R v Macdonald; R v Maitland

[2017] NSWSC 638

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

R v Macdonald; R v Maitland [2017] NSWSC 638

Hearing dates:

26 May 2017

Date of orders:

02 June 2017

Decision date:

02 June 2017

Jurisdiction:

Common Law - Criminal

Before:

Adamson J

Decision:

Ian Macdonald

 

(1) Convicted of counts 1 and 3 on the indictment.

 

(2) Impose 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 commencing on 26 May 2017 and expiring on 25 May 2024.

 

(3) The offender will become eligible to be released on parole on 25 May 2024.

 

(4) The sentences that would have been imposed for each offence if separate sentences had been imposed instead of an aggregate sentence are:

 

(a) For the offence of Count 1, a sentence of 8 years.

(b) For the offence of Count 3, a sentence of 7 years.

 

John Maitland

 

(5) Convicted of counts 2 and 4 on the indictment.

 

(6) Impose 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 commencing on 26 May 2017 and expiring on 25 May 2021.

 

(7) The offender will become eligible to be released on parole on 25 May 2021.

 

(8) The sentences that would have been imposed for each offence if separate sentences had been imposed instead of an aggregate sentence are:

 

(a) For the offence of Count 2, a sentence of 5 years.

 (b) For the offence of Count 4, a sentence of 4 years.

Catchwords:

CRIMINAL LAW – sentence – principal offender – 2 counts of wilful misconduct in public office – Minister of Mineral Resources – use of power conferred on him by the Mining Act to grant exploration licence to confer benefit on third party – damage to public institutions – importance of general deterrence and denunciation – motive not established

 

CRIMINAL LAW – sentence – wilful misconduct in public office – common law offence – no maximum penalty – consideration of statutory analogies

 CRIMINAL LAW – sentence – accessory – 2 counts accessory before the fact to wilful misconduct in public office – accessory causative of principal offence – motivated by financial gain

Legislation Cited:

Confiscation of Proceeds of Crime Act 1989 (NSW)
Constitution Act 1902 (NSW), s 13A
Corporations Act 2001 (Cth), s 184
Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 4, 5, 6, 7, 9, 21A, 24B, s 24C
Crimes Act 1900 (NSW), ss 3, 249B, 249E, 319, 346, Sch 2
Crimes Act 1958 (Vic), s 320
Criminal Code (Cth), s 142.2
Criminal Code 1899 (Qld), s 92A
Independent Commission Against Corruption Act 1988 (NSW), s 87
Mining Act 1992 (NSW), ss 3, 13(4), 22, 51
Parliamentary Contributory Superannuation Amendment (Criminal Charges and Convictions) Act 2017 (NSW)

Cases Cited:

Blackstock v R [2013] NSWCCA 172
Dipangkear v R [2010] NSWCCA 156
GAS v The Queen; SJK v The Queen (2004) 217 CLR 198; [2004] HCA 22
Hili v The Queen; Jones v The Queen (2010) 242 CLR 520; [2010] HCA 45
Hot Holdings Pty Ltd v Creasy (2002) 210 CLR 438; [2002] HCA 51
IW v City of Perth (1997) 191 CLR 1
Jackson v R; Hakim v R (1988) 33 A Crim R 413
Jaturawong v R [2011] NSWCCA 168
Markarian v The Queen (2005) 228 CLR 357; [2008] HCA 25
O’Sullivan v Farrer (1989) 168 CLR 210
Obeid v R (2015) 91 NSWLR 226; [2015] NSWCCA 309
Palmer v The Queen (1998) 193 CLR 1; [1998] HCA 2
R v Donald [2013] NSWCCA 238
R v Edwards (1996) 90 A Crim R 510
R v El Rashid (Court of Criminal Appeal (NSW), Gleeson CJ, 7 April 1995, unrep)
R v Girard [2004] NSWCCA 170
R v Macdonald; R v Maitland [2017] NSWSC 337
R v Nuttall; ex parte Attorney-General [2011] 2 Qd R 328; [2011] QCA 120
R v Obeid (No. 12) [2016] NSWSC 1815
R v Obeid (No. 2) [2015] NSWSC 1380
R v Rivkin (2004) 59 NSWLR 284; [2004] NSWCCA 7
R v Tuhakaraina [2016] NSWCCA 81
R v Qutami (2001) 127 A Crim R 369; [2001] NSWCCA 353
R v Hokin, Burton and Peisley (1922) 22 SR (NSW) 280
Ryan v The Queen (2001) 206 CLR 267; [2001] HCA 21
The Queen v Olbrich (1999) 199 CLR 270; [1999] HCA 54
Weininger v The Queen (2003) 212 CLR 629; [2003] HCA 14

Texts Cited:

PD Finn, “Public Officers: Some Personal Liabilities” (1977) 51 ALJ 313

Category:

Sentence

Parties:

Regina
Ian Macdonald (Offender)
John Maitland (Offender)

Representation:

Counsel:
M McHugh SC/ P English (Crown)
M Johnston SC (Offender Macdonald)
D Jordan SC/ES Kerkyasharian (Offender Maitland)

  Solicitors:
Director of Public Prosecutions (Crown)
Horton Rhodes Lawyers (Offender Macdonald)
Bob Whyman Solicitor (Offender Maitland)

File Number(s):

2015/59940; 2015/59990

Publication restriction:

Nil

Judgment

Introduction

1. On 30 March 2017, following a trial by jury, Ian Macdonald was convicted of two counts of wilful misconduct in public office and John Maitland was convicted of two counts of being an accessory before the fact to those offences. The offence of wilful misconduct in public office is a common law offence as the Parliament of NSW has not, to date, chosen to include it in the Crimes Act 1900 (NSW) or any other statute. One consequence of its being a common law offence is that there is no maximum penalty, either for the principal offence or the offence of accessory before the fact.

The facts

2. As sentencing judge, I may not take facts into account in a way that is adverse to the interests of each offender unless the facts have been established beyond reasonable doubt. However, if there are circumstances which I propose to take into account in favour of each offender, it is sufficient that they be proved on the balance of probabilities: The Queen v Olbrich (1999) 199 CLR 270; [1999] HCA 54 at [27], per Gleeson CJ, Gaudron, Hayne and Callinan JJ. There are other matters which can be taken into account in sentencing, or which form part of the narrative, which do not fall into either category: Weininger v The Queen (2003) 212 CLR 629; [2003] HCA 14 at [19]-[24]. I have satisfied myself beyond reasonable doubt of any matter which I have taken into account which is adverse to either offender that is not compelled by the jury’s verdict. Matters taken into account in favour of either offender have been established to the balance of probabilities, or conceded by the Crown.

3. I have addressed the elements of the offences of which the offenders were convicted in a separate judgment: R v Macdonald; R v Maitland [2017] NSWSC 337. The verdicts indicate that the jury was satisfied beyond reasonable doubt of the following matters. Mr Macdonald was a public official who acted in the course of or in connection with his public office as Minister of Mineral Resources when he granted consent to Doyles Creek Mining Pty Ltd (Doyles Creek Mining) on 21 August 2008 to apply for an exploration licence and when he granted the Exploration Licence No. 7270 (the Licence) on 15 December 2008. When he granted the consent and the Licence, Mr Macdonald was substantially motivated by the desire to confer a benefit on Mr Maitland and Doyles Creek Mining and was not motivated to any significant degree by the object of furthering the public interest. He knew either that he was obliged not to use his position in that way or that it was possible that he was not to use his position in that way but chose to do so anyway. He granted consent and the Licence without reasonable cause or justification. His conduct in granting consent and granting the Licence to Doyles Creek Mining was serious and merits criminal publishment having regard to his responsibilities as a Minister and the nature and extent of his departure from the public objects which those responsibilities serve.

4. The verdicts indicate that the jury was satisfied beyond reasonable doubt that Mr Maitland intentionally encouraged and assisted Mr Macdonald to commit the two principal offences, knowing that Mr Macdonald was wilfully misconducting himself in public office and intending that Mr Macdonald do so. The verdicts also indicate that the jury was satisfied that, on the basis of what Mr Maitland knew at the time of Mr Macdonald’s wrongdoing, Mr Macdonald’s conduct merits criminal punishment.

5. The evidence at the trial included evidence which was admissible against both Mr Macdonald and Mr Maitland as well as evidence which was only admissible against one of them. For the purposes of this sentencing judgment, I do not propose to identify into which category the evidence of each finding of fact fell. It is sufficient for the purposes of these reasons to note that, by and large, the evidence of matters that concerned the Department and the Minister’s Officer were admissible only against Mr Macdonald (except where Mr Maitland was shown to be aware of them); and the evidence of matters that concerned the internal operations and meetings of Doyles Creek Mining were admissible only against Mr Maitland. Evidence of admissions made by Mr Macdonald at the Noble House lunch (referred to below), which he disputed, were admissible only against him and not against Mr Maitland.

6. The documentary evidence in the trial comprised over a thousand pages. Thirty witnesses, including Mr Macdonald, gave evidence. The criminality of the offenders’ conduct can only be appreciated by contrast with the proper processes of Government and public service administration. Accordingly, findings will not only be made about the offending conduct, but also about the orthodox method of allocating coal resources at the time.

7. Mr Macdonald was elected to Parliament as a Member of the Legislative Council on 19 March 1988. When visiting the Upper Hunter, as the Member of the Legislative Council assigned to that region, he met Mr Maitland who was then an official of a union in that area which later merged into what became the Mining and Energy Division of the Construction, Forestry, Mining and Energy Union (CFMEU). By 1998 Mr Maitland was the National Secretary of the CFMEU, a position which he held until his retirement in 2006.

8. The CFMEU and its predecessor mining unions were generally supportive of the left faction of the Labor Party, to which Mr Macdonald belonged. The offenders encountered each other at party political, union and mining functions. They appeared to have an amicable professional relationship, but were not close personal friends. Tony Maher, who had been the General President of the Mining and Energy Division of the CFMEU since 1998, observed the two offenders together at a number of functions and said:

“[their] [l]unches and dinners were long and that's why I think that they enjoyed each other's company.”

9. Alan Coutts, the Deputy Director-General of the Department of Primary Industries, described Mr Maitland as having unfettered access to Mr Macdonald and immediate access to the Minister’s office. His recollection was:

“They had what I would describe as a close professional relationship, often Mr Macdonald would take Mr Maitland aside and have private conversations with him at functions and forums at which Mr Maitland was in attendance. He would seek Mr Maitland's advice on matters relating to the mining industry.”

10. In my view, the relationship between the offenders from 2007 onwards was a friendly, but strategic, alliance based on mutual regard and interest.

11. Mr Macdonald became a Minister, and therefore a member of Cabinet, on 2 April 2003. He first became Minister for Mineral Resources on 3 August 2005. Apart from a hiatus on 6 and 7 September 2008 when Nathan Rees replaced Morris Iemma as Premier, Mr Macdonald held that portfolio until 5 June 2010. He took an affirmation of office on several occasions, including on 2 April 2007 following the State election on 24 March 2007. Although the name of the Department responsible for mineral resources changed from time to time, I shall refer to it as the Department.

