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IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION



Stephen Cragg QC, Nikolaus Grubeck and Imogen Proud (on judgment) (instructed by Harrison Grant) for the Claimants Peter Oldham QC, Julian Milford and Edward Capewell (on judgment) (instructed by William Sturges LLP) for the Defendant Hearing date: 4 August 2016 ____________________

Mr Justice Hickinbottom :

Introduction

i) members of the Party who had held six months' continuous Party membership as at that day (i.e. who had been members since 12 January 2016); ii) affiliated supporters; and iii) registered supporters of the Party of over 18 years of age, who were on the electoral role, whose applications for registration were received between 18 and 20 July 2016, and who had paid a fee of £25.

The Labour Party Rule Book: The Law

As recognised by this court in Choudhry v Treisman [2003] EWHC 1203 (Ch) (" Choudhry "), the Labour Party is an unincorporated association with rules, currently set out in the Rule Book, which constitute a contract to which each member adheres when he joins the Party.

i) A person who joins an unincorporated association does so on the basis that he will be bound by its constitution and rules, if accessible, whether or not he has seen them and irrespective of whether he is actually aware of particular provisions ( John v Rees [1970] 1 Ch 345 at page 388D-E). ii) The constitution and rules of an unincorporated association are generally regarded as intended to be comprehensive, and further terms will not readily be implied ( Dawkins v Antrobus (1881) 17 Ch D 615 at page 621 (" Dawkins ") per Sir George Jessel MR, without demur from the Court of Appeal on appeal). iii) The constitution and rules of an unincorporated association can only be altered in accordance with the constitution and rules themselves ( Dawkins at page 621, Harrington v Sendall [1903] Ch 921 at page 926 and Re Tobacco Trade Benevolent Society (Sinclair v Finlay) [1958] 3 All ER 353 at page 355B-C). iv) The proper interpretation of the constitution and rules of an unincorporated association, like any other contract, is generally a matter of law for the court. The court focuses on the wording of the contract as it stands. If the words are clear and unambiguous, then there is no need to look outside them. However, if the natural and ordinary meaning of the words is unclear or ambiguous, then the court will consider the relevant context, being concerned to identify the intention of the parties by reference to "what a reasonable person having all background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean" ( Chartbrook Limited v Persimmon Homes Limited [2009] UKHL 38 at [14] per Lord Hoffmann; recently approved in Arnold v Britton [2015] UKSC 36 at [15] per Lord Neuberger of Abbotsbury PSC). I consider this proposition, uncontroversial so far as it goes, in the context of the specific provisions of the Rule Book below (see paragraphs 14-16).

The Labour Party Rule Book: The Provisions

"The work of the Party shall be under the direction and control of Party conference . Party conference shall meet regularly once in every year and also at such other times as it may be convened by the NEC."

Clause I(4) provides that:

"The Party shall give effect, as far as may be practicable, to the principles from time to time approved by Party conference."

"For the avoidance of doubt, any dispute as to the meaning, interpretation or general application of the constitution, standing orders and rules of the Party or any unit of the Party shall be referred to the NEC for determination, and the decision of the NEC thereupon shall be final and conclusive for all purposes. The decision of the NEC subject to any modification by Party conference as to the meaning and effect of any rule or any part of this constitution and rules shall be final."

"The members of the Party have agreed by [this clause] that it is the NEC who shall determine disputes as to the interpretation of the rules. The effect of the provision is that the NEC can adopt and apply any honest and reasonable interpretation of the rules."

