Jones v McNichol [2016] EWHC 866 (QB)

[2016] EWHC 866 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
IN THE MATTER OF AN INTENDED ACTION
Court 37
Venue Royal Courts of Justice, Strand, London WC2A 2LLDate Thursday, 24 th March 2016
Before
THE HONOURABLE MR JUSTICE KERR
Between
JonesClaimantMcNicholDefendant
B E T W E E N:
IAN JONES
and
IAIN McNICHOL
(sued on behalf of all members of the Labour Party except the proposed claimant)
Transcript from a recording by Ubiqus
61 Southwark Street, London SE1 0HL
Tel: 020 7269 0370
MS H MOUNTFIELD QC appeared on behalf of the Claimant
MR A CHOUDHURY QC appeared on behalf of the Defendant
JUDGMENT
[1]This is a judgment given at very short notice in the briefest of terms and if there are any factual errors or inaccuracies in it, or linguistic or grammatical errors, these may be subject to correction if and when a transcript of this judgment is obtained.[2]I have before me an application for urgent interim relief brought ex parte on notice, to lift the claimant Mr Jones’ current suspension from holding office in or representing the Labour Party. I am very grateful to leading counsel for both parties, Ms Mountfield for the claimant and Mr Choudhury for the defendant, for getting the case ready so quickly and for their economical and cogent submissions both oral and written.[3]The claimant is an elected councillor of Sandwell Metropolitan Borough Council, of some 25 years standing and a very experienced local politician. The defendant is the General Secretary of the Labour Party, and it is agreed that he is the appropriate defendant, sued on his own behalf and on behalf of all members of the Labour Party other than the claimant, the Labour Party being an unincorporated association.[4]There is a meeting tonight at which under the party’s rules the local constituency Labour Party (CLP) is due to select the candidate in forthcoming council elections to represent Tipton Ward in Sandwell.[5]The evidence before me is that the the preferred candidate of the CLP is very likely to be Mr Jones, the claimant. Unless I grant the relief sought, Mr Jones will not be eligible for selection and another candidate will be selected. The deadline for completed nomination forms for those candidates selected is 7 April 2016. If the proper forms are not completed and submitted by then, a candidate cannot stand.[6]The elections are due to be held on 2 May 2016 and in this case it is for a four-year term of office. In only some of the wards in Sandwell are the councillors up for re-election, and it happens that Tipton Ward is one of them.[7]Under the Labour Party’s Rule Book 2015, there is a vesting of responsibility for the party’s governance, to put it in general terms, in the National Constitutional Committee and the National Executive Committee. I will not go through the details of those rules which vest general responsibilities and power in those organs of the party.[8]There is a specific power of suspension in chapter 6, headed ‘Disciplinary Rules’, at clause 1’ under the subheading ‘National Action by the Party’. The NEC under paragraph 1: ‘shall take such disciplinary measures as it deems necessary to ensure that all Party members and officers conform to the constitution, rules and standing orders of the Party. Such powers shall include: A. In relation to any alleged breach of the constitution, rules or standing orders of the Party by an individual member or members of the Party, the NEC may, pending the final outcome of any investigation and charges (if any), suspend the individual or individuals from office or representation of the Party notwithstanding the fact that the individual concerned has been or may be eligible to be selected as a candidate in any election or by-election. The General Secretary or other national officer shall investigate and report to the NEC on such investigation. Upon such report being submitted, the NEC may instruct the General Secretary or other national officer to formulate charges against the individual or individuals concerned and present such charges to the NCC for determination in accordance with their rules’.[9]There are other rules which I was shown in chapter 13, which I will not go through in detail; requiring, not surprisingly, individual members to uphold high standards of probity and integrity and avoid wrong-doing and also the perception of wrong-doing. I was also shown a part of some procedural guidelines at Appendix 6 which make provision to guide the people involved in disciplinary cases where brought – they have not yet been brought in this case - and include a suggested timetable, subject to flexibility, which is clearly intended to avoid unreasonable delay.