Supreme Court New South Wales Medium Neutral Citation: Belinda Jane Neal v Kaila Murnain & Anor [2017] NSWSC 1039 Hearing dates: 7 August 2017 Date of orders: 07 August 2017 Decision date: 07 August 2017 Jurisdiction: Equity Before: Slattery J Decision: Summons dismissed. Interlocutory relief varied and made permanent. Plaintiff ordered to pay the defendants' costs. Catchwords: EQUITY — Equitable remedies — Injunctions – plaintiff and defendants all members of a political party and bound by the party's rules – plaintiff nominates for a pre-selection ballot for local government elections – plaintiff expelled from the party before the counting of pre-selection ballot papers - interpretation of party rules as to eligibility of candidate to be counted in ballot for pre-selection – whether plaintiff entitled to be counted in pre-selection ballot even if she is no longer eligible for endorsement as a candidate on behalf of the party in the local government elections – whether relief claimed is futile – whether relief would occasion hardship to third parties. Cases Cited: Byrnes Phelp Trust Co Pty Ltd v Kwikasair Freight Lines Ltd (1963) 63 SR (NSW) 492 Hercy v Birch (1804) 9 VES 357; 32 ER 640 Tito v Wardell (No 2) 1977 Ch 106 Texts Cited: JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (LexisNexis Butterworths, 5th ed, 2014) Category: Principal judgment Parties: Plaintiff: Belinda Jane Neal First Defendant: Kaila Murnain Second Defendant: Jannai Tabbernor Representation: Counsel: Plaintiff: G. Johnson Defendants: A. Leopold SC; E. Holmes Solicitors: Plaintiff: Michael Drake Osborne, Osbornes Lawyers Defendants: Ian Robertson, Holding Redlich File Number(s): 2017/240113 Publication restriction: No EX TEMPORE Judgment 1. The plaintiff is a former holder of public office in the Australian Parliament. During her career she has stood for and been elected on behalf of the Australian Labor Party - NSW Branch ("the Labor Party") to the Senate and to the House of Representatives. 2. The defendants are office holders in the Labor Party. The first defendant is the General Secretary of the Labor Party. The second defendant is the party's general elections returning officer. 3. The plaintiff brings proceedings by summons for relief in the Equity Duty List. She filed her Summons at 8.30am today. Notice was given to the Court after 11pm last night of her proposal to file and move upon the Summons. 4. The relief the plaintiff seeks in the Summons concisely states the issues for decision. She seeks: 1. An order that the First and Second Defendant include, consider and count the Plaintiff's candidacy during the count of the New South Wales Labor Party pre-selection ballot for the Gosford West Ward for the local government elections for Central Coast Council; and 2. An order that no steps be taken by either the First and Second Defendant, or any other person, to fail to include, consider and count the Plaintiff's candidacy or to remove the Plaintiff's name or candidacy from the New South Wales Labor Party pre-selection ballot for the Gosford West Ward for the local government elections for Central Coast Council. 1. The urgency of the matter is plain. The plaintiff was expelled from the Labor Party on 23 July 2017. She received the result of a review into her expulsion last Friday, 4 August 2017. She took advice over the weekend about the bringing of these proceedings. Acting upon that advice, her solicitor and counsel attended Court, by arrangement with my Associate and upon notice to the defendants, at 8.30 this morning. The matter was argued between about 8.30am and about 10.15am today. Judgment is now being given at 2.15pm. 2. Whilst she was a member of the Labor Party, the plaintiff nominated for the pre-selection ballot for the Gosford West Ward for the local government election of the Central Coast Council ("the pre-selection ballot"). When she nominated on 14 July 2017 she was a Labor Party member. After her nomination she was, by a process the Court will shortly explain, expelled from the Labor Party. The question for the Court is whether the plaintiff now has a right to be considered in the count for the pre-selection ballot, notwithstanding her expulsion from the Labor Party. 3. Local government elections in the State of New South Wales will take place on 9 September 2017. Nominations for these local government elections for the Central Coast close on Wednesday next, 9 August 2017. If the plaintiff is to be counted in the ballot for pre-selection, she seeks to have that count result known before Wednesday. Her submission is that the relevant rules give her a right to have her nomination as a candidate counted in the pre-selection ballot. The Interim Issue 1. The Labor Party's officials, including the defendants, propose that the pre-selection ballot count take place, commencing at 9am. That is why the Court convened at 8.30am today. It seemed efficient in the circumstances for the Court to provide a structure for the counting of the pre-selection ballot to continue, whilst the Court heard argument about the plaintiff's rights. 