12. Throughout the period Mr Macdonald was a Minister he received multiple versions of the Ministerial Code of Conduct, each of which provided that Ministers must perform their duties honestly and in the best interests of the people of NSW. The Code not only prohibited Ministers from using their position for private gain or for the improper gain of any other person but it also advised Ministers to avoid situations in which it might reasonably be thought that his or her Ministerial position was being used for such improper gain. Mr Iemma explained in his evidence that Ministers were encouraged, particularly when they travelled overseas on trade missions, to make a point of emphasising to potential investors that one of the attractions of investing in NSW was its “robust framework” based on three principles: first, that business transactions with Government would not be subject to political influence; secondly, that there would be oversight by probity bodies; and thirdly, that there would be market-testing through competitive processes.

13. As the Minister for Mineral Resources, Mr Macdonald had significant powers under the Mining Act 1992 (NSW). These powers were subject to the obligation implied by law that they must be exercised for public purposes. He was responsible for granting exploration licences under s 22. Where consent to apply for an exploration licence was required under s 13(4) because the mineral was within a mineral allocation area, he was the person who had the power to grant such consent. In December 2007, the whole of NSW was declared a mineral allocation area for coal. This meant that no one could apply for an exploration licence for coal without the consent of the Minister. As the Mining Act bound the Crown (s 3), the Department, too, was obliged to seek the Minister’s consent to conduct borehole drilling of any area in NSW it wished to explore to ascertain the type and quantity of coal there.

14. An exploration licence for coal, and the anterior consent, had commercial value. In 2007 and 2008, the value of such statutory permissions increased with the coal price during the boom. The value of coal is determined by its quality, its depth and the availability of infrastructure, and, if it is to be exported, the proximity of a port. Coking coal is more valuable because it is used in steel manufacturing; thermal coal is used in power stations. Thermal coal was classified as being either domestic or export quality, export being of a higher quality. Open cut mining is cheaper than underground mining but it creates greater environmental disturbance and therefore cannot usually be conducted near towns. Hunter Valley coal is generally more sought after than coal mined in the Gunnedah Basin because of the infrastructure available in the region, including rail lines and the proximity to the port of Newcastle.

Departmental procedures and the Coal Allocation Guidelines

15. The evidence of some of the witnesses at trial who had been employed as public servants in the Mineral Resources area of the Department properly indicated that they tended to regard themselves as the stewards of the State’s resources. Their focus was the sustainable development of mineral resources across NSW to get the maximum value for the community.

16. In about 2000 the Department developed Coal Allocation Guidelines, which were updated from time to time. The guidelines had no regulatory force as they were not specifically provided for by the Mining Act or regulations. The guidelines documented the policy for the allocation of coal resources, both to inform industry how allocations would generally be made; and to provide a framework for the Minister’s discretion to promote consistent decision-making. The default position under the guidelines was that coal would be allocated (first, by the giving of consent and then the grant of an exploration licence) on a competitive basis. Direct allocations could, however, be made when a competitive process was unsuitable.

17. There were several steps between an initial expression of interest in a mining area and the grant of a mining lease. Commonly, the first step was that an applicant would seek consent to apply for an exploration licence. The Coal Allocation Committee, an internal Departmental committee, would assess the application and decide whether to simply record the interest on the Coal Register or to recommend to the Minister that the coal resource be allocated, either by competitive process or direct allocation. The Committee would seek advice from the Coal Geology Group as to the nature and quantity of the resource. The Committee would also check the Coal Register, the Department’s record of all past expressions of interest, to see whether other companies had expressed interest in the same area or an overlapping area. After having considered these matters the Committee would then make a recommendation to the Minister as to whether merely to register the interest or to allocate the resource.

18. For example, on 5 September 2007 Atlas Coal wrote to the Department to express interest in the Jerrys Plains area. On 18 September 2007 Julie Moloney, who kept the Coal Register, informed Atlas Coal that its interest had been registered and that the Department:

“. . . intends to undertake a review of the geology and coal resource potential of the area before proceeding with any recommendation for an exploration licence allocation in the area.”

19. When the Coal Allocation Committee was considering an allocation, it would apply the criteria in the Coal Allocation Guidelines to determine whether to recommend a competitive process or direct allocation to the Minister. If the Minister gave consent to apply, the applicant would apply for an exploration licence which would be assessed by the Department. This assessment was largely administrative. The applicant would lodge financial security and furnish information and, provided it was all in order, the applicant would be granted an exploration licence, which would usually be signed under delegation by the Manager of Coal Titles Administration. Of the exploration licences granted between 1 January 1998 and 17 September 2009 most were signed under delegation. Once the exploration licence had been granted, the holder would need to apply to the Minister for Planning for development consent. If development consent was given, the Minister for Mineral Resources would grant a mining lease.

20. The Committee would not advise the Minister to give consent to an applicant to apply for an exploration licence unless it was reasonably confident that the proposal would be approved through all the processes of Government, including the Department of Planning. Thus, there was an emphasis on environmental and community concerns from the early stage of an application for consent to apply for an exploration licence, since such concerns could lead to refusal of development consent, which would prevent the grant of a mining lease.

Evidence of direct allocations

21. Apart from the allocation to Doyles Creek Mining, the evidence established that, since the 2004 Coal Allocation Guidelines, no direct allocations had been made by a Minister other than on the recommendation of the Department. There were some direct allocations of major resources, including major stand-alone mines. Such allocations were recommended by the Department and were within the Guidelines because of their particular circumstances. For example, direct allocations were made at Cobbora to a State-owned power generator to ensure coal supply; at Mt Pleasant, where a new industry was to be built around the allocation; and to Peabody Pacific, formerly Excel, for an extension to an existing mine.

The Caroona allocation

22. The allocation of an exploration licence for a new coal mining area in the Gunnedah Basin in north western NSW, known as Caroona, is of particular significance, both as an illustration of the usual processes adopted by the Department as compared with the grant of the exploration licence for Doyles Creek, and also for what it shows about the prices applicants were willing to pay for such grants at that time. Caroona was a resource which contained large quantities of underground export quality thermal coal. A later allocation, the Watermark resource, which contained open cut and underground thermal coal of domestic and export quality, is also important for the same reasons. Although the Doyles Creek resource was much smaller than Caroona and Watermark and had not been explored to any significant extent, it was nonetheless valuable as it largely comprised coking coal, had access to infrastructure and was significantly closer to the port of Newcastle which made export more cost effective.

22. On 21 June 2005 the then Minister for Mineral Resources, Kerry Hickey, announced plans for the release of the Caroona area. As the area had been explored by the Department over a number of years, there was significant data about the resource, including the results of borehole drilling. The Expression of Interest Information was released by the Department on 1 August 2005. It provided that a minimum payment of $15 million was to be made by the successful applicant but financial contributions in excess of that amount could be offered. Applicants were also invited to indicate what they proposed for infrastructure in the following terms:

“The proponent should provide details of any proposed infrastructure development based on the current constraints of the existing rail infrastructure and at the Port of Newcastle. Cost and timing of any proposal should be included.”

24. When Mr Macdonald became Minister for Mineral Resources on 3 August 2005 he became the Minister responsible for the Caroona release. At the end of 2005, a committee was constituted to evaluate expressions of interest. The committee comprised three senior officers from the Department, including, as Chair, Garth Holmes, Manager of Minerals Development; and Brad Mullard, Director of Minerals, who was located at the Department’s office in Maitland; and a Project Director from Premier’s Department. Each member of the committee was required to make a declaration that he had no conflict of interest. A probity auditor was also appointed.

25. Several expressions of interest were received, including from BHP Billiton (through a wholly-owned subsidiary, Coal Mines Australia Ltd), Mitsubishi Development, White Mining and Xstrata Coal. In January 2006, after evaluating the expressions of interest, the committee recommended that the Minister give consent to Coal Mines Australia Ltd to apply for an exploration licence. That company had offered an additional amount of $91 million, which was payable within 28 days of the grant of the exploration licence. Mr Coutts, who said that he was “blown away” by the size of the amount, described Mr Macdonald as being “very excited” about the news. Mr Macdonald wrote on the briefing note: “Excellent result for the State”. In accordance with the Department’s advice, on 17 February 2006, Mr Macdonald gave consent to Coal Mines Australia Ltd to apply for an exploration licence for the Caroona area, which was granted on 12 April 2006.

26. One of the special conditions required the licence holder to contribute to upgrading the rail track, which reflected Coal Mines Australia Ltd’s offer in its expression of interest. There was also a requirement to establish a Community Consultative Committee; and to reimburse the Department for its costs of the process and public expenditure in the exploration of the area. There was also a condition that the Minister could cancel the title in certain circumstances, if the licence holder did not substantially meet its commitments. Mr Macdonald’s knowledge of special conditions such as this one is relevant to his appreciation of the extent to which infrastructure or other public projects, including, in the case of Doyles Creek, the establishment of a training mine, could be achieved by an expression of interest process and by the imposition of conditions on the exploration licence granted to the successful applicant.

27. After the Caroona allocation the Coal Allocation Guidelines were changed to provide for Minimum, and Additional, Financial Contributions. The purpose of the amendment was to take advantage of the additional monies that might be available from applicants, particularly during the coal boom. The Department’s budget had been cut due to amalgamation and Mr Macdonald hoped that Treasury might permit the Department to retain a percentage of these payments. In May 2006 he approved the revised Coal Allocation Guidelines which incorporated these changes.

The desire to allocate further areas after Caroona

28. Mr Macdonald instructed the Department to identify further coal resources that could be allocated with a view to obtaining further payments as the State’s fiscal budget was tight. Mr Mullard set about the task, but was constrained by the fact that many areas of NSW had not yet been sufficiently investigated by the Department. Mr Mullard identified the Watermark resource as suitable for release since the Department had significant borehole information which could be included in a data package to enable informed bids to be made, thereby reducing the risk to the bidders and increasing the potential gain to the State.

29. In March 2008, on the advice of the Department, Mr Macdonald wrote to the then Premier, Mr Iemma, and attached a Cabinet minute to obtain funding to enable more borehole drilling to be conducted in other areas of NSW so that they, too, could be released.

The Noble House lunch

30. On 20 February 2006, Luke Foley, who was then an Assistant General Secretary of the NSW Labor Party, arranged a lunch at the Noble House Restaurant. The purpose of the lunch was to gauge support for Mr Macdonald ahead of the Party conference in June 2006 at which the ticket for the March 2007 election was to be finalised. The lunch was attended by Mr Foley and Mr Macdonald, as well as Doug Cameron and Paul Bastian, who were senior figures in the Australian Metal Workers Union. George Campbell, who was then a Senator, and Anthony Albanese, federal member for Grayndler, attended as leading figures in the left of the ALP.