[10]The facts, very briefly, begin in February 2015 when an investigation was going on into alleged sale at an undervalue in Sandwell of certain premises consisting of toilets; which, it was alleged, had been sold below the level of a valuation by the district valuer. That matter was then under consideration in Sandwell. The Labour Party came to suspect that Mr Jones might be party to some wrong-doing, and agreed with him that he should be subjected to suspension upon a voluntary basis.[11]A formal letter suspending him was sent to him, and received by him, dated 3 March 2015; and that letter made clear that the power of suspension being exercised, with Mr Jones’ consent, was the one that I have just quoted. The letter quite properly concluded by saying that the General Secretary had appointed a Mr Reilly, West Midlands Regional Director, to arrange conduct of the party’s own investigation and said that: ‘you will be contacted by him in due course with details as to how it is intended to proceed with enquiries’.[12]It soon became clear that Mr Reilly did not intend to investigate the matter himself, but to await the outcome of other investigations. By mid-November 2015, the claimant evidently considered that his suspension had gone on for long enough and instructed solicitors, who wrote on 13 November to Mr Reilly, stating that Mr Jones had effectively been cleared of wrong-doing in the council’s internal investigation; and asked the Labour Party to rescind his suspension. Mr Reilly declined that request saying that the other investigations were ongoing and: ‘[w]e therefore need to wait until the conclusion of the external investigations’.[13]The solicitors took issue with that stance, saying that there was no basis on which to suggest that Mr Jones had been involved in wrong-doing; and they continued to exert pressure on Mr Reilly to lift the suspension. The Labour Party, through Mr Reilly, wrote on 2 December 2015 to the claimant Mr Jones’ solicitors confirming his understanding that the council’s investigation had reached a conclusion and his understanding as a result of a letter he had received from the leader of the council, communicating that: ‘if and when the council receives the final Wragge report, it is not envisaged that this matter will go to a standards hearing’.[14]The reference to the ‘Wragge report’ arose because the council had instructed solicitors then known as Wragge (for short) to investigate and report on, among other things, possible wrong-doing in relation to the sale of the premises I have already mentioned. Mr Reilly went on to point out that the final Wragge report was not yet available and the police were also still investigating; and that the Labour Party ‘will not do anything that may prejudice an on-going investigation’. That, in other correspondence both earlier and later, became something of a mantra which was repeated many times.[15]The CLP, through its chair Mr Lloyd, put pressure on the General Secretary of the Labour Part to lift the suspension and expressed its confidence in Mr Jones. That was the evidence from, for example, a letter of 1 February 2016. On the same day, however, Mr Greenburgh, a partner at Wragge (as I shall call them) and the partner with responsibility for the investigation on behalf of the council, produced a letter not seen by the Labour Party’s officials until 10 March 2016, and not seen by the claimant’s representatives until two days ago, 22 March; saying that Mr Jones and another councillor may not have behaved impeccably in the matter of the sale of the premises in question and: ‘Whilst the evidence gives lie to a worrying micro-management of the Property Services team by Cllrs Jones and Hussain, the only breach of duty I find against Cllr Jones relates to the price at which the former toilet blocks were sold’.[16]Later in the same letter, Mr Greenburgh wrote:
‘I accept that Mr Willetts did not have confidence in the DV [district valuer] valuation. Mr Willetts thought the DV valuation was too high. I accept that the suggestion of the sale price was, on the balance of probabilities, proferred by Mr Willetts in response to a question from the Councillors. It was Cllr Jones [and Cllr Hussain] who accepted that view and indicated their approval of a sale at £35,000.’
