Maitland v The Queen; Macdonald v The Queen

[2019] NSWCCA 32

Court of Criminal Appeal

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

Maitland v R; Macdonald v R [2019] NSWCCA 32

Hearing dates:

13 & 14 November 2018

Date of orders:

25 February 2019

Decision date:

25 February 2019

Before:

Bathurst CJ, Beazley P, Ward CJ in Eq, Hamill J, N Adams J at [1]

Decision:

The following orders are made in respect of each appellant:
1.   Appeal against conviction allowed.
2.   Conviction quashed.
3.   A new trial is ordered.
4.   The matter is listed for mention in the Supreme Court Arraignments List on 1 March 2019 or such other date as directed by the Criminal List Judge.
5. Pursuant to s 7 of the Court Suppression and Non-publication Orders Act 2010 (NSW), on the ground set out in s 8(1)(e) of that Act, order that disclosure of [93]-[635] of these reasons (other than the orders themselves) be prohibited pending further order of the Court. This order does not apply to the disclosure of those paragraphs to the parties to these proceedings, their legal representatives or the Court.

Catchwords:

CRIMINAL LAW – appeals – appeal against conviction – principal offender – 2 counts of wilful misconduct in public office – common law offence

 

CRIMINAL LAW – appeals – appeal against conviction – accessory – 2 counts accessory before the fact to wilful misconduct in public office

 

CRIMINAL LAW – appeals – appeal against conviction – directions to jury – misdirection – mental element of offence of misconduct in public office

 

CRIMINAL LAW – appeals – appeal against conviction – unreasonable verdict

 

CRIMINAL LAW – appeals – appeal against conviction – miscarriage of justice

  CRIMINAL LAW – appeals – appeal against sentence – application for leave to appeal

Legislation Cited:

Court Suppression and Non-publication Orders Act 2010 (NSW)
Criminal Appeal Act 1912 (NSW)
Criminal Code RSC 1985, c. C-46
Environmental Planning Act 1979 (NSW)
Mining Act 1992 (NSW)
Environmental Planning Act 1979 (NSW)

Cases Cited:

Attorney General’s Reference (No 3 of 2003) [2005] QB 73
Boulanger v R (2006) 2 SCR 49
Chew v R (1992) 173 CLR 626; [1992] HCA 18
Dickson v The Queen (2017) 94 NSWLR 476
Fazzolari v Parramatta City Council (2009) 237 CLR 603; [2009] HCA 12
Hong Kong Special Administrative Region v Wong Lin Kay [2012] 2 HKLRD 898
Horne v Barber (1920) 27 CLR 494; [1920] HCA 33
Libke v The Queen (2007) 230 CLR 559; [2007] HCA 30
M v The Queen (1994) 181 CLR 487; [1994] HCA 63
Macdonald v R; Maitland v R (2016) 93 NSWLR 736; [2016] NSWCCA 306
MFA v The Queen (2002) 213 CLR 606; [2002] HCA 53
Mills v Mills (1938) 60 CLR 150
Obeid v R (2015) 91 NSWLR 226; [2015] NSWCCA 309
Obeid v R (2017) 96 NSWLR 155; [2017] NSWCCA 221
R v Baden-Clay (2016) 258 CLR 308; [2016] HCA 35
R v Bembridge (1785) 22 State Trials 1
R v Borron (1823) 3 B & Ald 433
R v Boston (1923) 33 CLR 386; [1923] HCA 59
R v Dytham [1979] QB 722
R v Llewellyn-Jones (1967) 51 Cr App R 4
R v Macdonald; R v Maitland [2017] NSWSC 337
R v Quach (2010) 27 VR 310; [2010] VSCA 106
R v Speechley [2005] 2 Cr App Rep (S) 75
Shum Kwok Sher v Hong Kong Special Administrative Region (2002) 5 HKCFAR 381
Sin Kam Wah v Hong Kong Special Administrative Region (2005) 8 HKCFAR 192
SKA v The Queen (2011) 243 CLR 400; [2011] HCA 13
Thompson v Council and Municipality of Randwick (1950) 81 CLR 87; [1950] HCA 33
Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285; [1987] HCA 11

Texts Cited:

Professor Finn in “Public Officers: Some Personal Liabilities” (1977) 51 ALJ 313

Category:

Principal judgment

Parties:

John William Maitland (Appellant)
Ian Michael Macdonald (Appellant)
Crown (Respondent)

Representation:

Counsel:
E Muston SC with E Anderson (Appellant Maitland)
P Boulten SC with D Mackay (Appellant Macdonald)
M McHugh SC with P English (Respondent)

  Solicitors:
Santone Lawyers (Appellant Maitland)
HWL Ebsworth Lawyers (Appellant Macdonald)
Solicitor for Public Prosecutions (Respondent)

File Number(s):

2015/59990; 2015/59940

Publication restriction:

Pursuant to s 7 of the Court Suppression and Non-publication Orders Act 2010 (NSW), on the ground set out in s 8(1)(e) of that Act, order that disclosure of [93]-[635] of these reasons (other than the orders themselves) be prohibited pending further order of the Court. This order does not apply to the disclosure of those paragraphs to the parties to these proceedings, their legal representatives or the Court.

 Decision under appeal 

Court or tribunal:

Supreme Court of NSW

Jurisdiction:

Criminal

Citation:

[2017] NSWSC 638

Date of Decision:

02 June 2017

Before:

Adamson J

File Number(s):

2015/59990; 2015/59940

Judgment

1. The Court: Ian Michael Macdonald (Mr Macdonald) was charged on an indictment presented on 6 February 2017 with two counts of wilful misconduct in public office. The charges were in the following terms:

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

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

2. John William Maitland (Mr Maitland) was charged with being an accessory before the fact to the offences in respect of which Mr Macdonald was charged. The relevant charges were in the following terms:

“2.   Between 17 January 2007 and 22 August 2008 in Sydney and elsewhere in the State of New South Wales did beforehand, aid, abet, counsel and procure the commission of the said offence.”

“4.   Between 21 August 2008 and 16 December 2008 in Sydney and elsewhere in the State of New South Wales did beforehand, aid, abet, counsel and procure the commission of the said offence.”

3. At the time the alleged offences the subject of the charges occurred, Mr Macdonald was the New South Wales Minister for Mineral Resources. He held that position from 2005 (except for a short break) up to the time that the alleged offences were committed. In that capacity he had significant powers under the Mining Act 1992 (NSW), including granting consent to apply for an exploration licence under that Act and to grant such a licence. At the relevant time, Mr Maitland was the Chairman and a shareholder in Doyles Creek Mining Pty Ltd (DCM).

4. The Crown case against Mr Macdonald on Count 1 was that his conduct in granting the consent under the Mining Act to DCM to apply for an exploration licence was misfeasance in public office because he granted the consent with an improper motive, that of benefiting Doyles Creek and Mr Maitland who was its Chairman and one of its shareholders. The case in respect of Count 3 was that the licence was granted with the same improper motivation.

5. The case against Mr Maitland essentially was that he was a party to the application for and granted the exploration licence knowing that it was being granted for an improper purpose.

6. Mr Macdonald and Mr Maitland were jointly tried before a jury and convicted of the offences. Mr Macdonald was sentenced to an aggregate sentence of 10 years, commencing on 26 May 2017 and expiring on 25 May 2027, with a non-parole period of 7 years. The trial judge imposed an indicative sentence in respect of Count 1 of 8 years and in respect of Count 3 of 7 years.

