Charges of Breach of Branch Rules Opposed by Plaintiff

Kairouz v Bracks (No 2) [2021] VSC 671 (19 October 2021)

Resolutions were passed by the National Executive providing for the intervention and the appointment of the Administrators and the amendment of the Victorian Branch Rules.  The Administrators charged Ms Kairouz with four breaches of the Australian Labor Party Victorian Branch Rules relating to branch stacking.  Ms Kairouz, member of the Australian Labor Party challenges the validity of the National Executive’s intervention in the Victorian Branch, amendments made to the Branch Rules and the disciplinary charges alleging involvement in, or knowledge of, branch stacking brought against her by the Administrators of the Branch.  

Facts:

On 14 June 2020, Channel 9 broadcast a report on its 60 Minutes program titled ‘The Faceless Man’.  The report contained allegations of branch stacking within the Victorian Branch, focusing on the activities of the then Victorian Minister for Local Government and Small Business within the Victorian Labor Government, Mr Adem Somyurek.  The defendants described the program’s report as including video and audio recordings and depicting a significant branch stacking operation within the Victorian Branch.  Among the principal speakers in the recording were Mr Somyurek and Ms Kairouz.  Ms Kairouz was described in the program as Mr Somyurek’s ‘trusted left hand’ and the program made allegations that she helped him ‘take over the Labor Party branch by branch’.

The recordings were said to depict the funding of party memberships for other individuals who were apparently unwilling to pay for their own subscriptions, the recruitment of members who did not live at, and were not enrolled to vote at, their claimed addresses, and attempts to procure the forgery of branch members’ signatures.  Those activities were alleged to have been engaged in to gain advantage in local party meetings or ballots.  The recordings included statements alleged to have been made by Ms Kairouz about the renewal of memberships.

Ms Kairouz is a member of the Australian Labor Party (the ‘ALP’), the member for Kororoit in the Victorian Parliament and a former Minister in the current Victorian Government.  She has brought this proceeding to challenge the validity of the National Executive’s intervention in the Victorian Branch, amendments made to the Branch Rules and the disciplinary charges alleging involvement in, or knowledge of, branch stacking brought against her by the Administrators of the Branch. Administrators were appointed as part of the intervention, which followed a television program and subsequent media coverage in June 2020 containing allegations of branch stacking in the Victorian Branch.  Ms Kairouz challenges resolutions passed by the National Executive providing for the intervention and the appointment of the Administrators and the amendment of the Victorian Branch Rules.  The defendants are the Administrators, the members of the National Executive and the trustees of trusts under which the Victorian Branch’s property is held.

On 14 September 2020, the National Executive resolved that the ‘Victorian Branch Rules be adapted in order to confirm the Administrators’ powers’.  These new rules gave the Administrators powers during the period of the administration to 31 January 2021, including the power to charge a member with a breach of the branch stacking rules and to revoke the membership of a member.  On 20 November 2020, Mr Bracks and Ms Macklin wrote to Ms Kairouz, asking questions about Ms Kairouz’s alleged involvement in branch stacking.  The charges that Ms Kairouz now faces appear, in part, to be based on the recording of that discussion in a meeting in early 2020 held in a Ministerial conference room, at which Mr Somyurek and staff were present.

Ms Kairouz seeks an injunction restraining the defendants from proceeding with the charges brought against her by its Disputes Tribunal.  

Issues:

I. Whether or not Ms Kairouz’s case is of the kind with which a court will become involved.

II. Whether or not the Victorian Branch of the ALP is a separate entity to what was described as the Federal ALP.

III. Whether or not the disciplinary charges brought against Ms Kairouz are valid.

Applicable law:

Australian Constitution s 15 - provides that registration under the Commonwealth Electoral Act enables political parties to nominate replacement senators.

Commonwealth Electoral Act 1918 (Cth) s 126 - provides that applications for registration must be made by the party secretary, setting out its name, giving details of its registered officer, and including the names of 500 members of the party and being accompanied by the party’s constitution.

Commonwealth Electoral Act 1918 (Cth) s 167 - provides that registration under the Commonwealth Electoral Act enables political parties to put forward persons as candidates at elections and bulk nominations of candidates.

Electoral Act 2002 (Vic) s 45 - provides for the registration of political parties, and requires them to be ‘established on the basis of a written constitution (however described)’ and for the constitution to be provided with the registration application.

Cameron v Hogan [1934] HCA 24; (1934) 51 CLR 358 - a decision of the High Court in 1934, in which Mr Edmond Hogan, the Labor Premier of this State, sought unsuccessfully to challenge his expulsion from the ALP following a disagreement about economic and employment policies during the Great Depression.

Kairouz v Bracks [2021] VSC 130 - where the Court granted an interlocutory judgment which prevented the hearing of the charges until the hearing and determination of this proceeding, or further order.

Setka v Carroll (2019) 58 VR 657 - concerned actions by the National Executive to expel a member from the ALP pursuant to its ‘plenary powers’.

