The cash-strapped NSW Liberals are on the hook for at least $2 million in the lead up to the March state election after would-be councillors sued the party for failing to nominate dozens of candidates in the last local government elections.
More than 140 Liberal candidates missed out on contesting the 2024 council elections after a humiliating administrative blunder meant the state arm of the party spectacularly missed the deadline to submit their nomination forms.
Hopeful councillors who were denied the chance to contest the statewide poll – eight councils went to the elections without a Liberal candidate – last year launched a class action against the party.
A proposed settlement has now been lodged with the Supreme Court which, if approved, would see the party forced to spend more than $1.75 million compensating about 50 candidates who were deemed likely to have secured a spot had they been nominated.
Election analyst Ben Raue was contracted to carry out electoral analysis as part of the settlement process, providing an indication of which candidates had strong chances of electoral success.
The NSW Liberals will also have to pay the victims their party membership fees for three years, waive nomination fees for the 2028 local government elections and provide $2250 in campaign funding for each ward or group ticket a candidate involved in the class action contests.
The Liberals will also have to deliver a “suitably worded apology” if the Supreme Court approves the settlement. A hearing to consider approval has been listed for December 11.
The settlement would likely leave the Liberals footing an estimated $2 million bill, not including legal fees, at the same time as it needs to fight a state election in less than five months’ time, where it will face a significant challenge from One Nation.
NSW Liberals are already facing major funding challenges, with NSW Electoral Commission data revealing the party raised $2.5 million in donations last financial year, compared to NSW Labor’s $5.4 million.
This financial year it has raised $56,979. NSW Labor has brought in $170,000.
The nominations debacle also caused significant internal dramas for the Liberals. Richard Shields, then-state director of the party, was sacked over the fiasco and party president and former NSW minister Don Harwin was also forced out.
Then federal opposition leader Peter Dutton instigated a federal takeover of the embattled NSW division of the party and appointed a three-person panel to clean up the dysfunctional division. The panel included former Victorian senator Richard Alston, former Victorian treasurer Alan Stockdale and former state MP Peta Seaton.
Northern Beaches Council was one of the most high profile of those affected by the nominations debacle, with Lane Cove, Camden and Campbelltown councils also left without Liberal candidates.
Regional voters in Cessnock, Wollongong and the Blue Mountains also had no Liberal option at the ballot box. About 16 councils were affected overall.
Party members John Moores and Paul Paynter were the lead plaintiffs in the class action, which alleged breach of contract and negligence after the Liberals failed to submit their nomination forms to run for Cessnock City Council in 2024.
“What occurred in 2024 was painful. We lived and breathed for our communities, and our inability to run really hurt us and our supporters. I am glad we are now on a pathway to closure so we can move on,” Moores said.
Paynter said he was “personally devastated” he was denied the chance to represent his community. “Democracy was affected, and I took this stand because that needed to be acknowledged,” he said.
Sydney lawyer George Newhouse, who brought the class action on behalf of affected Liberal Party candidates, said his clients were “hopeful that some closure is on the horizon”.
“While a proposed settlement has been reached, it remains subject to the approval of the Supreme Court. We will now work through that process and ensure that affected group members receive clear information about their rights and the proposed settlement,” Newhouse said.