31. Mr Foley and Mr Campbell suggested that Mr Macdonald had been in Parliament long enough and should not get pre-selected for another eight-year term in the Legislative Council. Others supported Mr Macdonald’s pre-selection for reasons which included that he was a Minister. There was also a discussion about how long Mr Macdonald, if pre-selected, would remain in Parliament until he retired.

32. Mr Macdonald told the group that there was more he wanted to do as a Minister. He expressed a wish to go to the Beijing Olympics in 2008 as a Minister. He also said that he wanted to continue as a Minister throughout 2009 when his daughter would be doing the HSC and mentioned financial considerations in this context. Mr Campbell’s evidence about the substance of what Mr Macdonald said accords with the facts as appear from the material before me on sentence. Mr Campbell’s evidence was that Mr Macdonald told him:

“that he had just got married, or was about to get married, and his partner, future partner, had several children and one of those children had a disability and he needed the money to assist to fund that child's education and to look after it into the future.”

33. Ultimately it was agreed that Mr Macdonald would be pre-selected for another term but that he would retire at around the end of 2009 when one of his step- daughters had completed the HSC.

Mr Maitland’s post-retirement appointments

34. In December 2006, not long after Mr Maitland had retired from his position as National Secretary of the CFMEU, Mr Macdonald appointed him to Chair the Coal Competence Board, a position for which it was agreed that he was qualified. He became involved with a private mining company, ResCo Services Pty Ltd (ResCo), of which he became the Chair. ResCo, which was registered on 13 November 2006, changed its name to Doyles Creek Mining Pty Ltd on 7 May 2007 and it was under this name that the company was granted an exploration licence by Mr Macdonald.

Mr Maitland’s approaches to Mr Macdonald on behalf of ResCo

35. On Monday 15 January 2007, Mr Maitland attended a meeting of ResCo to discuss the possibility of mining at Doyles Creek, which was said to be capable of yielding 3 million tonnes of coal per annum from the Redbank and Whybrow seams. Mr Maitland, Craig Ransley and two others attended on behalf of ResCo. Two geologists from Comet Coal, including Colin Randall, also attended, as did representatives from Eastern Mining and Construction, a company with which ResCo hoped to merge.

36. Those present discussed the procedure for applying for an exploration licence in NSW, by comparison with Queensland. The view was expressed that any submission made in NSW had to be in-depth and contain elements that would be attractive to the Government.

37. At about this time ResCo prepared an Information Memorandum dated January 2007 which set out the quantities of coal to be expected in two areas at Doyles Creek. ELA1 (the larger area) was said to contain 125.3 million tonnes and ELA2 (the smaller area) was said to contain 69.9 million tonnes. The Executive Summary listed the advantages of Doyles Creek: first, it was one of the very few areas still with vacant title with sufficient coal resources to enable a medium- to large-sized mining operation; secondly, it had good quality, coal resources, which were not difficult to market and known to be well regarded by Japanese companies; and, thirdly, it was close to coal infrastructure and services.

38. On Tuesday 16 January 2007, Mr Maitland sent an email to Mr Ransley confirming his remuneration package which included a “sitting fee” as Chair; an international travel allowance; reimbursement of all expenses and a grant of 5% equity in the company. Mr Maitland also listed the arguments which he intended to put to Mr Macdonald at their forthcoming meeting:

“2.    In my meeting with Minister Ian McDonald on Thursday the 18th January I will make a presentation in support of RESCO being granted an exploration licence over ELA 1 and/or ELA 2 as the case may be.

Arguments in support will include

(a) Lack of skilled workers for the industry

(b) RESCO wants to develop a training mine

(c) RESCO will receive support from industry, federal government and unions,

(d) RESCO needs new lease to establish a training mine

(e) Old mines have their own particular problems

(f) New mine can be specifically designed

(g) RESCO would start training at unused mine until new mine is established, possible 2-3 years with fast track.

(h) ELA 1 and /or ELA 2 have been, to date, unwanted by operators because of perceived faults and intrusions.

(i) RESCO wants invitation by Minister for expression of interest.”

39. On Friday 19 January 2007, the offenders met in Mr Macdonald’s Ministerial office in Governor Macquarie Tower. The Department had prepared a brief on the Coal Competence Board (to which Mr Maitland had just been appointed) in response to a request from the Minister’s office. However there was little, if any, mention of the Coal Competence Board at the meeting. Mr Maitland took the opportunity to raise the issue of a training mine in the Hunter Valley, which he said would address the skills shortage and be supported by TAFE. He told Mr Macdonald that it would be run as a small- to medium-sized commercial mine so that issues of funding which had prevented a training mine going ahead in the past would not arise. After this meeting Mr Macdonald told his staff that he thought that a training mine was a good idea.

40. Sue-Ern Tan, a Departmental Liaison Officer (DLO) in the Minister’s office, informed Mr Coutts what had been discussed. He told her that a training mine had previously been suggested and rejected. Mr Coutts asked Mr Holmes to research earlier proposals for a training mine.

41. The following Monday, 22 January 2007 Mr Maitland sent a two-page letter, which he entitled “briefing note”, to Tony Hewson who was then Mr Macdonald’s Chief of Staff. In the document, Mr Maitland developed the arguments which he had listed in his email to Mr Ransley of 16 January 2007: namely that there was a lack of skilled workers; a training mine would be financially supported by industry and the Federal Government and also receive union support; that it should be in a new area, rather than in an existing mine; and that training would start in a few years. He wrote that the proposed project only needed a coal resource that would allow the development of a small to medium sized mine. Mr Maitland asserted, in accordance with item 2(h) of his list to Mr Ransley, that the area in question (ELA 1) had not been wanted by other companies because of geological faults:

“The complexity of the local geology has discouraged larger coal producers from carrying out coal exploration.”

42. This sentence was incorrect because, as Mr Mullard explained in his evidence, no exploration was possible as no consent had been granted. I regard the inclusion of this sentence as no more than a tactic to disparage a resource, which Mr Maitland knew to be valuable, and to which he wanted ResCo to have access, without having to compete for it.

43. On 1 February 2007 Mr Coutts received an email from Mr Holmes which he forwarded to the Minister’s office. The email tracked the history of the idea of a training mine, including previous consideration by the Mine Safety Council (the predecessor of the Mine Safety Advisory Council) in 1999 and 2000 and the feasibility study which was carried out. Mr Holmes summarised, the position as follows:

“Following a consultant’s study in 2000 into the feasibility of a Training Mine- which indicated many problems, the (then) Mine Safety Council agreed that the Training Mine concept no longer be pursued. The CFMEU (at that time) supported the cessation of the underground Training Mine study in favour of the use of simulation training.”

44. At some stage in the first quarter of 2007, Mr Maitland and others from ResCo met representatives from UGM (an underground mining contractor) with a view to a merger between the businesses. In the hope that it would make ResCo more attractive to potential partners, they told UGM that ResCo was looking to secure an exploration licence for Doyles Creek.

The first Departmental briefing: 9 February 2007

45. On Tuesday 6 February 2007 Mr Maitland wrote to Mr Coutts setting out further information about the proposal and referred to BHP’s announcement that it was recruiting foreign mine workers, which Mr Maitland described as “overwhelming evidence of the skills shortage crisis across all areas of the mining industry and the need to urgently address this issue”.

46. When Mr Coutts received the email from Mr Maitland, he asked Mr Mullard to prepare a quick response. Mr Mullard consulted the Coal Register to see whether there had been interest in the Jerrys Plains area, where Doyles Creek was located. He noted that there were prior expressions of interest from Simitar Resources, Wambo Coal and Independent Coal Pty Ltd but they had not been progressed due to the proximity of the Jerrys Plains township, alluvial areas and the Wollemi National Park. As the Departmental drilling was insufficient to enable Mr Mullard to estimate the amount of coal at Doyles Creek, he used an estimate of coal reserves of 62 million tonnes made by Bayswater Colliery Company Pty Ltd, to which an exploration licence in a nearby area had been granted in 1989. That licence had been allowed to lapse as coal prices at that time made it uneconomic to proceed. Mr Mullard noted in the briefing note that, on the basis of this estimate, Doyles Creek would be classified as a major stand-alone area under the Coal Allocation Guidelines, meaning that it would be allocated by tender or expression of interest and that Additional Financial Contributions would be called for.

47. By Friday 9 February 2007, Mr Mullard had prepared a draft brief and a map of the area which was sent to Mr Coutts. The draft brief warned that any new mining development in the area would raise significant environmental and community concerns. He also said:

“If the area were to be tendered it is expected that there would be a number of interested parties seeking access to this resource.”

48. Ms Tan asked Mr Coutts to send the brief up formally so that she could talk to the Minister about it. In an email to Mr Hewson, she summarised the “things to note” in the draft briefing note as follows:

“1. Estimated 62MT resource

2. Ultra sensitive nature of the resource- close to Jerrys Plains’ township, alluvial areas and Wollemi National Park

3. There are other companies who have expressed an interest in the resource

4. We will have to put the area out to tender (for rights to explore)”

The ResCo application for consent dated 15 February 2007

49. In the meantime, ResCo was preparing an application for consent to apply for an exploration licence for Doyles Creek. On 12 February 2007 James Stevenson, a solicitor at Sparke Helmore, ResCo’s lawyers, sent an email to Mr Maitland informing him that he had arranged for one of his partners at the firm to contact David Agnew, who was described as “one of his contacts” at the Department for his suggestions about what should go in the letter. Mr Stevenson then drafted a letter to be sent by ResCo seeking consent from the Minister under s 13(4) of the Mining Act to apply for an exploration licence for Doyles Creek.

50. The final version sent to the Minister, dated 15 February 2007, was signed by Mr Maitland. He and Mr Ransley had, on that day, been formally appointed as directors of ResCo. Mr Maitland also emailed it to Mr Hewson and Ms Tan, who arranged for it to be included in the Department’s document system known as TRIM. The TRIM system enabled the Department and the Minister’s office to have access to all documents, including correspondence. In its application ResCo wrote of its intention to establish a training mine in an area not previously developed, which had sufficient coal reserves to enable a training mine to be self-funding. It referred to the proposed “establishment of at least a small to medium sized mining operation which could accommodate a training initiative”. The letter attached a map which set out, for the first time, the co-ordinates of ELA1, the area for which consent was sought.

51. When the Department eventually received a copy of this letter, it referred it to the Coal Allocation Committee which, at its meeting on 27 March 2007, noted ResCo’s interest in “Jerrys Plains” and recorded it in the Coal Register in accordance with its usual practice.

Briefing note of 22 February 2007

52. In response to Ms Tan’s request for a formal brief, the Department prepared a further brief, which included content from the earlier draft of 9 February 2007 with some additional sections headed “Comment”, “Options” and “Recommendation”. The Department did not have ResCo’s letter of 15 February 2007 when it prepared the formal briefing note dated 22 February 2007. As a result, the area proposed by Mr Maitland, which was identified with precision in the letter of 15 February 2007, was only referred to in general terms in the formal briefing note.

