Josephine Mary Hayes v Dr Mark Pack (sued as a representative of all members of the Liberal Democrats except the Claimant)

Hearing dates: 30 and 31 January, 3, 4 and 5 February 2025

Written submissions: 10, 13 and 17 February 2025

Approved Judgment

This judgment was handed down remotely at 10.00am on 27 February 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

This action involves a claim by the Claimant (“ Ms Hayes”), who was and claims still to be a senior member of the Liberal Democrats (“ the Party”), against the Party, represented in these proceedings by the Defendants. By a Decision Notice dated 1 September 2022 (“ the Decision Notice”), the Party purported to expel Ms Hayes, that decision following complaints made against Ms Hayes by Dr Mark Pack, who is President of the Party.

Three of the complaints (“ the Complaints”) were investigated and largely upheld by a complaints panel (“ the Panel”). Ms Hayes alleges that the Panel's handling of the Complaints, and the issuing of the Decision Notice by the Party were in breach of the contract between her and the other members of the Party, and that the Decision Notice is of no effect. She seeks reinstatement (or, more precisely, confirmation of what she claims to be her present status).

Given the subject-matter of these claims, it is right that I should record at the outset of this judgment that Ms Hayes presented her case respectfully and courteously. It is clear that Ms Hayes feels very strongly about her dealings with the Party and the subject-matter of this case, and holds particularly strong feelings so far as Dr Pack is concerned. Those strong feelings are clearly reciprocated, to some degree. That makes the courteous manner in which Ms Hayes presented her case commendable.

Ms Hayes did, however, look to explore her various disputes with the Party in cross-examination, even when they were not relevant to the relatively limited set of issues which I had to decide. In this judgment, I have limited myself to deciding the facts and issues which are relevant to the pleaded claims for relief within the applicable legal framework, and not sought to summarise or analyse all of the numerous emails, WhatsApp messages and social media threads I was referred to where they are not relevant to the issues which arise for determination at this trial.

Both parties were invited to file written submissions after oral closings to address specific issues at the court's request. Ms Hayes' written submissions, particularly those filed on 13 February 2025, sought to raise new points not raised at the hearing and which the Party had not had an opportunity to address. However, the limited post-hearing submissions the court permitted were not an opportunity to raise points which should have been argued at the hearing.

The applicable legal principles

The Party is an unincorporated association, with the legal relationship between the members being a matter of contract on the terms set out in the Party's constitution and rules at the time the member joins the association, and such rule changes as are subsequently made in a manner consistent with the terms of the constitution and rules at that time, or for which there is some subsequent contractually significant act of approval ( Conservative and Unionist Central Office v Burrell [1982] 1 WLR 522, 525; Aldcroft v International Cotton Association Limited [2017] EWHC 642 (Comm), [132] and Evangelou and Ors v Iain McNicol [2016] EWCA Civ 817). As Beatson LJ noted in the latter case at [19]:

“A person who joins an unincorporated association thus does so on the basis that he or she will be bound by its constitution and rules, if accessible, whether or not he or she has seen them and irrespective of whether he or she is actually aware of particular provisions”.

Where the rules of an unincorporated association provide for a power of expulsion on the part of a particular body or officer, they generally confer that power on the identified decision-maker as a matter of contract. While the exercise of that power will usually be subject to certain legal constraints, the power in question is one conferred on the contractual decision-maker, not the court. As a result, there are significant limitations on the Court's ability to interfere with the decision. The particular restraints which ordinarily arise as a matter of contract when a contract confers a power of decision (or as it is sometimes put, “a contractual discretion”) will vary according to the nature of the decision and the context. In the case of purely commercial decisions — for example the price at which to realise contractual security — they are likely to be more limited than in a case where a power of expulsion arises under the rules of an unincorporated association, particularly so far as limitations on the process by which the decision is arrived at are concerned.

There is a body of case law which sets out the limitations which are usually implied in relation to the making of a contractual decision in this latter context, and the concomitant ability of the courts to intervene to prevent or remedy the breach of contract which a failure to comply with those limitations would entail. In Chitty on Contracts (35 ^th) at [13–076], the position so far as “expulsion of members” is concerned is summarised as follows:

“The court will not restrain the exercise by a club of a power, contained in its rules, to expel members unless it is shown that what has been done is, in fact, contrary to the rules or has been done in bad faith or, at least where some sort of inquiry is contemplated, where the rules of natural justice have been infringed. It has been said that to give one reason for expelling a member and to act upon another is evidence of bad faith. In a case of expulsion it was held that the issues were whether the rules of the club had been observed, whether the committee had given the member a fair hearing and whether it had acted in good faith. Every member of the committee must be summoned to the meeting or the proceedings may be invalidated. Notice must be given to the member of the charge made against them and they must have a proper opportunity of being heard in their own defence; a rule purporting to deprive them of this right would probably be invalid as contrary to public policy. If a decision of a committee, based on the opinion of the committee, is challenged, the court will only interfere if there was no evidence upon which to base the opinion, in which case it will declare the decision ultra vires. The club cannot oust the jurisdiction of the courts by making the committee the final arbiter on questions of law; and the construction of the rules is always a question of law.”

That summary reflects the different language which courts have used to describe their limited powers of intervention in the decisions of contractual decision-makers of this kind over prior decades (the last case cited in the footnotes being from 1971). However, the themes which emerge are immediately familiar in more modern statements of the law of contractual discretions:

i) Any express limitations in rules on the exercise of the power must be complied with. Ascertaining the meaning of the rules involves a conventional exercise of contractual interpretation: Evangelou, [19]–[20].

ii) There is an obligation to exercise the power of expulsion in good faith, which includes an obligation to exercise the power for a proper purpose.

iii) In a context where the decision is to be reached following some form of inquiry or process, there are implied terms as to how the process is to be operated (cf. Braganza v BP Shipping [2015] UKSC 17 and contrast in a different context Lehman Brothers International (Europe) (In Administration) v Exxonmobil Financial Services BV [2016] EWHC 2699, [285]–[287] (Comm)). There was no dispute that for a decision of this kind by a private body, the relevant obligation is properly characterised as an obligation to adhere to the rules of natural justice: Lee v Showmen's Guild of Great Britain [1952] 2 QB 329, 342. I consider precisely what that entails below.

iv) When a challenge to such a decision is brought in court proceedings, the issue for the court is not whether, on the evidence before it, it would have reached the same answer, but whether the decision fell within the scope of the contractually permissible decisions open to the decision-maker. In more recent contractual discretion cases, that is usually described as an obligation not to reach an arbitrary, perverse or irrational decision ( Socimer International Bank Ltd v Standard Bank London Ltd [2008] EWCA Civ 116 and, in contexts rather closer to the present case, Williamson v Formby [2019] EWHC 2639 (QB), [23.5]; Neslen v Evans [2021] EWHC 1909 (QB), [11] and Rothery v Evans [2021] EWHC 577 (QB), [166]–[167]).

v) As Lord Sumption JSC explained in Hayes v Willoughby [2013] UKSC at [14]:

“A test of rationality … applies a minimum objective standard to the relevant person's mental processes. It imports a requirement of good faith, a requirement that there should be some logical connection between the evidence and the ostensible reasons for the decision, and (which will usually amount to the same thing) an absence of arbitrariness, of capriciousness or of reasoning so...