John Moores v Liberal Party of Australia NSW Division

1. [1]

   On 10 April 2025, the plaintiffs filed a Statement of Claim commencing representative proceedings pursuant to pt 10 of the Civil Procedure Act 2005 (NSW) (“the Act”).

2. [2]

   The plaintiffs brought the proceedings on behalf of a group defined in this way:

The Parties

1. [3]

   The first plaintiff, Mr Moores, prior to the 2024 election, was a councillor for Cessnock City Council, Ward B, and had sought pre-selection from The Liberal Party of Australia, NSW Division, as a councillor for Ward B, and as the Mayor of Cessnock City Council.

2. [4]

   The second plaintiff, Mr Paynter was an independent councillor for Cessnock City Council, Ward D, for three years up to September 2024. He joined the Liberal Party in March 2024 and sought pre-selection to be the Party candidate as a councillor for Ward D at the 2024 election.

3. [5]

   There are a total of 135 individuals who fall within the description of “group members” according to the solicitor for the second and fourth defendants.

4. [6]

   When proceedings were commenced, the first-named defendant was the Liberal Party of Australia, NSW Division (“the Party”). The second defendant was Bunori Pty Ltd (“Bunori”), which was alleged to be a management services company for the Party which, amongst other things, employed staff, entered agreements and expended monies on behalf of the Party. The third defendant, Mr Richard Shields, was, at the relevant times, the Party’s State Director, who, for the purposes of the Electoral Act 2017 (NSW) (“Electoral Act”), was the Party’s Registered Officer and the Party’s Secretary.

5. [7]

   The fourth defendant, Ms Ilievska, was, at all material times, the Party’s Deputy State Director and General Counsel. She was, at all material times, the Deputy Registered Officer of the Party, and after 15 August 2024, was, for the purpose of the Electoral Act, the Party’s Registered Officer and the Party’s Secretary.

The Statement of Claim

1. [8]

   It is notorious that, speaking generally, the Party failed to nominate, in a timely fashion, a large number of candidates who had been pre-selected to stand for the Party at the 2024 Local Government Election, which was held on 14 September 2024 (“the Election”).

2. [9]

   Because of that failure, the plaintiffs and group members were unable to contest the Election as Party candidates even, though they had been successful in their pre-selection applications.

3. [10]

   The Statement of Claim pleads the existence of a number of different contracts. First, it is alleged that there was a contract between the plaintiffs and group members, each of whom were financial members of the Party, and the Party itself, the terms of which were governed by the Constitution of the Party. It is pleaded that the consideration for that contract was the payment of membership fees to become a financial member of the Party. It will be convenient to refer to this as the ”First Party Contract”.

4. [11]

   It is alleged that the failure of the Party through its then State Director, the third defendant, and its then Deputy State Director, the fourth defendant, (together the “State Directors”) to nominate the plaintiffs and group members for the Election constituted a breach of the First Party Contract.

5. [12]

   The plaintiffs plead a second contract between them and group members, on the one hand, and the Party and/or the State Directors on the other, the consideration for which was that the plaintiffs and group members who were selected for a “winnable position” paid a nomination fee to the Party, made a donation to the Party to fund the Election and agreed to submit a signed authority directing that the relevant council to which they were elected would remit a levy equal to 3% (or perhaps upon an increase, to no more than 5%) of any council fees they received to the Party. This is referred to as the ”Second Party Contract”.

6. [13]

   The plaintiffs and group members plead that the Party, and each of the State Directors, breached that contract by failing to nominate them for the Election.

7. [14]

   The plaintiffs also pleaded a contract between them and group members on the one hand, and the second defendant, Bunori, as the employer and/or principal of the State Directors and other party staff, on the other. This is referred to as the “Bunori contract”.

8. [15]

   The Bunori contract relied upon the same consideration as the Second Party contract: see [12] above. Breach of the contract by Bunori was constituted by the failure of its servants or agents to nominate the plaintiffs and group members for the Election.

9. [16]

   In addition to those three contractual claims, as against the State Directors, the plaintiffs and group members plead a count in negligence. The plaintiffs and group members plead that the two State Directors owed, to them, a duty of care to exercise all due care, skill and diligence in processing their nominations once they were pre-selected for the Election.

10. [17]

    The plaintiffs and group members plead that the failure of the State Directors to nominate them for the Election, including submitting all of the relevant and appropriate forms, constituted a breach of that duty of care.

11. [18]

    In due course, it will be necessary to identify and deal with how it is said that that duty of care arises.

12. [19]

    The plaintiffs and group members also plead that, in the alternative, either the Party, or else Bunori, were vicariously liable for the negligent conduct of the State Directors.

Issues Raised by the Defendant

1. [20]

   After the Statement of Claim was served, and before any defence has been filed by any party, correspondence was engaged in whereby the defendants, in various different ways, made plain their objections to the Statement of Claim. As a consequence, the plaintiffs seek leave to amend their Statement of Claim (“the proposed ASOC”) to take account of some of the matters which have been raised.

2. [21]

   Bunori and the State Directors, being the defendants, oppose the amendments upon a number of bases, including that, speaking generally, the causes of action proposed to be included are hopeless and doomed to fail and, accordingly, it would be futile to grant leave to file the proposed pleading.

3. [22]

   In order to give context to the proposed ASOC, the structure of the Party must be examined.

The Liberal Party of Australia NSW Division

1. [23]

   Evidence was adduced, by the plaintiffs, which included copies of the Constitution of the Party as at 6 August 2022 and as at 25 May 2024. As well, correspondence between the parties setting out the respective views about the proposed ASOC was provided to the Court.

2. [24]

   The second and fourth defendants put before the Court, by way of evidence, copies of the Contracts of Employment between the Bunori, Mr Shields, and Ms Ilievska. Those contracts of employment were partly redacted to remove irrelevant but personal details.

3. [25]

   The evidence of the solicitor for Bunori and Ms Ilievska was that Mr Shields was employed by Bunori throughout 2024, until his employment ceased on or around 15 August 2024, and that Ms Ilievska was employed by Bunori throughout 2024 and remains so employed.

