Repercussions from a brief hearing yesterday in the NSW Supreme Court are set to affect every politician and public official.
The circumstances in which they risk criminal prosecution over decisions that bestow benefits are now more certain.
This will act as a long-overdue guide for anti-corruption commissions whose work, until now, has required them to grapple with a confused body of law.
Clarity about the law governing misconduct in public office could also ease concerns about a planned federal anti-corruption commission, promised by both sides of federal politics.
The immediate impact, however, is dramatic: the task confronting the prosecution in a pending corruption trial in NSW has just become more onerous. That case features jailed former politician Eddie Obeid who might stand a greater chance of acquittal because of what happened yesterday.
These are the likely consequences that flow from one of the most important decisions ever made by Lloyd Babb SC, the NSW Director of Public Prosecutions.
Babb’s office gave notice that it would not seek leave to appeal to the High Court to overturn a new formulation of the common law offence of misconduct in public office.
That formulation, which is based on precedent, was handed down by the NSW Court of Criminal Appeal on February 25 and is the basis for its decision to quash the convictions of former state mineral resources minister Ian Macdonald and former union leader John Maitland.
This is now the unchallenged law in NSW. While not yet binding elsewhere, it is likely to be highly persuasive when politicians throughout the nation are accused of this common law offence.
Because this formulation is part of the common law it will probably spread and determine the outcome of proceedings triggered by the promised federal anti-corruption commission. Federal ministers should pay attention.
After the federal election, the winning side could displace the new common law rules with a statute of its own. NSW and the other states could do the same.
But that is unlikely.
Such a move would be criticised as either watering down anti-corruption law, pandering to big-government authoritarians or destroying the consistency of common law rules that look set to spread around the nation.
The balance in the new rules has been set unanimously by a five-judge panel of the highest court in NSW and is therefore unlikely to be cast aside.
The immediate beneficiaries of this change are Macdonald and Maitland, who have been freed from prison, pending a retrial that will be conducted under the new formulation.
Other beneficiaries are Eddie Obeid and his son Moses who are about to face prosecution, along with Macdonald, on charges of conspiring to engage in misconduct in public office.
Because the new formulation accepts that ministerial decisions can have multiple purposes, even a collateral illegitimate purpose, it provides a way of protecting legitimate exercises of state power from anti-corruption agencies that might see evil everywhere.
It effectively recognises the reality that ministerial decision-making frequently involves the creation of winners and loses.
The key to ministerial safety is the appeal court’s “but for” test. If a minister would not have made a particular decision but for the fact that it would confer an illegitimate benefit, an offence is likely to have been committed.
Anti-corruption agencies need to ensure their staff understand this in order to avoid wasting time and money on those whose conduct, at law, is blameless.
The Court of Appeal’s standard might not appeal to everyone, but politicians should be the last to object — particularly in NSW. Parliament in that state was given plenty of notice that something was wrong with the law governing misconduct in public office and it did nothing.
In the face of inaction the judiciary has corrected a problem with the common law — which is, after all, the province of judges, not politicians.
In June 2017, a report was presented to the NSW parliament that described the common law offence as “problematic”.
That report was drawn up by John Nicholson, who at the time was the acting inspector of the NSW Independent Commission Against Corruption. He wrote that the offence was widely viewed as “ill-defined” and said there was a need to clarify, for public office holders, what misconduct in public office meant.
Nicholson urged parliament to seek advice from the NSW Law Reform Commission on whether the common law offence should be abolished, incorporated into a statutory offence or left in its current state.
That “ill-defined” state of the law is the reason Macdonald and Maitland were bounced into prison and then released after almost two years with their convictions quashed but no finality.
A jury convicted them on March 30, 2017, after being misdirected by judge Christine Adamson about a key element of the offence. They were sentenced on June 2 of that year.
On June 29, with Macdonald and Maitland serving 10 years and six years respectively, Nicholson provided parliament with a report that outlined the uncertainty associated with this law and the need for reform.
Some might consider it startling that a state government that has claimed repeatedly to have zero tolerance for corruption, did nothing about flaws in the law that is supposed to target corruption in public office.
This is some of what Nicholson, a former judge, told parliament:
“With most law, but particularly the criminal law, there is a need for precision and certainty as to what conduct is prohibited and ergo, what conduct is permissible,” Nicholson wrote.
“For many years now, various jurisdictions have engaged, one way or another, in seeking to provide more certainty about what constitutes the offence of misconduct in public office.
“The offence is widely considered to be ill-defined and has been the subject of recent criticisms by the (British) government …
“For the past 60 years there has been uncertainty inherent in the offence …
“The concept of public office appears to have widened with the passage of time but there appears to be still no workable definition of what is meant by that term,” Nicholson wrote.
In this context, Adamson’s misdirection to the jury is evidence of exactly the sort of legal uncertainty Nicholson warned about.
The appeal court corrected Adamson’s misdirection by quashing the convictions and ordering a new trial that will apply the new approach to misconduct in public office — if a retrial goes ahead.
It needs to be kept in mind that the new formulation, which is now accepted by the DPP, is closely related to a proposal outlined in the submissions of Macdonald’s legal team. It seems unlikely they would have suggested something contrary to their client’s interests at subsequent proceedings.
Even if Macdonald and Maitland do face a retrial — and that decision is up to the DPP — the next test of the new approach is likely to be the separate conspiracy trial involving Macdonald and the Obeids.
The conspiracy case, like the matter with Maitland, involves the allocation of a coal exploration licence.
The difficulty confronting the DPP under the new formulation can be seen by the steps confronting the prosecutors.
They will need to prove, beyond reasonable doubt, that Macdonald issued a licence that would not have been issued but for an improper purpose; they will then need to prove the Obeids knew of the improper purpose; and finally the prosecutors will need to prove the Obeids knew the licence would never have been issued but for the improper purpose.
The prosecution case will probably fail if the defence can show the licence was issued for a legitimate public purpose, regardless of any collateral illegitimate effect.
Chris Merritt, Legal Affairs Editor
WTF (used with permission)