53. The briefing note of 22 February 2007 became one of the most significant documents in the Crown case because it informed Mr Macdonald of the reasons why direct allocation of the Doyles Creek resource, without competitive processes, to ResCo would be inappropriate. For the reasons which follow I am satisfied that Mr Maitland was privy to that briefing note and, accordingly, was aware of those matters. The briefing note reflected the concerns of Mr Coutts and Mr Mullard that Mr Maitland was proposing to float the idea of a training mine to get access to a substantial coal resource. As Mr Coutts explained in evidence:

“The Department formed a view it didn't make a lot of sense at a time when this was a booming coal industry, to be allocating what was seen by the Department as a significant resource for a training mine without at the very least going out for some competitive process to see if there was the best proposal on offer or whether there were other proposals out there that we weren't aware of.”

54. In the “Comment” section of the briefing note, there was a summary of the previous consideration of a training mine, which had been the subject of the email from Mr Holmes which had been forwarded to the Minister’s office.

55. One of the paragraphs which Mr Mullard drafted for inclusion in the “Comment” section was, because of its significance, discussed with Mr Coutts as well as with Barry Buffier, the Director-General of the Department, before the briefing note was sent. The paragraph included the following sentence:

“There would be major policy difficulties, potential probity issues and environmental sensitivities involved in considering a proposed direct resource allocation for this purpose.”

56. The force of the reference in a Departmental briefing note to a Minister to “potential probity issues” ought not be underestimated. None of the witnesses who gave evidence in the trial, including Mr Macdonald, could recall ever having seen or used the words in any other briefing note. Mr Mullard explained in his evidence what he meant by those words as follows:

“I was particularly concerned that a direct allocation to a former head of the mining unions by a Labor Minister would raise questions regarding the probity of that allocation.”

57. Mr Macdonald did not ever ask Mr Mullard what he meant by the words “potential probity issues”. I infer he did not need to ask because he already knew that the phrase was a reference to the fact that the proponent was Mr Maitland. I do not accept either of the two explanations Mr Macdonald gave for his understanding of what the Department meant by the phrase “potential probity issues”: that it referred to the thinness of the proposal which he described as “lacking flesh on the bones”; or that it was a reference to the fact that the election was imminent and it was inappropriate to make such decisions in the period going into an election.

58. Mr Macdonald admitted that he appreciated that Doyles Creek was a major stand-alone area within the guidelines and that he realised that the interest shown by other parties would tend to increase the price in an expression of interest or tender process. I am satisfied that Mr Macdonald understood that to directly allocate a major stand-alone resource when other companies had expressed interest in the resource would cause “major policy difficulties” since a competitive process was called for by the Coal Allocation Guidelines.

59. The briefing note concluded with three options:

“1. The Minister reject the current proposal because the Government is not prepared to allocate the proposed area at this time and there is no demonstrated support from the coal industry in general for a proposed training mine.

2. The Minister agree to seeking competitive Expressions of Interest for the proposed area under the current Guidelines for Allocation of Future Coal Exploration Areas (March 2006) which includes a financial contribution.

3. The Minister refer the proposal to the Mine Safety Advisory Council (which as the former Mine Safety Council had previously considered a similar training mine proposal) and seek the Council’s advice on the current training mine proposal to inform the Minister’s further consideration of this matter.”

60. The Department concluded with the following “Recommendation”:

“Option 3 is recommended as appropriate initial action.”

61. The Minister’s office never responded to this briefing note. Mr Coutts later told Ms Tan that the proposal could also be referred to the Ministerial Minerals Advisory Council (MMAC), which, like the Mine Safety Advisory Council (MSAC), comprised key industry and union representatives.

Meeting in the Minister’s office on 8 March 2007

62. On 8 March 2007, Mr Hewson (who, as referred to above, was Mr Macdonald’s Chief of Staff) and Ms Tan met with Mr Maitland in the Minister’s office to discuss the Department’s briefing note. At that time, Mr Macdonald was away in the country electioneering. At Mr Hewson’s request, the Department sent him a soft copy of the briefing note of 22 February 2007 at 2.24pm in time for the meeting at 4pm. Mr Hewson showed Mr Maitland a copy of the briefing note around the time of the meeting. Mr Maitland already knew from earlier discussions with Mr Coutts that the area was environmentally sensitive and that the Minister might decide the exploration licence should go to tender. Mr Hewson had also told him before the meeting that the matter would not be considered until after the election. Mr Maitland had reported to the ResCo board on these matters on 28 February 2007.

Post-election (24 March 2007 onwards)

63. The Labor Party was returned to Government at the election on 24 March 2007. Ms Tan became a Policy Adviser in the Minister’s office and Craig Munnings became a DLO.

64. On the following Monday, 26 March 2007, Mr Maitland sent an email to Mr Stevenson, Mr Ransley and others from ResCo reporting on his meeting with the Minister’s staff on 8 March 2007. It read:

“Dear All now that the election is out of the way we can concentrate a little more in progressing the ELA [Exploration Licence Application] for Doyles Creek hopefully.”

65. Mr Maitland attached to his email a note which contained four points from his meeting with the Minister’s staff on 8 March 2007: first, that a similar proposal for a training mine had been made before which was considered by the Mine Safety Council, which became the MSAC. At that time the CFMEU supported the cessation of the training mine proposal in favour of simulation training. He also noted, adopting the language of the briefing note, that Doyles Creek had been the subject of interest previously and would be classified as a major stand-alone area, which should go to competitive tender; that the area was environmentally sensitive and near a town; and that the Department suggested referral to the MSAC. The text in the attachment was very similar, and at certain points, there was an almost word for word copy of the Department’s briefing note of 22 February 2007. For example, the briefing note said:

“These expressions of interest have not been progressed at this stage due to the sensitive nature of the area. This was due to the proximity of the Jerry’s Plains township, the alluvial areas and proximity to the Wolemi National Park. It is reasonable to expect that any new mining development in this area would raise significant environmental and local community concerns.”

66. The corresponding passage in Mr Maitland’s email was:

“The area is considered to have environmental and publicly [sic] sensitivities. This is due to its proximity to the Jerry’s Plans township, the alluvial areas of the Hunter River and the proximity to the Wollombi [sic] national park.”

67. The briefing note said:

“If the area were to be tendered it is expected that there would be a number of interested parties seeking access to this resource.”

68. The corresponding passage in Mr Maitland’s email was:

“It would seem that a number of interested parties would seek access to the reserves if the area were to be tendered.”

69. I infer from the similarities in the language between the briefing note and the document attached to the email that Mr Maitland had access to copy of the Department’s briefing note when he prepared this document. In all the circumstances, I infer that Mr Hewson gave it to Mr Maitland at around the time of the meeting, although probably not in the presence of Ms Tan, who said she would not have given such a document to a proponent. Mr Hewson did not see any difficulty doing so, although he had no particular recollection of whether he did on this occasion. It was suggested on behalf of Mr Maitland that the fact that Mr Maitland did not refer to those parts of the briefing note that set out the Department’s opinion that a direct allocation would give rise to major policy difficulties and potential probity issues meant that he did not have a copy of the whole briefing note. I am not persuaded by this submission. It would not have been in Mr Maitland’s interests to pass on these parts of the briefing note to Mr Stevenson or others at ResCo, who might have been concerned by the terms of the Department’s objections and might have regarded Mr Maitland’s involvement in ResCo’s bid for the licence as more of a liability than an asset.

70. Mr Maitland’s email to the ResCo board concluded:

“A major issue is the suggestion that there may be an open tender for the area, which could result in unrealistic bids for the resource.

My suggestion is that we conclude the MOU’s with HVTC [Hunter Valley Training Corporation], CSPL [Coal Services] and the CFMEU and then meet with the new Minister as soon as possible.”

71. In accordance with his own suggestion Mr Maitland visited Mr Maher at the CFMEU’s offices in Sussex Street to try to gain support for his training mine proposal. Mr Maher asked Mr Maitland whether there had been any discussions with mining companies about their willingness to supply trainees to the training mine or to employ trainees from the proposed training mine. Mr Maher regarded Mr Maitland’s answers as unsatisfactory and concluded that the training mine proposal had no merit. After Mr Maher refused to support the idea, or sign the draft letter which Mr Maitland gave to him, Mr Maitland then approached Peter Murray, the General Secretary of the Mining and Energy Division of the CFMEU, whom he persuaded to put the training mine on the agenda for the June 2007 meeting of the Executive Committee of the CFMEU. As referred to below, Mr Murray signed various letters of support in different capacities at Mr Maitland’s request.

72. On 3 April 2007 Mr Maitland reported to the ResCo board that the Department was suggesting a tender process for Doyles Creek and that it was important that he continue discussions with Hunter Valley Training Company, Coal Services and the CFMEU with a view to concluding memoranda of understanding for the establishment of a training mine.

73. The Minutes of that meeting recorded that Mr Ransley responded:

“My thoughts are that if we are able to bypass the tendering process and have the minister grant us the ELA we should go for it, however if this lease was to go to tender I believe we should drop it and move on to something more beneficial. I will be guided by the board.”

74. On 4 May 2007, in response to a query from the Department, the Minister’s office confirmed that no decision had been made on options listed in the Department’s briefing of 22 February 2007.

75. On Friday 18 May 2007 Ms Tan sent an email to the Minister’s secretary which said:

“The Minister agreed to meet with John for a meal. The hope is to do it before we go to Japan/ China. . . If we can’t fit in before the trip then just whenever. Thanks, Sue.”

76. I infer that there was at least some discussion between the offenders at around the time of the email. I do not accept Mr Macdonald’s evidence that he did not recall any discussion between himself and Mr Maitland between the election period (March 2007) and the lunch at Prime Restaurant on 26 July 2007 to which reference will be made below.

Meeting of the Central Executive of the Mining and Energy Division of the CFMEU

77. On 13 June 2007 there was a meeting of the Central Executive of the Mining and Energy Division of the CFMEU, which was attended by Mr Maher, the President; Peter Murray, the General Secretary; and a representative of each of the three biggest coal mining districts (Queensland, Northern NSW and South-Western NSW). As referred to above, Mr Murray had put the training mine on the agenda. The minutes recorded the result of the discussion about Mr Maitland’s training mine proposal as follows:

“Training mine presentation scheduled for the 16th July. The Executive takes a clear position on this. Whilst recognising and supporting the need for trained workforces it is more a matter for the industry and the union will not be involved in arrangements with the project.”

78. According to Mr Maher, the resolution was binding and, as it was a national decision, the various districts were meant to adopt it. Mr Maher did not attend the presentation given by Mr Maitland because he regarded the Central Executive’s resolution as a policy decision which would not be affected by any presentation.