2. To that end, shortly after 8.30am, the Court raised the possibility with the parties that the count could proceed. But to preserve both the plaintiff's and the defendants' rights in the interim, the Court directed that the count could proceed on two bases: that the plaintiff's ballot papers be included in one count but excluded in the other. The effect of this would be that whatever result the Court came to in this hearing, the result of the count would be available in time to meet the exigencies of nomination of Labor Party candidates for the local government election. 3. The parties assented to this course. At about 9.15am the Court made interim orders, to the following effect: 1. On an interim basis, whilst argument in these proceedings takes place, the Court orders that any count for the New South Wales Labor Party in the conduct of a pre-selection ballot for the Gosford West Ward for the local government election for the Central Coast Council take place on the following bases: 1. One including the plaintiff as a candidate; and 2. One excluding the plaintiff as a candidate. 1. Order that the results of the conduct of the ballots ordered pursuant to order 1 not be published or disclosed by any party to these proceedings or any person taking part in or scrutinising the conduct of those ballots, until further order of the Court. 1. Mr Johnson of counsel, instructed by Osbornes Lawyers, appeared for the plaintiff, and Mr Leopold SC and Ms Holmes, instructed by Holding Redlich, appeared for the defendants. In a case which has only been in Court for a matter of hours, the careful arguments presented on both sides have been of great assistance to the Court. The background to these proceedings 1. The plaintiff was a member of the Labor Party between 1981 and July 2017. She is currently a volunteer for the Labor Party and was the secretary of the Woy Woy branch until her expulsion. 2. The plaintiff and all other members of the Labor Party are subject to the Labor Party Rules, as amended by the 2016 Annual Labor Conference (the "2016 Rules"). These are the rules in evidence before the Court. It was not in issue that the 2016 Rules bind all Labor Party members, including the plaintiff, the defendants, and those who have adjudicated upon her rights in the Labor Party. This and related obligations are provided for in rule C.1, C.2 and C.3 of the 2016 Rules as follows: Responsibilities C.1 These Rules are binding on all Party members C.2 Rights Every Party member has the right to (i) Equality before the Rules, (ii) Be heard, (iii) Information regarding Party matters that directly affect them, (iv) Receive a prompt response to their correspondence, (v) Stand for public office, subject to these Rules, (vi) Seek redress of grievances before the Internal Appeals Tribunal, Review Tribunal and Ombudsman, (vii) Appeal to the justice system when their rights have been infringed, and (viii) Be treated with dignity and respect by other Party members. C.3 Responsibilities Every Party member has a responsibility to: (i) Uphold the Party's values and principles, (ii) Comply with these Rules, (iii) Allow others to be heard, and (iv) Treat other Party members with dignity and respect 1. Charges were brought against the plaintiff in February 2017. Further charges were brought in June of this year. The details of these charges are of only peripheral relevance to these reasons. The 2016 Rules provide a detailed regime for the hearing of charges before an Internal Appeals Tribunal (IAT) of the Labor Party and then a Review Tribunal. If a Party member is dissatisfied with the results of the IAT, or with a later appeal to a Review Tribunal, the 2016 Rules provide the plaintiff has a right to appeal to the justice system if his or her rights have been infringed: C.2(vii). 2. The plaintiff has availed herself of her rights under the 2016 Rules to deal with these charges. The short combined chronology of the hearing of the charges and of the holding of the pre-selection ballot is as follows: 1. the three charge matters were set down for hearing initially on 10 July 2017 before the IAT, but on 7 July 2017, the Labor Party called for nominations for pre-selection for the Gosford West Ward of the Central Coast Council for the three positions to be selected and the ballot was planned to be held on 22 July 2017. 2. In response to this call, on Friday, 14 July 2017, the plaintiff nominated for pre-selection to the Gosford West Ward, by lodging a nomination, the validity of which is not disputed. The plaintiff nominated for the pre-selection ballot under a ticket using the name "Local Labor Who Listen". A number of other persons also nominated. 