated 7 July 2008;

    4. (4)

       Colin Randall on behalf of Hydromining Coal Australia dated 1 August 2008;

    5. (5)

       Sharan Burrow on behalf of the ACTU dated 6 August 2008;

    6. (6)

       Brendan McPherson on behalf of Donaldson Coal dated 8 August 2008;

    7. (7)

       Ian Murray on behalf of Northern District CFMEU dated 22 August 2008;

    8. (8)

       Merv Mahon on behalf of the Retired Mineworkers Association dated 5 September 2008;

    9. (9)

       Geoffrey Pike on behalf of Sparke Helmore dated 23 September 2008;

    10. (10)

        Milton Morris on behalf of the Hunter Valley Training Company dated 23 September 2008;

    11. (11)

        Greg Combet, Federal Member for Charlton dated 24 September 2008;

    12. (12)

        Cliff Marsh and Richard Jones on behalf of the Westpac Rescue Helicopter Service dated 24 September 2008;

    13. (13)

        Kerry Hickey, Member of the Legislative Assembly for Cessnock dated 26 September 2008;

    14. (14)

        Stuart Barnett of Slater & Gordon dated 26 September 2008;

    15. (15)

        Nicholas Saunders on behalf of the University of Newcastle dated 29 September 2008;

    16. (16)

        Ray Barker on behalf of Skills DMC dated 29 September 2008;

    17. (17)

        Robert Coombs, Member of the Legislative Assembly for Swansea dated 29 September 2008; and

    18. (18)

        Gary Kennedy on behalf of Newcastle Trades Hall Council (undated).

34. [105]

    On 25 November 2008, Mr Macdonald had a dinner with Mr Maitland and Mr Gibson and another director of DCM. According to Mr Gibson, Mr Macdonald told them that he was getting very close to making a decision and that there would be another meeting where the exploration licence would be issued.

35. [106]

    On 5 December 2008, a departmental briefing including a draft letter for Mr Macdonald to sign was sent to Mr Gibson. Mr Macdonald signed it on that day. It stated:

36. [107]

    On 12 December 2008, a departmental briefing included a recommendation that the Minister grant an exploration licence in satisfaction of the application. On 15 December 2008, the deed for the exploration licence was executed at Catalina Restaurant in Rose Bay by Mr Macdonald as Minister. The press statement in relation to the training mine was released on 23 December.

Mr Macdonald’s submissions

1. [108]

   Mr Macdonald’s oral submissions were concise (they occupied pages 23-28 of the transcript) and are incorporated below, with the summary of his comprehensive written submissions.

2. [109]

   It was submitted that there was no doubt that Mr Macdonald genuinely believed in the training mine and that it had real public benefits, based on his testimonial evidence at the first trial, and the background of earlier mining disasters such as Gretley in 1996 and Beaconsfield in 2006, and evidence of his staff who confirmed that he was motivated by furthering the interests of New South Wales and that DCM had to demonstrate significant public good. It was submitted that this Court could not, based on the totality of the evidence, exclude the possibility that Mr Macdonald had a proper purpose and therefore there must be reasonable doubt that the power would not have been exercised except for the illegitimate purpose of conferring a benefit.

3. [110]

   Mr Macdonald submitted that the first decision did not follow his Department’s recommendations, but the second decision did. The first option on the briefing paper (a direct allocation to ResCo with strong conditions on title) was the option which led to a training mine. Mr Macdonald pointed to the evidence of former Premier Iemma that if the Minister wanted an underground training mine, option 1 was a way forward.

4. [111]

   Although the Coal Allocation Guidelines disfavoured direct allocations, Mr Mullard had admitted in cross-examination that direct allocation was not inconsistent with those guidelines.

5. [112]

   Against the force of the submission that the proposal should have gone to tender or some other competitive process, Mr Macdonald submitted that there were major stand-alone areas which proceeded by way of direct allocation, including Cobbora, Mount Pleasant, Narrabri and Oaklands Basin. In response to the Crown’s submission that each of those was allocated directly because of special circumstances, Mr Macdonald noted that the training mine for a public good was a special circumstance in the case of DCM.

6. [113]

   Against the likelihood of a substantial additional financial contribution, Mr Macdonald said that this was inherently uncertain. Mr Mullard’s evidence that the State might expect to receive $50,000,000 to $100,000,000 was based on hindsight. In the expression of interest process in 2008/2009 for eleven areas, which was limited to smaller players, four of the areas resulted in no additional financial contribution and the maximum amount was $2,125,000. One of the areas, Spur Hill, was a larger resource than Jerrys Plains, and received no additional financial contribution.