i) They were made in an ex tempore judgment on an application for interim relief. They were also obiter: the judge concluded that the interpretation of the rules adopted by the NEC in that case was not only honest and reasonable, but "correct" (see Choudhry at [70]). ii) As Stanley Burnton J accepted, in considering the rules, there is a "correct" interpretation, i.e. one that is right as a matter of law. Other interpretations are wrong as a matter of law. I have the same misgivings as Foskett J (see Foster v McNicol [2016] EWHC 1966 (QB) (" Foster "), a judgment arising out of a different decision made by the NEC at that same 12 July 2016 meeting, at [57]): it is difficult to see how a court could conclude that an erroneous interpretation of the rules was reasonable. iii) It is not clear whether Stanley Burnton J's observations on Clause X(5) were made purely on the basis of the words used in that clause, or whether he had in mind past authorities. He does not refer to Dawkins in his judgment  it is not clear whether he was even referred to that authority  but the concepts to which he alludes are considered there. The case concerned the expulsion of a member from the Travellers' Club. In the Court of Appeal, Cotton LJ said this (at page 634): "We are not here to sit as a Court of Appeal from the decision of the committee or of the general meeting [of the club]. We are not here to say whether we should have arrived at such a conclusion or not, and the question whether the decision was erroneous or not can only be taken into consideration in determining whether that decision is so absurd or evidently wrong as to afford evidence that the action was not bona fide, but was malicious or capricious, or proceeding from something other than a fair and honest exercise of the powers given by the rule." However, Cotton LJ had earlier identified two questions with which the court was concerned, namely (i) whether the actions of the committee and general meeting were "within the terms of the rule", and (ii) if so, whether the exercise of those powers had been proper, i.e. that the proceedings under the relevant rule had been carried out with "irregularity or unfairness" (page 635). That distinction is important. The passage which I have quoted was concerned with the latter question, not the former. iv) In my view, the proper interpretation of the Rule Book, as a contract between Party members inter se, is a matter of law for the courts. Clause X(5) does not  indeed, cannot  oust that jurisdiction. However, it is clear that the Rule Book (and thus each Party member) gives the NEC a substantial discretion  "area of judgment" would be a better term  in how the rules are applied, which is a very different thing. The breadth of that area of judgment is emphasised in several places within the Rule Book, although sometimes phrased in terms of the NEC having the power to determine interpretation or "adjudicate" upon disputes as between members (see, in addition to Chapter 1 Clause X(5), Chapter 1 Clause VIII(4) (quoted at paragraph 19 below) and Chapter 2 Clauses II(2) (quoted at paragraph 18 below)). v) Therefore, for example, in a soft-edged obligation such as Chapter I Clause 1(4), the NEC has a considerable leeway in how principles approved by Party conference are given effect; and the NEC has a considerable area of judgment over procedure, timetable and the general of conduct the election of a national officer (including Party Leader) under Chapter 4 (see paragraphs 20-21 below).

"1. There shall be individual members of the Labour Party who shall pay a subscription in accordance with these rules, subject to a minimum as laid down in Clause III below.

2. The term 'individual members of the Party' shall encompass all grades of membership laid down in Clause III below; all such members shall have equivalent rights within all units of the Party except as prescribed in these rules."

The rest of Clause I sets out various other conditions, such as a requirement to be not less than 14 years of age (Clause I(3)(A)). Clause III(1) requires payment of the relevant subscription; and Clause III(4)(B) provides that, to participate in selection of candidates "at any level", a member must be fully paid up "by the notified relevant date". The minimum standard rate of subscription is currently £3.92 per calendar month, although there are reduced rates for various categories such as youths, the unwaged and retired. The rate for an unwaged member is £1.96 per month.

"(1) Individual members of the Party shall be recruited into membership in accordance with these rules and any applicable NEC guidelines which shall be issued to Party units and affiliated organisations from time to time

(2) Without prejudice to any other provision of these rules, and without prejudice to its powers under Chapter 1.VII, the NEC shall be empowered to determine any dispute or question which may arise in respect of membership of the Party, either by considering the matter itself or by referring the matter to the NEC Disputes Panel for a decision. In such cases the NEC's decision, or the decision of the Disputes Panel as approved by the NEC, shall be final and binding.

(3)

(4) The NEC shall issue procedural guidelines on issues relating to membership from time to time ".

