Coleman v Liberal Party of Australia, New South Wales Division

Coleman v Liberal Party of Australia, New South Wales Division - [2007] NSWSC 736 - NSWSC 2007 case summary — Zoe

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3 A Selection Committee meeting at which the Party's candidate for Cook was to be selected was fixed to be held in the morning of 23 June 2007. The Plaintiff, Mr Coleman, is a candidate for pre-selection. At about 7pm on 22 June, Mr Coleman applied to this Court for an order restraining the holding of the meeting. He claimed that fifteen persons who would be entitled to attend and vote at the meeting had wrongfully been excluded from participation pursuant to a decision of the Party's Disputes Panel made that afternoon. Mr Coleman asserted that the Disputes Panel had misconstrued the relevant provisions of the Constitution and that the practical result of the error would be that, being deprived of the benefit of the votes of the fifteen excluded persons, he would fail to gain selection as the Party's candidate for Cook. 4 Mr Coleman filed in Court a Summons naming the Party as defendant. The Party's State Director, Mr Jaeschke, was present in Court when the application was made, but as he is not a lawyer and had no time to obtain legal representation, he was not able to contribute a great deal. For reasons which I then gave - see [2007] NSW 655 - I granted an interlocutory injunction restraining the holding of the Selection Committee meeting until 5pm on 25 June and listed the matter for hearing at 2pm that day. 5 When the matter was called on 25 June, Mr Miller, solicitor, appeared for the Defendant and said that it wished to maintain a neutral position in the proceedings. The Defendant's attitude was that the contest was really between Mr Coleman and Mr Michael Towke, another candidate for selection for the seat of Cook. Mr Towke's objections had resulted in the ruling of the Disputes Panel which Mr Coleman says is invalid. Mr Newlinds SC appeared for Mr Towke, but was not then prepared to proceed with the hearing. 6 The injunction granted on 22 June was therefore continued until 5pm on 27 June, with the intention that the whole of the proceedings would then be determined on a final basis. 7 When the matter was called on 27 June, Mr Street SC appeared for Mr Coleman, with Mr Neild of Counsel, Mr Miller, solicitor, appeared for the Defendant, Mr Newlinds SC and Mr Golledge of Counsel appeared for Mr Towke, and Mr Bell SC appeared for another candidate for selection, Mr Fletcher. By consent of all parties, I have heard submissions on behalf of Mr Towke and Mr Fletcher as intervenors, not as parties to the proceedings. Mr Miller advised that the Defendant continued to maintain a neutral position and would submit to the order of the Court. 8 As final determination of the matter was urgent, at the end of the parties' submissions, I delivered a short judgment stating my conclusions and said that I would deliver amplified reasons for judgment as soon as possible. These are the amplified reasons. Background facts

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(d) determine the earliest and the latest dates upon which the meeting of the relevant Selection Committee is to be held." 12 The State Executive of the Party decided to contest the Federal seat of Cook and advertised for nominations for pre-selection, which closed on 30 April 2007. Mr Coleman, Mr Towke and Mr Fletcher were among those who nominated. 13 In accordance with Clause 21.1.2(1) of the Constitution, the State Executive resolved to adopt a timetable for the pre-selection whereby election of selectors closed at 12 noon on 18 May 2007, challenges to rolls of selectors closed on 23 May 2007, and the Selection Committee meeting was to be held on a date to be fixed in June 2007 following the close of rolls. The State Executive subsequently fixed the date for the Selection Committee meeting as 23 June 2007. As far as the evidence reveals, the State Executive did not fix a date as at which eligibility for membership of a Selection Committee was to be determined, as required by Clause 21.1.2(1)(c). 14 In accordance with Clause 22.1.3 of the Constitution, the Selection Committee is composed of 160 selectors, being 48 "central" selectors drawn from the State Executive and the State Council of the Party, and 112 "local" selectors, being members drawn from the Federal Electorate Conference chosen in accordance with Clause 21.5.9 of the Constitution. 15 In accordance with Clause 21.5.9(2) of the Constitution, each Branch is allocated a number of selectors for the Selection Committee in proportion to the number of its members. The Miranda Kingsway Business Branch is entitled to provide 10 selectors and the Caringbah Branch is entitled to provide 5 selectors. 16 The Miranda Kingsway Business Branch held a meeting to elect its selectors on 17 May 2007. The State Director was then notified of the election of those selectors, in accordance with Clause 21.5.9(6), prior to 12 noon on 18 May 2007, the time fixed for the close of rolls. 