4. [26]

   The evidence also records that all staff “who provided administrative services for the benefit of the Liberal Party of Australia NSW Division are employed by Bunori”.

5. [27]

   The evidence does not otherwise provide any information about Bunori, the directors or shareholders of Bunori, any arrangement Bunori has with the Party, or any other details about what Bunori does, or its real relationship with the Party.

6. [28]

   The evidence also indicates that the proposed first defendant, and the 26 other individuals who are the fourth to thirtieth defendants, are and were at relevant times, the individuals who constituted the State Executive of the Party.

7. [29]

   The evidence of the defendants’ solicitor also says that, to the best of his knowledge and belief, and based upon instructions, there 135 individuals who meet the group member definition (including the two plaintiffs).

8. [30]

   In the course of this judgment, it will be necessary to refer to parts of the Constitution of the Party. It is convenient to do so by reference to the 2022 Constitution, which was admitted as Exhibit GN5. I was assured by counsel that there were no material amendments to that version of the Constitution.

9. [31]

   The Constitution is a lengthy document. It is a document which also annexes and imports various parts of the Federal Constitution of the Liberal Party of Australia.

10. [32]

    It is clear from the Constitution that the Liberal Party of Australia is an unincorporated association, and the NSW Division of the Party is equally an unincorporated body. The Liberal Party of Australia is an eligible political party within the meaning of the Commonwealth Electoral Act 1918 (Cth).

11. [33]

    Under the Commonwealth Electoral Act 1918 (Cth), a political party is able to be registered: s 133. To be eligible for registration, a party has to have one member who is a member of the Parliament of the Commonwealth, or else 1,500 members. It must be established on the basis of a written constitution. It does not have to be an incorporated body.

12. [34]

    The Constitution of the Party sets out who may join the NSW Division and who may not join the NSW Division.

13. [35]

    In order to join as a member of either a local branch or as a general member of the Division, a person is obliged to submit an application and to pay the membership fee (cl 2.3.2). To remain a member, the membership has to be renewed by the payment of an appropriate fee.

14. [36]

    With respect to becoming a general member, cl 2.5.3 places the responsibility for the decision to accept or refuse an application on the State Director. The State Executive may accept an application which has been refused by the State Director.

15. [37]

    The effect of membership is described. Clause 3.1.1 provides that the members of the Party, whether part of the State Parliamentary Party or Federal Parliamentary Party or else members of a different kind “… must co-operate and work together for the achievement of the objectives of the Division”.

16. [38]

    Clause 3.1.2 provides that all members are bound by the provisions of the Constitution.

17. [39]

    Clause 3.2.1 provides that a financial member of the NSW Division has certain rights. They include the right to attend a meeting of any branch of the Party, the right to be given notice of and, subject to paying the prescribed fee, attend the State Convention, and vote on all motions put at any meeting of the State Convention and:

18. [40]

    Clause 3.11 provides for circumstances in which a person’s membership of the NSW Division automatically terminates. The two relevant provisions are as follows:

19. [41]

    There is no appeal against the automatic termination of a person’s membership (cl 3.11.5).

20. [42]

    Clause 9.1.1 establishes a State Council and provides for its membership.

21. [43]

    Clause 9.2.1, amongst other things, provides that the functions of the State council are:

22. [44]

    It is provided that the State Council must hold at least three meetings each year (cl 9.3.1).

23. [45]

    Clause 13.1 establishes the State Executive and provides for its members. Some of those members are ex officio members. Others are elected.

24. [46]

    The functions of the State Executive are provided for in cl 13.2.1. They include:

25. [47]

    Clause 13.3.1 provides that the State Executive must meet at least once each month.

26. [48]

    Part 21 of the Constitution deals with the selection and endorsement of Liberal candidates generally.

27. [49]

    Clause 21.1.1 provides that, for every election, whether Federal, State or Local government “… the State Executive must decide which offices the Division will contest”.

28. [50]

    Clause 21.1.3 requires the State Executive to develop and approve a timetable for the pre-selection of a candidate for any contested office.

29. [51]

    Clause 21.1.3(4) provides significant detail with respect to the content of the timetable which is developed and approved by the State Executive with respect to elections. In particular, it provides that the State Executive:

30. [52]

    Clause 21.1.4 provides for the State Executive to call for nominations for offices which are to be contested.

31. [53]

    Clause 21.2 provides that a person who wishes to nominate for endorsement, as a Liberal candidate for election, to an office must be a financial member of the Party and must have been such a financial member, continuously, for at least six months preceding the close of nominations.

32. [54]

    Clause 21.3.1 provides that the Nomination Review Committee for Local Government will consist of the President of the Party, the State Director of the Party (or else his nominee who must be an employee of the Party) and two other individuals.

33. [55]

    Clause 21.3.3 provides for the duties of each Nomination Review Committee.

34. [56]

    Once a selection committee has selected a person to be the Liberal candidate, cl 21.6.1 provides that the State Executive must, by motion, resolve whether or not to endorse such a person.

35. [57]

    Clause 21.6.2 provides that the State Executive may cancel any selection or endorsement of a Liberal candidate for election to office without giving any reasons.

36. [58]

    In terms of the internal management of the NSW Division of the Liberal Party, the Constitution provides in, cl 27.1.1, that all payments received for the benefit or purposes of the division must be:

37. [59]

    Clause 27.4 provides for particular restrictions with respect to bank accounts and accounting procedures for monies received, including, in particular, that there must be two signatories to operate an account and that the signatories must be three or more of the President, Vice President, Secretary, Treasurer or other committee members of the relevant body of the Party.

Employment Agreement of State Director

1. [60]

   The employment agreement of the State Director provides, in cl 1.1, that the Director reports to the President and State Executive.

2. [61]

   Clause 2.1(a) provides that the State Director must properly perform the:

3. [62]

   The position, title and reporting in the schedule are entirely consistent with the body of the contract. No point turns on that. The position title is recorded as “State Director, Liberal Party of Australia NSW Division”. It is noted that the position reports to the President.

