ICAC/ Duncan V Ipp NSWSC

Result of corrupt Labor politician

Duncan v The Honourable David Andrew Ipp AO QC and Ors [2013] NSWSC 314

Hearing Dates

22 March 2013

Decision Date

10/04/2013

Jurisdiction

Common Law - Administrative law

Before

Hoeben CJ at CL

Decision

Plaintiff's summons dismissed.

Plaintiff to pay the Attorney-General's costs of the application.

Catchwords

ADMINISTRATIVE LAW - natural justice - rule against bias - apprehended bias - test for - actions of Commissioner of Independent Commission Against Corruption in course of a public inquiry - ADMINISTRATIVE LAW - bias by prejudgment - public inquiry by Independent Commission Against Corruption into granting of Mining Exploration Leases - contact between Commissioner and Departments of Government - provision of legal advice by Commissioner to Departments of Government - request by Commissioner that project approval not be granted until report made by Commission - statements by Commissioner that no factual findings yet made - application for injunction against Commissioner by potential beneficiary if Mining Lease granted - INDEPENDENT COMMISSION AGAINST CORRUPTION - significance of broad investigatory and inquisitorial functions and powers - how principles of apprehended bias by a prejudgment apply to such a body - whether contact with government bodies by a Commissioner and provision of advice provided basis for claim of bias by prejudgment - no basis for claim of bias by prejudgment established.

Legislation Cited

Independent Commission Against Corruption Act 1988 (NSW)
Environmental Planning and Assessment Act 1979 (NSW)
Evidence Act 1995 (NSW)
Mining Act 1992 (NSW)

Cases Cited

CUR 24 v DPP [2012] NSWCA 65
Ebner v Official Trustee in Bankruptcy [2000] HCA 63; 205 CLR 337
Gwandalan Summerland Point Action Group Inc v Minister for Planning & Ors [2010] 75 NSWLR 269
Keating v Morris & Ors [2005] QSC 243
McGovern v Ku-ring-gai Council [2008] NSWCA 209; 72 NSWLR 504
Michael Wilson and Partners Ltd v Nicholls [2011] HCA 48
R v Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA 13; 144 CLR 13
R v Carter and Attorney General(Tas) (unreported), Supreme Court of Tasmania, Full Court, October 1991
Webb v The Queen [1994] HCA 30; 181 CLR 41
Wentworth v Rogers [2000] NSWCA 368

Category

Principal judgment

Parties

Travers William Duncan - Plaintiff
The Honourable David Andrew Ipp AO QC - First Defendant
Independent Commission Against Corruption - Second Defendant
Attorney General of NSW - Third Defendant

Representation

Solicitors:
Yeldham Price O'Brien Lusk - Plaintiff
IV Knight, Crown Solicitor (NSW) - 1st, 2nd and 3rd Defendants

Counsel:
Mr N Hutley SC/Mr G Ng/Mr A Gerard - Plaintiff
Submitting Appearance - 1st and 2nd Defendants
Mr B Walker SC/Mr S Free - 3rd Defendant

File Number(s)

2013/68363

JUDGMENT

1HIS HONOUR:

Nature of proceedings

The plaintiff moves by way of summons for the following orders:

"1. An order restraining the first defendant (the Commissioner) from further presiding over or otherwise participating in, any public inquiry in respect of the investigation styled 'Operation Jasper' being conducted by the second defendant (the Commission), or any other investigation conducted by the Commission into matters falling within the scope of Operation Jasper, as amended on 1 and 12 November 2012.

2. An order restraining the Commission, by its officers, employees or agents, from preparing, furnishing to the Houses of the Parliament of New South Wales or otherwise publishing, any report in relation to any matter that is the subject of Operation Jasper, to the extent that such report is based on any evidence that was heard or adduced in any compulsory examination or public inquiry presided over by, or involving the participation of, the Commissioner.

3. An order restraining the Commissioner from preparing, or otherwise participating in the preparation of, any report prepared, furnished to the Houses of the Parliament of New South Wales, or otherwise published, by the Commission in relation to any matter that is the subject of Operation Jasper.

..."

2The Commissioner has filed a submitting appearance, as has the Commission. Leave was granted to the Attorney-General to be joined as the third defendant in order to fulfil the role of contradictor. This was done, having regard to what was said in R v Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA 13; 144 CLR 13.

3The parties provided to the Court a Joint Tender Bundle (JTB) which consolidated all of the documents which they proposed to tender. The JTB was prepared subject to each party's right to object to the tender of particular documents. The Attorney-General has objected to the documents commencing at JTB pp 6, 16, 18, 91, 98, 99 and 102. The basis of the objection is that none of those documents had been made public at any time and were not properly matters to be considered by a hypothetical "fair minded and informed observer".

4While the Attorney-General maintained that objection at the hearing, he submitted that it mattered not to the ultimate outcome as to whether those documents were considered. Accordingly, he was prepared to argue the matters raised in this application on the basis that the contents of those documents would be known to a "fair minded and informed observer". In the circumstances, I have proceeded on the basis that the contents of those documents are matters properly to be taken into consideration.

5That having been said, the stance adopted by the Attorney-General, in my opinion, relies too heavily upon what was said by Handley JA in Wentworth v Rogers [2000] NSWCA 368, which was a case very much dependent upon its own particular facts. In response, the plaintiff has marshalled a substantial body of authority to contrary effect: Webb v The Queen [1994] HCA 30; 181 CLR 41, Deane J at 73, CUR 24 v DPP [2012] NSWCA 65, Meagher JA at [39]; Gwandalan Summerland Point Action Group Inc v Minister for Planning & Ors [2010] 75 NSWLR 269 at [131].

6An objection to the document at JBT p 91 was raised on a separate basis, i.e. that it did not come within any of the exceptions in s69 of the Evidence Act 1995 (NSW). I will deal with that objection in due course.

Factual background and chronology

7On 11 November 2011 a resolution was passed by the Legislative Assembly of NSW that:

"1. Pursuant to s73 of the Independent Commission Against Corruption Act 1988, this House request the Independent Commission Against Corruption (ICAC) to inquire into and report with respect to:

(a) The circumstances surrounding the application for and allocation to Doyles Creek Mining Pty Ltd of Exploration Licence No 7270 under the Mining Act 1992 (NSW) (Mining Act);

(b) The circumstances surrounding the making of profits, if any, by the shareholders of NuCoal Resources NL as proprietors of Doyles Creek Mining Pty Ltd;

(c) Any recommended action by the NSW Government with respect to licences or leases under the Mining Act over the Doyles Creek area;

(d) Any recommended action by the NSW Government with respect to amendment of the Mining Act; and

(e) Whether the NSW Government should commence legal proceedings, or take any other action, against any individual or company in relation to the circumstances surrounding the allocation of Exploration Licence No 7270.

(2) As deemed necessary, the Commissioner may also inquire into any related matters.

(3) A message be sent to the Legislative Council informing it that the Legislative Assembly has this day agreed to the resolution and, pursuant to s73 of the Independent Commission Against Corruption Act 1988, request the Legislative Council to pass a similar resolution."

Operation Jasper

8On 23 November 2011 a resolution in similar (and in substance the same) terms, as passed by the Legislative Assembly on 11 November 2011, was passed by the Legislative Council.

9On 7 August 2012 the Commission announced that it would hold a Public Inquiry commencing 1 November 2012 in respect of Operations Jasper, Acacia and Indus. These names were allocated to investigations by reference to their geographic location. For example, Operation Acacia related to the allocation of an Exploration Licence (EL) for Doyles Creek and Operation Jasper related to the allocation of an EL for Mount Penny.

10The announcement included the following statement:

"Further, Operation Jasper will examine: The circumstances surrounding the decision by the Department of Primary Industries in November 2008 to reopen the expression of interest process for the awarding of exploration licences area and extend further invitations to additional mining companies, including Cascade Coal Pty Ltd; the circumstances in which exploration licences were awarded for Mount Penny (EL 7406) and Glendon Brook (EL 7405); whether confidential information relating to the expression of interest process for Mount Penny (EL 7406) and Glendon Brook (EL 7405) was provided to, and used by, persons associated with Cascade Coal Pty Ltd ..."

11On 24 August 2012 the Department of Planning and Infrastructure (DPI) requested an urgent advice from the Crown Solicitor as to whether the planning Minister (Mr Hazzard) could cease assessment of the application by Mount Penny Coal Pty Ltd (the relevant subsidiary of Cascade) pending the outcome of Operation Jasper.

12On 27 August 2012 the Crown Solicitor provided an advice to the DPI to the effect that there was no legal requirement for the Planning Minister to cease, temporarily or permanently, the assessment of the Mount Penny project application in order to await the outcome of Operation Jasper, and that it was not legally permissible for him to do so. The advice warned that if the assessment of the Mount Penny project ceased, whether temporarily or permanently, Mount Penny Coal could seek a "merits review" or a "judicial review" of the decision. The advice concluded that under the current legislative regime, the Minister did not have any lawful option to cease the assessment of the Mount Penny application in order to await the outcome of Operation Jasper.

13On the same day, two aspects of that advice were clarified by the Crown Solicitor. The phrase "not legally permissible" was intended to mean "no lawful basis" in the administrative law sense, and that even if the exploration licence was held to be invalid on the basis that it had been obtained by fraud, this would have no effect on the validity of the approval of the project application.

14On 7 September 2012 Mr Galasso SC provided an opinion to the DPI which generally agreed with the conclusions of the Crown Solicitor.

15On 25 October 2012 the Planning Minister (Mr Hazzard) is recorded by Hansard as saying in the Legislative Assembly:

"Having in mind that this application is on foot concurrently with the Independent Commission Against Corruption inquiry, it seems to me that a reasonable individual would ponder why the Government is allowing this application to proceed. Let me make it clear that, as planning Minister, I have explored whether it is legally possible to suspend or terminate the current Cascade Coal application. Accordingly, I requested and received Crown Solicitor's advice. I also obtained counsel's opinion. Whilst it is not appropriate to disclose the full details of those advices, I can tell the House that counsel advised that:

"As a matter of planning law, any grant of rights in relation to the project ... is a grant in rem attaching to the land, but is not a grant of rights in personam, given to a particular person."

That is, a development application attaches to the land and not to the individual applicant. Furthermore, counsel's opinion stated:

"How or why a person came to become the owner of land or the proponent for development is not necessarily a relevant consideration within the scheme of the Act."

