Power to the Political Parties: An Overview of the current Legal Developments Affecting Elected Representatives Post-GE15

Introduction

Freedom of association under attack? Or is it just the case that you ought to have known what exactly you signed up for?

Malaysia in the post-Sheraton Move period has led to a number of new developments affecting our Members for Parliament (“MP”) (as well as other elected representatives) and their relationships with their own political parties. The biggest change to the law came in the form of a number of new constitutional amendments commonly dubbed as “Anti-Hopping Laws”.

Article 49A(1) of the Federal Constitution now states that:

“Subject to the provisions of this Article, a member of the House of Representatives shall cease to be a member of that House and his seat shall become vacant immediately on a date a casual vacancy is established by the Speaker under Clause (3) if—

(a) having been elected to the House of Representatives as a member of a political party—

(i) he resigns as a member of the political party; or

(ii) he ceases to be a member of the political party; or

(b) having been elected to the House of Representatives otherwise than as a member of a political party, he joins a political party as a member.”

Article 160 of the Federal Constitution also includes a new definition to ‘political parties’ which are as follows:

‘“political party” means—

(a) any society which by any of its objects or rules, regardless whether such object or rule is its principal object or rule, or constitutes merely an object or rule which is ancillary to its principal object or objects or to its principal rule or rules, makes provision for the society to participate, through its candidates, in elections to the House of Representatives, or to a State Legislative Assembly; or

(b) any society which, notwithstanding anything contained in its objects or rules, carries on any activity or pursues any objective which involves its participation, through its candidates, in elections to the House of Representatives, or to a State Legislative Assembly,

and includes a coalition of such societies which has been registered under any federal laws;’.

The exact legal effect of the “Anti-Hopping Laws” remains unclear for the time being but since the start of the current Parliamentary term, we have seen a pattern of changes emerging in the way the relationship between our elected representatives and their political parties are regulated within the “spirit” of these “Anti-Hopping Laws”. This article seeks to recap some of the current developments affecting our elected representatives and their relationship with their own political parties

The Election Bond: Valid in Law or Contrary to Public Policy?

Prior to GE-14, election candidates from Parti Keadilan Rakyat (“PKR”) had entered into an election bond with PKR to which it was agreed that those candidates may contest on the party’s ticket during GE-14 and that in the event of a defection by that MP, they are expected to pay RM10,000,000.00 as compensation to PKR. Some MPs from PKR eventually defected from the party during the Sheraton Move. In response to that, PKR had filed a claim in the High Court against one of those members, namely former MP and former vice-president of PKR, Datuk Zuraida Kamaruddin (“Zuraida”), alleging a breach of that election bond.

On 23.06.2023, the Kuala Lumpur High Court had determined that Zuraida, had breached her election bond that she entered into with PKR when she had chosen to defect away from the party during the events of theSheratonMove (https://www.freemalaysiatoday.com/category/nation/2023/06/23/zuraida-ordered-to-pay-rm10-mil-for-breaching-pkr-bond/) (“Zuraida’s Case”).  

While the full grounds of the High Court’s judgment have not yet been released, it was reported in the media that the High Court had found that Zuraida had entered into a valid and binding contract when she signed that election bond with PKR to contest in GE-14. The High Court also found that there was sufficient evidence that Zuraida had signed the bond voluntarily with full knowledge of its contents. It is also notable that the court highlighted the purpose of the election bond which is:

“The purpose of the bond is to deter members, especially (PKR’s) elected candidates, from acting against the interest of the party before or after an election.

The implication of this decision is that a political party is free to enter into contracts with its members for the purposes of regulating its relationship. Furthermore, an MP who signs an election bond in this manner ought to know exactly what they signed up for and therefore, a political party could have a legitimate expectation to expect that MP would comply with the terms of its election bond during a parliamentary term. 

While personal contracts regulating an organisation and its members appears to be a relatively new concept in Malaysian societies law, it is not a foreign concept in other areas of the law. For example, the courts have long recognised that in company law, the relationship between a company and its shareholders can be further supplemented and regulated by a shareholders’ agreement alongside the operation of a company’s articles of association or constitution. In Tuan Haji Ishak Bin Ismail & Ors v Leong Hup Holdings Bhd And Other Appeals [1996] 1 MLJ 661, the Court of Appeal observed that:

At p 685 “… However, as Lord Wilberforce stressed in Ebrahimi v Westbourne Galleries Ltd the case for giving effect to equitable considerations must be made in each instance and it is not sufficient simply to assert that the company is small or private, for in many cases the basis of the relationship will be adequately and exhaustively laid down in the articles. If it is so defined by the articles or, for example, by the articles supplemented by a shareholders' agreement, then there is little room for finding further legitimate expectations beyond those outlined in the documents.”