4. [63]

   The responsibilities in cl 2.2 also requires the State Director to comply with all directions and policies, procedures and codes of conduct of Bunori and the Party.

5. [64]

   The balance of the agreement provides what might be regarded as standard conditions of employment, including providing for payment, reimbursement of expenses, leave entitlements and the like.

6. [65]

   Clause 7 of the agreement provides for either immediate termination by Bunori, or termination with notice by Bunori. It also provides that the State Director may terminate their employment as well.

7. [66]

   Ms Ilievska, the fourth defendant, was employed by a written offer, which was accepted by her. The written offer was on the letterhead of Bunori Pty Ltd, and commences with the following paragraph:

8. [67]

   The position description provides an overview in the following terms:

Proposed Amended Statement of Claim

1. [68]

   The first significant change in the proposed ASOC was that the Liberal Party of Australia, NSW Division, the named first defendant, was to be deleted and replaced with an individual, The Honourable Donald Thomas Harwin, who was, at the relevant time, the President and a Member of its State Executive. As well, 26 further individuals were to be added as defendants upon the basis that each of them was, at the relevant time, a member of the State Executive of the Party. It will be convenient to refer to these defendants, together, as the “State Executive”.

2. [69]

   In other words, in light of the fact that the Liberal Party of Australia, NSW Division is not an incorporated entity, the first significant amendment is sought to join all of the members of the State Executive of that unincorporated body as being the appropriate individuals to be sued, as the State Executive controls the business of the Party.

3. [70]

   The proposed ASOC maintained the previous claims in contract made against the Party, that is, the First Party Contract and the Second Party Contract remain, but are amended by substituting, as the contracting party, the members of the State Executive.

4. [71]

   The proposed ASOC added a cause of action in negligence against Bunori, and a cause of action in negligence against the State Executive, on the basis that the members of that (unincorporated) body were charged with the responsibility of managing the affairs of the Party.

5. [72]

   The claim in vicarious liability was amended by the deletion of the reference to the Party and the substitution of the State Executive defendants.

Proposed Defendants – State Executive

1. [73]

   The proposed State Executive members were, at the Court’s discretion, served with notice that an application had been made to the Court for their joinder. The proposed ASOC was also served on them.

2. [74]

   Those proposed defendants were invited to make any submissions which they may wish to, if they opposed being joined to the proceedings. No such submissions were made. The State Executive defendants did not appear when the application was heard.

Submissions for the Third Defendant

1. [75]

   It is convenient to set out the submissions of the third defendant, Mr Richard Shields, who was, at the relevant time, employed by Bunori and was the State Director of the Party.

2. [76]

   Although the proposed ASOC did not make any amendment to the Statement of Claim, insofar as the cause of action against the third defendant was concerned, nevertheless, the third defendant opposed the grant of leave. He did so solely on the basis that the plaintiffs’ claim against him – whether in its current form or in the proposed ASOC – disclosed no reasonable cause of action.

3. [77]

   He submitted that the duty of care that was pleaded against him, by the plaintiffs and group members, was neither “recognised by law nor capable of being made out on the pleaded facts”. That duty of care was described, he submitted, as being one that he, personally, owed endorsed candidates to take reasonable care in the Party’s nomination process to avoid them suffering pure economic loss.

4. [78]

   The submissions of the third defendant concentrated on the pleaded duty of care which, he submitted, simply could not arise.

5. [79]

   It is undoubted, as the third defendant submitted, that the claim by the plaintiffs and group members is for pure economic loss. But it is to be noted that in the particulars of loss given in the original and the proposed pleading, the claim is also for damages for “… disappointment, distress and inconvenience arising from the failure to be validly nominated”.

6. [80]

   Paragraph 58 of the proposed ASOC sets out the basis upon which it is alleged that the duty of care arises. That basis includes the following integers:

7. [81]

   The pleading pleads that it was reasonably foreseeable to the State Directors that, if they did not process and lodge the nomination forms with the Electoral Commission, the plaintiffs and group members would not be nominated for the Election and would incur loss and damage as a result.

8. [82]

   The plaintiffs also plead, in accordance with the Civil Liability Act 2002 (NSW), that the relevant risk of loss and damage because of a breach of a duty of care was reasonably foreseeable, not insignificant and a risk against which a reasonable person in the position of the State Directors would have taken precautions.

9. [83]

   Further, the pleading pleads that it was not unreasonable for the plaintiffs and group members to rely upon the State Directors and the Party to lodge their nominations.

10. [84]

    As senior counsel for the third defendant encapsulated it, he submitted that the Court would regard the essence of the pleaded duty in the following way:

11. [85]

    The third defendant sought to argue that there were three reasons why it was “not seriously arguable” that he owed the duty alleged. First, he submitted that reasonable foreseeability alone is insufficient. The submissions drew attention to the well-known proposition that, to establish a common law duty, reasonable foreseeability is a necessary, but not sufficient, element. So much can be accepted as a correct legal proposition.

12. [86]

    The second basis upon which it was submitted that the duty was not seriously arguable was that there was no “personal assumption of responsibility by” the third defendant.

13. [87]

    The third defendant submitted that properly understood, the decision of the High Court of Australia in Mallonland Pty Ltd v Advanta Seeds Pty Ltd [2024] HCA 25; (2024) 418 ALR 639. Mallonland at [32]-[34] established that the touchstone for the recognition of a duty of care, in cases of pure economic loss, is a personal undertaking by the defendant, to the plaintiff. Counsel points to the fact that there is no pleading of a particular fact asserting that, as between the third defendant and the plaintiffs (or the group members), the third defendant proffered any personal undertaking.

14. [88]

    Counsel for the third defendant accepts that the pleading asserts that the Party, acting through its officers, had an institutional responsibility for lodging nominations, but submits that that is not the same as, and is very different from, a personal legal responsibility to each candidate.

15. [89]

    Finally, the third defendant submits that there is no coherent basis for imposing personal liability on the third defendant. It is submitted that an employee or officer is not personally answerable in negligence to third parties, merely because he or she performs tasks for their employer.