7. In relation to Mr Maitland, the trial judge imposed an aggregate sentence of 6 years commencing on 26 May 2017 and expiring on 25 May 2023, with a non-parole period of 4 years. The trial judge imposed an indicative sentence of 5 years in respect of Count 1 and 4 years in respect of Count 4.

8. Each of Mr Macdonald and Mr Maitland has appealed against his conviction and sought leave to appeal against sentence.

Grounds of appeal against conviction

9. Mr Macdonald relied upon the following grounds of appeal:

“1.   The learned trial judge misdirected the jury in relation to the elements of common law offence of misconduct in public office in relation to both charges.

2.   The jury’s verdicts were unreasonable and cannot be supported having regard to the evidence.

3.   A miscarriage of justice was occasioned on account of evidence now available to the appellant.

4.   There was a miscarriage of justice at Mr Macdonald’s trial because members of the prosecution team had had access to evidence compulsorily obtained from him at the Independent Commission Against Corruption.”

10. Mr Maitland relied upon the following grounds of appeal (as amended by leave granted on 28 November 2018):

“1.   The jury’s verdicts were unreasonable and cannot be supported having regard to the evidence.

2.   The trial judge misdirected the jury with respect to the mental element for misconduct.

3.   There was a miscarriage of justice at Mr Maitland’s trial because members of the prosecution team had had access to evidence compulsorily obtained from him at the Independent Commission Against Corruption.

4.   There was a miscarriage of justice at Mr Maitland’s trial because of evidence not adduced at the time of trial.”

11. It should be noted that Ground 4 of Mr Macdonald’s grounds of appeal and Ground 3 of Mr Maitland’s grounds of appeal were only formally pressed having regard to the decision of this Court in Macdonald v R; Maitland v R (2016) 93 NSWLR 736; [2016] NSWCCA 306.

12. It is convenient to deal at the outset with the grounds of appeal relating to the misdirection to the jury (Macdonald Ground 1, Maitland Ground 3). The ground of appeal asserts that the trial judge wrongly directed the jury on the mental element of the offence.

The directions

13. The trial judge gave the following written direction in respect of Charge 1 against Mr Macdonald:

“1)   The accused was a public official.

A Member of the Legislative Council of New South Wales is a public official.

A Minister of the Government of New South Wales is a public official.

2)   The accused granted consent to Doyles Creek Mining Pty Ltd to apply for an exploration licence under the Mining Act 1992 (NSW).

3)   In granting consent the accused acted in the course of, or in connection with, his public office.

4)   In granting consent the accused misconducted himself.

To prove this element the Crown must prove beyond reasonable doubt, that in granting such consent:

a.   the accused was substantially motivated by the desire to confer a benefit on John Maitland and Doyles Creek Mining Pty Ltd; and

b.   the accused was not motivated to any significant degree by the object of furthering the interests of the State of New South Wales.

5)   The accused’s misconduct was wilful.

To prove this element the Crown must prove beyond reasonable doubt that the accused knew either that:

a.   he was obliged not to use his position in that way; or

b.   it was possible that he was obliged not to use his position in that way but chose to do so anyway.

6)   The accused granted such consent without reasonable cause or justification.

7)   The accused’s conduct was misconduct that was serious and merits criminal punishment having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those objects.”

14. A substantially similar direction was given in relation to Charge 3. It is unnecessary to set it out.

15. So far as Mr Maitland was concerned, in respect of Charge 2, the written direction given in relation to Charge 1 against Mr Macdonald was repeated and the following additional directions were given to take account of the fact that Mr Maitland was charged as an accessory:

“2)   That between 17 January 2007 and 22 August 2008 the accused intentionally assisted and encouraged Mr Macdonald to commit the principal offence.

3)   That the accused intended that Mr Macdonald, in connection with his public office, would grant consent to Doyles Creek Mining Pty Ltd to apply for an exploration licence while Mr Macdonald:

a.   was substantially motivated by the desire to confer a benefit on the accused and Doyles Creek Mining Pty Ltd;

b.   was not motivated to any significant degree by the object of furthering the interests of the State of New South Wales;

c.   did not have reasonable cause or justification; and

d.   knew either that he was obliged not to use his position in that way; or that it was possible that he was obliged not to use his position in that way but chose to do so anyway.

4)   That, at the time the accused encouraged and assisted Mr Macdonald, the accused knew that:

a.   Mr Macdonald was a public official.

b.   Mr Macdonald had the power to give consent to Doyles Creek Mining Pty Ltd to apply for an exploration licence under the Mining Act 1992 (NSW) and that there was a real prospect that he would grant such consent.

c.   If Mr Macdonald granted consent to Doyles Creek Mining Pty Ltd to apply for an exploration licence under the Mining Act 1992 (NSW) he would be acting in the course of, or in connection with, his public office.

d.   If Mr Macdonald granted consent to Doyles Creek Mining Pty Ltd to apply for an exploration licence under the Mining Act 1992 (NSW), he would be misconducting himself because:

i.   Mr Macdonald was substantially motivated by the desire to confer a benefit on the accused and Doyles Creek Mining Pty Ltd; and

ii.   Mr Macdonald was not motivated to any significant degree by the object of furthering the interests of the State of New South Wales.

e.   If Mr Macdonald granted consent to Doyles Creek Mining Pty Ltd to apply for an exploration licence under the Mining Act 1992 (NSW) his misconduct would be wilful because Mr Macdonald knew either that:

i.   he was obliged not to use his position in that way; or

ii.   it was possible that he was obliged not to use his position in that way but chose to do so anyway.

f.   If Mr Macdonald granted such consent it would be without reasonable cause or justification.

5)   That the facts of which the accused was aware were sufficient to result in Mr Macdonald’s misconduct being serious and meriting criminal punishment having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those objects.”

16. A similar direction was given in relation to Charge 4.

17. The trial judge dealt with the mental element of the offence on a number of occasions in her summing-up. Early on in her summing-up, she dealt with the question of motive. She gave the following direction:

“[40]   In this context I want to say a word about motive, as distinct from motivation. As you know from the elements document, the motivation of the accused Macdonald is an element of the offence (element 4). Because it is an element it is something that needs to be proved beyond reasonable doubt. However, there have been references to motive, as well, which is a different thing. For example, the Crown suggested that the accused Macdonald had a motive to benefit Mr Maitland because he was leaving Parliament and could expect Mr Maitland to help him when he left. It is not essential that the Crown establish a motive of this kind. Evidence tending to establish a motive of that sort is just one of many pieces of evidence making up a circumstantial case. For example, to prove element 4a, the Crown does not have to satisfy you why the accused Macdonald was substantially motivated to confer a benefit of Mr Maitland and Doyles Creek Mining Pty Ltd. It just has to prove that, at the relevant time, Mr Macdonald was substantially motivated to confer a benefit on Mr Maitland and Doyles Creek Mining Pty Ltd. The same is true for 4b.”

