Mulholland v Funnell
[2014] VSC 349
•18 July 2014
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
PRACTICE COURT
S CI 2014 03617
| JOHN MULHOLLAND | Plaintiff |
| v | |
| PAUL FUNNELL | Defendant |
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JUDGE: | GINNANE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 17 and 18 July 2014 | |
DATE OF JUDGMENT: | 18 July 2014 | |
CASE MAY BE CITED AS: | Mulholland v Funnell | |
MEDIUM NEUTRAL CITATION: | [2014] VSC 349 | |
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Clubs And Associations – Political party – Democratic Labor Party – Entitlement of defendant to use title Federal President – Convening of State Conference – Validity – Interlocutory injunction refused.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | In person | |
| For the Defendant | Mr D Hanna | Direct Brief |
HIS HONOUR:
This matter came before me yesterday, Mr Mulholland having issued a writ and a summons on Tuesday, 15 July 2014. Mr Mulholland seeks interlocutory injunctions restraining Mr Paul Funnell, the defendant, from describing himself, representing himself or holding himself out as Federal Secretary, or it may have been intended to mean President, of the Democratic Labor Party (the “DLP”), while present in Victoria or while communicating with members or prospective members of the DLP and from convening, arranging, organising or conducting any part of any meeting or Conference that purports to be a DLP meeting or Conference in Victoria. He sought, also, declarations that a meeting or Conference proposed to be held at Scoresby tomorrow was not in accordance with the DLP Constitution and Rules and that, insofar as it purported to be, it was in all respects void.
The defendant, and others associated with him, have purported to convene a Victorian State Conference tomorrow at 10am. The agenda for that Conference lists 18 items, Item 14 of which is that this State Branch of the DLP has confidence in the State Executive. That motion is referrable to a particular rule which I refer to later in these reasons. There are also on the agenda three motions which raise policy issues. As I have said, the summons sought declarations that the Conference was in effect invalid. But as argument developed, Mr Mulholland really sought orders that the Conference not go ahead.
The matter came before me yesterday ex parte, and I adjourned it until today and gave directions to endeavour to ensure that Mr Funnell was aware of the proceedings. Mr Hanna of counsel appeared for him this morning. Mr Funnell relies on his own affidavit and that of Mr Michael Murphy. Mr Murphy was the registered officer of the DLP in Victoria and was cross-examined on his affidavit. Mr Mulholland has sworn a lengthy affidavit with many exhibits to which I have given close attention.
The background to the matter includes proceedings in this court before Robson J, which were concluded by orders given on 2 December 2013.[1] Those proceedings were between Mr Kevin Butler and Mr Mulholland. Robson J declared that the State Executive of the Victorian Branch of the DLP immediately following upon its 2008 Victorian State Conference consisted of, (1) Kevin Butler as President; (2) a casual vacancy for the First Vice-President; (3) Frances Murphy as Second Vice-President; (4) John Mulholland as Secretary; (5) Michael Casanova as Assistant Secretary; and, (6) David Bennett as Acting Treasurer.
[1]Butler v Mulholland (No 2) [2013] VSC 662.
To some degree at least, the rationale behind Mr Mulholland’s application is a concern that the Conference, purported to have been called for tomorrow, is an attempt to circumvent the orders made by Robson J. His Honour’s judgment and orders remain in effect.
I accept that in appropriate circumstances, the court does have power to grant injunctive relief of the kind that Mr Mulholland seeks. The relevant authorities are referred to in Robson J’s judgment and the court’s power has not been disputed.
I am informed that the DLP consists of volunteers, and none of the office-bearers are paid.
Mr Mulholland’s case in its first part is a challenge to Mr Funnell describing himself as the Federal President or, as the summons says, Federal Secretary of the DLP. Mr Mulholland refers to cl 37 of the DLP Constitution and Rules 2000, which states:
Federal Executive: The Federal Executive shall be the ruling authority to administer the Democratic Labor Party, interpret the Constitution and Rules and implement policy, in accordance with the decisions of the Federal Conference. It shall meet annually, or at other agreed intervals, and shall comprise the officers elected by the previous Federal Conference, each State Secretary, or a proxy from the State Executive, and the Democratic Party leader and deputy leader in each House of Federal Parliament.
