Inside Story

If Setka is shaming Labor, is Labor shaming the law?

A Victorian judge has gone against a quarter-century’s treatment of political parties

Graeme Orr 30 August 2019 1330 words

Nuclear option: opposition leader Anthony Albanese responds to the court’s decision during a press conference in Marrickville on Tuesday. Bianca De Marchi/AAP Image

Are political parties above, below or subject to the law? In a remarkable ruling on John Setka’s case against Labor’s decision to expel him from the party, a judge has said they are below the law.

To be precise, Justice Peter Riordan of the Victorian Supreme Court agreed with the party’s defence team that the constitution of a political party is not enforceable by a court. Unless a party’s constitution declares that it is contractually binding — something they rarely do — it has no more status than the rules of an informal social club drawn up over a few wines and pinned on a noticeboard.

In making this ruling, the judge bypassed more than twenty-five years of precedent set by other courts in Australia. Those courts have held that political parties are not mere “voluntary associations” flying beneath the radar of the ordinary laws of the land.

Setka may appeal. Aware of this, the judge went on to look at the substance of his claims “in case I am wrong” and party rules are enforceable. On the substance, Setka won easily. The national executive is not a dictatorship and can only expel members for a limited set of offences under the party’s state rules.

So Setka has plenty of incentive to appeal, and could yet win his battle to remain a member. But if the bulk of the Labor membership and leadership disavow him, he’ll still be a pariah in the party.

He claims his position as head secretary of the Victoria–Tasmania branch of the Construction Forestry Maritime Mining and Energy Union depends on remaining a Labor Party member. But for the most part, this is a case about face and symbolic power — about opposition leader Albanese versus a controversial union leader.

Regardless of what happens on appeal, either side could then approach the High Court for its view. The court is likely to take the case. Not because the public is interested in the Albanese-versus-Setka show, but because it is in the public interest to resolve how the law conceives of political parties.

The nature of parties and the freedom of association they should enjoy have long been the subject of debate, here and abroad. The nineteenth-century view was that parties were mere factions of ideologically or personally compatible MPs and wannabe MPs. Even as their membership bases grew in the first half of the twentieth century, parties within the Westminster tradition remained (in most instances) unincorporated associations.

In the famous decision of Cameron v Hogan in 1934, the High Court held that party rules were not generally enforceable by the courts. This case also involved Labor, but it was not a mere locking of horns over whether one prominent figure was sullying the party’s reputation. It concerned Ned Hogan, Labor leader and former premier of Victoria, who had been summarily expelled by the party’s executive over his support for the austere, Depression-era Premiers’ Plan. According to the court, the judicial system could only intervene in party affairs to resolve disputes about ownership of property.

That decision was widely criticised in ensuing decades. (Recent critiques appear in works by political scientists like Anika Gauja and lawyers like me.) If even the most senior member of a party could be expelled, potentially in flagrant breach of the party’s own rules, what hope is there that the rule of law will prevail over brute force within these organisations?

In any event, parties are not organised to amass property but to channel or sway political opinion and win elections. They are central to our system of electoral politics and government. Besides these profoundly public functions, parties are also publicly funded. Since the 1980s, they invariably register with the Australian Electoral Commission to receive close to $2.80 for every first-preference vote garnered at national elections. In Victoria, the state division Setka is fighting, they also receive up to $6 per vote plus annual funding to cover administrative costs.

To cynics, such funding shows that parties — who, via their MPs, make the very statute law governing parties — are caught in a circular and self-serving trap. From this position “above” the law, they have been adept at avoiding imposing on themselves the kind of internal democracy they have imposed on, say, trade unions. But cynicism can be taken too far. We have a competitive party system and a critical media, so there is some political accountability for legislation dealing with parties.

Champions of freedom of association caution against undue legal interference with parties’ internal rules or processes. Given they benefit from public funding, the quid pro quo should be that parties are subject to a high level of financial transparency and probity, not a one-size-fits-all set of internal rules.

But Setka’s case, like Cameron v Hogan, doesn’t involve the law meddling with parties’ internal rules. In these disputes, members aren’t asking the courts to treat parties like public bodies that must be run according to a Rolls Royce standard of internal democracy and fair process. A party like the original Palmer United Party can still have a constitution that centralises and entrenches power in its founder and his family. If you don’t like it, join a party with greater internal democracy. In our competitive landscape, you have no fewer than fifty-three different parties to choose from at the national level alone.

Instead, the question here is simply whether members can ask the courts to resolve a dispute about the meaning and application of the party’s own, self-chosen rules. If those rules have not been abided by, why not? The remedies don’t involve monetary compensation. Instead, a court can declare the legal position to guide the party, or give an injunction to do justice between the party and the members concerned, at its discretion and depending on the time pressures and mutual behaviour involved.

In a watershed case in 1993, a Queensland Supreme Court judge decided just that. Party rules were to be enforceable in court and the approach in Cameron v Hogan was to be avoided. (This case concerned the Liberal Party breaching its own rules for vetting candidates for preselection.) Statutory developments like registration and public funding, he said, brought parties within the legal radar. They could no longer be treated as informal social clubs.

In a series of cases since then, Supreme Courts in various states have accepted and refined this approach. Party rules that are vague or deal with ideology, public policy or minor matters are not enforceable. Non-members cannot sue to enforce the rules, allowing parties to robustly repel hostile takeovers. When parties have internal dispute-resolution processes, members should exhaust them first, unless the matter is urgent.

By and large, parties came to accept this degree of judicial oversight. After all, it’s hardly bad practice for parties to abide by their own rules. Today’s dominant faction may be tomorrow’s dissidents. And declining social trust in parties is unlikely to repair if we retreat to a world where parties are not bound by their own rules.

Of course parties don’t like dirty linen being washed in open court, or having maverick members waste resources on speculative litigation. But sometimes internal disputes need to be definitively resolved, as a case this year over the Greens’ NSW Senate ticket demonstrated. Sometimes the party leadership doesn’t even have a dog in the fight and is happy for an independent court to resolve it. And often the party’s powerbrokers have friendly lawyers who will argue their case at mates rates. Not every member is so lucky.

This level of acceptance of court oversight has, until now, been reflected in how parties have responded to litigation. But the spectre of Setka, apparently, has triggered the Labor Party to use the nuclear option, to blast the law back to 1934. The party may be ashamed of Setka, but it will be a real shame for the law if this decision catches on. •