Edward Moses Obeid Snr v David Andrew Ipp

[2016] NSWSC 1376

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:	Edward Moses Obeid Snr -v- David Andrew Ipp [2016] NSWSC 1376
Hearing dates:	2, 3, 4, 8, 9, 10, 11, 15, 16, 17 August 2016
Decision date:	27 September 2016
Jurisdiction:	Common Law
Before:	Hammerschlag J
Decision:	Plaintiffs’ claims dismissed.
Catchwords:	ADMINISTRATIVE LAW — STATUTES — Independent Commission Against Corruption Act 1988 (NSW) (“the Act”) — inquiry into allegations of corruption — requirement to provide procedural fairness to potentially affected persons — claim by the plaintiffs for declaratory relief that they were denied procedural fairness by reason of the non-disclosure of a number of specified matters — HELD: denial of procedural fairness not established — the plaintiffs had an adequate opportunity to deal with the relevant subject matter — the plaintiffs were not deprived of the possibility of a successful outcome.   TORT — Misfeasance in public office — requirements for liability — whether defendants held public office — whether they knowingly or recklessly exceeded powers — whether they were reckless as to whether plaintiffs would suffer damage — whether plaintiffs suffered damage — CLAIM that ICAC committed misfeasance by knowingly denying procedural fairness — HELD: plaintiffs not denied procedural fairness — damage not established — CLAIM that Commissioner committed misfeasance in public office by making a suppression order which he knew he had no power to make — HELD: not established that the Commissioner had no power — not established that the Commissioner knew he had no power — no damage established — CLAIM that Counsel Assisting committed misfeasance in public office by cross-examining on a knowingly false premise — HELD: Counsel Assisting did not occupy public office — existence of false premise not established — no damage established — Counsel Assisting entitled to barristers’ immunity — CLAIM that ICAC investigators who executed search warrant committed misfeasance in public office by causing videotaping of documents outside search warrant — HELD: investigators executing search warrant did not hold public office — held they did knowingly engage in conduct beyond power — knowledge or recklessness of damage to be suffered not established — no damage established.
Legislation Cited:	Barristers Rules 2011 (NSW) Independent Commission Against Corruption Act 1988 (NSW) Legal Profession Uniform Law (NSW) Uniform Civil Procedure Rules 2005 (NSW) Victorian Police Regulation Act 1958 (Vic)
Cases Cited:	Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 225 CLR 88 Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 331 ALR 1 Australian Competition and Consumer Commission v Radio Rentals Ltd (2005) 146 FCR 292 Australian Special Opportunity Fund LP v Equity Trustees Wealth Services Ltd (2015) 323 ALR 570 Brambles Holdings Ltd v Carey (1976) 15 SASR 270 Cannon v Tahche (2002) 5 VR 317 Chappel v Hart (1998) 195 CLR 232 Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 Cornwall v Rowan (2004) 90 SASR 269 Duncan v Independent Commission Against Corruption [2016] NSWCA 143 Dunlop v Woollahra Municipal Council [1981] 1 NSWLR 76 Elguzouli-Daf v Commissioner of Police of the Metropolis [1995] QB 335 Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 Ex parte Aala (2000) 204 CLR 82 Federal Commissioner of Taxation v Futuris Corporation Ltd (2008) 237 CLR 146 Fish & Fish Ltd v Sea Shepherd UK [2015] AC 1229 Frank Davies Pty Ltd v Container Haulage Group Pty Ltd (No 2) (1989) 98 FLR 324 Glynn v Independent Commission Against Corruption (1990) 20 ALD 214 Gondarra v Minister for Families, Housing, Community Services and Indigenous Affairs (2014) 220 FCR 202 Hart v Commissioner of Australian Federal Police (2002) 124 FCR 384 Jones v Dunkel (1959) 101 CLR 298 Kioa v West (1985) 159 CLR 550 Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563 Leerdam v Noori (2009) 227 FLR 210 Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133 March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 Minister for Immigration and Border Protection v SZSSJ [2016] HCA 29 Minister for Immigration and Multicultural and Indigenous Affairs, Re; Ex parte Applicants S134/2002 (2003) 211 CLR 441 Minister for Immigration and Multicultural and Indigenous Affairs, Re; Ex parte Lam (2003) 214 CLR 1 Moder v Commonwealth of Australia (2012) 261 FLR 396 Northern Territory v Mengel (1995) 185 CLR 307 Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204 Porter v OAMPS Ltd (2005) 215 ALR 327 Poynder v Kent [2008] VSCA 245 Rosenberg v Percival (2001) 205 CLR 434 Ruddock v Taylor (2005) 222 CLR 612 Sanders v Snell (1998) 196 CLR 329 Shields v Overland (2009) 26 VR 303 Slaveski v Victoria [2010] VSC 441 South Australia v Lampard Trevorrow (2010) 106 SASR 331 Stead v SGIO (1986) 161 CLR 141 SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152 Tampion v Anderson (No 2) [1973] VR 715 Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1 WZARH v Minister for Immigration and Border Protection (2015) 90 ALJR 25
Texts Cited:	C Sappideen and P Vines, Fleming’s The Law of Torts (10th ed, 2011, Thompson Reuters) R P Balkin and J L R Davis, Law of Torts (5th ed, 2013, Lexis Nexis)
Category:	Principal judgment
Parties:	Edward Moses Obeid Snr - First Plaintiff Moses Edward Obeid - Second Plaintiff Paul Edward Obeid - Third Plaintiff Edward Joseph Obeid Jnr - Fourth Plaintiff David Andrew Ipp - First Defendant Geoffrey Maurice Watson - Second Defendant Grant Lockley - Third Defendant Paul Anthony Grainger - Fourth Defendant The Independent Commission Against Corruption - Seventh Defendant
Representation:	Counsel: C R C Newlinds SC with D R Sulan and A J O’Brien - Plaintiffs B Walker SC with S Free and P Herzfeld - First Defendant D A McLure SC with P G Sharp - Second Defendant P Braham SC with R Scruby - Third Defendant E Cheeseman SC with J Hutton and Ms S Patterson - Fourth Defendant J K Kirk SC with A M Mitchelmore and C G Winnett - Seventh Defendant   Solicitors: Breene & Breene Solicitors - Plaintiffs Corrs Chambers Westgarth - First Defendant HWL Ebsworth - Second Defendant Kemp Strang - Third Defendant Crown Solicitors Office - Fourth Defendant Ashurst Australia - Seventh Defendant
File Number(s):	2015/201089

Judgment

Operation Jasper

1. HIS HONOUR:   The Independent Commission Against Corruption (ICAC or the Commission) was constituted under the Independent Commission Against Corruption Act 1988 (NSW) (the Act). It was established to investigate, expose and prevent corruption involving or affecting public authorities and officials. It has special powers to enquire into allegations of corruption.

2. References below to sections are, unless the context otherwise requires, references to the Act.

3. Operation Jasper was the name given by ICAC to an investigation into the circumstances surrounding a decision made in 2008 by the then Minister for Primary Industries and Minister for Mineral Resources, the Hon Ian Macdonald MLC (Macdonald), to grant a coal exploration licence, referred to as the Mount Penny tenement, located in the Bylong Valley, including whether that decision was influenced by the then Hon Edward Obeid MLC (Edward Obeid Snr), or members of his family.

4. In July 2013, the first defendant, the Hon David Ipp AO QC (the Commissioner) presented the Commission’s Report (the Report) on the Operation Jasper investigation to the Presiding Officer of each House of Parliament.

5. The Commission found that each of Macdonald, Edward Obeid Snr and Moses Obeid engaged in corrupt conduct, essential elements of which were that they:

1. had entered into an agreement whereby Macdonald acted contrary to his public duty as a minister of the Crown by arranging for the creation of the Mount Penny tenement for the purpose of benefiting Edward Obeid Snr, Moses Obeid, and other members of the Obeid family; and

2. had entered into an agreement whereby Macdonald acted contrary to his public duty as a minister of the Crown to provide Moses Obeid or other members of the Obeid family with confidential information for the purpose of benefiting Edward Obeid Snr, Moses Obeid, and other members of the Obeid family.

6. The Commission made adverse credibility findings about Edward Obeid Snr, Moses Obeid and Paul Obeid. The Commission found that the evidence of Edward Obeid Snr on some important issues was deliberately untrue or false. It found that Moses Obeid was an unreliable witness, willing to lie or mislead whenever it suited his purpose. Paul Obeid was subject to similar criticisms to those made of Moses Obeid, and aspects of his evidence were found not to be believable and designed to mislead the Commission. No finding of corruption was made with respect to Paul Obeid.

7. As part of Operation Jasper, ICAC held compulsory examinations (which are conducted in private (s 30(5)) and a public inquiry (s 31(8)). Each of the plaintiffs was examined privately and publically. Moses Obeid, Paul Obeid and Edward Obeid Jnr are sons of Edward Obeid Snr.

8. ICAC obtained and executed a search warrant at premises occupied by an Obeid family company, Locaway Pty Ltd, in a business centre (commonly referred to as Birkenhead Point) at Drummoyne, Sydney.

9. The plaintiffs allege that they were denied procedural fairness.

10. They also sue the Commission, the Commissioner, Counsel Assisting the Commission, and two ICAC officers who executed the search warrant for damages for the tort of misfeasance in public office. Liability is being tried first.

11. No finding was made against Edward Obeid Jnr in the Report. It is not clear why he joined as a plaintiff. He has no cognisable interest in the proceedings and no attempt was made on his behalf to identify one. His claim must be dismissed.

The envelope and the maps

12. An A3 size orange-coloured envelope (the envelope) containing a number of documents and a manila folder (the manila folder) was seized under the search warrant. It was on or in a cabinet against the wall behind Paul Obeid’s desk.

13. A question in the investigation was whether two confidential, government maps dated 9 May 2008 and 30 May 2008 respectively (the maps), which had been created at the instance of Macdonald and which related to the proposed Mount Penny tenement, had been passed on to an Obeid family member. If they were in the manila folder at the time it was seized, this would be evidence of that having happened. In Chapter 12 of the Report which is entitled “Confidential documents found in the Obeid offices”, the Commission made findings that at the time the search warrant was executed, the maps were in the manila folder together with two other documents related to Obeid activities at Cherrydale (an Obeid property, the majority of which was covered by the Mount Penny tenement).

14. The agreements found by the Commission to have been made between Macdonald, Edward Obeid Snr and Moses Obeid were inferred from a number of other findings, including that the maps had been created in the Department of Primary Industries (DPI) in response to a request from Macdonald, that they were not publically available – yet were found in Paul Obeid’s office, and that none of the plaintiffs could explain how this came about.

15. Katherine Kyriakopoulos (Kyriakopoulos), an operational analyst with ICAC and one of the searchers under the warrant, found the envelope in an office occupied by Paul Obeid. The event was videotaped by ICAC operative Gavin Whalebone. The envelope had, it seems, come from solicitors Colin Biggers & Paisley (who had done legal work for the Obeid interests). Stuck to the envelope was a white sticker reading “To be collected Gerard Obeid”, another son of Edward Obeid Snr. The envelope contained a number of documents and the manila folder. A hand written record of the lodgement of these documents was made in ICAC’s Property Movements Register. The envelope was lodged with Manuel Azaola, an ICAC Property and Records Officer, and was allocated ICAC Property Reference Number E11/0363/36/48. ICAC has a computerised record system known as MOCCA. The envelope was registered on MOCCA on 24 November 2011 with that reference number.

16. Not earlier than 10 October 2012, Kyriakopoulos signed a statement of evidence (incorrectly dated 27 September 2012) about her search in Paul Obeid’s office. She stated that she recalled recovering the envelope and folder containing various documents. She recalled looking into the manila folder and quickly glancing at a document relating to a Chinese company and an old looking newspaper clipping. She said nothing of the maps. In an email exchange not disclosed to the plaintiffs, on 26 and 27 December 2012 between her and Timothy Fox (Fox), ICAC’s Chief Investigator, Fox asked her to include in her statement seeing two maps within the manila folder, if she recalled this. She responded by saying that she did recall seeing two old looking maps, but that this was all, and that she recalled recovering them from the cabinet near the window.