18. In dealing with [4] of her written direction (the mental element), she gave the following directions:

“[72] There are two aspects to the fourth element, which you will see on the list of elements and the Crown must prove each of them beyond reasonable doubt. Before I come to the two aspects, I propose to give you some instruction in the law associated with the exercise of a statutory power. The power to grant consent to an application for an exploration licence is a statutory power because it is conferred by a statute, which is another word for an Act of Parliament, in this case s 13(4) of the Mining Act. In count 1, the relevant power relied on by the Crown is the power that the accused Macdonald had, as Minister for Mineral Resources, to grant consent to Doyles Creek Mining Pty Ltd to apply for an exploration licence. In count 3 the relevant power is the power to grant an exploration licence, which derives from s 22 of the Mining Act.

[73] All public powers, including the powers under ss 13(4) and 22 of the Mining Act, are legally granted on the basis that they are to be exercised in the public interest and not for the personal advantage of the public officer who exercises the power or for the benefit of his or her friends, family or associates.

[74] A power of this nature is abused where an official, in the exercise of his or her powers, makes a decision from what is called an improper motivation. Now the proper motivation for exercising powers such as the one in s 13(4) is the furthering of the public interest. If the motivation to give consent is to confer a benefit on someone else that is an improper motivation.

[75]   Now, of course, whenever a Minister gives consent to an applicant, A, to apply for an exploration licence, the Minister confers a benefit on applicant A. But as long as the Minister is motivated to grant the consent because he or she believes it to be in the public interest to do so, there is no misconduct even though a consequence of the grant will be to benefit applicant A. However, if the Minister grants consent because he or she is motivated to benefit Applicant A, and not because he or she is motivated by the public benefit, the Minister will be guilty of misconduct, even if the Minister may happen to believe that there is some public benefit associated with the giving of consent.

[76]   So you are not judging whether or not it was a good idea for the accused Macdonald, as Minister, to grant consent to Doyles Creek Mining Pty Ltd to apply for an exploration licence. What you are actually determining is what motivated the accused Macdonald to grant the consent to Doyles Creek Mining Pty Ltd; in other words, why did he do it? Did he do it to benefit the public or did he do it to benefit Mr Maitland?

[77]   The way these principles are set out in the list of elements is set out in 4. The Crown must prove two things: first, that in granting consent the accused Macdonald was substantially motivated by the desire to confer a benefit on Mr Maitland and Doyles Creek Mining Pty Ltd; and, secondly, the accused Macdonald was not motivated to any significant degree by the object of furthering the interests of the State of New South Wales.”

19. As will be seen, particular criticism was directed to [76].

20. The problem seen by counsel for Mr Maitland in relation to [76] was raised with the trial judge and the following interchange occurred:

“JORDAN: We respectfully submit that it’s not appropriate for the jury to be left with the question posed in those terms, that is, ‘Why did he do it, to benefit the public, or to benefit Mr Maitland?’, for the following reasons: First, the question must always be, has the Crown proved he did it in accordance with elements 4(a) and 4(b)? And if the Crown has not proved that specific motivation, then the Crown has failed, even in circumstances where the jury cannot, or does not form any view as to why he did it.

…

JORDAN: The question must always be, has the Crown proved beyond reasonable doubt the motivation as set out in 4(a) and 4(b)?

HER HONOUR: Right

JORDAN: Next, we suggest: If the Crown has not proved beyond reasonable doubt such motivation, then the Crown has failed, even in the circumstances where you cannot form a view as to why Mr Macdonald exercised his powers as he did.

And lastly, for abundant caution, I remind you that it is not the case that granting consent intending to favour Mr Maitland necessarily establishes the motivations as specified in elements 4(a) and 4(b), together.

That is what we propose your Honour.

HER HONOUR: All right, what I will do, subject to anything Mr Crown and Mr Johnson said, is tell the jury that first bit: If the Crown has not proved reasonable doubt. But I think the second bit is confusing, because if he did it intending to benefit Mr Maitland, then that is exactly what 4 is about, and I think it would confuse them. But certainly, I am prepared to say what you have said before, and I will say that as soon as the jury comes in to emphasise to them the importance of the Crown proving to the requisite standard 4(a) and 4(b). All right.”

21. Her Honour then gave the following further direction:

“[94]   HER HONOUR: Good morning members of the jury. Yesterday I had taken you through the elements of the charges against the accused Macdonald, but there is one further thing I wish to emphasise about 4(a) and 4(b) of charges 1 and 3, and they relate of course to the motivation of the accused Macdonald. You will see on your elements document, what is said there, and what the Crown must prove beyond reasonable doubt; those two things, 4(a) and 4(b).

[95]   Now I just want to emphasise that if the Crown had not proved beyond reasonable doubt such motivation, then the Crown has failed, even in circumstances where you cannot form a view as to why the accused Macdonald exercised the power. So if you are uncertain about this, then the Crown fails. The Crown has to prove beyond reasonable doubt each of those two things, 4(a) and 4(b).”

22. Her Honour gave a separate direction in relation to the knowledge of Mr Maitland. This was in the following terms:

“[113]   Then in 4, you will see that the elements directed your attention to the accused’s knowledge, which of course is a separate matter from intention. Once again, the sub-paragraphs are set out and for each of them you must be satisfied, if you come to this point, that at the time the accused encouraged and assisted Mr Macdonald, the accused knew that. Then you move to (a), whether you are satisfied beyond reasonable doubt that the accused Maitland knew that Mr Macdonald was a public official. If you are, you go back to 4 and move down to (b). So each of those must be dealt with individually.

[114]   I should say, in the context of knowledge in element 4 of the counts against Mr Maitland, that the accused Maitland does not, however, have to have legal knowledge that the conduct to be committed by Mr Macdonald actually amounts to a criminal offence. So knowledge of the law is not a requirement. If it were a requirement, it would be in this list.”

23. Following the conclusion of the summing-up, the trial judge was asked the following question by the jury:

“Could your Honour please clarify what the Crown must prove beyond a reasonable doubt in relation to:

-   Charge 1, element 4a; and

-   Charge 2, element 1(d)(i)

Specifically, do the jury need to know, beyond reasonable doubt, the specific benefit that would be received by the accused, Mr McDonald, in order to establish ‘substantially motivated’?”

24. In discussion with counsel following the asking of the question, the following interchange occurred:

“When one looks at the element in charge 1, element 4(a), the Crown has to prove the accused was substantially motivated by the desire to confer a benefit on John Maitland and Doyles Creek Mining Pty Limited. I propose to tell the jury that in relation to 4(a), they need to be satisfied only of that matter beyond reasonable doubt, and they do not need to be satisfied of any – that the accused Macdonald would receive any benefit, let alone any specific benefit. Although that is a matter they might take into account in deciding whether the accused Macdonald had a motive and, therefore, whether the Crown has proved 4(a).

In relation to charge 2, element 1(d)(i), that’s obviously the corresponding element in the charge against Mr Maitland, and so I think the answer in respect of charge 1 would also apply in respect of charge 2.

Do you wish to say anything about what I have proposed Mr Johnston?

JOHNSTON: I think I do your Honour.

HER HONOUR: Yes.

JOHNSTON: I think there is a risk that arises, when I hear that question, that the jury are somehow conflating the issue of whether an actual benefit is received as opposed to what is the principal requirement of their determinations, which is the motive. Your Honour certainly fixed that up, but I think they certainly need to be refocussed to the fact that it’s the motive that is important.