That is, although the application may have come into existence as a result of corrupt practices, that corruption does not stop or necessarily taint the development application process. Furthermore, if the application proceeds, it must be dealt with as all applications are dealt with, irrespective of the origin of the original entitlement to bring the application. That is, the application must be dealt with on merit. Hence, in my opinion, a decision by me or by the Department of Planning and Infrastructure to forcibly defer the assessment of the application or to terminate the assessment would provide potential grounds for the applicant to appeal in the Land and Environment Court. A decision adverse to the Government's application in the Land and Environment Court would also run the risk of a court order for costs being made against the Government."

16On 12 November 2012 the public inquiry, with respect to Operation Jasper, commenced before the Commission. The scope and purpose of the public inquiry was announced by the Commissioner at the commencement of public hearings on that date and a document setting out those matters was published. Relevant parts of that document were:

"5. The circumstances surrounding the decision by the Department of Primary Industries in November 2008 to reopen the expression of interest process for the awarding of Exploration Licence areas and to extend further invitation to additional mining companies including Cascade Coal Pty Ltd and Mr MacDonald's role in these decisions.

6. The circumstances in which Exploration Licences were awarded in respect of Mount Penny (EL 7406) ... and how the holders of those licences have dealt with them.

7. The actual and potential financial benefits of the award of the Mount Penny and Yarrawa tenements to those parties who have or have had a direct or indirect interest in those tenements, whether by way of a holding of shares or as a trust beneficiary or otherwise.

8. Without detracting from the generality of paragraph 7, the actual and potential financial benefits to Cascade Coal Pty Limited and investors in that company including Travers Duncan ... of the award of the Mount Penny tenement to Cascade Coal Pty Ltd.

10. Whether Mr MacDonald or any member of his personal staff or any employee of the Department of Primary Industries ... provided confidential information relating to the expression of interest process in respect of the Mount Penny and Yarrawa tenements to members of the Obeid family or persons associated with Cascade Coal Pty Ltd.

...

17. Whether Cascade Coal Pty Ltd, Messrs Duncan .... attempted to mislead the NSW Government by concealing the involvement of members of the Obeid family in the acquisition of and dealings concerning the Mount Penny tenement."

17Between November 2012 and March 2013 the Commission conducted public hearings in relation to Operation Jasper. The Commissioner indicated his intention to bring down reports in relation to Operations Indus, Jasper and Acacia before July 2013. In the course of his opening remarks, the Commissioner said:

"The opening statement of counsel assisting is designed to further a number of ends. Its principal purpose is to make an early public statement as to the nature of the important allegations which the inquiry will investigate. Reference will be made only to some of the evidence on important matters. Affected persons will thereby be given as reasonable an idea as is possible at this stage of the import of and the context in which allegations have been made." (JTB 45S-T)

18In the course of that opening statement, counsel assisting said:

"132 Through a circuitous route which will be described later, a company called Cascade Coal Pty Ltd eventually acquired the Exploration Licence for the Mount Penny tenement." (JTB 67R)

"173 In the original call for expressions of interest (EOI), the Department of Primary Industry cut off dates for submissions at 24 November 2008.

174 On or about 3 December 2008 the Department of Primary Industry announced that it was suspending the EOI process, and reopened it so that new bidders could participate.

175 The evidence suggests that the ordinary EOI assessment process was interrupted at the direction of Ian MacDonald. His reasons for doing so set off yet another branch in this inquiry. Investigations so far suggest that it might be that Mr MacDonald was influenced to reopen the EOI process because of an approach made to him by Travers Duncan.

176 Travers Duncan is an important figure in the Australian coal industry - in fact, I understand that he revels in being known as "Mr Coal". Mr Duncan is a civil engineer who founded a coal mining company, Felix Resources Ltd. In 2009 a Chinese company, Yanzhou Coal, bought out Felix Resources for $3.5 billion. ...

177 A decision to reopen a governmental competitive bidding process is, by itself, unusual. ...

178 The issue is particularly important here because of two related matters. The first is that a company associated with Travers Duncan - Cascade Coal Pty Ltd - appears to have been a substantial beneficiary of the decision to reopen the EOI process. The second is that after declining to agree with the decision to reopen the EOI process, the Deputy Director General, Alan Coutts, found that he was no longer needed in the Department of Primary Industry." (JTB 74S-75Q)

"267 Obviously the allegations which will be made during this inquiry are very serious. I will now outline some of the more serious allegations:

...

That Ian MacDonald directed the Department of Primary Industries to reopen the EOI process with a view to benefiting Travers Duncan and persons associated with Travers Duncan.

...

That seven persons associated with Cascade Coal, Travers Duncan ...

Received and used confidential information provided to them by the Obeids and their associates.

Used that information in a way that Cascade Coal would win the Mount Penny Exploration Licence which they intended to resell for massive profit.

Attempted to conceal the involvement of the Obeid family to mislead the other directors and owners of White Energy." (JTB 89U-90I)

19On 6, 7 and 10 December 2012 the plaintiff was examined in the public inquiry. The public inquiry of Operation Jasper was adjourned on 14 December 2012 until 21 January 2013 after 58 of the 83 witnesses to be called had given evidence. All but two of the investors in Cascade Coal had given evidence by 14 December 2012.

20On 15 January 2013 a briefing note was prepared for the Premier by Mr Miller, who was the General Counsel for the Department of Premier and Cabinet (DPC) (hereafter referred to as the Miller briefing note). This is the document at JBT p 91 to which objection was taken by the Attorney-General. The briefing note is headed "ICAC Investigations into Mining Exploration Licences - Operations Jasper and Acacia".

21The briefing note records some detail of the Commission's investigation with specific reference to items (c), (d) and (e) in the referral by Parliament of questions relating to mining exploration at Doyles Creek (see [4] hereof). Paragraph 3.4 records:

"3.4 In a meeting with the Director General, the Commissioner of the ICAC suggested that the Premier may wish to confirm in writing that the NSW Government would welcome, in due course, recommendations from the Commission along the lines referred to in paragraph (c) to (e) of the resolution above, in respect of those other licences and leases and not just Doyles Creek."

22In the remainder of the briefing note, Mr Miller set out by reference to the suggestion from the Commissioner, the various options available to the Premier.

23Objection was taken by the Attorney-General to the admissibility of the whole of the briefing note on the basis that there was nothing in the document to indicate that Mr Miller was present at any meeting between the DG and the Commissioner, nor that he had any personal knowledge of any of the asserted facts about that meeting. The Attorney-General submitted that there was no indication of Mr Miller having been directly or indirectly supplied with the information by a person who had, or might reasonably be suspected to have had, personal knowledge of any asserted facts about the meeting.

24The Attorney-General objected to any part of the briefing note going into evidence, in particular the review of options in that they and the other parts of the document amounted to nothing more than a commentary by Mr Miller about proposed courses of action.

25The Miller briefing note is signed by Mr Miller and is also signed by Mr Eccles, the DG of the DPC.

26Mr Eccles was a party to the meeting. He was clearly in a position to know of the fact of the meeting and what took place at it. His endorsement by way of his signature on the Miller briefing note makes that part of it, i.e. paragraph 3.4 admissible. The balance of the briefing note is irrelevant and has been correctly characterised by the Attorney-General as a commentary. Accordingly, I am satisfied that a meeting did take place between the Commissioner and the DG of the DPC on or shortly before 15 January 2013 and that the subject matter of that meeting was that which is set out in paragraph 3.4. I reject the other parts of the Miller briefing note.

27On 21 January 2013 the public inquiry of Operation Jasper resumed to hear the evidence of the remaining witnesses. Mr McGuigan, one of the remaining investors in Cascade Coal, gave evidence in the public inquiry and the final witness from Cascade Coal gave evidence on 31 January 2013. The evidence of witnesses in the public inquiry of Operation Jasper concluded on 7 March 2013.

28On 30 January 2013 the Premier signed a letter to the Commissioner. The Commissioner received that letter on 5 February 2013.

29The content of the Premier's letter was:

"Dear Commissioner,

I am writing in relation to the Commission's current investigations concerning certain mining exploration licences (Operations Jasper and Acacia).

On 11 November 2012 (Legislative Assembly) and 23 November 2012 (Legislative Council), a resolution was passed under section 73 of the Independent Commission Against Corruption Act 1988 referring to the Commission for investigation and report certain matters relating to Exploration Licence No 7270 under the Mining Act 1992 over the Doyles Creek area.

The resolution included that the Commission should report on:

"(c) Any recommended action by the NSW Government with respect to licences or leases under the Mining Act over the Doyles Creek area;

(d) Any recommended action by the NSW Government with respect to amendment of the Mining Act; and

(e) Whether the NSW Government should commence legal proceedings, or take any other action, against any individual or company in relation to the circumstances surrounding the allocation of Exploration Licence No 7270."

The resolution also authorised the Commission to inquire into any related matters.

It is apparent that the Commission's investigations in respect of Operations Jasper and Acacia concern a number of other exploration licences and leases, as well as Exploration Licence No 7270 over the Doyles Creek area.

Accordingly, I am writing to you now to indicate that the NSW Government would welcome any findings and recommendations the Commission may think it fit to make along the lines of the matters referred to in paragraphs (c) to (e) above in relation to any other exploration licences or leases that may be relevant to your investigation."

30On 31 January 2013 the Commissioner telephoned Mr Eccles, the DG of the DPC, who made a file note of the contents of the telephone conversation (JTB 98). The content of that file note is as follows:

"I received a phone call from Commissioner Ipp this morning in relation to the issue of Exploration Licences and Mining Leases at Mount Penny.

The Commissioner advised that Minister Hazzard had spoken to him with the advice that he (the Minister) could not take matters before the current ICAC inquiry into account when considering whether to grant a development application (DA). This would have the practical effect of preventing ICAC related matters being taken into account in the decision to issue a Mining Lease as such a lease is for all intents and purposes automatically granted once a DA is provided.

The Commissioner then described the following legislative pathway:

Under s 65(2) of the Mining Act the Minister may grant a mining lease if a development consent is in force.

Under the relevant 2011 SEP, development for the purpose of the mining of coal is a State Significant Development (SSD).

Division 4.1 of the EPA Act.

- Under s89D the Minister for Planning and Infrastructure is the Consent Authority for the purpose of a SSD.

- Under s89K a mining lease cannot be refused if it is necessary for a SSD.

- Section 89H provides that section 79C of the EPA applies to the determination of a DA.