Also of relevance is cl 148, which states that:
Until the reconstitution of a Branch of the Democratic Labor Party (DLP) of Australia in a State other than Victoria, decisions of the State Conference and State Executive of the Victorian Branch shall have respective standing as Federal Conference and Federal Executive decisions, to the extent of their relevance to the federal context. At any time, the effect of this rule shall apply, mutatis mutandis, to any senior remaining State Branch.
Mr Funnell, in his affidavit, states that he has been elected and re-elected as Federal President of the DLP, but that is disputed by Mr Mulholland. Mr Mulholland disputes that what are described as Conferences of the DLP were indeed valid Conferences. For example, in his affidavit he refers to a purported Federal Conference that the DLP held in Brisbane in November 2009, and the subsequent declaration of what he regards as the DLP Federal Executive that that Conference was bogus.
For the purposes of this interlocutory application, I am not persuaded that I should give considerable weight to these submissions by Mr Mulholland. A number of issues that have been raised in proceedings brought by Mr Mulholland against the Australian Electoral Commission in the Administrative Appeals Tribunal were decided in November 2011.[2] Mr Mulholland’s appeal against the AAT’s decision was dismissed by a Full Court of the Federal Court in 2012.[3] The AAT decided that a properly constituted meeting of the Federal Conference of the DLP was held in Brisbane on 28 November 2009 and a subsequent Conference was held in Sydney on 23 July 2011. It seems that all States were represented at the Sydney Conference.
[2]Re Mulholland and Australian Electoral Commission [2011] AATA 879.
[3]Mulholland v Australian Electoral Commission [2012] FCAFC 136.
While it is true that the AAT was considering different issues concerning the registration requirements of the Commonwealth Electoral Act 1918 (Cth), I consider that, particularly on an interlocutory application, I should give considerable weight and respect to its conclusions. I have taken into account Mr Mulholland’s submissions about the validity of the Federal Conference meetings. However, I am not persuaded that I should grant any interlocutory relief restraining Mr Funnell from describing himself as Federal President, as he does in correspondence which has been put before me.
For the purposes of this interlocutory application, I do not accept Mr Mulholland’s contention that the Federal Executive and the South Australian and Western Australian branches of the DLP do not have legitimacy.
The second issue in this application concerns the State Conference that Mr Funnell and others have purported to convene for tomorrow. The urgency of Mr Mulholland’s application is caused by that proposed Conference, even though notice of it has been available for some months. I have already referred to the agenda for that meeting. Mr Funnell, purporting to act as Federal President, wrote to DLP members on 5 May 2014 stating that:
In my role as Federal President it is my duty to inform you that a Victorian State Conference is to be held on Saturday 19 July 2014 at 10am …
All members who wish to attend as a delegate must reply in writing by 19 June 2014 …
According to Mr Murphy’s oral evidence this morning, it seems some 20-plus persons are likely to attend.
On 7 April 2014, Mr Funnell wrote a letter addressed to “Dear DLP Colleagues”, with the heading “Federal Executive Report and Notice of Federal Executive Meeting” and makes reference to Robson J’s judgment and to the AAT decision to which I have referred. It states in part:
In short: if Victoria remains in conflict over who is running the DLP there may be no DLP left to fight over.
To the best of my knowledge, the post-2008 executive (as found by Justice Robson) has been unable or unwilling to meet with a quorum. That includes the period following the decision in December 2013. The same applies to Victorian state conferences.
It goes without saying that this situation is unacceptable at every level of the DLP. Victorian members of the party have been denied a functioning executive to represent them. The flow of policies from Victoria to its elected senator has been interrupted. Other state branches, accustomed to working closely with their Victorian colleagues, now face uncertainty and silence. Without making any value judgement or accusation of any kind – the solidarity of the party has been disrupted by the Victorian state of affairs.
