Goff smear fails

December 5th, 2012 at 6:48 pm by David Farrar

In Parliament today Phil Goff asked:

When he appointed Peter Kiely as director of the Pacific Forum Line in July 2009 was he aware that Mr Kiely was, from November 2008, listed under the Companies Register as a shareholder in a competing shipping company, Sofrana, and that he held those shares right through until 10 August 2012?

Was it appropriate for Mr Kiely to have been a shareholder in Sofrana and not disclose that information to his Minister or to the Ministry of Foreign Affairs and Trade when Mr Kiely was involved in giving advice to the Ministry of Foreign Affairs and Trade on the sale of the Pacific Forum Line and when the preferred bidder was in fact the Sofrana shipping line?

But Kiely is not a shareholder. McCully says:

Foreign Affairs Minister Murray McCully has called allegations made by Phil Goff MP against former Pacific Forum Line director Peter Kiely “reckless, cowardly and wrong”.

“By attacking Mr Kiely without checking the facts Mr Goff has impugned the reputation of a highly professional individual without any justification.

“Central to Mr Goff’s allegation is that Mr Kiely held shares in shipping company Sofrana at the time PFL, of which he was a director, was considering an offer from Sofrana.

“Mr Kiely has never owned shares in Sofrana. The shares referred to by Mr Goff were held by Mr Kiely as a non-beneficial trustee for a Sofrana employee. Practising lawyers like Mr Kiely commonly hold shares for clients as non-beneficial trustee. If Mr Goff had asked he could have been told this.

Goff could have found this out by setting down a written question. He thought he had a gotcha, but failed.
Just a big as fail was in Q5:

JACINDA ARDERN (Labour) to the Minister for Social Development: When was she first aware that the Transition to Work Grant had been used to pay for flights to Australia for job seekers who had an offer of employment?

Hon PAULA BENNETT (Minister for Social Development) : It was just after 1 p.m. yesterday that I was advised there might be cases where payment had been granted for flights to Australia. I am aware that there has been the odd request for airfares to Australia via correspondence to my office. I have been clear that my expectation is that they would not be paid. Transition to Work grants were introduced in 2007 under Labour. That year there were 16 cases where airfares were granted to Australia, and I have been informed that there have been six cases this year at a combined total cost of $4,600 approximately. I will be removing any ambiguity in the programme by a direction to the chief executive that will be tabled in this House.

And just for good measure:

Rt Hon John Key: Does the Minister find it unusual that a party that set up the fund and used it 16 times in the first year now finds in Opposition that it is opposed to its very own policy that it established?

Again, this could be avoided by good planning. Seek the information under written PQs and then you know whether your attack will backfire or not.

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Payne v NZ National Party

May 1st, 2008 at 7:59 pm by David Farrar

Legal beagles can read the entire 27 page judgement here. I’ve extracted some quotes below, interspersed with my comments:

The statement of claim filed by Mr Payne on 10 April alleged that the decision of the Board of the National Party to disapprove his nomination was in breach of natural justice and of s71 of the Electoral Act. He also challenged the validity of the Constitution and Rules of the National Party on the basis that the most recent version was not supplied to the Electoral Commission within the time limits prescribed in s71B of the Act. He further asserted that “the National Party’s undemocratic behaviour” constituted a corrupt practice, being an example of undue influence contrary to s218 of the Electoral Act.

A further issue of possible breach of contract was also considered by the court, which I will touch on later.

The allegation based on s218 of the Electoral Act is misconceived. Assuming, without deciding, that a member of the Board of the National Party could be a complainant of undue influence, the gravemen of the section is conduct directed to a person to induce or compel them by violence or threat of violence to vote, or refrain from voting, for a particular candidate. There is no evidence of any conduct capable of falling within s218.

This is the problem of representing yourself in court.  Even the most inexperienced lawyer would probably know that s218 is referring to the general election, not internal selection contests.

There is another problem with the statement of claim. It is not drawn in a manner which adequately identifies the underlying basis of the claim. In particular, it is unclear whether the claim is intended to be viewed as an application for judicial review, or not.

Again, the problem of do it yourself lawyers.

As Mr Kiely pointed out s71B(1)(c) does not require all changes to the rules to be supplied to the Electoral Commission, rather only changes which relate to membership of the party or the selection of persons to represent the party as candidates for election as Members of Parliament. And, the submission continued, the changes between the 20th and 21st editions did not fall into either of these categories. Hence, technically, there was no requirement upon the party to supply the latest rules to the Commission. That it did so recently, and no doubt in response
to this proceeding, was neither here nor there.

That basically takes care of the issues of which rules were in force.

The above extracts demonstrate the genesis of, and thinking behind, s71. The nomenclature “democratic procedures” attained currency in the Royal Commission’s Report. Although at first blush there may be a tendency to equate the reference to democratic procedures in s71 with the principles of natural justice, the origins of the phrase suggest otherwise. The word “democratic” was, I think, deliberately chosen to capture the notion identified in “Towards a Better Democracy” and subsequently endorsed by the Electoral Law Committee and by speakers in the House. What the Royal Commission, and subsequent adherents, had in mind was a requirement that the selection of candidates by political parties would be participatory; that members of the party may participate in the selection process, whether directly or through representatives (delegates) themselves elected by the membership at large.