Submissions for the Second and Fourth Defendants

1. [90]

   It is to be recalled that the second defendant is Bunori, a company which is described in the pleadings as a management services company which employed staff, entered agreements and paid operational expenses on behalf of and for the purposes of carrying out the functions of the Liberal Party.”

2. [91]

   As earlier noted, the fourth defendant was the Deputy State Director of the Party, and then, the State Director.

3. [92]

   The submissions of the second and fourth defendants are that the opposed claims, a phrase to which I will come, are futile and that the plaintiffs should not be granted leave to file the proposed ASOC. As well, it is submitted that to allow the opposed claims to proceed, there will be a significant increase in the complexity, duration and cost of the proceedings in a material way. Further, it is submitted that such time and costs would be wasted if the Court ultimately finds that the claims are hopeless.

4. [93]

   The “opposed claims” are: first, the claim for breach of the First Party Contract based upon the Constitution of the Party, because such a Constitution does not amount to a legally binding contract between members, with the consequence that such a cause of action must fail.

5. [94]

   The second opposed claim relates to the Second Party Contract and the Bunori contract, in which it is submitted that the plaintiffs have failed to plead the material facts necessary to establish the formation of the alleged contracts.

6. [95]

   The third opposed claim is the claim in tort against the State Executive defendants. It is submitted that this claim is fundamentally misconceived as there is no proper basis pleaded to assert that each of the State Executive defendants owed each of the plaintiffs and group members a duty of care.

7. [96]

   The fourth opposed claim, that the State Executive defendants are vicariously liable for the negligence of the State Directors, is said to be untenable because the State Executive did not enter into legal relationships for the benefit of the Party, as it is not a “juridical” entity. It notes that the State Directors were employed by Bunori.

8. [97]

   The second and fourth defendants accept that the test which the Court is to apply is that set out in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129:

9. [98]

   As is clear, the submissions of the second and fourth defendants ranged across issues that were of broader application than just those which affected those two parties. By way of example, some submissions addressed the cause of action against the proposed State Executive defendants, although the solicitor for the second and fourth defendants informed the Court that he did not have instructions to act for those defendants

10. [99]

    With respect to the cause of action presently pleaded, by the plaintiffs, against the Party (as the existing first defendant) or, is proposed to be pleaded against the State Executive defendants, who are sued in respect of the conduct of the Party, the second and fourth defendants submitted that it was not open to the plaintiffs to plead (and the Court would not be persuaded) that any pleading which relied upon the proposition that the internal rules of an unincorporated association amounted to a legally binding contract was viable.

11. [100]

    In respect of that submission, the second and fourth defendants submitted that the judgment of the High Court of Australia in Cameron v Hogan [1934] HCA 24; (1934) 51 CLR 358 at 376, was authority for the proposition that the internal rules of an unincorporated association should not be presumed to amount to a legally binding contract. In particular, reliance was placed on the judgment of Rich, Dixon, Evatt and McTiernan JJ, where it was said:

12. [101]

    Counsel submitted that the question of whether or not an intention to create contractual relations required the Court to ascertain the objective construction of the relevant rules or Constitution. Counsel submitted that it was appropriate for this Court to form a final view on that question, even though the Court was being asked, in effect, to consider the matter as if on summary judgment.

13. [102]

    Counsel submitted that the decision in Cameron had been applied in Camenzuli v Morrison [2022] NSWCA 51; (2022) 107 NSWLR 439 at [65]. In that case, the issue was the justiciability of a dispute within the Liberal Party of Australia on the question of whether steps taken by resolution of the Federal Executive to establish a committee with power to endorse three incumbent Liberal members of the Parliament as Liberal candidates to contest their seats, were valid, or amounted to a breach of the party rules.

14. [103]

    The challenge by the plaintiff in that matter was to the validity of the resolution of the Federal Executive. The substantive argument turned on the correct construction of the Federal Constitution of the Liberal Party of Australia.

15. [104]

    At [34], the Court (Basten, Leeming and Payne JJA) noted that:

16. [105]

    In Camenzuli, there was no argument about whether the Constitution of the Liberal Party of Australia had contractual force or not. The plaintiff in that case accepted that there was no contractual force.

17. [106]

    Accordingly, counsel for the second and fourth defendants submitted that the First Party Contract claim could not succeed because of the fact that the Constitution did not create contractual relations. As well, counsel submitted that the proposed ASOC did not contain any sustainable allegation as to the element of consideration because it could not be argued that the membership fees or renewals of financial memberships were made for the benefit of any members of the State Executive, nor was it a condition of any of those persons agreeing to be a member of the State Executive that they would receive any part of the membership fees, or receive any other transfer of value of a kind which could possibly constitute consideration.

18. [107]

    Thirdly, the second and fourth defendants submitted that the plaintiffs’ allegations created an incongruity.

19. [108]

    Fourthly, the second and fourth defendants submitted that the authority relied upon by the plaintiffs was inappropriate and did not support the principle contended for.

20. [109]

    With respect to the Second Party Contract, which pleaded that the plaintiffs and group members entered into a contract with the State Executive defendants, counsel for the second and fourth defendants submitted that such a contract could not be enforceable. At the very least, it was submitted, there must be identifiable parties to the arrangement, the terms of the arrangement must be certain and, unless recorded as a deed, there must generally be real consideration for the agreement. Counsel submitted that the material facts pleaded did not establish formation of any type of offer and acceptance, or any type of agreement or arrangement.

21. [110]

    It was submitted that, as the State Executive defendant did not employ either of the State Directors, there was no factual basis to make a number of the allegations which had the substantive effect of pleading an agency‑type arrangement.

22. [111]

    It was submitted that the proposed ASOC does not plead material facts sufficient to establish that the terms of the second Party contract could be regarded as certain.

23. [112]

    Fourthly, as it had earlier done with respect to the previous contract, counsel for the second and fourth defendants submitted that there was no quid pro quo to be discerned.