For this reason, and the fact that there has been a dispute against Victoria brought to me under clause 124 of the Constitution by two other states, the Federal Executive meeting will consider a motion under clause 129 of the Constitution and Rules (2008 edition) for the Federal Executive to intervene in the management of the Victorian branch. The aim of this intervention is to:
1. Resolve the ongoing issue as to quorum;
2.Consolidate the membership records of the Mulholland and Farrell-led DLP so that all members on both lists will be entitled to stand for office;
3.Convene a state conference under cl 130 to either vote for confidence in the existing Victorian executive or to elect a new executive and federal conference delegates; and then
4.Immediately return control of the Victorian branch to the Victorian executive.
A Federal Executive meeting was held on 11 April 2014. I am informed by Mr Hanna that there were only two office-bearers in attendance at that meeting, they being Mr Funnell and Ms Rosemary Lorrimar, one of the Vice-Presidents. The other offices were vacant. State secretaries were in attendance as well as Senator John Madigan. The minutes support that contention. At that meeting a motion was passed by majority:
That as requested by the West Australian and South Australian state branches, under clause 124 of the constitution, the Federal Executive resolve this dispute by intervening in the management of the Victorian state branch and convene a State Conference pursuant to clauses 129 and 130 of the Constitution and Rules (2008).
The first issue in respect of the purported holding of the Conference is the question whether the Federal Executive meeting was invalid for want of a quorum. The quorum rule is cl 73, which reads:
Meetings of the Federal/State Executive, of any Local Branch or Support Group or of any Democratic Labor Party sub-committee shall be comprised of a quorum of not less than one-half of the number of office-bearers at the respective level, plus one.
There have been differing interpretations advanced as to the meaning of that rule. Robson J referred to the differing interpretations, being whether the rule applies to offices that are actually filled by office-bearers or whether it applies to all offices, whether or not they are filled.[4] The view I express on that issue in this judgment is a provisional view. While I consider both interpretations to be arguable, the preferable view is that the rule only refers to actual office-bearers. The number of one-half plus one has to be counted of offices filled by office-bearers. That conclusion is supported by the reference to the term “office-bearers” in the rule itself. On that interpretation, the meeting had a quorum as the only two office-bearers were present.
[4]Butler v Mulholland (No 2) [2013] VSC 662 [135].
I now turn to cll 129 and 130, which give rise to the other attack on the calling of the Conference. The Federal Executive is given wide powers by cl 124 to deal with disputes. It states:
The Federal Executive may deal with and settle, as it thinks fit, any dispute between two or more State Branches, subject to any right of appeal to the Federal Conference.
Clause 129 states:
The Federal Executive shall not discipline a division of a State Branch, or member thereof, without the prior agreement of the relevant State Executive, but, in a disputed case, may take steps to intervene in the management of the State Branch, as far as the Constitution and Rules provide.
Clause 130 states:
Where a State Branch of the Democratic Labor Party, or a constituted division thereof, acts in breach of the Constitution and Rules or otherwise against party solidarity or the principles of democracy, justice and fairness, the Federal Executive, where requested in accordance with the Constitution and Rules, shall convene a State Conference, chaired by the Federal President, to resolve an issue of confidence in the State Executive. The State President, or another member of the State Executive in stead, shall commence debate by moving to the effect, “That this State Branch of the Democratic Labor Party has confidence in the State Executive”. If the motion is lost, each position on the State Executive, and for delegates to the Federal Conference, shall immediately become vacant, and the Conference shall thereupon elect a new State Executive and delegates. Where the motion is carried, or where a new State Executive becomes installed, the Federal Executive shall withdraw, and the State Branch shall resume control of its own affairs.
One of the items on the agenda for tomorrow’s meeting is a motion of confidence in the terms contained in cl 130.