3. On 14 July, the plaintiff also received notice that the IAT hearing would take place on 22 July. The plaintiff was not able to attend the IAT hearing due to important competing family responsibilities. She made a request that no action be taken to remove her from the pre-selection ballot planned for 23 July. 4. The pre-selection ballot was conducted with the plaintiff's name included. But the ballot was not counted that day, 23 July. Rather, the count is to take place this morning. The IAT nevertheless proceeded with its hearing. It made a decision on 23 July to expel the plaintiff from the Labor Party. That decision was made public by 24 July. 5. The plaintiff then sought to appeal to the Labor Party's Review Tribunal, the next level of internal appeal against the IAT's expulsion decision. The plaintiff was able to take part in the Review Tribunal hearing on 30 July 2017, which ran from approximately 11am until about 9.30pm. 1. Under the 2016 Rules, rule J.13, the Review Tribunal is constituted by persons including lawyers at the level of Senior Counsel or the equivalent of a partner of a law firm and other eminent persons. The Review Tribunal did not give a decision on 30 July. Last Thursday, 3 August, the plaintiff provided supplementary submissions to the Review Tribunal. On Friday, the Review Tribunal gave its decision (Exhibit A). 2. The Review Tribunal's hearing was in substantial degree a rehearing on the merits of the IAT's decision. The Review Tribunal affirmed the IAT's decision to expel the plaintiff from the Party. The plaintiff did not get the full text of the Review Tribunal's decision until about 5.30pm last Friday, 4 August 2017. The plaintiff indicates that her intent is to consider her further rights of appeal or review, both internally and externally, in respect of the Review Tribunal's decision. 3. Yesterday, the plaintiff was informed by a scrutineer for the pre-selection ballot that notice had been issued for the ballot count to take place this morning at 9am. Upon receiving that information, without delay, the plaintiff sought legal advice. She and her lawyers acted quickly to bring the present application. The Nature of this Hearing 1. The Court raised whether the parties wished to have the matter determined on an interlocutory or a final basis. They both indicated the latter. Two potential kinds of argument are available to the plaintiff. Only one was ultimately advanced: that she claims to have a right for her name to be counted in the pre-selection ballot, notwithstanding her expulsion from the Labor Party. That question can be determined on the proper construction of the 2016 Rules and can now be dealt with on a final basis. 2. Another kind of question could have been, but was not, argued. The Court is not now considering whether it would be practicable to argue this other question, given that the Court has been fully occupied today apart from this case with many other matters in the Duty List. Nor is the Court commenting on whether the plaintiff has yet had an adequate opportunity to take advice on the contents of the Review Tribunal decision. The other kind of argument that potentially could be pursued was whether the plaintiff wanted to seek judicial review on recognised administrative law grounds, to seek to overturn the Review Tribunal decision. 3. Mr Johnson crisply made clear that that was not part of this application. But he indicated that his client was seeking advice whether such an application may be brought at a future time. The Court is now left with the argument based upon the construction of the 2016 Rules that was presented at this urgent final hearing. The Plaintiff's Submissions 1. Based on rule N.11 and rule D.4 of the 2016 Rules, the plaintiff argues that the second defendant must count votes for her candidacy during the count of the pre-selection ballot, taken on 23 July 2017. Rule N.11(a) of the 2016 Rules states: ELIGIBILITY N.11 To be eligible for selection and endorsement as a candidate for public office, a person must: (a) Have one year of continuous financial Party membership immediately prior to the date of calling for nominations; 1. The plaintiff's argument simply put is that the words of rule N.11(a) speak to eligibility for selection and endorsement as a candidate for public office by a person who qualifies, immediately prior to a particular date, has having one year of continuous financial Labor Party membership. And the particular date in question, before which a person must have continuous financial party membership to maintain rule N.11(1)(a) eligibility, is the date of calling for nominations. In this case, that is probably 7 July and is certainly no later than 14 July, when the plaintiff nominated. There is no issue in this case that the plaintiff was a member of the Labor Party at that time. Her expulsion only operates from 23 July. 2. The plaintiff also points to rule D.5(b). This provides for the Labor Party's Administrative Committee to perform the ceremony of endorsement of a candidate for Party selection for public office: The Administrative Committee decides on endorsement for Party selection for public office. It can decide to endorse or not to endorse the Party's officially selected candidate or candidates for public office in the way stated in the Rules. 