17. At a compulsory examination (21 August 2012) and in the public inquiry (6 February 2013), Paul Obeid was examined about the envelope and its seizure by Counsel Assisting the Commission, Geoffrey Watson SC (Watson), the second defendant. On 6 February 2013, Paul Obeid gave evidence that at the time it was seized, the envelope was sealed and that he had never seen the documents found in it. Watson put a number of questions to Paul Obeid in connection with the seizure. The plaintiffs say that Paul Obeid was asked by Watson to assume, contrary to the fact, that that video evidence showed the maps, and that they were in the manila folder.

18. On 20 February 2012, Fox asked Lisa Stockley (Stockley), an ICAC investigator, to assist in the review of material seized under the warrant. On 14 November 2012, Stockley signed a statement of evidence in which she stated that:

• on 22 February 2012, she retrieved the envelope from the Commission’s Property Division;

• she took item E11/0363/36/48 (the envelope) to her desk at the Commission where she reviewed the contents of the envelope; and

• the contents included a manila folder marked with the hand written word “Dulux”, in which she found four documents, including the maps.

19. ICAC internal records indicate that Stockley retrieved the envelope on 22 February 2012, but actually found the maps six days later on 28 February 2012. The evidence in the inquiry did not directly reveal the physical whereabouts of the maps for those six days. This period became known in these proceedings as “the 6 day gap”.

20. The practice adopted by ICAC for making available documents tendered during the public inquiry to interested parties was to upload them onto a dedicated website to which those parties had access. Stockley’s statement should have been uploaded by ICAC on to the website, to which the plaintiffs all had access, but because of ICAC’s error, it was not uploaded. A purported explanation for the error was given by an ICAC officer, but it is unintelligible.

21. The video recording of the execution of the search warrant, and a number of other statements concerning the execution of the search warrant, including the Kyriakopoulos statement, were successfully uploaded. A physical version of these statements, as well as Stockley’s statement, was marked as exhibit J-181 and apparently tendered at the public hearing on 7 March 2013.

22. The plaintiffs, however, did not have knowledge of the Stockley statement before publication of the Report. They learnt of it when it was provided to their solicitors by the Office of the Director of Public Prosecutions (DPP) on 26 November 2015, in the context of different proceedings.

Gardner Brook

23. One John Gardner Brook (Gardner Brook), a former investment banker who had been introduced to members of the Obeid family as a person who might assist them in the entrepreneurial side of coal mining, was examined at a compulsory examination (12 March 2012) and in public hearing (27 November 2012). He gave evidence that he was shown one of the maps by Moses Obeid and that in July 2008, Paul Obeid was able to mark on a map for him an area indicating the size of the proposed Mount Penny tenement.

24. Gardner Brook gave the following evidence in compulsory examination (12 March 2012):

Now, I want to ask you about this and I want to show you a bundle of documents which we got in this fashion. I want you to assume I 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. Two of them are maps and I want you to have a look at the maps and I want to ask you do you recognise whether they are maps which at one stage or another were shown to you by some member of the Obeid family?—One of them was, sir.

Which one? One is dated 30 May, 2008 and the other is dated 9 May, 2008?—The 30 May, 2008.

That was definitely shown to you?—Yes.

[Emphasis added.]

25. The video recording does not show that the manila folder was taken off Paul Obeid’s desk whether by “scooping” or some other manner not involving scooping.

26. Gardner Brook gave the following evidence at the public inquiry (27 November 2012) about the manila folder (referred to in the ICAC transcript variously as the “manilla” or “vanilla” folder):

I'm going to ask the Commissioner's associate to show you two other documents, one we call MFI 5 and the other we call MFI 6. I want you to assume that these are two maps which we found in a vanilla folder, vanilla, start again. Might have been a vanilla folder. I want you to assume these are two maps that we found in a manilla folder in the office of Paul Obeid at Birkenhead Point. Have you ever seen those maps before?—The, the one, MF1 6.

We call that MFI 6?—Sorry, it looks familiar definitely.

And in what sense does it look familiar, did someone show you that or?—Yes. Well, well, not necessarily this version, but certainly outlined the map, yeah.

All right. And who was the person or persons who showed to you do you believe?—Moses and Paul Obeid.

Now, what you'll see on MFI 6 is it has a rather distinctive pink hatched area—?—Yes.

—which we're calling an S on its side. And does that area, the way that it's marked, ring a bell with you?—Yes, it does.

Had you ever seen anything like this before, I mean it's an unusual looking map?—Not before, no.

Not before what?—Not before Moses and Paul Obeid showed me the map.

Could you return, fold up those maps—?—Sure.

—and return them to the Commissioner's associate. Mr Brook, did any of the Obeids ever tell you that they had access to information from a deep throat within either the Government or the Department in relation to these matters?—Not specifically, no.

Did you ever hear them mention Ian Macdonald?—Only through the luncheon at Lehman.

Now Mr Brook if I return to something we were talking about earlier, that's the selection by you of a mining company, I've shown you some documents already?—Ah hmm.

If l return to that am I fair with this summary of your evidence so far, that you were given the task of finding a mining company which might provide a suitable mining company with whom the Obeids could deal in a mining venture?—Yes.

Did they suggest to you the proposal, the form of the mining venture in the sense that it was either through a partnership or a joint venture or through buying shares in the company? Did they make any suggestions along those lines?—Initially it wasn't specific. What was specific was they be a silent partner in whatever form it took.

(The transcript of this examination, amongst others, was tendered on 14 February 2013 from which time it was available to the plaintiffs).

27. On 13 March 2012 (in the period between his compulsory examination and his examination in public), Gardner Brook was interviewed by ICAC officers, including Fox. During the interview, Fox said that they wanted to clarify “a couple of points” arising from his compulsory examination the previous day. There is in evidence a file note prepared by Fox, which records that Gardner Brook called Fox on 18 May 2012 after he had been contacted by a journalist. Gardner Brook expressed concern about the impact of his involvement with ICAC, and asked if he was in ICAC’s “gun sights”. The file note concludes with the following:

He ended by asking if he was in oir [sic] gunsights or an allie [sic], I told him we just wanted to get to the truth, he said that he wanted to resolve this by being a witness for us and I said then lets proceed on that footing.

28. Robert Mangioni (Mangioni) is an Australian legal practitioner. In 2014 he was acting for Dr Andrew Cornwell (Cornwell), the then sitting member in the NSW legislative assembly for the seat of Charlestown, in connection with an ICAC inquiry code named Operation Spicer.

29. Mangioni was called by the plaintiffs as a witness in these proceedings. He was not cross-examined. On 23 July 2014, Mangioni met with Watson and others. There was a discussion about the terms upon which Cornwell would be prepared to cooperate with the Commission. He says that Watson said words, including words to the following effect:

If he [Dr Cornwell] helps us we’ll help him.

We have a lot of flexibility in the report and the focus of the findings. That’s what we did in the Obeid inquiry for Gardner-Brook.

30. Later that day, Watson said words to the following effect to Mangioni and Cornwell:

We've reviewed your statement. It contains information which will be of significant assistance to ICAC.

We have a lot of flexibility in the report and the focus of the findings.

In the public inquiry, its necessary for you to give evidence.

Don't worry about McCloy and Grugeon - they will be emasculated.

I will promote you as one of the heroes; as we did we did with Rees, Kenealy and Sartor.

I will stake my reputation on protecting your reputation. But there are some issues. McCloy - you didn't do enough. I won't go after it but the press will be interested. And Grugeon - the press will be interested in the painting.

You've done the right thing.

You'll come out of this better. I will present you as a white hat. This will be an opportunity for a platform for your future political career.

You and Tim Owen were not experienced politicians, you were taken advantage of by the party machine.

31. Cornwell then signed a statement of evidence which Mangioni handed to Watson.

32. During the Operation Jasper inquiry, Edward Obeid Snr was represented by Stuart Littlemore QC, Moses Obeid was represented by Lionel Robberds QC, instructed by Jeff Tunks of Marsdens Law Group, and Paul Obeid and Edward Obeid Jnr were represented by Graham Turnbull SC, instructed by Michael Bowe of Marsdens Law Group.

Graham Turnbull SC

33. The plaintiffs called Turnbull SC. He was cross-examined by Senior Counsel for the Commission. His evidence was carefully and precisely given. He is a truthful witness.

34. He gave evidence that his general strategy, which he considered would most likely protect the long-term interests of his clients, involved avoiding the leading of any evidence, cross-examination of any witnesses, or seeking to advance an affirmative case as to what in fact occurred in the events that were the subject of investigation. They would keep “their heads down”, at least until final written submissions, being the most appropriate place to make submissions as to the sufficiency of the material to support corrupt or other adverse findings. Even then, he says his approach to written submissions was not to be exhaustive, and generally, not to address allegations not substantiated by evidence before the Commission.

35. Turnbull SC had a number of reasons for this approach. One was that he considered that the directions which were issued by the Commissioner with respect to cross-examination of witnesses effectively precluded cross-examination by an interested party unless the interested party articulated a positive case. Another was that he considered it distinctly possible that adverse findings would be made against his clients, even if evidence of the sort that would be admissible in a court did not establish the facts the subject of those findings on the balance of probabilities.

36. He says that he formed the clear impression early in the public inquiry that the Commissioner and Watson were taking a sceptical stance in relation to members of the Obeid family, that the public inquiry was being conducted in a combative manner, and that it was possible that adverse views had already been formed prior to the public inquiry’s commencement.

37. Turnbull SC gave unchallenged evidence that the uploading of the material was of significant interest to him at the time, and that following Paul Obeid’s evidence on 6 February 2013, he believed the ability of ICAC to prove that the maps had been seized from the Locaway premises may be a significant issue in the public inquiry. He recalls having thought that the video most clearly did not show a seizure of the maps and having come to the conclusion that Watson’s cross-examination about the maps could not have been based on what was visible on the video alone.

38. He says that he formed the view that the Kyriakopoulos statement did not support a finding that the maps had been seized from the Locaway premises, because Kyriakopoulos did not refer to the maps having been in the manila folder. He says that having formed the view that there was not sufficient evidence to support a finding that the maps were seized from the premises, he had no reason to cross-examine any of the makers of the uploaded statements.

39. Turnbull SC gave evidence about what he may have done had he been informed at the time of the public inquiry that in the course of preparing her witness statement, Kyriakopoulos had been asked whether she could recall recovering the maps, and had said that she could not recall doing so. He considers it to be very unlikely that it would have caused him to seek instructions to make an application to cross-examine Kyriakopoulos because this would have been inconsistent with his general approach to the public inquiry, and that if the fact that Kyriakopoulos could not recall recovering the maps was in material that was before the Commission, this would have been a further reason why that material did not support a finding that the maps had been seized. In such circumstances, he says he would not have had a reason to cross-examine her.

40. He says, however, that he would have been duty-bound to consider, and would certainly have considered, highlighting the fact that Kyriakopoulos could not recall recovering the maps in written submissions. But, he also says that it is likely that he would have formed the view that apparent evidential defects should remain untouched in light of the potential for a prosecution referral and subsequent criminal proceedings. His evidence was that there was more than a possibility, but less than a likelihood that he would have included the point in written submissions.

41. Turnbull SC gave evidence that had he been aware of the Stockley statement at the time of the public inquiry, it is possible he would have made an application to cross-examine her, but that given his approach to the public inquiry, he considers it more likely that he would not have done so. However, he would have discussed it with, and sought instructions about the possibility, particularly from Paul Obeid. He was unable to say with any level of certainty that he would not have made the application. In favour of making the application was that he would have been confident that what the statements (including Stockley’s) disclosed was as good as ICAC could do to prove that the maps had been seized from the premises, meaning it was therefore unlikely that cross-examination would have elicited evidence less favourable to his clients. Also, the statements (including Stockley’s) suggested to him that the investigators’ systems for proving what was seized and guaranteeing secure and accountable storage of exhibits were inadequate.

42. He says that had he wished to and been allowed to examine Stockley, generally relevant lines of cross-examination may have included the circumstances in which she said that she found the maps in the manila folder, inside the envelope. This would have included asking her about the manner in which the manila folder was secured in the period between the execution of the search warrant at the premises and when Stockley stated that she found the maps in the manila folder. He also points out that she apparently found the maps nine months after the search warrant, and made her statement a year after it.