17 The Caringbah Branch held a meeting to elect its selectors at 10am on 18 May 2007. The State Director was then notified of the election of those selectors, in accordance with Clause 21.5.9(6), prior to 12 noon on that day. 18 As mentioned, challenges to rolls closed on 23 May 2007. On that day, Mr Towke wrote to the State Director challenging the pre-selection roll in a number of respects. Mr Towke sought the removal from the roll of the six additional selectors chosen by the Miranda Kingsway Business Branch (being those selectors other than the office bearers) on the ground that, contrary to the Constitution, they were elected by a show of hands rather than by secret ballot. He also sought the removal from the roll of all five selectors from the Caringbah Branch on the ground that, contrary to the Constitution, the Caringbah Branch failed to hold its meeting to elect its selectors in an electorate adjoining the electorate of Cronulla. 19 By memorandum dated 29 May 2007, the State Director ruled that the Caringbah Branch's meeting and the business conducted at the Miranda Kingsway Business Branch meeting were invalid for failure to comply with the Constitution. He noted in the memorandum that, in accordance with Clauses 4.1.5 and 4.1.6 of the Constitution respectively, each branch had the opportunity to correct the invalidating defect by convening a further Branch meeting. 20 Clause 4.1.5 of the Constitution provides: " Opportunity to correct defect

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One reason which must contribute in a great degree to produce the result is the general character of the voluntary associations which are likely to be formed without property, and without giving to their members any civil right of a proprietary nature. They are for the most part bodies of persons who have combined to further some common end or interest which is social, sporting, political, scientific, religious, artistic, or humanitarian in character, or otherwise stands apart from private gain and material advantage. Such associations are established upon a consensual basis, but, unless there were some clear positive indication that the members contemplated the creation of legal relations inter se, the rules adopted for their governance would not be treated as amounting to an enforceable contract. (compare per Jessel, M.R , Rigby v Connol , (1880) 14 Ch D 482 at p 487; and per Scrutton, LJ, Rose and Frank v Crompton and Bros ., (1923) 2 KB 261 at p 288." 27 At p.376, the majority said: "But the question which arises first is whether the rules relating to the selection of party candidates were intended to operate at all as a contract. If the action be treated as a representative proceeding against all the members of the party other than the respondent, it would be necessary for him to establish that the rules should be understood as a warranty by every member to every other who should be nominated for selection that his name would be admitted to ballet, unless it was withdrawn after proper opportunity for defence. If the action be treated as a proceeding against the members of the central executive who failed to submit the respondent's nomination for ballot, to establish a breach of contract it would be necessary for the respondent to show that the appellants, either by accepting office, or by adhering to the rules as members of the party, engaged with him contractually as a member to perform their duties in relation to nomination, in complete accordance with the rules.

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Contractual rights, therefore, appear to me out of the question. The rules of a voluntary association organised for political purposes are not agreements enforceable at law, or, in other words, contracts. Members of such associations who have grievances must resort to the remedies and the redress afforded them by the rules of their associations, and not to the Courts of law." 29 It will be noticed that whereas Starke J stated without qualification that the rules of a voluntary association organised for political purposes are not legally enforceable, the majority said that such rules are not treated as legally enforceable "unless there were some clear positive indication that the members contemplated the creation of legal relations inter se". 30 It is fair to say that in the 73 years since it was decided, Cameron v Hogan has been seen as increasingly difficult to reconcile with the needs of contemporary society. Judges have struggled to justify granting declaratory relief to resolve disputes within voluntary organisations which affect reputation, standing, occupation and the use of amenities, though not directly involving proprietary rights, while still paying lip service to Cameron v Hogan. Some Judges have simply ignored the case, as did Street CJ in Eq in Grogan v McKinnon [1973] 2 NSWLR 290, at 292C and in Flynn v University of Sydney [1971] 1 NSWLR 857, at 858G. Wootton J forthrightly and eloquently refused to follow it in McKinnon v Grogan [1974] 1 NSWLR 295, at 297-298. See also the elaborate review of the authorities by Holland J in Makin v Gallagher [1974] 2 NSWLR 559, at 578ff. 31 In Scandrett v Dowling (supra) Mahoney JA recognised that legally binding rights and obligations could arise other than by contract, so as to make the rules of a