Section 79C provides the factors that can be taken into account by the Minister in relation to a DA.

- Section 79(1)(a) describes the factors and section 79(c)(e) identifies the public interest as a factor.

The Commissioner considers that allegations of Ministerial fraud and corruption are relevant to the public interest.

Under the ICAC Act, evidence given in the course of an inquiry cannot be used in criminal/civil proceedings. The Commissioner advises that the decision by the Minister to issue a DA is an administrative action and is not caught by the statutory limitation on the use of ICAC inquiry evidence. The Minister may, therefore, have full regard to such evidence.

The Commissioner believes that the Minister should not issue a DA in relation to Mount Penny until the report of the current inquiry is delivered to Parliament.

The Commissioner concluded by advising that he was speaking to me and providing formal advice pursuant to s13(3)(a) of the ICAC Act.

Chris Eccles - 31.1.13"

31On the same date the Commissioner sent a letter to the DG of the DPC referring to their telephone conversation and setting out in more detail his opinion concerning a "legislative pathway". In that letter the Commissioner said:

"First there is an alternative approach.

Clause 6(2) of Schedule 6A of the EPA Act provides that a development maybe declared to be of State Significance whether or not the development is a transitional Part 3A project. On the making of the declaration the development ceases to be a transitional Part 3A project.

Division 4.1 of Part 4 of the EPA Act deals with development that is State Significant development. Section 89H (which is in Division 4.1) provides that section 79C of the EPA Act applies to the determination of the development application.

If, therefore, the Minister was to declare the Mount Penny project of State Significance it would no longer be a transitional Part 3A project and, as the relevant consent authority, the Minister would be able to take into account the public interest under s79C when determining the application.

Whether the Minister who granted the Exploration Licence for the proposed development acted fraudulently or corruptly is a factor which should be taken into account in determining whether it is in the public interest to grant the development application.

The factual and any corrupt conduct findings made by the Commission in the present investigation will be relevant to a consideration of the public interest. It would also be open to the Commission to state its opinion or make a recommendation that development consent should not be granted (see section 13(3) of the ICAC Act). Such an opinion or recommendation may also be relevant to the public interest issue. However, relevant findings and recommendations will only be available once the Commission publishes its report, and this will not occur until the middle of the year.

The evidence given by witnesses at the public inquiry is available before the Commission publishes its report. Such evidence can be taken into account in considering the public interest question. Although the evidence has been given under objection, the effect of the objection is that the evidence cannot be used against the witness "in any civil or criminal proceedings or in any disciplinary proceedings" (s37(3) of the ICAC Act). Consideration by the Minister of the public interest does not involve such proceedings.

I confirm that I have given you the information disclosed in our telephone conversation and in this letter as I consider, pursuant to s111(4)(c) of the ICAC Act that, it is in the public interest to do so."

32On 31 January 2013 the solicitor for the Commission (Mr Waldon) sent a further letter to the DG of the DPC which referred to the Commissioner's letter of 31 January 2013 and reported on a conversation between Mr Waldon and the DG of the DPI (Mr Haddad). Mr Waldon said "the Commissioner asked me to convey to you Mr Haddad's comments".

33On 5 February 2013 the solicitor for the Commission sent a letter to Mr Walker SC seeking advice as follows:

"I refer to my letter of 20 December 2012. The Commission seeks your advice on two matters connected with the issue of whether the Government or the relevant Minister can take action to refuse to grant a mining lease for the Mount Penny tenement.

In particular your advice is sought with respect to:

(a) Whether, in order to attract the public interest criteria under s79C of the Environmental Planning and Assessment Act 1979(the EPA Act) when determining the current major project application for the Mount Penny tenement, the Minister for Planning and Infrastructure can declare the Mount Penny tenement a Development of State Significance and

(b) Whether in considering the public interest under s79C of the EPA Act, the Minister is entitled to take into account the circumstances in which the tenement was created and the Exploration Licence was granted."

34On 6 February 2013 the Premier's letter was tendered in the public inquiry and the Commissioner made the following announcement about the letter:

"That is the end of the letter. I wish to say something about that. The Commission is considering responding to that letter by providing advice as to any recommended action in respect of the tenement which is being investigated in this section of the inquiry, that is the tenement the subject of Operation Jasper. In my view it is urgent that advice should be given to the Government by the Commission in regard to ensuring that the Government has powers to take into account all matters of public interest in deciding what to do about the tenement. I propose, unless I decide otherwise, to give such advice within the next 10 days. I'm advising all parties now so that if they wish to they can make any submissions to the Commission within that period." (JTB 108R - U)

35The Court was then taken to a number of press reports which are set out in the JTB. I cannot see any useful purpose to be served in setting out those reports. It is sufficient to say that the Commissioner's statement on 6 February following the reading of the Premier's letter, caused considerable media interest.

36On 11 February 2013 before the public inquiry resumed, the Commissioner said:

"I understand that interested parties have made inquiries as to the nature of the submissions that might be made in regard to recommendations that the Commission might make in response to the Premier's letter of 30 January 2013 Exhibit J-122. Inquiries have also been made concerning the issues which might arise in consequence of the Premier's letter and the Commission's acceptance of his request to provide the advice he has sought.

In response I give the following details. At this stage the Commission proposes to give the Premier advice as to the following issues, (a) whether whatever factual findings may be made in the future the evidence led so far and the media publicity that has arisen require the application of public interest criteria to the issues described below; (b) the considerations that in law apply to the grant or refusal of a development application sought in respect of the Mount Penny tenement; (c) the considerations that in law apply to the grant or refusal of a Mining Lease in respect of the Mount Penny tenement; (d) whether public interest criteria now form part of the considerations referred to in paragraphs (b) and (c); (e) if in the Commission's view public interest criteria do not now apply to any of those considerations what steps should be taken to ensure that such criteria will apply including, but not limited to, the passing of appropriate legislation.

I wish to emphasise that in giving such advice, the Commission shall not make any factual findings whatever, the factual finding that the Commission makes should only be made once all submissions are in and the first public notice of those findings will be given when the Commission publishes its report to Parliament. ...

In extending this invitation to parties to address these issues the Commission is not thereby recognising that it has any obligation to do so. It is merely inviting parties to make submissions if they so wish in order to receive as much assistance as possible before providing the advice sought by the Premier." (JTB 124D - R)

37On 13 February 2013 the solicitors for the plaintiff sent a letter to the Commission. That letter included the following:

"2. The purpose of this letter is to set out our client's position in response to the Commissioner's invitation to the parties to make submissions on this topic if they choose to do so. (It should also be treated as our client's submission.) ..." (JTB 125P)

"6. It is not immediately apparent to us that the resolutions referred to in the Premier's letter constitute for the purposes of s73 of the Independent Commission Against Corruption Act 1988 (NSW) (the ICAC Act), a referral to the commission of any question relating to actions that may or should be taken by the NSW Government concerning EL 7406. Nor do we understand the ICAC Act to confer the Executive Government of NSW the power to expand the scope of a referral purportedly made under s73 of that statute, without any consultation with, or resolution passed by, the Houses of NSW Parliament.

7. That being so, we do not consider it appropriate for the Premier to have communicated with the Commission in respect of the conduct of the Operation Jasper as he has done or for the Commission to have received that communication and to act upon it in the manner which appears to be contemplated in the Commissioner's announcement on 6 February 2013. After all, to the extent that the Premier requires legal advice in relation to EL 7406, that maybe sought from the Solicitor General of NSW or the Crown Solicitor, and to the extent that some of policy advice is required, he is perfectly capable of availing himself of the knowledge and professional judgment of the officers within the NSW Public Service.

8. Nonetheless, notwithstanding our concern about the appropriateness of the communication and the course apparently proposed by the Commissioner, we make the following observations about the Premier's letter and the Commissioner's announcements.

8.1 That the Premier does not raise the need for urgent advice to be provided to the Government on these issues.

8.2 The Premier does not request that the Commissioner provide, in respect of the topics identified in his letter, any advice or recommendations separate to or in advance of the final report by the Commissioner;

...

8.5 It appears that the Commissioner formed his view within 24 hours of receiving the Premier's letter;

...

8.7 The Commissioner's announcement of 6 February 2013 concerning the urgency of the advice proposed to be provided to the NSW Government, and his further statement of 11 February 2013 as to the nature of that advice, together indicate that, in the Commissioner's view, the NSW Government should, even before the publication of his report, consider whether it should refuse development consent for a mining lease in respect of the Mount Penny tenement. Furthermore, it appears to be the Commissioner's view that this should be informed by public interest considerations, presumably of a sort capable of emphasising such matters as corrupt conduct. It is difficult to see, in the light of these pronouncements, how the Commissioner can possibly avoid the impression that he might have come to a concluded view concerning, among other things, allegations of corrupt conduct on the part of major investors in Cascade Coal Pty Ltd. Certainly, that impression has not been dispelled by the Commissioner's statement that factual findings will only be made after the receipt of submissions. After all, this leaves open the possibility that the Commissioner has come to a fixed view as to what those findings should be, one that is incapable of alteration by any evidence or arguments which have yet to be provided. So much may suggest itself to an informed fair minded observer.

9 Given the above, our client is concerned that:

9.1 The Commissioner might have apparently formed views on these issues sufficient to permit him to provide the advice contemplated to the Government before the conclusion of evidence or the receipt and consideration of submissions ...

10 We respectfully request that before the Commissioner take any of the steps contemplated, the Commission:

10.1 Identify with precision all of the facts, matters and circumstances which have led the Commissioner to form the view that the advice contemplated is urgent and should be provided separately in his report;

10.2 Identify with precision the nature of the advice contemplated to be provided;

10.3 Disclose any other facts, matters or circumstances of which the Commission is aware which may have a bearing on this issue.

10.4 Provide our client with a reasonable opportunity upon consideration of the matters requested in paragraphs 10.1 and 10.2, to consider his position and take any further action that he considers appropriate. ..." (JTB 126V - 128W)

38On 14 February 2013 before resuming the public inquiry, the Commissioner said:

"I think it entirely inappropriate for these letters to be written in this form. If there's anything that needs to be said on behalf of Mr Duncan it should be said openly in this hearing. Everything in this public inquiry so far has been undertaken in an open way. I also regard the tone of the letters as impertinent and impertinent in the sense that Yeldham Price O'Brien Lusk appear to regard the Commission and me as some kind of opposing party in litigation making demands and requiring me to give explanations for doing anything.

