The by-election was precipitated by the death of sitting Labour Party member of parliament and Speaker of the House Sir Stanley Whitehead on 9 January 1976.

Whitehead had been re-elected two months earlier at the 1975 general election which saw the defeat of the Third Labour Government, of which he was a member.

A group of local party members threatened legal action over his membership tenure if he was nominated.

To prevent a split in the membership Arthur Baysting, the secretary of the Nelson Labour Electorate Committee (LEC), pushed for Courtney to be selected believing him to be the most electable alternative to Palmer.

[12] Two people came forward to represent the Social Credit Party, Cliff Beer and Rudolph Muller.

Moyle, Faulkner and Labour leader Bill Rowling spoke at meetings in support of Courtney and defended him from attacks by National that he was the wrong choice of a candidate and that Palmer was more suitable highlighting that Courtney had lived and worked in Nelson for the last 6 years while Palmer had not.

[14] Social Credit Party leader Bruce Beetham campaigned in the by-election and drew on previous MP for Nelson Harry Atmore's record as an advocate for monetary reform and providing an independent voice for the area as evidence that Nelson residents could benefit from voting Social Credit instead of the main two parties.