[17]The letter went on to say: ‘Whilst Mr Willetts [and Cllr Hussain] were clearly culpable on that analysis; indeed to the extent that Mr Willetts was a senior officer and a professional valuer, he was arguably more culpable; Nevertheless Cllr Jones was a very experienced Councillor and cabinet member [sic – that should have read ‘former cabinet member’] and in my judgment he properly understood the obligation for the Council to obtain best value on a sale of its property. In those circumstances I find that he knew that selling for less than the DV valuation without obtaining any alternative written advice was wrong But I don’t think that occurred to him at the time. He acquiesced in the proposal as agreed between Cllr Hussain and Mr Willetts’.[18]And at the end of the letter, Mr Greenburgh wrote:
‘… this does not appear to me to be an offence under the Member Code of Conduct, rather it is contrary to the Financial Regulations and Standing Orders; as well as Section 123 of the Local Government Act 1972’
. He ended the letter by saying: ‘I will continue to conclude [sic] my report as fast as I am able, which will include the full reference and evidential references’.[19]On the strength of that advice the council, through both leader and chief executive, decided that for its part it would not be taking any further action against Mr Jones; and a referral to the standards committee was withdrawn. When Mr Stolliday of the Labour Party, who by then was involved in the matter, heard this news he responded in an email of 11 February 2016: ‘Brill – thanks’; and asked if the police had also stated that they would be taking no further action.[20]The claimant’s solicitors continued to put pressure on the national leadership of the party, personified now by Mr Stolliday, to lift the suspension; arguing that if there had been any grounds for proceeding in some way against Mr Jones, that would have become evident and it would have been done by now; and that the party itself had obtained no evidence to support any suggestion of misconduct.[21]This was accepted in the middle of February 2016; Mr Stolliday emailed on 17 February saying that he had removed Mr Jones’ suspension, and a formal letter of that date stated that that conclusion was based on correspondence on 3, 4 and 8 February setting out the council’s intention to take no further action: ‘notwithstanding the outcome of the report by Wragge Solicitors’.[22]Whatever those words mean, I was told that the writer of that letter, Mr Stolliday, had not at that stage seen Mr Greenburgh’s letter of 1 February. Mr Stolliday’s letter confirmed that whilst the matter would go before the next NEC meeting for ‘formal endorsement’, the lifting of the suspension was immediate and the claimant was free to resume his party activities and take part in the Sandwell Council Labour Group.[23]The next day, however, Mr Stolliday changed his mind and emailed that he realised there was more to the matter, that ‘the letters provided were in fact only part of the fuller picture and that on their own they had provided a misleading impression about the progress of the Council and Police investigations’. He re-imposed the suspension in that email, saying that he wanted to wait and see what was said in the final Wragge report which had not been ‘published or provided to the [West Midlands] Police’.[24]The same day, as it happened, Mr Jones received the awaited good news from the police who wrote to him in a letter of 18 February saying: ‘… following review of evidence collected during the investigation into the sale of three former public conveniences by [the council] …. no further action will be taken. The matter is now closed and you are not presently subject to any WM Regional Fraud Team investigation’.[25]On the strength of that, the claimant’s solicitors again unsuccessfully sought the lifting of the suspension which had been re-imposed; and they argued, among other things, that the Wragge report or draft report which had been provided to the council, was subject to counsel’s advice and: ‘is not a document that is being disclosed to third parties at present, and so cannot be released. It might never be released to third parties’.[26]The point was also made in correspondence that certain passages within the draft report which had been submitted to Mr Jones for his comment (which comments I am told he had made in December 2015 under the process known as ‘Maxwellisation’) were, in the usual way, to remain confidential and Mr Jones would not have been at liberty, even if he wanted to, to disclose them to the leadership of the Labour Party.[27]The Secretary of the CLP on 8 March 2016 wrote protesting at the continuation of Mr Jones’ suspension, calling the continued requirement that the Wragge report be made available ‘perverse, obstructive and unjust’. The author noted near the end of the letter that the General Secretary, to whom it was addressed, had:
‘already acknowledged that “time pressure by forthcoming selections” is of paramount importance’