…

JOHNSTON: The other aspect that is troubling me, I will try and articulate it obviously, is that first limb of 4(a), the notion of benefit is the improper benefit as opposed to the fact that any conferral of an exploration licence, or an invitation, brings with it a benefit. And obviously that distinction needs to be, I think perhaps picked up by your Honour as well. Particularly if there is a risk from that question that they are focusing simply on benefit as opposed to motive.

HER HONOUR: Yes, thank you for that. I certainly accept that. The granting of consent inevitably confers a benefit on the applicant, and the granting of an exploration licence does the same, and if the Minister’s power is exercised properly, that is the case anyway.

JORDAN: Yes.

JOHNSTON: Thank you.

HER HONOUR: I will make that point.”

25. Her Honour then gave the following additional directions:

“[618]   Now the first thing I will remind you of is that whenever a Minister for Mineral Resources grants consent to an applicant to apply for an exploration licence, or grants an exploration licence, that inevitably benefits the applicant; and that is whether the Minister does it in the interests of New South Wales, which is a proper purpose, or for an improper purpose, namely to benefit the applicant.

[619]   So that is why in determining whether the Crown has made out element 4 in granting consent, the accused misconducted himself, you need to concentrate on the accused’s motivation. Why did he do this? Did he grant consent because he was substantially motivated by furthering the interests of the State of New South Wales, or did he grant consent to benefit Mr Maitland and Doyles Creek Mining?

[620]   Now I am asking those questions in an open way, but you will see from the elements document that because of the onus of proof, which of course is on the Crown throughout, the Crown had to prove beyond reasonable doubt that in granting such consent, the accused was substantially motivated by the desire to confer a benefit on John Maitland and Doyles Creek Mining, and the accused was not motivated to any significant degree by the object of furthering the interests of the State of New South Wales.

[621]   Now, your question is asking about a specific benefit to the accused, Mr Macdonald. Now, as you will see from the elements, the Crown doesn’t have to prove any benefit at all to Mr Macdonald. On the other hand, you will recall from the way the Crown put its case, it suggested various motives for why the accused Macdonald might have granted consent, or granted the exploration licence, and one of the motives it suggested was friendship, another motive it suggested was that the accused Macdonald was going to get something out of the relationship after he left politics.

[622]   This is to do with motive, and that does not have to be proved beyond reasonable doubt, and it’s something that you can take into account in deciding whether the Crown has proved these elements on the elements of charge sheets. But that is why the wording of these elements is very important, and why when you come to element 4, what you are concentrating on is the motivation of the accused Macdonald, and whether you are satisfied that the Crown has proved both (a) and (b) in relation to 4. So motivation. Why did he do this? That is why the word motivation has been used.”

26. That was essentially the last direction given to the jury.

Judgment of the trial judge on the mental element of the offence

27. In a judgment delivered on 8 March 2017, R v Macdonald; R v Maitland [2017] NSWSC 337 (the elements judgment) the trial judge articulated the reasons for her written direction as to the elements of the offence. Although these proceedings are not, of course, an appeal from that judgment, her Honour’s reasoning is of great assistance in considering the issues which divide the parties.

28. Her Honour noted (at [12]) that the Crown accepted that it would not be sufficient to establish that Mr Macdonald had no genuine belief that the granting of consent was in the interest of the State of New South Wales but that it must also prove that the accused was improperly motivated. She noted that it was submitted, on behalf of both accused, that the Crown must prove, as an element of the offence, that the accused Macdonald’s “sole intention” was to benefit DCM and Mr Maitland and that the Crown had to prove that the accused Macdonald did not have a genuine belief that the grant was “in any way” in the interests of the State of New South Wales (elements judgment at [15]).

29. Her Honour extensively reviewed the authorities, accepting (at [19]) that the gravamen of the offence of misconduct in public office was as described by Professor Finn in “Public Officers: Some Personal Liabilities” (1977) 51 ALJ 313 at 315, that “an officer, having been entrusted with powers and duties for the public benefit, has in some way abused them, or has abused his official position”. She stated that it was apparent from Professor Finn’s analysis that “the relevant mental element is motivation as distinct from knowledge, belief or intention”. She stated that it was “the motivation, not intention or belief, which determines whether the giving of consent or the grant of the licence” amounted to misconduct. She stated that “as the root of the wrong to be remedied by the law is the same, whether in a civil or criminal context, it is appropriate that the language used to describe the wrong be consistent”. She stated that “in a civil action, an administrative decision can be quashed or set aside on the basis that the decision-maker made the decision from an ‘improper motive’”. She stated that “the reason for the use of the term ‘motivation’ in the elements, rather than ‘motive’” was to “maintain the distinction between motivation and motive, which is relevant in a criminal trial for such an offence” (elements judgment at [24]).

30. In that context, her Honour stated that “to express the requisite mental element in terms of intention, as distinct from motivation, is problematic since it has the potential to import concepts of purpose, which are apt to confuse in a case such as the present where an inevitable consequence of the grant of consent to apply for an exploration licence, as well as the grant of the licence, is to benefit the recipient of the consent or the holder of the exploration licence”. She stated that the use of the words “sole intention” creates an additional difficulty because the expression tends to imply a dichotomy which she considered to be a false one. She also stated that “insofar as it would require proof of knowledge, it would import into the element an inapposite mental state” in that “it is not an element of the offence that the accused knew that the decision was not in the interests of the State” (elements judgment at [26]-[29]).

31. Her Honour stated (elements judgment at [31]) that “applying these principles to the present case, the question [of] whether the accused Macdonald believed it was in the public interest to grant consent to Doyles Creek Mining Pty Ltd under s 13(4) or exploration licence to it under s 22 of the Mining Act, while relevant is not determinative”. She stated that Mr Macdonald may have believed that the giving of the consent was in the public interest, but if his motivation in granting consent or granting the licence was to benefit Mr Maitland and DCM, the element of misconduct had been made out.

32. Her Honour stated, however, that she did “not accept the Crown’s submission that it would be sufficient for it to prove that the accused Macdonald was substantially motivated by the desire to confer a benefit on the accused Maitland and Doyles Creek Mining Pty Ltd”. She stated that “the Crown must also prove, as part of the element regarding motivation, the negative: namely, that Mr Macdonald was not motivated to any significant degree by the object of furthering the interests of the State of New South Wales”.

33. Her Honour considered that her formulation of this element was supported by what was said by the Court of Appeal of England and Wales in R v Speechley [2005] 2 Cr App Rep (S) 75, in which the Court considered a direction which included the following remarks:

“ .... if you found -- and it is entirely a matter for you -- that in early 2000 he not only thought that there was potentially something in it for him in shifting the line -- in other words personal financial gain -- but that by moving the line it would, for example, help the inhabitants of Barbers Drove and address the problem of the trees -- two of the things he says he was concerned about -- then what would be the position? He would have two motives for influencing the line, one honest and the other dishonest.

As I have said, and I repeat, if you find he was, or might have been acting solely -- I stress 'solely' -- for perfectly proper motives, namely acting as the local County Councillor for the benefit of the community, as he says, then there can be no dishonesty, no misconduct, and you will acquit him.