"The NEC shall have the power to adjudicate in disputes that may arise at any level of the Party, including between [Constituency Labour Parties ("CLPs")], affiliated organisations and other Party units, and between CLPs, other Party units and individuals in those units and in disputes which occur between individual members or within the Party organisation. Where the rules do not meet the particular circumstances, the NEC may have regard to national or local custom and practice as the case may require. The NEC's decisions shall be final and binding on all organisations, units and individuals concerned."

"Clause I

General Principles

1. Internal Party elections for officer posts and the membership of national committees shall be conducted in a fair, open and transparent manner, in accordance with the constitutional rules of the Party and any appropriate NEC guidelines.

Clause II

Procedural rules for elections for national officers of the Party

1. General

A. The following procedures provide a rules framework which, unless varied by the consent of the NEC, shall be followed when conducting elections for Party officers. The NEC will also issue procedural guidelines on nominations, timetable, codes of conduct for candidates and other matters relating to the conduct of these elections.

2. Election of leader and deputy leader.

A. The leader and deputy leader shall be elected separately in accordance with rule C below

C. Voting

iii. An Independent Scrutineer will be appointed by the Returning Officer to oversee and verify the ballot, and the results shall be declared at a session of Party Conference.

iv. The timetable for the election, including any freeze date, and the procedures for agreeing the list of those eligible to vote must be approved by the Independent Scrutineer.

vi. Votes shall be cast in a single section, by Labour Party members, affiliated supporters and registered supporters.

vii. The precise eligibility criteria shall be defined by the National Executive Committee and set out in procedural guidelines and in each annual report to conference.

viii. No person shall be entitled to more than one vote. Votes shall be cast by each individual and counted on the basis of one person one vote"

I pause there merely to note that, as part of the election timetable (for which the NEC is responsible: Chapter 4 Clause 2(1)(A)), it is envisaged that a "freeze date" may be applied. That is nowhere defined. As will become apparent, however, its proper scope lies at the heart of this claim. I consider it further below (especially at paragraphs 71 and 77-83).

"The following rules shall be observed in the selections of all prospective elected representatives:

A. Rights of members participating in the selection process

i. All individual eligible members of the Party with continuous membership of at least six months (who reside in the electoral area concerned) are entitled to participate in selections. Any exceptions to this must be approved by the NEC.

B. Nominating criteria of members standing for public office

i. In additional to fulfilling any statutory requirements for the relevant public office, persons wishing to stand as a Labour candidate must have continuous membership of the Party of at least 12 months. Where not otherwise prevented they shall also be a member of a trade union affiliated to the TUC or considered by the NEC as a bona fide trade union and contribute to the political fund of that union. Any exceptions to these conditions must be approved by the NEC ".

The Rule Book is therefore clear: in respect of selection processes for external posts, subject to waiver by the NEC, an otherwise eligible member may not participate unless he has six months' continuous membership.

"Members enjoy the formal democratic rights of Party membership as stated within the rules. Party members have the right to participate in the formal process of the Party, vote at Party meetings, stand for Party office and elected office as stated within the rules."

"i. Individual members of the Party shall be recruited into membership in accordance with these guidelines either by the appropriate branch, constituency, national or regional Party, or by personal application.

ii. All recruitment to the Party shall be in accordance with these guidelines on membership recruitment which shall be issued to Party and affiliated organisations from time to time, and need to be read in conjunction with section two of the Party's rules on Membership.

iii. The Party is anxious to encourage the recruitment of new members and to ensure that new members are properly welcomed into the Party and opportunities offered to enable their full participation in all aspects of Party life.

iv. The Party is concerned, however, that no individual or faction should recruit members improperly in order to seek to manipulate our democratic procedures.

v. The health and democracy of the Party depends on the efforts and genuine participation of individual who support the aims of the Party, wish to join the Party and get involved with our activities. The recruitment of large numbers of 'paper members', who have no wish to participate except at the behest of others in an attempt to manipulate Party processes, undermines our internal democracy and is unacceptable to the Party as a whole."