I can tell you now Mr Ng I am not going to reply to these letters any more. If you've got submissions to make, make them. I will make a short reply to this letter simply summarising what I'm going to say to you now. You've read these letters I take it?

MR NG: I have Commissioner.

THE COMMISSIONER: Yes. So that everybody understands what I'm talking about these letters concern the statement I made on 11 February 2013 concerning the request that the Premier had made of me and the Commission to give advice. Again in the interests of transparency and in the interests of giving everybody a chance to make submissions that letter was made an exhibit in this inquiry.

I made it clear, I think, that in advising people of the contents of the Premier's letter I was not accepting that there was any obligation on the Commission to do that and I would be acting perfectly within my rights to give a reply to the Premier without inviting anyone to make submissions on it. The letters that I - to which I have referred seem to adopt the position that I do have such a duty. I am not going to debate that issue, I am simply asserting as I asserted initially, that I do not regard there to be any duty and Mr Ng if your clients disagree with that, there are very well known means of attempting to exercise their rights if they consider that they have them.

Now one of the questions or demands that are made on me by these letters is to explain the urgency of providing the advice. I explained that before. I think it in the public interest in the light of the nature of the evidence and the media publicity and the public interest generally manifested that the options, open to the Government be made plain to it. I made it quite clear in my letter that I have not formed any opinion as to factual findings and I was not going to make any factual findings in giving the advice. The advice was solely based on the public interest in the Government receiving it. The letter, however, does suggest that despite my statement that I will not make any factual findings and I have not, and that the only factual findings I will make is when reporting, the letter suggests I might well make factual findings. I regard that as impertinent Mr Ng. When I have said that I will not I expect that to be accepted by legal practitioners ...

Now I am going to proceed to advise the Premier as soon as possible, I have said that I was going to advise him by Friday that is tomorrow, it may be that I will not be able to comply with that because this hearing has taken longer than I expected. But I intend, unless otherwise restrained by a Court, to proceed to respond to the Premier's letter." (JTB 131 F- 132H)

39On Friday 15 February 2013 the following exchange took place between a reporter, Mr Dempster, and the Minister for Resources and Energy, Mr Hartcher, on a television program:

"DEMPSTER: Minister welcome. Will the Government revoke the 11 Exploration Licences issued by Ian MacDonald's department in 2008 including the Obeid/Cascade Coal Mount Penny tenement if the ICAC finds the process was tainted by corruption?

MINISTER: The Government has asked these very questions to the ICAC Commissioner. Originally in relation to Doyles Creek Licence but recently some 10 days to 2 weeks ago the Premier also wrote to the ICAC Commissioner and asked his views in respect of the Bylong Valley Licences as well." (JTB 138M - N)

...

"DEMPSTER: What was your reaction when you saw evidence that Monaro Coal, one of the bidders had bid $25 million to become the frontrunner for that Mount Penny Licence then withdrew and Cascade Coal, Travers Duncan, Cascade Coal got the licence for just one million dollars. What was your reaction to that?

MINISTER: I know - I know - it was a rort - it was a clear-cut rort. There is no other word for it. The people of NSW as the ICAC Commissioner said, have been cheated - there's been a fraud - we believe there's been a fraud committed on the people of this State and if there are legal means by which we can recover what is owed to the people of this State, clearly we will investigate them." (JTB 139KL - M)

40On 19 February 2013 Mr Walker SC provided his advice. Relevantly, it said:

"16 In summary in relation to a Part 3A process there is a very respectable argument that if the Director General were not to raise a particular matter of public interest in the report to the Minister, the Minister could not take that matter into account in deciding, say, to disapprove the project. On balance, I prefer the opposite view - but my opinion recognises and does not eliminate the existence of that respectable view.

17 Before leaving the Part 3A process, I note that, on my reading of clause 8b of the Regulation, the Director-General is empowered to take into account and report on irregularities of a sinister kind in a process by which a project has reached a stage of an environmental assessment. I would not accept, as if it were a rule, that transparency, probity and propriety of antecedent steps in relation to a project have no connection with environmental assessment. Environmental assessment has always involved, under the EPA Act, a measure (albeit various in different circumstances) of public involvement. It has always been part of a process by which proponents - very often, corporations trading for profit and the investors with interests in the corporations - stand to gain very substantially from the exercise of administrative and executive decisions. It seems to me that a Director-General can and perhaps should note his misgivings about or outright deprecation of such irregularity.

18 By way of an extreme example, if the Director-General were aware that there was a nefarious connection between the Minister and a proponent or a person standing behind the proponent with an interest in the matter, it is to be hoped the Director-General would include under the rubric of public interest in the report to the Minister that the Minister's proposed conduct of considering and deciding the application would be contrary to the public interest."

41Following receipt of that opinion, by letter dated 20 February 2013, the Commissioner wrote to the Premier in response to the letter of 30 January 2013. In that letter the Commissioner reviewed events leading up to it and attached a copy of the opinion. He said in respect to his public announcement on 11 February 2013:

"I made it clear at the time of my announcement that, in giving such advice, the Commission would not make any factual findings whatever. Nothing contained herein should be taken as indicating that the Commission has made any factual findings or intends to make factual findings of a particular nature." (JTB 158G)

42The Commissioner then proceeded to address specific issues which he identified in his announcement of 11 February 2013.

"Issue (a) - Irrespective of any factual findings the Commission may ultimately make, or any legal challenge to any findings of corrupt conduct, it is now open to the NSW Government to consider that in light of the nature of the evidence led to date in the public inquiry, the substantial media publicity that has arisen as a result of that evidence and the general notoriety of the issues which are the subject of that evidence, public interest criteria should be applied to any decision affecting the Mount Penny Exploration Licence and any grant or refusal of any development application or application for Mining Lease." (JTB 158M - N)

43Under issue (d) the Commissioner said:

"Mr Walker's advice is that under the EPA Act public interest criteria form part of the considerations in determining whether to grant a development application. This is so whether the development is being dealt with as a transitional Part 3A development of a State Significant development.

...

In considering the public interest the Commission considers it would be open to the Minister for Planning and Infrastructure (and the Director-General in the event the project remains a transitional Part 3A project) to take into account matters such as "irregularities of a sinister kind" referred to in paragraph 17 of Mr Walker's advice and any "nefarious connection between the [then Minister (for Mining)] and a proponent or a person standing behind the proponent with an interest in the matter" as referred to in paragraph 18 of Mr Walker's advice." (JTB 160D - F)

44In relation to issue (e) the Commissioner said:

"The Commission is aware that the Department of Planning and Infrastructure has received legal advice which cast doubt on whether evidence relating to the circumstances in which an Exploration Licence was granted could be taken into account in assessing a development application because of a lack of legal interdependence between the granting of an Exploration Licence and the approval of a development application.

The Commission disagrees with that advice." (JTB 160P - R)

Legislation

45The following are relevant provisions of the Independent Commission Against Corruption Act 1988 (the Act).

"2A Principal objects of Act

The principal objects of this Act are:

(a) to promote the integrity and accountability of public administration by constituting an Independent Commission Against Corruption as an independent and accountable body:

(i) to investigate, expose and prevent corruption involving or affecting public authorities and public officials, and

(ii) to educate public authorities, public officials and members of the public about corruption and its detrimental effects on public administration and on the community, and

(b) to confer on the Commission special powers to inquire into allegations of corruption."

46Sections 7 and 8 contain broad definitions of "corrupt conduct". The functions of the Commission as set out in Part 4 of the Act, generally relate in one way or another to corrupt conduct.

47Section 12 provides:

"12 Public interest to be paramount

In exercising its functions, the Commission shall regard the protection of the public interest and the prevention of breaches of public trust as its paramount concerns."

48Section 13 relevantly provides:

"13 Principal functions

(1) The principal functions of the Commission are as follows:

(a) to investigate any allegation or complaint that, or any circumstances which in the Commission's opinion imply that:

(i) corrupt conduct, or

(ii) conduct liable to allow, encourage or cause the occurrence of corrupt conduct, or

(iii) conduct connected with corrupt conduct,

may have occurred, may be occurring or may be about to occur,

(b) to investigate any matter referred to the Commission by both Houses of Parliament,

(c) to communicate to appropriate authorities the results of its investigations,

(d) to examine the laws governing, and the practices and procedures of, public authorities and public officials, in order to facilitate the discovery of corrupt conduct and to secure the revision of methods of work or procedures which, in the opinion of the Commission, may be conducive to corrupt conduct,

(e) to instruct, advise and assist any public authority, public official or other person (on the request of the authority, official or person) on ways in which corrupt conduct may be eliminated,

(f) to advise public authorities or public officials of changes in practices or procedures compatible with the effective exercise of their functions which the Commission thinks necessary to reduce the likelihood of the occurrence of corrupt conduct,

(g) to co-operate with public authorities and public officials in reviewing laws, practices and procedures with a view to reducing the likelihood of the occurrence of corrupt conduct,

(h) to educate and advise public authorities, public officials and the community on strategies to combat corrupt conduct,

(i) to educate and disseminate information to the public on the detrimental effects of corrupt conduct and on the importance of maintaining the integrity of public administration,

(j) to enlist and foster public support in combating corrupt conduct,

(k) to develop, arrange, supervise, participate in or conduct such educational or advisory programs as may be described in a reference made to the Commission by both Houses of Parliament.

...

(2) The Commission is to conduct its investigations with a view to determining:

(a) whether any corrupt conduct, or any other conduct referred to in subsection (1) (a), has occurred, is occurring or is about to occur, and

(b) whether any laws governing any public authority or public official need to be changed for the purpose of reducing the likelihood of the occurrence of corrupt conduct, and

(c) whether any methods of work, practices or procedures of any public authority or public official did or could allow, encourage or cause the occurrence of corrupt conduct.

(2A) Subsection (2) (a) does not require the Commission to make a finding, on the basis of any investigation, that corrupt conduct, or other conduct, has occurred, is occurring or is about to occur.

(3) The principal functions of the Commission also include:

(a) the power to make findings and form opinions, on the basis of the results of its investigations, in respect of any conduct, circumstances or events with which its investigations are concerned, whether or not the findings or opinions relate to corrupt conduct, and

(b) the power to formulate recommendations for the taking of action that the Commission considers should be taken in relation to its findings or opinions or the results of its investigations.

...