voluntary association justiciable: see at p.504, and see Buckley v Tutty (1971) 125 CLR 353. His Honour concluded that such binding obligations could arise from the rules of the Anglican Church, a voluntary organisation, but that it was a matter for the exercise of the Court's discretion whether it would grant declaratory or injunctive relief to enforce any particular rule: see at pp.505-507. After an exhaustive review of the authorities in the United Kingdom, South Africa and Australia which have discussed the enforceability in a court of law the rules of the Anglican Church, Priestley JA, with whom Hope AJA agreed, concluded that the Church's rules in relation to internal procedures had no legally binding effect and were not justiciable. His Honour's reasons make it clear that his conclusions were not intended to be of general application to all types of voluntary associations but were confined to the particular rules of the Anglican Church with which the Court was concerned. 32 In Baldwin v Everingham [1993] 1 Qd R 10, the plaintiff sought endorsement as the Liberal Party candidate for the Federal seat of Moreton. The State Executive decided that the plaintiff's application for endorsement should not proceed so that he was not considered by the Selection Committee. The plaintiff commenced proceedings for a declaration that his exclusion from consideration by the Selection Committee was in breach of the Party's constitution. The defendants contended that, in accordance with Cameron v Hogan, the issue was not justiciable. The case is, therefore, on all fours with the present. 33 At p.15ff, Dowsett J drew attention to the fact that since Cameron v Hogan had been decided there had been a change in the status of Australian political parties. The Commonwealth Electoral Act 1918 gives statutory recognition to the existence of political parties. A political party is registered pursuant to the Act. Section 169B provides that a person is taken to be endorsed by a registered political party as its candidate in an election if specified procedures are followed. Pt XX deals with election funding and financial disclosures. His Honour also noted that many of the procedural difficulties, particularly as to enforcement of remedies, referred to by the High Court in Cameron v Hogan, depending as they did on whether or not the rules of a voluntary association constituted a binding contract, were now of reduced significance because of the wider availability of declaratory relief. 34 At pp.18-20, Dowsett J said that he was obliged to follow Cameron v Hogan unless it was distinguishable by reason of the fact that political parties were now given statutory recognition. His Honour reached the conclusion that Cameron v Hogan was distinguishable on that ground. In doing so, his Honour derived support from the reasoning of Isaacs J in Edgar & Walker v Meade (1916) 23 CLR 29. That case, which concerned the rules of a trade union registered under the Conciliation and Arbitration Act 1904 (Cth), had been referred to by the majority in Cameron v Hogan. In Edgar & Walker, Isaacs J had held the internal disputes of a registered trade union to be justiciable even though the trade union was a voluntary association. 35 Dowsett J further held that there were no discretionary grounds justifying refusal of declaratory relief. He said, at p.24: "There is now a sufficient public interest in the enforcement of the rules of registered political parties."

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41 It does not follow as a matter of course that if a Court finds justiciable an issue arising out of the construction of the rules of a voluntary association it will proceed to grant the discretionary remedies of declaratory and injunctive relief. Where members of a voluntary association submit, under the rules, to a final determination of disputes by a domestic tribunal, Courts often refuse to review such a determination on the merits: see per Tadgell JA in Australian Football League v Carlton Football Club Ltd [1998] 2 VR 546, at 549-550. 42 In the present case, Clause 17 of the Constitution deals with the determination of specified "Disputes" by a Disputes Panel. A "Dispute" for the purposes of the clause is defined in Clause 17.6.1; there is no doubt that the issues in the present case constitute a Dispute as defined. 43 Clauses 17.7.1 and 17.11.2 provide that a Dispute comes to a Disputes Panel for a First Review and for a Second Review upon application of a Member. There is no issue that Mr Towke made applications for both reviews in the present case in accordance with the requirements of Clause 17. There is no issue that the Disputes Panels on the First and Second Reviews made their determinations in accordance with the procedures specified in Clause 17. 44 Clause 17.14.5 provides: "Subject to this Constitution, a decision of the Disputes Panel about a Dispute is final and binding on the Division and all Members and there is no appeal to any Body of the Division." 