Foster v McNicol & Anor

When interpreting the rules of an unincorporated association, the court must begin with their natural and ordinary meaning in context. Where the wording is clear, wider principles of contractual construction and historical material are unnecessary.

Under the Labour Party rules, where there is no vacancy for Leader, the 20 per cent nomination threshold applies to a potential challenger. The incumbent Leader is not a challenger and therefore requires no nominations to take part in the ballot.

A clause purporting to make the NEC’s interpretation final does not prevent the court from deciding whether a fundamental question of legal interpretation is right or wrong, although the court may properly defer to the NEC on ambiguous and politically sensitive applications of the rules.

Michael Foster, a Labour Party member, challenged the NEC’s decision that Jeremy Corbyn, the incumbent Leader, could participate automatically in a forthcoming leadership ballot without obtaining nominations from 20 per cent of the combined Commons members of the PLP and EPLP.

The claim enforced the contractual rights arising from Labour Party membership. The parties agreed that there was no vacancy because Mr Corbyn had not resigned. The central issue was whether Clause II.2B(ii) required the incumbent Leader, as well as a potential challenger, to obtain the prescribed nominations.

1. Construction of the rules. The court approached the Rule Book as a contractual document. It first considered the natural and ordinary meaning of Clause II.2B(i) and (ii) in the context of the rules as a whole. Wider principles of contractual construction would apply if the wording were unclear, ambiguous or patently absurd.
2. Meaning of Clause II.2B. Where there was a vacancy, any person seeking the leadership required nominations from 15 per cent of the combined Commons members of the PLP and EPLP. Where there was no vacancy, a potential challenger required nominations from 20 per cent of that combined membership to mount a challenge. The incumbent Leader was not a challenger and therefore required no nominations to compete in the ballot.
3. The words “in this case” in Clause II.2B(ii) referred to the circumstances described in the first sentence, including the emergence of a potential challenger. The subsequent references to “nominees” were consequential provisions governing persons who became nominees under Clause II.2B(i) or (ii); they did not define who was a nominee. The reference to “nominee” in the voting provision was an instance of untidy draftsmanship.
4. NEC’s decision. The NEC had reached the correct legal conclusion. The court was not reviewing whether the decision was merely reasonable. A fundamental issue of legal interpretation required the court to decide whether the NEC was right or wrong.
5. Clause 1.X.5. The court left the true effect of the finality clause for a case in which the issue genuinely arose. It accepted that the NEC might be better placed to determine ambiguous applications of the rules involving politically sensitive background material. That observation did not alter the conclusion on the clear wording of Clause II.2B(ii).
6. The claim therefore failed. Mr Corbyn was entitled to take part in the ballot without obtaining nominations.