24. [113]

    Insofar as the Bunori contract was pleaded in the proposed ASOC, counsel submitted that it suffered from the same deficiencies as previously articulated, with respect to the two previous contracts.

25. [114]

    Insofar as the proposed pleading asserted a cause of action in negligence against the State Executive defendants, counsel submitted that the claim was hopeless, because the mere fact of membership of an unincorporated association could not mean that each member owes each other member a duty by virtue of their membership: see Hrybrynyuk v Mazur [2024] NSWCA 374. Counsel accepts that there may be circumstances that give rise to a duty of care by a particular committee member of an unincorporated association but points out that that is not the pleading of this cause of action.

26. [115]

    Counsel points out that the proposed ASOC tends to treat the State Executive members as though the unincorporated body is able to be sued in its own right, as opposed to the fact that there are individuals who are being sued who do not always act in unison. Counsel submits that this arises by reason of a fundamental misunderstanding of the relationship between the parties and the status of the State Executive. Accordingly, counsel submits that the plaintiffs must plead, and then establish facts, for each individual member of the State Executive sufficient to create a duty of care owed and that that individual breached the duty. They point out that there is no such pleading.

27. [116]

    With respect to the claim for vicarious liability, counsel submits that it is essential before a person can be vicariously liable for the conduct of another, that there be a relationship of employment. Counsel submits that it is plain from the employment agreement with the third defendant and the letter of employment with the fourth defendant, that none of the State Executive defendants employed the State Director or Deputy Director. Rather, they were employed by Bunori. In those circumstances, it is submitted there can be no vicarious liability resting on the State Executive.

Submissions of the Plaintiffs

1. [117]

   The plaintiffs made some overarching submissions. In the first place, the plaintiffs submitted that the Court would keep in mind the statement of principle of the High Court of Australia in Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658 at 664, namely:

2. [118]

   The plaintiffs pointed to the decision in Sims v Wran (1984) 1 NSWLR 317 at 321, which the plaintiffs submitted was authority for the proposition that particulars in a pleading (and the pleadings themselves) served to make other parties aware of the nature of the case they are called upon to meet, so that each party may know what issues are to be investigated at the hearing and, provided that the pleadings meet that requirement, they are not liable to be struck out and are therefore proper in both form and substance.

3. [119]

   The plaintiffs submitted that no prejudice flows to the existing defendants by the filing of the proposed ASOC. The plaintiffs submit that they are seeking to make amendments at an early stage of the proceedings, and before the defendants have filed any defence to the claims raised.

4. [120]

   The plaintiffs submitted that, on a proper analysis of the proposed ASOC, there is no basis for a submission that, by adding the State Executives as defendants to the action, there would be an unnecessary delay to the hearing and an increase in costs to the existing defendants. The plaintiffs submit that when one examines the pleadings, they are largely concerned with the same conduct that occurred at the Party’s central office, and the only additional time to be occupied by the amendments is any submission about whether, as a matter of law, the State Executive defendants ought be held liable in contract and tort having regard to the obviously pleaded factual matrix, and the unincorporated status of the Party and the State Executive committee.

5. [121]

   The plaintiffs submitted that, having regard to the nature of the proceedings, being representative proceedings, any such additional cost and delay would not be of any significance, and was, at best, in the realm of speculation.

6. [122]

   With respect to the position of the State Executives, the plaintiffs submitted that it is uncontroversial that members of a committee of an unincorporated association can be found liable in contract and in tort. For this proposition, the plaintiffs placed reliance on Bradley Egg Farm Ltd v Clifford [1943] 2 All ER 378, a case in which the majority held that, with reference to an unincorporated association, where the nature of the business in which it was engaged (including the fact that it employed individuals), the terms of correspondence it entered into and the conduct of a particular employed individual, had demonstrated that it had been negligent, it was appropriate that the members of the council who managed the affairs of the unincorporated association be the defendants.

7. [123]

   In Bradley Egg Goddard and Scott LJJ, noted that an important consideration in coming to their conclusion was that the members of the unincorporated association, called the Lancashire Utility Poultry Society, had no rights to the funds or property of the Society at all. They held that it could not be said that the property of the unincorporated association belongs beneficially to the members jointly.

8. [124]

   Bradley Egg was cited with approval in Peckham v Moore [1975] 1 NSWLR 353, where the Court of Appeal held that a relevant sporting club, which had over 1,000 members, whose identities changed from time to time, relied upon its general committee – the members of which were elected annually – to be the principals of a contract of employment of a sporting player who was injured whilst participating in the sport. It was noted that it was the members of the executive committee at the time the contract was made, who would be regarded as the employer, and hence the appropriate defendants.

9. [125]

   That decision involved a careful analysis of the way in which the affairs of the sporting club were, in fact, conducted.

10. [126]

    The plaintiffs submitted that, similarly with Peckham, in these proceedings it was a question of quite complex fact as to how the Party organised itself, and managed its affairs, including ensuring that pre-selected candidates were properly nominated for an election and therefore whether or not the State Executive were the appropriate defendants.

11. [127]

    The plaintiffs note that by the Party’s Constitution, the State Director is directly employed by the State Executive – cl 13.2.1; cl 19.1.1; and cl 21.3.1.

12. [128]

    The plaintiffs submit that it is reasonably arguable that the State Executive is the employer of the State Director, that any persons engaged by the State Director under cl 19.2.1 of the Constitution are also employees of the State Executive. Hence, the plaintiffs submit that it is reasonably arguable that the State Executive is vicariously liable for the negligent acts of the State Director, the Deputy State Director and administrative staff of the Party.

13. [129]

    The plaintiffs point to the fact that there is simply no evidence at all about what the relationship between Bunori and the Party, the State Council or the State Executive is. Any such evidence was within the power of the second, third and fourth defendants to adduce, but they did not do so. The plaintiffs submit that, at this early stage of the proceeding, and in the absence of any discovery, there is no factual basis to assert that the State Executive does not retain any responsibility at all as the employer of at least the State Director, Deputy State Director and perhaps also the Party’s administrative staff.

