Kiwiblog

National has failed in its application to judicially review the Electoral Commission’s decision to allow the EPMU to register as a third party. The decision is here – kirk-v-electoral-commission-anor-jmt-260808-jud_jtk_717.

The key clause is below:

The assessment of the effects of the membership and other rights which the Union has under the Labour Party Rules, and the making of a judgment as to whether these rights are such as to constitute involvement in the administration of the affairs of the party, are matters for the Commission. The Commission has clearly taken into account that the Union has the voting and nomination rights of a member.

The decision does not contain a detailed analysis of the rights. That is not required. There is no basis in the decision for a submission that the Commission has proceeded on a mistaken view as to the nature and extent of the rights under the Rules. This is not a case where the Commission has failed to take this relevant matter into account. It is not for the Court to substitute its view, based on its own assessment of the Rules. The question on this application for judicial review is not whether the Court would have reached the same conclusion. Rather, it is whether the Commission has reached a conclusion which is so clearly untenable as to amount to an error of law. The plaintiff has failed to meet that high hurdle, on this aspect of the case.

As Justice MacKenzie says the hurdle is high, and this does not mean the Court agrees with the Commission, just that the Commission appeared to consider all relevant issues. It is interesting that because the Electoral Commission did not give many details of the rationale for its decision, that makes it harder to argue they should be reviewed.

While I initiated the letter to the Electoral Commission, I am not the decision maker on the court cases, so don’t know if this is the end of the issue, or if National will appeal to the Court of Appeal.

Personally I am more interested now in the possible prosecution of the EMA Northern. You see reliable sources have told me that the total cost of their advertising campaign against the KiwiSaver law changes was in excess of $120,000. If this is so, then they would face prosecution for not an illegal practice, but a corrupt practice. The EMA Chief Executive could be jailed for up to three two years if found guilty. Yes, seriously.

I’ve been at the Wellington High Court all day, listening to arguments in the court case over whether the Electoral Commission was correct to allow the EPMU to register as a third party, or was the EPMU a person involved in the administration of the affairs of the Labour Party.

There is a significant barrier for the plaintiff (National) to overcome. Courts are traditionally reluctant to second guess the decisions of specialist or expert bodies such as the Electoral Commission. The court will only act if they Commission has clearly made an error in law, or reached a conclusion that is so unreasonable it is untenable. So if the action fails, it does not necessarily mean the Court has decided the Electoral Commission made the right decision. It means that the decision was a reasonable decision to make.

Obviously National, as plaintiffs, think it was an unreasonable decision and that there were errors in law. National probably had three major strings to its case:

1. The Electoral Commission erred in not obtaining a copy of the EPMU constitution which states in their Rule 23 that the National Executive (or a sub-committee of it) shall appoint all delegates from the EPMU to Labour Party committees at national, regional and electorate level. This goes against the contention that EPMU members are there just as members, not representing the EPMU
2. The Electoral Commission erred in interpreting “involved in the administration of the affairs of a party” as menial administrative tasks and not governance. The analogy of a company director was used – they sit on the board and govern, but are considered to be involved in the administration. There is no case law anywhere on this point, so it was argued from first principles and dictionary definitions. I have mentioned elsewhere that under the Commission’s interpretation even a Party President could be seen as not involved in the administration, which makes the whole ineligibility clause almost meaningless.
3. That while Andrew Little was elected Affiliates Vice-President by the Labour Conference, he is bound by the EPMU rules to act in the best interests of the EPMU. But also, even putting aside the nature of Andrew’s role on the National Council, there is no question the EPMU has direct representation on all 69 Electorate Committees, all the local body committees and all six Regional Councils, and that this constitutes involvement in the administration of the affairs.

It would be a brave person who predicts the outcome, as Justice MacKenzie was giving nothing away with his body language and asked no significant questions to either side. As I said above, it is a very significant hurdle to get over, to persuade the Court to “second guess” (and Crown Law pushed strongly that they should not do so in this case), but I thought the lawyers for National did a good job arguing the case that this was one of those times where they should. But again, no predictions on outcome from me.

Of course I am more than an interested bystander as I wrote the original letters which raised the eligibility issue, so I smiled at the number of times the words “Farrar affadavit” came up in court.  Regardless of the outcome, it will be a very interesting judgement to consider.