7. [114]

   Further, given that the upfront costs of the training mine were $7,000,000, with annual recurrent costs of $6,000,000, it was said to have been highly unlikely that a tenderer would be prepared to make any further substantial additional financial contribution.

8. [115]

   The Caroona and Watermark resources were not comparable. They were resources of 500,000,000 and 1,000,000,000 tonnes respectively which had been the subject of much greater investigation, and they were open cut mines which were far cheaper to develop, and were not subject to the need to have a training mine.

9. [116]

   The $15,000,000 estimated minimum financial contribution was based on a 91,000,000 tonnes resource, and would be less if the resource were smaller. As it was put orally:

10. [117]

    Mr Macdonald submitted that “[n]ormally motive is one aspect of a circumstantial case” but here the primary judge was unable to make any finding as to motive. He submitted:

11. [118]

    In relation to the consent letter issued by the Minister, based on a template obtained from the Department and the flurry of emails earlier on 21 August 2008, Mr Macdonald submitted that the Department was already on notice that this would occur, based on evidence from Ms Madden, who worked with Mr Mullard, and Mr Gibson.

12. [119]

    In relation to the failure to obtain endorsement from the NSW Minerals Council, Mr Macdonald submitted that since the Council’s members were industry bodies, this was unremarkable, in light of their opposition to a unionised workforce. The Department brief did not recommend any such reference, and the Minister was free to make a decision without consulting the Council or any other body. In oral submissions, counsel pointed to evidence that the NSW Minerals Council was supportive, but that because that body’s support did not come through in time, the Minister just made the decision.

13. [120]

    The letters of support, according to an agreed fact, set out the position of their authors which were the true beliefs of the authors based on the information each had at the time. Further, obtaining letters of support was common practice, according to two former premiers and Mr Macdonald’s chief of staff. The letters came from a wide range of persons, all of whom perceived benefits in the training mine.

14. [121]

    Mr Macdonald’s written submissions were critical of [516] of the reasons of the primary judge:

15. [122]

    Mr Macdonald submitted that any perceived lack of scrutiny of the proposal did not inevitably lead to an inference that Mr Macdonald had the requisite intent, or that but for the illegitimate motivation the decision would not have been made. It indicated a lack of care, rather than a criminal purpose or intent.

16. [123]

    Further it was submitted that the primary judge had “not given any weight to the importance of the conditions and penalties imposed in the exploration licence”.

17. [124]

    Mr Macdonald also noted, in relation to the size of the training mine, that its size could be reassessed after the geological data had been obtained, that the continuation of a training mine could have been made a condition throughout the life of a mine, and his evidence that the figures were just initial figures, and that the proposal was a feasibility study to see if the site could have a mine.

18. [125]

    For those reasons, Mr Macdonald said that the criticism based on the training mine being “a very small component” was misplaced, and until the resource had been “JORCed” and the conditions finalised there could be no certainty as to whether any additional conditions, including any further contributions, would be imposed. In oral submissions, counsel added “If a Labor minister can save 100 workers from a training mine disaster, surely that is worthwhile”.

19. [126]

    Mr Macdonald added that the primary judge’s analysis overlooked other potential benefits, including funding of the university, partnerships with Westpac Helicopter Service and substantial revenues from coal royalties. He submitted that the findings of the primary judge appeared to overlook these future financial benefits.

20. [127]

    Mr Macdonald criticised [526] of the reasons of the primary judge:

21. [128]

    This was said not to be supported by the evidence. It was submitted that there was no evidence that “public good allocations” were put to tender on a competitive basis, or being referred to advisory bodies. Instead, the training mine condition was a public good which placed the resource in the same category as other cases of direct allocations. He relied on his evidence at trial:

22. [129]

    Mr Macdonald submitted that “[i]n light of the public good, the above benefits, the letters of support which were sent to the Minister, and the Minister’s genuine belief in the benefits of a training mine, it is difficult to see how the trial judge found the appellant guilty beyond reasonable doubt that the driving force behind Mr Macdonald’s conduct in granting consent and in granting the exploration licence was to benefit Mr Maitland and DCM such that but for that motivation, the conduct would not have occurred”.