45 Mr Newlinds SC does not submit that Clause 17.14.5 ousts the jurisdiction of this Court to determine a dispute as to the construction of the Constitution, if such dispute is otherwise found to be justiciable. Rather, he submits strongly that Mr Coleman has committed a breach of Clause 17.14.5 in not accepting as final the decision of the Disputes Panel on a Second Review and in commencing these proceedings. He says that the fact that Mr Coleman is in breach of Clause 17.14.5 should weigh heavily in the exercise of discretion against granting any relief. Further, he says, the Court should give effect to the obvious intention of the Constitution that disputes within the Party should be kept within the Party and not aired publicly in Court. 46 I am unable to accept Mr Newlinds' submissions. I note first that the Party itself has not opposed Mr Coleman's application to the Court for declaratory relief. Referring to Mr Newlinds' submissions based on Clause 17.14.5, Mr Miller said: "… the Defendant recognises the rights of a person to approach the Court. The Defendant will be bound by the Court's decision in this regard." T30.13. 47 This concession recognises, I think, the reality that certain decisions of a political party's internal process - such as those relating to selection of candidates for election, for example - are in truth not private matters at all; they are very public, particularly when there are disputes between factions. In such circumstances, a political party may regard it as highly expedient in order to quell faction-fighting that the final decision on the Constitutional validity of its internal proceedings be left, not to a domestic tribunal constituted by party members whose impartiality may, however unjustly, be called into question but, rather, to a Court whose impartiality is beyond any question. Perhaps it is this expediency which explains why the decisions distinguishing Cameron v Hogan on the ground explained in Baldwin v Everingham have never been taken on appeal, so that the High Court has never had occasion to revisit Cameron v Hogan. 48 Judges have called attention to the fact that a modern political party registered under the legislation governing elections is in itself an institution whose internal stability and good governance is important in the democratic process: see e.g. Baldwin v Everingham at p.17.5. Accordingly, there is a public interest in ensuring that a registered political party, which is entitled to funding assistance for electoral expenses from public monies, is administered in accordance with a correct construction of its rules: see e.g. Baldwin v Everingham at 10.5, 20.20-.46; Grogan v McKinnon (supra) at 297E-298A; Daley v Newnham [2005] VSC 303, at [32]-[33]; Burston v Oldfield (supra) at [17]; Sharples v O'Shea (supra) at [14]. 49 In my opinion, if the Disputes Panel in the present case has not construed the Constitution correctly, so that Mr Coleman has been wrongfully deprived of consideration as a candidate by a properly constituted Selection Committee, there is a public interest in affording him the right to have that error corrected in this Court by declaration and, if necessary, injunction. If such relief is otherwise available in the present case, I would exercise the Court's discretion to grant it. Construction of the Constitution

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(b) State Executive approves the application, not later than the date determined by the State Executive for that Branch." 54 It seems that the Panel's reasoning is that "a time limit … imposed by the Constitution" for the purposes of Clauses 4.1.5 and 4.1.6 means a time limit created by a date expressly stated in the Constitution, such as 31 August and 30 November as stated in Clause 7.5.2. I do not agree with this reasoning. It is a very narrow construction of the words "imposed by the Constitution" in Clauses 4.1.5 and 4.1.6. Those clauses are obviously intended to be remedial and beneficial provisions in the Constitution, designed to prevent defects in formal procedure from defeating expressions of the will of meetings of all kinds which are to be held under the Constitution. A remedial clause is not to be construed in a narrow or pedantic manner: see e.g. Nilant v Macchia (2000) 104 FCR 238, at [42] per Weinberg J. 55 Clauses 4.1.5 and 4.1.6 appear in Section 4 of the Constitution, which deals generally with the formal requirements of members' meetings. The Constitution prescribes that meetings of members must be held in very many different circumstances. Many of such meetings do not have inflexible time limits created by dates expressly stated in the Constitution. A perfect example is Clause 7.5.2, which was referred to by the Second Review Disputes Panel in support of its reasoning. Clause 7.5.2(1) provides that an AGM must be held "by 31 August in each year or such other date" as the State Executive may determine. There is no restriction on the Executive's power to determine another final date for the holding of an AGM. Can it be right that Clauses 4.1.5 and 4.1.6 are available to cure an invalid AGM if the State Executive has not exercised its power to vary the last date from 31 August, but they are not available if the Executive has exercised such power? I do not think so: such a distinction would be pointless and absurd. 