However, if he had, so to speak, these dual motives, what is your approach? I said a moment ago that you cannot, and must not, convict unless each of the six things were proved so that you are sure. That remains the case. Even if you were to conclude that Mr Speechley had a genuine and honest motive or motives as well as the dishonest one, I repeat, you can only convict providing you are sure that in influencing the route, the driving force -- that is the key phrase here, 'the driving force' -- in his mind and his motivation was the dishonest one. If, as I say, you are sure of that, you will be entitled to convict. Anything less than sure, you acquit.” (2004) EWCA Crim 3067 at [40]

34. In that case, the Court rejected the submission that the trial judge should have adopted the approach of Widgery J in R v Llewellyn-Jones (1967) 51 Cr App R 4, where Widgery J, as his Lordship then was, indicated the boundaries of the offence in the following terms (at 6):

“ …. if the registrar of a county court when exercising his power to order payment out of court of money held on behalf of a beneficiary were to make an order in expectation of some personal benefit which he hoped to obtain and in circumstances where, had it not been for the personal benefit, he would not have made the order, that would be an example of misconduct in a public duty sufficient to come within this rule. The reason why I feel that that would come within the rule is because in that hypothetical case a public officer would be distorting the course of justice to meet his own personal ends and, in my opinion, it would be sufficient to justify a conviction if it could be shown that he had made such an order with intent to obtain personal benefit for himself and in circumstances in which there were no ground for supposing that he would not have made the order but for his personal interest and expectation. On the other hand, I have reached an equally clear view that it is not enough to bring a country court registrar within the principle merely to show that, when making an order which was within his powers and which he could make for perfectly proper motives, he knew that by a side wind, as it were, he was going to gain some personal benefit.”

35. In that context their Lordships in R v Speechley made the following comments at [44]-[45]:

“[44]   As to the judge’s failure to refer to the insufficiency of the defendant merely knowing that he was going to gain some personal benefit by a side wind, we accept the response of Mr Martin Wilson QC for the Crown, who submitted that to do so was unnecessary and would only have created confusion because of the way in which the judge formulated the necessary ingredients of the offence. If dishonesty was the driving force in the appellant's mind, and his motivation was dishonest, he cannot have been someone honestly seeking a legitimate goal but knowing that if he succeeded he was going to get some personal benefit by a side wind.

[45]   That is sufficient to dispose of the first ground of appeal, but we also accept Mr Wilson’s submission that the judge went further than he need have done in favour of the defence. At point 6 it would have been sufficient to say that at some relevant time when attempting to influence the route his motivation was dishonest in that he was motivated to a significant degree by considerations of personal advantage. What amounts to a significant degree is something that could properly be left to the good sense of the jury.”

36. In the elements judgment her Honour, after citing the passages from the judgment of the Court of Appeal to which we have referred above, stated that she had “incorporated what was said in R v Speechley into the element regarding motivation” to “take account of the need for the Crown to prove, not that the improper motivation was the sole one, but that it was a substantial one”. She stated that she had rejected the formulation proposed by the accused, which was largely based on the wording of the direction given by Beech-Jones J in R v Obeid (No 12) [2016] NSWSC 1815.

The parties’ submissions

a   The appellants

37. In his written submissions Mr Macdonald criticised the formulation of the element of intention in par (4) of the written direction on a number of bases. First, he submitted that “the threshold of being substantially motivated was too low for a criminal offence”. Mr Macdonald cited an example of a situation where part of a Minister’s purpose in approving a project was to “assist his/ her electoral prospects at the next election but his/her dominant purpose or causative purpose was to generate jobs or development in the State”.

38. Second, Mr Macdonald stated that cases such as R v Borron (1823) 3 B & Ald 433 stand for the proposition that it is “the motive of the maker of the decision which constitutes the hallmark of misfeasance”.

39. Third, he submitted that “the issue should not be a person’s motivation but rather their purpose or intent”. Mr Macdonald stated that the “mens rea of the offence lies in the intention to use one’s public office for purposes other than the benefit of the public”.

40. Fourth, Mr Macdonald submitted that the test proposed by the English Court of Appeal in R v Speechley, namely, that the accused was “motivated to a significant degree by consideration of personal advantage”, was “not only too low a bar but also presents the considerable difficulty of assessing what is meant by a significant degree”.

41. Fifth, Mr Macdonald submitted that the trial judge erred in distinguishing “Beech-Jones J’s determination in R v Obeid, that the proper test for the mental element of the offence of misconduct in public office is the sole purpose on the grounds that the indictment against the appellant did not allege any mental state”.

42. Sixth, he submitted that the inclusion of the words “by the desire” in the direction as part of element 4(a) was “otiose and liable to mislead the jury”.

37. Seventh, Mr Macdonald submitted that there were several problems with element 4(b). He submitted first, that it was “arguably also otiose because it was captured by element 6”. Secondly, and more significantly, he submitted it was “very difficult to measure what ‘significant degree’ actually means”.

38. In his written submissions, Mr Macdonald criticised the direction given in answer to the question asked by the jury to which we have referred at [23] above. He submitted that the direction, which we have set out at [25], posing the question “Why did he [Mr Macdonald] do this?” was a direction likely to mislead the jury.

39. Mr Macdonald also referred in his written submissions to the directions in [621] and [622] of the elements judgment (see [25] above) where her Honour stated that the Crown did not have to prove motive and that the real issue was the accused’s motivation “Why did he do this?”. He submitted that “the distinction drawn between motive and motivation is misguided as they are one and the same and the distinction clearly did confuse and misled the jury”.

40. In submissions at the hearing, senior counsel for Mr Macdonald submitted that what was said by the Court of Appeal in R v Speechley was not the law, or alternatively, that the trial judge did not apply it properly. He stated that there were numerous problems with the fourth element in her Honour’s direction, submitting that the term “substantially motivated” was “vague, imprecise and insufficient to demonstrate the mens rea that is required for proof” and that par 4(b) was similarly imprecise. He submitted that there was no suggestion in the written directions that “the jury needed to consider that the appellant intended a particular outcome”. He said that the Crown needed to prove that Mr Macdonald was “working deliberately towards the improper granting of the benefit”.

41. In those circumstances senior counsel for Mr Macdonald submitted that it had to be proved that the improper motive was either “the sole operative motive or was the real reason or sine qua non of the decision”.

42. Senior counsel for Mr Macdonald submitted that in those circumstances the proper test was that the improper purpose had to be “dominant in the sense that the impermissible purpose was causative” in that “but for its presence, the power would not have been exercised”. In that context senior counsel for the appellant relied on what was said by the majority of the High Court in Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285; [1987] HCA 11 at 294 to what was there described as “the preponderant view” of what was required to invalidate an allotment of shares made for an impermissible purpose (T 8).

43. Senior counsel for Mr Macdonald also criticised [74]-[76] of the summing-up to which we have referred at [18]. He submitted in relation to [74], that a mere granting of a benefit itself did not demonstrate improper motivation, but rather, it was “the intention to provide it partially, and therefore improperly that is the mental element”. He submitted that [76] of the summing-up did not take into account that the trial was a criminal trial where the onus and standard of proof required “the elimination of [a] hypothesis consistent with innocence”. He submitted that by asking the open-ended question, “Why did he do it?” the jury was misled on an important issue concerning the outcome of the trial. Although he accepted that her Honour corrected this later on, he submitted that her concluding directions (see [25] above) fell into the same error.