43. He says that he would have been duty bound to address, and certainly would have considered addressing the Stockley statement in written submissions. However, given his approach to the public inquiry, he cannot be certain that he would have done so. His evidence was that there was more than a possibility, but less than a likelihood that he would have included the point in written submissions.

44. As to the 6 day gap, Turnbull SC’s evidence was that had he known of it, he may have cross-examined Stockley, although he considers it likely that he would have advised Paul Obeid that she should not be cross-examined, and that Paul Obeid would have taken the advice. Relevant lines of cross-examination may have included the circumstances in which she said she found the maps in the manila folder inside the envelope, and the manner in which the manila folder was secured between when the search warrant was executed and when she said she found the maps. He says he would have certainly considered addressing these matters in written submissions, and considers it probable that he would have included submissions as to why the matters undermined evidence in support of a finding that the maps had been seized.

45. Turnbull SC settled written submissions to the Commissioner on behalf of Paul Obeid dated 15 April 2013, in which the following was put as to why the allegation that Paul Obeid was able to mark the map for Gardner Brook should be rejected:

Although the documents that comprise exhibit J108 were found in an envelope at Paul Obeid’s Birkenhead Point office, his evidence was that the envelope was sealed and, as a consequence, that he had never seen the actual contents of the envelope. This evidence is consistent with Paul Obeid’s earlier evidence that he had never before seen the map dated 30 May 2008, including his unshakable denial to the first question Counsel [Assisting] put to him – a denial that was not seriously challenged in evidence.

Paul's lack of knowledge of the contents of the envelope refutes any allegation or inference of possession which requires knowledge and custody or control.

46. The strategy adopted by Robberds QC and Tunks on behalf of Moses Obeid was no different in substance. In relation to Gardner Brook, on 28 November 2012, Robberds QC advised Moses Obeid that it was not in his interest to raise, by way of cross-examination during the inquiry, further matters that might be the subject of other avenues by the Commission. In an email the day before, Tunks expressed the view that they should, at that stage, stick to the “Lionel plan”, obviously a reference to the strategy of passivity.

47. On 6 March 2013, after the search warrant video recording and statements concerning the execution of the warrant (including the Kyriakopoulos statement) had been uploaded and obtained, Tunks advised Moses Obeid by email, relevantly, as follows:

I note we did not raise issue with the manner of search nor recovery of the folder / map during Moses’ evidence.

The tape and evidence speaks for itself in that

1. The map is not identified as having coming [sic] from the envelope nor search as alleged by Watson.

2. Even if it is in there…and there is no evidence that it was based on what has been produced….it has made its way into an open envelope with a number of other unrelated documents some 2 years after its creation as a confidential document.

3. I am unaware of what Mr Turnbull is going to do but I note that he is the one who raised it via Paul’s evidence.

There is much mileage to be made in examining this further I suspect. However, left as it is, the evidence is wholly unsatisfactory of ICAC.

I do not see the value in giving them a chance to redeem this situation.

Happy to discuss

Jt

48. Littlemore QC, on behalf of Edward Obeid Snr, sought to put to Gardner Brook in cross-examination that he had only met Edward Obeid Snr once, at the home of Moses Obeid, at a time when Gardner Brook was showing signs of substance abuse. The question was objected to and disallowed. Littlemore QC did not raise the seizure of the manila folder or the maps in cross-examination or deal with it in final written submissions.

The Advice and the Heads of Agreement

49. During the execution of the search warrant, two other documents were discovered by ICAC operatives in a safe.

50. One was a written advice (the Advice) dated 15 October 2009 from the Solicitor General to the Crown Solicitor on behalf of the Minister for Infrastructure. It dealt with a question of compliance with government guidelines for privately financed projects with respect to a proposal by Australian Water Holdings Pty Ltd concerning the Rouse Hill development area and the North West Growth Centre.

51. The other was a document dated 4 November 2010 entitled “Heads of Agreement – Australian Water” (the Heads of Agreement). It is an agreement between parties described as the Obeid Family Trust and Nicholas Anthony Di Girolamo respectively, and provides for the sale by Di Girolamo to the Obeid Family Trust of shares in Australian Water Pty Ltd and Australian Water Holdings Pty Ltd for $3,000,000. From its coversheet, it was prepared by a law firm called Lands Legal.

52. The Heads of Agreement includes the following clauses:

General terms

1   Sale of Shares

1.1   Sale

In consideration of payment by the Purchaser to the Vendor of the Purchase Price in accordance with clause 1.2, the Vendor agrees to transfer the Shares to the Purchaser on Monday 8 November 2010. On that date the Vendor must deliver to the Purchaser share certificates for the Shares.

1.2   Purchase Price

The Purchase Price is payable as follows:

1.   On Monday 8 November 2010 - $1,000,000

2.   No later than 31 March 2011 - $2,000,000

……………………

3   Interest and Consultancy

3.1   Interest

The Vendor shall pay to the Purchaser a return of no less than $300,000 per annum payable monthly in advance on the first day of each month as interest on the investment made by the Purchaser pursuant to this agreement. This payment shall commence at the time the payment referred to in clause 1.22 is made. If these payments are not made on the due date, the payment shall increase to $360,000 per annum as a genuine loss suffered by the Purchaser for the payment being late.

3.2   Consultancy

The Vendor shall procure that the Companies enter into a consultancy agreement with an entity nominated by the Purchaser on the following terms:

(a)   Ten (10) years with two subsequent options of ten (10) years each or as mutually agreed

(b)   $350,000 per annum plus GST payable monthly in advance

(c)   Commencing at the time the payment referred to in clause 1.22 is made

(d)   Other such terms as are appropriate for such agreements

53. These documents were not seized, but videoed up close by an ICAC operative, Darren Curd (Curd), so as to record their contents. The third defendant, Grant Lockley (Lockley), an ICAC senior financial investigator, and the fourth defendant, Paul Grainger (Grainger), an ICAC senior investigator, were present.

54. On 19 December 2012, Meaghan Fleeton, a Principal Lawyer with ICAC, wrote the Commissioner a memorandum in connection with Operation Credo, another ICAC investigation, which included investigations into an allegation that Edward Obeid Snr and Moses Obeid held an interest in Australian Water Holdings Pty Ltd and that, during contract negotiations with Sydney Water, they exercised influence in the outcome for financial benefit. The memorandum recommended the Commissioner sign a Summons to produce documents to a solicitor at Lands Legal.

55. The Heads of Agreement as videoed was, I find, used to prepare the memorandum and the Summons to Lands Legal in order to produce the Heads of Agreement for the purposes of Operation Credo.

56. On 1 February 2013, during the public inquiry, Watson showed Moses Obeid an unredacted copy of the Heads of Agreement and made a redacted copy available to the Commissioner. Watson informed the inquiry that a portion of it had been blacked out for security purposes. After examining Moses Obeid about the transaction, he sought a suppression order in respect of the unredacted copy, which the Commissioner granted. The suppression order pertained to cl 3 of the Heads of Agreement.

57. The version which became available to the public was redacted accordingly. However, Watson cross-examined Moses Obeid on the unredacted version.

58. On 2 February 2013, the following article appeared in the Sydney Morning Herald newspaper:

Obeids' billion dollar bonanza

THE family of Labor kingmaker Eddie Obeid struck an agreement just before the last election to take a secret one-third share in a water company pushing for a billion-dollar privatisation deal with the then state Labor government.

The explosive revelation came during heated questioning of Mr Obeid's son Moses at a corruption inquiry on Friday.

Moses Obeid initially denied ever seeing a document titled ''Heads of Agreement - Australian Water'', which was dated November 2010. But the document, which would deliver to an Obeid family trust a third of the company for $3 million, was signed by him, his brothers Paul and Eddie jnr, and their close associate Nick Di Girolamo, the head of Australian Water Holdings, who has close ties to the Liberal Party.

Last January the O'Farrell government signed a 25-year agreement with the company - without going to tender - giving it the right to roll out all of the $500 million worth of water infrastructure still needed in the north-west growth centre.

A Herald investigation has revealed that by the time the secret Obeid deal was signed, Eddie Obeid had extensively lobbied his colleagues to assist the company, which wanted the government to agree to sell it all of Sydney Water's operations in the north-west. It has also confirmed that prior to the 2011 election the former planning minister Tony Kelly rewrote a top-level cabinet minute to support the company's proposal even though it had been rejected by senior bureaucrats.

A government source familiar with the privatisation proposal described it as ''a complete and utter rort … the size of that work would have been billions''.

Had that proposal proceeded, the Obeids might have been sitting on a windfall as big as the coal deals now being investigated by the Independent Commission Against Corruption.

The inquiry has heard that the Obeid family still has a 9.3 per cent interest in a coal resource at Mount Penny for which they have already received $30 million. Should a mining licence be granted, the mine could be worth up to $1 billion.

It was suggested to Moses Obeid at Friday's hearing that the family's share in the mine could deliver a further $50 million to $100 million to the Obeids. ''I hope it's worth more,'' he said.

Before Moses Obeid was shown the Australian Water document, he was asked why a telephone intercept had recorded him in 2011 telling an associate that his brother Paul was going to be ''at Australian Water tomorrow''. Asked whether the Obeids had ever held any interest in the company, Moses replied: ''Not that I know of.'' After a short break, he was shown page seven of the document which contained his signature.

Moses Obeid told the commission the agreement might have been ''superseded'' by a $3 million loan to Mr Di Girolamo, with shares in the company used to secure this loan.

In December, Mr Di Girolamo said: ''The Obeids have no pecuniary interest or any interest in my shares in Australian Water.''

Accounts tendered at ICAC show the Obeids have a $3.4 million investment in Australian Water but Mr Di Girolamo said the money was a personal loan from Eddie Obeid jnr.

A Herald investigation last year unearthed the Obeids' extensive links to the company, including that Eddie Obeid and his son Eddie jnr had brokered a deal that installed the former Labor treasurer Michael Costa as the company's chairman.

Both Mr Kelly and Mr Costa hung up on the Herald twice.

the hearing

59. Mr C R C Newlinds SC together with Messrs D R Sulan and A J O’Brien appeared for the plaintiffs.

60. Mr B Walker SC together with Messrs S Free and P Herzfeld appeared for the Commissioner.

61. Mr D A McLure SC together with Mr P G Sharp appeared for Watson.

62. Mr P Braham SC together with Mr R Scruby appeared for Grainger.

63. Ms E Cheeseman SC together with Mr J Hutton and Ms S Patterson appeared for Lockley.

64. Mr J K Kirk SC together with Mesdames A M Mitchelmore and C G Winnett appeared for the Commission.

65. The hearing occupied 10 days. Some 10,000 pages of written material were tendered. The Court received extensive written submissions. Positions, especially that of the plaintiffs (which was significantly narrowed) were refined in final addresses. I have had regard to all arguments but have not restated them. It was made clear that the outer extent of the plaintiffs’ claim is articulated in their closing written submissions irrespective of what additionally may have been pleaded in the statement of claim.

66. I will deal first with the claim of procedural unfairness and thereafter with the misfeasance in public office claim. First, however, it is necessary to say more about the Act and to set out some of its provisions.

the act

67. The Commission is constituted by s 4 which provides:

Commission

(1) There is constituted by this Act a corporation with the corporate name of the Independent Commission Against Corruption.

(2) The Commission has the functions conferred or imposed on it by or under this or any other Act.

(3) The functions of the Commission are exercisable by the Commissioner, and any act, matter or thing done in the name of, or on behalf of, the Commission by the Commissioner, or with the authority of the Commissioner, shall be taken to have been done by the Commission.

(4) A reference in this Act to a compulsory examination or public inquiry before the Commission or anything done or omitted by, to or in relation to the Commission includes a reference to a compulsory examination or public inquiry before, or a thing done or omitted by, to or in relation to, the Commissioner or another officer of the Commission having authority in the circumstances.

68. Section 5 provides:

Commissioner

(1) The Governor may appoint a Commissioner for the Independent Commission Against Corruption.

(2) The Commissioner has and may exercise the functions conferred or imposed on the Commissioner by or under this or any other Act.