The lunch at Prime Restaurant on Thursday 26 July 2007

79. On Thursday 26 July 2007, Mr Macdonald, Ms Tan, Mr Maitland and Mr Ransley had lunch at GPO Prime Restaurant to discuss the training mine proposal. Mr Maitland raised the skills shortage and told Mr Macdonald that he was discussing the training mine with Newcastle University, Hunter Valley Training Company and the Hunter Region SLSA Helicopter Rescue Service Ltd (the Helicopter Service), which were all Non-Government Organisations (NGOs) in the Hunter Valley. At that stage, there was no discussion about the number of trainees who would be trained in the training mine if it went ahead. Mr Macdonald said that he was interested in the concept of a training mine and that groups who supported the proposal should indicate their support in correspondence which should be sent to his office. Following the lunch Mr Macdonald instructed Ms Tan to obtain a briefing from the Department on the skills shortage in the NSW mining industry.

80. I am satisfied that, at or around the time of the lunch at Prime Restaurant, the offenders conceived a plan to make the training mine look good, because they knew, or suspected, that it would not have the general support of industry or the Central Executive of the CFMEU and would, accordingly, not gain the support of any of the tripartite committees (MSAC or MMAC), or the Minerals Council. The initial plan was that so-called “letters of support” would be sent to Mr Macdonald from persons to whom Mr Maitland had provided drafts, in which the authors would refer to the skills shortage and the need for training. There would be no reference to the training mine in these letters.

81. I am satisfied that Mr Macdonald was involved in the plan. The evidence revealed that from time to time he instructed his staff, including Ms Tan, to liaise with Mr Maitland about the letters from the institutions that they discussed at the Prime lunch. For example, on 31 August 2007 Ms Tan, who knew Mr Macdonald was waiting for letters of support for the training mine, emailed Mr Munnings asking him to keep an eye out for letters regarding training or skills shortage in the mining industry and print out a copy for her before TRIM-ing it to the Department to avoid any delay in their receipt by the Minister. Mr Macdonald admitted that, when he saw the letters, he understood that they related to his discussion with Mr Maitland at the Prime lunch. From time to time, Mr Maitland travelled to Sydney to discuss the proposal with Mr Macdonald’s staff. On 26 September 2007 he discussed the letters from NGOs with them and, on Friday 23 May 2008, he met with them again.

82. In 2008, as the time for the grant of consent to apply for the exploration licence drew near, the plan involved a second tranche of letters. These letters were, once again, based on drafts supplied to their authors by Mr Maitland. This time they made specific reference to the training mine.

83. The plan was a cynical one. The ultimate audience for the letters was not Mr Macdonald, who needed no persuasion that consent should be given to Doyles Creek Mining since he was not relevantly motivated by the public interest. Nor was it the Department, who could hardly expect to be taken in by such a device. Rather, the letters were designed to forestall the criticism which the offenders anticipated, once the public and the industry eventually became aware of the allocation of a substantial coal resource without a competitive process.

84. Mr Jordan accepted on behalf of Mr Maitland that the jury’s verdicts necessarily imply that the letters of support ought be described as a means of “political cover”, notwithstanding that it was agreed that their authors genuinely believed what they wrote. Mr Jordan also accepted that obtaining the letters assisted Mr Macdonald to commit the offences and that Mr Maitland aided and abetted the commission of the offences by obtaining the letters. The evidence established that Mr Maitland used the authors to implement the plan referred to above by getting them to indicate their support, with wording which he influenced by providing them with drafts.

85. The evidence for these findings is largely circumstantial. The inferences which I have drawn are based on the content, timing and source of the letters, as well as the evidence of Richard Jones to which reference will be made below. Other letters sent in 2007 followed a similar pattern of referring to skills shortage as a problem (which the evidence established it was, although to a lesser extent in the Hunter than in other regions) but not identifying a solution. This is particularly noteworthy as many of the authors (including from the Helicopter Service, the Hunter Valley Training Corporation and Newcastle University) were discussing the training mine with Mr Maitland at the time but did not refer to it in their letters.

86. On 8 August 2007 Mr Macdonald received a letter from the CFMEU Mining and Energy Division, signed by Mr Murray, as General Secretary, which Ms Tan identified as a “letter of support”. Notwithstanding the resolution of the CFMEU’s Central Executive referred to above, Mr Murray took his own course and, in his capacity as General Secretary of the CFMEU, provided letters of support to Mr Maitland for provision to Mr Macdonald, as well as sending them directly to Mr Macdonald.

87. The letter from Mr Murray reflected the strategy referred to above in that it raised the issue of skills shortage affecting mine safety; expressed support for on-site facilities; and mentioned the need for an appropriate plan and the benefits of a skilled workforce. What it did not mention was the proposal for a training mine, although Mr Murray knew that this was what Mr Maitland was actually proposing. Like many of the letters belonging to this category, the sender was not disinterested but did not disclose the potential conflict of interest.

88. In Mr Macdonald’s letter dated 6 September 2007 responding to the CFMEU’s letter, he said:

“I am always open to proposals to new strategies which would enhance the supply of skilled labour and take advantage of opportunities for expansion in the mining industry.”

89. His reply is consistent with the strategy referred to above in so far as it put on the record Mr Macdonald’s preparedness to consider ways of dealing with the skills shortage but withheld the training mine as a possible solution.

Departmental briefing on skills shortage in the NSW mining industry

90. On 13 August 2007 the Department provided the briefing note on skills shortage requested by Ms Tan. It said that the demand for skilled workers was high because of the mining boom and advised that about 5,000 additional employees would be required in the NSW minerals sector by 2015, against a national figure of 70,000. The briefing outlined the relevant work of the Ministerial Minerals Advisory Council, which had met with the Department of Education and Training to discuss how to address the issue.

Failure to refer the training mine to tri-partite advisory councils

91. On 22 August 2007, Mr Macdonald, accompanied by Ms Tan, attended a meeting of the MMAC. There was no mention of a training mine at that, or any other, MMAC meeting. Nicholas Papallo, whom Mr Macdonald had appointed as Chair, said it was never discussed and he “didn’t even know it existed”. Nor was the training mine proposal ever referred to the MSAC, notwithstanding that Mr Macdonald made a particular point of highlighting the importance of its role in his speeches to open the annual Minerals Council conferences on occupational health and safety at Leura in May of 2007 and 2008.

92. I do not accept Mr Macdonald’s evidence that he did not refer the issue of a training mine to either council because he had a policy of not referring anything controversial to any committee comprised of representatives from employers, the union and the Department. He referred other controversial matters to the MSAC, such as the occupational health and safety implications of production bonuses and safety incentive schemes, hours of work and fatigue management. I am satisfied that he did not refer it to either council because he knew that support for the proposal was unlikely to be forthcoming from them.

The continued implementation of the strategy

93. Mr Maitland was still trying to obtain support from NGOs for a training mine. On 5 September 2007, he sent an email to Mr Ransley, attaching a draft letter which he had sent to Richard Jones, the Chief Executive Officer of the Helicopter Service. He told him that he had arranged to meet for lunch that day with Mr Jones and Cliff Marsh, the Chair of the Helicopter Service, to finalise a Memorandum of Understanding and a letter. Mr Maitland made representations to the Helicopter Service that, if the training mine went ahead, each NGO would get 5% of the mine’s profits. The Helicopter Service slightly amended the draft and sent a letter of support dated 7 September 2007 to Mr Macdonald. The actual agreement, which was concluded on 20 September 2010, made no provision for any percentage of profits to be paid to the Service.

94. On 20 September 2007 Mr Jones reported to the board of the Helicopter Service on his meetings with Doyles Creek Mining as follows:

“We also were asked to send a letter to the Minister in support of training as we have special needs ourselves and anything that can be done to assist we would support. Our letter mentions nothing of the mine but the strategy is that all NGO’s will provide similar letters, and when the Minister receives an application for a new mine, with a specific purpose, he will already have letters which will support the concept.

The big final news is that all the NGO’s involved will, for their support, receive 5% of profits, annually, which on projected tonnages will be anywhere between $2.0m and $5.0m, for EACH NGO per year.”

95. Mr Jones was not sure of the provenance of the word “strategy” and, in particular, could not be sure that Mr Maitland had ever used the word. However, in my view, the word is apt to describe the plan referred to above.

96. In September 2007 Mr Macdonald received letters of support from Hunter Valley Training Corporation, the Helicopter Service and the University of Newcastle. All referred to a skills shortage; none referred to the training mine although each NGO was discussing it with Mr Maitland at the time.

97. Although Mr Macdonald never responded to the Department’s briefing note of 22 February 2007, Mr Coutts knew as at October 2007 that the idea of the training mine had not gone away. On 23 October 2007, he reported to the other members of the Executive of the Mineral Resources area in the Department, including Mr Mullard, that:

“The issue of skills shortage in the mining industry has been mentioned again by John Maitland. The concept of a training mine has gained the support of the Newcastle University and Hunter Valley Training Company. Possible way forward is to go to tender with a business plan as part of the tender.”

98. This report indicates that Mr Coutts was trying to accommodate what Mr Macdonald apparently wanted, a training mine at Doyles Creek, with the policy for major stand-alone mines as set out in the Coal Allocation Guidelines, which required a competitive process. A tender with a business plan was ultimately what the Department recommended to Mr Macdonald in May 2008.

The involvement of Newcastle University

99. At the same time as Newcastle University was talking with Mr Maitland about the training mine in 2007, it was also having discussions with the Department about a proposal that the NSW Government would establish a Chair of Geoscience at the University of Newcastle. Mr Macdonald suggested a meeting in his office with Professor Plimer, then Professor of Geology at the University of Adelaide, and representatives of the University of Newcastle to discuss the Chair proposal. As far as Mr Coutts knew, the meeting had been arranged because Mr Macdonald wanted to encourage the University to establish a Chair of Geoscience and hoped to persuade Professor Plimer, whom Mr Coutts described as “a well-known climate [change] sceptic”, to take up that position.

100. Mr Macdonald’s staff communicated with Mr Maitland about the proposed meeting. On 25 October 2007 in an email to Ms Tan confirming the date for the meeting, Mr Maitland made the following request:

“What I need is a little more information about what we are proposing so can you send me a few lines which will be kept confidential.”

101. Ms Tan’s draft formulation was:

“I think the general idea is to set up a chair (and a Department) geology department. There may also be a potential to link it in with training/ skills issues currently facing the industry.”

102. This form of words reflected Ms Tan’s understanding that, although initially the Chair at the University was entirely separate from the proposal for a training mine, they became linked. On 26 October 2007, Ms Tan, at the request of Mr Macdonald, sent an email to Professor Plimer to confirm a meeting on 5 November 2007 with the University of Newcastle and to let him know that Mr Macdonald had suggested that Mr Maitland, who had been working on a “training project”, attend. She also informed him that Mr Maitland had asked her to provide some general lines (to be kept in confidence) about the proposal and asked him about her formulation. Professor Plimer responded by email a couple of hours later proposing the following narrative as an alternative:

“The skills shortage in NSW is extreme. The industrial base of Newcastle, The University of Newcastle and the proximity of the NSW Geological Survey at Maitland suggest that there may be synergy for the building of a School of Mines in Newcastle funded by industry and DPI funds and to integrate with other training programs.”