However, an argument could be made as to whether the object of such an election bond is unlawful and contrary to public policy from the outset. This was the case in Datuk Ong Kee Hui v Sinyium Anak Mutit [1983] 1 MLJ 36 where the Federal Court held that in a situation where an MP and his party has an arrangement where that MP agreed to donate his parliamentary allowance to his political party, this was deemed to be an illegal arrangement and contrary to public policy. It is notable that the Federal Court observed the following:

At p 39 “The system of representative government is based upon freedom of choice. The electors must be free to choose a candidate to represent them in the legislature, whilst the candidate who is successfully returned must in turn be free to act in accordance with his independent judgment. Any arrangement depriving him of this independence is frowned upon by the law as violating public policy. Thus in Amalgamated Society of Railway Servants v Osborne [1909] 1 Ch 163; [1910] AC 87, Fletcher Moulton and Farwell L.JJ. in the Court of Appeal and Lord Shaw of Dunfermline in the House of Lords expressed very strong objections to the legality of a rule of a trade union empowering the union to make a compulsory levy on its members for the purpose of securing representation in Parliament by members of Parliament paid and maintained by the union from the fund collected by the levy but responsible to the Labour Party whip. These three Law Lords held that the impugned rule in addition to being ultra vires the Trade Union Acts of 1871 and 1876 was also against public policy and therefore illegal.”

However, the scope of the decision in Datuk Ong Kee Hui (supra) was clarified in the Federal Court case of Yang Dipertua, Dewan Rakyat & Ors v Gobind Singh Deo [2014] 5 MLJ 812 where the court found that the exact object of that arrangement concerning the donation of an MP’s parliamentary remuneration to its political party had to be seen as unlawful as it was contrary to Article 64 of the Federal Constitution. It was observed that:

[36] It must be reiterated that it is the Constitution that decides whether Parliament is empowered to take any disciplinary action against any of its members in the form of suspension without remuneration. Constitutionally the remuneration of a Member of Parliament is guaranteed under art 64 of the Constitution. The language used under it is imperative, and understandably so, because, as stated by the Federal Court in Datuk Ong Kee Hui v Sinyium Anak Mutit, 'In providing remuneration for its members of Parliament, Parliament intended to provide them with a decent subsistence to enable them to carry out the duties free from any temptation of abusing the political powers and influence in order to acquire wealth'. In the particular context of this Federal Court's decision, it was also said 'an undertaking whereby a member is deprived of the remuneration is clearly against public policy as it would be hard for him to function effectively as a Member of Parliament without financial worries'.

The decision in the Zuraida’s Case is currently under appeal and it remains to be seen as to how the appellate courts will continue to treat these types of contracts between a political party and its MPs.

The Unity Government MOU: 

One of the possible implications arising out of the Zuraida’s Case is the validity and enforceability of the Memorandum of Understanding to form a coalition government known as the “Unity Government” dated 16.12.2022 (the “Unity Government MOU”) (https://twitter.com/rafiziramli/status/1603656775752101890?s=46&t=V4BFLdkfVD-RrBe5mENbDQ). 

The Unity Government MOU is, in essence, a confidence and supply agreement between Pakatan Harapan, Barisan Nasional, Gabungan Parti Sarawak, Gabungan Rakyat Sabah and Warisan for the purposes of creating a stable government. One of the key components to the enforcement of the Unity Government MOU lies in Clause 4 which states as follows:

“4(a) Setiap Parti-Parti dan pihak-pihak hendaklah mengundi untuk menyokong Perdana Menteri dalam usul-usul berkait dengan usul percaya, pembekalan dan/atau apa-apa usul berbentuk prosedur yang mempunyai kesan kepada keabsahan Kerajaan Persekutuan mengikut Perlembagaan Persekutuan. Setiap Parti-Parti dan pihak-pihak hendaklah bertanggungjawab untuk menguruskan secara dalaman di dalam Parti-Parti mereka bagi memastikan sokongan parlimen untuk mengekalkan Kerajaan Perpaduan Malaysia dalam sebarang undian yang membawa kesan kepada keabsahan Kerajaan Perpaduan Malaysia mengikut Perlembagaan Persekutuan.

4(b) Setiap Parti-Parti dan pihak-pihak hendaklah memastikan bahawa setiap Ahli Parlimen mereka mengundi menurut klausa 4(a) di atas. Kegagalan, kengganan atau kecuaian dari berbuat demikian hendaklah diambil kira sebagai pelanggaran tanggungjawab Ahli Parlimen secara individu kepada Parti itu, yang dianggap sebagai perletakkan jawatan dan/atau pemberhentian daripada menjadi Ahli Parlimen dan bahawa kerusi beliau dikosongkan dalam kerangka maksud Artikel 49A(1) Perlembagaan Persekutuan. Parti Ahli Parlimen tersebut hendaklah mengeluarkan notis kepada Yang Dipertuan Dewan Rakyat atas pengosongan tersebut menurut Artikel 49A(1) Perlembagaan Persekutuan untuk memberi notis kepada Suruhanjaya Pilihanraya untuk mengadakan pilihanraya kecil.”

