Supreme Court New South Wales Medium Neutral Citation: R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 5) [2019] NSWSC 1489 Decision date: 18 June 2019 Jurisdiction: Common Law Before: Fullerton J Decision: The evidence is admissible against all three accused. Catchwords: EVIDENCE — Relevance — Whether evidence as to the Noble House meeting, the discussion of Mr Macdonald's future career at the meeting, and the agreement reached subject to that meeting, is relevant to facts in issue in the trial Category: Procedural rulings Parties: The Crown Ian Michael Macdonald (Accused) Edward Moses Obeid (Accused) Moses Edward Obeid (Accused) Representation: Counsel: S Callan / R Rodger (Crown) M Cunneen SC / J Davidson (Accused Macdonald) CT Barry QC (Accused Edward Obeid) MJ Neil QC / M Kalyk (Accused Moses Obeid) Solicitors: Solicitor for Public Prosecutions (Crown) HWL Ebsworth Lawyers (Accused Macdonald) M Bowe (Accused Edward Obeid) Murphy's Lawyers Inc (Accused Moses Obeid) File Number(s): 2015/212910; 2015/214251; 2015/212851 Judgment 1. HER HONOUR: The Crown proposes to adduce evidence of a lunchtime meeting on 20 February 2006 at the Noble House Restaurant in Sydney attended by various Members of the NSW Labor Party (the ALP), including Mr Macdonald. As at the date of the lunch, Mr Macdonald was a Member of the NSW Legislative Council and the Minister for Mineral Resources. The lunch was attended by Mr Luke Foley, together with Mr Doug Cameron, Secretary of the Australian Metal Workers Union, and Mr Paul Bastian, another senior member of that Union. Mr George Campbell, a senator in the Federal Parliament, and Mr Anthony Albanese, the Federal Member for Grayndler, were also in attendance. Both Mr Campbell and Mr Albanese were recognised leading figures in the left faction of the ALP in 2006. 2. The Crown proposes to call each of Messrs Albanese, Campbell, Foley and Bastian to give evidence of the fact of the meeting; the fact that Mr Macdonald's future career was discussed at the meeting; and the agreement reached at or after the meeting concerning his future as a Member of the NSW Legislative Council. It is also intended that Mr Foley will give detailed evidence that, amongst other reasons, the Noble House lunch meeting was held in order to gauge the extent of support for Mr Macdonald to be endorsed for preselection on the ALP Legislative Council ticket for another eight-year term ahead of the Labor Party conference in June 2006 and the March 2007 election. I anticipate that the Crown will lead evidence from Mr Foley to the effect that in each New South Wales state election the ALP puts forward a ticket of eight or nine candidates for the Legislative Council. Although the ultimate determination of who will be included on the ticket rests with the party's annual conference, he will give evidence that in practice senior officials are charged with managing the process of preselection in advance of the conference with the object of ensuring as much harmony as possible in the endorsement of candidates in the interests of party unity. 3. It is also intended that Mr Foley will give evidence that in his capacity as one of two Assistant General Secretaries of the ALP he was the principal organiser and representative of the interests of the left faction of the party, of which Mr Macdonald was a Member, while Edward Obeid was generally regarded as one of the two leaders of a powerful subgroup within the right faction. 4. The Crown anticipates that Messrs Foley and Campbell will give evidence that they were of the shared opinion that Mr Macdonald should not be endorsed for preselection and that he should not contest the 2007 election. Others at the lunch, including Mr Cameron, were of the opinion that his preselection should be supported for reasons which included that he was a serving Minister. Were Mr Macdonald to be successful in his bid to be endorsed for preselection and were he preselected, there was also discussion at the lunch as to how long he should remain in Parliament before announcing his retirement. 5. Mr Macdonald told those assembled at the lunch that he wanted to further his career as a Minister. He also expressed a wish to go to the Beijing Olympics in 2008 in that capacity. He expressed a wish to continue as a Minister until the end of 2009 when his daughter, who would be doing the HSC during that year, completed her secondary studies. He also expressed a wish to retain his Ministerial role in Cabinet as the Minister for Mineral Resources for financial reasons. 6. The Crown intends to adduce evidence from Mr Campbell to the effect that Mr Macdonald told him that: First, he was in financial difficulties – he had just gotten married or was about to get married and one of the daughters of his new partner was going through HSC and had a disability; and Secondly, he was a 'first class' Minister getting good publicity for cabinet, and he did not believe Morris Iemma would allow him to resign. 