(5) The following are examples of the findings and opinions permissible under subsection (3) but do not limit the Commission's power to make findings and form opinions:

(a) findings that particular persons have engaged, are engaged or are about to engage in corrupt conduct,

(b) opinions as to:

(i) whether the advice of the Director of Public Prosecutions should be sought in relation to the commencement of proceedings against particular persons for criminal offences against laws of the State, or

(ii) whether consideration should or should not be given to the taking of other action against particular persons,

(c) findings of fact."

49Section 14 of the Act relevantly provides:

"14 Other functions of Commission

(1) Other functions of the Commission are as follows:

(a) to gather and assemble, during or after the discontinuance or completion of its investigations, evidence that may be admissible in the prosecution of a person for a criminal offence against a law of the State in connection with corrupt conduct and to furnish such evidence to the Director of Public Prosecutions,

(b) to furnish, during or after the discontinuance or completion of its investigations, other evidence obtained in the course of its investigations (being evidence that may be admissible in the prosecution of a person for a criminal offence against a law of another State, the Commonwealth or a Territory) to the Attorney General or to the appropriate authority of the jurisdiction concerned.

(1A) Evidence of the kind referred to in subsection (1) (b) may be accompanied by any observations that the Commission considers appropriate and (in the case of evidence furnished to the Attorney General) recommendations as to what action the Commission considers should be taken in relation to the evidence.

(1B) A copy or detailed description of any evidence furnished to the appropriate authority of another jurisdiction, together with a copy of any accompanying observations, is to be furnished to the Attorney General.

(2) If the Commission obtains any information in the course of its investigations relating to the exercise of the functions of a public authority, the Commission may, if it considers it desirable to do so:

(a) furnish the information or a report on the information to the authority or to the Minister for the authority, and

(b) make to the authority or the Minister for the authority such recommendations (if any) relating to the exercise of the functions of the authority as the Commission considers appropriate."

50Section 16 relevantly provides:

"16 Co-operation with other agencies

(1) In exercising its principal functions relating to the investigation of conduct, the Commission:

(a) shall, as far as practicable, work in co-operation with law enforcement agencies, and

(b) may work in co-operation with the Auditor-General, the Ombudsman, the Australian Crime Commission, the Australian Bureau of Criminal Intelligence and such other persons and bodies as the Commission thinks appropriate.

(2) In exercising its other principal functions, the Commission shall, as far as practicable, work in co-operation with the Auditor-General, the Ombudsman, educational institutions, management consultants and such other persons and bodies as the Commission thinks appropriate.

(3) The Commission may consult with and disseminate intelligence and information to law enforcement agencies, the Australian Crime Commission, the Australian Bureau of Criminal Intelligence and such other persons and bodies (including any task force and any member of a task force) as the Commission thinks appropriate.

..."

51The Commission has the incidental power to do all things "necessary to be done for or in connection with, or reasonably incidental to the exercise of its functions" (s19(1)).

52The functions of the Commission in relation to investigations, examinations and inquiries are set out in Divisions 2 and 3 of Part 4 of the Act. The Commission may conduct an investigation on its own initiative, on a complaint made to it, on a report made to it or on a reference made to it (s20(1)). For the purposes of an investigation the Commission may conduct a compulsory examination (s30) or conduct a public inquiry (s31).

53The Commission has the duty to fully investigate a matter referred to it for investigation by a resolution of each House of Parliament (s73). The Commission may prepare reports in relation to any matter that has been, or is the subject of an investigation (s74(1)). Where a matter has been referred to the Commission by both Houses of Parliament, the Commission shall prepare a report, as directed by those Houses (s74(2)). Section 74B precludes the Commission from making certain findings in a report, including a finding or opinion that a person has committed a criminal or disciplinary offence.

54Section 111 of the Act relevantly provides:

"111 Secrecy

(1) This section applies to:

(a) a person who is or was an officer of the Commission (which is defined to include the Commissioner himself) ...

(2) A person to whom this section applies shall not, directly or indirectly, except for the purposes of this Act or otherwise in connection with the exercise of the person's functions under this Act:

(a) make a record of any information, or

(b) divulge or communicate to any person any information,

being information acquired by the person by reason of, or in the course of, the exercise of the person's functions under this Act.

...

(4) Despite this section, a person to whom this section applies may divulge any such information:

...

(c) in accordance with a direction of the Commissioner or Inspector, if the Commissioner or Inspector certifies that it is necessary to do so in the public interest"

55References are made to sections of the Environmental Planning and Assessment Act 1979 (NSW) (the EPA Act) in this judgment, but it is not necessary to set out the content of those sections.

Submissions

56The basis for the relief sought by the plaintiff is that "a fair minded and informed observer might reasonably apprehend that in his conduct of Operation Jasper, the Commissioner might have failed and might be failing still, to bring an impartial and unprejudiced mind to the matters being investigated by the Commission".

57The plaintiff submitted that this was not a demanding test (McGovern v Ku-ring-gai Council [2008] NSWCA 209; 72 NSWLR 504 at [14]). He submitted that the use of the word "might" contemplated a possibility (real and not remote) rather than the probability of apprehended bias (Ebner v Official Trustee in Bankruptcy [2000] HCA 63; 205 CLR 337 at [7]). The plaintiff accepted that the application of this principle in connection with decision makers outside the judicial system must sometimes recognise and accommodate differences between court proceedings and other kinds of decision making but submitted that those differences must not obscure the fundamental principle.

58The plaintiff accepted that commissions of inquiry served a function distinct from that performed by judicial officers, being one which must accommodate itself to the notion that during an inquiry the emergence of facts and the assignment of significance to them is likely to be different than that in civil litigation, often causing new lines of investigation to be explored. The plaintiff accepted the following statement of principle (which was in relation to a royal commission) that:

"The fair minded person would not be quick to suspect bias if the Commissioner intervened in the cross-examination of certain witnesses in a robust way and on occasions to an extent in excess of that expected of a judicial officer. Similarly, the fair minded observer would not be quick to suspect bias upon learning that the Commissioner was, in general terms, directing counsel assisting to pursue certain lines of inquiry nor even if he learnt that the Commissioner, as his inquiry progressed, began to entertain certain tentative views about key witnesses. The Commissioner's duty to inquire as well as to report and recommend is a factor which the fair minded bystander will have at the forefront of his or her mind." (R v Carter and Attorney General(Tas) (unreported), Supreme Court of Tasmania, Full Court, October 1991.)

59The plaintiff, however, qualified that concession by also relying upon the proposition that the circumstances that a commission of inquiry was an investigative body, charged with an inquisitorial function rather than a body called upon to resolve a contest between litigants, did not relieve it of any obligation of impartiality. On that issue, he relied upon the statement of principle by Moynahan J inKeating v Morris & Ors [2005] QSC 243:

"Recognition of the inquiry's inquisitorial and reporting function and its powers allowed the Commissioner to take a more active, interventionary and robust role in ascertaining the facts and a less constrained role in reaching conclusions that applies in litigation. It does not, however, dilute or diminish the expectation that an impartial and unprejudiced mind will be applied to the resolution of any question."

60By reference specifically to the functions of the Commission, the plaintiff accepted the following:

(i) There was no doubt that, as the repository of an inquisitorial function in the context of a public inquiry, the Commissioner could engage in hostile questioning of witnesses and in sharp exchanges with counsel. He might also have formed preliminary views capable of suggesting new lines of inquiry.

(ii) Despite the reputational damage that might be inflicted upon an individual as a consequence of the making of adverse findings by the Commission, the mere step of furnishing a report to the Houses of Parliament did not constitute the determination of the rights and obligations of any person. This would necessarily have a bearing upon the standard of impartiality to which the Commission would be held and in particular, the extent to which it reflected the standard required of curial decision making.

(iii) The power conferred upon the Commission to initiate investigations of its own accord distinguished it from even a Royal Commission, suggesting that it might have greater leeway in the formation of preliminary views than an ad hoc commission of inquiry.

(iv) Notwithstanding the element of collaboration that must attend the working relationship between the Commissioner and any counsel assisting appointed pursuant to s106 of the Act, the conduct of counsel assisting should not be seen as a proxy measure for the extent to which the Commissioner was complying with the requirements of procedural fairness. (PWS 49 - 52)

61Although being prepared to make those concessions, the plaintiff submitted that the obligation to avoid the appearance of bias on the part of the Commissioner was higher than that owed by Ministers of the Crown. He submitted that the obligation of the Commissioner was to do more than give genuine consideration to the matters before him and to avoid any personal interest in such a matter. He submitted that even though the Commission was the repository of various powers that distinguished it from an ordinary commission of inquiry, there was no reason why a standard of impartiality higher than that required of ministerial decision making should not apply to it, at least when it was conducting a public inquiry.

62In summary, the plaintiff submitted that despite the investigatory and advisory functions conferred upon the Commission, there was nothing in the Act to suggest that in the conduct of a public inquiry which was to culminate in the provision of the report to the Houses of Parliament, the Commissioner was not required to bring and to be seen to bring, a mind "open to persuasion" whose views, however developed, were at least capable of alteration on the basis of any evidence or arguments yet to be presented. The plaintiff submitted that the Court should have regard specifically to s2A of the Act and that the description of the Commission as an "independent and accountable body" should be seen as more than a "platitudinous statement of good intentions"(PWS [58]). The plaintiff submitted that at the very least, a fundamental aspect of the standard of impartiality required to be displayed by the Commission in the discharge of its functions was that it be independent from the Executive Government of NSW.

63The plaintiff's challenge to the conduct of the Commissioner was directed to five areas.

(i) The letter from the Premier of 30 January 2013.

(ii) The Commissioner's advice concerning the EPA Act and his contact with DPI.

(iii) The Commissioner's invitation to the parties to make submissions as to his proposed response, following receipt of the Premier's letter.

(iv) The Commissioner's response to the Premier's letter.

(v) The Commissioner's changing reliance upon sections of the Act.

The Premier's letter

64The plaintiff emphasised the following matters relating to that letter. The approach concerning the letter was initially made by the Commissioner to the DG of the DPC. The content of the letter was suggested by the Commissioner. The approach was made after much of the evidence in the matter had been given in what the plaintiff described as "a highly charged, highly significant public inquiry". As a matter of law, the letter was unnecessary and added nothing to the Commissioner's powers in that in his report to Parliament on Operation Jasper, he could have dealt with all of the matters referred to in the letter. At no time did the Commissioner disclose the background to the letter so that the impression created was that of the Government requesting an expansion of the area of inquiry with respect to Operation Jasper. By not revealing the true factual circumstances behind the letter, the Commissioner was in fact misleading the parties and the public.