Schmidt v Rosewood Trust [2003] UKPC 26 - referred to by Ms Kairouz in claiming that the Administration Resolution had interfered with the due administration of the trusts and sought remedies to deal with that interference.

Leahy v Attorney-General (NSW)[1959] UKPC 1; [1959] AC 457 at 485 - provides that insofar as the trusts were objects trusts, then the Court would identify beneficiaries who would include the members of the Victorian Branch. 

Rendall-Short v Grier [1980] Qd R 100, 109–110 - his Honour referred to Cameron v Hogan, and the right of members of an association to see that its rules were observed, including in respect of the application of its property and income in promotion of its objects. 

Burton v Murphy [1981] QSC 274 - concerned the ALP Federal Executive’s intervention in the Queensland Branch in 1980 and is relevant to the issues to be decided in this case.

Deutsch v Deutsch [2012] VSC 227 - considered such circumstances to include that a plaintiff was materially interested in the due enforcement of the claims or would be seriously prejudiced if they were not duly prosecuted; that a substantial impediment existed to the trustee prosecuting the proceeding; and that due to the nature of the assets or position of the trustees, it would be either impossible, or at least seriously inconvenient, for them to bring proceedings.

Stevens v Keogh [1946] HCA 16; (1946) 72 CLR 1 - where the High Court decided that a member of a voluntary association, an unincorporated trade union, was entitled to challenge its use of funds to pay a member’s legal costs.

Wylde v Attorney-General (NSW) (ex rel Ashford) [1948] HCA 39; (1948) 78 CLR 224, 296-297 - Dixon J explained that it is hardly necessary to add that this suit is not framed as a proceeding by one or more members against other members of the Church considered as a voluntary association for the enforcement of the rules adopted for the good order and government of the communion.

McKane v Adams [1934] HCA 24; (1934) 51 CLR 358, 376 - referred to in matters which concern hitherto rules made by a political or like organisation for the regulation of its affairs and the conduct of its activities have never been understood as imposing contractual duties upon its officers or its members.

Evangelou & Ors v McNicol (Rev 1) [2016] EWCA Civ 817, [18]-[19] - where the English Court of Appeal decided that the relationship between the Labour Party, an unincorporated association, and its members was in contract.

Foster v McNicol [2016] EWHC 1966 (QB) - concerned Jeremy Corbyn’s attempt to challenge Labour Party decisions about whether he was permitted to stand in a leadership ballot in accordance with the Party’s rules. 

Baldwin v Everingham[1993] 1 Qd R 10, 14-21 - relied upon the effect of amendments to the Commonwealth Electoral Act to distinguish Cameron v Hogan. 

Analysis:

The defendants argued that Ms Kairouz’s claims were not justiciable because of the High Court decision in Cameron v Hogan.  They relied on it for the proposition that, as Ms Kairouz could not establish a proprietary or contractual claim, her claims were not justiciable because Courts do not become involved in internal disputes in voluntary associations, including political parties.  Ms Kairouz sought to bring her claim within the proprietary interest exception recognized by the High Court, by relying on her rights under, or in respect of, the trusts upon which the Victorian Branch’s property is held.  She claimed that the Administration Resolution had interfered with the due administration of the trusts and sought remedies to deal with that interference.

The ALP is an unincorporated association, organised as a federal body with national machinery superimposed on six States and two Territory branches.  The National Conference is the supreme governing authority of the Party and its decisions are binding upon every member and section of the Party.  The Australian Labor Party and it has branches, which are organisational units, reflecting the dispersal of Australia’s population in states and territories.  Particular branches may develop their own practices and cultures, but to call a branch of an association a separate entity misunderstands the ordinary meaning of the word ‘branch’ and the role that branches play in the larger organisation. 

In disputing the charges brought against her, Ms Kairouz argued that the Amended Rules did not operate retrospectively because, as with legislation, without very clear language, the Rules are not taken to operate retrospectively.  The defendants, on the other hand, submit that the amendments defining certain activities as branch stacking merely made explicit what was already implicit and plain in the existing rules.  They did not change the substance of any obligation or principle to which Ms Kairouz had subscribed on becoming a member.  Nor did they remove any accrued right that she possessed, as the fact that particular conduct is not proscribed or regulated does not create a right which is protected by the presumption against retrospectivity.  

While there are contextual indicators that support finding the intention that the rules are to operate retrospectively, they have insufficient ‘certainty’ to overcome the prospective language of the rules.  

Conclusion:

The Court decided that Ms Kairouz’s claim that the National Executive’s intervention by the Administration Resolution was an unlawful interference with the trusts upon which the Victorian Branch property is held is justiciable.  The Court concluded that Ms Kairouz has not proved or established her claim that the National Executive has interfered with the administration of the Branch trusts by passing and implementing the Administration Resolution.  The Victorian Branch of the ALP is not a separate legal entity, but as the word Branch, which is part of its name, indicates, it is part of the ALP.  The Court dismissed the proceedings.