1. Messrs Albanese and Bastian are expected to give evidence to similar effect (paragraphs 8 and 10 of their statements, respectively). 2. The Crown intends to adduce evidence that it was agreed at the end of the lunch that Mr Macdonald would be endorsed for preselection to the Legislative Council for the March 2007 election but, if elected, he would retire at the end of 2009, that is, before the expiration of his eight-year term. I note that Mr Macdonald in fact resigned as a Member of Parliament on 7 June 2010, apparently as a consequence of Operation Jasper, an investigation by the Independent Commission Against Corruption (ICAC). 3. The Crown submitted that the evidence of what transpired at the Noble House meeting, in particular Mr Macdonald's stated determination to resist the views by some at the lunch meeting that he should not seek preselection for an additional eight-year term in the Legislative Council (a move that would have effectively ended his parliamentary career as and from March 2007), was probative in two related respects of his motivation in agreeing to participate in the conspiracy and, by extension, probative of whether he in fact participated in the conspiracy. 4. The first is that the jury would be entitled to find that he might be more willing to take the risk of misusing his position in public office by committing the nine acts of wilful misconduct variously dated between May 2008 and January 2009 (each of which was in furtherance of the conspiracy and for the improper purpose of benefiting the Obeid family interests in connection with the coal exploration licence at Mount Penny) at a time when he knew his parliamentary career was coming to an end. 5. The second is that the jury would also be entitled to find that he was, or might have been, motivated by the hope or the expectation that he might receive a financial benefit from either the sale of Cherrydale Park to the mining company who was ultimately granted the exploration licence over Mount Penny and/or that he might receive a financial benefit from any arrangement that members of the Obeid family might have been able to forge with that mining company for the exploitation of any valuable coal resource under the Mount Penny tenement at a time when he was subject to ongoing financial pressures of the kind he spoke about at the Noble House meeting. 6. Ms Cunneen SC, counsel for Mr Macdonald, submitted that the evidence did not meet the test of relevance in circumstances where the evidence did not allow for a finding that there was an agreement reached at or after the Noble House lunch meeting in the terms contended for by the Crown. I reject that submission. I consider it open to the jury to accept Mr Foley's evidence that the issue of Mr Macdonald's preselection to the ALP Legislative Council ticket was resolved a short time after the meeting, with Mr Macdonald gaining endorsement on the proviso that he would retire mid-way through the next Parliament, on or around the middle of the 2009 calendar year, and Mr Albanese's evidence that the meeting ended on the basis that Mr Macdonald would be preselected again but that he was to resign during the course of his next term and not sit the full eight years. 7. In addition, while the fact that the agreement reached at the meeting was apparently not honoured may impact on whether the jury accepts there was an agreement of the kind described by Mr Foley and Mr Albanese, that does not render their evidence that there was such an agreement irrelevant. I accept the Crown's submission that the fact of the agreement alone allows the jury to find that after the Noble House meeting, and extending up to the March 2007 election, Mr Macdonald apprehended that his parliamentary career was limited and, viewed in that way, that he might have been willing to use what time he considered was available to him for the purposes particularised by the Crown in the conspiracy charged. 8. Ms Cunneen also submitted that the possible consequences of a Minister misconducting himself are much greater than the loss of his political career, and thus even the fact (if it be the fact) that Mr Macdonald was in his last term of office, or believed he was, does not make it any more likely that he would engage in illegal conduct than if he intended to remain in office for the full extent of the eight-year term. In my view, that is a question of fact for the jury to grapple with. I am satisfied that the evidence allows for competing submissions. In short, I am satisfied the evidence is admissible against Mr Macdonald for the reasons identified by the Crown. 