. He emphasised the full confidence that the branch had in Mr Jones as their ward councillor and asked for a response by 11 March.[28]The party, through Mr Stolliday, continued to take the line (see in particular an email of 14 March), that the Wragge report was not in final form, that the conclusions in favour of Mr Jones to date from both the council, through its chief executive, and the police, were equivocal and possibly provisional. Ms Mountfield, in her submissions, criticised that approach as unfair since there was no material available to the Labour Party at that stage which would have enabled it to know when, if ever, it would receive an update on those conclusions; and there was no timescale for the party bringing the matter to a resolution by either charging Mr Jones or lifting his suspension.[29]In the same email of 14 March, Mr Stolliday stated at the end that as a result of the suspension, Mr Jones would be unable to be selected as a candidate for the local elections in May. Mr Stolliday was therefore saying, effectively, that there would not be any resolution or decision on lifting the suspension during the 10 days between 14 March and today, 24 March.[30]After that, the matter became litigious and letters were exchanged between solicitors leading to the present application being made. The chief executive of the council was contacted by the claimant’s representatives, and sent an email in the last 24 hours or so to the leader of the council stating, among other things, that not everything in the letter of Mr Greenburgh of 1 February was accurate, and that it was still the chief executive’s view that Mr Jones had not breached the Member’s Code of Conduct.[31]At the hearing before me today, the position of the party was expressed thus in a statement of Mr Creighton, Director of Audit and Risk Management, at paragraph 6: ‘It is not uncommon for members to be subject to other disciplinary investigation or proceedings at the same time, e.g. if a local authority member is being investigated by that authority. The party’s practice in such cases is almost invariably to let the external investigation run its course before reaching any final conclusions in the party’s investigations. The party’s conclusions would often be informed, although not determined by the outcome of the external investigations. The party would of course have no control over the speed at which the external investigations are carried out’.[32]The difficulty with that policy, it seems to me, is that it does not recognise the wording in the suspension rule, which mandates the carrying out of an investigation by an official of the party. Mr Creighton continued at paragraph 25 that the party wished to consider the contents of Mr Greenburgh’s letter, that is the letter that it had since 10 March and: ‘…would want to consider those matters as part of its own investigation and that the investigation would be completed as soon as reasonably practicable. The letter concluded by stating that although the police do not consider any action should be taken in respect of possible fraud and that Wragge had apparently advised that there is no case to answer of breach of the Members Code, there remains the need in the General Secretary’s view to proceed with the party’s own investigation. The suspension therefore remains in place’.[33]He continued at paragraph 29 to comment:
‘the final status of the Wragge report is also not in the party’s control’
. He went on to say at paragraph 31 that: ‘Completion of the investigation [that is, the investigation by the Labour Party] is dependent on the publication of the Wragge report so that the other matters which are of concern may be addressed. If it is confirmed that the Wragge report is not to be published or that a copy of extracts are not to be provided to the Party, then the Party will have to conclude its investigations without the benefit of the report. The Party would endeavour to do this as quickly as practicable. However, without the head start that might have been provided by the report, I would envisage this process taking several weeks’.[34]Mr Creighton does not put any timescale on the proposed investigation by the party. It seems to me that his reference to ‘several weeks’ is to the duration of the Labour Party’s process, if and when it were to start investigating the matter itself, which it has not done. He does not state in his statement that he has had any undertaking from the council or any other indication that the Wragge report will be disclosed to the party by the council, or that if it is that is going to happen, it will have happened by any particular date.[35]On the evidence before me, therefore, the party does not know when, if ever, it will receive that report; it is not trying with any diligence or urgency to find out; and has not set a deadline or timescale for commencing its own investigation in the event that it has not received the report by a certain date.[36]Those, then, are the facts in brief. In view of the urgency of this matter and other cases in the list this afternoon, which is the last working day before the Easter long weekend, I will deal with the submissions of the parties very briefly.