Brian Rudman: Saga of Onehunga Labour Party house ends with whimper

It hasn't been a great few weeks for Chris Diack, Auckland factotum to Act Party leader Rodney Hide.

First the ungrateful electors of Hobson ward turned down his offer to be one of their city councillors.

Now he's been forced to hand back the Onehunga Labour Party investment property that he and his right-wing schismatics walked off with in 1994 when they defected to Roger Douglas' rightist splinter group.

Mr Diack's latest surrender is signalled in Justice Tony Randerson's "final judgment" on the case, where he says that Mr Diack's front group, the Hugh Watt Society, "does not wish to remain responsible for the property in question" and "does not have the resources to continue active involvement in the litigation".

One suspects it's the lack of cash that has forced Mr Diack to see sense, rather than any change of heart.

That and the worry the Labour Party will pursue him for the $45,000 in investment income from the property he admitted in court to having used to fund the current legal battle.

Whatever, he's sure singing a more subdued tune than that of a year ago.

That's when he reacted to Justice Randerson's order that the society hand the property back to its rightful owners, the Labour Party, by defiantly floating the idea of selling the property and sharing the proceeds among Onehunga Labour Party members as of October 12, 1996, the day the electorate went out of existence.

This extraordinary saga was sparked off in December 1992 when Mr Diack, a Rogernome and local electoral organisation favourite, missed out on selection as Labour's Onehunga candidate in the 1993 election.

Mr Diack and his supporters spat the dummy. First they drained the electorate cash accounts by paying more than $6000 in outstanding debts to party headquarters, leaving just $7 for the fighting fund of Mr Diack's victorious rival, Richard Northey.

Then they turned to the electorate's main asset, an income-earning rental house. It had been bought with funds raised over the years by party members and was controlled by an incorporated society made up of officers of the party branch.

After Mr Northey's selection, Mr Diack and his supporters on the branch/society executive began a wholesale revision of the society constitution.

They said at the time it was to stop party bosses selling the Mt Smart Rd property and transferring the profits to Wellington.

By June 1994 society members, with Mr Diack as secretary, had used a series of rule changes to make themselves a self-perpetuating entity.

Any references to the Labour Party were expunged. At winding up, any assets were to go not as originally to Labour Party headquarters, but to registered charities active in Onehunga.

The problem festered for years until in May 2001 new party president Mike Williams called in the lawyers.

In October last year, Justice Randerson backed the party, ruling that Mr Diack's society held the property in trust on behalf of Onehunga members of the Labour Party and "has been unjustly enriched at the expense of those who raised the original funds" for its purchase. He called on both sides to make submissions within six weeks as to how this ruling could be honoured.

There were delays on both sides but finally Justice Randerson has ruled that as an interim measure the property be vested in Labour's central property company.

As well, he called upon the Labour Party to consult party members and affiliate union members as of October 12, 1996, who resided in the old Onehunga electorate for their reaction to the proposal that the beneficiaries of the property be present and future members of the Labour Party residing within the old boundaries of the electorate.

Then he will make a final ruling.

Mr Williams is "absolutely delighted."

He says it's established the principle that money raised for the party stays with the party.