69. One of the principal functions of ICAC is to investigate any allegation or complaint, or any circumstances which in the Commission’s opinion imply that either corrupt conduct, conduct liable to allow, encourage or cause the occurrence of corrupt conduct, or conduct connected with corrupt conduct may have occurred, may be occurring, or may be about to occur (s 13(1)(a)). Another is to make findings and form opinions on the basis of the results of its investigations in respect of any conduct, circumstances or events with which its investigations are concerned, whether or not the findings or opinions relate to corrupt conduct (s 13(3)(a)).

70. The Commission is not bound by the rules or practice of evidence and can inform itself on any matter in such manner as it considers appropriate (s 17(1)). The Commission is to exercise its functions with as little formality and technicality as is possible, which includes accepting written submissions as far as is possible. Compulsory examinations and public inquiries are to be conducted with as little emphasis on an adversarial approach as is possible (s 17(2)).

71. In aid of its functions, the Commission is given power to conduct preliminary investigations (s 20A), compulsory examinations in private (s 30) and public inquiries (s 31). It has power to obtain information and documents (ss 21 and 22). Sections 40–48 make provision for the issue and execution of search warrants.

72. Section 31(4) provides:

Public inquiries

(4) A public inquiry is to be conducted by the Commissioner or by an Assistant Commissioner, as determined by the Commissioner.

73. Section 41 provides:

Authority conferred by warrant

(1) A search warrant authorises any member of the NSW Police Force, or any other person, named in the warrant:

(a) to enter the premises, and

(b) to search the premises for documents or other things connected with any matter that is being investigated under this Act, and

(c) to seize any such documents or other things found in or on the premises and deliver them to the Commission.

(2) A member of the NSW Police Force, or a senior Commission investigator, named in and executing a search warrant may search a person found in or on the premises whom the member of the NSW Police Force or senior Commission investigator reasonably suspects of having a document or other thing mentioned in the warrant.

(3) In this section:

"senior Commission investigator" means an officer of the Commission who is designated by the Commissioner as a senior investigator and who is issued by the Commissioner with means of identification as such a senior Commission investigator.

74. Section 47(1) provides:

Seizure pursuant to warrant-special provisions

(1) If, in the course of searching, in accordance with the terms of a search warrant, for documents or other things:

(a) the person executing the warrant finds a document or other thing that the person believes on reasonable grounds to be evidence that would be admissible in the prosecution of a person for an indictable offence against the law of the Commonwealth, a State or a Territory, and

(b) the first-mentioned person believes on reasonable grounds that it is necessary to seize the document or other thing in order to prevent its concealment, loss, mutilation or destruction, or its use in committing such an offence,

that person may seize the document or other thing and, if it is so seized, it shall be taken, for the purposes of this Act, to have been seized pursuant to the warrant.

75. Section 104 empowers the Commission to appoint members of staff to assist it in exercising its functions (staff members). Those persons are taken to be employed by the Government of New South Wales in the service of the Crown (s 104(2)), except that ICAC is taken to be their employer for the purposes of court or tribunal proceedings relating to them (s 104(9)).

76. Section 106 provides:

Counsel assisting Commission

The Commissioner may appoint an Australian legal practitioner to assist the Commission as counsel, either generally or in relation to a particular matter or matters.

77. Section 109 provides:

Protection from liability

(1) No matter or thing done by the Commission, the Commissioner, the Inspector or any person acting under the direction of the Commission, the Commissioner or the Inspector shall, if the matter or thing was done in good faith for the purpose of executing this or any other Act, subject the Commissioner, the Inspector or a person so acting personally to any action, liability, claim or demand.

(2) (Repealed)

(3) An Australian legal practitioner assisting the Commission or representing a person before the Commission has the same protection and immunity as a barrister (within the meaning of the Legal Profession Uniform Law (NSW) ) has in appearing for a party in proceedings in the Supreme Court.

(4) Subject to this Act, a person summoned to attend or appearing before the Commission as a witness, or producing a document or other thing to the Commission, has the same protection as a witness in proceedings in the Supreme Court.

(5) No criminal or civil liability (apart from this Act) attaches to any person for compliance, or purported compliance in good faith, with any requirement made under this Act.

(6) In particular, if a person gives any statement of information or produces any document or other thing under section 21 or 22, no civil liability attaches to the person for doing so, whether that liability would arise under a contract or otherwise.

78. Section 112 provides:

Restriction on publication of evidence

(1) The Commission may direct that:

(a) any evidence given before it, or

(b) the contents of any document, or a description of any thing, produced to the Commission or seized under a search warrant issued under this Act, or

(c) any information that might enable a person who has given or may be about to give evidence before the Commission to be identified or located, or

(d) the fact that any person has given or may be about to give evidence at a compulsory examination or public inquiry, or

(e) any written submissions received by the Commission (including, but not limited to, submissions made by Counsel assisting the Commission),

shall not be published or shall not be published except in such manner, and to such persons, as the Commission specifies.

(1A) The Commission is not to give a direction under this section unless satisfied that the direction is necessary or desirable in the public interest.

(2) A person shall not make a publication in contravention of a direction given under this section.

Procedures adopted during the public inquiry

79. On 15 October 2012, the Commission published directions for the conduct of the public inquiry. It published supplementary directions on 12 November 2012. Those directions provided relevantly that:

1. subject to the control of the Commissioner, Counsel Assisting would determine which witnesses were called and the order of those witnesses. The Commission would decide whether to receive evidence orally or by statement;

2. in determining whether a person had a sufficient interest to cross-examine, the Commission could call upon the cross-examiner to identify the purpose of the cross-examination, set out the issues to be canvassed and state the details of any contrary affirmative case to be made;

3. if the Commission was to be invited to disbelieve a witness, the material grounds upon which it was said that the evidence should be disbelieved was to be put to the witness, so that the witness may have an opportunity to offer an explanation. The Commission indicated that this did not mean that mere inconsistencies or unimportant differences needed to be raised, nor was a party required to put a matter to a witness when another party had already done so, or where the party had otherwise put the Commission on notice that the witness’ evidence was under challenge on particular grounds; and

4. the Commission expected that where it was contended that deliberately false evidence had been given, or that there had been a mistake on the part of the witness on a significant issue, the grounds of such contention would be put.

80. During the public inquiry, the Commissioner required counsel to identify an affirmative case to which proposed cross-examination related – such that examination purely on credibility issues would not be permitted.

81. Parties authorised to appear were provided with “confidential electronic access to certain documents likely to be tendered as exhibits in the public inquiry”, for purposes including enabling them to “identify whether any application should be made for a suppression order in relation to any document”.

82. Affected persons were permitted to make written submissions after the conclusion of the evidence. The written submissions were placed on a restricted website, and Counsel Assisting and persons adversely mentioned in the submissions in response were given an opportunity to reply.

procedural unfairness

The legal principles

83. At common law, procedural fairness is implied as a condition of the exercise of a statutory power through the application of the principle of statutory interpretation that a statute conferring a power to affect an interest of an individual is presumed to confer that power on condition that it is exercised in a manner that affords procedural fairness to that individual. The presumption operates unless clearly displaced by the particular statutory scheme: Minister for Immigration and Border Protection v SZSSJ [2016] HCA 29 at [75] (“SZSSJ”).

84. The content of an obligation to afford procedural fairness depends on the requirements of each case: Glynn v Independent Commission Against Corruption (1990) 20 ALD 214 (“Glynn”).

85. A finding of corrupt conduct by the Commission can (self-evidently) affect the interests of persons the subject of it by having a significant, even devastating, adverse effect on their reputation. The Commission must therefore afford procedural fairness to persons who may be adversely affected by its findings. The plaintiffs are such persons.

86. Here, the obligation flows from the exercise by the Commission of powers under the Act. The scope of the obligation must therefore accommodate the provisions of the Act which regulate how the Commission is to go about its task: Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 225 CLR 88 at 93 (“Veal”).

87. The Commission’s function in a public inquiry is investigative. It bears no relation to a civil or criminal trial before a court with jurisdiction to resolve factual and legal issues in a dispute between contending parties: Duncan v Independent Commission Against Corruption [2016] NSWCA 143 at [690].

88. There is no right to cross-examine at a public inquiry. This may only occur with leave, and the area of questioning is restricted to any matter that the Commission considers relevant (s 34). The obligation does not extend to giving all of the procedural and evidentiary protections of adversarial proceedings. There is no right for affected persons to call further evidence and there is no obligation on the Commission, akin to the prosecutorial duty, to call all material witnesses.

89. To satisfy the condition of procedural fairness, ICAC was obliged to adopt a procedure which conformed to that procedure which a reasonable and fair repository of the power to be exercised would adopt in the circumstances: Kioa v West (1985) 159 CLR 550 at 627; WZARH v Minister for Immigration and Border Protection (2015) 90 ALJR 25 at [53] (“WZARH”).

90. Procedural fairness is concerned with procedures, rather than with outcomes. A breach of the implied condition which governs the exercise of statutory powers of consideration is material, so as to justify the grant of declaratory relief by a court of competent jurisdiction, if it operates to deprive the affected person of the possibility of a successful outcome. The concern of procedural fairness is to avoid practical injustice – there is no denial of procedural fairness where no practical injustice is shown: WZARH at [55]–[57] (Gageler and Gordon JJ). What must be shown by a person seeking to establish a denial of procedural fairness will depend upon the precise defect alleged to have occurred in the decision-making process: Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1.

91. In WZARH at [59]–[60], Gageler and Gordon JJ said:

[59] There are cases in which conduct on the part of an administrator in the course of a hearing can be demonstrated to have misled a person into refraining from taking up an opportunity to be heard that was available to that person in accordance with an applicable procedure which was otherwise fair. To demonstrate that the person would have taken some step if that conduct had not occurred is, in such a case, part of establishing that the person has in fact been denied a reasonable opportunity to be heard.

[60] Where, however, the procedure adopted by an administrator can be shown itself to have failed to afford a fair opportunity to be heard, a denial of procedural fairness is established by nothing more than that failure, and the granting of curial relief is justified unless it can be shown that the failure did not deprive the person of the possibility of a successful outcome. The practical injustice in such a case lies in the denial of an opportunity which in fairness ought to have been given.

92. It is not in contest that the obligation on the Commission included one to give the plaintiffs an opportunity to deal with adverse information that was credible, relevant and significant to its potential findings: Kioa v West (1985) 159 CLR 550 at 628–629.

93. In Veal at [17]–[18] the High Court said:

[17]…what is “credible, relevant and significant” information must be determined by a decision-maker before the final decision is reached. That determination will affect whether the decision-maker must give an opportunity to the person affected to deal with the information. And that is why Brennan J prefaced his statement about a person being given an opportunity to deal with adverse information that is credible, relevant and significant, by pointing out that there may be information, apparently adverse to the interests of a person, which can and should be put aside from consideration by the decision-maker as not credible, not relevant, or of little or no significance to the decision to be made. “Credible, relevant and significant” must therefore be understood as referring to information that cannot be dismissed from further consideration by the decision-maker before making the decision. And the decision-maker cannot dismiss information from further consideration unless the information is evidently not credible, not relevant, or of little or no significance to the decision that is to be made. References to information that is “credible, relevant and significant” are not to be understood as depending upon whatever characterisation of the information the decision-maker may later have chosen to apply to the information when expressing reasons for the decision that has been reached.

[18] It follows that the tribunal’s statement, that it gave no weight in reaching its decision to the letter or its contents, does not demonstrate that there was no obligation to reveal the information to the appellant and to give him an opportunity to respond to it before the tribunal concluded its review. Deciding that it could reach its conclusion on other bases did not discharge the tribunal’s obligation to give the appellant procedural fairness.

94. In SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152 at [32], the High Court approved the following statement of the Full Federal Court in Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 at 590–591:

It is a fundamental principle that where the rules of procedural fairness apply to a decision-making process, the party liable to be directly affected by the decision is to be given the opportunity of being heard. That would ordinarily require the party affected to be given the opportunity of ascertaining the relevant issues and to be informed of the nature and content of adverse material.