Procedure for the Election of the Party Leader

"Additionally, in line with the principle adopted in Refounding Labour, individuals outside of affiliated unions should be able to register as supporters and participate in the ballot. But they should be required to sign a declaration affirming their support for Labour values. Furthermore, in order to participate in any selection, immediately prior to the ballot they would be required to pay a fee (to be determined by the NEC) and to reaffirm their support."

That was a key proposal within the Collins Review, designed to extend the franchise for internal elections: in particular, it would enable those who were neither individual members nor members of affiliated trade unions, but who "affirmed Labour values" and paid a fee (to be determined by the NEC), to participate directly in the election of the Party Leader. The Review concluded that:

"The creation of a single section of members and supporters provides the basis for a purer form of OMOV to be used to elect the leader and deputy of the Labour Party."

" The Electoral College for leadership elections should be abolished and replaced in Party rules by a new system based on the principle of OMOV.

 Multiple voting in leadership elections should be ended.

 The eligible electorate should be composed of members, affiliated supporters and registered supporters.

 Members of affiliated organisations who are not already party members may take part in the ballot if they register with the party as affiliated supporters. This will require them to declare their support for Labour values, provide the Party with personal contact details and be on the electoral register.

 Individuals who are not already Party members or members of an affiliated organisation may take part in leadership elections by registering with the party as a supporter. This will require them to declare their support for Labour values, provide the Party with personal contact details, be on the electoral roll and pay the party a fee.

 The NEC should agree the detailed procedures for leadership elections including issues regarding registration, fees and freeze dates."

It is to be noted that the Collins Review recommended that "the eligible electorate" in respect of leadership contests should include "members"; and, unlike the other two categories of elector (i.e. affiliated supporters and registered supporters), the Review did not propose any criteria restricting the eligibility of members to vote for Party Leader.

"It was deemed necessary that registered supporters should be on the electoral roll, in order to ensure that applications were genuine i.e. people were who they said they were, and lived where they said they lived. The Party was aware that a system of registered supporters, without the checks applied to members, was potentially open to abuse, and thought that one pragmatic way of preventing that abuse was to insist that registered supporters should be on the electoral roll."

"Votes shall be cast in a single section, by Labour Party members, affiliated supporters and registered supporters".

" [T]he recommendations in the Collins Review were adopted at Conference, and form part of the corpus of rules governing the party. The principles upon which the Party is based require it to comply with the democratic will of the membership, as expressed through Conference. Accordingly, the NEC could have been open to challenge if it had departed from the Collins Review proposals."

"The principles in the Collins Review were applied to the 2015 leadership election, which resulted in the election of Mr Corbyn".

In that election, he says, it was very widely publicised that non-members could become registered supporters of the Party on payment of £3, and take part in the leadership election. Ballot papers were despatched on Friday 14 August 2015, and the ballot closed on 10 September 2015. A "freeze date" of two days before the start of the ballot was applied, so that any members or registered supporters wishing to take part in the election had to join the Party or apply for registration by noon on Wednesday 12 August 2015. Mr McNicol explains (see paragraph 22 of his First Statement):

"The reason both for the very truncated freeze date, and the very small payment of £3, was to encourage wide participation in the election, that being the approach that the Party decided to adopt at the time";

in other words, it was in accordance with the principles and recommendations of the Collins Review as adopted by Party conference.

Pre-2016 Leadership Elections

"Indeed, it is inevitable that they must be applied, because otherwise in theory new members could join right up until the very last day of the ballot, and still claim entitlement to vote."

There needs to be a date upon which the electorate is frozen, so that, in practical terms, they can be balloted.

"The NEC agreed that there is no 6 month qualification for this ballot and that all members who have not lapsed their membership as at 12.30pm, Wednesday, 8 September will be eligible to vote. For the purposes of this election, the NEC also agreed to waive the eight week eligibility rule. Eligible to vote therefore means on the national membership system and not lapsed membership."