[37]Ms Mountfield submits that it is strongly arguable on those facts that there was a breach of the contractual power to suspend and that it is trite that that power must be exercised fairly. She submits that this is not a case about money, but about her client’s career and political service; that he has the backing of his local party; and that if he is not eligible for selection at tonight’s meeting there will be irreparable and long-lasting damage to his career, as he will have lost a very good chance of re-election for a further four year term of office.[38]She pointed out that if and when circumstances justify further action, it is open to the party to take that action, investigate the circumstances and take any action, including disciplinary action, if so minded thereafter. She submitted that the balance of convenience and justice, to put it in Cyanamid terms, is firmly in favour of granting the relief sought because otherwise her client’s career would be ruined after 25 years of unblemished public service.[39]The defendant, through Mr Choudhury, made submissions that are very different. He started from the premise that the standard to be met here is not merely that of a serious issue to be tried, because of the urgency of the matter and the practical point that today’s application is likely to be determinative. The court, he said, must therefore take account of the strengths of the parties’ respective cases and the merits. That meant the claimant would need to show a strong likelihood of success and not just a serious issue to be tried. He referred to Lock International plc v Beswick [1989] 1 WLR 1268.[40]Mr Choudhury submitted that the present case is not one in which the Labour Party was sitting on its hands and waiting for something to turn up. Its investigation is not complete. He said the party was justified in adopting its policy of not conducting its own investigation until others investigations had been concluded; otherwise, he pointed out, Mr Jones would have to fight on two or more fronts, confronted with different investigations proceeding in tandem.[41]He submitted that Mr Jones had not objected to the inactivity of the Labour Party until November 2015 and that the party’s inactivity until then and since, was not unfair: the Wragge report is still in draft and is being reviewed by a silk. Even the chief executive of the council had expressed his conclusions, though not leading to any intention to proceed against Mr Jones, in qualified and guarded terms. Those conclusions are, said Mr Choudhury, not consistent with the statement of Mr Greenburgh who had said, in effect, that the toilet blocks had been sold at an undervalue.[42]I turn to my reasoning and conclusions. I think Mr Choudhury is absolutely right that this is a case where I must look beyond whether there is a serious issue to be tried and must make such assessment as I can, in the limited time available, of the merits.[43]It is common ground that there is a standard of fairness to be read into the suspension rule. That standard could be formulated in various ways. Words such as ‘arbitrary’, ‘capricious’, ‘good faith’ and just plain ‘fairness’ are among the terms commonly used to formulate the required standard in cases of this kind. I need not attempt to pinpoint my own formulation because it is common ground that the standard is essentially one of fairness.[44]I have been shown cases such as McInnes v Onslow-Fane [1978] 3 All ER 211 and D’Arcy v. Adamson (1913) Times Law Rep. 367and I drew the parties’ attention to Lewis v Heffer [1978] 1WLR 1061, which was decided at a time before the party had an express power of suspension and was very different factually but does, in my view, support the proposition (in any event not disputed) that a power of suspension must be exercised fairly, as pointed out by Ormrod LJ at pages 1076H-1077A.[45]In the present proceedings it seems to me that the merits are strong. The Labour Party has not carried out an investigation. The rule empowering suspension does not say that it can piggyback on someone else’s investigation. I accept of course, that the party can take account of the findings of others if it is able to gain access to those findings. It currently has them in a very incomplete form, a very long time after the initial suspension was imposed.[46]To my mind, the short point is that this suspension has gone on too long;ustice delayed is justice denied, as the saying goes. The failure of an investigative body to do its job in the hope that someone else will do it for them, is all too common in public life. It is often used as an excuse to do nothing and leave the suspected person under a cloud, stranded and in limbo. It is rarely fair, yet frequently encountered.[47]I am quite clear that damages would not be an adequate remedy for either side. This is a case in which the financial considerations, though not negligible, pale into insignificance alongside the considerations of both the reputation of the party and the reputation of Mr Jones.[48]It is true that there was a degree of acquiescence on Mr Jones’ part; he did not disagree with exercise of the power to suspend him and he did not press for the suspension to be lifted during the period between February and November 2015. True it is, also, that there may be something to be said in some cases for awaiting the outcome of other investigations, provided it is not an excuse for open-ended inactivity and abdication of responsibility.