14. [130]

    The plaintiffs submit that the joining of each of the members of the State Executive is supportable, first, at the level of the pleaded employment relationship and, secondly, at the level of their service as a member of the State Executive.

15. [131]

    The plaintiffs draw attention to the fact that there is no objection from the State Executive advanced at this hearing.

16. [132]

    Insofar as the First Party Contract is concerned, the plaintiffs submit that the contract is pleaded in a way which discloses all of the material facts necessary for the defendants, including the proposed State Executive defendants, to know the case they must meet. They plead the formation of a contract upon the plaintiffs and group members becoming or reapplying as a financial member, in accordance with the Party’s Constitution, the consideration paid, a term referring to the right under the Constitution of a financial member to nominate for endorsement, performance – namely that the plaintiffs sought to invoke that right, and breaches of that First Party Contract in the ways particularised, with respect to the failed nomination process.

17. [133]

    The plaintiffs plead that the arguments raised against it with respect to this contract, including whether the Constitution and surrounding factual matrix manifested intention to create legal relations, is a triable issue because it turns on the text of the Constitution, the context of the Party, its nature, organisation and conduct. They submit that it is not determinable on a summary dismissal standard.

18. [134]

    In response to the submissions of the second and fourth defendants that the authority of Cameron does not permit a Court to find a contract in existence between members of an unincorporated association, the plaintiffs submit that, properly understood, the authority of Cameron reflects the need for close attention as to whether, on the words of the Constitution alone, one can infer that each member of an unincorporated association intended to form a legally enforceable contract arising from the mere fact of membership under the rules (or Constitution) of the Party.

19. [135]

    The plaintiffs draw attention to the proposition that Cameron is not a general rule that cannot be addressed by evidence called at trial.

20. [136]

    The plaintiffs point to the provision in the Party’s Constitution at cl 3.1.2 which, they submit, is in clear terms, namely that “all Members are bound by the provisions of this Constitution”. The plaintiffs seek to argue that one can readily see from that, and other provisions, that there is a clear intention for the members to be contractually bound, and that the Constitution confers specific rights on members of the organisation.

21. [137]

    In particular, the plaintiffs submit that the disputes with the State Executive defendants and the State Director defendants are not capable of resolution through the internal dispute process of the Party, as set out in the Constitution.

22. [138]

    In response to the arguments that the Second Party Contract (and the Bunori contract) ought be struck out on the grounds that the material facts are not pleaded, the plaintiffs submit that a proper reading and understanding of the pleadings demonstrates the contrary. The plaintiffs submit that the proposed pleadings pleads offer and acceptance in writing, including by way of:

23. [139]

    The plaintiffs submit that these are the material facts upon which such a contract could be found.

24. [140]

    Insofar as there are complaints by each of the defendants regarding the duty of care pleaded upon, which the cause of action in negligence is based, the plaintiffs submit that the pleading is conventional and relies upon the multi‑factorial or salient features approach endorsed by the High Court of Australia in Sullivan v Moody [2001] HCA 59; (2001) 207 CLR 562 and by the Court of Appeal in Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258; (2009) 75 NSWLR 649.

25. [141]

    The plaintiffs undertook, in their submissions, a careful examination of the Constitution, drawing attention to the roles and functions of the State Executive and its obligation to manage the Party.

26. [142]

    They also drew attention to the fact that the claims being put here were being put on quite a different basis to the claim made in Cameron. The plaintiffs characterised that claim as one in which the disappointed plaintiff argued that they should have been selected by the relevant party, if the party had followed its own rules, and that that was a dispute that was covered by the internal dispute resolution mechanism contained within the relevant Constitution and rules.

27. [143]

    Here, the plaintiffs submitted that this was not a case which could be dealt with in accordance with the internal dispute resolution mechanisms because, as they pointed out, they had been endorsed by the Liberal Party and selected to run, but it was a failure to carry out the administrative tasks which put into effect that decision which were, on the pleadings, the responsibility of the Party solely, together with its State Executive and State Directors, which are the subject of the claim. All candidates who were endorsed and selected to run were required to leave those tasks to the Party and its administration.

28. [144]

    Accordingly, the plaintiffs distinguished the relevant authorities to the extent that they were said to be applicable.

Discernment

1. [145]

   At the outset, it is important to identify the test which all parties accept as appropriate for considering the submissions about the futility of a grant of leave to file the ASOC because various of the causes of action could not succeed.

2. [146]

   I have earlier drawn attention, at [97] above, to the well-known formulation with respect to summary judgment of Barwick CJ in General Steel Industries. It is unnecessary to repeat it here.

3. [147]

   But there are two other decisions to which attention should be given. In Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 at [57], Gaudron, McHugh, Gummow and Hayne JJ said:

4. [148]

   As well, it is appropriate to keep in mind what the High Court said in Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87 at 99:

5. [149]

   I will keep these principles and statements in mind when considering the arguments which have been raised in the submissions.

6. [150]

   The second preliminary matter to be dealt with is that I accept the submission of the plaintiffs that no prejudice is occasioned to any existing party, or the proposed new parties, by a grant of leave to file the ASOC. The plaintiffs correctly point out that the proceedings are at an early stage, the existing defendants have not yet filed any defence, and the discovery and evidentiary phases of the proceedings are not yet being undertaken.

7. [151]

   If the grant of leave to amend results in additional costs to the existing parties, then that can be remedied by an order for costs.

8. [152]

   No other prejudice is identified in the evidence, nor can any be assumed, particularly having regard to the early stage of the proceedings.

9. [153]

   I do not accept the submission that the addition of the State Executive defendants, as well as the substitution of an individual, the President of the Party, The Honourable Donald Harwin, as the first defendant, is likely to cause any increase in costs, difficulties in case management, or complexity in the proceedings which would be such as would tell against the exercise of the Court’s discretion to grant leave to file the ASOC.