This is a pretty core aspect – that the reference to democratic procedures for candidate selection in s71, does not mean that parties are bound by  principles of natural justice (as public bodies are).

With the benefit of reference to the above extrinsic materials the impression I held previously that the candidate selection processes adopted by the National Party probably met the requirements of s71 is strengthened. The text of the section, read in light of the Royal Commission’s Report, was clearly intended to provide a defined level of participatory democracy. Candidates to represent the party at general elections are to be selected by current financial members of the party from the particular electorate or by delegates of that class of persons. But, the participatory requirement was, I think, deliberately framed so as to leave scope for the overarching influence of senior officials of the party, provided that they too were democratically elected by the party membership.

Again, very interesting. Basically it affirms board vetoes etc are not contrary to the Electoral Act.

I am satisfied that the rules of the National Party include a comprehensive code for the democratic selection of constituency candidates. The requirement contained in s71 for participation in the selection process by current financial members of the party from the electorate, or by delegates elected/selected by current financial members of the party, is met. Delegates on the Board consider the nominations and may reject one or more, while the pre-selection committee must reduce the number to a maximum of five. Thereafter, the universal suffrage option provides for current financial members from the electorate to make the final choice by a closely defined democratic process.

Accordingly, the rules of the National Party do satisfy the requirement of democratic procedure contained in s71. Extensive provision is made for members of the party to participate in the selection of constituency candidates. The preceding review of the rules demonstrates as much.

I suspect all political parties will find some comfort in the interpretation of the court.

Section 71 aside, is it seriously arguable that r94(b) is challengable on other grounds? Mr Payne’s case seemed to me to be predicated on s71, but nonetheless I shall also consider this further question.

Mr Kiely anticipated this further aspect. He posed the question whether, assuming compliance with s71, there may still be a breach of the rules actionable as a breach of contract.

Always smart to anticipate an angle the court may take, even if the plaintiff has not asked for it.

Although in terms of r94(b) there is no obligation to supply reasons for a nominee’s rejection, Mrs Kirk’s affidavit identifies three matters which influenced the decision. The first was Mr Payne’s conduct in 2002 when he failed to win the Rakaia nomination and publicly criticised the remaining candidates, Mr Connell in particular, both when he became the constituency candidate and following his election to Parliament. Second, as a candidate for the Rakaia electorate Mr Payne was required to sign an undertaking that if unsuccessful he would not act in competition to the successful National Party candidate. Mr Payne was considered to be in breach of his undertaking because he stood for the Christian Heritage Party in Rakaia and thereby acted contrary to the interests of National. Third, Mr Payne was involved in protracted Family Court litigation with his former wife which resulted in numerous court hearings and, eventually, newspaper comment in 2005 concerning action taken to evict Mr Payne from his Wellington home. In the course of this dispute Mr Payne was also declared bankrupt for non-payment of court costs, but the bankruptcy was subsequently annulled.

Clearly suitable to go direct into Cabinet, as Mr Payne claimed he was.

More specifically the rule itself does not suggest a requirement of notice, followed by an opportunity to be heard. All the indications are the other way, and indicate to me the exclusion of even this rudimentary level of natural justice. The Board is clothed with an unfettered discretion, and is absolved of the need to interview a candidate, or even to assign reasons for rejection. This indicates a power of veto in the widest of terms.

I conclude, therefore, that there is no serious question to be tried based on a contractual breach of r94(b).

So that takes care of the substantive issue. Then Justice Panckhurst looks at the injunction:

Much more significant to my mind is the inconvenience to third parties. Four of the remaining candidates for the Selwyn nomination made affidavits for the purpose of this hearing. I shall not refer to the detail of the individual affidavits. It is sufficient to say that the candidates each ordered their work and personal lives upon the assumption that the constituency candidate would be selected on 7 April. After my decision of 3 April the candidates were placed in a position of considerable uncertainty. Arrangements they had made to enable them to campaign through to 7 April were no longer of any utility. Whether similar arrangements for a resumed final selection process will be attainable, is questionable. Certainly, I accept on the basis of the affidavit evidence that the remaining candidates have been, and will continue to be, significantly inconvenienced until such time as a final decision is made concerning the Selwyn constituency candidate.

Indeed, the disruption has been quite massive to the candidates. With 700 delegates involved they had effectively put aside their day jobs to campaign fulltime.

Counsel also contended that the ultimate relief in this case could be nothing more than a requirement for the National Party to reconsider Mr Payne’s nomination. The reality, he suggested, was that such relief would prove futile. Reconsideration would almost inevitably lead to the same result. Either Mr Payne’s nomination would be rejected by the Board of the National Party or at the pre-selection stage.

Absolutely. There never has been any chance at all that Payne would ever be the candidate, even if he won in court. It really has just all been about an ego boost for him, with no chance of eventual selection.

For the reasons given I am satisfied it is appropriate to review and in the event rescind the interim order made on 3 April. Accordingly the interim injunction granted on that day is discharged.

Yay. Payne can appeal to the Court of Appeal of course but with no injunction remaining, National can proceed with its final electorate selection.

Costs in relation to the interlocutory hearings are reserved. If sought by the defendant, it may file a memorandum in support within 10 working days, after which the plaintiff will have 10 working days in which to reply.

Bearing in mind the previous evidence, I have a suspicion that regardless of the order for costs, any payment might be a long time coming!

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