95. Recently, in SZSSJ at [83], the High Court said:

[83] Ordinarily, affording a reasonable opportunity to be heard in the exercise of a statutory power to conduct an inquiry requires that a person whose interest is apt to be affected be put on notice of: the nature and purpose of the inquiry; the issues to be considered in conducting the inquiry; and the nature and content of information that the repository of power undertaking the inquiry might take into account as a reason for coming to a conclusion adverse to the person. Ordinarily, there is no requirement that the person be notified of information which is in the possession of, or accessible to, the repository but which the repository has chosen not to take into account at all in the conduct of the inquiry.

96. In Glynn, Wood J said at 218–219 in a well-known passage:

Inevitably such an inquiry will expand and move into new or different areas, within its terms of reference, as it progresses. What is necessary is that by the end of the hearing, a party potentially affected by an adverse finding have the opportunity to meet it by submission, and if necessary, by evidence. The argument of the plaintiff in this regard seems to proceed on a misconception that after the evidence is received, the nature of the inquiry changes and it ceases to be investigative. I can see no basis for such a view.

If in the course of submissions, it becomes apparent that there is an area not previously raised for consideration, which does call for investigation, then it may be necessary for the Commission to stop and permit its further investigation by evidence and addresses. To take any other view would be to fail the purpose for which the Commission was created, but the cost may be an interruption and delay to ensure that natural justice is done.

97. Where the procedure is shown itself to have failed to afford a fair opportunity to be heard, the granting of curial relief is justified unless it can be shown that the failure did not deprive the person of the possibility of a successful outcome: Stead v SGIO (1986) 161 CLR 141 at 145 (“Stead”); WZARH at [60]. Not every failure to afford procedural fairness (or natural justice) will be a jurisdictional error vitiating an administrative decision.

98. If it can be shown that the breach or denial could have no bearing on the outcome and that it was inevitable, relief will be declined as being futile: Ex parte Aala (2000) 204 CLR 82 at [4], [80], [104], [131]–[132], [211]–[212].

99. In ReMinister for Immigration and Multicultural and Indigenous Affairs; Ex parte Applicants S134/2002 (2003) 211 CLR 441 (“S134/2002”), there was a complaint of procedural unfairness on the grounds that a tribunal had failed to disclose certain information which it had, but of which it was unaware and did not take into account. In those circumstances, the High Court held (at [33]):

[33] Alternatively, the prosecutors found upon the failure by the tribunal to disclose to the prosecutors the information in folios 121 and 124. However, the tribunal could not have disclosed that of which it was unaware. The tribunal did not rely upon what was to be found in the folios. In those circumstances, it is not apparent that there was any absence of procedural fairness afforded to the prosecutors.

The plaintiffs’ contentions

100. The plaintiffs complain that they were denied procedural fairness as a consequence (individually and cumulatively) of:

1. the Commission failing to make the Stockley statement available to them;

2. the Commission failing to tell them about the 6 day gap;

3. the Commission failing to disclose to them that Kyriakopoulos had been asked but could not confirm that she had seen the maps when the search warrant was executed;

4. Watson being permitted to cross-examine “Obeid witnesses” on the footing that the maps were seen on the video, which was contrary to the fact, and on the footing that the maps were certainly in the manila folder, despite the Commission knowing of the 6 day gap and what Kyriakopoulos could not confirm; and

5. the Commission not disclosing to them matters which undermined Gardner Brook’s reliability as a witness. These matters were that:

1. ICAC had reached an understanding or arrangement with Gardner Brook that he would be a witness “for ICAC”, and that if he cooperated with the Commission, it would be flexible and focus its findings so as not to make a corrupt conduct finding against him; and

2. his statement that one of the maps had been given to him by one of the Obeids was extracted from him in answer to a question which was both leading and factually incorrect, in that it was put (contrary to the fact) that the maps had been scooped up from Paul Obeid’s desk.

101. They say that they were, as a consequence, denied opportunities of cross-examination and submission and the possibility of a successful outcome with the result that the Commission’s findings that:

1. Edward Obeid Snr and Moses Obeid engaged in corrupt conduct within the meaning of the Act; and

2. Edward Obeid Snr, Moses Obeid and Paul Obeid gave evidence that was deliberately false or misleading;

were made without or in excess of jurisdiction, and are therefore a nullity.

102. They seek declarations to this effect.

The Commission’s answers

103. ICAC’s closing written submissions are lengthy, complex and heavily footnoted. The central propositions for which it contends appear to me to be as follows.

The Stockley statement and the 6 day gap

104. First, ICAC puts that what Stockley said, and the fact of the so called 6 day gap, was not material which was credible, relevant and significant because it was not “adverse” and could have had no significance to a decision adverse to the plaintiffs given that:

1. the Stockley statement makes no allegation against any of the plaintiffs which goes to the ultimate findings of corrupt conduct in the Report, or to the intermediate factual findings of agreements between Edward Obeid Snr, Moses Obeid and Macdonald whereby Macdonald would arrange for the creation of the Mount Penny tenement and would provide Edward Obeid Snr and Moses Obeid with confidential information to benefit the Obeids;

2. the Stockley statement did no more than identify Stockley as a person who found the maps in the envelope on a particular day;

3. the 6 day gap amounted to no more than evidence that the maps were stored outside ICAC’s vault for a six day period; and

4. the material could have no practical bearing on whether findings of corrupt conduct should have been made, and amounts to no more than evidence about the handling of evidence.

105. As part of this answer, ICAC puts that the tender of the Stockley statement in the public inquiry did not elevate it to material that was credible, relevant and significant.

106. Second, ICAC puts that there is no obligation on a decision-maker to disclose material of which the decision-maker does not have actual knowledge and does not propose to consider in making the relevant decision. The Commissioner did not know of the Stockley statement or the 6 day gap.

107. Third, ICAC puts that the plaintiffs lost no opportunity to advance their case or otherwise suffered any detriment because they:

1. had an adequate opportunity to deal with the substance of the allegation to which the material relates, namely, that the maps were found in Paul Obeid’s office;

2. were conscious of gaps in the evidence with respect to the chain of custody of the maps and took a deliberate forensic decision not to cross-examine in the face of those gaps; and

3. had the opportunity to present a case that the maps were not seized, or that there was insufficient evidence for a finding that they were seized, but did not do so.

108. Fourth, ICAC puts that the plaintiffs’ complaint falls within the category of case (described at [59] in WZARH) where it is asserted that a decision-maker’s conduct misled the complainant into refraining from taking up an opportunity to be heard that was available, and that the plaintiffs have not demonstrated that they would have taken up the opportunity.

109. Fifth, ICAC puts that relief should not be given because the plaintiffs were not deprived of the possibility of a successful outcome. The Report contained no findings of corrupt conduct against either Paul Obeid or Edward Obeid Jnr. As to the adverse findings with respect to Paul Obeid’s credit, the material (or any cross-examination upon it) would have made no difference having regard to the fact that they were made on the basis of a significant body of material.

110. In the case of Edward Obeid Snr and Moses Obeid, there were incontrovertible facts before the Commission which provided an independent and sufficient basis for the intermediate factual finding that the maps were seized and the ultimate finding of corrupt conduct.

Kyriakopoulos

111. First, ICAC puts that it was under no obligation to disclose the absence of recall on the part of Kyriakopoulos of the maps being present because such material was neither adverse, nor could it have had any significance to a decision adverse to the plaintiffs that all, or any of them, had engaged in corrupt conduct.

112. Second, it puts that the substance of her non-recollection was disclosed. In her statement, Kyriakopoulos gave her recollection of what was in the manila folder, which did not include the maps. This gave rise to the clear inference that she did not so recall seeing the maps.

113. Third, it puts that the plaintiffs lost no opportunity to advance their case or otherwise suffer any detriment because they had the opportunity to present a case that the maps were not seized or that there was insufficient evidence for a finding that they were seized, but did not do so.

114. Fourth, it puts that the plaintiffs were not by its omission deprived of the possibility of a successful outcome because an express statement by Kyriakopoulos of not recalling the maps would have made no difference to the ultimate findings of the Report.

Watson’s cross-examination

115. First, ICAC puts that the questions put by Watson to the witnesses did not assert (as the plaintiffs would have it) the existence of video evidence that the maps were certainly within the manila folder inside the envelope.

116. Second, it puts that what Watson actually put was true and had an evidentiary basis.

117. Third, it puts that Watson’s questions were not unfair and no practical injustice otherwise resulted from them being asked because the plaintiffs lost no opportunity as a consequence of them being asked and answered (or not answered), and the plaintiffs were not deprived of a successful outcome.

118. Fourth, it puts that Watson himself owed no obligation of procedural fairness to the plaintiffs and the Commissioner had no obligation to exercise his power to reject the questions.

Gardner Brook

119. First, ICAC denies the existence of any arrangement or understanding with Gardner Brook as asserted by the plaintiffs.

120. Second, it puts that procedural fairness did not require disclosure of the other matters said to go to the reliability of Gardner Brook’s evidence.

121. Third, it puts that the plaintiffs did not lose any opportunity to respond to Gardner Brook’s version of events in the public inquiry and to challenge it in the course of advancing a positive case.

122. Fourth, it puts that the plaintiffs were not by any omission deprived of the possibility of a successful outcome.

The Commission’s additional defence

123. Rule 59.1(a) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) provides:

Application

(1) This Part applies to the following proceedings for judicial review:

(a) proceedings under section 65 and 69 of the Supreme Court Act 1970 and other proceedings in the supervisory jurisdiction of the Supreme Court

124. Rule 59.2 provides:

Definitions

In this Part:

"defendant" means a person against whom proceedings are commenced.

"judicial review proceedings" means proceedings to which this Part applies.

"plaintiff" means a person by whom proceedings are commenced or on whose behalf proceedings are commenced by a tutor.

"public authority" includes a public officer.

125. Rule 59.10 provides:

Time for commencing proceedings

(1) Proceedings for judicial review of a decision must be commenced within 3 months of the date of the decision.

(2) The court may, at any time, extend the time for commencing proceedings fixed by subrule (1).

(3) In considering whether to extend time under subrule (2), the court should take account of such factors as are relevant in the circumstances of the particular case, including the following:

(a) any particular interest of the plaintiff in challenging the decision,

(b) possible prejudice to other persons caused by the passage of time, if the relief were to be granted, including but not limited to prejudice to parties to the proceedings,

(c) the time at which the plaintiff became or, by exercising reasonable diligence, should have become aware of the decision,

(d) any relevant public interest.

(4) This rule does not apply to proceedings in which there is a statutory limitation period for commencing the proceedings.

(5) This rule does not apply to any proceedings in which the setting aside of a decision is not required.

126. ICAC argues that the plaintiffs’ procedural unfairness claim constitutes proceedings for judicial review of a decision which were, contrary to r 59.10(1), not commenced within time.

127. The plaintiffs dispute that the rule is engaged because they seek declarations, not the setting aside of any decision.

128. In the alternative, they move for an order extending the time under sub-rule 59.10(2).

Consideration

129. For the reasons which follow, the plaintiffs’ claim of procedural unfairness fails.

The Stockley statement

130. The plaintiffs are entitled to feel a sense of grievance at ICAC’s failure to provide them with the Stockley statement in accordance with its own procedures. Their sense of grievance is no doubt heightened by the fact that the procedural directions made by ICAC and imposed on them and others in the public inquiry were somewhat stringent. It is incumbent on ICAC, a body with extensive invasive powers, to ensure that material tendered by Counsel Assisting the Commission and admitted to evidence in a public inquiry, and which is to be made available in accordance with a procedure dictated by ICAC, is made available. It does not lie easily in ICAC’s mouth to suggest that the plaintiffs can have no legitimate complaint because the material which they should have been given was not significant, or because (somewhat remarkably) neither the Commissioner nor Counsel Assisting the Commission actually read it.

131. However, so much having been said, I am not satisfied that by the omission, any practical injustice was wreaked upon any of the plaintiffs. Indeed, I am satisfied that it was not.

132. This is not, as ICAC suggests, a case of the type (described in WZARH at [59]) where a plaintiff asserts that the conduct of a decision-maker misled it into not taking up an opportunity to be heard, with the consequence that it is for the plaintiff to demonstrate that it would have taken up the opportunity. If contrary to my view, it were such a case, the plaintiffs fail at the first hurdle because taken at its highest, their evidence does not establish that they would have taken up any opportunity to cross-examine or make submissions on what was disclosed by the Stockley statement. As appears below, I am satisfied that they would not have done so.