10. [154]

    In the absence of the nomination of a person or persons to represent either the Party, or else the State Executive, it is an available option to a plaintiff to sue all of the members of the State Executive at the relevant time, being those who were charged with the management of the affairs of the Party. In those circumstances, they are a necessary party. If the joinder of a necessary party does complicate the proceedings in one of the ways identified, then that is not a function of the amendment, it is a function of the way in which the Party is organised from a legal perspective. In any event, whatever be the additional cost, if such there is, it is not sufficient to tell against a grant of leave to amend.

11. [155]

    The first substantive issue is the submission by all existing defendants that the pleaded counts in contract are hopeless and doomed to failure because it is not open to the plaintiffs to rely upon the terms of the Constitution of the Party as creating legal relationships.

12. [156]

    In my view, the commencing point for this issue is the statement of Gaudron, McHugh, Hayne and Callinan JJ in Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 at 105 [25], where their Honours, in dealing with the question of whether there is an intention to create contractual relations said this:

13. [157]

    The defendants argue, however, that decided authorities have prescribed at least one kind of case in which it can be presumed, by reference to the type and class of case, that there is no intention to enter into contractual relations.

14. [158]

    That type or class of case is, it is submitted by the defendants, a case involving political parties which are unincorporated, and which exist either at a Federal or State level for the purpose of advancing views about the way in which the Commonwealth and the States should be governed.

15. [159]

    The defendants draw attention to and rely upon the remarks of the High Court in Cameron to the effect that associations being bodies of people who have combined to further some common end or interest (including sporting or political interests) which is established on a consensual basis will not, unless there was some clear positive indication that the members contemplated the creation of legal relations inter se, have their governance rules treated as amounting to an enforceable contract.

16. [160]

    Prior to the remarks just summarised, the judgment of Rich, Dixon, Evatt and McTiernan JJ, at 370, says this:

17. [161]

    This statement is significantly narrower than the principle contended for by the defendant in these proceedings.

18. [162]

    In Cameron, the High Court held that the exclusion of Mr Hogan, the then Premier of the State of Victoria and leader of the State Parliamentary Labor Party, from membership of the Australian Labor Party (“ALP”), State of Victoria Branch, in circumstances where, Mr Hogan, as Premier, had participated in May and June 1931 at a conference of Premiers of all States and the Commonwealth, which had agreed to a range of financial proposals known as “the Premier’s Plan”, which was contrary to various declarations and policies which had been determined by the Special Conference of the ALP, was clearly governed by the internal rules of the ALP.

19. [163]

    In fact, Mr Hogan had been re-elected in May 1932 to the Victorian Legislative Assembly, but by reason of his non-endorsement as a Labor candidate, he was not eligible for reappointment to the leadership of the State Parliamentary Labor Party.

20. [164]

    The relief sought by Mr Hogan was, in substance, a declaration he was, at all material times, and still was, a member of the ALP and entitled to his rights and privileges as such, and a declaration that his exclusion from the Association was wrongful.

21. [165]

    Mr Cameron, who was the President of the ALP, was, together with the Victorian Central Executive, two Vice Presidents, Treasurer, General Secretary, Organising Secretary and 18 members of the Executive of the Party, sued in respect of that relief.

22. [166]

    The defendants pleaded, amongst other things, that the plaintiff, Mr Hogan, was not entitled to bring the present action in respect of his exclusion from the Association until he had exhausted the remedies available to him, by way of appeal to an Annual Conference provided by the Constitution of the Victorian branch, and by the Federal Constitution of the ALP.

23. [167]

    It was noted in argument that the rules of the ALP provided a domestic tribunal to hear appeals from the actions of the Executive, in respect of internal administration of the Association.

24. [168]

    It is in that context, that the remarks of Rich, Dixon, Evatt and McTiernan JJ at 376 must be understood. There, their Honours said:

25. [169]

    In the later decision of the Court of Appeal of Western Australia in Cockman v Gorman [2023] WASCA 44; (2023) 413 ALR 646, the Court was content to approach the proceedings on the basis that it required an analysis of the WA Labor Rules. Having undertaken that analysis by reference to various parts of it, and, as well, the statements of the plurality judgment in Cameron, bearing in mind the caution expressed in Ermogenous, the Court held that political objectives of the unincorporated association (the WA ALP) do not require that its Constitution create contractual relations. They then said this:

26. [170]

    The significance of the Rules of the ALP was paramount. The conclusion of the Court of Appeal of Western Australia was at [38] and said this:

27. [171]

    The decision of Curthoys J at first instance, is reported as Cockman v Gorman [2022] WASC 125. At [81], his Honour held that the WA Branch Rules were to be read with cl 2 of the National Constitution of the ALP.

28. [172]

    Clause 2 had been considered in some depth in Asmar v Albanese [2022] VSCA 19; (2022) 403 ALR 159. Clause 2 was in these relevant terms:

29. [173]

    Upon that basis, namely, internal resolution of disputes, Curthoys J held that the rules did not evidence an intention to create legal relations, whether contractual or otherwise.

30. [174]

    The WA Court of Appeal considered the decision of the Victorian Court of Appeal in Asmar, which held that, notwithstanding the presence of cl 2 of the National Constitution, the dispute was nevertheless justiciable because:

31. [175]

    The WA Court of Appeal noted that the NSW Court of Appeal in Camenzuli declined to follow Asmar with respect to the relevance of, and influence of the Commonwealth Electoral Act 1918 (Cth) on the Register of Political Parties.

32. [176]

    The WA Court of Appeal concluded at [65], this:

33. [177]

    The plaintiffs submit that, upon the proper construction of the Constitution, and the application of the authority of Ermogenous, in respect of the subject matter of these proceedings, and the causes of action in contract, the correct position on analysis of the Constitution of the Party is that a contract is created.

34. [178]

    The plaintiffs accept that one is dealing with political parties. The plaintiffs, however, point out that the Constitution, which is binding on all members, provides a defined path which is a singular one by which a person could stand in local government elections as the endorsed candidate for the Party. In short, the plaintiffs submit that, once a person is identified as the pre-selected or chosen candidate, having submitted to the State Executive, or the State Director, the relevant nomination forms required by the Electoral Commission of NSW, thereby exercising their right which exists under the Constitution, then having regard to the facts, matters and circumstances, including particular correspondence sent by the State Deputy Director, the failure of the relevant bodies (State Executive, State Director or Deputy Director and/or Bunori) to lodge in a timely manner the relevant documents with the Electoral Commission was conduct which breached the contract permitting Party members to nominate, obtain endorsement and stand as candidates for office in an election.

