Ten weeks from now, Labor’s Chris Minns will lead his party at an election in NSW that could make him the next premier of the nation’s most populous state.
So why has NSW Labor chosen this moment to launch legal action that reopens one of the most embarrassing incidents in Labor’s recent past?
Labor lodged legal action last month that will require the Federal Court to re-examine a political funding scandal inside the party that has already been examined by the Independent Commission Against Corruption and the state Electoral Commission.
An ICAC report issued in February last year outlines how the party received $100,000 in an Aldi shopping bag from businessman Huang Xiangmo as part of a scheme to circumvent electoral funding laws.
That report shows NSW Labor’s former general secretary, Kaila Murnain, admitted giving false or misleading evidence to ICAC and making a false declaration to the NSW Electoral Commission. This is the same woman whose evidence will be of vital importance in the Federal Court proceedings.
Labor is suing its former legal advisers, Holding Redlich, for negligence, breach of contract and misleading and deceptive conduct over the advice Murnain claims to have received from managing partner Ian Robertson in 2016.
The party wants $1.6m for costs incurred during the inquiries by ICAC and the Electoral Commission.
Both sides of this argument have an enormous amount riding on the outcome. If Labor wins, it could offload at least part of the odium from the funding scandal to its former lawyers.
This would have devastating consequences for Robertson’s public standing.
There are three points to consider: the first is that the law firm denies any wrongdoing and seems set to fight it out in court.
The second is that large parts of Labor’s case will rely on Murnain’s recollection of the advice she claims Robertson gave her more than six years ago.
The third point is that when this matter was before ICAC, the commission did not accept Murnain’s assertion that Robertson told her to do nothing.
Yet Labor is now proposing to run exactly the same argument in the Federal Court.
The statement of claim says Robertson failed to advise Murnain to conduct investigations into the suspected unlawful donation.
“Rather, the advice given by Robertson during the meeting was that there was no need for her to take any action …” the statement of claim says.
So why was this not accepted by ICAC? The commission’s report on this affair points to “difficulties in relation to Ms Murnain’s credibility” because she had admitted giving false or misleading evidence to ICAC and to making a false declaration to the Electoral Commission.
It also pointed out that the advice she said she received from Robertson “would, if accepted, have the effect of not only explaining but, at least in part, absolving her later conduct in respect of her later failure to disclose” a conversation with a Labor member of parliament that put her on notice about the suspected illegal donation.
“In all the circumstances, the commission cannot rule out the real possibility that self-interest may have played some part in Ms Murnain’s evidence as to the advice that she said she received from Mr Robertson,” the ICAC report says.
Given this history, why would NSW Labor consider presenting the same argument in the hope of securing a different outcome?
Unless Labor has found something new, there must be a risk that this legal action could suffer the same fate that befell Murnain’s assertion at ICAC.
Any additional factor would need to be compelling. So what could it be? Did ICAC miss a smoking gun?
In order to succeed, Labor would need to demolish the public standing of Robertson – who was Bob Hawke’s personal lawyer for 28 years.
He is an Officer of the order of Australia and is a former chair of Film Victoria, a former deputy chair of Film Australia and Screen Australia and a former board member of the Australian Broadcasting Authority.
He has been national managing partner of Holding Redlich since 2015 and until this incident he had been the principal partner responsible for NSW Labor’s legal work.
Without prejudging Labor’s case, it is worth considering some of the other reasons why ICAC did not accept Murnain’s assertion.
“Evidence as to verbal statements allegedly made by a person several years before, in the absence of corroborative evidence, is evidence that demands the exercise of caution by the relevant tribunal of fact,” the ICAC report says.
“The reasons for that include the possibility of faulty recollection and/or fading memory for detail over time, and whether the narrator of past conversations has a particular cause or interest to advance.”
Murnain first told ICAC about her conversation with Robertson at her second compulsory examination, held at her request, in August 2019. She made no mention of it when she was first called for questioning.
During the ICAC inquiry, the counsel assisting, Scott Robertson, submitted that “the evidence falls short of being of sufficient cogency as would permit the commission to conclude that Mr Robertson gave the advice that Ms Murnain said she was given …”
“It would be extraordinary (indeed scandalous) for a practitioner of Mr Robertson’s standing and experience to advise someone to, in effect, encourage Ms Murnain to conceal (both internally and externally) evidence of potential wrongdoing.
“Strong evidence would be required before the commission would regard itself as persuaded that such advice was in fact given. Evidence of that kind is not before the commission,” Robertson told ICAC.