The Judge was Justice MacKenzie. The full judgement is here Here are some key extracts:

[18] Because there is no legal impossibility involved in the proposition that an artificial person might be involved in the administration of the affairs of a party, to read the word “person” in s 13(2)(f) as limited to natural persons would in effect create two categories of persons involved in the administration of the affairs of a party:
(a) Natural persons ,who are ineligible to be listed as a third party; and
(b) Artificial persons, who are eligible to be listed as a third party.

Exactly. It would create an illogical distinction. If a “person” is capable of being involved in the administration of a political party, the ineligibility criteria must apply to them, regardless of the type of person (natural vs legal).

[21] Second, in the absence of such a legal prohibition, the question of whether a particular person is involved in the administration of the affairs of the company is a question of fact. The scheme of the Act is such that the determination of that question of fact is a matter for the Commission. Under s 17(1)(c) the Commission must refuse an application if it is not satisfied that the applicant is eligible to be listed. To interpret s 13(2)(f) as not applying as a matter of law to artificial persons, by adopting a narrow meaning of the word “person” from its context in the wider phrase, would be to pre-empt the very question which the Commission is required to address.

This is why I am surprised the Electoral Commission followed the Crown Law advice, as doing so actually meant the Commission would not be as effective in doing its job in making sure only eligible persons can register as third parties. To be fair to the Electoral Commission, they did say in their affidavit something along the lines of having some reservations about the advice, but by consensus decided to accept it.

Crown Law now have the dubious distinction of having been patently wrong by saying the original EFB did not breach the Bill of Rights and with their definition of “person”.

[22] Third, I can discern no reason, derived from the purposes of the Act, which would justify exclusion, from the category of persons created by s 13(2)(f), of an artificial person involved in the administration of the affairs of a party, as distinct from a natural person who is so involved. The clear purpose of s 13(2)(f) is to ensure a degree of separation between persons involved in the administration of political parties, on the one hand, and third parties, on the other. That purpose is best achieved by excluding from eligibility all persons involved in the administration of a political party, not merely a subset of such persons.

This goes right to the heart of the case – what interpretation best meets the overall purpose of the Act.

[27] For these reasons I conclude that, on its proper interpretation, the word “person” in s 13(2)(f) bears the meaning given to it by s 29 of the Interpretation Act 1999.

I had had so many lawyers tell me that this must be the case, I would have been very surprised if the case had gone the other way.

[29] For these reasons, I consider that the Union does potentially fall within the scope of s 13(2)(f) of the EFA and that the question of whether it does so must be determined by the Commission before it can be listed as a third party.

As previously stated, this does not mean the EPMU is ineligible. It means the Electoral Commission must now determine if its opinion that EPMU is involved in the administration of the Labour Party. I am of course of the view that there is an overwhelming case that they are involved, and hence ineligible.

If they fail to be registered they can still spend their money campaigning. They just need Mike Smith’s permission and for their spending to count as part of the cap for Labour – the party they have voluntarily joined and are involved in.

[34] The extent of enquiry which the Commission may make, and the processes which it may undertake, to determine whether, in particular, s 17(1)(c) is met, based on the application made under s 15(3), is not specified in the Act. It is a matter for the Commission. The Commission has power, under s 6(2)(aa) of the Electoral Act 1993 “to make such enquiries as the Commission thinks necessary for the proper discharge of its functions”. I do not consider that it is appropriate for this Court to direct the Commission as to how it should go about the performance of its functions, or how it should conduct its enquires.

This is where the EPMU counter-claim is turned down. The Electoral Commission I am sure will be pleased they retain discretion as to whether to allow members of the public, like myself, to offer an opinion on matters before them.

[35] There will be a declaration that word “person” in s 13(2)(f) of the Electoral Finance Act 2007 has the meaning given to it by s 29 of the Interpretation Act 1999.

I doubt there will be an appeal. I can probably now reveal that the legal team were so confident of victory that they were talking of going to the Supreme Court if necessary. In fact I suspect they may even be a bit disappointed they won, as it means no appeal work

Labour now have to face the possibility that the law they rammed through Parliament may end up making their largest ally the biggest victim.