9. The Crown advanced the further submission that since it was agreed after the Noble House meeting that Mr Macdonald would retire at the end of 2009, the evidence from Mr Foley and Mr Campbell of what was said at the meeting to that effect is also probative of the existence and nature of the conspiracy, and therefore admissible against each of the accused. Each of the accused objected to the evidence being admitted for that purpose. 10. The Crown developed that submission as follows: the conspiracy charged was an illegal agreement in which Mr Macdonald agreed to wilfully misconduct himself as a Minister by acting in breach of his Ministerial duties. The fact that he was "prepared" to act in this way (irrespective of what might have personally motivated him to participate in the agreement), against the backdrop of an agreement that he would retire without completing his parliamentary term, is evidence capable of establishing the fact that the conspiracy existed and its nature and scope. The Crown Prosecutor put the submission in writing in the following way: [Because] this was to be Macdonald's last term in office, is also probative … of the existence and terms of the conspiracy because it is probative of [his] willingness to misconduct [himself] in public office and [that] but for the improper purpose [of benefiting the Obeids] he would not have done so. 1. In the absence of any evidence that either Edward Obeid or Moses Obeid were aware of the agreement between Mr Macdonald and members of his factional alliance that his parliamentary career was to be limited by a timeframe (or any evidence that may ground that inference), I am unable to see how what was agreed at the Noble House meeting is in any relevant sense probative of the existence of a conspiracy which had as its object the improper purpose of benefiting or advancing the financial interests of the Obeid family and their associates, including the fact that the illegal agreement was initiated in September 2007 and fully executed by 31 January 2009. 2. Finally, the Crown submitted that the evidence of what transpired at the Noble House meeting whereby Mr Macdonald effectively traded continuing support for his preselection and the financial benefits of continuing to hold public office in the short term on the understanding that were he elected at the March 2007 election he would resign from the Legislative Council well before the expiration of the eight-year term, could be legitimately deployed by the Crown at trial to meet any submission advanced on Mr Macdonald's behalf (or on behalf of the other accused) querying why Mr Macdonald would put his political career and his parliamentary stipend at risk by wilfully agreeing to misconduct himself in breach of his Ministerial duties and responsibilities. To the extent that is a submission advanced by either or both of Edward Obeid or Moses Obeid at trial, the Crown may seek a further ruling as to the use it might make of the evidence of the Noble House meeting. That question will await the conduct of the accused's case at trial. 3. The Crown also proposes to lead evidence, principally through Mr Morris Iemma, of the existence and nature of the political factions that operated in the ALP at the time that both Mr Macdonald and Edward Obeid were Members of Parliament. Mr Iemma was a Member of the NSW Parliament from 25 May 1991 to 19 September 2008 and Premier of the State of New South Wales from 3 August 2005 to 5 September 2008. That evidence is set out in detail in Mr Iemma's statement of 4 March 2014. 4. In summary, it is intended that he will give evidence that Members of the ALP that were elected to the Legislative Assembly or the Legislative Council were referred to as the "Caucus" which was comprised of two main factions, referred to as the "Left" and "Right". Within those factions there were various subgroups. Voting within Caucus is said by Mr Iemma "to follow factional lines and in some instances consistent with the subgroup within the faction". The Crown also proposes that Mr Iemma will give evidence that, subject to a few noticeable exceptions in relation to particular policy issues, the Left and Right factions of the ALP worked "quite well together". 5. This evidence is relied upon by the Crown as contextual to what Mr Iemma describes as a strong working relationship between Mr Macdonald, a significant figure on the Left, and Edward Obeid, as a leader on the Right. It is intended that Mr Iemma will give evidence that by 2008 the number of members of the Right faction in Caucus meant that it effectively controlled Caucus and that Edward Obeid (and Mr Joe Tripodi) had, to his observation, very significant influence within the ALP and were considered powerbrokers. 6. The Crown also intends to adduce evidence from Mr Iemma that both at various factional meetings and in private discussions with Edward Obeid, Edward Obeid would speak positively about Mr Macdonald, including on occasions where he would actively promote him as a suitable candidate for Ministerial appointment. 