133. In my opinion, the failure did not deny the plaintiffs an adequate opportunity to be heard, nor did it deprive them of the possibility of a successful outcome for three reasons.

134. First, they were given sufficient opportunity to be heard on the allegation and to deal with the issue to which the Stockley statement went. It is to be remembered that the plaintiffs’ complaint is not that ICAC made an error of fact in deciding what it did: see S134/2002 at [37]. Their complaint is that ICAC failed to give them an opportunity to deal with a piece of evidence, it did not itself take into account, in coming to findings on issues which were undoubtedly in play.

135. The Stockley statement goes, relevantly, to the question whether the maps were in the manila folder at the time of seizure under the search warrant. It is corroborative of the assertion that they were. Both the primary factual issue whether they were then in the manila folder and the intermediate factual issue whether there were agreements between Edward Obeid Snr, Moses Obeid and Macdonald (as ultimately found by the Commission) were plainly on the table as matters being investigated by the Commission. The plaintiffs do not suggest otherwise. Indeed, each of Edward Obeid Snr, Moses Obeid and Paul Obeid were examined in public hearing on the subject of the maps.

136. The closing submissions of Counsel Assisting contained the following (at [240]–[243] - evidentiary references excluded):

The two maps

240.   On 23 November 2011 a search warrant was executed at the Obeid offices in Birkenhead Point. Amongst the documents seized was a manila folder found in the office of Paul Obeid. The manila folder contained four documents - a newspaper article; a draft "Memorandum of Understanding" between Monaro Mining and a Chinese partner; and two maps dated 9 May and 30 May 2008. These were documents used or handled by the Obeids - the MOU even had Moses' handwriting on it.

241.   The two maps are the key documents. They were prepared by Leslie Wiles of the DPI and never generally released. They were, however, provided to Macdonald. The earlier map was provided in the original briefing on the Mt Penny area on 9 May 2008. The later map was provided in a confidential briefing on 4 June 2008. Macdonald accepted the maps were confidential. No member of the Obeid family could (or, perhaps, would) explain how they came into possession of the two maps.

242.   The map dated 30 May 2008 has some faint pencil marks on it which correlate with the location of Donola and Coggan Creek. Brook recalled being shown this map by Moses or Paul.

243.   These maps must have been supplied by Macdonald. They are in an enlarged format. The same two maps had originally been provided to Macdonald in a smaller format. Later that day Gibson requested Mullard provide enlarged versions of the maps. Macdonald had specifically requested the enlarged maps. Gibson confirmed the two maps found on the Obeid premises were like the enlarged maps he supplied to Macdonald. Macdonald confirmed that the maps held by the Obeids were similar to the enlarged maps he had received.

137. Turnbull SC’s evidence was that following Paul Obeid’s evidence on 6 February 2013, he believed the ability of ICAC to prove that the maps had been seized from the Locaway premises may be a significant issue in the public inquiry.

138. Only Paul Obeid, represented by Turnbull SC, chose to deal with the issue in written submissions (dated 15 April 2013, as referred to earlier).

139. None of the plaintiffs sought to lead any evidence at the inquiry. A noticeable omission was that they did not call anyone from their solicitors, Colin Biggers & Paisley, who had sent them the envelope to say what was in it, or not in it.

140. By the end of the public inquiry, the plaintiffs had been given (and to an extent in the case of Paul Obeid, had taken up) the opportunity to meet these issues by adducing evidence and making submissions. There was thus no procedural unfairness. Although, having reached this conclusion, it is not strictly necessary to deal with the additional reasons why this complaint is not made out, I will nevertheless do so.

141. The second reason the complaint fails is that I am satisfied that if the Stockley statement had been disclosed, the plaintiffs would not have taken any course different to the one they actually took. That is, I am satisfied that they would not have sought to cross-examine Stockley or made any submissions about the matters which she disclosed.

142. In Stead, at 145–146, the High Court pointed out that a court who is asked to make a finding that a new trial, sought to remedy a denial of natural justice relevant to a finding of a fact, could make no difference to the result already reached, should proceed with caution. That approach is apt here. Proceeding with caution, I am nevertheless satisfied that the non-disclosure of the Stockley statement did not translate into the loss of a chance of obtaining a different outcome because I am satisfied, and I find, that the plaintiffs would ultimately have acted no differently to how they did act.

143. Whilst the plaintiffs have generally lumped themselves together in these proceedings, each of Edward Obeid Snr, Moses Obeid and Paul Obeid must make out that he was, individually, denied procedural fairness.

144. In my opinion, the assessment of what the plaintiffs would have done is to be made with due regard to objective factors which prevailed at the time of the public inquiry (being when the relevant steps would have been taken), particularly the attitudes of the plaintiffs and their legal advisors: Chappel v Hart (1998) 195 CLR 232 at [32]; Rosenberg v Percival (2001) 205 CLR 434 at 449; Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 at 581.

145. Neither Edward Obeid Snr nor Moses Obeid gave or called any evidence on what they might or would have done had the Stockley statement been disclosed. Neither Robberds QC nor Littlemore QC was called. It may be inferred that their evidence, or that of their lawyers, would not have assisted their respective erstwhile clients.

1. the suppression order caused the plaintiffs damage for the following reasons: it is to be inferred from the reporting of Moses Obeid’s evidence in the Sydney Morning Herald caused the plaintiffs some reputational damage; a person reading the article would be left with the clear impression that there was no doubt that the “secret shareholding” was proved by the Heads of Agreement; that impression could not have been conveyed by any responsible journalist with access to the unredacted version of the Heads of Agreement; while there possibly would have been some sort of article in any event, that article would have almost certainly been different; and it ought to be inferred that the press would have sought accurately to report the events of the day, including the fact that there were clauses in the Heads of Agreement consistent with Moses Obeid’s evidence to the effect that there was a loan and not a holding of shares.

266. The plaintiffs put that if it is established that the Commissioner acted in excess of power, this should be judicially noticed by a declaration even if no damage is established, because it is important that the exercise of the power to make a suppression order should be done scrupulously according to law.

267. It is not in dispute that the Commissioner was at all relevant times a public officer.

268. It is also not in dispute that s 112(1A) makes it a condition of the exercise of the power to direct non-publication, under s 112(1), that the Commissioner must be satisfied that the direction is necessary or desirable in the public interest.

269. This claim is without merit.

270. I have no difficulty in accepting that the Commissioner knew what s 112(1A) required.

271. The procedure which was adopted with respect to the application for, and the making of the suppression order was summary, as one might expect.

272. Watson tendered the redacted version and moved for the suppression order on the basis of “security purposes”.

273. In asking for the order, Watson was acting at the behest of investigators who had discussed with him the need for redactions and who prepared the redacted version.

274. On 19 December 2012, the Commissioner had received the memorandum from Meaghan Fleeton in relation to Operation Credo.

275. There was nothing exceptional in Watson moving for the suppression order and the Commissioner granting it, taking into account that Counsel Assisting was communicating that it was for security purposes – a shorthand version of saying that confidentiality was required to protect the integrity of ICAC investigations.

276. There is nothing to support a finding other than one that the Commissioner purported to exercise a power which he considered he had.

277. It borders on the eccentric to suggest that the Court should infer that the Commissioner made the suppression order in circumstances where he knew he had no power to make it, or was recklessly indifferent as to whether he was acting in excess of his power.

278. I reject the proposition that the Commissioner knew, or was reckless as to the fact that the making of the order would cause the plaintiffs harm, because he knew that the redacted version contradicted Moses Obeid’s version and that the press would record that contradiction.

279. The basal premise that the redacted version contradicts Moses Obeid’s denial of an equity interest is false. Clause 1 of the Heads of Agreement records a sale in unequivocal terms. It provides for the unconditional transfer of the shares with no provision for retransfer. This unequivocally reflects an equity interest. On no reasonable view can cl 3.1 be construed, because of the use of the word “interest”, as affecting this so as to warrant the conclusion that the transaction is a loan, on security of the shares. The same goes for the consultancy provided in cl 3.2. It is to be observed that the Heads of Agreement makes no provision for the payments under cl 3 to cease once the “Purchase Price” had been repaid (assuming it to be the loan principle).

280. Even if there is some contradiction or tension between Moses Obeid’s evidence and the redacted version, there is no basis for concluding that the Commissioner knew it, even less that the Commissioner must have known that the press would report that Moses Obeid’s evidence was contradicted by the redacted version. These suggestions are inconsistent with the fact (which the plaintiffs themselves assert) that the Commissioner was not shown the unredacted version. They are fanciful.

281. There is no foundation for a conclusion that the newspaper, armed with the unredacted version, would have reported things any differently to the way that it did or that this was foreseeable.

282. It is to be observed that the article accurately reported that Moses Obeid had sought to answer the Heads of Agreement by saying that he believed it had been superseded by a loan agreement.

283. The unredacted version was made available to Counsel for Moses Obeid and he raised no objection to the cross-examination on the footing that there was any tension between the two versions or some relevance to be attached to the differences.

284. The plaintiffs have not established that they suffered any loss because of the making of the suppression order.

Watson

285. The claim of misfeasance against Watson entails the following propositions:

1. in his role as Counsel Assisting, he was a public officer. This is said to be the consequence of his appointment under s 106, which appointment, it is put, imposed on him a public duty to assist the Commission and which required him to discharge a public function;

2. the appointment gave him power under s 34 of the Act to examine witnesses, the exercise of which power was conditioned by a requirement that he comply with the New South Wales Barristers’ Rules (the Rules). The Rules in force at the relevant time were published on 8 August 2011. The relevant ones are:

●   Rule 63 which provided:

A barrister must not allege any matter of fact in:

(a) any court document settled by the barrister;

(b) any submission during any hearing;

(c) the course of an opening address; or

(d) the course of a closing address or submission on the evidence;

unless the barrister believes on reasonable grounds that the factual material already available provides a proper basis to do so.

●   Rule 64(a) which provided:

A barrister must not allege any matter of fact amounting to criminality, fraud or other serious misconduct against any person unless the barrister believes on reasonable grounds that:

(a) available material by which the allegation could be supported provides a proper basis for it

●   Rule 94 which provided:

A barrister who appears as counsel assisting an inquisitorial body such as the Criminal Justice Commission, the Australian Crime Commission, the Australian Securities and Investments Commission, the ACCC, a Royal Commission or other statutory tribunal or body having investigative powers must act in accordance with Rules 82, 84 and 85 as if the body is a court referred to in those Rules and any person whose conduct is in question before the body is an accused referred to in Rule 84.

●   Rule 82 which provided:

A prosecutor must fairly assist the court to arrive at the truth, must seek impartially to have the whole of the relevant evidence placed intelligibly before the court, and must seek to assist the court with adequate submissions of law to enable the law

properly to be applied to the facts.

3. the effect of these Rules was to place a condition on the exercise of Watson’s power to cross-examine, that there be a proper and reasonable basis for putting the propositions that are put in the manner in which they are put;

4. Watson cross-examined the Obeid witnesses on the basis, contrary to the fact known by him or the falsity of which he was recklessly indifferent, that there was no doubt that the maps had been found in the Obeid offices and that there was a video recording showing the manila folder, containing the maps, being seized from the Obeid offices;

5. Watson knew, or was reckless as to the fact that he was acting in excess of power, by putting propositions with no reasonable basis;

6. Watson knew, or was reckless as to the fact that his cross-examination of Edward Obeid Snr, Moses Obeid and Paul Obeid was likely to cause them harm in the form of damage to reputation and credit and exposure to findings of corruption, and if Watson did not in fact foresee that harm, it was plainly foreseeable; and

7. the plaintiffs suffered damage in the form of stress, humiliation or embarrassment; reputational damage in the eyes of those present during the evidence of Edward Obeid Snr, Moses Obeid and Paul Obeid, who were likely to perceive them as lying in their evidence relating to the Maps; and reputational damage as a consequence of the findings of corrupt conduct and adverse credit findings made against them, to which it may be inferred that Watson’s cross-examination contributed.

