Former NSW Labor minister Ian Macdonald has been found guilty of wilful misconduct after granting a mining licence to a company chaired by ex-union boss John Maitland.
The former NSW resources minister was found guilty of two charges, while Mr Maitland was found not guilty of being an accessory to the offences.
In August 2008, Macdonald granted consent for Doyles Creek Mining Pty Ltd (DCM), owned by labour hire company ResCo, to apply for a coal mining exploration licence in the Hunter Valley
He approved the application later that year.
The decision to directly allocate the licence was made despite a briefing note from the Department of Primary Industries recommending a competitive tender process.
"The market was extremely competitive," Justice Hament Dhanji said.
"The coal price was high. Mr Macdonald knew this and also knew that other companies were interested in the area."
"The reality is that Mr Macdonald granted the consent not knowing what might have been obtained."
Throughout the case, the Crown argued that Macdonald was a close friend of Mr Maitland and had been helping him so that that he would be similarly looked after when he retired.
Justice Hament Dhanji said the evidence did not show that there had been any promise of reward or benefit.
"[That] involves a significant element of speculation," he said.
"Ultimately, the evidence of motive is so uncertain that I do not regard it as probative of guilt."
Despite that, he said he believed the "driving force" behind Macdonald's decision to grant an exploration licence to DCM was to benefit Mr Maitland and his company and amounted to misconduct.
"But for that motivation, the conduct would not have occurred," he said.
In finding Mr Maitland innocent, Justice Dhanji said it was unclear how much he had known about the proper process.
"There is room for suspicion and perhaps grave suspicion. But what ultimately is required is an analysis of the inferences able to be drawn from the objective evidence," he said.
"I am unable to exclude the possibility that Mr Maitland unquestioningly accepted the process the minister put in place."
He said Mr Maitland had been hired by ResCo partly because of his ability to influence politics.
"It is no surprise that that is what he was trying to do," he said.
The Supreme Court verdict is the result of a judge-alone retrial, after an appeal court found the jury in the first trial in 2017 was misdirected.
Macdonald is already behind bars, having been convicted in a separate matter concerning a coal licence in Bylong Valley.
A sentencing hearing is scheduled for February next year.