"By the start of July we already had tens of thousands of new people sign up  as members, affiliated supporters or registered supporters. A fantastic achievement so far, but we know that after the May elections, there is more to do.

The innovations introduced to the way we conduct Leadership elections are an important first step but over the months and years we will need to continue to reach out and re-engage with the electorate if we are to return a Labour Government in 2020."

The 2016 Leadership Election

"Labour Party members on the national membership system and not lapsed from membership at the date set on the timetable will be eligible to vote. Affiliated supporters and Registered Supporters, as defined by the NEC, who have been registered with the Labour Party at the date set on the timetable will be eligible to vote."

"Qualifications

 Must be over 18

 Must be on the Electoral Register with a valid polling number

 Must supply a valid email address, home address and date of birth, and be able to pay the fee online

 In all other respects must meet the qualification criteria of membership of the Labour Party

 Pay a fee of £25

 Must be validly registered by 5pm on Thursday 14 July 2016 "

"Timetable and Freeze Date

The Special Conference at end of the Collins Review concluded that all selection timetables should be, once started, as short as possible. The Collins Report also states: 'The NEC should agree the detailed procedures for leadership elections including issues regarding registration, fees and freeze dates.' The Party requires members to hold six months' continuous party membership on the freeze date to be eligible to take part in a selection."

"[W]hen the NEC has decided 'freeze dates' which did not require 6 months' for past leadership elections, it has done so by way of explicit derogation from, or at least reference to, the '6 month' principle".

Mr Cragg submitted that that again suggests that, as at 12 July 2016, Mr McNicol considered the six month membership requirement in Chapter 5 applies to leadership election under Chapter 4.

i) By Chapter 5 Clause I(1)(A)(i), members are required to have six months' membership before they can vote in the selection of candidates for elected office, and: "The general premise behind that requirement is that members should be able to show (by the length of their membership) that they have not joined the Party simply to select a candidate, but have joined because they are committed to the Party's principles and programme as a whole. That rationale applies no less to a leadership election, and it was logical to apply the principle by analogy." (paragraph 35). ii) The Party was concerned that individuals had become members or registered supporters before the 2015 leadership election merely in order to vote for candidates, and without the intention of participating otherwise in the Party's activities; and, indeed, it seemed that some individuals may have done so to subvert the Party's processes for the election of its Leader. iii) The fact that very large numbers joining the Party, particularly as registered supporters, up to two days before the opening on the ballot in 2015, created considerable practical problems in vetting the applicants.

i) registered supporters should have seven days (not two days) to sign up (rejected; although the window for registered supporter applications was moved from 12-14 July to 18-20 July 2016); ii) the freeze date should be 24 June 2016 (rejected, the minute reading: " . the recommendation in the paper stands: that the Party requires members to hold six months' continuous membership on the freeze date to be eligible to take part in a section"); and iii) the fee for registered supporters be £25 rather than £12 (accepted).

i) For the further discouragement of 'paper members'. ii) The minimum standard Party membership fee for an unwaged member is around £26 per annum (in fact, it seems, £23.52: see paragraph 17 above), that being the fee for unwaged members. It was logical to bring the fee for registered supporters into rough alignment with that minimum Party membership fee.

If members who had joined and paid the fee were not allowed to vote, that logic is perhaps not obvious; but, again, the rationale for this is not relevant to the claim as put.

The Labour Party Website

" By applying to become a member of the Labour Party you agree to accept and conform to the constitution, programme, principles and policy of the Party .

 You also confirm that you are not a member of any other registered political party (save the Co-Operative Party); and you are not a member of any organisation incompatible with membership of the Labour Party.

 Your provisional membership rights commence from the date your membership is recorded on the national membership list.

 Your provisional membership lasts eight weeks and during that time you can attend your Labour Party meetings in a non-voting capacity and your membership can be rejected  you would be advised in writing and depending on the reason you could have a right of appeal.