286. As an alternative position, the plaintiffs put that Watson intentionally or recklessly exercised the power to cross-examine in a way as to constitute the tort of misfeasance in public office. The plaintiffs acknowledged that this formulation may fall outside the formulations in Mengel. They put that whilst I am bound by Mengel, the tort is still under development and its limits are not ascertained. Save to state that on this alternative formulation, the complaint would not on the facts be made out, I do not propose to deal with it.

287. As appears above, I am not satisfied that Watson’s questions contained the inaccurate factual assumptions of which the plaintiffs complain. That being the case, this complaint must fail at the first hurdle. It follows that it has not been established that Watson breached any of the Rules in his cross-examination of Edward Obeid Snr, Moses Obeid and Paul Obeid. It is not in dispute that Watson saw the video, and it is clear that the video did not show the maps being seized. Had the questions complained of included the assumption that the video recording showed the maps being seized, Watson would have known that assumption to be wrong.

288. The complaint against Watson fails for further reasons.

289. First, as Counsel Assisting, he did not hold public office. He held no office which required him to perform duties for the public. His function was to assist the Commission, if appropriate, by examining or cross-examining witnesses with leave of the Commission. The grant of such leave did not invest Watson with any public power. He was exercising functions as Counsel and was no more a public officer than was the solicitor in Leerdam v Noori (2009) 227 FLR 210, counsel assisting the Board of Inquiry in Tampion v Anderson (No 2) [1973] VR 715, and the solicitor employed to prosecute in Cannon v Tahche (2002) 5 VR 317.

290. Second, the Rules are not conditions upon the exercise of power, statutory or otherwise. They impose ethical standards on barristers in the discharge of their professional duties. Section 34(1) requires Counsel Assisting to be an Australian legal practitioner. The purpose of this is to ensure that such a person is bound by the ethical standards imposed on such practitioners. It is not concerned with power, or the limits upon its exercise.

291. Third, there is no basis for finding that Watson knew, or turned his mind to the possibility that he was exercising statutory power, let alone that he was exceeding it.

292. Fourth, the plaintiffs have not established that they suffered any stress, humiliation or embarrassment beyond that which they would have suffered anyway (assuming they suffered any at all). Any reputational damage as a consequence of the findings of corrupt conduct and adverse credit findings would have happened anyway. They have also not established that they were not lying in their evidence relating to the maps.

293. Finally, Watson has the benefit of the immunity provided for in s 109(3).

294. That section provides that an Australian legal practitioner assisting the Commission or representing a person before the Commission has the same protection and immunity as a barrister (within the meaning of the Legal Profession Uniform Law (NSW)) has in appearing for a party in proceedings in the Supreme Court.

295. Recently, the High Court (by majority) in Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 331 ALR 1, made it clear that the advocate’s immunity does not extend to acts or advice of the advocate which do not move litigation towards determination by a court.

296. Relying on this, it was put on behalf of the plaintiffs that Watson is not protected by the immunity because it is only available in relation to work that contributes to a judicial determination of litigation, and there is no such determination in an ICAC inquiry. It was put that Watson would not have immunity even if the inquiry were before this Court.

297. In my opinion, Watson has the benefit of the immunity, notwithstanding that there is no judicial determination of litigation in an ICAC inquiry. The effect of s 109(3) is to confer upon a legal practitioner in relation to assisting ICAC, or representing a person before it, the full extent of the traditional immunity which a barrister would have in the Supreme Court, on the footing that the barrister had it there. The logical consequence of the plaintiffs’ submission is that the legislature intended a barrister before ICAC only to have immunity where there is judicial determination. Given that there is never judicial determination before ICAC, s 109(3) would then have no work to do. This cannot have been the intention of the legislature.

Lockley and Grainger

298. The plaintiffs put the claim of misfeasance against Lockley and Grainger as follows:

1. in executing the search warrant each was acting as a public officer;

2. the Advice and the Heads of Agreement were not covered by the terms of the search warrant and it did not authorise the videotaping of those documents as was done;

3. both Lockley and Grainger knew these facts;

4. they nevertheless instructed Curd to record the documents and in so doing, they knew, or were recklessly indifferent to the fact that they were exceeding their powers under the search warrant;

5. they knew that the videotaping would cause injury, or was likely to cause injury to the plaintiffs, or were recklessly indifferent as to whether it would do so; and

6. their conduct caused damage to the plaintiffs because it was directly linked to the issue of the Summons to Lands Legal, which in turn was used in the cross-examination of Moses Obeid on 1 February 2013, which but for the videoing, would not have happened, and further, because the documents videoed were confidential to the plaintiffs.

299. Although the plaintiffs, presumably for convenience, group Lockley and Grainger together, they are not sued as joint tortfeasors: see Fish & Fish Ltd v Sea Shepherd UK [2015] AC 1229, where the requirements for such liability are set out.

300. The claims against Lockley and Grainger have the common factual matrix of the execution of the search warrant, but the plaintiffs must establish each element of the cause of action of misfeasance against each separately. No claim in trespass is brought. Trespass is a wrong to possession: Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204 at 224.

301. Inherent in the plaintiffs’ claim is the assertion that Lockley and Grainger each exercised power by causing the documents to be videoed (by Curd). Lockley and Grainger put in issue both that they did this as a matter of fact, and that what they did was the exercise of power in any event, because Curd was an investigator whose role, as described in his position description, was to investigate suspicions or allegations of corruption, prepare reports on investigations and to prepare briefs of evidence of criminal or disciplinary offences, and it is not suggested that Curd was subordinate to Lockley or Grainger or that they had authority to require him, and that he had any obligation, to follow an instruction to video the documents.

302. In considering this claim, it is necessary first to consider what it is that they did. This is revealed on the video, taken by Curd.

What did Lockley and Grainger do?

303. Grainger and Lockley are in the vicinity of a safe. A third (unidentified) person arrives and opens the safe. There is a discussion with Grainger and Lockley about cash in the safe. The cash is collected and handed to the person. Grainger asks him whether the documents in the safe are also his, and he answers, “no – it’s a shared safe”. He conveys that there is “nothing else valuable in that safe” except for “footy tickets” and then leaves. Grainger and Lockley are in the alcove containing the safe.

Grainger examines a bundle of documents which includes the Advice. He identifies the Advice as one from the Crown Solicitor’s office to Joe Tripodi.

Lockley says “relating to?”

Grainger says “a company that one of them is … private partnership by Australian Water Holdings”.

Grainger says “interesting, why they would have this?”

Grainger says “do you just want to video that Curd? Can you just video each page of that and the covering…”? (this is a request to video).

Grainger passes the Advice to Lockley who passes it to Curd.

Someone says “do you just want to take that?”

Lockley replies “it doesn’t relate though, does it?”

Curd starts videoing each page of the Advice, including the covering with-compliments slip from the Director General of the Department of Premier and Cabinet to Tripodi’s office.

Grainger hands Lockley the Heads of Agreement.

Lockley has another document in his right hand. He takes the bundle passed from Grainger in his left hand, looks at the top document, and passes them to Curd. The top document is a share transfer form. It does not seem likely that Lockley saw the Heads of Agreement at all.

Lockley says to Grainger “what do you want to do with that?”

Grainger says “video it”.

Lockley says (apparently to Curd) “just video those front pages”.

Curd says “all of them?”

Someone (it seems Grainger), says “yep”.

Curd videos every page of the Heads of Agreement.

304. Lockley’s relevant participation in the enterprise was:

1. asking to what the Advice related;

2. taking the Advice from Grainger and passing the Advice to Curd after Grainger requested Curd to video it;

3. observing that the Advice “doesn’t relate though, does it?”;

4. taking the Heads of Agreement from Grainger and passing it to Curd;

5. asking Grainger what Grainger wanted to do with it; and

6. telling Curd to video it after Grainger told Lockley to video it.

305. Grainger’s relevant participation in the enterprise was:

1. examining the bundle of documents and identifying the Advice;

2. responding to Lockley’s question as to what the Advice related;

3. requesting Curd to video it and handing it to Lockley to pass to Curd;

4. handing the Heads of Agreement to Lockley; and

5. telling Lockley that he wanted it to be videoed.

Public office?

306. Both Lockley and Grainger were appointed under s 104 as members of staff of the Commission.

307. Lockley was a senior financial investigator whose role, as described in his position description, was to investigate suspicions or allegations of corruption with an emphasis on financial aspects, preparing reports, assisting in preparing briefs of evidence for criminal or disciplinary offences and providing high level financial investigative advice. He reported to Fox as Chief Investigator and no-one reported to him.

308. Grainger was a senior investigator whose role, as described in his position description, was to support the Chief Investigator by providing advice and leading, managing and mentoring investigation staff to ensure allegations of corrupt conduct are thoroughly investigated and where appropriate, to coordinate and prepare briefs for public inquiries to be conducted by the Commission and coordinate and prepare criminal briefs for referral to the DPP for consideration of criminal public prosecutions. He too reported to Fox.

309. Each was a person named in the warrant as contemplated in s 41(1) and their authority to enter, search and seize stemmed from that ad hoc naming, not from any position which they occupied with the Commission.

306. It may be that in executing the search warrant, they were exercising a power in the public interest, but it was not a power which they had from any official position to which continuing functions or duties were assigned. The hallmarks of public office are absent. It follows that this claim fails at the first hurdle.

307. Although it is not necessary to consider the further elements of this claim, it is appropriate in the circumstances of this case to do so.

Within the search warrant?

312. The search warrant is, relevantly, in the following terms:

SEARCH WARRANT (OTHER THAN PART 5 SEARCH WARRANT)

(Independent Commission Against Corruption Act 1988)

(Law Enforcement (Powers and Responsibilities) Act2002)

This search warrant expires at 12:45 pm on 22 December, 2011 and must not be used after that time.

On 22 November, 2011

(date)

Stephen Lister

(name of authorised officer)

an authorised officer empowered to issue search warrants under section 40(1) of the Independent Commission Against Corruption Act 1988, granted this search warrant authorising Grant Lockley of the Independent Commission Against Corruption (the applicant), and Wayne Smith, Nicole Hodges, Michael Kane, Raymond Kwan, Ann Maree Robinson, Steve Thomas, Anthony Jones, Bernadette Dubois, Andrew Browning, Michael Buchhorn, Darren Curd, Tim Fox, Michael Riashi, Leonie White, Andrew Tran, Chris Wightman, Ron Hillier, Gavin Whalebone, Paul Grainger, Katherine Kyriakopoulos, Stephen Osborne, Christopher Bentley, Yolande Groenewood, Milka Rezo and Beata Kubiak:

1. to enter the premises known as Locaway Pty Limited, Suite 501-501 A, Henry Lawson Business Centre, Roseby Street, Drummoyne, Sydney in the State of New South Wales, being an office ("the premises") and

2. to search for records and documentation relating to Locaway Pty Ltd, United Pastoral Group Pty Ltd, Mincorp Investments Pty Limited and Desert Sands Holdings Limited (including correspondence with shareholders of Mincorp Investments), Justin 'Kennedy Lewis Pty Limited, Geble Pty Ltd, Justin Kennedy Lewis Trust, Mona Plains Trust, Elbeg Unit Trust, financial records relating to the disbursement of funds the shareholders of Mincorp Investments relating to the sale of shares in Loyal Coal Limited, any record that identifies the directors, shareholders or bank accounts of Desert Sands Holdings Limited and any correspondence, notes, accounts and financial records, whether in paper, computer or electronic form, computer tapes and any magnetic, electronic or other computer storage medium containing relevant information and any hard copy printout of any such information, connected with the matter that is being investigated under the Independent Commission Against Corruption Act concerning allegations or complaints of the following nature that:

in about November 2007, former government minister Edward Obeid misused

confidential New South Wales government information to enable his family

company, Locaway Pty Ltd, and at a later date, Justin Kennedy Lewis Pty Ltd and Geble Pty Ltd, to purchase property within a potential mine licence area in the Bylong Valley prior to the awarding of exploration licences; and   

information by disclosing it to (Paul) Gardner Brook who used that information to assist a company, Monaro Mining NL to secure exploration licences from the New South Wales government.

313. Neither the Advice nor the Heads of Agreement is covered by the warrant. Neither document refers to any of the entities identified in paragraph 2 of the warrant or the subject matter of the allegations or complaints described in the warrant. It is obvious that both concern endeavours unconnected with those to which the search warrant was directed.