44. He also submitted that “there was no impression given to the jury that they needed to be satisfied that the decision was made by the driving force of the improper motive or motivation or intention”.

45. Mr Maitland made broadly similar complaints about the written directions and the summing-up as were made by Mr Macdonald. In relation to the written direction he contended that the jury ought to have been instructed that to find that Mr Macdonald committed the principal offences, the Crown needed to prove that he was motivated solely by a desire to benefit Mr Maitland and DCM and not motivated by the object of furthering the interests of the State of New South Wales. His written submissions set out a number of contentions in support of that proposed but ultimately at the hearing senior counsel for Mr Maitland adopted the formulation of the appropriate direction by senior counsel for Mr Macdonald, see [24] above (T 69).

46. Mr Maitland also submitted that the trial judge was in error in posing the question (at [76] of her summing-up (see [18] above)) “Why did he [Mr Macdonald] do it? Did he do it to benefit the public or did he do it to benefit Mr Maitland”. He submitted that “the binary nature of the inquiry required the jury to answer a question different to that which they ought as a matter of law have been called upon to answer, namely, whether or not the Crown had proved to the criminal standard both the improper motivation on the part of Mr Macdonald for which it contended and the absence of a proper motivation on his part”. He submitted that “it distorted the role of the jury by inviting it to engage in a free-ranging inquiry as to Mr Macdonald’s motivation”. He submitted that the redirection subsequently given by her Honour (at [95] of the summing-up (see [21] above)) was inadequate to overcome the problems associated with the earlier direction. He submitted that it did “not expressly correct the error made the day before and it did not include a reiteration of the jury’s proper role in evaluating the Crown’s allegations”.

47. Senior counsel for Mr Maitland submitted that “the principal difficulty” in her Honour’s formulation of element 4 in the directions was that “the words ‘substantial’ and ‘significant’ carry with them a great degree of uncertainty in the sense of what is substantial and what is significant for the purposes of determining whether or not there has been a wrongdoing of the type which would engage element 4”. He submitted that the difficulty was even greater when one comes to accessorial liability as it was necessary to assess whether the person who was making the decision has formed the particular view about what is substantial and significant, particularly in a case which may involve mixed motives. He submitted that it was not enough to say as in Speechley that it could properly be left to the good sense of the jury and that concepts of significant and substantial in “these sorts of areas is a foreign concept in criminal law”.

48. Senior counsel for Mr Maitland submitted that element 4(b) created even more uncertainty around the central element of the offence because of the difficulty of assessing the requisite balance of what “crosses the line” and what does not.

49. Ultimately, senior counsel for Mr Maitland adopted what was said by senior counsel for Mr Macdonald to be the appropriate direction, submitting that it was “fundamentally different” to what the trial judge adopted.

b   The Crown

56. In its submissions the Crown accepted that, as the charges involved an exercise of a discretion that was within power, “it was necessary to prove that Macdonald acted with a corrupt or improper motive”. The Crown submitted that it was not argued below that element 4 should have involved a dominant purpose test and that, in any event, “a person’s dominant purpose or significant motivation can be seen as alternative expressions of the same state of mind”.

57. The Crown submitted that the inclusion of the words “to a significant degree” in element 4(b) posed “no more than a classic jury question”. It was described as a question “the answer to which requires a normative assessment undertaken by reference to community standards”. In that context the Crown relied on R v Speechley at [45].

58. In its written submission the Crown submitted that any “oral inarticulation” of the element test at [619] of the summing-up was immediately clarified by what was said in [622].

59. The balance of the Crown’s written submissions were directed to what was contended by Mr Macdonald and Mr Maitland at the trial, namely, that for the offence to be established it had to be shown the improper purpose was the sole purpose of the transaction in question.

60. At the hearing the Crown referred to the description in Whitehouse v Carlton Hotel Pty Ltd at 294, of the invalidating impermissible purpose needing to be the “substantial object” of the transaction. He submitted that her Honour used the word substantial which had a correlation with dominant. Having made that point the Crown submissions continued as follows:

“If we come down about a dozen lines there’s a reference to causative, that is we come down a few lines there’s a sentence beginning ‘As a matter of logic and principle’ do your Honours have that? ‘The preferable view … have been exercised’. Then we come to questions about the but for test and whether that’s an appropriate test to use in this area or not? The bench of five, your Honours will come to your own views about that, but if I could seek to assist on the circumstances of this case we say there was a causative test in any event.”

61. It is unclear from that submission whether or not the Crown was accepting that the approach in Whitehouse v Carlton Hotel Pty Ltd was the correct approach.

62. The Crown then submitted that pars 4(a) and 4(b) dealt with what was described as the “positive and negative” in a “mixed motive case”. He submitted that “whatever the jury thought substantially motivated meant, they knew that was the improper way”. He submitted that there was only one motive or purpose which could be “the driving force or could be the dominant purpose or could be causative or but for”. The Crown submitted that however mens rea is looked at, the jury was given a “proper direction in the circumstances of the case”. However, the trial judge expressly excluded the expression “driving force” from her summing-up, relying on R v Speechley.

63. In relation to the complaint concerning [76] of the summing-up, the Crown submitted that was immediately corrected by what was said in [77] which he submitted set out properly what must be proved beyond reasonable doubt in element 4. He also referred in that context to what was said in [94] of the summing-up.

64. In relation to her Honour’s remarks at [618]-[622] of the summing-up, it submitted they provided no great difficulty when considering the summing-up as a whole and the fact that the jury had the written direction of the elements of the offence.

Consideration

65. It must be said at the outset that the position adopted by the appellants in relation to a sole purpose test was significantly different to their approach at the trial. Further, although objection was taken to some elements of the summing-up, no real criticism was directed to the use by her Honour of the words motives and motivation, to which exception has been taken during the course of argument in the present case.

66. Further, at the hearing of the appeal there ultimately appeared to be little disagreement as to the appropriate test for the mental element of the offence. Senior counsel for each appellant adopted a causation test (see [48]-[55] above), an approach with which the Crown did not seem to take issue.

67. Whether or not that is the correct approach falls to be considered by reference to the purpose of the common law offence. In Obeid v R (2015) 91 NSWLR 226; [2015] NSWCCA 309 at [133] this Court accepted as correct the formulation of the elements of the offence set out by the Victorian Court of Appeal in R v Quach (2010) 27 VR 310; [2010] VSCA 106 at [46]. This formulation was based on the formulation of the elements by Sir Anthony Mason NPJ in Shum Kwok Sher v Hong Kong Special Administrative Region (2002) 5 HKCFAR 381 at [84] as modified by him in Sin Kam Wah v Hong Kong Special Administrative Region (2005) 8 HKCFAR 192 at [45]-[46]. The circumstances of the reformulation were set out in Obeid v R (2017) 96 NSWLR 155; [2017] NSWCCA 221 at [164] and it is not necessary to repeat it.

68. The object of the offence is to prevent public officers (in the case of misfeasance) from exercising their power in a corrupt and partial manner. Thus, in R v Bembridge (1785) 22 State Trials 1, Lord Mansfield at 155 formulated the liability of officers in the following terms:

“[I]f a man accepts an office of trust and confidence, concerning the public, … he is answerable to the king for his execution of that office; and he can only answer to the king in a criminal prosecution… [Secondly] where there is a breach of trust, a fraud, or an imposition in a subject concerning the public, which, as between subject and subject, would only be actionable by a civil action, yet as that concerns the king and the public (I use them as synonymous terms), it is indictable.”