7. The Crown submits this level of patronage provides a basis for an inferential finding that Mr Macdonald regarded Edward Obeid not simply as a friend and a political ally despite their factional differences, but as a person to whom he owed a debt of gratitude by reason of the support he gave him both in his dealings with the Premier and within the Caucus. The Crown further submits that, with that in mind, Mr Macdonald found a way to repay that debt by agreeing with Edward Obeid (and his son Moses Obeid) that he would provide confidential information to them concerning the Mount Penny coal release area in breach of his Ministerial obligations. 8. All defence counsel objected to the evidence of Mr lemma being used for that purpose. 9. Mr Barry QC, counsel for Edward Obeid, submitted that Mr Iemma's evidence that "Mr Obeid spoke positively about Mr Macdonald" and that he observed that "they reached agreement on various policies and initiatives despite factional differences", together with other aspects of his evidence when he speaks of the formation and operation of the Left and Right factions of the party, are statements of opinion and are inadmissible for that reason. I do not accept that submission. As a long-term Member of the ALP and leader of the Parliamentary Labor Party, Mr Iemma's evidence sources from direct experience and observation. Mr Barry did not maintain any objection to Mr Iemma's evidence on the ground of relevance. 10. In Ms Cunneen's submission, the relevance of this body of evidence for the purposes identified by the Crown (namely as an additional source of evidence of Mr Macdonald's motivation in participating in the conspiracy) is "stretched, contrived and highly speculative". She submitted that since there is clear and countervailing evidence that Edward Obeid had considerable support and patronage from the "hard right", such that he had no need for any alliance with Mr Macdonald, and Mr Macdonald similarly had no need for an alliance with Edward Obeid given the support he could rely upon from within his own faction to secure Ministerial appointment or to advance his career (including from the Premier himself), the evidence sought to be adduced from Mr Iemma as to his observations of the working relationship between Edward Obeid and Mr Macdonald is irrelevant, having no rational capacity to be probative of any fact in issue, whether it be the fact and existence of the conspiracy or Mr Macdonald's participation in it. 11. While there might be other explanations, or possible explanations, for what motivated Mr Macdonald to enter into a conspiracy of the kind alleged, a conspiracy which had as its object the improper purpose of conferring benefits on Edward Obeid and his family by his agreement misconduct himself as a Minister, conduct he would not have agreed to but for that improper purpose, is not to the point. Neither is it to the point that his motivations might have included a financial motivation, or perhaps that in demonstrating the reach of his Ministerial power he was motivated by simple hubris and that he conferred a benefit on his political ally and his family because he had the power to do so. Competing or additional motivations do not neutralise the capacity of Mr Iemma's evidence to support the Crown's submission that his motivations might also have sourced from a desire or willingness to repay a favour to Edward Obeid. The weight that the jury might attach to that evidence will be a question for them in the context of all the evidence led at trial. 12. In the result, I regard Mr Iemma's evidence as probative of what might have motivated Mr Macdonald to commit the acts of misconduct the subject of the illegal agreement with each of Edward Obeid and Moses Obeid, and is admissible against him on that basis. Mr Iemma's evidence is also, by the same analysis, relevant to proving the existence of a relationship between Edward Obeid and Mr Macdonald as alleged co-conspirators, including the circumstances in which, as members of different political factions, it was open to them to forge the conspiratorial criminal alliance that the Crown alleges. Since the question whether Mr Macdonald did, in fact, wilfully misconduct himself as a Minister in the way the Crown alleges is one of the issues fundamental to proof of the conspiracy (perhaps the central issue), evidence of what motivated him or what might have motivated him to act in that way is also relevant to the question whether there was in existence a conspiracy of the nature and kind as that alleged by the Crown. That being the case, Mr Iemma's evidence is admissible against all three accused, including against Moses Obeid. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 July 2021