314. On behalf of Lockley, it was unconvincingly put that the Heads of Agreement could conceivably relate to Locaway because the purchaser is an Obeid Family Trust and was executed on behalf of an unnamed ‘Obeid Entity’, which could be Locaway. However, this connection was not established as a fact and there is no reason to think that this notional possibility crossed the mind of Lockley or Grainger.

Videotaping?

315. The plaintiffs put that the videotaping of the documents was a seizure. Although the information which was videoed was in a sense seized, the physical documents themselves were not: cf. Hart v Commissioner of Australian Federal Police (2002) 124 FCR 384 at 407 [91].

316. Copying, by videoing or otherwise, is permissible if it is reasonably incidental to, and done for the purpose of the exercise of the powers conferred by the warrant: Slaveski v Victoria [2010] VSC 441 at [192]. That is not this case.

317. The documents were manifestly not covered by the warrant. The manner in which they were videoed, that is to capture the full detail of the documents, together with the fact that they were not seized, is inimical to the suggestion that they were videoed for the purpose of assessing whether they were covered. I find that both Lockley and Grainger appreciated that the documents were not covered.

318. On behalf of Grainger, it was put that seizure (and therefore videoing of the documents) was permissible under s 47(1), as documents which Grainger believed on reasonable grounds to be evidence that would be admissible in criminal proceedings or which may have been concealed, lost, mutilated, destroyed or used in committing an offence. I reject this submission. There is no evidence of any such belief on the part of Grainger. Grainger did not give evidence. No applicable indictable offence was identified.

319. I find that the videoing of the documents was beyond the scope of the warrant.

In excess of power?

320. It is immaterial that neither Lockley nor Grainger was in a position to issue a binding instruction to Curd to video, and that Curd was not obliged to do what either of them said. It can safely be inferred that they knew and expected Curd to do what they expressly or by implication asked him to do.

321. The warrant, read with s 41, empowered Lockley and Grainger to enter the premises, search for the documents connected with the matter being investigated and seize them.

322. The exercise of power was not the giving of an unenforceable instruction to Curd, it was the doing of acts that caused Curd to video.

323. Each of Lockley and Grainger separately and directly by their own acts caused something in excess of their power under the warrant to be done, namely the videoing as it occurred.

324. I find that Lockley and Grainger acted in excess of their power.

Knowledge of excess of power?

325. I find that Lockley and Grainger knew that they were acting in excess of power. I find that they knew that the documents were not covered by the warrant and that they held no belief that the videoing was necessary to make a determination. This is because:

1. Lockley and Grainger were both experienced investigators;

2. a cursory glance at the documents makes it clear that they were not covered, and this must have been obvious to them;

3. with regard to the Advice, Lockley asked the question “relating to?” and Grainger referred to “a company that one of them is…private partnership by Australian Water Holdings”, and observed “interesting, why would they have this?”. Lockley comments that “it doesn’t relate though, does it?”. This conversation establishes that they understood that the Advice “did not relate” (that is, that it was outside of the search warrant). They then moved on to the Heads of Agreement, which on its face, concerns the same Australian Water Holdings; and

4. if they had considered that the documents may (or did) fall within the search warrant, there is no reason why they would not have seized them. Instead, not only did they video them, but they videoed their entire contents.

326. Added to this, is the consideration that only they could give direct contrary evidence as to the lack of such knowledge, but neither gave evidence.

327. No reason was given for Lockley not entering the witness box. It may safely be inferred that his evidence would not have assisted him: Jones v Dunkel (1959) 101 CLR 298.

328. It was put on behalf of Grainger that no such inference should be drawn because it was reasonable for him not to give evidence, in light of his present state of health.

329. In early 2016, Grainger suffered an intracerebral hemorrhage. He underwent surgery on 30 March 2016. He was in hospital following surgery for about eight days and was absent from work until 23 May 2016. Thereafter, on medical advice, he returned to work on a part-time basis of two days per week pending further medical assessment. He has been placed on restricted duties at work and is endeavouring to minimise stress. He apparently becomes fatigued towards the end of the day and there is deterioration in his speech and general presentation during the work day. He has hypertension.

330. Grainger and the plaintiffs adduced medical evidence in the form of written reports from medical practitioners.

331. Dr Mark Dexter, a neurosurgeon called by Grainger, reported that any prolonged period of stress may extend his recovery period and lead to a deterioration in his condition, and his issues regarding cognitive fatigue may be more obvious in the short term. Dr Dexter opined that:

if it is essential that Mr Grainger provides evidence in Court over the coming months or provides a statement with regards to these issues, my recommendation would be that these activities are performed in the mornings only and that Mr Grainger has the afternoons free to rest. My recommendation would be that Mr Grainger has at least a 15 minute rest period each hour. Ideally, it would be advantageous to Mr Grainger’s recovery if these statements or the provision of evidence could be deferred for 12 months following the surgery that was performed in March of this year.

332. Professor Matthew Kiernan, a consultant neurologist and neuropsychologist, also called by Grainger, reported on the potential impact that providing a statement or giving evidence in court is likely to have on Grainger’s recovery and/or his current condition. He opined as follows:

In the context of robust questioning and cross-examination by the plaintiff’s barrister and other parties, these processes will only serve to further aggravate the underlying constitutional diagnosis of hypertension with an impact that will not only affect Mr Grainger’s recovery, but also runs the risk of Mr Grainger experiencing a further intracerebral hemorrhage.

333. Professor Kiernan identified a number of risk factors which, if Grainger were to be requested to present evidence in court, would significantly increase Grainger’s risk of a further brain hemorrhage.

334. Dr Ross Mellick, a consultant neurologist called by the plaintiffs, opined that he regarded Grainger as fit to give evidence, that there was no indication of any problem with regard to his cognition, nor his ability to marshal his thoughts and to express them. He opined that the mild hesitancy, which can be described as apraxia, presents a minimal barrier to conversation. He noted that Grainger is on appropriate medication for stress and hypertension, and that his current dose is small, and so if necessary, a small increment could be readily provided by his general practitioner.

335. The parties choose not to cross-examine the medical practitioners, leaving the Court in the position of having to do its best on the written material. It seems to me that the views of the respective doctors can be reconciled. Grainger is fit to give evidence, but if he were cross-examined in a way such as to significantly increase his level of stress, he is at risk of a further hemorrhage. Grainger’s knowledge is a matter of critical importance. Steps could have been taken to ensure that any stress he suffered was reduced (say by video link evidence) and strictly controlling cross-examination. He could have provided affidavit evidence as to his state of mind, and sought a ruling that he be permitted to read it without having to be cross-examined.

336. In the circumstances, I think it would be permissible for the Court to infer that his evidence would not have assisted him, but it is not necessary to do so in this case to be comfortably satisfied in any event, as I am, that he knew he was acting outside the warrant. His knowledge is established anyway. The inference would simply reinforce that finding. He has not proffered any evidence which assists him. There is no reason to draw any explanatory or exculpatory inference in his favour.

Knowledge of injury or likely injury?

337. As will be seen below, the plaintiffs have not established that they have suffered any damage at all, let alone any attributable to, or caused by the videotaping complained of.

338. It is difficult to contemplate what damage Lockley and Grainger could have believed or thought would be caused to these plaintiffs by the videotaping. For the same reason, it is not fairly open to attribute to them recklessness with respect to causing any damage. It is also difficult to see what damage could have reasonably been foreseen.

339. The claim of misfeasance fails for this reason as well.

Damage?

340. The plaintiffs apparently articulate the damage they were allegedly caused in two ways.

341. First, they say that:

1. the videoed information was directly linked to the issue of the Summons to Lands Legal;

2. the Heads of Agreement returned by Lands Legal was used in the cross-examination of Moses Obeid on 1 February 2013, an event which would not have occurred but for the videotaping; and

3. they were caused stress, humiliation, embarrassment and reputational damage by that cross-examination (presumably by reason of the Sydney Morning Herald article – again on the footing that the article would have been different if the unredacted version had been made available to the newspaper).

342. Second, they say that the documents were confidential to them, which confidentiality was impaired by the videoing. Implicit in this contention is that the plaintiffs had some proprietary or possessory interest in them.

343. Both of these positions are manifestly untenable.

344. As to the first, I have already dealt with the difficulties with the proposition that the plaintiffs suffered damage by the redacted version alone being made available to the newspaper.

345. I am prepared to infer that the information garnered from the videotaping was used in the preparation of the Fleeton memorandum, and in turn, the Summons to Lands Legal.

346. The Fleeton memorandum records that during the execution of the search warrant a number of Australian Water Holdings documents were located, but not seized. This, it can safely be inferred, is a reference to the Heads of Agreement that was videoed.

347. The Summons required the production, amongst others, of all documentation in the care, custody or control of Lands Legal, including but not limited to electronic documents relating to any interest in Australian Water Holdings Pty Ltd held either directly or indirectly by the Obeid Family Trust (or any subsidiary or nominee company), Eddie Obeid Snr, Eddie Obeid Jnr, Paul Obeid, Moses Obeid or Gerard Obeid. The Obeid Family Trust is referred to on the face of the Heads of Agreement.

348. I am also prepared to infer, although there is no direct evidence to this effect, that the version of the Heads of Agreement, produced by Lands Legal, was used in cross-examining Moses Obeid. In other words, I am prepared to infer that ICAC had no other source. It did not suggest any particular alternative source.

349. The plaintiffs must establish that viewed in a common sense way, the act complained of caused them damage: March v E & MH Stramare Pty Ltd (1991) 171 CLR 506.

350. The chain of causation is asserted to be the following:

1. the information was used by someone else (who made a decision) to prepare a Summons to Lands Legal for documents which produced a version of the Heads of Agreement;

2. the Heads of Agreement were redacted and the redacted portion was, by the Commissioner acting under s 112(1), made the subject of a suppression order;

3. Watson chose to cross-examine, publicly, only on the redacted version;

4. the press consequently reported the cross-examination in a manner that would not have occurred but for the redaction and cross-examination on it; and

5. that manner of reporting placed the plaintiffs in a bad light.

351. In my opinion, it cannot sensibly be suggested that the damage alleged finally to have been suffered was caused by the initial act complained of. The initial act is too remote from the ultimate asserted consequence to be viewed as having caused it. There are too many intervening independent acts of others between the two.

352. As to the second formulation of their damage, surprisingly (or perhaps not), the plaintiffs have not sought to prove any proprietary or possessory interest in the Advice or the Heads of Agreement.

353. Perhaps for good reason, they have not sought to explain the presence of the Advice at the premises in the safe, which is ostensibly a confidential and privileged document produced by the Solicitor General for the Crown Solicitor. They have not sought to establish the identity of the Obeid entity, which is apparently the party to the Heads of Agreement. They have not sought to prove ownership of, or access to the safe.

354. The evidence is that it was a shared safe, but there is no evidence of who shared it. There is evidence that other persons and entities occupied space at Birkenhead Point.

355. As I have said earlier, each plaintiff bears the onus of establishing each element of his cause of action.

356. This being so, although the plaintiffs assert in their written submissions that the Advice and Heads of Agreement were in their possession and confidential to them, they have not established this.

357. It follows that they have not established that they have suffered any loss or damage.

Immunity

358. It was put on behalf of Lockley that he has protection from liability under s 109(1) and (5). Given my findings, no question of immunity arises. However, if the plaintiffs had otherwise established liability on Lockley’s behalf, s 109(1) and (5) would not have assisted him because his conduct, in knowingly exceeding his powers under the search warrant, was not in good faith.

conclusion

359. The plaintiffs have failed against all defendants.

360. The proceedings must be dismissed and I so order.

361. I will hear the parties on costs should this be necessary and on any issues that remain to be determined.

362. The exhibits can be returned.

Amendments

20 February 2017 - Para 64 - amend initials C G Winnett

07 October 2016 - Amend initials of counsel appearing for seventh defendant

28 September 2016 - Para 99 - amend upon to "of"

28 September 2016 - Para 99 - amend upon to "of"

Para 195 - amend as an assumption to "on an assumption"

Para 256 - amend to Australian Securities and Investments Commission

Para 289 - amend prosecutor to "solicitor"

Decision last updated: 20 February 2017