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Supreme Court 19 July 2021

R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 17)

[2021] NSWSC 858

Fraud & dishonestyPublic order & justice offences
CRIME ELEMENTS OF THE OFFENCE JOINT TRIAL OF THREE CO ACCUSED CIRCUMSTANTIAL EVIDENCE CASE SHEPHERD DIRECTION

Citation: R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 17) [2021] NSWSC 858
Court: Supreme Court of New South Wales
Date: 19 July 2021
Judge(s): Fullerton J

Background

The three accused faced a single charge of conspiracy to commit the common law offence of wilful misconduct in public office. The first accused, Mr Ian Macdonald, was the Minister for Mineral Resources in the New South Wales Executive Government. The second and third accused, Mr Edward Obeid (a Member of the Legislative Council and Edward Macdonald's political ally) and Mr Moses Obeid (Edward's son), were alleged to have agreed with Mr Macdonald that he would misuse his ministerial office for their financial benefit.

The Crown alleged that between approximately 1 September 2007 and 31 January 2009, the three accused agreed that Mr Macdonald would wilfully breach his ministerial duties of confidentiality and impartiality in connection with the granting of an exploration licence (EL) for coal at Mount Penny in the Bylong Valley. The Obeid family owned a rural property called Cherrydale Park situated near Mount Penny. The Crown's case was that Mr Macdonald committed eight particularised acts of misconduct in furtherance of this agreement, including making focused enquiries of the Department of Primary Industries (DPI) about coal reserves in the area and providing confidential departmental information to the Obeids, enabling them to pursue lucrative commercial arrangements with mining companies.

The trial was conducted without a jury before Fullerton J. None of the accused gave evidence. The case was substantially circumstantial, relying on documentary evidence, telephone records, diary entries, witness testimony from departmental officers and others, and admissions made by the Obeids in interviews with journalists.

Legal Issues

  • Whether a conspiracy to commit the common law offence of misconduct in public office is an offence known to law
  • Whether the indictment was legally defective for failing to specify the precise acts of misconduct that Mr Macdonald would commit, or for failing to identify what Edward Obeid and Moses Obeid agreed to do
  • Whether private individuals can be co-conspirators with a public official where they do not agree to perform any particular act in furtherance of the conspiracy
  • Whether the Crown was obliged to prove that each accused knew the intended misconduct was so serious as to merit criminal punishment
  • What constitutes a Minister's duty of confidentiality and duty of impartiality, and whether those duties were breached
  • Whether Mr Macdonald's knowledge that the Obeids owned Cherrydale Park near Mount Penny was proved beyond reasonable doubt, as an indispensable fact
  • Whether the conspiracy and the participation of each accused were proved beyond reasonable doubt on the circumstantial evidence
  • Whether the misconduct the subject of the conspiracy was serious enough to merit criminal punishment

Decision

Issue 1: Validity of the indictment and elements of the conspiracy offence

The court held that a common law conspiracy to commit the common law offence of misconduct in public office is an offence known to law (at [72]). The indictment was not defective for framing the agreement at a high level of generality, without specifying the precise acts of misconduct Mr Macdonald would commit (at [105]). It was sufficient that the accused agreed Mr Macdonald would wilfully breach his ministerial duties in connection with the granting of an EL at Mount Penny concerning the interests of the Obeids and their associates (at [107]).

The court declined to direct verdicts of not guilty based on any alleged legal deficiency in the indictment (at [111]). Fullerton J held that the indictment did not need to specify what Edward Obeid or Moses Obeid agreed to do as participants, and there was no legal bar to private individuals conspiring with a public official without themselves agreeing to play any specific role in execution of the conspiracy (at [128]-[129]).

Issue 2: The "seriousness" element and state of mind required

The court held that the Crown was not obliged to prove that each accused knew, at the time the agreement was forged, that the intended misconduct was so serious as to merit criminal punishment (at [71]). That assessment is for the tribunal of fact to undertake as a precondition to conviction, after being satisfied that the conspiracy and each accused's participation in it are proved beyond reasonable doubt (at [35], [158]). The Crown was, however, required to prove that each accused knew Mr Macdonald would wilfully breach his ministerial duties of impartiality and confidentiality for an improper purpose, and that "but for" that improper purpose he would not have agreed to act as he did (at [69], [155]).

Issue 3: The Minister's duties and whether they were breached

The court held that Mr Macdonald, as Minister for Mineral Resources, owed duties of both confidentiality and impartiality under the Ministerial Code of Conduct (at [211]-[216]). The duty of confidentiality, expressed in clause 4.2 of the Code, prohibits the use or provision of information obtained through ministerial office for an improper private purpose (at [233]-[234]). The duty of impartiality required the Minister to perform duties honestly, impartially, and in the public interest, not responsive to private interests at the expense of the public interest (at [282]).

The court found that five of the eight particularised acts of misconduct were established. These included Mr Macdonald making focused enquiries of the DPI about coal reserves near Mount Penny (first and second acts), and providing confidential departmental information including maps and a list of companies to be invited to the EOI tender process to the Obeids (fourth, seventh, and eighth acts) (at [1862]-[1868]). Three other particularised acts were not established. In each proven case, the court was satisfied that Mr Macdonald would not have acted as he did "but for" the improper purpose of advancing the Obeids' private interests (at [1868]).