35. [179]

    None of the claims made by the plaintiffs and group members involve any interpretation of the terms of the Constitution itself. There is no dispute about what the Constitution’s terms are, or what they mean. The issue, rather, is only whether there was, or was not, a contract between the plaintiffs and group members which arises from the terms of the Constitution. The significance of that is, the plaintiffs argue, that there is no dispute in accordance with the terms of the contract which could be determined by any Internal Disputes Committee.

36. [180]

    Accordingly, the plaintiffs submit that the proceedings here, and the particular contracts pleaded, are very different from those considered in the cases cited above, dealing with the ALP rules (either in Victoria or Western Australia), and also in Camenzuli, in which the issue of whether the Liberal Party of Australia’s Constitution created a contract between the members was not argued, and formed no part of the proceedings.

37. [181]

    The plaintiffs, in substance, submit that what, in truth, is the central issue is whether the conduct of those responsible for perfecting nominations for members of the Party to the Electoral Commission achieved that purpose.

38. [182]

    In my view, the causes of action which arises from that do not fall within the “presumption” set out in Cameron. The plaintiffs point to the authority of Ermogenous and the caution at [26], in which the plurality judgment doubts “… the utility of using the language of presumptions” in the context of ascertaining whether there was an intention to create legal relations.

39. [183]

    I do not think that the position is as clear as the defendants suggest, with respect to the creation of a contract. Nor do I think that the posed difficulties which are submitted, that the contract pleaded would be vague or uncertain, that it would not be clear with whom the contract had been made, and whether there was, personally, a contract with each member of the State Executive, or else with Bunori, is a matter which is so clear as to warrant a summary dismissal of the claim.

40. [184]

    In my view, the defendants have failed to persuade me that there is no basis, at all, upon which the Constitution of the Party can be regarded as constituting a contract with the features pleaded. There are certainly many features of the contracts pleaded in these proceedings which significantly differ from the circumstances considered in previous authorities.

41. [185]

    I am not prepared to hold that the defendants have persuaded me, in accordance with the General Steel test, that, if the proposed ASOC was filed, it would be liable to be summarily dismissed and, accordingly, any grant of leave would be an exercise in futility.

42. [186]

    The defendants also sought to attack the existence of a duty of care residing either with the members of the State Executive or, alternatively, individually with the State Director or Deputy Director, or with Bunori as the employee of the Party administrative staff.

43. [187]

    I accept that legal principle dictates that it is not a matter of universal application that all people, all owe all other people a duty of care to prevent pure economic loss or pure financial harm being suffered.

44. [188]

    I also accept the fundamental proposition that reasonable foreseeability is an insufficient criterium for the existence of a duty of care to avoid causing pure economic loss, although it is necessary: Mallonland at [32]-[34].

45. [189]

    However, Mallonland does not stand for a proposition that there can never be a duty of care falling upon a body or an individual to take care with respect to causing pure economic loss. Between [33] and [41], the judgment of the plurality noted various factors which may point for or against the recognition of a duty of care in a novel case. At [37], their Honours said that what was necessary to decide upon the existence of a duty of care was “an incremental and analogical approach, paying close attention to relevant precedents and any risk of incoherence in the principles they establish …”.

46. [190]

    The parties did not challenge, and the decision of all of the Justices accepted, that the salient features approach to determining whether or not a duty of care at common law existed with respect to pure economic loss, was the approach to be applied in the determination of that case.

47. [191]

    Here, I accept the submissions of the plaintiffs, with respect to the determination of the existence of a novel duty of care, as being one which follows that approach. Whether or not each of the features nominated will be proved at trial, particularly the State Executive or State Directors assuming the responsibility to lodge the plaintiffs’ and group members’ nominations with the Electoral Commission, and whether the plaintiffs and group members, once pre-selected to be candidates for the party had “… an expectation that all things necessary to be done to process their nomination would be done” is a matter with which I do not need to be concerned at this stage.

48. [192]

    Rather, the question is, assuming all of the integers pleaded are established, whether it is reasonably arguable that a duty of care existed. I am well satisfied that the existence of a duty of care in the manner pleaded is reasonably arguable.

49. [193]

    It follows that I am not satisfied that any of the defendants have established that, if the proposed pleading was filed, they would be entitled to summary dismissal of the claim against them. Nor am I satisfied that it would be futile for the proposed pleading to be filed in those circumstances.

50. [194]

    On the contrary, I am satisfied that the pleading raises and pleads a reasonably arguable cause of action in contract, and a cause of action in negligence.

51. [195]

    I do not accept that the plaintiffs have failed to plead, in the proposed ASOC, the material facts and elements of each of the causes of action.

Conclusion

1. [196]

   I conclude, in all of the circumstances, that the plaintiffs ought be entitled to amend their Statement of Claim in the form proposed and considered during the hearing of these arguments, subject to any further amendments which may be necessary to ensure that the provisions of Civil Liability Act 2002 (NSW) are adequately addressed.

2. [197]

   The Court makes the following orders:

   1. (1)

      Grant leave to the plaintiffs to file their proposed Amended Statement of Claim.

   2. (2)

      Order that any proposed Amended Statement of Claim be filed and served by 20 February 2026.

   3. (3)

      Order the plaintiffs to pay the costs of the second, third and fourth defendants of and occasioned by the filing and service of the proposed Amended Statement of Claim, not including the hearing before the Court on 16 September 2025.

   4. (4)

      Order that each party pay their own costs of the hearing on 16 September 2025.

   5. (5)

      Order that the defendants file and serve a Statement of Defence on or before 10 April 2026.

   6. (6)

      Stand the proceedings over for judicial case management to 1 May 2026 before Cavanagh J.

   7. (7)

      Grant liberty to apply.