1. It is a matter for the decision of the Administrative Committee whether to endorse or not to endorse the Party's officially selected candidate for public office. The plaintiff says that she is still eligible for both selection and endorsement as a candidate for public office because she was qualified at the date of calling for nominations. The Defendant's Submissions 1. In reply the defendants rely on specific rules among the 2016 Rules that deal with the endorsement of candidates for local government elections. Rule H.1(a) to (c) provides: Local Government H.1 (a) The Party will endorse candidates for local government elections. After consultation with local Party Units, the Administrative Committee will decide in which local government areas to endorse candidates. (b) Only members with at least 12 months membership in the Party can be endorsed as candidates for local government elections. An exception can be made when a majority of the Administrative Committee decides that a significant advantage would be gained for the ALP if a person with less than 12 months membership in the Party stood as a candidate in a selection ballot. (c) In areas where Councillors have embarrassed the Party, endorsement will not be given to candidates until the Administrative Committee is sure that the Party would be best served by allowing those candidates to be endorsed. 1. The defendants submit that the plaintiff can never now qualify under rule H.(1)(b) to be endorsed as a candidate. As only members with at least twelve months' membership of the Party can be endorsed as candidates for local government elections, she cannot be endorsed, whatever the result of the count. 2. It is not contested that endorsement of a person as a candidate follows their selection, which in turn in this case follows upon the obtaining of the results of the count of the pre-selection ballot. That is a date which is in the future. It is not a date in the past. The defendants say that, due to her expulsion, the plaintiff cannot qualify as a person with twelve months' membership of the Labor Party at the time of any future endorsement, so she can never meet the requirements of rule H.1(b). 3. In support of their argument, the defendants also point to r A.7(v), which provides: A.7 (a) It is a condition of Party membership that a member must not: … (v) Fail to nominate after being selected as the Party's official candidate in an election. 1. Rule A.7(a)(v) stresses the continuing public connection between the Labor Party and the endorsement of a candidate on behalf of the Party. A Labor Party member upon endorsement must stand as the Labor Party's official candidate. 2. The defendants submit that this is a complete answer to the plaintiff's case. She can never be endorsed as the Labor Party's candidate, so any relief she were now to obtain would be futile. 3. But the defendants articulated another argument. They submitted that aspects of the decision of the Review Tribunal were sufficient to disqualify the plaintiff from eligibility for selection or endorsement under other parts of r N.11. But it seems to me that this is not an avenue of argument that is useful for the Court. It merely invites another proceeding in which the plaintiff may challenge the Review Tribunal's findings. She has already indicated that a future review of these findings is under consideration. It seems to me that the better course is, therefore, to consider the defendants' primary argument. Consideration 1. In my view, the defendants' argument is persuasive. Even if the plaintiff is correct in her contentions about the effect of rule N.11(a) and she must be counted in the ballot, there is no answer to the defendants' contention that she cannot be endorsed as a candidate. Based on the clear and proper construction of rule H.1(b), there is no prospect of her endorsement. And none was suggested in argument. 2. Is the plaintiff entitled to relief? The plaintiff is seeking either a mandatory injunction or specific relief to enforce the 2016 Rules to permit the count of the ballot to take place. But this is discretionary relief. And a grant of discretionary relief should have some utility. Hardship to third parties may also weigh against the grant of such discretionary relief. 3. The orders the plaintiff seeks are in the nature of a mandatory injunction of the enforcing type in that they seek to compel the defendants to whom they are addressed to do something active, which they have promised for valuable consideration to do: Byrnes Phelp Trust Co Pty Ltd v Kwikasair Freight Lines Ltd (1963) 63 SR (NSW) 492. In this case the valuable consideration was provided by all members of the Labor Party, including the plaintiff, agreeing to the Party's Rules and paying any applicable membership fees to the Labor Party whereby they become contractually binding. Such injunctions are analogous to decrees of specific performance and the same defences are available to a claim for such an injunction as could be fielded where the action is one seeking a decree of specific performance in the proper sense: JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (LexisNexis Butterworths, 5th ed, 2014) ("Meagher, Gummow & Lehane"), [21-460]. 