23. [130]

    The gravamen of what was put in favour of this ground was encapsulated in the following exchange immediately before the luncheon adjournment:

24. [131]

    The Crown’s response made the points that (1) the Minister himself said that in the ordinary course he would follow the departmental advice; (2) although there might be a legitimate purpose of a training mine to address the skills shortage, a point about which there were competing views, including the fact that mines generally trained their own workers, but in any event “what was proposed by way of the training mine was hardly significant, in terms of the 104 positions”; (3) royalties would be paid by whoever exploited the resource, but there might well have been a significant additional financial contribution that was being given up; (4) the absence of a finding of motive that was probative of guilt was not determinative; and (5) the letters of support highlighted the absence of any independent process. Counsel concluded in his answer to the issue:

Consideration

1. [132]

   We are persuaded beyond reasonable doubt that the driving force behind both of Mr Macdonald’s decisions was to benefit Mr Maitland and DCM, without which neither decision would have been made. That is so notwithstanding that (a) Mr Macdonald denied on his oath that he had any such illegitimate purpose and (b) no differently from the primary judge, we are unable to make any finding, on the criminal standard, as to Mr Macdonald’s motive.

2. [133]

   We start with matters which were plain on the face of the material before Mr Macdonald when he granted consent pursuant to s 13(4) of the Mining Act.

3. [134]

   First, Mr Macdonald knew that his Department advised against the proposal.

4. [135]

   Secondly, Mr Macdonald knew that the only persons who favoured the proposal, at least at the time Mr Macdonald chose to grant consent to an application being made, were those selected and put forward by DCM. The timing of Mr Macdonald’s decision was up to him, and he did so without following his Department’s advice and obtaining independent advice on a training mine from bodies well placed to provide such advice.

5. [136]

   Thirdly, Mr Macdonald knew that there was existing interest in exploring the Jerrys Plains area. “Interest in the area has been expressed by other mining companies” appeared in the second paragraph of the briefing note, and this was the very first point made in the comments in the departmental brief:

6. [137]

   The departmental recommendation was:

7. [138]

   Fourthly, Mr Macdonald must have known that there was at least a real possibility that if the process went to tender or expressions of interest, the State would receive an additional financial benefit which DCM was not offering. Conversely, Mr Macdonald must also have known – for it is the converse of the same proposition – that it would be difficult to award DCM the consent and the exploration licence if a competitor offered an additional financial benefit and DCM did not. It is striking that the Minister adopted the course which denied the State of all opportunity to enjoy a substantial financial benefit, and gave to DCM the opportunity to secure a valuable resource uncompetitively, despite the fact that a competitive allocation process was at the forefront of the matters put forward by the Department.

8. [139]

   Fifthly, the potential for very significant additional financial contributions was very real. Mr Macdonald was reported in the Newcastle Herald on 14 August 2008 as saying that “China Shenhua Energy Company had won a rigorous tender to explore the 190-square-kilometre coalfield about 35 kilometres south-east of Gunnedah”, and that “China Shenhua would pay $300 million within 30 days of the licence being granted”. He was also reported as saying:

9. [140]

   True it is that the Watermark resource was different from the resource at Jerrys Plains. It was larger and better explored and likely to be more profitable. But it highlighted the fact that the same Minister who had secured a benefit of hundreds of millions of dollars for the State earlier that month by the exercise of powers under the Mining Act later that month exercised the powers under the same Act in the absence of a competitive process and without obtaining any upfront financial benefit.

10. [141]

    Sixthly, DCM was of course offering to put in place a training mine, as opposed to an upfront financial contribution, and relied on that as a public benefit. However, the training mine component was relatively miniscule compared to the actual mine. The departmental briefing note emphasised (in the fourth paragraph) that the proposal suggested “91Mt of coal would be removed, or 3.3 Mtpa, of which only 150,000 tonnes would be from the ‘training panel’”. Less than 5% of the mining would be from the training mine. That small percentage was reflected in the minimal contribution. DCM’s submission said “independent research project[ed] the need for an additional 70,000 mining workers” over the next decade, while the training mine would produce 25 trainee mine workers after a one year course, five positions for deputy mine manager after a two year course, two positions for mine undermanager placement after four years, and 18 trade positions for fitters and electricians each requiring four years training. This is a fraction of 1% of the projected need.

11. [142]

    Similarly, DCM stated in its proposal which accompanied its application that the initial capital required for the mine was $209,000,000, as opposed to $7,000,000 for the construction of the “Doyles Creek Training Facility”.