103. I infer that, by the time Professor Plimer sent this email, he was aware of the potential link between Mr Maitland’s training mine proposal and the establishment of the new Chair at Newcastle University. Ms Tan sent Professor Plimer’s version to Mr Maitland. I infer that the offenders wanted the University of Newcastle to support the training mine to make it appear to have broader acceptance, which was lacking from industry. The University was encouraged to give its support by the promise of a new Chair which was to be, at least partly, funded by Doyles Creek Mining. For this reason Mr Macdonald involved Mr Maitland in meetings with the University of Newcastle and instructed his staff to include Mr Maitland in communications on the topic of the new Chair.

Meeting on 5 November 2007

104. On 5 November 2007 both offenders, representatives of the University of Newcastle and Mr Coutts met at the Minister’s office. Mr Coutts understood the purpose of the meeting to be to discuss the proposed new Chair. During the meeting Mr Macdonald said, “John Maitland has a proposal for a training mine” to which Mr Coutts responded, “John is aware of my view and the Department’s view of the training mine proposal”. There was a discussion about how the proposed Chair would be funded. Mr Maitland said that the proposed training mine could potentially work with the University and could offer underground training to its students. According to Mr Coutts, straight after the meeting, Mr Macdonald told Mr Maitland:

“along the lines that you need to get support from industry, you've got some support, you need to get out there now and get some of the key players to back your proposal up and say that it's a good idea.”

105. Mr Coutts understood the conversation in his presence to be Mr Macdonald’s way of giving him a “fairly clear indication” that he supported the training mine.

The preparation of Doyles Creek Mining’s application for consent

106. On 21 November 2007, representatives of Doyles Creek Mining (including Mr Maitland and Mr Ransley) met with Mr Stevenson; Lawrie Ireland and others from Eastern Mining & Construction; and Mike Chester from Opes Prime, financiers. Mr Stevenson recorded the following in a file note of the meeting:

“2. Need bankable document to present to Dept.

. . .

4. Considering capital raise of 250K in

CR- don’t want to spend $1M

-don’t want to have to go to tender

. . .

5. So we xx ‘pre-feasibility’ study with ‘spin’ for training mine.”

6. So we sell as benefit to state but can stand alone commercially ie pre feasibility is that it can stand alone.”

107. Mr Stevenson recorded against Mr Maitland’s initials various matters including the following:

“1.    Background in proposals for training mine � tried in 2000 but no financial backing – proposed closed mine.

2.   Training mine will operate with producing mine

Training facility� UNI/HVTC� will have to operate financially independent.

3.   Minister (Ian McDonald [sic]) supportive � UNI/HVTC involvement

Alan Coutts – was a sceptic � . . .

. . .

7.   Minister – want him to exercise discretion � not tender or EOI

8.    Need to show commercially sustainable mine with training facility.

. . .

10.   Minister wants assistance to establish chair of mining at Newcastle University”

108. On 19 December 2007 there was a meeting between Mr Maitland and Peter Demura, of PwC, the firm engaged by Doyles Creek Mining to help prepare the submission in support of its application for consent, which was eventually sent on 18 March 2008. Mr Demura’s notes recorded:

“Meeting held at EMC to use unexploited coal for training mine – reserves are scarce as hen’s teeth.

. . .

need for innovation for gvt support as industry opposition”

109. He also noted:

“Government: Minister supportive and PS [public service] not so enthusiastic due to prior history and came down to economics and who is going to pay for it.”

� DC� need for financially sustainable model

� Centre of excellence for mining and training for industry� community and State benefits

“- Need to demonstrate benefits and not a goldmine for entrepreneurs.

Options

-    General tender

-   Expressions of interest

-   Discretion”

110. Mr Demura also wrote:

“Minister requirements

-   Minister- commitments sought

From:   HVT      )

Uni N/C   )   Letter on shortages

Westpac   )”

111. Mr Demura noted “shouldn’t be seen as a privilege from entrepreneurs” and “transparency”. He also wrote:

“Not about personal gain – about a concern for the industry safety & the development of a ‘professional mine’”.

112. He recorded:

“Minister risk

-   Incorrect discretion

[therefore] need for compelling argument”

113. The notes Mr Demura took provide an insight into Mr Maitland’s knowledge of the considerable obstacles to direct allocation. Mr Maitland already knew that direct allocation was the only available avenue for Doyles Creek Mining to gain access to the resource because the company had neither the wherewithal nor the will to compete for the resource. He had long been aware of the Department’s opposition to direct allocation, having had access to the briefing note of 22 February 2007 as referred to above.

Changes in personnel in early 2008

114. In January 2008 Barry Buffier was replaced as Director-General of the Department by Dr Richard Sheldrake, who had no background in minerals. Until December 2008 Dr Sheldrake had little involvement in the Doyles Creek Mining application, which was principally dealt with in the Department by Mr Mullard and Mr Coutts, until the latter’s transfer to the Food Authority in November 2008.

The need for exploration by the Department before further areas could be released

115. On 5 March 2008 Mr Macdonald wrote to the then Premier, Mr Iemma, requesting that Cabinet urgently consider extending the so-called “New Frontiers Exploration Initiative” for a further three years, from July 2008 until June 2011, at a cost of $5.5 million per annum. A Cabinet Minute was attached to the letter which explained:

“[4.1.4]   The Department of Primary Industries (DPI) creates the geoscientific framework that assists the mineral and petroleum exploration industries in discovering new deposits. This framework generates new exploration investment by providing new geoscientific information to better enable industry to understand the under-explored prospective frontier regions of NSW. This reduces the risk of exploring in NSW compared with other jurisdictions.”

116. The Cabinet Minute covered coal, as well as other minerals and petroleum. It cited the Caroona allocation as evidence of the value of having sufficient geological data on which companies could base their tender proposals. It referred to various areas, including Jerrys Plains, where Doyles Creek is located, as similar to Caroona and said:

“These allocations may be at risk if funding is not maintained for the New Frontiers initiative."

117. It also contained the following:

“In summary, the long term risks to NSW of not proceeding with the New Frontiers initiative are forfeiture of revenue streams from mining royalties; forfeiture of revenue streams for the tendering for coal resources. . .”

118. Mr Macdonald was aware, from Departmental briefing and the contents of the Cabinet minute, that it was not in the State’s interest to release areas for exploration prematurely since, in the absence of borehole data, the State could not confirm the true value of the allocation or obtain the best result that competitive processes could deliver. He knew that, by directly allocating Doyles Creek, he was potentially forfeiting Additional Financial Contributions, as well as other benefits to the community, including contributions to public infrastructure.

Application by Doyles Creek Mining dated 18 March 2008 for consent to apply for an exploration licence

119. By letter dated 18 March 2008 signed by Mr Maitland, Doyles Creek Mining wrote to Mr Coutts to seek the Minister’s consent to apply for an exploration licence under s 13(4) of the Mining Act. The attachments contained the letter from ResCo to Mr Macdonald of 15 February 2007; a letter from Opes Prime Group dated 26 February 2008 confirming its support for a capital raising; and a document entitled “Training Mine Facility Submission”.

120. The covering letter referred to the establishment of a small- to medium-sized mining operation which incorporated a “training initiative”. The Executive Summary for the “Training Mine Facility Submission” said that the proposal sought to address “the current and expected shortage of skilled labour” in the industry. It described the mineable resource of 91 million tonnes as capable of supporting coal mining operations over 35 years.

121. Details of the proposed training positions were given. From the fourth year of the mine’s operation the proposal was for 104 trainees comprising 72 trade positions (fitters and electricians) and 32 mining positions. The submission stated:

“only a small to medium sized mining operation would be required for the Submission to be economically viable.”

122. The submission listed “Strategic Alliances”, including with the University of Newcastle, the Helicopter Service and the Hunter Valley Training Corporation. The advantages of granting the project in this area were said to include:

“the area is with vacant title with sufficient coal resources to enable a small to medium sized mining operation”

123. The proximity of Doyles Creek to rail and washery facilities was noted. The initial capital required was said to be $209 million for the underground mine, of which $7 million was for the “training facility”. This amount was to be funded by $125 million of equity funding and $84 million of debt funding. The total royalty payments for the 35 year life of the mine were said to be $546 million (calculated as the product of 91 million tonnes at A$100 per tonne at the current rate of 6%). Profits were projected to be $54.8 million in the fifth year. Partners who would buy the coal pursuant to off-take agreements were said to have been identified although they were not named.

124. Mr Maitland’s background, experience and qualifications were listed under the heading “Ownership structure” but no details were given as to his shareholding. A diagram showed that Jonca Investments Pty Ltd (Jonca), which, though not identified as such, was Mr Maitland’s family company, and owned over 20% (62,475) of the shares in Doyles Creek Mining.

125. A map showed that the training panel, which had 150,000 tonnes of coal, was to be mined using the bord and pillar method. This method involves developing tunnels in the coal seam and is much less profitable than the longwall method, which is fully mechanised. The location and physical characteristics of the training panel made it unsuitable for longwall mining. The balance of 91 million tonnes was to be mined by the longwall method and had no practical connection to the training operation. The training component was trivial compared with the size of the mine and represented less than 0.165% of the total mineable resource. The map also depicted the neighbouring land, which was referred to as providing infrastructure including washery facilities, which was owned by United Collieries, which Mr Macdonald knew to be a joint venture between Xstrata and the CFMEU.

126. Mr Macdonald read the production forecasts and the financial overview, including the projected net profit after tax for the commercial mine. He appreciated that the proponent’s projections in its application were that the training mine would be cost neutral by 2014. He knew, having regard to the proponent’s assessment of royalties over the life of the mine, that the proposal was worth one billion dollars (undiscounted) over the life of the mine. Although Mr Macdonald did not accept in cross-examination that a direct allocation of that resource, without any competitive process, would be a “gift”, I am satisfied that he not only knew that it was but intended it to be so.

127. At about this time Mr Macdonald told Jamie Gibson, one of his staffers, that, as the Minister, he had the legislative authority to allocate the Doyles Creek resource to Mr Maitland’s company. In this context, Mr Macdonald told Mr Gibson that he and Mr Maitland were not friends. On at least two separate occasions he also informed Mr Gibson that at some point the CFMEU had not supported his pre-selection. I infer that this was a reference to an incident in 1998 when Mr Maitland had supported Jeff Shaw, the then Attorney-General, for pre-selection over Mr Macdonald, who was still a back-bencher. I regard these statements to Mr Gibson as incriminating. Mr Macdonald knew that the direct allocation looked bad and was bad. He sought to cloak his misconduct by reference to an irrelevant event in the distant past to give it a semblance of probity.

128. Mr Coutts found nothing in Doyles Creek Mining’s application to counter his view that the training mine was not a particularly good use of the State’s resources and that it was not appropriate that there be a direct allocation of the resource. He referred the application to Mr Mullard. Mr Mullard regarded the estimates for the resource in the submission as reasonable and confirmed that it would be classified as a major stand-alone mine under the Coal Allocation Guidelines which ought to be allocated by competitive process.