65The plaintiff submitted that a fair minded observer being aware of those matters, might reasonably apprehend that the Commissioner's motivation might have been driven by a concern as to the appearance of the Commission's report trespassing without solicitation or encouragement upon matters which had not been specifically referred to it under s73. He submitted that a fair minded observer might reasonably apprehend that the Commissioner might have been desirous of "political cover" because he had already determined to make recommendations which he understood might be perceived as drastic or sensitive. The plaintiff submitted that a fair minded observer might reasonably have apprehended that the Commissioner might already have decided to make findings against interests associated with Cascade Coal and the plaintiff.

66The plaintiff submitted that put another way, a fair minded observer having been made aware of the Commissioner's role in promoting the sending of the Premier's letter, might reasonably apprehend that the Commissioner himself had arrived at a fixed view concerning the matters falling within the scope of Operation Jasper. This was because there would be no other justification for the need for "political cover".

67The plaintiff submitted that this matter taken in isolation was sufficient to establish apprehended bias but if that were not so, when taken with the other matters on which he relied, their combined effect provided a basis whereby a fair minded observer might conclude that the Commissioner might already have decided to make adverse findings against interests associated with Cascade Coal and the plaintiff.

The EPA Act advice and contact with DPI.

68The plaintiff submitted that the proffering of unsolicited advice to the DG of the DPC and to the DPI and its Minister concerning whether or not the evidence before the Commission could be taken into account as a matter of public interest under the EPA Act,when deciding whether or not to complete the assessment of the Mount Penny mining application, was indicative of apprehended bias.

69On that issue, the plaintiff relied upon the following matters. The Premier's letter did not call for urgent advice. The Commissioner had suggested a legislative pathway for ensuring that the evidence before the Commission could be considered by the Planning Minister in relation to the granting of mining leases at Mount Penny. The Commissioner had urged that no decision be made in relation to the Mount Penny leases before the delivery of his report on Operation Jasper to Parliament.

70The plaintiff submitted that a fair minded observer might reasonably infer that the Commissioner had acted in this way because he wanted to prevent leases being granted at Mount Penny because he might have already reached a conclusion on that issue which was adverse to the plaintiff and interests associated with Cascade Coal. The plaintiff submitted that the impression created by the Commissioner's actions was that of a person anxious to foreclose the possibility that the Planning Minister might grant mining leases at Mount Penny to interests associated with Cascade Coal.

Invitation to parties to provide submissions

71The plaintiff submitted that it was clear from the communications between the Commission and the DG of the DPC and the DPI that the Commissioner had already made up his mind as to how he would respond to the Premier's letter so that the request for submissions was not a genuine one and that the Commissioner was not really interested in considering whether it was appropriate for him to provide the foreshadowed advice or not. The plaintiff submitted that this was an additional matter which might lead a fair minded observer to conclude that the Commissioner might have already made up his mind, not only as to the advice which he was going to give to Government, but as to his ultimate conclusions with respect to Operation Jasper.

Letter of advice of 20 February 2013

72The plaintiff submitted that despite assertions in the letter to the effect that nothing in it should be taken as indicating any actual or intended factual findings, a fair minded observer was entitled to discount disclaimers of that kind. He submitted that the course of events culminating in the provision by the Commissioner of this letter constituted a sufficient basis for why a fair minded observer might discount such disclaimers.

73The plaintiff drew the Court's attention to the following matters relating to the letter. It was not responsive to the Premier's letter. There was no disclosure of the Commissioner having made the initial contact with the DG of the DPC, nor did it refer to advices concerning the Mount Penny leases previously given, both orally and in writing. When responding to issue (d), the Commissioner had used what senior counsel described as an "extreme example" to illustrate his point. In doing so, the Commissioner had added words to senior counsel's advice which altered its meaning.

74The plaintiff submitted that the alterations made by the Commissioner changed a hypothetical example by senior counsel into a direct allegation against Mr MacDonald, the former minister, whose conduct was the subject of Operation Jasper. He submitted that it was unfair for the Commissioner to rely upon an "extreme example" to support his argument. The plaintiff submitted that a fair minded and informed observer might reasonably think that the Commissioner, when providing this advice, might have sought to suggest to the government that there existed such a "nefarious connection" between Mr MacDonald and the plaintiff and interests associated with Cascade Coal.

Commissioner's changing reliance on sections of the Act

75The plaintiff submitted that when communicating with the DG of the DPC, the Commissioner was acting outside the functions conferred upon him by the Act, notwithstanding his purported reliance on s13(3)(a). He submitted that the Commissioner's reliance upon s111(4)(c) of the Act in his communication with the Director on 31 January 2013 was equally misconceived. The plaintiff submitted that the Commissioner's apparent reliance on 11 February 2013 on ss13(1)(d), (e) and (f) and 14(2)(b) as the sources of his power to advise the Premier, when taken with his earlier identification of other sections of the Act upon which he sought to rely, amounted to a series of changing explanations for his authority to interact with the Executive Government. The plaintiff submitted that a fair minded observer might conclude that these attempts to extend the limits of the Act might indicate that the Commissioner had already conclusively assessed the matters, the subject of Operation Jasper, adversely to the plaintiff and the interests associated with Cascade Coal.

76In summary, the plaintiff submitted that taken individually and together, those five areas of concern were sufficient to provide a basis whereby a fair minded observer might reasonably apprehend that the Commissioner might have already conclusively determined an outcome in respect of Operation Jasper which was adverse to the plaintiff and interests associated with Cascade Coal.

Consideration

77The difficulty for the plaintiff is that the actions under scrutiny are not those of a Judicial Officer performing judicial functions, but of a Commissioner with wide investigative and inquisitorial powers exercising those powers in the course of a public inquiry. The plaintiff while purporting to acknowledge such a difference in approach, has not done so in his submissions.

78On this issue, useful guidance is provided by McGovern v Ku-ring-gai Council [2008] NSWCA 209; 72 NSWLR 504 at [6] ff where Spigelman CJ said:

"6 Lawyers are, understandably, susceptible to approaching such issues, when they arise in the context of a statutory power, by treating judicial decision-making as some kind of paradigm, departures from which have to be explained or even justified by reason of the particular statutory power or decision-making body. In my view this is an incorrect approach. The case law on judicial decision-making is not a starting point when determining the application of the apprehended bias test in a specific statutory context. The statute must be part of the assessment from the outset and not treated as some kind of qualification of a prima facie approach.

7 How the apprehended bias test is applied is, as Basten JA indicates, affected by the statutory functions being performed and by the identity and nature of the decision-maker who is obliged by statute to perform those functions. The content of what the test requires varies from one context to another by a process involving, and usually determined by, statutory interpretation.

8 Each of the elements in the apprehension of bias principle requires a context specific approach which may, and usually will, differ from that appropriate for a judicial decision-making process.

9 In each case the Court must have an understanding, in the particular context of:

· What is the process involved in 'resolving the question' that the decision-maker "is required to decide".

· What may constitute an absence of 'impartiality' or lack of 'prejudice' in the mind of the decision-maker?

· What might a "fair minded lay observer ... reasonably apprehend" as to the above two matters.

...

11 However, as Hayne J has put it, it is necessary to inquire "what kind or degree of neutrality (if any) is to be expected of the decision-maker" (Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17; (2001) 205 CLR 507 at [187]). That expectation will differ from one statutory context to another. As indicated above, the judicial paradigm is not universally applicable."

79Basten JA in McGovern said:

"75 The important question for present purposes is how the test operates in relation to a local government authority, constituted by elected councillors, which has a diversity of functions including the broadly political (see Local Government Act 1993 (NSW),s 8) and those of an administrative decision-maker granting authority for specific developments, in accordance with statutory criteria, as in the present case. As the judgments of the High Court in Minister for Immigration and Multicultural Affairs v Jia Legeng demonstrate, quite different standards will operate in relation to ministerial decision-making because of the need to take into account the particular role and functions of the decision-maker: (see Gleeson CJ and Gummow J at 533 [78], 538 [99] - [102]); (Kirby J dissenting, but not on this point) (at 545 [125], 551 [141] - [143]); (Hayne J) (at 562 [180] - [182], 564 [187]; Callinan J (at 583 [244] - [245]. As explained by Hayne J at 562 [179] - 181]):

"[179] Importantly, the rules about judicial prejudgment recognise that, subject to questions of judicial notice, judges, unlike administrators, must act only on the evidence adduced by the parties and must not act upon information acquired otherwise. No less importantly, the rules about judicial prejudgment proceed from the fundamental requirement that the judge is neutral. ...

[180] Decisions outside the courts are not attended by these features. Reference need only be made to a body like the Refugee Review Tribunal ... to show that this is so. The procedures for decision-making by that body are much less formal than those of a court. There is no provision for any contradictor and the procedures are, therefore, not adversarial. ... The decision-maker ... will bring to the task of deciding an individual's application a great deal of information and ideas which have been accumulated or formed in the course of deciding other applications. A body like the Refugee Review Tribunal, unlike a court, is expected to build up 'expertise' in matters such as country information. Often information of that kind is critical in deciding the fate of an individual's application, but it is not suggested that to take it into account amounts to a want of procedural fairness by reason of prejudgment.

[181] The analogy with curial processes becomes even less apposite as the nature of the decision-making process, and the identity of the decision-maker, diverges further from the judicial paradigm...."

76 After referring to a number of relevant factors, his Honour continued (at 565 [187]):

"[187] Conferring power on a Minister may well indicate that a particularly wide range of factors and sources of information may be taken into account, given the types of influence to which Ministers are legitimately subject. It is critical, then, to understand that assessing how rules about bias, or apprehension of bias, are engaged depends upon identification of the task which is committed to the decision-maker. The application of the rules requires consideration of how the decision-maker may properly go about his or her task and what kind or degree of neutrality (if any) is to be expected of the decision-maker."

77 There can be no doubt that the position of councillors sitting on a local government authority are far removed in the exercise of their functions from a judicial paradigm. In those circumstances, a significant degree of care must be taken in applying a test, the language of which is deemed appropriate both in respect of courts and in respect of elected administrative decision-makers."