Issue 4: Proof of the conspiracy and each accused's participation

The Shepherd fact (that Mr Macdonald knew the Obeids owned Cherrydale Park near Mount Penny) was found to be indispensable to proof of the conspiracy and was proved beyond reasonable doubt (at [187], [1879]). Based on the five established acts of misconduct and the totality of the evidence, the court was satisfied beyond reasonable doubt that the conspiracy was forged by no later than 9 May 2008 (at [1880]-[1881]).

Mr Macdonald's participation was proved by the acts of misconduct themselves (at [1879]). Moses Obeid's participation was proved beyond reasonable doubt by his direct dealings with Mr Macdonald in July and August 2008, his use of confidential information to broker mining deals through investment banker Mr Brook, and deliberate lies he told journalists to conceal his involvement (at [1957]-[1969]). Edward Obeid's participation was proved beyond reasonable doubt, with the court also invoking the inclusionary rule in section 87(1)(c) of the Evidence Act 1995 (NSW) to admit the acts and declarations of his co-conspirators as further evidence against him (at [2000]-[2020]). The court was satisfied that it was implausible the conspiracy would have been forged and executed without Edward Obeid's intentional participation (at [2018]).

Issue 5: Seriousness of the misconduct

The court held that the scope and object of the agreement constituted a gross departure from Mr Macdonald's responsibilities as Minister for Mineral Resources (at [2041]). Agreeing to act in wilful breach of ministerial duties to confer private advantage on a cohort of individuals, including a fellow member of Parliament, was found to be serious in the extreme and to merit criminal punishment (at [2039]-[2045]).

Orders Made

  • Verdict of guilty entered against each accused.

Key Takeaways

  • A conspiracy to commit the common law offence of misconduct in public office is an offence known to law, and an indictment charging it may frame the subject-matter agreement at a high level of generality without specifying the precise acts the public official would commit in execution (at [72], [105]-[107]).

  • Private individuals can be party to a conspiracy with a public official that the official will commit misconduct in public office, without themselves agreeing to perform any particular act in furtherance of the conspiracy; it is sufficient that they intentionally agree that the unlawful act will be committed (at [128]-[129]).

  • Where a conspiracy to commit misconduct in public office is charged, the Crown is not required to prove that the accused knew the intended misconduct was so serious as to merit criminal punishment; that qualitative assessment is for the tribunal of fact as a precondition to conviction after the conspiracy and each accused's participation are proved beyond reasonable doubt (at [71], [158]).

  • A Minister of the Crown's duty of confidentiality under the Ministerial Code of Conduct extends beyond marking documents "confidential" and prohibits the use or provision of information obtained through the exercise of ministerial office for an improper private purpose, informed by the circumstances in which the information was received (at [233]-[234], [280]).

  • In a circumstantial conspiracy case, the court may find the existence of the conspiracy proved beyond reasonable doubt from a pattern of acts of misconduct committed by the public official in furtherance of the agreement, without being able to identify when or where the agreement was reached, so long as each act is found to have been committed pursuant to an anterior agreement (at [1879]-[1881]).

Legislation and Cases Referenced

Legislation
- Coal Mining Act 1973 (NSW)
- Constitution Act 1902 (NSW)
- Crimes Act 1900 (NSW)
- Crimes Act 1914 ( Cth)
- Criminal Procedure Act 1986 (NSW)
- Evidence Act 1995 (NSW)
- Evidence (Audio and Audio Visual Links) Act 1998 (NSW)
- Freedom of Information Act 1989 (NSW) (repealed)
- Freedom of Information Act 1982 ( Cth)
- Independent Commission Against Corruption Act 1988 (NSW)
- Migration Act 1958 ( Cth)
- Mining Act 1973 (NSW)
- Mining Act 1992 (NSW)

Cases
- Ahern v The Queen (1988) 165 CLR 87; [1988] HCA 39
- Aston v R (1987) 26 A Crim R 128
- Attorney-General v Guardian Newspapers (No 2) [1990] 1 AC 109
- Attorney-General (UK) v Heinemann Publishers Pty Ltd (1987) 10 NSWLR 86
- Australian Competition & Consumer Commission v Leahy Petroleum Pty Ltd [2007] FCA 794
- Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11
- Barca v The Queen (1975) 133 CLR 82; [1975] HCA 42
- Bennett v R (1998) 144 FLR 311
- Blackstock v R [2013] NSWCCA 172
- Browne v Dunn (1893) 6 R 67 (HL)
- Coco v AN Clark (Engineers) Ltd [1969] RPC 41
- Edwards v The Queen (1993) 178 CLR 193; [1993] HCA 63
- Elomar v R [2014] NSWCCA 303
- Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10; [1995] HCA 19
- Faulkner v Upper Boddington Overseers (1857) 3 CB(NS) 412
- Fennell v The Queen [2019] HCA 37
- Giorgianni v The Queen (1985) 156 CLR 473; [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 R; Macdonald 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; [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