69. In R v Borron, a case involving criminal information against a magistrate, Abbott CJ made the following comments at 434:

“They [the magistrates] are, indeed like every other subject of this kingdom, answerable to the law for the faithful and upright discharge of their trust and duties. But, whenever they have been challenged upon this head, either by way of indictment, or application to this Court for a criminal information, the question has always been, not whether the act done might, upon full and mature investigation, be found strictly right, but from what motive it had proceeded; whether from a dishonest, oppressive, or corrupt motive, under which description, fear and favour may generally be included, or from mistake or error. In the former case, alone, they have become the objects of punishment.”

The same point was made in Boulanger v The Queen [2006] 2 SCR 49 at 73 where the Supreme Court of Court made the following remarks referring to the ruling of Widgery J to which we have referred at [35];

“As with any offence, the mens rea is inferred from the circumstances. An attempt by the accused to conceal his or her actions may often provide evidence of an improper intent: Arnoldi. Similarly, the receipt of a significant personal benefit may provide evidence that the accused acted in his or her own interest rather than that of the public. However, the fact that a public officer obtains a benefit is not conclusive of a culpable mens rea. Many legitimate exercises of public authority or power by a public servant confer incidental advantages on the actor.”

See also Horne v Barber (1920) 27 CLR 494; [1920] HCA 33 at 500; R v Boston (1923) 33 CLR 386; [1923] HCA 59 at 403.

70. More recently Lord Millett NPJ in Hong Kong Special Administrative Region v Wong Lin Kay [2012] 2 HKLRD 898 summarised the rationale for the offence in the following terms:

“[45]   Every such power, duty, discretion or responsibility is granted for the benefit of the public and for a public purpose. For the person having such a power, duty or responsibility to exercise it or refrain from exercising it for his or her own private purposes, whether out of malice, revenge, friendship or hostility, or for pecuniary advantage is an abuse of power and amounts to the offence of misconduct in public office.”

71. In Obeid v R (2017) 96 NSWLR 155; Bathurst CJ at [96] expressly left open the question of whether it was a necessary ingredient of the offence when based on an improper misuse of power, that the improper purpose was the sole purpose. Leeming JA, without determining the question, stated at [335] that it was “easy to contemplate cases where the improper purpose falls short of being the sole purpose”.

72. Having regard to the rationale for the offence, it would be surprising if it was necessary for the improper purpose to be the sole purpose. If, for example, a Minister of the Crown embarked upon a transaction for the purpose of conferring a benefit on himself or his friends, it would not seem to matter that he also has a belief that the transaction would or might benefit some members of the public. In these circumstances, if the transaction in question would not have been undertaken but for the improper purpose, then subject to the other elements being made out, the offence, in our opinion, would have been committed.

73. Although the authority on the question is relatively limited it is not inconsistent with what we believe to be the correct approach. In R v Llewellyn-Jones in which the Registrar of a County Court was charged with a count which alleged he had made an order in respect of funds under his control in the expectation he would gain a personal advantage from doing so, Widgery J made the ruling to which we have referred at [34] above.

74. That ruling which was not criticised on appeal, R v Llewellyn-Jones [1968] 1 QB 429, was subsequently approved by the Court of Appeal in R v Dytham [1979] QB 722 at 726. In approving it, it was described by the Court of Appeal as a “but for” test.

75. As their Honours pointed out in R v Speechley, the Court said it was sufficient that the accused be influenced to a significant degree by the improper purpose. Although, as will be seen in our opinion, that does not adequately explain the test to the jury, it provides further support for the proposition that the improper purpose need not be the sole purpose.

76. In Boulanger v The Queen the Supreme Court of Canada considered the elements of an offence under s 122 of the Canadian Criminal Code RSC 1985, c. C-46. The section was in the following terms:

“122   Every official who, in connection with the duties of his office, commits fraud or a breach of trust is guilty of an indictable offence and liable to imprisonment for a term not exceeding five years, whether or not the fraud or breach of trust would be an offence if it were committed in relation to a private person.”

77. The Court determined (at [48]) that the mens rea and actus reus of the offence must be determined by reference to the common law authorities which considered the offence of misfeasance in public offence. In dealing with the mens rea, the Court made the following remarks:

“[55]   In the early common law cases, the mental element of misfeasance in public office was imprecise and varied from case to case. However, common law judges consistently insisted on the presence of some variant of nefarious or dishonest intent. This was described using different terms: dishonesty, corruption, partiality and oppression. All reflected a central concern: that public officials, entrusted with duties for the benefit of the public, carry out those duties honestly and for the benefit of the public, and that they not abuse their offices for corrupt or improper purposes.

[56] … In principle, the mens rea of the offence lies in the intention to use one’s public office for purposes other than the benefit of the public. In practice, this has been associated historically with using one’s public office for a dishonest, partial, corrupt or oppressive purpose, each of which embodies the non-public purpose with which the offence is concerned.”

78. It should be noted that immediately following the passage cited, the Court cited the ruling of Widgery J in R v Llewellyn-Jones with approval.

79. It should also be noted that Widgery J’s formulation of the duty in R v Llewellyn-Jones was referred to in the Court of Appeal in Attorney General’s Reference (No 3 of 2003) [2005] QB 73 without disapproval at [39]-[40].

80. Professor Finn (as his Honour then was) in his article, “Public Officers: Some Personal Liabilities” (1977) 51 ALJ 313, pointed to the fact that although “the language of ‘trust and confidence’ seems at first a little incongruous in public law it has not deterred the courts from equating the public officer with the private law trustee and fiduciary”: (1977) 51 ALJ 313 at 315. Although the analogy cannot be taken too far in formulating the elements of the offence, assistance on the mental element can be gained from cases involving breaches of fiduciary duties.

81. In the oft-cited passage in Mills v Mills (1938) 60 CLR 150, Dixon J as his Honour then was made the following remarks (at 185-186):

“Directors of a company are fiduciary agents, and a power conferred upon them cannot be exercised in order to obtain some private advantage or for any purpose foreign to the power. It is only one application of the general doctrine expressed by Lord Northington in Aleyn v Belchier: ‘No point is better established than that, a person having a power, must execute it bona fide for the end designed, otherwise it is corrupt and void’.

Upon the facts of the present case, or at all events upon the expressions used by Lowe J in stating his findings, it may be thought that a question arises whether there must be an entire exclusion of all reasons, motives or aims on the part of the directors, and all of them, which are not relevant to the purpose of a particular power. When the law makes the object, view or purpose of a man, or of a body of men, the test of the validity of their acts, it necessarily opens up the possibility of an almost infinite analysis of the fears and desires, proximate and remote, which, in truth, form the compound motives usually animating human conduct. But logically possible as such an analysis may seem, it would be impracticable to adopt it as a means of determining the validity of the resolutions arrived at by a body of directors, resolutions which otherwise are ostensibly within their powers. The application of the general equitable principle to the acts of directors managing the affairs of a company cannot be as nice as it is in the case of a trustee exercising a special power of appointment. It must, as it seems to me, take the substantial object the accomplishment of which formed the real ground of the board’s action. If this is within the scope of the power, then the power has been validly exercised. But if, except for some ulterior and illegitimate object, the power would not have been exercised, that which has been attempted as an ostensible exercise of the power will be void, notwithstanding that the directors may incidentally bring about a result which is within the purpose of the power and which they consider desirable.”