I asked Mr Hanna what the relevant issue of dispute was, and he replied, in effect, that the concept of party solidarity and the opening words of cl 130 were capable of application to the issue of whether there is a functioning Victorian Branch with which other States may work. Mr Mulholland submits that there must be a dispute in fact and that the Federal Executive cannot manufacture a dispute for the purposes of using the rule. But in my opinion, which again is being expressed only for the purposes of this interlocutory application, it is sufficient that there is a matter capable of being regarded by the Federal Executive as a dispute, and it is not for the court to set aside such a conclusion, except where it is clearly unreasonable, reached in bad faith or, perhaps, was not open on the material before the Executive meeting.
Mr Funnell in his affidavit states:
By the beginning of April 2014 the Court-determined State Executive had not met, no[r] made any arrangements to meet. I had received complaints from other State Branches, to the effect that the Victorian Branch, (the largest in Australia), had ceased any political activity and was not functioning at all.
That assertion is strongly contested by Mr Mulholland who has exhibited to his affidavit minutes of a meeting of the DLP Victorian Executive held on 25 May 2014, which deals with a number of items of business. Mr Mulholland attended that meeting. However, it is to be noted that one of the resolutions carried at that meeting was:
that to settle tension exacerbated by legal proceedings within the Victorian Branch since 2008, and to avoid a regeneration of factual disputation in the lead-up to the 2014 Victorian State election, the State Executive rules that the next Victorian State Conference be postponed until after that election.
The position before the court is, therefore, that the Victorian Executive, of which Mr Mulholland is a member, considers that no State Conference should be held whereas Mr Funnell and the Federal Executive, of which he is a member, are desirous of holding a State Conference.
I consider the court would only be justified in granting an interlocutory injunction restraining the holding of tomorrow’s Conference if there was a clearly arguable case that it had been invalidly convened. I am not so persuaded. The second matter of which I would require persuasion is that the balance of convenience supported the making of an interlocutory injunction.
Even if I had been persuaded that Mr Mulholland had established a good arguable case that the Conference had been invalidly convened, I would have found that the balance of convenience was against the granting of the interlocutory injunction for the following reasons. First, the Conference has been planned for some time and the plaintiff has known of it for some weeks. It appears that a number of people have made plans to come from various parts of Victoria to attend it. Secondly, is the proximity of this year’s State Election and the desire of at least a number of people who describe themselves as DLP members to hold a Conference to make arrangements for participation in that election. Connected to that point is the assertion that unless candidates are endorsed for the State election, the registration of the DLP under the electoral legislation may be jeopardised. Thirdly, decisions of the Conference can be the subject of separate challenge by other litigation or by other steps in this proceeding, if that is required. Fourthly, is the import of the observations of Robson J in the proceedings between Mr Butler and Mr Mulholland about the holding of a Victorian State Conference. His Honour stated:
In my opinion, for the DLP to continue in Victoria under its current Constitution it will be necessary for one or more of the current office-bearers in one faction to meet with the office-bearers in the other faction. In those circumstances, if a quorum was achieved, a State Conference could be called to elect new office-bearers. For example, Mr Butler could meet with Mr Mulholland’s office bearers and the four agree on a new State Conference.[5]
[5]Butler v Mulholland (No 2) [2013] VSC 662 [138].
Whilst I accept that there are disputes about the validity of actions taken by persons describing themselves as office-bearers of the DLP, I consider that the balance of convenience favours allowing the Conference that has been convened for tomorrow to occur.
They are my reasons, I have taken into account all of the affidavits and exhibits put before me, including the correspondence between Mr Funnell and Mr Mulholland. Because I am delivering this judgment in the Practice Court, I will not take the time to incorporate expressly in my reasons all of those matters, but I have taken them into account.
I therefore dismiss the summons dated 15 July 2014. My tentative view is there should be no order as to costs. I propose to direct that an appearance be filed by the defendant by next Friday 25 July 2014, the defendant then serve a defence 14 days after that and then the matter be referred to the Listing Associate Justice, for further directions.
This proceeding should be amenable to mediation.
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