80It is true, as the plaintiff submitted, that the Commissioner unlike the Minister referred to by Hayne J, or the councillors the subject of the decision in McGovern, does not have a political dimension to his role. Unlike those persons, however, he does have extensive investigatory and inquisitorial functions and powers which require him to take actions which can be incompatible with the role of a Judicial Officer. Sections 2A(a) and (b), 10(2), 12, 12A, 13, 14, 18(1) and 19 describe those functions and powers in general terms with other sections specifying specific powers which can be exercised by the Commission. Importantly, the functions of the Commission include: "to investigate, expose and prevent corruption and by the exercise of special powers, to inquire into allegations of corruption" (s2A).

81In the context of this action, it is important to understand what constitutes "pre-judgment" for the purposes of apprehended bias. On that issue, McGovern is again of assistance. There Spigelman CJ said:

"15 The test for pre-judgment in Australian law is, in my opinion, to the same effect as that identified by the Supreme Court of Canada in Old St Boniface Residents Association v Winnipeg (City) [1990] 3 SCR 1170 where, in the terminology of the majority judgment: the decision-maker must be "capable of being persuaded" (at 1197c); pre-judgment is of such an "extent" that contrary representations "would be futile" (at 1197d-e); statements said to constitute pre-judgment must be an "expression of final opinion ... which cannot be dislodged" (at 1197f); the position of the person must be "incapable of change" (at 1197g). ...

16 A similar approach has been adopted in Australia on pre-judgment issues in Jia Legeng (at 531 [71], 540 [105]) where, in the joint judgment of Gleeson CJ and Gummow J, their Honours referred to a test of whether the decision-maker "is open to persuasion" or whether the "conclusion already formed [is] incapable of alteration, whatever evidence or arguments may be presented" (at 531 [72])."

82Having examined the authorities, Spigelman CJ concluded:

"22 Furthermore, as the joint judgment of the High Court said in R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546 at 554, a "fair and unprejudiced" mind:

"... is not necessarily a mind which has not given thought to the subject matter or one which, having thought about it, has not formed any views or inclination of mind upon or with respect to it."

23 The "open to persuasion" test is an appropriate formulation for bias by pre-judgment, to which the dual "might" test of apprehended bias must be applied; that is, that an independent observer might reasonably apprehend that the decision-maker might not be open to persuasion."

83Another important statement of principle which needs to be kept in mind is that of the plurality (Gleeson CJ, McHugh, Gummow and Hayne JJ) in Ebner at [8] where their Honours said:

"8 The apprehension of bias principle ... requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge (or juror) has an "interest" in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed."

84That statement of principle was refined in Michael Wilson and Partners Ltd v Nicholls [2011] HCA 48 where the plurality (Gummow ACJ, Hayne, Crennan and Bell JJ) said:

"63 In Ebner v Official Trustee in Bankruptcy, the plurality pointed out that application of the apprehension of bias principle requires two steps. First, it requires the identification of what it is said might lead the judge to decide a case other than on its legal and factual merits. And second, there must be an articulation of the logical connection between that matter and the feared deviation from the course of deciding the case on its merits. The plurality in Ebner went on to say that "[t]he bare assertion that a judge (or juror) has an 'interest' in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated". So too, in this case, the bare assertion that the judge appeared to be biased through prejudgment would be of no assistance without articulation of the connection between the events giving rise to the apprehension of bias through prejudgment and the possibility of departure from impartial decision making.

...

67 As pointed out earlier in these reasons, an allegation of apprehended bias requires an objective assessment of the connection between the facts and circumstances said to give rise to the apprehension and the asserted conclusion that the judge might not bring an impartial mind to bear upon the issues that are to be decided. An allegation of apprehended bias does not direct attention to, or permit consideration of, whether the judge had in fact prejudged an issue. ...

...

69 Here, however, it was said that "the fact that one party appeared before the judge on seven separate days in closed court raised a different and additional concern". That concern was identified as the possibility "in such circumstances that the judge's mind will become familiar with the character of the plaintiff's case to an extent that, consciously or subconsciously, there will be a tendency to place the further evidence within the pre-existing mental structure" (emphasis added). But the existence of a "concern" described as the possibility of placing the evidence led at trial into a "pre-existing mental structure" does not demonstrate that the fair-minded lay observer might reasonably apprehend that the judge might have prejudged an issue to be decided at trial. In order to establish such a reasonable apprehension it is necessary to analyse more closely the connection that is asserted between the conduct and disposition of interlocutory applications and the possibility of prejudgment.

70 The fact that Einstein J made several ex parte interlocutory orders and on each occasion directed that those applications, the material in support, the reasons for making the orders and the orders themselves not be disclosed to one side of the litigation did not found a reasonable apprehension of prejudgment of the issues that were to be fought at trial. It may well be that the directions not to disclose material should not have been left in force for as long as they were. Perhaps they should not have been made at all. But if their making or the failure to limit their duration was wrong, that did not found a reasonable apprehension of bias."

The Premier's letter

85When considering the position of the "fair minded lay observer" one needs to take into account that at the very least, such a person is aware of the contents of the Act. While such a person should not be regarded as possessing such knowledge of the Act as would be expected of a lawyer, that person should be regarded as having a general knowledge of the content of the Act and the functions performed by the Commissioner under it. In particular, such a person should be regarded as having an awareness of the Commissioner's investigatory and inquisitorial role, as well as that of making findings and recommendations and providing advice.

86At the heart of the plaintiff's submissions concerning the letter is the unstated premise, that because at no time was any public disclosure made of a direct contact between the Commissioner and the DG of the DPC which led to the Premier sending the letter of 30 January, this might be indicative that the Commissioner might have reached a decision concerning the Mount Penny tenement that was adverse to the plaintiff and interests associated with Cascade Coal. That proposition does not withstand analysis.

87Because much of the evidence concerning Operation Jasper had already been given when the Commission adjourned on 14 December 2012, it was open to the Commissioner to have announced publicly at the time that he proposed to widen the terms of reference of Operation Jasper, as in fact occurred. Had he done so, such an announcement was well within power and there could have been no basis for a complaint of apprehended bias.

88The Commissioner chose not to follow that approach, but communicated with the DG of the DPC suggesting that such an invitation come from the Premier. This is criticised by the plaintiff because of a lack of transparency, i.e. that the invitation was initiated by the Commissioner and not by the Premier. I do not see how, as a matter of logic, such "lack of transparency" could provide a basis whereby a fair minded observer might apprehend that the Commissioner might already have reached a final conclusion which was adverse to the plaintiff and his interests. Such an analysis comprehensively fails the second limb of the Ebner test, in that there is no articulation of the logical connection between the lack of transparency and the feared deviation from the course of deciding the investigation on its merits.

89There are a number of possible explanations for why the Commissioner might follow such an approach, none of which are suggestive of apprehended bias. The most obvious is that having heard much of the evidence, he considered that the referral with respect to Operation Jasper should be widened and that this would be better received by the public if it came from the Government, rather than from the Commission. That, of course, is purely speculation and there may have been other reasons. In retrospect, it may have been better for the Commissioner to have simply announced his intention to widen Operation Jasper. None of those propositions, however, satisfy the second limb of the Ebner test.

90Moreover, there is nothing sinister (in the apprehended bias sense) between such contact between the Commissioner and the DG of the DPC. In an inquiry of this kind, such contacts would be expected in the normal course of events. Nothing has been put before the Court to demonstrate that any fair minded, lay observer would expect that all dealings with Government by the Commission would be the subject of revelation. This is particularly so when on closer analysis, the nature of the contact which is revealed is of no consequence in the context of the plaintiff's application, in that it has no logical connection with a reasonable apprehension of predetermination by the Commissioner.

91What the Premier's letter and the Commissioner's response to it achieved was to alert the parties, in particular the plaintiff and the interests associated with Cascade Coal, to the fact that the evidence adduced in Operation Jasper might be able to be taken into account by the Planning Minister so as to enable him to delay processing development applications in respect of mining at Mount Penny. It was this which generated the letter from the plaintiff's solicitors of 13 February and almost certainly caused these proceedings to be brought.

92That the Commissioner should decide to include within the ambit of Operation Jasper, the provision of such advice after hearing some but not all of the evidence, is exactly the sort of circumstance specifically allowed for by the Act and its provision for the Commissioner to be proactive with a public interest charter (s12).

93Finally, there are the statements made by the Commissioner before re-commencing the public inquiry on 14 February and in his letter to the DG of the DPC of 20 February that he had not reached any final conclusion concerning the Mount Penny tenement. No basis has been identified as to why a fair minded observer might disregard such clear statements by the Commissioner.

The EPA Act advice and contact with DPI

94The plaintiff has failed to establish any basis for a claim of apprehended bias with respect to these actions of the Commissioner.

95Contrary to the plaintiff's submission, there was urgency associated with the Commissioner's response to the Premier's letters. One of the factors bearing on the Commissioner's response to the Premier was the pending application for project approval under Part 3A of the EPA Act in respect of Mount Penny. From at least October 2012 it was a matter of public record that the Minister for Planning had received legal advice suggesting that he might be obliged to deal with the application for project approval for a mine at Mount Penny without taking account of the circumstances that led to the granting of the Mount Penny Exploration Licence (JTB 116W-117H).

96In this context, it is important to note a feature of Part 3A of the EPA Act that was relevant to the process being undertaken by the Minister for Planning. Pursuant to s75V(1)(c) (which continues to operate in respect of the application for project approval of the Mount Penny mine by virtue of the savings and transitional provisions), a mining lease under the Mining Act 1992 cannot be refused if it is necessary for carrying out an approved project and is to be substantially consistent with the approval under Part 3A. It follows that if project approval for the Mount Penny mine under Part 3A of the EPA Act was granted, a mining lease under the Mining Act 1992 must follow as a matter of course. The application being considered by the Minister for Planning and the DPI therefore involved a process by which the Mount Penny Exploration Licence (EL 7406) could be converted into a mining lease under the Mining Act 1992.

97Once this context is appreciated, it is hardly surprising that the process relating to the application for Part 3A project approval was a matter relevant to the ongoing investigation by the Commission. In particular, the proposition that the Minister for Planning might be obliged to determine that application without regard to the circumstances in which EL 7406 was granted, was a matter of some potential significance given that the Commission was in the midst of an investigation, the scope of which included those very circumstances.

98The practical effect of the Minister for Planning following the legal advice which he had received, and which he had summarised in Parliament, was that any findings made as a result of Operation Jasper, which were adverse to the plaintiff and interests associated with Cascade Coal, would have little or no practical effect. This was the scandal to which the Minister had referred in his parliamentary speech.

