Annabel Digance and her husband Greg already found guilty of blackmailing Premier Peter Malinauskas before trying to sue him

Former politician Annabel Digance and her husband are suing the Premier but unsealed court documents show they were actually found guilty of blackmailing him, a court can now reveal.

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Former Labor MP Annabel Digance and her husband Greg were found guilty of blackmailing Premier Peter Malinauskas in a closed court hearing before agreeing to leave him alone in exchange for not being sentenced, a court has heard.

On Wednesday, the Supreme Court revealed the District Court had issued “sealed orders” including “a finding of guilt” against both Digances prior to prosecutors dropping their blackmail charges in April 2023.

Those orders say “the court, having found the defendant Annabel Faith Digance guilty, considers it should exercise its power” under the Sentencing Act “to issue against the defendant” orders for the “prevention of abuse” of Mr Malinauskas.

The revelation has stunned some of Adelaide’s most senior and experienced criminal lawyers and barristers who, together, boast a combined 200 years of legal experience.

They said withdrawing charges after a finding of guilt was “very strange”, “unheard of” in criminal courts and something they had “never seen” in their years in the profession.

Another said it was “a super deal” that “probably would have ensured that it never got out into the public”.

It came during the first hearing of Ms Digance’s $2.3 million lawsuit – which lawyers for Mr Malinauskas and the state government said they would immediately move to have thrown out.

Michael Abbott KC, for Mr Malinauskas, said the Digances agreed to stay away from his client after District Court Judge Paul Muscat had found them guilty of blackmail.

Annabel and Greg Digance outside of District Court. Picture: Naomi Jellicoe

Premier Peter Malinauskas. Picture: Mark Brake

That was the only way at law, he said, such an imposition on their personal liberty could be implemented.

The finding of guilt, he said, meant Ms Digances’ prosecution was neither malicious nor unlawful, as she has alleged.

He asked the court to order the government hand over SA Police and the Office of the Director of Public Prosecutions’ files as to how the “agreement” with the Digances, to end their case without a sentencing penalty, came about.

Ms Digance is suing Mr Malinauskas and the government for $2.3 million, alleging her 2021 arrest for blackmail was unlawful and a malicious prosecution.

She alleges Mr Malinauskas abused his position, and engaged in misfeasance, by orchestrating the arrest to damage her career and stop a parliamentary bullying inquiry.

She further alleges Mr Malinauskas’ covert recordings of conversations with both her and her husband, Greg, were made unlawfully.

Mr Malinauskas and the government have denied her allegations, with the Premier telling The Advertiser “all I’ve ever wanted is for” the Digances “to leave me alone”.

Ms Digance’s arrest in 2021. Picture: Emma Brasier

In court on Wednesday, Mr Abbott said Ms Digance’s lawsuit could not succeed and should be thrown out.

He noted the Digances were represented in court by former judge Steven Milsteed and top barrister Lindy Powell KC when they consented to the orders.

“It’s clear from the court documents that the sentencing judge, Judge Muscat, found Ms Digance guilty of the charge of blackmail,” he said.

“When Judge Muscat entered the court (that day) he was undertaking a directions hearing … he was then invited to proceed as a sentencing judge.

“It was made clear to him that he could only excerise the power (to make the orders) that he did under the Sentencing Act, so he was in a sentencing process when all this happened.

“He made the orders and, after the orders were made, the sentencing process and sentencing jurisdiction was then brought to an end by the ODPP withdrawing the charges.

“Otherwise, he could have gone on to impose a sentence of imprisonment, a fine or a bond.”

Court records show the hearing was opened to the public and media in time for the withdrawl of the charges.

Barrister Michael Abbott KC, who represents Mr Malinauskas.

Associate Justice Graham Dart agreed, saying “the only way” Judge Muscat could have issued orders against the Digances was upon “the finding of guilt”.

“Clearly, for a malicious prosecution, the prosecution needs to be without merit,” he said.

“It seems to me, whatever else might be said, the prosecutor bore fruit because the Digances consented to the orders being made against them.”

Counsel for Ms Digance disagreed, saying her case was about more than just the prosecution and dealt with allegations of police and prosecutorial misfeasance.

They asked the court order the release of all documents to them by Friday of this week.

Associate Justice Dart declined that request, saying it was appropriate for Mr Malinauskas to first receive documents from the government ahead of the strikeout application.

He ordered that occur ahead of a further hearing in September.