Former NSW Labor Minister Ian Macdonald and his former union boss friend John Maitland have had their convictions over the granting of a multimillion-dollar coal exploration licence set aside and a retrial has been ordered.
NSW Supreme Court judge Christine Adamson in mid-2017 sentenced Mr Macdonald to at least seven years behind bars and Mr Maitland to at least four over the direct allocation licence to Doyles Creek Mining, a company Mr Maitland chaired, while he held the minerals portfolio in December 2008.
A jury had earlier that year found Mr Macdonald guilty of two counts of public misconduct over the lucrative deal, while Mr Maitland, who had made $6 million from the sale of shares relating to the deal, was found guilty as an accessory.
The pair appealed, and in its verdict on Monday the NSW Court of Appeal quashed the pair's convictions and ordered a retrial, with an administrative hearing set down for March 1.
Both men were bailed in separate applications before Supreme Court judge Natalie Adams straight after the Court of Appeal decision.
Neither of the men appeared at the appeal verdict or the bail applications.
Mr Macdonald's wife, Anita Gylseth, burst into tears and said outside court that she was "overwhelmed".
Among his bail conditions, Mr Macdonald must live at an address in Leura, in the Blue Mountains; must be of good behaviour; must not contact any prosecution witnesses and must not appropriate any points of international departure.
He is also required to report to Katoomba police station every Friday between 8am and 8pm.
Mr Maitland was bailed on similar conditions, including to live at address in Kingsford and report to Maroubra police station every Friday between 8am and 8pm.
In sentencing Mr Macdonald, Justice Adamson said he had "sought to cloak his misconduct" in the "apparently worthy" venture of a training mine to promote mining safety.
"The people of NSW were betrayed by Mr Macdonald's conduct," Justice Adamson said in sentencing Mr Macdonald in June 2017.
But during the November 2018 appeal, Mr Macdonald's barrister, Phillip Boulton, SC, said it was never proven to the jury who convicted Mr Macdonald that his intentions in carrying out the deal were improper.
"The fact was the appellant got nothing out of it," Mr Boulton said.
In adding to that argument, Mr Maitland's barrister, Edward Muston, SC, said that, in order to prove his guilt, Mr Maitland "needed to have known" of Mr Macdonald's nefarious intentions.
"The jury could not be properly satisfied that these elements were made out," he said.
Mr Muston also said that in directing the jury to decide whether Macdonald had executed the deal to benefit the public or to benefit Maitland, Justice Adamson had "essentially bound Mr Maitland to Mr Macdonald's wrongdoing".
Mr Boulton said Justice Adamson had provided misleading and confusing directions to the 12-person jury, including while answering a question during a late stage of the deliberations.
Among his grounds for appeal, Mr Macdonald also claims he suffered a miscarriage of justice because the prosecution had evidence compulsorily obtained from him at the Independent Commission Against Corruption.
He also argued his sentence is excessive and should be reduced.
Mr Boulton said there needed to be a "bright line that demarcates sloppy or negligent conduct, which might deserve … perhaps removal from office on one hand, and criminal conduct, which could lead to 10 years prison on the other".
Mr Maitland appealed on the grounds that Justice Adamson misdirected the jury in regards to the mental element required for misconduct; that the jury's verdicts were unreasonable given the evidence; and that there was a miscarriage of justice at trial because prosecutors had evidence forcibly obtained from Maitland by the ICAC.
The Court of Appeal held that Justice Adamson had misdirected the jury as to the state of mind required to be found guilty of the offence of wilful misconduct in public office.
"The Court held that the trial judge should have directed the jury that Mr Macdonald could only be found guilty if the power to grant consent to apply for an exploration licence and the power to grant the exploration licence would not have been exercised, except for the illegitimate purpose of conferring a benefit on Mr Maitland and Doyles Creek Mining Pty Ltd," a statement issued by the court reads.