 Full membership rules and procedures are available in the Labour Party rule book."

"Where could my membership take me?

As a member, you'll be a key part of our election winning team. You'll be eligible to vote in leadership elections, you can help shape party policy, you can attend local meetings and you can even stand as a candidate.

So whether you want to chip in to help us reach our goals because you share our values, or because you have ambitions to serve your community and country, the only place to start is through joining the Labour Party as a member.

Was that everything you wanted to know? Click here to join now." (emphasis added).

"Labour Party members

Any eligible Labour Party member who became a member on or before 12 January 2016 will be entitled to a vote.

Registered Supporters

Registered Supporters who signed up between 5pm on Monday 18 July 2016 and 5pm Wednesday 20 July 2016."

Across the payment screen there has been the further following warning about joining the Party as a member:

"Please note that this will not entitle you to a vote in the current leadership election."

The Consequences of the NEC Membership Voting Requirement

The Claimants

The Main Claim

i) The "eligible electorate" for leadership contests was considered by the Collins Review, which concluded that it should include "members" without qualification. That recommendation was endorsed by Party conference. The NEC is bound to comply with and implement that recommendation, which has been transposed into the Rule Book as Chapter 4 Clause II(2)(C)(vi). ii) Clause II(2)(C)(vii) does not purport to give the NEC the power for which Mr Oldham contends. Immediately following (vi) (which, as I have described, includes members in the voting constituency), it merely allows the NEC to define and set out, in "procedural guidelines", "precise eligibility criteria" (emphasis added). In my view, those words are sufficiently clear on their face; but they are abundantly clear when read in context. They clearly do not give the NEC the power to set whatever criteria it wishes, subject only to the bounds of rationality. Read in the context of the Collins Review and the push to involve a greater number of people in the election of the leader, and in line with the NEC's role of implementing the will of Party conference, they deal with the election process: the provision enables the NEC to define, in any honest and reasonable way it chooses, how a member or category of elector is to be identified. In this case, "members" were to be those who were on the national membership system and whose membership had not lapsed at the date set on the timetable (i.e. 8 August 2016) (see paragraphs 48 and 58 above). But the provision cannot be used to redefine "members" in a wholly artificial way, to exclude a category of members from the constituency which Party conference (in adopting the recommendations of the Collins Review) has determined should be entitled to vote and the Rule Book provides will be entitled vote. iii) Whilst acknowledging the caution with which the subsequent practice of the Party can be used to interpret the Rule Book (see Choudhry at [64]-[66]), there is no evidence that the NEC has used (or sought to use) its powers in this way in the past.

i) As a matter of ordinary language, "freeze date" suggests a crystallisation of matters from a current or future time, not a reversion to a past state of affairs. ii) In Jeffers v The Labour Party [2011] EWHC 529 (QB), a case concerning a dispute between the Party and an affiliated organisation, freeze dates were considered; and, in a letter from the Party's solicitors to the affiliate's solicitors (quoted by Wyn Williams J at [29]), it was said on behalf of the Party: "What the imposition of the freeze date does is prevent additional individuals seeking to become members, especially by reason of encouragement or inducement by candidates, after the election process has begun. This is standard practice in the case of selection of Parliamentary and local government candidates and at Chapters 19 and 20 of the Party Rule Book and, by custom and practice, in respect of election of officers of Party units." (emphasis added). Mr Cragg submitted, with force, that that accurately set out what the Party meant by "freeze date" in this context; and it can be assumed that that is what those conducting the Collins Review must have taken it to mean when they adopted the term and required it to be put into the Rule Book.

The Other Claims

Conclusion

i) The judgment shall stand as declaratory relief. ii) The Defendant shall pay damages of £25 to each of the Second, Third and Fourth Claimants. iii) There be liberty to apply in relation to relief, on 48 hours' notice.

I shall make an order in those terms.