Mr Maitland’s conduct after the application by Doyles Creek Mining

129. On 8 April 2008, Mr Munnings met with Mr Maitland about the training mine in the Minister’s office.

130. On 2 May 2008, Mr Maitland wrote to Edward Chen, the Chairman of the Taiwan Power Corporation, to invite him to Australia to discuss investment opportunities “as we are certain to have a project of interest to you by the end of next Month”. I infer that this was a reference to his confidence that Mr Macdonald would give his consent to Doyles Creek Mining to apply for the exploration licence.

131. On 21 May 2008 Mr Maitland met with Ian Kirkwood, a journalist from the Newcastle Herald. Mr Kirkwood’s article, which was published in the Newcastle Herald on 23 May 2008 under the headline “$200m mining school Underground site ideal”, reported (as was the case) that Mr Maitland had a 5% stake in the company which was planning a $200 million mine at Doyles Creek.

The fourth Ministerial briefing on 27 May 2008

132. On 27 May 2008, the Department sent its brief to Mr Macdonald in response to the application by Doyles Creek Mining dated 18 March 2008. Mr Macdonald read the briefing note. There is no evidence that Mr Maitland saw it.

257. Until the revocation of bail Mr Macdonald was working in his wife’s business cleaning and servicing bed and breakfast accommodation. He was also consulting on projects for cancer and coronary artery disease for which he was not paid a salary although would be entitled to a commission if they were successful. According to the pre-sentence report, he receives a parliamentary pension, of an undisclosed amount.

258. Mr Johnston contended that the sentence ought take into account the hardship to Mr Macdonald’s family by reason of the needs of his disabled step-daughter who is in her late twenties and requires constant supervision because of her mental disability and consequential disinhibitions. I accept that Mr Macdonald has, in recent times, played a substantial role in the care of his youngest step-daughter and that his wife and step-daughter will suffer hardship as a result of his incarceration. Mr Johnston submitted that, even if this consideration were not taken into account in mitigation of the sentence, it ought to be taken into account in a finding of special circumstances: Dipangkear v R [2010] NSWCCA 156 at [34]. I infer that, while Mr Macdonald was a Minister, the demands on the role limited the hours he could have spent caring for his step-daughter and that other arrangements were made for her care during this and other periods when he was not available. I note that Mrs Macdonald said in her reference that she and the offender are “making ends meet by working as cleaners every day of the week”. The evidence does not permit an assessment to be made of the family’s financial position or the extent to which it will be compromised by Mr Macdonald’s incarceration, although I accept that it will have an adverse effect.

259. Hardship to third parties is an almost invariable consequence of incarceration since many offenders will be breadwinners, carers of children or the disabled and otherwise integral to the lives of others: R v Edwards (1996) 90 A Crim R 510 at 515 per Gleeson CJ. I do not regard the hardship to Mr Macdonald’s wife and step-daughter that will be occasioned by his incarceration as being sufficiently extreme to affect the length of the sentence, having regard to the seriousness of the offences and the need for general deterrence: Dipangkear v R at [34]. However I take it into account as part of Mr Macdonald’s subjective case and as being relevant to special circumstances: R v Tuhakaraina [2016] NSWCCA 81 at [86]-[87] per Wilson J, R A Hulme J agreeing, approving R v Girard [2004] NSWCCA 170 at [21].

260. In the present context, Mr Macdonald’s character is of lesser significance since it provided him with the opportunity to commit the offences: R v Rivkin (2004) 59 NSWLR 284; [2004] NSWCCA 7 at [410], Mason P, Wood CJ at CL and Sully J, citing R v El Rashid (Court of Criminal Appeal (NSW), Gleeson CJ, 7 April 1995, unrep) at 3. There are statutory constraints which apply to Members of Parliament which mean that those with a criminal history cannot necessarily attain, or retain, that office. For example, the seat of a person who has been made bankrupt or convicted of an offence of particular gravity while a sitting member, becomes vacant: s 13A, Constitution Act 1902 (NSW).

261. On 1 June 2017 the Parliamentary Contributory Superannuation Amendment (Criminal Charges and Convictions) Act 2017 (NSW) commenced, which disqualified Mr Macdonald from receiving his parliamentary pension and will oblige him to repay past amounts received. By reason of s 24C of the Act, I may not take into account as a mitigating factor in sentencing the loss of Mr Macdonald’s parliamentary pension. I note, in any event, the evidence is not sufficient to establish the value of Mr Macdonald’s present pension entitlements or past payments.

Other sentencing options

263. In my view, the purpose of general deterrence in the present case can only be fulfilled by imposing custodial sentences on both offenders. As this Court (Latham J, Hidden and Adamson JJ agreeing) said in R v Donald [2013] NSWCCA 238 at [86]:

“It has also been repeatedly observed that the real bite of general deterrence takes hold only when a custodial sentence is imposed: R v Boulden[2006] NSWSC 1274 per Whealy J at [51]; R v Zamagias[2002] NSWCCA 17, per Howie J at [32]. Notwithstanding judicial statements to the effect that a suspended sentence is a sentence of imprisonment, the community (including those in ‘white collar’ occupations) might be justifiably forgiven for thinking that an offender who is serving a bond in the community has escaped meaningful punishment.”

264. Having considered the possible alternatives in respect of each offender and the purposes of sentencing in s 3A of the Act, I am satisfied that no penalty other than imprisonment is appropriate: s 5(1) of the Act. Neither a home detention order nor an intensive correction order would be appropriate having regard to the gravity of the offending: ss 6 and 7.

Special circumstances

265. I am persuaded that there are special circumstances, arising from Mr Macdonald’s age, the fact that this is his first time in gaol and the hardship which the sentence will impose on his wife and youngest step-daughter. Accordingly, the non-parole period will reflect an alteration to the statutory ratio. The alteration is not particularly large for the reason that the non-parole period ought reflect the minimum period of incarceration that is appropriate having regard to all relevant factors, including, in particular, the seriousness of the offences and the need for general deterrence and punishment.

Mr Maitland

The evidence at the sentence hearing

266. Ten character references and a pre-sentence report were tendered at the sentence hearing as well as three expert reports. A report of Dr Dennis Mazalin, clinical psychologist, was relied on in respect of Mr Maitland’s mental state and two reports of Claire Desmond, a psychologist who began treating the offender’s wife, Carol, in 2014, were also relied on. For the reasons given above in respect of the material tendered on behalf of Mr Macdonald, limited weight can be put on the pre-sentence report, the references or on some of the statements made to Dr Mazalin and Ms Desmond since they were not the subject of sworn evidence, either from Mr Maitland himself or from others. I do, however, place weight on the experts’ opinions. Mr Maitland also relied on a letter from his accountant, Michael Quinn, as to the financial consequences of the profits made from offending conduct. Parts of the contents of this letter have been included in the narrative above.

The seriousness of the offending conduct and the harm caused

267. Mr Maitland’s conduct must be viewed from a different perspective from that of Mr Macdonald. No public trust was vested in him. He had no public power. What duties he owed were owed to ResCo and Doyles Creek Mining. He was entitled to make a profit. I accept the Crown’s submission that Mr Maitland’s conduct is less serious than that of Mr Macdonald.

268. The liability of an offender who is convicted of intentional participation in a crime by lending assistance or encouragement is central to the sentencing exercise, both in terms of assigning culpability and finding facts: GAS v The Queen; SJK v The Queen (2004) 217 CLR 198; [2004] HCA 22 at [19].

269. Having regard to the requisite standard, the evidence does not permit findings to be made about many aspects of the offenders’ conduct, including: which of the offenders instigated the idea of the direct allocation; who conceived of the idea of the training mine as a cloak for Mr Macdonald’s misconduct; who initiated the strategy which resulted in the two tranches of letters; and what each knew about the other’s financial means or future prospects.

270. The verdicts indicate that the jury was satisfied that Mr Maitland encouraged and assisted Mr Macdonald to commit the principal offences, knowing that Mr Macdonald’s motivation was improper and intending that Mr Macdonald breach the duties he owed to the public by reason of his office. Mr Maitland liaised and communicated in person and by email, phone and letter with Mr Macdonald and his staff throughout the period up to the granting of consent and the grant of the licence. Mr Maitland was party to, at least, the implementation of the strategy using letters of support at about the time of the Prime Restaurant lunch. Mr Maitland drafted and obtained letters of support for Mr Macdonald. Mr Maitland approached NGOs to get them to commit to the training mine proposal because he knew Mr Macdonald wanted such commitments before he would grant the consent and the licence. Mr Maitland was both central and instrumental to Mr Macdonald’s criminality. His provision of information about the Minerals Council’s position so that it could be inserted into the letter of consent on 21 August 2008 to insinuate the prospect of support shows how closely he was involved in helping and encouraging Mr Macdonald to commit the principal offences.

271. I reject the Crown’s submission that Mr Maitland’s offending was aggravated by his role as Chair of the Coal Competence Board. I am bound by the agreed fact that he was suitably qualified for that position.

272. But for Mr Maitland’s intervention, the Doyles Creek resource would have been allocated, if at all, only after a competitive process, involving the kind of evaluation that took place with Caroona and Watermark. Mr Maitland’s offending conduct was a contributing cause of Mr Macdonald’s offences, with the attendant consequences for the community. The harm caused by Mr Maitland’s offending was substantial since he actively encouraged and assisted Mr Macdonald to wilfully misconduct himself in a significant way, to the detriment of the community. Mr Maitland’s conduct as an accessory is serious.

273. Although Mr Maitland has not been shown to be aware of all of the details of Mr Macdonald’s culpability, he knew enough to know how improper Mr Macdonald’s motivation was. He knew from the 22 February 2007 briefing note that a direct allocation of the Doyles Creek resource to Doyles Creek Mining would give rise to major policy difficulties and potential probity issues. He also knew of the potential value of the exploration licence. He knew that any mining company interested in the resource would have been prepared to establish a training mine to get access to it and that there would have been competition for the resource which would have increased the Additional Financial Contributions which would have been offered for it. He knew that he and Doyles Creek Mining were being given a gift, although he has not been shown to have known why they were favoured.

The need for general deterrence

274. Many governmental acts benefit individuals in the community. Examples include consents to apply for an exploration licence, exploration licences, mining licences, planning approvals, development consents and rezoning. Great wealth and opportunity can be bestowed on the recipients of such permissions, which in many cases have substantial market value in themselves and permit substantial capital raising. Ministers whose portfolios include the power to grant such permissions are particularly vulnerable by reason of their position to approaches from those, such as Mr Maitland, who seek to benefit from their grant.

275. Mr Maitland must be punished to deter those who seek government permissions from seeking to profit from the wilful misconduct of public officials who have the power to grant such permissions.

Aggravating factors

The offence was committed for financial gain

276. Mr Maitland’s motive (as distinct from his intention or knowledge) is relevant only to the question whether he committed the offences for financial gain, which is an aggravating factor (s 21A(2)(o)), and which therefore must be established beyond reasonable doubt. As there was no admission or direct evidence to that effect, the question must be resolved by considering the circumstantial evidence.