82. Whitehouse v Carlton Hotel Pty Ltd, a case principally relied upon by the appellants, concerned a breach of fiduciary duty. The majority made the following remarks (at 293-294); (reference to citations omitted):

“It should be mentioned that one finds in some statements of the vitiating effect of a purpose of diluting the voting power of one or more existing shareholders a qualification to the effect that the allotment will be invalid if it is ‘merely’ or ‘purely’ or ‘solely’ for that purpose: see, e.g., Piercy v. S. M. Mills and Co.; Grant v. John Grant & Sons Pty. Ltd.; Howard Smith v. Ampol. The introduction of such a qualification is intended to put to one side cases in which there are present both permissible and impermissible purposes. In such cases of competing purposes, practical considerations have prevented the law from treating the mere existence of the impermissible purpose as sufficient to render voidable the exercise of the fiduciary power to allot shares: see Mills v. Mills and note, as to Dixon J.’s apparently inadvertent use of the word ‘void’, Richard Brady Franks Ltd. v. Price. In this Court, the preponderant view has tended to be that the allotment will be invalidated only if the impermissible purpose or a combination of impermissible purposes can be seen to have been dominant — ‘the substantial object’ (per Williams A.C.J., Fullagar and Kitto JJ., Ngurli Ltd. v. McCann quoting Dixon J. in Mills v. Mills and see Harlowe’s Nominees); ‘the moving cause’: per Latham C.J., Mills v. Mills. The cases in which that view has been indicated have not, however, required a determination of the question whether the impermissible purpose must be ‘the’ substantial object or moving cause or whether it may suffice to invalidate the allotment that it be one of a number of such objects or causes. As a matter of logic and principle, the preferable view would seem to be that, regardless of whether the impermissible purpose was the dominant one or but one of a number of significantly contributing causes, the allotment will be invalidated if the impermissible purpose was causative in the sense that, but for its presence, ‘the power would not have been exercised’: per Dixon J., Mills v. Mills. It is, however, unnecessary to express a concluded view on the question of precise formulation of the relevant test in such cases since the present case does not raise any problem of competing permissible and impermissible purposes.”

83. That approach is also consistent with the approach commonly adopted in determining whether an exercise of power by administrative officers was for a purpose foreign to the purpose for which the power was conferred: Thompson v Council and Municipality of Randwick (1950) 81 CLR 87; [1950] HCA 33 at 106; cf Fazzolari v Parramatta City Council (2009) 237 CLR 603; [2009] HCA 12 at [55], [94].

84. Having regard to these authorities, it seems to us that the direction as to the mental element of the offence should have been that Mr Macdonald could only be found to have committed the crime (subject to the other elements being made out) if the power would not have been exercised, except for the illegitimate purpose of conferring a benefit on Mr Maitland and DCM.

85. Each of the appellants criticised the use of the word motivation in the written direction. As we have pointed out the expression “improper purpose” is commonly used in cases of abuse of fiduciary powers, see Mills v Mills; Whitehouse v Carlton Hotel Pty Ltd, as well as in cases involving criminal offences of improper use of position by an officer of a corporation, see, for example, Chew v R (1992) 173 CLR 626; [1992] HCA 18 at 630, 633 and 635, where the direction was criticised for failing to isolate the element of purpose before the jury could bring in a verdict of guilty. Further, the difficulty with the expression “improper purpose” identified by the trial judge is in our opinion answered by the formulation of the direction which we have set at [84] above.

86. Notwithstanding, we do not think that the use of the word motivation had the potential to divert the jury. Motivation has the same meaning as purpose when used in this particular context. However, there is more difficulty in the use by the trial judge of the expressions “substantially motivated” in par 4(a) and “not motivated to any significant degree” in 4(b) of her written directions.

87. The difficulty with the direction is that it had the potential to cause the jury to reach a verdict by weighing up the significance of any proper purpose they considered Mr Macdonald had and the improper purpose in the decision-making, rather than focusing on the proper question, namely, whether but for the improper purpose the consent and licence would not have been granted.

88. It is apparent from the elements judgment that in formulating the direction her Honour placed reliance on what was said by the Court of Appeal in R v Speechley (see [44]-[45] above), that the question of what amounts to a significant degree could be left to the jury. With respect to the Court of Appeal, in our opinion, in dealing with a charge of this nature it is incumbent to set out precisely what needs to be proved, rather than relying on the good sense of the jury to apply the appropriate test. In Boulanger v The Queen, the Court stated at 68-69 that “[p]ublic officers, like other members of the public, are entitled to know where the line lies that distinguishes administrative fault from criminal culpability”. Equally, it is important that it be made clear to juries where the line is to be drawn.

89. The difficulty, in our opinion, was compounded by the oral direction complained of. We agree with the Crown that the problem with the direction contained in [76] of the summing-up may have been overcome by what was said in [95] of the summing-up, although that direction again referred the jury back to the elements document containing the concepts of substantial motivation and not motivated to a significant degree. However, in answer to the jury question asked after they had retired, the trial judge again on two occasions ([619], [622] of the summing-up) asked the question “Why did he do it?”, adding “did he grant consent because he was substantially motivated by furthering the interest of the State…or did he grant consent to benefit Mr Maitland or DCM” (almost identical to the misdirection at [76]), inviting the jury to speculate as to the significance of the competing motives.

90. It follows, in our opinion, with the greatest respect to the trial judge, that the jury was not properly directed on the mental element of the offence.

91. No reliance was placed on the proviso to s 6 of the Criminal Appeal Act 1912 (NSW) by the Crown in its written submissions. However, at the hearing the Crown in answer to a question from Adams J submitted that the proviso would apply if the direction was wrong but effectively directed a dominant purpose test even if not in those words. However, although it may have been possible for the jurors to reason from the direction in that fashion, it does not seem to us inevitable that they would do so. It follows that the Court cannot be satisfied that there was not a substantial miscarriage of justice and in these circumstances, it would not be appropriate to apply the proviso: Lane v The Queen (2018) 92 ALJR 689 at [38].

92. It follows this ground of appeal has been made out.

Paragraphs [93]-[635] redacted.

Conclusion

635   [Redacted] We make the following orders in respect of each appellant:

1. Appeal against conviction allowed.

2. Conviction quashed.

3. A new trial is ordered.

4. The matter is listed for mention in the Supreme Court Arraignments List on 1 March 2019 or such other date as directed by the Criminal List Judge.

5. Pursuant to s 7 of the Court Suppression and Non-publication Orders Act 2010 (NSW), on the ground set out in s 8(1)(e) of that Act, order that disclosure of [93]-[635] of these reasons (other than the orders themselves) be prohibited pending further order of the Court. This order does not apply to the disclosure of those paragraphs to the parties to these proceedings, their legal representatives or the Court.

636   Reasons redacted as provided above will be published on Caselaw pending re-trial.

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Amendments

25 February 2019 - Cover sheet and [635] Change "Non-Publication" to "Non-publication"

[81] change "(185)" to "(185-186)"

[81] change" acts or directors" to "acts of directors"

Decision last updated: 25 February 2019