Whilst confidence and supply agreements are nothing new and are regularly used in other Westminster-based constitutional systems across the Commonwealth, the exact legality of the Unity Government MOU has been called into question as it appears to be an agreement that is intended to restrict an individual MP’s freedom to exercise his judgment in Parliament. 

However, it should be noted that the courts in the Commonwealth have recognised that a confidence and supply agreement is not subject to judicial review as it seen as an extension of how Parliament chooses to regulate its own processes and therefore, lies within parliamentary privilege. In the case of R (McClean) v First Secretary of State and Another [2018] 1 Costs LO 37, the English High Court observed that:

18. At some points in his submissions Mr Chambers seemed to rely on Porter v Magill in support of a wider argument, that MPs from the DUP and the Conservative Party would be acting unlawfully if they voted in Parliament on Estimates and an Appropriation Act designed to give effect to the confidence and supply agreement. But I do not consider that Porter v Magill offers any support at all for such a wide-ranging and radical submission. DUP MPs would be acting perfectly properly if they decide to vote in accordance with the confidence and supply agreement, as an agreement which provides for the creation of a stable government and for the provision of more funding for the benefit of their constituents. MPs are fully entitled to make those sorts of judgments. The same is true for Conservative MPs, who will presumably believe that it is in the interests of the country and their constituents to have a stable and Conservative government. Unlike the council in Porter v Magill, no MP in our case would be exercising any powers conferred on them by statute, which would be subject to express or implied limits like the statutory powers in that case. Porter v Magill has no arguable bearing on the different issues and in the different context in which the present claim is brought. The relevant decisions in our case go to the issue of how voting rights of MPs will be exercised in Parliament. Unlike in Porter v Magill, those voting rights are not statutory powers subject to a statutory obligation that they be exercised without regard to party advantage. The voting rights of MPs are used to enact statutes and hence to impose statutory duties. They are not the subject of statutory duties themselves. Moreover, it is abundantly clear under our constitution that the voting rights of MPs can perfectly legitimately be exercised having regard to party advantage. Indeed, that is how they regularly are exercised day in day out in the conduct of business in Parliament.

20. In my judgment, the making of the confidence and supply agreement and the announcement of spending commitments are political acts which cannot be challenged, declared unlawful or struck down in a court of law. On the one hand, the claimant has no valid claim in law to impugn the way in which MPs in both parties propose to vote to give effect to them. On the other hand, it can also be seen that once they have voted so that Parliament authorises the expenditure in line with the commitments in the agreement, the claimant will have no valid claim in law to say that the expenditure is unlawful.

21. The claimant says that the government had an illegitimate conflict of interest when it made the relevant decisions to enter into the confidence and supply agreement and to announce spending commitments in accordance with it. In my view this is not remotely arguable as a contention of law. In this political context there is no relevant standard of impartiality or disinterestedness which has been breached. The confidence and supply agreement is a political agreement made in a context where some form of political agreement was inevitable and indeed required if a stable government was to be formed. All political parties seek to promote particular interests and particular interested points of view. That is the nature of the political process, and the disciplines to which they are subject are the usual political ones of needing to be able to command majorities in the House of Commons on important votes and of seeking re-election at the appropriate time. The law does not super-impose additional standards which would make the political process unworkable.

Upon closer inspection of Clause 4 of the Unity Government MOU, it is the author’s view that the Unity Government MOU does not seek to limit the exercise of an individual MP’s own personal judgment and conscience. Unlike the scenario in Datuk Ong Kee Hui (supra), the Unity Government MOU is an agreement entered into between political parties and is not an agreement between an individual MP and their party. 

Additionally, Parliament is entitled to regulate its own affairs without the same being challenged in court pursuant to Article 63(1) of the Federal Constitution and Clause 4 of the Unity Government MOU places the burden on those political parties to regulate its relationship with their own MPs in compliance with the way that Parliament chooses to arrange its own affairs in. This is where Zuraida’s Case may become relevant as it serves as judicial recognition that a political party is capable of regulating its relationship with its MP and that the same could be legally enforceable. 

Conclusion

As the legal challenges and court processes continue to play out, the present situation remains fluid. However, it does appear that the law on this area is starting to take shape and find some level of coherence. These ongoing developments will represent the foundations that will shape Malaysian law on societies as well as its constitutional jurisprudence moving forward.