277. Mr Maitland was Chair of Doyles Creek Mining, having been appointed as a director on 15 February 2007, which was the day he signed the first letter seeking Mr Macdonald’s consent to apply for an exploration licence. I infer from the evidence that Mr Maitland’s utility to Doyles Creek Mining was his access to, and relationship with, Mr Macdonald and his staff. As referred to above, Mr Maitland knew, at least from about April 2007, that Doyles Creek Mining would not engage in any competitive process with respect to the Doyles Creek resource.

278. Jonca, Mr Maitland’s family company, had an interest in ResCo which was slightly greater than 20% as at 27 February 2008 (immediately prior to the application for consent being lodged). A further 103,148 shares were acquired by Jonca on 25 June 2008, just over a week after the dinner at the Strangers Dining room. There was no evidence that, after it changed its name from ResCo on 7 May 2007, Doyles Creek Mining had any purpose other than to obtain rights to the resource at Doyles Creek. The investment Mr Maitland had made in the company, both in terms of time and money, would pay off only if consent was given and the exploration licence granted. Mr Maitland knew that once the consent was granted the value of Doyles Creek Mining would increase substantially, as would his shares, and that if an exploration licence was granted, the company could be floated on the stock exchange, to the benefit of its shareholders. These matters are sufficient to raise for consideration the hypothesis that Mr Maitland’s motive for actively encouraging and assisting Mr Macdonald to commit the principal offences (and thereby committing the offences of being an accessory before the fact) was financial gain.

279. Mr Jordan contended that Mr Maitland’s motive for the commission of the offences, which arose from his lifelong dedication to mine safety issues, was to establish a training mine. Mr Jordan emphasised that there was no evidence that Mr Maitland realised that the resource would ordinarily be allocated after a competitive process when he suggested the training mine proposal and submitted that this tended to prove that his true motive was the establishment of a training mine. Mr Jordan submitted that:

“Mr Maitland encouraged and assisted the Minister to do what in his view was the right thing (an underground training mine), but for the wrong reason (his desire to establish a training mine, rather than the State’s interest in the opportunity to test the value of the resource by competitive tender process).”

280. I reject this submission, which I regard as a considerable understatement of Mr Maitland’s criminality. Had Mr Maitland been interested in the establishment of the training mine for its own sake to the exclusion of material benefit for himself, he could have lobbied Mr Macdonald to invite expressions of interest for Doyles Creek with a requirement that each applicant include a training mine proposal as part of the bid. Alternatively, he could have used his considerable expertise in the mining industry to approach a mining company with the wherewithal to engage in a competitive process for Doyles Creek and assist it to submit a proposal that included a training mine. He did neither.

281. Mr Maher was also an experienced union leader who can be taken to have been concerned with issues that affected the workers, including mine safety. His reaction to the training mine proposal was telling. Mr Maher found Mr Maitland incapable of answering basic questions about the benefits to trainees from the training mine. When Mr Maher realised that no commitments had been obtained from mining companies to employ the trainees or otherwise recognise their qualifications, he refused to support it and was instrumental in passing the resolution recording that the CFMEU did not support it. Mr Maitland never approached Mr Maher again to obtain the support of the CFMEU. Mr Maitland was always sceptical about his chances of obtaining the support of the Minerals Council, which meant that the commitments Mr Maher regarded as important were unlikely to be forthcoming. As referred to above, the views of the Department, the Minerals Council and the Central Executive of the CFMEU were, in substance, the same.

282. Although I accept that Mr Maitland might have wanted to bring about the training mine at Doyles Creek, I am satisfied that, when he encouraged and assisted Mr Macdonald to commit the principal offences, Mr Maitland also did so for financial gain.

283. That Mr Maitland has effectively lost all that he gained from the offending conduct is not a matter of particular weight although it will be taken into account on subjective circumstances. It is a not uncommon consequence of crime that the profits made from it are not retained. Mr Maitland’s current financial position is largely a result of the tax liabilities he incurred as a consequence of the profits made from the increase in value of NuCoal shares as well as the legal fees he incurred in the investigation conducted by the Independent Commission Against Corruption (ICAC).

284. For the same reasons as given above with respect to Mr Macdonald, I do not regard the harm caused by Mr Maitland’s offending able to be assessed by reference to any potential Additional Financial Contribution which might have been earned by the State, or with the profit made by Jonca on the shares at any particular time.

285. I do not propose to take the element of planning into account as an aggravating factor since I regard it as integral to the elements of the offence of accessory before the fact in the present case.

Mitigating factors

286. On 7 March 2016 Mr Maitland was convicted of an offence of giving misleading evidence at a public inquiry contrary to s 87(1) of the Independent Commission Against Corruption Act 1988 (NSW) for which he was directed to enter into a good behaviour bond pursuant to s 9(1) of the Crimes (Sentencing Procedure)Act for 2 years commencing on 7 March 2016. His appeal against sentence was dismissed by Baly SC DCJ on 13 October 2016. The offence was committed in 2013 when he gave evidence to ICAC that he had sought to comply with the obligation not to disclose the content of his compulsory examination as directed. His guilt was proved by evidence of a telephone intercept which recorded his disclosure of that examination to a third party (not Mr Macdonald). This offence took place some years after the offences for which Mr Maitland stands to be sentenced. In these circumstances I accept that Mr Maitland is entitled to be treated as not having any record of previous convictions and is otherwise a person of good character. His contribution to mine safety is referred to below.

287. I consider that Mr Maitland is unlikely to re-offend because the prospect that he will ever be in a position again to assist or encourage a holder of public office to commit wilful misconduct in public office is remote, having regard to his age and the presumed effects on his reputation of the current offences. In these circumstances specific deterrence is of limited relevance. I am not satisfied he has good prospects of rehabilitation as he has no insight into his offending. He has shown neither remorse nor contrition and, accordingly, is not entitled to mitigation on those grounds.

Subjective circumstances

288. Mr Maitland was born in 1946 and had a stable family life. He attended private schools in his formative years. He left school after Year 11 to take up a position as a clerk. He worked as an underground miner in Queensland and became a qualified deputy who also worked in mines rescue. He had a distinguished career in mining unions, which culminated in his election as the National Secretary of the CFMEU in 1998, a position which he held until his retirement on 2006. He was the workers' spokesperson for the development of the International Labour Organisation Convention on Health and Safety in Mines in 1995. From 1999 until 2005, Mr Maitland was the President of the International Federation of Chemical, Energy Mine and General Workers' Union, an international union based in Brussels which covered some 20 million workers in 114 countries. As a result of his international commitments, he was, according to Mr Maher, often out of the country. In 2010 was awarded the Order of Australia for his contribution to the mining industry both in Australia and overseas. I accept, on the basis of the evidence at the trial, that Mr Maitland dedicated his professional life to mine safety, both in Australia and overseas.

288. Mr Maitland told Lorena Lincolne, who prepared the pre-sentence report, that he felt victimised as he had dedicated his entire working life to improving work and safety conditions for miners in Australia and abroad.

289. Mr Maitland married Carol in 1970. They have two adult children, who are in their forties. The offender and his wife have provided emotional and financial support to their daughter, whose son has an immune deficiency disorder which has required surgery. They have also provided support to their son, following the breakdown of his relationship, and grandson.

290. According to Dr Mazalin, Mr Maitland was initially diagnosed with Adjustment Disorder with Mixed Anxiety and Depressed Mood in 2014, but this diagnosis has recently been adjusted to Major Depression. Dr Mazalin opined that he could make a full recovery “with ongoing treatment, and a greater sense of certainty about his future”. Mr Maitland is very concerned about his wife’s declining mental health. Dr Mazalin opined that Mr Maitland would require psychological treatment if imprisoned, and possibly medication, because of the potential for his depression to worsen and the possibility of suicidal ideation.

291. I accept that Mrs Maitland is devastated by the prospect that her husband will go to gaol and is worried “given his ill health that it may kill him”. Ms Desmond opined in her recent report of 19 May 2017 that Mrs Maitland is presently suffering from Acute Adjustment Disorder with Anxiety and Depressed Mood and is taking anti-depressants. Ms Desmond opined that Mrs Maitland’s state of health would seriously deteriorate if Mr Maitland was sentenced to a term of imprisonment.

292. I do not regard the hardship which will be suffered by Mr Maitland’s family, and particularly his wife, as sufficiently extreme to affect the length of the sentence. However, it will be taken into account, with other matters, on the question of special circumstances.

Special circumstances

294. I find special circumstances in the case of Mr Maitland due to a combination of his age, his mental health, and that of his wife and the fact that this will be his first time in custody. There will be some adjustment to the statutory ratio between the total term and the non-parole period.

Other matters concerning both offenders

Facilitating the administration of justice

295. Defence counsel conducted the trial on behalf of the offenders in an efficient manner. Concessions were made and agreements reached, including as to certain facts and the admissibility of evidence, which considerably shortened the time and cost to the public of the trial. The Crown accepts that I should take this matter into account on sentence in favour of both offenders, and I do so.

Accumulation and concurrence

296. The grant of consent to apply and the grant of the exploration licence are closely related and derive from a continuous course of conduct. Nonetheless the criminality associated with each offence was separate and needs to be separately accounted for. In the present case I consider it to be appropriate to impose an aggregate sentence in respect of each offender.

Commencement of the sentence

297. I revoked bail in respect of each offender on 26 May 2017. Accordingly the sentences will commence from that day.

ICAC investigation

298. There was passing reference in the sentence hearing to the fact that both offenders were investigated by ICAC. Mr Jordan submitted that Mr Maitland was the subject of serious adverse findings by ICAC and that he had, accordingly, been publicly denounced. However, the evidence did not extend to the ICAC investigation or its findings, apart from the material concerning offence committed by Mr Maitland arising from his giving evidence there. In these circumstances I do not propose to address further any matter arising from the ICAC investigation as it was not the subject of evidence. I note that Mr Jordan did not submit that denunciation had no further role to play after the findings by ICAC.

Orders

299. I have decided to impose aggregate sentences of imprisonment on both offenders.

300. I make the following orders:

Ian Macdonald

1. Convicted of counts 1 and 3 on the indictment.

2. Impose 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 commencing on 26 May 2017 and expiring on 25 May 2024.

3. The offender will become eligible to be released on parole on 25 May 2024.

4. The sentences that would have been imposed for each offence if separate sentences had been imposed instead of an aggregate sentence are:

1. For the offence of Count 1, a sentence of 8 years.

2. For the offence of Count 3, a sentence of 7 years.

John Maitland

1. Convicted of counts 2 and 4 on the indictment.

2. Impose 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 commencing on 26 May 2017 and expiring on 25 May 2021.

3. The offender will become eligible to be released on parole on 25 May 2021.

4. The sentences that would have been imposed for each offence if separate sentences had been imposed instead of an aggregate sentence are:

1. For the offence of Count 2, a sentence of 5 years.

2. For the offence of Count 4, a sentence of 4 years.

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Amendments

30 March 2023 - Publication restriction removed – judgment republished

Decision last updated: 30 March 2023