56 If the State Executive varied the final date for the holding of an AGM, it would do so in exercise of a power under the Constitution, namely, that conferred by Clause 7.5.2(1). The varied time limit for the holding of the AGM would, therefore, be imposed "by" the Constitution, in the sense of "under" or "in accordance with" the Constitution. I agree with the submissions of Mr Street and Dr Bell that "by" can mean "under" or "in accordance with", depending upon the context and that the word does have those meanings in the context of Section 4 of the Constitution: see e.g. Ex parte Zietsch; re Craig (1944) 44 SR(NSW) 360, at 364 per Jordan CJ; Energy Resources of Australia Ltd v Commissioner of Taxation (2003) 52 ATR 120, at [37]. 57 Mr Newlinds SC submits, however, that the issue to be determined in the present case does not depend upon the meaning of "by" in Clauses 4.1.5 and 4.1.6. He says that: "The time for the relevant meeting and procedures for the carriage of business at that meeting are not determined by (or for that matter under) the Constitution at all … the Branch itself simply calls the meeting as and when it chooses to do so …": Submissions, paras 32-33. 58 I am unable to accept this submission. It overlooks the actual words of the clauses. The words are "the time limit imposed" not "the time imposed" or "the date imposed". The "time limit" upon which Clauses 4.1.5 and 4.1.6 operate in the present case was imposed by the State Executive in exercise of its power under the Constitution when it determined the date for closing of the rolls to be 12 May 2007: if a Branch meeting to elect selectors was to be valid, it had to be held within that time limit. 59 Mr Newlinds submits that while Clauses 4.1.5 and 4.1.6 may operate to extend times for meetings, they do not operate to extend other times fixed under the Constitution. He says that the time for closing of the rolls was fixed by the State Executive under Clause 21.1.2(b) as 18 May 2007 and Clauses 4.1.5 and 4.1.6 cannot operate to extend that date by permitting pre-selection Branch meetings to be held after that date. 60 I am unable to accept this submission. As Mr Street and Dr Bell correctly point out, it overlooks other provisions of the Constitution. 61 Clause 28.3.3(a) and (c) of the Constitution expressly recognise that the roll of selectors brought into existence as at the closing date fixed by the State Executive under Clause 21.1.2(b) is a provisional roll only and is subject to challenge. Under Clause 28.3.3(b) the provisional roll may be challenged within the time fixed by the State Executive under Clause 21.1.2(b). 62 In this case, the last day fixed for challenge to the roll was 23 May 2007. On that day, Mr Towke challenged the rolls of selectors appointed by the Miranda Kingsway Business Branch and the Caringbah Branch. Those rolls of selectors did not, therefore, close finally on 18 May; they were provisional until the challenge was determined. 63 The State Director upheld Mr Towke's challenge and pointed out that the invalidities were susceptible to cure under Clauses 4.1.5 and 4.1.6. 64 Clause 4.1.5(a) extended the time for valid appointment of selectors at a validly held Branch meeting for one month after the State Director's ruling, i.e. until 29 June 2007. The State Executive had, however, fixed the date for the Selection Committee meeting for 23 June. Clearly, the provisions of Clauses 4.1.5(a) and 4.1.6 must be read together with other relevant provisions of the Constitution in such a way as will give a commonsense construction and effect to both. 65 In my opinion, Clause 4.1.5(a) operates to extend the time limit for a particular meeting for a full month from the State Director's ruling unless the time for carriage of business at that meeting is validly fixed under the Constitution at less than a month from the Director's ruling, in which case Clause 4.1.5(a) operates to extend time only for the shorter period. 66 In the present case, Clause 28.3.3 operated to make the rolls of selectors provisional and subject to correction upon challenge. Although the time limit for close of challenges to the rolls was fixed by the State Executive under Clause 21.1.2(1)(b) as at 23 May, the State Executive did not expressly fix a date under Clause 21.1.2(1)(c) by which eligibility of selectors was to be determined if their election had been challenged under Clause 21.1.2(1)(b). The State Executive fixed the Selection Committee meeting for 23 June so that the time for determining the eligibility of selectors was, in fact, limited to the commencement of the Selection Committee meeting on 23 June. Another way of looking at it is to say that in determining a date for the Selection Committee meeting under Clause 21.1.2(1)(d), the State Executive in the present case also determined the eligibility date under Clause 21.1.2(1)(c). 67 In the result, Clause 4.1.5 and 4.1.6 operated to extend the time for validating meetings from 29 May to the commencement of Selection Committee meetings on 23 June. The validating meetings of the Caringbah Branch and the Miranda Kingsway Business Branch were held prior to 23 June. 68 For these reasons, I uphold the submissions of Mr Coleman and Mr Fletcher. Orders

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