Supreme Court battle to seize back control of Victorian Labor fails

A judge has ruled against two separate cases challenging the federal takeover of the Labor Party in Victoria.

A supreme court battle to seize back control of Victorian Labor for unions and local members has failed.

Justice Tim Ginnane on Tuesday ruled against two separate cases challenging the federal takeover of the party in Victoria.

Former Andrews Government minister Marlene Kairouz took her own party to court after she was asked to front an internal disputes panel over charges related to party memberships.

A group of Labor-affiliated unions launched a similar legal challenge because preselections for the federal election were moving ahead without their vote influencing decisions.

Both cases were heard together because they both challenged the legality of the federal intervention.

Justice Ginnane ruled that Ms Kairouz’s challenge was within the jurisdiction of the court, but did not find in favour of her arguments.

He also ruled that the Victorian branch was not a separate entity from the Australian Labor Party and that this gave the national executive its powers to intervene.

The court case brought by trade unions was also knocked back.

Former Andrews government minister Marlene Kairouz is involved in the legal battle. Picture: Ellen Smith

The Independent Broad-based Anti-corruption Commission had been investigating the misuse of taxpayer resources for party political activity such as branch stacking.

This has centred on the alleged behaviour of former ministers and allies Adem Somyurek, Robin Scott, Marlene Kairouz and their staff.

The scandal, first aired in 2020, also led to Labor’s national executive taking over the Victorian branch, suspending voting rights and auditing false members along with others who broke party rules.

In the wake of the scandal, Ms Kairouz was charged with breaking party rules and went to court to prevent her membership being suspended or cancelled.

Justice Ginnane heard the matter alongside a similar legal bid led by Labor-affiliated unions, with both cases challenging the legality of the national intervention.

Unions and factions within the party have been deeply divided over the affair, which kicked off at the same time as a new “stability agreement” that shut out some powerbrokers.

A federal intervention to take control of Victorian Labor was sparked by the Adem Somyurek secret tapes scandal. Picture: Tony Gough

It comes as Daniel Andrews has conceded there is a cultural problem with Victorian Labor amid damaging claims about government staffers aired by the state’s corruption watchdog.

The Independent Broad-based Anti-Corruption Commission last week heard explosive claims of the serious misuse of taxpayer funds by MPs and their staffers.

It is also probing allegations of branch stacking, a practice within political parties in which factional warlords improperly recruit large numbers of new members to local branches to increase their power to pick candidates and influence decisions.

Four ministers – Adem Somyurek, Marlene Kairouz, Robin Scott and, on Monday, Luke Donnellan – have already resigned amid the branch stacking scandal.

It means the Premier has lost six ministers since being elected in 2014, in addition to having the Labor speaker and deputy speaker resign over a rorting scandal.

Victorian Premier Daniel Andrews accepts there are cultural issues within his party. Picture: NCA NewsWire / Andrew Henshaw

But Mr Andrews would not be drawn on whether the toxic culture extended from the Labor Party into his government.

“This government’s focused on delivering its commitments … That’s what we’re focused on,” Mr Andrews said.

“Letting IBAC do its work means that at the end of that process, if they recommend we go further, if they recommend there should be additional rule changes (or) additional measures then we won’t hesitate to do that.”

The evidence to IBAC this week, largely based around former minister Adem Somyurek and federal MP for Holt Anthony Byrne, detailed taxpayer-funded staff being used to assisted branch stacking and amass factional power.

Other allegations included electorate office money being used to purchase stamps that were then used for campaign materials and of cash from party fundraisers being used to pay memberships.

Adam Sullivan, a former staffer for Mr Somyurek, who has denied branch stacking, said in his evidence that senior Labor figures had continued to do the wrong thing because everyone had “skeletons in the closet” and there was a sense of “mutually assured destruction”.

“If you were to make the assertion that we were all involved in … a morally and ethically bankrupt calculation … that’d be a fair assessment,” he said.

Opposition Leader Matthew Guy said the culture of misusing public resources uncovered by IBAC was “really concerning”.

“It’s the culture that’s been led to establish itself in this government,” he said.

“I think all Victorians look at it with great shock to see that people’s money has been misused in this way, and government staff have been used in ways that have been.”

Mr Guy said the Victorian Ombudsman had already found the misuse of taxpayer funds for party political activity to be “completely inappropriate” in a report into the red shirts rorts scandal.

“It’s a terrible misuse of people’s money,” he said.

“I would have thought the Ombudsman’s report, which was pretty comprehensive, would have been enough to discourage anyone in any political party from acting in that way.”

Victorian Opposition Leader Matthew Guy says the culture of misusing public resources uncovered by IBAC was “really concerning”. Picture: NCA NewsWire / Andrew Henshaw

It comes as the Premier refused for a third day to say whether he was involved in a peace deal to pause branch stacking in Melbourne’s southeast in 2002.

Mr Somyurek earlier this week named Mr Andrews as having been part of the negotiations, with the Herald Sun then revealing that the deal could not have happened without the now Premier’s agreement, according to a source close to the deal.

Asked whether he was involved, Mr Andrews – who has denied ever branch stacking – said: “The subject matter, and claims made by others who are, I think, very directly participating in the commission, I’m not getting into a debate with them.

“We’re not getting into a debate on these issues. There’s a process been set up, the process should be allowed to run its course.”