4. The Court may, in its discretion, refuse a grant of specific performance or a mandatory enforcing injunction if performance would be futile: Meagher, Gummow & Lehane [20-145]. The general theme of the cases on the discretionary defence of futility is that the Court will not readily grant a decree which would involve a pointless waste of time and money by compelling the doing of acts which could readily be reversed or which would apparently benefit no-one: Hercy v Birch (1804) 9 VES 357; 32 ER 640; Tito v Waddell (No 2) 1977 Ch 106. 5. The plaintiff's claim for relief to be included in the count of the pre-selection ballot, without any prospect of later endorsement as a candidate for the Labor Party, seems to be a fruitless exercise of the kind that commonly attracts a defence of futility. Nothing can come of a count in the pre-selection ballot even with an outcome of the count in the plaintiff's favour. She cannot thereafter be endorsed as a candidate on behalf of the Labor Party, as she is no longer a member of the Labor Party. 6. There can be no utility in granting relief to the plaintiff. Even if she is included in the count, the result of that count cannot, on the current state of her membership, ever result in an endorsement as a candidate. There therefore seems no point in granting the relief she seeks. No particular alternative reason was advanced why relief should be granted where endorsement was not possible. 7. But the defence of hardship is also relevant. Were the relief claimed to be granted, and the count taken including the plaintiff, and were the count result to show the plaintiff was the person who gained the highest number of votes, and who, but for her expulsion from the Labor Party would be the candidate who would be available for endorsement, the publication of that result would tend to detract from the authority of the persons who are actually pre-selected and endorsed by the Labor Party for this forthcoming Council election for the Central Coast Council. 8. It is easier to establish a defence of hardship in a case of a mandatory injunction: Meagher, Gummow & Lehane [21-46]. Mere hardship of itself will not compel the Court to refuse a mandatory injunction. But this is a case where the ultimate public authority of the candidates who are competing with the plaintiff in this pre-selection as representatives of the Labor Party sharpens the Court's focus on considerations of hardship to those other persons. In my view, were the Court to grant this decree, without any apparent tangible benefit to the plaintiff, there would be a grave risk it would result in loss of authority for these other candidates in the eyes of the public. There is a risk they might be seen as candidates who commanded less internal support than the plaintiff. Moreover, to expose them to this risk is not to treat them with the respect and dignity to which they are entitled under rule C.2(xiii) and with which the plaintiff is obliged to treat them under rule C.3(iv). This is likely to occasion hardship to them as members of the Labor Party. I will therefore decline to grant the injunction sought. 9. For these reasons, in my view, the plaintiff's application fails. But the Court must still consider the question of what happens with the interlocutory orders that have been made. They will, presumably, have to be dissolved. They may, indeed, have resulted in the last six hours or so in a result, but the Court wishes now to hear an application as to what will happen to the interlocutory non-disclosure orders. Dissolving the Plaintiff's Interlocutory Orders 1. The defendants submit persuasively that the count this morning would not have taken place but for the proceedings on which the plaintiff has failed. The result of the count is not known at this time. If any final count resulting from the interim orders were to be published and if Ms Neal wins that ballot, publication may undermine the authority as Labor Party representatives of the persons who are in fact endorsed for candidature. 2. In my view, that consideration weighs against publication of the count including the plaintiff. The interim order will be adjusted accordingly. 3. Accordingly the Court orders: 1. The plaintiff's Summons is dismissed. 2. Order that the results of any ballot conducted under interlocutory Order 1(a) made earlier today are not to be published or disclosed by any party to these proceedings or any person taking part in or scrutinising the conduct of those ballots. 3. Costs are awarded against the plaintiff. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 August 2017