[49]But I do not accept the mantra of the party that it should do nothing as a matter of policy in cases where other investigations are ongoing without any regard to the timescale of those other investigations or the likelihood that they will produce a result before the possibility of irreparable damage to the suspended person’s political career. That approach is simply inconsistent with the duty placed on the party under the suspension rule.[50]It seems to me that the party lost sight of elementary fairness - or there is at least a good and strong arguable case that it did - by doing nothing between November 2015 and March 2016 except to change its mind about the lifting of the suspension, after lifting it in the middle of February.[51]The difficulty about the party’s position in this application is that it advances even now no timescale for resolution of the matter. As far as the party is concerned, it is putting to the court the proposition that it is acceptable for the suspension power to be exercised on an open-ended basis, even in circumstances where it may never see the report of Wragges.[52]The party could have acted, but did not act, on the basis of receipt on 10 March of Mr Greenburgh’s letter suggesting that the claimant may have been involved in the sale at an undervalue of the toilet block premises. That it did not do so suggests that it did not regard that proposition as sufficient of itself to charge Mr Jones with any disciplinary offence.[53]I take into account, of course, that there is a strong interest in the party, and indeed the public, having a pool of candidates for selection whose integrity is and is seen to be untarnished and beyond reproach. I take into account also the strength of the proposition that it is for the party and not the court or anyone else to select its candidates. But it must do so in accordance with the rules, including the obligation to operate its powers within those rules fairly.[54]This party is not just a national party; it also is constituted at local level by the CLP which, on the evidence I have, if I do not grant the injunction sought will be denied its preferred candidate. I accept that under the rules, as Mr Choudhury pointed out, the NEC can impose unwanted candidates on CLPs; but that must be done, again, in accordance with the rules which includes the requirement to operate them fairly.[55]The highest that the allegation can be put against Mr Jones is that in the view of one solicitor he was the least culpable of three people who bore varying degrees of responsibility for a decision to sell certain toilet blocks for £35,000, that being less than the level of a valuation by the district valuer, producing, again in the view of that solicitor a breach of the duty to obtain best value in section 123 of the Local Government Act 1972 and the council’s financial standing orders, but not the Code of Conduct for Members.[56]Beyond that, the party has no evidence on the basis of which to continue the suspension. Even if it could get hold of the Wragge report, it is likely that it will confirm that view in a bit more detail. If that is sufficient to charge Mr Jones, I ask myself why has the party not charged him already. Presumably, the answer is: for want of sufficient evidence. That helps me to reach the conclusion that continuing the suspension is unfair.[57]I also take into account that the suspension rule, as I have said, mandates an investigation by the party and that it has not done one. Mr Choudhury accepted that there comes a point where delay amounts to unfairness. He submitted that we have not yet reached that point, but I respectfully think there is a good arguable case for disagreeing with him about that.[58]It seems to me that, when confronted with the solicitor’s correspondence from November 2015 asking for the suspension to be lifted, the party should have taken on board the point that elections were coming up seven months or so later, and should have undertaken and discharged its responsibility then to enable the matter to be resolved. There has been plenty of time between November and now for that to happen, but it has not happened and I do not think that the reasons given for that amount to such a strong justification as to outweigh the case of unfairness that has been put forward by Mr Jones.[59]I accept that another candidate will be shut out unless my order is discharged between now and 7 April and I take that into account. I also take into account that it is open to the party, if so advised, to apply to discharge my order - perhaps armed with further evidence such as the full Wragge report or a current draft of it. The party can make that application and ask for it to be listed on one of the working days on any of 29, 30, 31 March or 3, 4, 5 or 6 April, and if successful it could then impose its preferred candidate without missing the deadline on 7April.[60]For those reasons, it seems to me that the balance of convenience and justice come down firmly in favour of the grant of relief and I will grant that relief. As discussed at the hearing, I will reserve the costs and I would be very grateful if counsel could draw a form of order now – it is already done, thank you.

Cited in 2 later judgments