99The reason for Operation Jasper being undertaken was that very serious allegations had been made. The public inquiry and the evidence placed before the Commission were designed to test the veracity and reliability of those allegations. The conversion of the application for project approval into a mining lease in respect of Mount Penny would render that exercise futile. That was because, regardless of the findings made, the persons who were accused of corrupt conduct would gain the fruits of that conduct. As the Commissioner said on a number of occasions, he was doing no more than endeavouring to persuade the Minister for Planning to wait until the outcome of the inquiry was known before granting project approval for the Mount Penny Mine.

100By proffering legal advice and having that advice largely confirmed by the opinion of senior counsel, which was contrary to that which the Minister for Planning had thus far received, the Commissioner was providing a principled basis for the Minister deferring his decision concerning project approval for the Mount Penny Mine. Significantly, at no time did the Commissioner ever suggest either orally or in writing, that the Minister for Planning should refuse project approval for the Mount Penny Mine. He did no more than seek to maintain the status quo until findings were made which it was anticipated would occur in July 2013.

101The plaintiff accepted that, depending upon the findings made by the Commissioner in his report to Parliament, it was open to him to express opinions as to the law affecting the grant of mining leases or development consent for mining projects and to make a recommendations that development consent should be withheld in respect of a project application (PWS 110). The plaintiff recognised that one of the possible outcomes of Operation Jasper, if the Commissioner were to find allegations of corruption in relation to the grant of EL 7406 to be substantiated, was a recommendation that there not be a grant of project approval (and therefore no automatic grant of a mining lease) in respect of Mount Penny. This must follow from an appreciation of the nature of the allegations being investigated by the Commission and the functions of the Commission under ss13 and 14 of the Act.

102Accordingly, the urgency for such a response by the Commissioner arose because of the pending application before the Minister for Planning, the need to allow the allegations of corruption to be fully investigated before that application was processed by the Minister, if that were possible, and the need to conclude the investigation within the specified time limit of July 2013. These were the reasons put forward by the Commissioner. They are compelling and reasonable and provide no basis for an allegation of apprehended bias. Moreover, other than by this application, they were not challenged.

103Once it is appreciated that an adverse finding against the plaintiff and interests associated with Cascade Coal was a potential outcome of Operation Jasper, the basis for criticism of the Commissioner's response to the Premier's letter disappears. The evidence indicates that the Commissioner formed the view that it was in the public interest that project approval in relation to the Mount Penny Mine should not be issued before his report. He expressed that view to the DG of the DPC (JTB 98). He was aware that the Minister for Planning had received different legal advice. That being so, he recommended that matters affecting Operation Jasper ought not proceed in such a way as to preclude the Commission from making appropriate recommendations about the Mount Penny project if and when it had made findings of fact which enabled such recommendations to be made. The formation and communication of these views by the Commissioner was reasonable, was consistent with the paramount objectives in s12 of the Act, and did not bespeak apprehended bias.

104There is nothing in these communications with the DG of the DPC and with the DPI to suggest that the Commissioner had a closed mind about the matters under investigation, or was bound to reach a particular conclusion about those matters. The Commissioner was acknowledging that one of the possible outcomes of the investigation was a finding that the grant of the Mount Penny Exploration Licence was affected in one way or another by corrupt conduct. His advice and recommendations had regard to the state of the Commission's investigation and the status of the application for project approval of the Mount Penny Mine at the time they were made. He was doing no more than recommending the deferral of the project approval for the Mount Penny Mine so as to allow Operation Jasper to proceed to its conclusion on the basis that allegations of corruption relating to the grant of EL 7406 had been made, were subject to ongoing investigation and would most likely be the subject of findings by the Commission in the near future. The analogy drawn by the Attorney-General with an application for an interlocutory injunction in adversarial litigation is, with respect, quite apt.

105I have concluded that a fair minded observer could not reasonably apprehend that the Commissioner had provided advice of the kind which he did because he might have already reached a conclusion in relation to the Mount Penny tenement which was adverse to the plaintiff and interests associated with Cascade Coal.

Invitation to parties to provide submissions

106There was no doubt that the Commissioner had a clear idea of the sort of response which he proposed to make to the Premier's letter when he invited submissions from the parties to the public inquiry. There is nothing surprising in that. Even though he was not required to do so, he adumbrated to the parties the response which he intended to make but gave them the opportunity of making submissions with respect thereto. Ultimately, the response made by the Commissioner was along the lines which he had foreshadowed.

107There is nothing in that factual circumstance which provides a basis for the submission that a fair minded observer might apprehend that the Commissioner might have formed a concluded view adverse to the plaintiff with respect to the Mount Penny tenement. The submission is misconceived.

Letter of advice of 20 February 2013

108I do not accept the plaintiff's submission (PWS 113 - 117) that the Commissioner in his response to the Premier had reworked the words of senior counsel's advice in such a way as to suggest predetermination or a closed mind with respect to the matters under investigation.

109Senior counsel in paragraph 18 of his advice was making a general point about the scope of the "public interest" in a statutory decision-making process by reference to an example in which the hypothetical players were a Director General and a Minister (JTB 167). The Commissioner in summarising the relevant legal principle in his letter to the Premier adopted the advice of senior counsel and expressed his own conclusion about how that principle would apply to the situation at hand (i.e., where there was an allegation under investigation that there was a nefarious connection between the Minister for Mines and an applicant for an Exploration Licence) (JTB 160). In doing so, the Commissioner provided an appropriate and orthodox translation of an abstract principle to a particular factual context.

110The other matters raised in the submission have already been dealt with. This submission has not been made out.

The Commissioner's changing reliance on sections of the Act

111The first difficulty with the plaintiff's submissions in relation to this matter is that even if the plaintiff were correct and the Commissioner had misinterpreted or misunderstood the sections of the Act upon which he sought to rely, such an error is irrelevant to a determination of whether apprehended bias has been established. Nowhere does the plaintiff explain how the proposition that the Commissioner acted ultra vires by providing advice to the Premier about the scope of certain powers, leads to the proposition that he had a closed mind about the matters under investigation. The use of words such as "straining the limits of the ICAC Act" is unhelpful. The fact that the Commissioner identified more than one source of power for his actions, might indicate no more than the overlapping nature of the functions conferred by the Act, rather than any inconsistency or doubt about the existence or exercise of a power.

112Such a submission was expressly disapproved in Nicholls, where the plurality said:

"67 ... And, no less fundamentally, an inquiry of either kind moves perilously close to the fallacious argument that because one side lost the litigation the judge was biased, or the equally fallacious argument that making some appealable error, whether by not dealing with all of the losing side's arguments or otherwise, demonstrates prejudgment. (Emphasis added)

...

70 ... It may well be that the directions not to disclose material should not have been left in force for as long as they were. Perhaps they should not have been made at all. But if their making or the failure to limit their duration was wrong, that did not found a reasonable apprehension of bias."

On this issue, Heyden J agreed:

"116 Of the six factors which the Court of Appeal saw as supporting that conclusion, the first five are no more than pointers to possible legal error on the part of Einstein J. Similarly, among the arguments advanced by the respondents in support of the view that there was a reasonable apprehension of prejudgment were arguments that Einstein J had fallen into error in dealing with the ex parte applications which justified appellate intervention. Even if Einstein J had fallen into error, which he did not, that by itself would not support the conclusion that there was a reasonable apprehension of prejudgment."

113In any event, the submission that the Commissioner was "straining the limits of the ICAC Act" is not made out. The submission requires a narrow interpretation of the Act so that where an investigation is on foot the Commission can do little more than produce a final report. Without reaching any final conclusion, it is certainly arguable that no such restriction is imposed by the Act. The power to report to Parliament is discretionary and flexible - the Commission "may prepare reports in relation to any matter that has been or is the subject of an investigation". The option to provide such a report, after or during an investigation, does not suggest that the Commission is otherwise constrained in forming opinions and formulating recommendations including "as a result of investigations", and communicating such opinions pursuant to s13(3).

114Similarly, the power under s14(2) of the Act to furnish information and make recommendations is not conditional on the Commission completing a public inquiry or investigation and/or furnishing a s74 report. It is arguable that the section contemplates that information may be furnished and recommendations provided without any public inquiry. It is also arguable that ss13(1)(d), (e) and (f) are not constrained by any requirement relating to the progress of an investigation or the provision of a s74 report. Those sections appear to be governed by the principal objects of the Act (s2A) by authorising the Commission to consider broader issues of public administration, including relevant laws bearing on corrupt conduct and to permit the Commission to provide advice at any time for the purpose of eliminating corrupt conduct. It is arguable that the actions taken by the Commissioner in responding to the Premier's letter involved the exercise of those functions.

115This submission has not been made out.

Conclusion

116For the above reasons, the particular actions identified by the plaintiff did not, either individually or together, provide a basis whereby a fair minded observer might apprehend that the Commissioner might have predetermined the matters under investigation.

117There were fundamental difficulties in the plaintiff's case to which I have already adverted. Firstly, the plaintiff submitted that a fair minded observer would be entitled to "discount" the various clear statements by the Commissioner that he had not made, and was not making, anything in the nature of factual findings. Despite that assertion, no argument was advanced to support this proposition beyond a general reference to the "course of events culminating in the provision of the Commissioner's advice".

118It is true that in McGovern Basten JA (at [81]) said:

"81 ... In a case where the decision-maker has publicly identified that prejudicial material has been available, the observer would be entitled to take account of a statement that it has not affected the decision-maker's approach to the decision, but need not be expected to accept the disclaimer."

119The observer, however, would need to have some rational basis for not accepting the disclaimer. In this case, no basis has been identified for the rejection of the Commissioner's statements on a number of occasions that no findings had been or were being made. Nowhere does the plaintiff identify any evidence that the Commissioner had made findings or that he might have made findings so that he was not "open to persuasion". The plaintiff has not identified any statements or actions by the Commissioner which are inconsistent with the proposition that no findings had been made.

120Secondly, none of the matters relied upon by the plaintiff could provide a basis whereby the second limb of the Ebner test could be satisfied. At no point was there an articulation of a logical connection between the matters relied upon and the feared deviation from deciding Operation Jasper on its merits.

121In the circumstances, I am not satisfied that an independent observer might reasonably apprehend that the Commissioner might not be open to persuasion concerning the matters, the subject of Operation Jasper. The orders which I make are as follows:

(1) The Summons is dismissed.

(2) The plaintiff is to pay the Attorney-General's costs of the application.

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