12. [143]

    Seventhly, the potential profits for DCM were enormous. DCM said that it would establish a Community Trust Fund, into which payments would be made:

13. [144]

    Of course, projections over some three decades in the future are subject to a degree of uncertainty. But payments of $50,000,000 at a rate of 5% of after tax profits meant that on the face of DCM’s application, there would be after tax profits of one billion dollars. The one billion dollar amount was not included in the materials supplied by DCM to the Minister, but the proposition that $50,000,000 representing 5% of after-tax profits would be paid was highlighted as a reason to grant consent.

14. [145]

    Eighthly, all of the foregoing pointed to the appropriateness of there being the competitive process in accordance with the departmental guidelines. There was at least a chance that such a process would secure millions of dollars of additional financial contribution to the State. The only downside would be some delay, in an application which had already suffered substantial delays.

15. [146]

    None of this is inconsistent with Mr Macdonald holding a genuine belief that a training mine was a good idea which would provide a public benefit to New South Wales. We do not accept the submission that the existence of such a belief entails a reasonable doubt that his conduct constituted misconduct. The question is whether the Crown had established beyond reasonable doubt that the driving force of the decision, but for which it would not have been made, was an illegitimate purpose of conferring a benefit upon Mr Maitland and DCM. In order to do so, it was not necessary for the Crown to exclude the possibility that there was also a minor contributing purpose of the benefit of a training mine.

16. [147]

    Two aspects of the timing of the Minister’s decision are unusual, and tend to confirm the force of the considerations summarised above.

17. [148]

    The first concerns the NSW Minerals Council, an industry lobby group representing, among others, companies which mined coal. Dr Williams, its Chief Executive Officer, said that Mr Macdonald raised the issue of its support for a training mine with her repeatedly, including in telephone calls at 7:30am and on a Sunday evening, as well as in meetings with Mr Macdonald at Parliament House or in Governor Macquarie Tower. She said of the reference in the board paper to the training mine being “a Ministerial pet project”, that the words were hers, and that she included them “[b]ecause unusually I felt that I was being lobbied by the Minister rather than the normal process of me trying to lobby him”. She said that was based on “the frequency with which he spoke” on this topic. Neither of her cross-examiners suggested that the conversations did not occur.

18. [149]

    Ultimately, the NSW Minerals Council declined to support DCM’s application, following a meeting on 11 September 2008. But by then Mr Macdonald had already granted consent.

19. [150]

    The significance of this evidence is that it conveys that the Minister was determined to grant the application, and contrary to the usual order of things was lobbying a lobbyist for her organisation’s support. It is also strange that having gone to those efforts, Mr Macdonald did not wait for the response from the NSW Minerals Council.

20. [151]

    Secondly, there is the manner in which the decision was made and communicated to DCM. Ordinarily, this would be done by the Department. Unusually, the Minister wrote personally to Mr Maitland. He did so following urgent efforts being made to obtain precedents from the Department, as summarised above.

21. [152]

    Against this, Mr Macdonald’s written submissions pointed to evidence which suggested that some persons in the Department were aware, before the event, that the Minister would personally grant consent to apply for an exploration licence. That does not detract from the force of the point. Obviously, the relatively junior public servants involved in supplying the precedent knew. But it is far from clear that Mr Coutts knew. The gravamen of this aspect of the circumstantial case is the seeming haste by the Minister to make a decision on that day, and (contrary to usual practice) to draft the letter in his office when he understood that the departmental processes would take longer. If truly the decision to grant DCM consent without any competitive process had been made in the best interests of the State and not for any illegitimate purpose, why did it need to be made on that day rather than a few days later? There was no urgency apparent on the face of the materials. A similar application had been made more than a year earlier, and had not been addressed due to the State election. The latest application had been made more than a year later. There was no reason for determining it on 18 August 2008, as opposed to later in August or in September of that year, in the ordinary way with a departmental letter communicating consent.

22. [153]

    It may be that Mr Macdonald feared that he would lose his portfolio, and indeed a new premier was sworn in around a fortnight later, although as it happens he retained his portfolio. It is not necessary to reach a conclusion on this issue. All that matters is that Mr Macdonald’s evident haste in making the decision under s 13(4) tends to support the conclusion that the decision was made for some other reason rather than because he perceived it was in the best interests of the State.

23. [154]

    Contrary to Mr Macdonald’s submissions, the absence of a finding as to Mr Macdonald’s motive does not make the finding of guilt unreasonable or unsafe. It is not the law that a circumstantial case must fail unless the tribunal of fact is able to make a finding of motive.

24. [155]

    Nor does this decision set any “dangerous precedent”. The question in every case will be whether the Crown has established to the criminal standard all of the elements of the offence. It is likely to be only an unusual case where the circumstantial evidence on matters other than motive sustains a finding of guilt, but it is not the law that a finding of improper motive in a circumstantial case is elevated so that rather than being merely a strand, it becomes an essential element without which the case must fail.

25. [156]

    When all those considerations are borne in mind, we are satisfied that the driving force behind Mr Macdonald’s decision to grant consent to DCM was to benefit Mr Macdonald and DCM, and not to act in the best interests of the State.

26. [157]

    Both parties’ submissions were focussed on the element of wilful misconduct in relation to the first count, and directed few submissions to the third count. That was an appropriate course to take.

27. [158]

    We are also satisfied to the criminal standard that the same driving force lay behind the second decision, to grant an exploration licence – namely, to benefit Mr Maitland and DCM. The reasons already given support that conclusion. It is true that by this stage the Department had ceased its opposition, but that reflects the fact that the critical decision was that under s 13(4) (as is also reflected in the sentences imposed, with the sentence imposed for count 3 being wholly subsumed within the sentence imposed for count 1).

28. [159]

    We are also satisfied that the final element of the offences is made out. The resource was very valuable, Mr Macdonald held a very senior office, and he exercised his power in a way that conferred an immense benefit upon Mr Maitland and DCM rather than in the best interests of the State. The misconduct is extremely serious and warrants criminal sanction. We did not understand any contrary submission to be put.

29. [160]

    We reach those views having conducted our own independent assessment of the whole of the evidence, and in accordance with what was said in Dansie at [16] we have not relied on the reasons of the primary judge in any respect in which Mr Macdonald took issue.

30. [161]

    There are other matters which bear upon the circumstantial case, including the friendship of Messrs Macdonald and Maitland and evidence about what was said by the men in their dealings with one another. But we have addressed above all of the matters relied upon by Mr Macdonald which are favourable to the existence of reasonable doubt, and it is unnecessary to summarise the more peripheral aspects of the Crown case in order to reach our conclusion. That accords with the approach of the primary judge, at [538], who added that “[v]arious other matters relied on by the Crown such as not taking the matter to Cabinet are, for the reasons discussed above, if not significantly probative of guilt, at least not inconsistent with guilt”. No criticism was made of that reasoning with which we respectfully agree.

31. [162]

    Although there should be a grant of leave, this ground should be dismissed.

Leave to appeal against sentence

1. [163]

   Against the possibility that the appeal against conviction failed, Mr Macdonald also sought leave to appeal against the sentence imposed for both counts. The effective sentence was a term of imprisonment for eight years with a non-parole period of five years and six months. There were two proposed grounds of appeal: that the primary judge had erred in his assessment of objective seriousness, and that the sentence was manifestly excessive. Mr Macdonald and the Crown exchanged written submissions on these grounds which were not sought to be developed in oral address. Both grounds may be addressed relatively concisely.

2. [164]

   In relation to ground 6, the primary judge regarded both counts as extremely serious examples of the offence of wilful misconduct in public office. In reaching that conclusion, his Honour relied upon:

   1. (1)

      the fact that as a Minister and Member of Cabinet, Mr Macdonald occupied a very senior public office;

   2. (2)

      the misconduct was deliberate and extended over a period of at least some months (in the case of the first count, from no earlier than the Department’s Briefing Note of 27 May 2008 until the decision on 21 August 2008, and in the case of the second count, a similar period of time);

   3. (3)

      the significance of the resource (estimated to be 91 million tonnes of soft and semi-coking coal with a value of $9.1 billion);

   4. (4)

      the loss of an additional financial contribution, valued at somewhere between $50 million and $100 million, which would have been realised had the exploration licence gone to competitive tender, all of which was fully known by Mr Macdonald;

   5. (5)

      the consequences to NSW in terms of the damage to confidence of potential investors as a place where business can be transacted fairly and without political interference, and

   6. (6)

      the fact that the misconduct occurred at a time when State finances were under considerable strain.

3. [165]

   Mr Macdonald emphasised that he did not receive any financial benefit from his conduct, did not act in secret, and did not commit any explicit acts of deceit or dishonesty. He submitted that it was an error of judgment to confer a benefit upon DCM which could not be classified as being in the worst category. He submitted that if the proceedings were for judicial review then it would be doubtful that the Court could find that the decision was Wednesbury unreasonable. Moreover, subsequently the exploration licence was cancelled by the NSW Government, with the consequence that there was no real loss to State revenue (because the licence could be granted to a third party subsequently). Mr Macdonald also drew attention to the maximum penalty for the statutory analogue under Part 4A of the Crimes Act 1900 (NSW), being seven years, and the maximum penalty for the Commonwealth offence of misconduct in public office under s 142.2 of the Criminal Code Act 1995 (Cth) was five years. Mr Macdonald submitted that the sentence imposed had the effect of determining “that Mr Macdonald’s conduct in relation to the two [offences] was the worst of cases and therefore the appellant should receive the maximum”.

4. [166]

   We do not accept these submissions. The primary judge regarded both counts as “extremely serious examples” of the offence. There is no reason to infer that his Honour did not mean what he said, and instead proceeded on the basis that they were the “worst case” despite stating that they were “extremely serious examples”. There is no maximum penalty for the common law offence.

5. [167]

   True it is that Mr Macdonald received no benefit, but the primary judge expressly had regard to the fact that he received no benefit and that the essence of the misconduct was conferring a benefit upon DCM. The other matters to which the primary judge referred, namely, the senior position held by Mr Macdonald as a minister of the Crown, the deliberate and sustained conduct over a period of some months, and the quantum of the benefit all point squarely in support of the characterisation given by the primary judge. The primary judge mentioned that the value of the resource exceeded $9 billion. At least equally significant is the fact that, on the face of the material supplied in support of the application by DCM, it anticipated receiving a net profit after tax of $1 billion over the lifetime of the mine.

6. [168]

   It is trite that the characterisation of objective seriousness is classically for the sentencing judge: Mulato v The Queen [2006] NSWCCA 282 at [37]. No basis for interfering with his Honour’s characterisation has been made out; what is more, we consider it to be correct. It is unnecessary to engage with all aspects of Mr Macdonald’s submissions, including whether, if proceedings for judicial review had been brought, the decision would be regarded as Wednesbury unreasonable, because those submissions are not directed to, and distract attention from, the correct inquiry.

7. [169]

   Pursuant to ground 7, Mr Macdonald submitted that the sentence was manifestly excessive, given that he was 74 years old when sentenced, had received no financial benefit, had no record prior to the act in question, was a person of good character and was unlikely to reoffend given his age and the fact that he would never again be elected to public office.

8. [170]

   Mr Macdonald noted that another minister (Mr Rex Jackson) had been convicted for accepting a bribe in his capacity as Minister for Corrective Services as an inducement to show favours to certain persons in violation of his duty, and was sentenced to a period of imprisonment of 10 years with a non-parole period of five years: Jackson v R; Hakim v R (1988) 33 A Crim R 413. Mr Gordon Nuttall was convicted of receiving secret commissions and five charges of corruption and five counts of perjury and was sentenced for a term of 14 years: R v Nuttall; ex parte Attorney-General [2011] 2 Qd R 328; [2011] QCA 120.

9. [171]

   We agree that there are no prospects of Mr Macdonald reoffending, and that considerations of specific deterrence do not loom large. On the other hand, general deterrence is very important in offending of this nature. Very little turns upon the sentences imposed on Messrs Jackson and Nuttall for different offences many years ago (in the case of Mr Jackson, almost forty years ago). As Button J observed in Macdonald v The King (sentence) [2023] NSWCCA 253 at [222], “sentencing patterns have increased so markedly since the offending in Jackson v R & Hakim v R almost 40 years ago, as to render that decision of this Court as little value as a comparator”.

10. [172]

    True it is that the sentence imposed is not a lenient one, especially given Mr Macdonald’s age, however, we are unsatisfied that it is so far “out of the range” as to warrant the conclusion that some error of principle must have occurred, even though it is not apparent from the reasons of the sentencing judge.

11. [173]

    Although we would grant leave in relation to grounds 6 and 7, neither of these grounds is made out.

Conclusion and orders

1. [174]

   For those reasons, there should be a grant of leave to appeal, confined to grounds 3-7, but the appeal must be dismissed. Proposed grounds 1 and 2, which not only lack merit but which are also diametrically opposed to the submissions advanced on behalf of Mr Macdonald at trial, do not warrant a grant of leave.

2. [175]

   This Court’s orders are: