FEDERAL COURT OF AUSTRALIA Health Services Union v Jackson (No 4) [2015] FCA 865 Citation: Health Services Union v Jackson (No 4) [2015] FCA 865 Parties: HEALTH SERVICES UNION v KATHERINE JACKSON; KATHERINE JACKSON v HEALTH SERVICES UNION ROBERT ELLIOTT v HEALTH SERVICES UNION; HEALTH SERVICES UNION v ROBERT ELLIOTT, MICHAEL WILLIAMSON AND KATHERINE JACKSON File numbers: VID 1042 of 2013 NSD 1501 of 2013 Judge: TRACEY J Date of judgment: 19 AUGUST 2015 Catchwords: INDUSTRIAL LAW – contraventions of provisions of the Fair Work (Registered Organisations) Act 2009 (Cth) and the Corporations Act 2001 (Cth) regarding duties of officers in relation to financial management of organisations – reporting obligations – improper use of position – misuse of union funds – applications for compensation and interest Legislation: Bankruptcy Act 1966 (Cth) ss 55, 58(3) Corporations Act 2001 (Cth) ss 9, 57A(1)(b), 116, 180, 181, 182, 1317H Fair Work Act 2009 (Cth) s 90(2) Fair Work (Registered Organisations) Act 2009 (Cth) ss 5(3)(a), 26, 27, 140(1), 141(1)(b), 149(1), 149(5), 190, 237, 242, 252, 253(1), 253(2), 253(3), 255, 257(1), 257(2), 258(1), 265(1), 266(1), 284(c), 285, 286, 287, 291, 307(1), 308, 310(3), 338 Long Service Leave Act 1992 (Vic) Cases cited: Bell Group Limited (in liq) v Westpac Banking Corporation (No 9) (2008) 39 WAR 1 – cited Brown v Health Services Union (2012) 205 FCR 548 – cited Chew v R (1992) 173 CLR 626 – cited Commissioner of State Revenue (Vic) v Royal Insurance Australia Limited (1994) 182 CLR 51 – cited Doyle v Australian Securities and Investments Commission (2005) 227 CLR 18 – cited Guinness PLC v Saunders [1990] 2 AC 663 – cited Health Services Union v Jackson (No 3) [2015] FCA 69 – cited Moore v Doyle (1969) 15 FLR 59 – cited R v Byrnes (1995) 183 CLR 501 – cited Re Health Services Union (2009) 187 IR 51 – cited Re Wan Ze Property Development (Aust) Pty Ltd (2012) 90 ACSR 593 – cited Westpac Banking Corporation v Bell Group Limited (in liq) (No 3) (2012) 44 WAR 1 – cited Date of hearing: 7, 8 and 9 July 2015 Date of last submissions: 14 August 2015 Place: Melbourne Division: FAIR WORK DIVISION Category: Catchwords Number of paragraphs: 293 Counsel for the Applicant: Mr MA Irving and Mr T Borgeest Solicitor for the Applicant: Holding Redlich Counsel for the Respondent/Third Cross-Respondent: The Respondent/Third Cross-Respondent did not appear IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY FAIR WORK DIVISION VID 1042 of 2013 BETWEEN: HEALTH SERVICES UNION Applicant AND: KATHERINE JACKSON Respondent AND BETWEEN: KATHERINE JACKSON Cross-Claimant AND: HEALTH SERVICES UNION Cross-Respondent JUDGE: TRACEY J DATE OF ORDER: 19 AUGUST 2015 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The respondent pay the applicant $926,990.30 as compensation for damage suffered by the applicant resulting from the contravention, by the respondent, of Schedule 1B of the Workplace Relations Act 1996 (Cth) and the Fair Work (Registered Organisations) Act 2009 (Cth). 2. The respondent pay the applicant $67,912 as money had and received by the respondent for the use of the applicant. 3. On or before 2 September 2015 the applicant file written submissions relating to any further amounts claimed by it by way of costs and interest. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY FAIR WORK DIVISION NSD 1501 of 2013 BETWEEN: ROBERT ELLIOTT Applicant AND: HEALTH SERVICES UNION Respondent AND BETWEEN: HEALTH SERVICES UNION Cross-Claimant AND: ROBERT ELLIOTT First Cross-Respondent MICHAEL WILLIAMSON Second Cross-Respondent KATHERINE JACKSON Third Cross-Respondent JUDGE: TRACEY J DATE OF ORDER: 19 AUGUST 2015 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The third cross-respondent pay the cross-claimant $411,635.86 as compensation for damages suffered by the cross-claimant resulting from the contravention by the third cross-respondent of Schedule 1B of the Workplace Relations Act 1996 (Cth) and the Fair Work (Registered Organisations) Act 2009 (Cth). 2. On or before 2 September 2015 the cross-claimant file written submissions relating to any further amounts claimed by it by way of costs or interest. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY FAIR WORK DIVISION VID 1042 of 2013 BETWEEN: HEALTH SERVICES UNION Applicant AND: KATHERINE JACKSON Respondent AND BETWEEN: KATHERINE JACKSON Cross-Claimant AND: HEALTH SERVICES UNION Cross-Respondent IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY FAIR WORK DIVISION NSD 1501 of 2013 BETWEEN: ROBERT ELLIOTT Applicant AND: HEALTH SERVICES UNION Respondent AND BETWEEN: HEALTH SERVICES UNION Cross-Claimant AND: ROBERT ELLIOTT First Cross-Respondent MICHAEL WILLIAMSON Second Cross-Respondent KATHERINE JACKSON Third Cross-Respondent JUDGE: TRACEY J DATE: 19 AUGUST 2015 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 There are two proceedings before the Court. It will be convenient to refer to them as "the Victorian proceeding", (VID 1042 of 2013), and "the New South Wales proceeding", (NSD 1501 of 2013). On 24 March 2014 I ordered that the two proceedings should be heard concurrently. 2 Initially, in the Victorian proceeding, the applicant ("the HSU" or "the Union") sought orders that Ms Jackson pay to it some $280,000, together with interest and costs. 3 These claims arise from two matters. The first is referred to in the pleadings as the "Toomey Pegg matter". Toomey Pegg is a firm of solicitors. The HSU alleges that, acting in breach of duty and without authority, Ms Jackson retained Toomey Pegg to provide legal services to the HSU on her instructions thereby incurring a liability, on the part of the HSU, for legal fees totalling $34,725. 4 The second claim in the Victorian proceeding related to what was referred to as "the NHDA transfers". The acronym referred to the National Health Development Account which, it is alleged, Ms Jackson opened and operated as the account holder. The HSU alleged that, between February 2004 and May 2010 Ms Jackson, acting without authority and in breach of duty, caused a total of $246,500 to be transferred from the funds of the Victoria No 3 Branch of the HSU to the NHDA. The HSU sought to recover this amount. 5 Ms Jackson cross-claimed in the Victorian proceeding for wages said to be due to her as National Secretary of the HSU between 2012 and 2014 during which period she was on sick leave. This cross-claim was dismissed by operation of a self-executing order which I made on 15 August 2014. 6 The New South Wales proceeding was commenced by Mr Robert Elliott who was National Secretary of the HSU from 1996 to 2002. In this proceeding Mr Elliott sought orders for payment in lieu of untaken annual leave and long service leave, declarations and compensation for contravention of s 90(2) of the Fair Work Act 2009 (Cth) ("the Act"), imposition of pecuniary penalties payable to Mr Elliott pursuant to the Act and the Long Service Leave Act 1992 (Vic) and an award of damages for breach of contract. 7 The HSU cross-claimed against the former President of the HSU, Mr Michael Williamson, and Ms Jackson alleging that, acting without authority, and in breach of duty, they had caused the HSU to enter into an agreement with Mr Elliott pursuant to which he was paid remuneration and superannuation benefits totalling $414,985 to which he was not entitled. The HSU sought interest and costs in respect of its cross-claim. 8 In April 2014 Mr Elliott discontinued his claim against the HSU and the cross-claim against Mr Williamson was stayed by order of the Court. Following these developments the only remaining claim being pressed in the New South Wales proceeding was that of the HSU against Ms Jackson. 9 Once it was ordered that the two proceedings were to be heard concurrently a consolidated statement of claim was filed by the HSU and a defence was filed by Ms Jackson. 10 In February 2015 the HSU sought and was granted leave to amend its consolidated statement of claim. These amendments related to the NHDA payments and saw the making of some additional claims. 11 The amendments to the NHDA claim pleaded, in the alternative, that the expenditure of funds from the NHDA account was unauthorised and otherwise improper. The NHDA claim was also increased to $284,500 to account for additional transfers made between February 2004 and October 2010. 12 The additional claims arose out of investigations, undertaken by the HSU, into the expenditure of Union funds by, or on behalf of, Ms Jackson. They related to cash drawings on Union accounts and purchases made on credit cards issued to Ms Jackson which were paid for by the Union. 13 Two further claims were also made. One was that Ms Jackson had been paid twice in respect of accumulated leave entitlements. The other related to what was said to be the payment to her of an unauthorised honorarium of $63,000. 14 Following a series of adjournments, the trial was fixed to commence on 29 June 2015. When the proceedings were called on that morning counsel appearing for Ms Jackson advised the Court that she had filed a debtor's petition under s 55 of the Bankruptcy Act 1966 (Cth) ("the Bankruptcy Act"). A document which certified the appointment of a trustee of her estate was sent to the Court by the solicitor who had been acting for her. The solicitor advised the Court that, as a result of Ms Jackson's bankruptcy, he would shortly file a notice of ceasing to act for her. Such a notice was filed. 15 The HSU made an application, under s 58(3) of the Bankruptcy Act for leave to take fresh steps in and continue the proceedings. I granted that application on 3 July 2015: see Health Services Union v Jackson (No 3) [2015] FCA 694. 16 The trial eventually commenced on 7 July 2015. Neither Ms Jackson nor her trustee appeared. 17 As a result, the evidence relied on by the HSU was not challenged. 18 The evidence substantially supported the claims made by the HSU. Although the Union pressed all of its broad claims, it modified some parts of some of them with the result that lesser amounts of compensation were sought. 19 Multiple causes of action were relied on in respect of most of the areas of expenditure. Some were advanced in the alternative. In the event, it has not been necessary to deal with all of the causes of action pleaded by the HSU. I have, for example, upheld a series of claims, made by the HSU, following findings that Ms Jackson had contravened s 287 of the Fair Work (Registered Organisations) Act 2009 (Cth) ("the FWRO Act"). In most, if not all of those instances, the HSU had strongly arguable cases that she had also contravened ss 285 and 286 of that Act. The Health Services Union 20 The claims made by the HSU relate to events which occurred between 2003 and 2012. During this period the structure of the HSU changed from time to time and Ms Jackson held a variety of offices. In order to understand the evidence it is first necessary to say something about the organisation of the Union and the offices occupied by Ms Jackson. 21 At all relevant times the HSU was a registered organisation under Commonwealth industrial legislation. Until 30 June 2009 the relevant Act was the Workplace Relations Act 1996 (Cth). Thereafter, the FWRO Act applied. 22 Throughout the period the Union was governed pursuant to registered rules. Ultimate authority rested with the National Council and, between meetings of that Council, the Union's affairs were in the hands of a National Executive. The rules made provision for a number of federal offices including a National President and a National Secretary. 23 The national entity was made up of a number of branches which were organised on a geographic and occupational basis. Each branch had a Committee of Management and branch officers including branch secretaries. 24 During the relevant period there were a number of material changes to the branch structure. At the start of the period there were, relevantly, four branches in Victoria, identified as the Victoria No 1, No 2, No 3 and No 4 Branches and a single branch in New South Wales. There was, as well, in New South Wales, a State registered union. 25 During 2008 and 2009 the Victoria No 1 Branch became dysfunctional. It was placed in the hands of an administrator pending elections: see Re Health Services Union (2009) 187 IR 51. 26 On 24 May 2010 Fair Work Australia certified some changes to the HSU Rules whereby the Victoria No 1 Branch, the Victoria No 3 Branch and the New South Wales Branch merged to become the HSU East Branch. 27 Further instability followed within the merged branch such that, in 2012, an administrator was appointed to the HSU East Branch and, in the same proceeding, to the State registered New South Wales Union: see Brown v Health Services Union (2012) 205 FCR 548 (Flick J). The Court ordered that there should be a demerger of the HSU East Branch and the reconstitution of the New South Wales and the Victoria No 1 and Victoria No 3 Branches. The period of administration commenced on 8 June 2012. The demerger was subsequently effected by rule change. 28 Ms Jackson held offices at both the National and Branch level over a long period. 29 In 2002 Ms Jackson was the National Assistant Secretary of the Union. Between 2004 and 2007 she was the Senior National Assistant Secretary. She became Acting National Secretary in December 2007. Between 23 January 2008 and 24 May 2010 she was the National Secretary. She again became the incumbent of this office on 23 December 2010 and continued to hold it until the end of the relevant period. 30 In 1997 Ms Jackson had become the Secretary of the Victoria No 3 Branch. She continued to hold this position until 22 January 2008. On the latter date she had to relinquish the office because she had become the National Secretary and the rules provided that she could not hold both offices simultaneously. Following a rule change, she resumed the office of Branch Secretary on 13 May 2008 and held it until the creation of the HSU East Branch on 24 May 2010. 31 Ms Jackson was the Executive President of the HSU East Branch from 24 May 2010 until 21 June 2012 when she was removed from office pursuant to an order of the Court: see Brown v Health Services Union (2012) 205 FCR 548 at 604 (Flick J). 32 It will be necessary to return later in these reasons to deal, in greater detail, with the HSU Rules which applied, at various times, to Councils of the Union and those which applied to the offices held, from time to time, by Ms Jackson. The FWRO Act 33 At the start of the relevant period registered organisations, such as the HSU, were regulated by Schedule 1B to the Workplace Relations Act 1996 (Cth). This legislation was superseded, with effect from 1 July 2009, by the FWRO Act. Relevantly, the terms of the legislation did not change. It will, therefore, be convenient to refer to the provisions of the FWRO Act as if they had application at all relevant times. 34 The HSU was an employee association registered under the FWRO Act: see s 26. As a registered organisation it became a body corporate: see s 27(a). 35 The affairs of registered organisations are regulated by the FWRO Act. The FWRO Act prescribes "standards" which are designed, inter alia, to ensure that registered organisations "are representative of and accountable to their members, and are able to operate effectively …": see s 5(3)(a). 36 Registered organisations must be regulated by rules which contain provisions stipulated in the FWRO Act: see s 140(1). Among the matters for which the rules must provide are: "(ix) the manner in which the property of the organisation is to be controlled and its funds invested; and (x) the yearly or other more frequent audit of the accounts; and (xi) the conditions under which funds may be spent …" See s 141(1)(b). 37 By s 149(1) of the FWRO Act it is provided that: "(1) The rules of an organisation must provide that a loan, grant or donation of an amount exceeding $1,000 must not be made by the organisation unless the committee of management: (a) has satisfied itself: (i) that the making of the loan, grant or donation would be in accordance with the other rules of the organisation; and (ii) in the case of a loan—that, in the circumstances, the security proposed to be given for the repayment of the loan is adequate and the proposed arrangements for the repayment of the loan are satisfactory; and (b) has approved the making of the loan, grant or donation." 38 Section 149(5) of the FWRO Act provides that, for the purposes of the section, "an organisation includes a reference to a branch of an organisation." 39 Section 190 makes it an offence for an organisation or branch to use, or allow to be used, "its property or resources to help a candidate against another candidate in an election under this Part for an office or other position." This provision is framed sufficiently broadly to prohibit the expenditure of the funds of one union to support a candidate in an election in another union and to prevent such support being given to candidates for election for a branch office in another branch in the same organisation. 40 Section 237 of the FWRO Act requires that an organisation must lodge with the Fair Work Commission each year a statement providing details of "each loan, grant or donation" which exceeds $1,000 and which have been made by the organisation in the immediately preceding financial year. 41 Part 3 of Chapter 7 of the FWRO Act deals with the accounting and auditing obligations which fall on registered organisations. 42 Section 242 provides that these obligations apply to reporting units. An organisation may constitute a single reporting unit. If, however, it is divided into branches then, normally, each branch will be treated as a separate reporting unit. 43 Obligations under the Part are imposed on "designated officers" of reporting units. Such an officer is one "who, under the rules of the reporting unit, is responsible (whether alone or with others) for undertaking the functions necessary to enable the reporting unit to comply with this Part." 44 Section 252 requires each reporting unit to maintain accurate financial records and to do so in such a manner as will facilitate auditing as required by other provisions in the Part. 45 Annual financial reports must be prepared by each reporting unit. Such reports must be presented in accordance with Australian Accounting Standards: see s 253(1). Sections 253(2) and (3) provide that: "(2) The general purpose financial report must consist of: (a) financial statements containing: (i) a profit and loss statement, or other operating statement; and (ii) a balance sheet; and (iii) a statement of cash flows; and (iv) any other statements required by the Australian Accounting Standards; and (b) notes to the financial statements containing: (i) notes required by the Australian Accounting Standards; and (ii) information required by the reporting guidelines (see section 255); and (c) any other reports or statements required by the reporting guidelines (see section 255). (3) The financial statements and notes for a financial year must give a true and fair view of the financial position and performance of the reporting unit. This subsection does not affect the obligation for a financial report to comply with the Australian Accounting Standards." 46 Section 255 provides for the promulgation of reporting guidelines for the purposes of s 253. Such guidelines applied in each financial year starting on or after 1 November 2004 until 17 October 2014. Clause 11 required disclosure of balances of certain items of expense, including grants, donations, employee benefits paid to office holders or employees, and fees and allowances paid to persons in respect of their attendances at conferences or other meetings. Clause 14(c) required disclosure of the total amount of employee benefits paid to office holders. The term "employee benefits" was defined as "all forms of consideration given by the reporting unit in exchange for services rendered by holders of office or employees": see clause 28. Under clause 26(c), the committee of management statement was required to be signed by a "designated officer". 47 The financial reports of each reporting unit must be audited annually: see s 257(1). The auditor is empowered to seek information and explanations from any designated officer or employee of the reporting unit and such person is obligated to respond: see s 257(2) and (3). It is an offence for an officer or employee to hinder or obstruct an auditor or to fail to comply with the request for information: see s 258(1). 48 Section 265(1) of the FWRO Act deals with financial reports to members of organisations. It provides that: "(1) A reporting unit must provide free of charge to its members either: (a) a full report consisting of: (i) a copy of the report of the auditor in relation to the inspection and audit of the financial records of the reporting unit in relation to a financial year; and (ii) a copy of the general purpose financial report to which the report relates; and (iii) a copy of the operating report to which the report relates; or (b) a concise report for the financial year that complies with subsection (3)." 49 Section 266(1) provides that the full report must be presented to a general meeting of the members of the reporting unit within six months of the end of the financial year to which the report relates. Within two weeks after the general meeting a copy of the report must be lodged with the Fair Work Commission: see s 268. 50 Part 2 of Chapter 9 of the FWRO Act deals with the duties of officers in relation to the financial management of organisations. 51 Sections 285, 286 and 287 impose obligations on officers of organisations in relation to these matters. These sections provide that: "285 Care and diligence—civil obligation only (1) An officer of an organisation or a branch must exercise his or her powers and discharge his or her duties with the degree of care and diligence that a reasonable person would exercise if he or she: (a) were an officer of an organisation or a branch in the organisation's circumstances; and (b) occupied the office held by, and had the same responsibilities within the organisation or a branch as, the officer. (2) An officer of an organisation or a branch who makes a judgment to take or not take action in respect of a matter relevant to the operations of the organisation or branch is taken to meet the requirements of subsection (1), and their equivalent duties at common law and in equity, in respect of the judgment if he or she: (a) makes the judgment in good faith for a proper purpose; and (b) does not have a material personal interest in the subject matter of the judgment; and (c) informs himself or herself about the subject matter of the judgment to the extent he or she reasonably believes to be appropriate; and (d) rationally believes that the judgment is in the best interests of the organisation. The officer's belief that the judgment is in the best interests of the organisation is a rational one unless the belief is one that no reasonable person in his or her position would hold. 286 Good faith—civil obligations (1) An officer of an organisation or a branch must exercise his or her powers and discharge his or her duties: (a) in good faith in what he or she believes to be the best interests of the organisation; and (b) for a proper purpose. (2) A person who is involved in a contravention of subsection (1) contravenes this subsection. 287 Use of position—civil obligations (1) An officer or employee of an organisation or a branch must not improperly use his or her position to: (a) gain an advantage for himself or herself or someone else; or (b) cause detriment to the organisation or to another person. (2) A person who is involved in a contravention of subsection (1) contravenes this subsection." 52 Each of these provisions is a civil penalty provision. 53 A person will be "involved" in a contravention of ss 286 and 287, inter alia, if he or she has "been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention": see s 284(c). Subject to one qualification ss 285, 286 and 287 operate in addition to, and not in derogation of, any rule of law relating to the duty or liability of a person because of his or her office or employment in relation to an organisation or a branch and do not prevent proceedings being taken against the person for breach of such duties: see s 291. The qualification is that s 291 does not apply to s 285(2) "to the extent to which it operates on the duties at common law and in equity that are equivalent to the requirements of subsection 285(1)". 54 If a person contravenes a civil penalty provision (including ss 285, 286 and 287) the organisation concerned may apply to the Court for compensation for any damage which has "resulted from the contravention": see ss 307(1), 310(3) and 338. Any compensation orders made by the Court must specify the monetary amount of any compensation awarded. Additional orders may be made under s 308. The Corporations Act 55 The Union also pleaded causes of action founded on provisions of the Corporations Act 2001 (Cth) ("the Corporations Act"). 56 Sections 180 and 181 of the Corporations Act impose on directors and officers of corporations care and diligence and good faith duties which are similar to those imposed by ss 285 and 286 of the FWRO Act respectively. The duty imposed by s 181 of the Corporations Act differs in terms from that imposed on union officials by s 286 because s 181(1)(a) requires directors and officers to exercise their powers and discharge their duties "in good faith in the best interests of the corporation". It may be, however, that the same subjective element ("what he or she believes") which appears in s 286(1)(a) is imported into s 181(1)(a): see, for example Westpac Banking Corporation v Bell Group Limited (in liq) (No 3) (2012) 44 WAR 1 at 169 (Lee AJA). See also Carr AJA at 525 who agreed with the analysis of the trial judge whose reasons are relevantly reported at the Bell Group Limited (in liq) v Westpac Banking Corporation (No 9) (2008) 39 WAR 1 at 575-583. Section 182 of the Corporations Act imposes on officers and employees of corporations the same constraints as those imposed on officers or employees of an organisation by s 287(1) of the FWRO Act. 57 Although trade unions cannot be registered under the Corporations Act (see s 116), ss 180, 181 and 182 regulate the conduct of directors and officers of "corporations". 58 A "corporation" is defined to include "any body corporate (whether incorporated in this jurisdiction or elsewhere)": see ss 9 and 57A(1)(b). By operation of s 27 of the FWRO Act, the HSU is deemed to be a body corporate. A person "who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the entity" is an "officer": see s 9. 59 The Court may make an order, under s 1317H of the Corporations Act which requires a person to compensate a corporation if the person has contravened provisions, including ss 180, 181 and 182, and damage has resulted from such a contravention. The Court's order must specify the amount of the compensation. The HSU Rules 60 The supreme governing body of the Union was the National Council: Rule 21. It was required to meet annually: Rule 22(a). The powers of the National Council included the fixing of the remuneration and terms and conditions of employment of "the Officers of the Union": Rule 21(c). Prior to 24 May 2010 the Rules provided that one of these "Officers" was the National Secretary who was to be a full time paid officer: Rule 19. The Rule was amended, with effect from that day, to provide that it was for the National Council to determine, from time to time, whether the office of National Secretary was to be a full time paid office. The Rule in its amended form applied for the remainder of the relevant period. 61 Provision was made, in the Rules, for a National Executive comprising the National Officers, including the National Secretary, and the Branch Secretaries of each Branch: Rule 26. 62 The National Executive had a general power, subject to certain qualifications, to conduct and manage the affairs of the Union and could exercise the powers of the National Council between its meetings: Rule 27(a). Meetings of the National Executive were to be held when decided by the National Council or the National Executive or if considered necessary by the National Secretary in conjunction with the National President: Rule 28(a). 63 The powers and duties of the National Secretary were dealt with in Rule 32. They included being the registered officer with power to sue and be sued on behalf of the Union and to control and conduct the business of the Union between meetings of the National Executive. 64 Rule 36 dealt with the funds and property of the Union. Rule 36(b) provided that: "The funds and property of the Union shall be controlled by the National Council and the National Executive both of which shall have power to expend the funds of the Union for the purposes of carrying out the objects of the Union and all cheques drawn on the funds of the Union shall be signed by two officers of the Union and at least one Trustee. For the expenditure of the funds of the Union on the general administration of the Union and for purposes reasonably incidental to the general administration of the Union, the prior authority of the National Council or the National Executive shall not be necessary before cheques are signed or accounts paid." 65 Rule 36(g) gave effect to the requirements of s 149(1) of the FWRO Act relating to the approval of loans, grants or donations exceeding $1,000. 66 Rule 35 provided for the appointment of a national auditor and Rule 35A gave effect to the requirements of s 265(1) of the FWRO Act relating to the provision of financial reports to members. 67 Under the Rules Branches were declared to be "the basic unit of the Union." By Rule 44 the Branches of the Union "shall be completely and absolutely autonomous within the ambit of these Rules, and shall be responsible for their own Government and administration." 68 The management and control of the affairs of each Branch was in the hands of a Branch Committee: Rule 49(a). Each Branch had officers, including a Branch Secretary: Rule 50(a). The Branch Committee consisted of the officers of the Branch and not less than five nor more than 15 ordinary members who were elected from time to time: Rule 51. 69 The powers and duties of the Branch Committee were dealt with in Rule 52. The powers included the fixing of the remuneration and terms and conditions of employment of officers of the Branch and the taking of any action which, in the opinion of the Committee, was in the interests of the Branch: Rule 52(e), (l). 70 By Rule 56 (Rule 57 from 24 May 2010) the Branch Secretary was to be "the chief executive officer of the branch" and was to "have charge of the general conduct, administration and business, of the branch." Among the Branch Secretary's specific powers were powers to: "(b) receive or cause to be received all moneys on behalf of the branch and issue receipts and pay all moneys received by him/her on behalf of the Branch into such bank … or any other financial institution as the Branch Committee may from time to time decide; … (d) prepare and present to each meeting of the Branch Committee an up-to-date financial statement and when called upon to do so by the Branch Committee, produce all relevant books; … (j) hand his/her successor, on the latter's election, all moneys and property held by him/her on behalf of the Branch; (k) subject to any direction of the Branch Committee appoint, engage, control and dismiss such clerical and other staff as may be necessary for the conduct of the affairs of the branch; (l) prepare returns required by the Industrial Relations Act 1988 (sic); …" 71 Rule 59 (Rule 64 from 24 May 2010) provided for the appointment, by the Branch Committee, of a branch auditor. 72 Rule 60 (Rule 65 from 24 May 2010) dealt with the funds and property of the Branch. Relevantly it provided that: "(a) The funds and property of a branch shall consist of – (i) any real or personal property of which the branch by these rules or by an established practice not inconsistent with these rules, has, or, in the absence of any limited term lease, bailment or arrangement would have, the right to custody, control or management; … (c) All cheques drawn on the funds of a branch shall be signed by the Branch Secretary (or in his/her absence the Branch Assistant Secretary) together with any two members of the Branch Committee. (d) For the expenditure of the funds of a branch on the general administration of the branch and for purposes reasonably incidental to the general administration of the branch, the prior approval of the Branch Committee shall not be necessary before such cheques are signed or accounts paid." 73 Rule 60(e)/65(e) gave effect to the requirements of s 149 of the FWRO Act relating to the provision of loans, grants or donations of more than $1,000 from the funds of a branch. 74 Rule 60(c) was amended on 24 May 2010 and renumbered 65(c). It provided that: "All cheques drawn on the funds of a branch shall be signed by the Branch Secretary (or in his/her absence the Branch Assistant Secretary or, in the HSU East Branch, one of the Deputy General Secretaries) together with any two members of the Branch Committee. 75 Mention should also be made of the provisions of Rule 68(a) (Rule 75 from 24 May 2010). It provided that: "Should any member of the Union lose any part of his/her salary or wages or be required to work overtime in consequence of his/her having been engaged on the business of the Union or his/her branch under instructions from the National Executive or his/her Branch Committee, the National Executive or his/her Branch Committee, as the case may be, shall may good all such loss or shall remunerate the member at his/her rate of salary for the time occupied by him/her whilst so engaged. Reasonable out-of-pocket expenses shall be allowed [to] members engaged on Union or branch business." 76 Under Rule 29 elections for national and branch offices of the Union were to take place every four years commencing in 2006. THE NHDA TRANSFERS 77 In the course of 2003 a dispute arose between the Victoria No 3 Branch of the HSU (of which Ms Jackson was the Branch Secretary) and the Peter MacCallum Institute. The dispute related to what were said to be underpayments of wages to employees who were, or were entitled to be, members of the Branch. A settlement was negotiated. One of the terms of settlement was that the Institute would pay $250,000 to the Union. The Union, for its part, undertook not to pursue the Institute for penalties for breaches of the relevant Award. The money was duly paid into an account maintained by the Branch. This occurred in September 2003. 78 On 4 December 2003 Ms Jackson opened a Commonwealth Bank of Australia ("CBA") account entitled "National Health Development Account." She intimated, in the relevant authority, that the account was held by an unincorporated association. She did not name that association but certified, as the chairperson or chief officer of the association, that authority had been given for the opening and operation of the account "by resolution passed at a legally constituted meeting of the Committee Members of the Association." Ms Jackson nominated herself as the only person authorised to obtain information relating to the account and to endorse cheques drawn on it. 79 Despite what she told the bank, Ms Jackson asserted, in her Defence, that "the NHDA was a (sic) nothing more and nothing less than a bank account." 80 Between February 2004 and October 2010 a series of payments was made from Branch accounts into the NHDA account. These payments totalled $284,500. 81 In her Defence Ms Jackson claimed that these transfers had occurred pursuant to three resolutions of the Branch Committee of Management. 82 The first of those resolutions was said to have been adopted in 2004. In paragraph 66 of her Defence Ms Jackson said that: "In early 2004 the BCOM discussed what should be done with the windfall 'Peter Mac money' and resolved it should be earmarked as a discretionary fund to be spent over time to advance the industrial and political interests of the Vic 3 Branch and the Union more generally (Fund) and authorised Jackson to spend that money at her discretion for the purposes specified in the resolution, including an amount of $4,000 that she was authorised to spend on her own personal expenses …" ("the 2004 resolution"). 83 The date of the meeting on which the resolution was said to have been carried was not identified. Nor was there any evidence as to who had moved and seconded the purported motion. 84 Although Ms Jackson claimed that this resolution was recorded in the minutes of the Branch Committee of Management, no such minute was in evidence. There is reason to doubt that any such resolution was passed in "early 2004" (if at all). Ms Jackson claimed that the NHDA account had been opened in order to implement the resolution. As already seen, the account was opened on 4 December 2003. Furthermore, Ms Jackson left Australia later in December and did not return until March 2004. The first transfer from the Branch account into the NHDA account occurred in February 2004 whilst Ms Jackson was overseas. 85 There were two later resolutions of the Branch Committee of Management on which Ms Jackson relied. In 2008 the Committee resolved that: "HSU Vic 3 Branch fund the NHDA up to $90,000 per annum for the next three years." ("the 2008 resolution"). 86 In 2010 the Committee of Management resolved that: "HSU Vic 3 Branch fund the NHDA up to $90,000 for the next financial year." ("the 2010 resolution"). 87 In her Defence Ms Jackson admitted that, at the time of transfer into the NHDA account, all of the monies were funds of the Branch but she denied that, following the transfer, the funds continued to be subject to the control or management of the Branch Committee of Management. She further asserted that she regarded all of the monies transferred from the Branch account to the NHDA account as "monies that she was obliged to spend in accordance with the [Committee of Management] approval." In an affidavit, filed by her in the proceedings, she repeated this assertion saying: "I say that every transfer of money to the NHDA account and every expenditure of monies by me out of the NHDA account was within the [Committee of Management] approval …" 88 The use to which monies which were transferred from the Branch account to the NHDA account were put throws some light upon Ms Jackson's understanding of what constituted the advancement of the industrial and political interests of the Branch and the Union. In her affidavit she deposed that monies held in the NHDA account had been expended by her for a range of purposes including: making contributions to candidates in various union elections; contributions to various ALP electoral candidates or for other ALP purposes; the funding of "political/industrial project work"; and the funding of litigation "where the interests of the Union were at stake". Despite this deposition Ms Jackson did not plead, in her Defence, that she had applied the funds in the NHDA account for the purposes identified in the 2004 resolution or for any of these specific purposes. 89 Ms Jackson sought to explain why it was necessary to devote Union funds for such purposes. In a lengthy but illuminating passage in her affidavit she deposed that: "The basic factional distinction within the ALP is the distinction between 'the Left' and 'the Right'. That distinction has a long history but became all-consuming in the 1950s and 1960s and reflected the broader geo­political struggle for and against Communism and Socialism. Under the Rules of the ALP voting on things connected with the acquisition and exercise of power within the ALP and within government when the ALP is in office at a State or Federal level, for example votes to determine who will be pre-selected for a safe ALP seat, turns on the votes of affiliated Unions where the votes of those Unions is weighted according to the number of members. It is true that Unions only exercise 50% of the total voting power within the ALP and that the other 50% may be exercised by the members of the ALP. However, for many years, the membership of the ALP has been disengaged (including as a consequence of branch stacking where the 'branch stacked' members typically have no interest in participating in ballots of members and it is rare for the votes of members of the ALP to be determinative (a rule proved by the occasional exceptions, for example Martin Pakula's challenge to Simon Crean in the preselection for the seat of Hotham). Some unions, for example, the ANF ('the Nurses'), the CPSU, the AEU ('the Teachers') and the NTEU (the tertiary education union), choose not to be affiliated to the ALP. Some smaller unions are affiliated to the ALP but do not actively engage in ALP politics. However, most of the big unions are affiliated to the ALP and participate actively in the factional politics of the ALP. Union affiliation to the ALP occurs at the State level. Affiliated Unions will usually have an allegiance to either the Left or the Right and allegiance that is determined by history and the political allegiances of the person or persons who have practical control over the Union. Affiliated Unions typically deploy their ALP votes as part of a factional block arranged and or directed by the factional leaders. The 'factional warlords' are the factional leaders who can arrange and coordinate the votes of a group of affiliated unions from time to time or more generally. The position is complicated. Some unions are blindly loyal to a factional warlord, others have a looser allegiance and will sometimes pursue their own agendas and may allow federal considerations to withhold support in a particular circumstances. The main Right unions were and remain the AWU, TWU, SDA (the 'shoppies'), NUW (the old Storemen and Packers) and HSU (Vic 1 and Vic 3, and then HSU East Branch). The main Left unions were the AMWU (the 'Metal Workers'), the CFMEU, CEPU (including the 'Plumbers' and the 'Electricians') and United Voice (the old 'Miso's'). In unions with autonomous branch rules, the Left/Right division can occur within the union, with some autonomous branches aligning with the Left and some with the Right. That was the case with the HSU. Historically the HSU was a Left union. NSW, Vic 1 and Vic 3 each shifted its alignment to the ALP Right over time. Tasmania No 1 (Chris Brown) and Victoria No 2 (Lloyd Williams) and Vic No 4 (Rosemary Kelly) were always aligned with the ALP Left. Nationally, the HSU was regarded as Right union because the overwhelming majority of its members were in Branches that were aligned to the Right. In Tasmania, the HSU is a left union. As at September 2011 the Right in Victoria was called 'Centre Unity' and had a series of sub-factions each headed by a factional warlord. Bill Shorten, Stephen Conroy and David Feeney were those factional warlords. Shorten had the unwavering support of the AWU (his hand picked successor, Cesar Melham), Conroy had the unwavering support of the TWU, David Feeney had the support of the HSU Vic 1 and Vic 3 branches. The SDA and NUW, the other main Right unions were inclined to support Feeney but tended to act with a greater degree of independence driven by Federal considerations. For many years there has been an agreement or understanding in both NSW and Victoria that has seen the available parliamentary seats 'divided' up between the Left and the Right. Generally speaking, the Right does not contest 'Left' seats vice versa. When a safe ALP seat that 'belongs' to the Right becomes vacant there will usually be a candidate selected by the Right factional warlords who will receive the votes of the Right unions in the POSC pre-selection ballot and thus be preselected. Occasionally there is a contest between the factional warlords of the Right as to who should be the Right's candidate for preselection to fill a 'Right' vacancy in a safe ALP seat or a viable spot on the Senate ticket. In this context the broader deal may [be] compromised and a Right factional warlord will form an alliance of convenience with the Left in return for some quid pro quo. That occurred in Centre Unity in (sic) when Shorten and Conroy joined with the Left's Carr to freeze out David Feeney. Left-Right factional warfare will occur if the Left seeks to take over a branch or division of a union that 'belongs' to the Right or vice versa. However, there can also be factional warfare within the Left or Right factions. Thus, in the 2009 election for the No 1 Branch there was a three cornered contest between candidates supported respectively by Conroy, Shorten and Feeney. One cannot be a factional player within the ALP without money. Factional contests for control of a branch of a union are invariably vicious affairs that ultimately sound in an election contest with competing candidates backed by the respective factions. It costs a large amount of money to post an election mail-out to the members of a branch. It costs money to print flyers and undertake advertising. There are a myriad of costs associated with conducting a successful election campaign in a contested union election. Moreover, a factional player also needs alliances with ALP politicians. Such alliances serve a variety of purposes including the legitimate purpose of ensuring that the union has an ear in government so that legitimate objections to government policies or decisions (for example, whether or not a laundry function in a public hospital will be outsourced) can be advanced effectively. Supporting ALP politicians, whether at the local, State or Federal level involves contributing money to assist with the cost of their election campaigns and the various other expenses associated with standing for office – often including the need to pay for branch memberships of groups of people organised by the candidate or one of their factional supporters. In this context ethnic communities become significant, as do the people who can marshal support within an ethnic community. In short, one cannot be an ALP factional player without access to a fighting fund, and without the need to deploy funds in a manner that is kept secret and ignores disclosure obligations because the funds are being deployed in circumstances that 'must' be kept secret. There is a 'code of omerta' that is implicitly recognised by participants in the ALP factional system – one must never get caught doing things that will cause public embarrassment and one must never talk publicly of things that will cause negative publicity for the ALP or an ALP government. Breaking of this code can have very bad consequences for the individual. People know that and usually do not want to be associated with the person who is airing the dirty linen lest they make themselves a target by association." 90 These disarmingly frank disclosures explain a great deal about Ms Jackson's conduct as a Union official. She emerges as an active participant in factional politics both within the union movement and in the party political environment. She saw it as entirely proper for the Branch Committee of Management, of which she was a member, to pay substantial sums of members' money into a bank account which she alone controlled. She had chosen an ambiguous title for the account and represented (falsely) that she was the chairperson or chief officer of a non-existent unincorporated body which had authorised her to open the account. Once the funds were in the account she expended them, at her discretion and in secrecy. The members were told very little about the purpose of the payments from the Union accounts and nothing about the expenditure of those funds once they were in the NHDA. Ms Jackson appears to assume that the expenditure of members' funds to advance factional causes would, in some way, be beneficial to them. She does not explain how or why this would be so. How, for example, would members of her Branch benefit from their money being used secretly (and, probably, unlawfully) to fund the election campaigns of candidates in other branches or other unions? How could the use of Branch funds for "branch stacking" in a political party assist the members? 91 Another feature of Ms Jackson's approach to being a "factional player" who was a participant in "factional warfare", which also had a bearing on other claims made by the HSU in these proceedings, is the blurring of the distinction between personal and Union interests. The strengthening of the position of the factional warrior who holds a Union office is assumed to advance the interests of the Union and its members. This mindset readily evolves into a pervasive sense of entitlement, on the part of the office holder, to utilise the Union's resources to advance his or her personal interests. 92 Under the Rules the funds were the property of the Branch prior to their transfer to the NHDA account. If, as Ms Jackson claimed, the NHDA account was nothing more nor less than a bank account which she controlled and operated for the benefit of the members, the transferred funds should have been accounted for in annual financial reports provided to the members. This was not done. When, belatedly, the Branch auditor, in 2009, queried payments from a Branch account into the NHDA, Ms Jackson provided a response. The auditor recorded the information which was given to him: "Amounts are paid at the discretion of Kathy, no invoice or supporting documentation to support amount being paid. NHDA is the National Health Development Account. All branches contribute to this account for research/campaign purposes … The payments are made at the discretion of the Branch Secretary or when the National Office requests it … Based on discussion with Branch Secretary, Kathy Jackson, she confirmed that the amount of $45,500 was authorised by her for payment into the NHDA." 93 The auditor apparently accepted this explanation at face value. He does not appear to have taken the view that, once the transfer had occurred, the funds remained the property of the Branch. They were not included in the Branch accounts. In those circumstances it is surprising that the monies were not treated, for accounting purposes, as a grant or donation to the NHDA under s 149(1) of the FWRO Act or as employee benefits paid to Ms Jackson. 94 As time went on, as will shortly be seen, Ms Jackson regularly drew on the NHDA account for personal discretionary spending thereby emphasising that she treated the money, in that account, as being available to her for whatever purpose she deemed appropriate. 95 Ms Jackson did not dispute the HSU's allegation that, between February 2004 and October 2010, $284,500 was transferred from Branch funds to the NHDA. 96 The bank statements for the NHDA were in evidence. They disclosed the following deposits: Date Amount 27 February 2004 80,000 23 June 2005 20,000 6 January 2006 10,000 30 June 2006 8,000 29 June 2007 5,000 6 December 2007 8,000 21 December 2007 8,000 27 June 2008 7,000 4 September 2008 8,000 5 December 2008 5,000 7 January 2009 12,000 23 March 2009 50,000 1 July 2009 7,500 5 October 2009 8,000 27 October 2009 8,000 7 April 2010 22,000 27 May 2010 12,000 13 October 2010 6,000 97 For most of these transactions the statements record that the transfer was made from the Union's Victoria No 3 Branch account using Netbank. Although the last two transfers were recorded as having come from the Victoria No 3 Branch account, that Branch had ceased to exist on 24 May 2010. 98 Other relevant evidence came from a long-standing member of the Branch Committee of Management. Ms Olga Gountras was a member of the Committee between 1994 and 2009. During this period she attended about 100 meetings of the Committee. Ms Gountras had never heard of the NHDA. She had no recollection of the 2004 resolution having been passed, although she conceded that she had missed meetings between 25 April and 30 June 2004 whilst she was overseas. The Committee was told, on occasions, that the NHDA funds were a "health fund contribution". Ms Jackson had never advised, at any meeting at which Ms Gountras had been present, that she (Ms Jackson) had transferred or was proposing to transfer Branch funds into an account which Ms Jackson alone controlled. 99 Over the relevant period all of the monies transferred from Branch accounts into the NHDA were expended by Ms Jackson. The bank statements provide some insight into the manner in which and the purposes for which Ms Jackson used funds drawn from the NHDA account. There were, for example, a large number of cash withdrawals from automatic teller machines. The HSU invited the Court to draw inferences about the purposes for which the funds were drawn. The first cash withdrawal following the first transfer of $80,000 into the account on 27 February 2004 occurred early in the following month. Ms Jackson was in the United States at the time. She withdrew US$500 from a machine in Las Vegas. She remained in the United States for some weeks. During this time she made a series of further withdrawals from cash machines. A further cash withdrawal was made at Heathrow Airport late in March. Similar withdrawals occurred on later overseas trips undertaken by Ms Jackson and some withdrawals occurred on the eve of her departure on those travels. The Union invited the Court to infer that Ms Jackson used this money for private purposes whilst she was on holidays. On other occasions large cash withdrawals were made and, within a short period, deposits of similar amounts were made into other accounts controlled by Ms Jackson. Again, the Union invited the conclusion that these cash withdrawals were used to satisfy various personal financial obligations of Ms Jackson. 100 The Union submitted that an analysis of the expenditure from the NHDA account showed that it fell into seven broad categories. They were: deposits into Ms Jackson's personal accounts ($102,300); expenditure on Ms Jackson's divorce settlement ($102,000); withdrawals just prior to her embarking on holidays ($55,900); expenditure during holidays ($8,387); personal retail expenditure ($8,084); other small cash withdrawals ($27,480); and political expenditure (approximately $82,000). The HSU's analysis is substantially supported by bank statements and other documentary evidence. For reasons which I will shortly explain it is not necessary to deal with each item of expenditure from the NDHA account. 101 When, on 24 May 2010, the Victoria No 3 Branch amalgamated with other Branches to form the HSU East Branch, Ms Jackson became the Executive President of the new amalgamated Branch and held this office until she was removed on 21 June 2012. At the time of the merger Ms Jackson was required under the Rules (see Rule 48B(f)) to cause all funds of the Victoria No 3 Branch to be transferred to the new HSU East Branch. She did not transfer any of the funds then standing to the credit of the NHDA account to the new Branch. These funds were retained in the NHDA account and were supplemented by two further payments from an account which continued to be held in the name of the Victoria No 3 Branch after the merger. On 27 May 2010 $12,000 was transferred and a further $6,000 was transferred on 13 October 2010. The HSU contended that these payments had been made by or at the direction of Ms Jackson. In her Defence she admitted this allegation even though the No 3 Branch no longer existed at these times. What is, however, uncontroversial is that, after the merger of Branches in May 2010, Ms Jackson continued as the sole signatory to the NHDA account and that she made multiple withdrawals from it for domestic and other purposes. 102 When the HSU East Branch was dissolved, by order of the Court in 2012, Flick J ordered that persons holding offices in the Branch (including Ms Jackson) were to transfer to the Administrator all property of the Union in their possession: see: Brown v Health Services Union (2012) 205 FCR 548 at 604 (Flick J). Ms Jackson did not transfer any of the funds held in the NHDA account to the Administrator. On the contrary, she continued to make withdrawals from the account until it was entirely depleted in 2013. 103 Ms Jackson's conduct strongly suggests that she believed that, once monies were transferred, at her direction, from Branch accounts into the NHDA account, they became her funds which were available to her to be expended in her unfettered discretion or in the exercise of a discretion fettered only by a requirement that she spend the monies on what she perceived to be the broadly expressed purposes identified in the 2004 resolution. 104 The HSU submitted that the 2004 resolution had not been adopted by the Branch Committee of Management. It further contended that, even if such a resolution had been passed, it did not authorise the transfers made by Ms Jackson. It accepted that the 2008 and 2010 resolutions had been carried but submitted that they did not authorise any of the subsequent transfers. The Union further submitted that each of the transfers had been made without the informed consent of the Committee and that they constituted a grant or donation to the account of Ms Jackson and were a related party transaction which had not been disclosed to the members. 105 Ms Jackson admitted in her Defence that each of the transfers had been made by or at her direction. She denied that the Branch Committee of Management had not approved the making of each transfer, that it had not been informed of any interest which she had in the NHDA account, that it had not passed a resolution authorising the making of a donation or payment to the NHDA account or to her and that the Committee had not been informed that the transferred payments constituted a related party transaction. 106 The precise terms of the alleged 2004 resolution were not in evidence. The paraphrased version of the resolution which appeared in Ms Jackson's Defence did not authorise the creation of an account which was to hold funds which had been transferred from a Branch account but which were not to be treated thereafter as Branch funds for accounting purposes. Nor did the resolution authorise Ms Jackson (or anybody else) to establish an account entitled the NHDA or to transfer funds from Branch accounts into the NHDA account. The purported authority giving Ms Jackson unfettered discretion to spend $4,000 of Union money "on her own personal expenses" constituted the authorisation of additional remuneration for Ms Jackson. She did not, however, apparently regard it as such because it was not disclosed, once drawn down by her, as part of her income for tax purposes. Moreover, Ms Jackson was the only person authorised to operate the account. In a practical sense any transfer to the account, at least to the extent of $4,000, constituted a "grant" to her. There was, however, nothing in the resolution to record that the Committee of Management had satisfied itself that the making of the grant was in accordance with the Rules as required by s 149(1)(a)(i) of the FWRO Act and the Union Rules made to give effect to it. 107 The 2008 and 2010 resolutions were even less specific. They did no more than provide that the Branch fund the NHDA up to a particular amount during a particular period. The NHDA was the name of an account not a body corporate or unincorporate. A decision that the account be funded could have meant no more than that money should be paid into it. The resolutions did not, in terms, authorise Ms Jackson (or anyone else) to transfer Branch funds to the NHDA. Even if such authority could be implied, having regard to Ms Jackson's powers under the Rules as Branch Secretary, she could only act to implement the resolutions if the relevant payment could be made consistently with those Rules. 108 Minimal details were provided to the Committee of Management about the NHDA and expenditure made from it. Ms Jackson did not assert, in her Defence, that she had informed the Committee about details of the account such as its purported status as the operating account of an unincorporated association of which she was the chairperson or chief officer or that she was the sole signatory authorised to operate the account. Nor does it appear that she ever advised the Committee of Management that she held a credit card that enabled her to draw down cash from the account at whim. No invoices were raised before amounts were transferred from Branch accounts to the NHDA. No financial statements were provided to the Committee relating to the expenditure of funds from the NHDA. The auditor was falsely advised by Ms Jackson, in 2009, that all Branches contributed to the account "for research/campaign purposes" and that the payments might be made out of the NHDA account if requested by the National Office of the Union. 109 Ms Gountras's evidence confirms that little, if any, information about the NHDA account was ever given to the Committee. On at least one occasion the Committee was misled when the members were advised that monies paid into the account were for a health fund contribution. 110 The Union's contention that the Branch Committee of Management had not given informed consent to the transfer of funds into the NHDA should be accepted. 111 Ms Jackson did not, in her Defence, contest the allegations that the payments were related party transactions or that the Branch's financial statements over the relevant period had not identified any related party transactions. 112 The HSU contended that Ms Jackson had contravened s 287(1) of the FWRO Act and s 182 of the Corporations Act by improperly using her positions as Branch Secretary of the Victoria No 3 Branch and Executive President of the HSU East Branch to gain an advantage for herself or others. 113 The constraints imposed on officers and employees of corporations by s 182(1) of the Corporations Act are applied by reference to an objective standard. Impropriety "consist[s] in a breach of the standards of conduct that would be expected of a person in [the particular] position by reasonable persons with knowledge of the duties, powers and authority of [that] position … and the circumstances of the case …": Doyle v Australian Securities and Investments Commission (2005) 227 CLR 18 at 28. 114 In their joint judgment in R v Byrnes (1995) 183 CLR 501 at 514-5, Brennan, Deane, Toohey and Gaudron JJ said that: "Impropriety does not depend on an alleged offender's consciousness of impropriety. Impropriety consists in a breach of the standards of conduct that would be expected of a person in the position of the alleged offender by reasonable persons with knowledge of the duties, powers and authority of the position and the circumstances of the case. When impropriety is said to consist in an abuse of power, the state of mind of the alleged offender is important …: the alleged offender's knowledge or means of knowledge of the circumstances in which the power is exercised and his purpose or intention in exercising the power are important factors in determining the question whether the power has been abused. But impropriety is not restricted to abuse of power. It may consist in the doing of an act which a director or officer knows or ought to know that he has no authority to do." (Emphasis added). 115 It is, therefore, possible for a director to act improperly even if the director has no intention of acting dishonestly or otherwise than in the best interests of the company: see Chew v R (1992) 173 CLR 626 at 640 (Dawson J), 647 (Toohey J). 116 The approval of the withdrawal of a corporation's funds and the making of such withdrawals by a director or officer who lacks the authority to make them and the subsequent application of such funds for the personal purposes of the officer constitutes a contravention of both ss 181 and 182 of the Corporations Act: cf Re Wan Ze Property Development (Aust) Pty Ltd (2012) 90 ACSR 593 at 601-2 (Black J). 117 There is no material difference between the provisions of s 182 of the Corporations Act and s 287 of the FWRO Act. The same principles should apply to the construction and application of both provisions. 118 During the period in which it operated, the NHDA account received a series of credits of funds drawn from the Victoria No 3 Branch account. Each of these transfers was effected by Ms Jackson or by someone else at her direction. The propriety of each of these transactions is to be assessed at the time at which they occurred. The transfers occurred as part of a course of conduct in which Ms Jackson engaged. The transactions occurred over a period exceeding five years. At the time each transfer occurred (apart from the first) Ms Jackson can be taken to have known how the money, previously in the account, had been expended and the reporting and accounting treatment (or lack of it) of that expenditure. This knowledge will inform any objective assessment of the efficacy of each of the transfers. 119 On each occasion Ms Jackson well knew that the funds drawn down from the Branch account were the property of the Union. She either knew or should have known that the payments to an account controlled solely by her had not been authorised by the Branch Committee of Management. What, according to her Defence, the Committee had agreed was that the "windfall 'Peter Mac'" money, which was held in a Union bank account, would be "earmarked as a discretionary fund". It was "to be spent over time to advance the industrial and political interests of the … Branch and the Union more generally …" She had, according to her narrative, been authorised to "spend that money at her discretion" for those purposes. In addition, $4,000 of the "earmarked" money could be spent "on her own personal expenses …" I note, in this context, that, although Ms Jackson's rendition of the purported 2004 resolution contained provision for a one off payment of $4,000 to her from the "windfall 'Peter Mac'" money, elsewhere in her Defence (at paragraph 120) she asserted that the resolution provided for her to "spend an amount of $4,000 per annum on her personal expenses" (emphasis added). 120 The purported resolution did not authorise the establishment of an account of the kind which Ms Jackson established and in which the transferred funds were no longer to be regarded as funds of the Branch. Nor did it authorise the establishment of an account which was not subject to the reporting and auditing requirements of the FWRO Act or the Union Rules. As Branch Secretary Ms Jackson knew, or should have known, that, had the "earmarked" Branch funds been, as they should have been, in a Branch account, albeit one separately created for the purpose, it would have been necessary for all payments into the account and payments out of it to have been accounted for and audited. This would have required Ms Jackson to report and justify all of the payments out of the account. She would, for example, have had to explain to the Branch Committee of Management why it was she withdrew large cash payments whilst overseas on holidays or in anticipation of them. She would have had to attempt to justify expenditure for unlawful purposes such as the funding of election campaigns in the Branch, other Branches of the Union and in other Unions. This she plainly did not wish to do. Rather, she wished to advance her own interests, both personal and political. If the funds in the NHDA account were not, as Ms Jackson claimed, the funds of the Branch, each of the transfers to the NHDA account from Branch funds constituted a grant. Under Rule 60(e) such grants could not be made unless they had first been approved by the Committee of Management. 121 The creation of the NHDA account and the payment of Union funds into it by Ms Jackson were improper within the meaning of both s 182 of the Corporations Act and s 287 of the FWRO Act. Ms Jackson had no authority to deal with Union funds in this way. I readily infer that Ms Jackson well knew this when she created the NHDA account and paid successive sums into it. At the very least she ought to have known that she lacked authority of the Union to so act. 122 Each of the payments resulted from the improper use, by Ms Jackson, of her positons as Branch Secretary or Executive President. None of the payments was authorised in accordance with the Rules. In each case s 287 of the FWRO Act was contravened. 123 The Court has a discretionary power, under s 307 of the FWRO Act, to order a person who has contravened a civil penalty provision, such as s 287, to pay compensation to an organisation when damage results from the contravention. A similar power is conferred by s 1317H of the Corporations Act in respect of contraventions of civil penalty provisions in that Act. 124 Ms Jackson should be ordered to pay $284,500 to the HSU, by way of compensation, for damage caused to it by reason of her contraventions of s 287. 125 The Union advanced alternative causes of action on the assumption that the transferred funds remained the funds of the Branch while in the NHDA. These claims emphasised the failures to account to the members for the expenditure from the fund and the unauthorised nature of that expenditure. It is not necessary, having regard to my principal findings, to pursue these alternative claims. CASHED CHEQUES 126 Between July 2007 and May 2010 at least 38 cheques were drawn on the Victoria No 3 Branch account authorising payment in cash. The total of the amounts drawn, using these cheques, was $239,837. A further $19,900 was drawn from the HSU East Branch account using two "cash" cheques between 24 May 2010 and 30 June 2010. 127 Ms Jackson signed each of the 40 cheques. None of them was countersigned by two other members of the Branch Committee as required by Rule 60(c). Five of the cheques were signed by Ms Jackson between 4 February 2008 and 19 May 2008. During this period Ms Jackson was not the Branch Secretary. 128 The amounts for which the cheques were drawn ranged from $500 to $12,000. Twenty of the cheques were presented on the eve of Branch Committee of Management meetings. 129 At each meeting of the Committee Ms Jackson gave $100 in cash to each of the members attending. These usually numbered 10 or 11. She retained the rest of the cash herself. Once in Ms Jackson's hands the expenditure of these monies was not reported in the Branch's financial returns or audited by the Branch auditor. 130 In her Defence Ms Jackson admitted that she had used funds from this "kitty" for personal purposes. Specifically, she admitted that: $4,500 drawn using a cashed cheque dated 19 May 2008 formed part of a cash deposit into a credit union mortgage account operated by her and her then husband on 29 May 2008; $7,500 drawn using a cashed cheque dated 24 December 2008 was used to fund a $5,000 cash deposit on the same day into the mortgage account; and $3,000 of $6,000 drawn using a cashed cheque dated 29 September 2009 was paid into a personal account of Ms Jackson in the CBA on the same day. 131 On 3 July 2008 the Branch Committee of Management passed a resolution in these terms: "That the honorarium and training/conference allowances to be paid up to $9500 per meeting to the [Branch Committee of Management], this would be paid in cash at every meeting that was attended." ("the 2008 resolution"). A further resolution, in the same terms save that the amount stipulated was $9,800, was passed by the Committee on 24 February 2010 ("the 2010 resolution"). 132 The HSU contended that neither of these resolutions authorised any of the withdrawals which had occurred between July 2007 and May 2010. 133 In her Defence Ms Jackson admitted that the 2008 resolution did not authorise the payments made prior to 3 July 2008 but she denied that it did not have effect thereafter. 134 In seeking to justify the withdrawals made before the 2008 resolution was carried she pleaded that: "Jackson says that years prior to 2008, and before any of the cash cheques identified as referable to 'honorarium and training/conference allowances', the [Branch Committee of Management] approved the payment of such amounts to the branch committee of management who, by agreement, in turn, donated all but $100 of the amount referable to them back to the union for use as discretionary funds, which amounts were retained by Jackson in a metal box and referred to as the 'Kitty' for use by her at her discretion, to advance the industrial and political interests of the Branch and the Union." ("the pre-2008 resolution"). 135 The pre-2008 resolution which was said to have supported the practice was not in evidence. Ms Gountras had no recollection of any such resolution ever being passed by the Committee of Management. 136 Ms Gountras did recall that the Branch Committee of Management had approved the payment of sitting fees of $100 cash per member per meeting. Such payments were made at meetings which she had attended between 2007 and 2009. She was, however, adamant that no additional money had been paid to her and then handed back to Ms Jackson as a "donation" to the Union. She deposed that: "As to what happened in reality, it would be wrong to say that at a BCOM meeting I was given a large sum (say $400 or $800) and donated all but $100 back to the Branch or to a 'kitty'. There was no such arrangement or any similar arrangement that I was party to or aware of. I never donated any money to the Branch. I never saw any sum of cash being distributed at BCOM meetings, other than the $100 sitting fee to each person present. I never saw, or was told about, any BCOM member making such donations or receiving anything other than the $100 sitting fee. I did not know of any kitty that Ms Jackson refers to. The true arrangement when Ms Jackson was branch secretary and sitting fees were reinstated was simple: each BCOM member received a $100 sitting fee for each BCOM meeting attended." 137 The two remaining cheques were drawn following the Branch amalgamation that produced the HSU East Branch in May 2010. At the time these cheques were drawn Ms Jackson was not the Secretary of the Victoria No 3 Branch. The funds and property of the former No 3 Branch had become the property of the new Branch. Ms Jackson was not the Secretary of that new Branch. In her defence Ms Jackson sought to justify these withdrawals as follows: "Upon the amalgamation taking effect, Mr Williamson, as General Secretary of the HSU East Branch and the HSUeast, gave Jackson lawful instructions to (a) continue conducting the financial affairs of the old Vic 3 Branch portion of HSU East Branch/HSUeast on a "business-as-usual" basis until such time as the necessary merging of accounts and accounting functions for the three amalgamating branches had been finalised; and (b) continue using her existing Union credit cards as her ongoing Union credit cards to meet work related expenses incurred by her. Williamson had authority to give that direction and Jackson was authorised thereby." There was no evidence that any such instruction had been given to Ms Jackson by Mr Williamson. 138 Under Rule 68 of the Branch Rules the Branch Committee of Management of the Victoria No 3 Branch had power (until the dissolution of the Branch in May 2010) to authorise payment of Branch funds to compensate Committee members who had incurred expense in attending Committee meetings. The Branch Committee of Management did not, however, have power, under the Rules, to authorise the making of payments to Committee members so that those Committee members might "donate" those monies to the Union or the Secretary in order that such funds could be disbursed at the discretion of the Branch Secretary. To the extent that any of the pre-2008, 2008 or 2010 resolutions purported to authorise these additional drawings, they were ultra vires the Rules. 139 In any event, I do not accept that Branch Committee of Management members were paid cash sums in excess of $100 at any of the Branch meetings. This is confirmed by Ms Gountras's evidence. There were, therefore, no donations made by Branch Committee of Management members to the "kitty". Ms Jackson simply kept this additional cash with the intention of using it as she wished. 140 There was no obstacle, under Rule 68, to expenses being paid in cash to Branch Committee of Management members. Ms Jackson could, therefore, have drawn cash from Branch accounts using appropriately endorsed and signed cheques. None of the 40 "cash" cheques bore the necessary number of authorised signatories. Ms Jackson herself had no authority, under the Rules, to sign the cheques used to draw cash between 23 January 2008 and 19 May 2008 and between 24 May 2010 and 30 June 2010. 141 Twenty of the 40 cash withdrawals did not coincide with Branch Committee of Management meetings and I infer that none of the cash produced by these withdrawals was paid to Branch Committee of Management members. 142 Apart from the amounts paid to Branch Committee of Management members, each of the withdrawals was unauthorised. They were improper for this reason and because the cheques used to make the drawings were not countersigned by two Branch Committee of Management members other than Ms Jackson and were, in some instances, signed by Ms Jackson when she was not Branch Secretary. 143 It was Ms Jackson's duty, under Rule 56(d), to prepare and present an up-to-date financial statement to each meeting of the Branch Committee of Management. She was also required to prepare the returns which had to be presented in accordance with the FWRO Act. The cash withdrawals were falsely recorded in the general ledger of the Branch under headings such as "honorarium", "professional development" and "conference/seminar" expenses. 144 Some, at least, of the withdrawals were undertaken by Ms Jackson with the intention of using the funds for personal purposes. The temporal proximity of the withdrawals from Branch accounts and deposits into personal accounts which Ms Jackson admitted had occurred, strongly supports such an inference. 145 Ms Jackson was responsible for each of the withdrawals. She retained the bulk of the cash to be used at her discretion. She thereby used her positions, as Branch Secretary of the Victoria No 3 Branch or as Executive President of the HSU East Branch, improperly to gain an advantage for herself (and, in some instances, her former husband) and thereby contravened s 287 of the FWRO Act. She also contravened s 182 of the Corporations Act. 146 The HSU is entitled to be recompensed for the losses it sustained because of Ms Jackson's contraventions. 147 In order to calculate the Union's losses as a result of these contraventions by Ms Jackson it is necessary to make allowance for that part of the cash withdrawals which was likely to have been paid by way of attendance fees to members of the Branch Committee of Management. Those calculations have been made in the following table: Date Amount drawn BCOM meeting Attendees Retained by Ms Jackson 3 July 2007 $4,800 Yes 11 $3,700 7 August 2007 $8,400 No $8,400 28 August 2007 $8,000 Yes 11 $6,900 11 September 2007 $7,500 Yes 11 $6,400 1 October 2007 $4,000 No $4,000 2 November 2007 $8,500 Yes 11 $7,400 8 November 2007 $8,000 No $8,000 6 December 2007 $8,000 Yes 11 $6,900 24 December 2007 $8,000 No $8,000 24 December 2007 $500 No $500 24 December 2007 $500 No $500 17 January 2008 $500 No $500 4 February 2008 $8,500 Yes 11 $7,400 26 February 2008 $1,000 Yes 11 $0 6 March 2008 $5,000 No $5,000 31 March 2008 $5,000 No $5,000 19 May 2008 $4,500 Yes 11 $3,400 3 June 2008 $6,500 Yes 11 $5,400 3 July 2008 $4,800 Yes 9 $3,900 3 July 2008 $5,300 No $5,300 23 July 2008 $8,500 No $8,500 12 September 2009 $9,400 No $9,400 9 October 2008 $8,000 Yes 10 $7,000 11 December 2008 $7,000 Yes 8 $6,200 18 December 2008 $4,500 No $4,500 24 December 2008 $7,500 No $7,500 11 February 2009 $7,800 Yes 8 $7,000 27 March 2009 $8,500 Yes 9 $7,600 8 May 2009 $1,000 No $1,000 29 September 2009 $6,000 Yes 11 $4,900 6 October 2009 $12,000 No $12,000 10 December 2009 $9,600 No $9,600 21 December 2009 $1,300 Yes 11 $200 21 December 2009 $5,600 Yes 11 $4,500 9 February 2010 $9,500 Yes 11 $8,400 24 February 2010 $8,900 Yes 11 $7,800 6 April 2010 $8,037 No $8,037 9 April 2010 $9,400 Yes 11 $8,300 28 May 2010 $11,500 No $11,500 25 June 2010 $8,400 No $8,400 TOTAL $259,737 $238,937 148 A compensation order in the sum of $238,937 should be made. THE $63,000 HONORARIUM 149 On the eve of the amalgamation of the Victoria No 3 Branch with other Branches to form the HSU East Branch, the Branch Committee of Management of the Victoria No 3 Branch passed a resolution which, purportedly, authorised the payment of $63,000 to Ms Jackson. On 23 March 2010 the Committee resolved that: "The BCOM also reminded the Secretary that she had not claimed the $21 000 honorarium that she has been entitled to for the past 3 years, and she should arrange payment. The BCOM also noted that the Secretary should be paid the full $21 000 honorarium in total, for this financial year, not pro rata, regardless of the date of amalgamation as a sign of thanks and appreciation for her service to health professionals." 150 The amalgamation took effect on 24 May 2010. 151 On 30 June 2010 Ms Jackson wrote a cheque for $63,000 on an account operated by the HSU East Branch. The cheque was made payable to her. She signed it. It was countersigned by one but not two members of the HSU East Branch Committee of Management. 152 At the time that the resolution was passed by the Committee of Management of the Victoria No 3 Branch Ms Jackson was not an employee of that Branch. She had not been since January 2008 when she assumed duties as National Secretary of the Union. As National Secretary she held a full time paid office under the Rules and her remuneration was fixed by the National Council: see Rules 19 and 21(c). 153 A question immediately arises as to the authority of the Branch Committee of Management of the Victoria No 3 Branch to adopt the relevant resolution. Although it had broad powers to manage and control the affairs of the Branch, to fix the remuneration of the officers of the Branch and to take any action which was in the interests of the Branch (Rules 49(a), 52(e) and 52(l)), it had no express powers to grant honoraria to Branch or National Officers. It is to be borne in mind that, during the period to which the payment of the honorarium related, Ms Jackson was an officer, but not an employee, of the Branch. In the absence of any express provision, in the Rules, for the making of payments to honorary office holders, Ms Jackson had no entitlement to this additional remuneration: cf Guinness PLC v Saunders [1990] 2 AC 663 at 690. 154 Ms Jackson sought to justify her transfer of HSU East Branch funds to herself on a number of bases. The first was that "there had been a history of honoraria being paid to persons in respect of their unpaid offices under the Rules, both to national officers and senior branch officials, without any challenge to the lawfulness of the resolutions of the National Council in relation to the National Officers and or the relevant BCOM." Whether or not such a practice existed (and there was no evidence of it before the Court) such a practice could not be the source of the relevant authority. Ms Jackson next contended that, "in conferring [the] honorarium, the Victoria 3 Branch BCOM acted reasonably and within its authority". That authority was said, by her, to be derived from Rule 68. That Rule provides for the recompense of Union members who lose part of their salary or wages by being engaged on Union business. Ms Jackson had lost nothing during her period as National Secretary. She had the benefit of a salary, fixed by the National Council at $173,331.16 per annum. 155 Ms Jackson next pleaded that she was "entitled to full time remuneration under the Rules by virtue of holding office." No such entitlement is conferred by the Rules. 156 Ms Jackson also sought to defend her position by contending that she was a disinterested beneficiary of the largesse of the Branch Committee of Management. This defence is unsustainable. The Committee of Management of the Victoria No 3 Branch had no authority, under the Rules, to authorise the payment of the honorarium. As a result Ms Jackson had no authority to pay herself the $63,000 from the funds of the amalgamated Branch using a cheque which had not been signed by the required number of Committee of Management members. Ms Jackson either knew or ought to have known that the Rules did not authorise the passing of the resolution, her giving effect to it and the manner in which she did so. Even had she been disinterested (which I doubt) in relation to the process whereby she acquired these monies, those processes were tainted with impropriety. 157 Ms Jackson acknowledged that the cheque which she signed was drawn on the HSU East Branch account after the amalgamation had occurred. She asserted that she was, nonetheless, entitled to pay herself the honorarium by reason of the instructions allegedly given to her by Mr Williamson at the time of the amalgamation (see above at [137]). Even had Mr Williamson given the "business-as-usual" direction, he did not and could not authorise the specific transaction in his capacity as General Secretary of the amalgamated Branch. 158 In her Defence Ms Jackson also pleaded that, even if the honorarium had been paid in breach of the Rules, the HSU did not suffer any loss "because even if [Rule 65(c)] had been complied with, the payment would still properly have been made." This assertion must fail because it assumes the validity of the Branch Committee of Management's resolution. For reasons already given that resolution was ultra vires the Rules. 159 Again Ms Jackson improperly used her positions as Branch Secretary and Executive President to gain an advantage for herself. As a result, the Union suffered the loss of $63,000. 160 A compensation order should be made in that sum. THE ELLIOTT MEMORANDUM 161 Mr Robert Elliott was the National Secretary of the HSU between 1996 and 2002. In 2005 he became an employee of the Victoria No 1 Branch. Between 2007 and 2010 he worked for the Victoria No 3 Branch as a consultant. 162 In early 2010 the proposed merger between the New South Wales Branch and the Victoria No 1 and No 3 Branches was in contemplation. Branch officials from each of these Branches had gathered in Sydney. On 25 February 2010 the Branch Committees of Management of the New South Wales Branch and the Victoria No 3 Branch endorsed the merger. 163 In the course of that day Mr Elliott told Mr Williamson that he (Mr Elliott) needed to be "looked after" following any merger. Mr Elliott said he wanted a contract to work for the new HSU East Branch. He wanted to be paid $150,000 per year. Mr Williamson responded that it was too late for such a contract to be entered into because all the branches had voted to merge. Mr Elliott then told Mr Williamson that the Victoria No 1 Branch Committee of Management was yet to vote and that the members of that Committee would not vote on the merger until Mr Elliott had been "looked after". Mr Williamson reluctantly agreed to enter into a contract but made it a condition that Ms Jackson had also to sign on behalf of the Union. What became known as the "Elliott Memorandum" was quickly prepared and executed. 164 The manner in which the agreement was prepared, negotiated and signed is not entirely clear. At some time, later on 25 February 2010 a written agreement was prepared. Ms Jackson deposed that, as she was passing Mr Williamson's office on that day, he called her in and invited her to sign the document. She read, considered and signed it within five minutes. She said that she thought, at the time, that she was signing as a witness. 165 The contract was termed a "Memorandum of Agreement". It identified the parties as being Mr Elliott and the Union. It recited that they intended to create a binding legal agreement between them. The terms of that agreement were: "Term of agreement 1. This agreement shall commence on the coming into effect of the HSU Branch created by the amalgamation of the Victoria No 1, Victoria No 3 and NSW branches of the HSU (HSU East") and will operate for 4 years from the date. Salary and superannuation 2. Rob Elliott shall be employed by the HSU at an initial annual salary of $150,000 per year 3. On the 1st October of each year that the agreement is in operation the annual salary paid shall be adjusted by a percentage amount equivalent to the consumer price index change for the preceding year to the 30th June. 4. The HSU shall pay a sum equivalent to 9% of Rob Elliott's salary to a superannuation fund nominated by him. Nomination to HESTA Board 5. The HSU shall continue to nominate Rob Elliott to be one of the HSU's nominee directors to the board of the Health Employees Superannuation Trust of Australia ("HESTA"). Rob Elliott shall retain all and any directors' fees or associated payments paid in respect to his role as HESTA director. Duties 6. Rob Elliott is employed to provide strategic and policy advice, counsel and support and consultancy to HSU East on: • National health and community services policy issues • Superannuation matters and retirement incomes policy • Corporate governance and rules matters • National industrial relations policies and direction Accumulated entitlements 7. Rob Elliott shall be credited all unused sick leave and annual leave accumulated in his employment with the Victorian Nos 1 and 3 branches since his resignation from the position of National Secretary of the HSU. Additionally Rob Elliott shall be credited with 1.71 weeks of long service leave for every year since his resignation from the office of National Secretary of the HSU and will be credited 1.71 weeks long service leave for every year of the operation of this agreement." There was also a "Non-compete" clause. The agreement was signed by Mr Elliott and "on behalf of the HSU". Ms Jackson signed as: "National Secretary Health Services Union Branch Secretary, Victoria No 3 Branch Health Services Union Executive President Nominate, HSU East". and Mr Williamson as: "National President, Health Services Union Branch Secretary, Health Services Union NSW Branch General Secretary Nominate, HSU East". Adjacent to each of the signatures was the date: 25 February 2010. 166 After this agreement was signed an appendix was added. Relevantly, the appendix provided that: "The parties acknowledge that although the agreement is one for the employment of Rob Elliott his role will be in effect one of consultant to the Branch. As such his time will be costed at $2000 per day so that, in any given year, Rob Elliott shall be available to the union for 75 days per year. Rob Elliott will be based in Melbourne and work from the Melbourne offices of HSU East. The parties shall agree the pattern of hours or days in which Robert Elliott shall be available to do work for the HSU; for example whether on the basis of regular weekly hours, in blocks of days or weeks, or a combination of the two." The appendix was signed, on the same day, by Mr Elliott, Ms Jackson and Mr Williamson. Ms Jackson and Mr Williamson purportedly signed in the same capacities in which they had signed the original agreement. 167 This contract was particularly beneficial to Mr Elliott. At the time the memorandum was signed Mr Elliott was receiving $442.24 per day for his work with the Victoria No 3 Branch. The memorandum increased his daily rate to $2,000. That salary was to increase annually with movements in the consumer price index. Mr Elliott was not required to work to obtain the remuneration provided for under the contract. He was only required to be available to work for up to 75 days per year. Accumulated and proposed long service leave and payment in lieu of sick leave and annual leave were to be paid at the new rate of $2,000 per day. 168 Another curious feature of the agreement was that the provisions relating to the appointment of Mr Elliott to the board of the HESTA Superannuation Fund and his right to retain director's fees required decisions of the National Council or the National Executive of the Union. Neither Mr Williamson nor Ms Jackson had power to confer these entitlements. 169 The HSU East Branch came into existence on 24 May 2010 and continued in existence until it was dissolved by order of this Court on 8 June 2012. An administrator was appointed on 21 June 2012: see Brown v Health Services Union (2012) 205 FCR 548 at 602-614 (Flick J). 170 In the course of his administration the administrator raised questions relating to the employment and payment of Mr Elliott. In November 2012, whilst investigations were still in progress, Mr Elliott asserted that the administrator had repudiated his contract and accepted that repudiation as terminating the contract. Despite the administrator advising Mr Elliott that his employment had not been terminated, Mr Elliott commenced the New South Wales proceeding in this Court. That proceeding was ultimately settled. It was a term of the settlement that the Union pay $40,073 to Mr Elliott. 171 The HSU contended that Ms Jackson had misused her positions in the Union to gain an advantage for Mr Elliott or to cause detriment to the Union. It contended that she had executed the memorandum without authority, that she had done so in breach of the financial governance procedures and that she had purported to bind the Union to make excessively generous payments to Mr Elliott by way of remuneration and other conditions of employment. 172 Ms Jackson denied each of these allegations. It will be convenient to deal with them separately. 173 Ms Jackson sought to justify her execution of the Elliott Memorandum on a number of bases. She asserted that: In executing the memorandum she was acting for and on behalf of the Victoria No 3 Branch and Mr Williamson was acting for and on behalf of the New South Wales Branch. "The execution of the Elliott Memorandum … was the business of the Victoria No 3 Branch and the NSW Branch as branches that were in the process of amalgamating." "… she occupied the office of Secretary of the Victoria No 3 Branch and, after amalgamation, was to occupy the office Executive President of HSU East Branch …" She "genuinely believed that she had power and authority, as Branch Secretary of the Victoria No 3 Branch, one of the three amalgamating branches, to execute the Elliott Memorandum." 174 Each of these defences must be rejected. They fail because Ms Jackson had no authority, in her capacity as Secretary of the Victoria No 3 Branch, to fix the terms and conditions of employment of Mr Elliott as an employee of the, yet to be created, HSU East Branch. This power rested exclusively with the Committee of Management of the new Branch which had yet to be formed: see Rule 52(e). 175 For the same reasons Ms Jackson did not have power to execute the memorandum as Executive President nominate of the HSU East Branch. 176 Ms Jackson did not dispute that she lacked authority to enter into the contract, on behalf of the HSU, in her capacity as National Secretary. Ms Jackson did not report the execution of the contract or the contents of the memorandum to either the National Council or the National Executive of the Union. 177 Ms Jackson sought to defend her position on the additional ground that the HSU East Branch or the State registered union, known as HSU East, had later ratified her conduct. There is no evidence to support her claim of ratification by the HSU East Branch once it was formed. The State registered union was an entity separate from the HSU and could not, even if it had wished to do so, ratified Ms Jackson's conduct as an officer of the HSU. In any event, there was no evidence that it had done so. 178 Under the HSU's Financial Governance Procedures, the National Secretary was authorised to make and/or commit to expenditures within the context of normal operations. The National Secretary was also authorised to make expenditure up to $10,000 provided it was within the annual budget and reported to the Finance Committee as soon as practicable. If not within the annual budget, prior approval by the Finance Committee was required. The procedures required that expenditure over $50,000 must be approved by the National Executive prior to the expenditure being incurred, or, in urgent and unforeseen circumstances, jointly by the National Secretary and the National President, provided that such payments shall be immediately reported to the members of National Executive by email and to the next meeting of the National Executive following the expenditure. 179 The Elliott Memorandum did not deal with a normal operating expense of the Union. The appointment of Mr Elliott was not part of the systematic, repetitive and continuous business of the union. Further, there was no evidence that the financial commitments, made to Mr Elliott, had been provided for in the Union's budget. The terms of the memorandum were not reported by Ms Jackson to the Finance Committee. It was not approved by the Finance Committee. The circumstances in which the memorandum came into existence were neither urgent nor foreseen. Mr Elliott remained employed in the Victoria No 3 Branch and his future employment by the new Branch could have been considered once it had been formed. 180 The terms and conditions of employment of Mr Elliott provided for in the memorandum were significantly more beneficial to him than those which had previously obtained when he was working for the Victoria No 3 Branch. Whether or not these new terms and conditions were "excessive" need not be determined by the Court. Suffice it to say that, had it been a valid contract, the HSU would have been committed to providing Mr Elliott with benefits in excess of $1 million over the four year life of the contract. Such a commitment would have imposed considerable demands on the finances of the Union and, to that extent at least, would have constituted a detriment to it. 181 Once the Branch was formed Ms Jackson kept no records of the days and times that Mr Elliott worked, if, indeed, he did any work. 182 Ms Jackson used her position as an officer of the HSU improperly to gain an advantage for Mr Elliott and, in doing so, caused detriment to the organisation. 183 The Union is prima facie entitled to compensation for the losses incurred by reason of Ms Jackson's conduct. 184 The Union claimed a total loss of $432,725.09. This figure was made up as follows: Mr Elliott's salary between 24 May 2010 and 3 December 2010 - $80,769.36 plus superannuation of $7,269.23. These payments were made by the HSU East Branch. His salary of $262,499.58 plus superannuation of $7,528.92 paid between 4 December 2010 and 31 August 2012. These payments were made by the New South Wales State registered union pursuant to a resolution of the HSU East Branch on November 2010 that "the payment of wages and employment entitlements will as an administrative convenience be undertaken by HSU East on behalf of both entities". Further an earnings report covering the period of July 2011 to August 2012 recorded "the earnings of Elliot paid by the New South Wales Registered Union". His salary of $31,730 plus superannuation of $2,855 paid between 1 September 2012 and 16 November 2012. These payments were made by the Victoria No 3 Branch. The settlement sum of $40,073 paid by the Union to settle Mr Elliott's claim. 185 Mr Neil Bowker has, since February 2013, been the Finance and Services Manager of the Victoria No 3 Branch. He examined the financial records of the Branch both before and after the merger with the New South Wales and Victoria No 1 Branches. These records confirmed that Mr Elliott had been paid a total of $88,038.59 (inclusive of superannuation) in the period between 25 May 2010 and 3 December 2010. The Union contended that the references in the payslips and pay records to the 'Health Services Union – Victorian No 3 Branch' and to the 'Health Services Union – Health Prof' should be interpreted as a reference to the merged branch, i.e. the HSU East Branch. This is because, at that time, the Victorian No 3 Branch had ceased to exist. 186 The Union contended that the New South Wales State registered union had paid Mr Elliott's salary and superannuation entitlements between 4 December 2010 and 31 August 2012 as agent for the Union. It claimed that it had sustained the loss as principal. In the alternative, the Union contended that, on the distribution of the combined assets of the State registered union and the branch in August 2012, it had suffered loss consisting of the diminution in the net equity of the amalgamated branch available for distribution. 187 The State registered union had not sought reimbursement from the HSU at the time of the trial. The HSU did not, therefore, sustain a loss to the full extent of the amounts paid by the State registered union to Mr Elliott. It did, however, suffer some indirect financial loss. This occurred in the course of the demerger of the HSU East Branch in the latter part of 2012. 188 An issue arose in the course of the demerger as to the appropriate distribution of the financial assets of the Branch to the three Branches which were to resume their separate existences. The administrator sought the advice of accountants. The accountants constructed a consolidated profit and loss statement for each of the demerging entities over the period during which the HSU East Branch existed. An attribution process was applied which produced the following assessed notional net asset/liabilities on demerger at 30 June 2012 as follows: The State registered union - $1,258,938 (assets). The New South Wales Branch - $33,300 (assets). Victoria No 1 Branch - $1,439,913 (assets). Victoria No 3 Branch - $1,111,995 (liabilities). The total assets on demerger were, therefore, $1,620,156. 189 During the existence of the HSU East Branch, the Branch and the New South Wales Union were not treated as separate entities for accounting purposes. The financial affairs of the Branch were largely incorporated within the State registered union's ledger. Having examined the accounts the accountant recommended (and the administrator accepted) that the $1,620,156 should be allocated as follows as between the various entities: The State registered union - $126,656 (7.81%). The New South Wales Branch - $3,500 (0.22%). Victoria No 1 Branch - $1,142,212 (70.50%). Victoria No 3 Branch - $347,788 (21.47%). 92.19 % of the available funds were thus allocated to the balance sheets of Branches of the HSU. 190 The HSU argued that, had the unauthorised payments not been made to Mr Elliott by the State registered union, the total sum disclosed by the balance sheet would not have been $1,620,156 but $1,890,184.50 (that is $1,620,156 plus $262,499.58 salary plus $7,528.92 superannuation). It contended that it should be entitled to claim 92.19% of the difference between the two figures, that is, 92.19% of $270,028.50 or $248,939.27. 191 I accept this submission. Had the unauthorised expenditure not been made the amount divided between the State and Federal entities would have differed materially and an additional $248,939.27 would have been available to the Federal entity. Had there been any evidence to suggest that Mr Elliott had made any productive contributions to the Union during the relevant period I would have been minded to discount this sum when calculating compensation. There was, however, no such evidence. 192 Mr Bowker's researches disclosed that the Victoria No 3 Branch had again paid monies to Mr Elliott between 1 September 2012 and 16 November 2012. $34,585 was paid by way of salary and superannuation. 193 Ms Jackson's actions in relation to the execution and giving effect to the Elliott memorandum constituted a misuse of her position as National and Branch Secretary. She contravened s 287 of the FWRO Act and s 182 of the Corporations Act. As a consequence of Ms Jackson's actions in relation to the memorandum, the Union: paid Mr Elliott $80,769.36 in salary and $7,269.23 in superannuation from 24 May 2010 to 3 December 2010. would have been entitled to an additional $248,939.27 on the date of the demerger had the State registered union not made payments to Mr Elliott from 4 December 2010 to 31 August 2012. paid $31,730 in salary and $2,855 in superannuation to Mr Elliott between 1 September 2012 and 16 November 2012. paid $40,073 to settle Mr Elliott's claim. 194 The Union thereby suffered loss. A compensation order of $411,635.86 should be made. THE TOOMEY PEGG MATTER 195 Between 2009 and 2011 a delegate of the General Manager of Fair Work Australia conducted an investigation into various matters relating to the HSU. Following his investigation the delegate formed provisional views that the Union and certain of its officers had contravened provisions of the FWRO Act and the Rules. On 14 December 2011 the delegate signed and despatched three letters. Two of them were addressed to Ms Jackson in her capacity as National Secretary of the Union. The first of the letters addressed to Ms Jackson raised allegations that the Union had contravened provisions of the FWRO Act. The second contained allegations that Ms Jackson had, herself, contravened provisions of the FWRO Act and of the Rules. The third letter was addressed to Mr Williamson. The delegate sought a response from Ms Jackson and Mr Williamson to each of the allegations levelled against them by 20 January 2012. He sought a response from the Union by 27 January 2012. 196 Ms Jackson promptly reported the receipt of the delegate's letter relating to the Union to national officers. She did not, at the same time, advise them that she too had received a letter containing allegations relating to her conduct. The National Executive convened on 19 December 2011 to consider its response to the allegations against the Union. The Executive resolved to engage lawyers to prepare a draft response to the delegate's queries. Ms Jackson said nothing about having received a separate letter relating to her conduct. 197 On 21 December 2011, in the course of a discussion with Mr Brown, then Acting National President, and another national officer, Ms Jackson said that she had received a letter from the delegate raising allegations against her. She did not, however, say anything about retaining lawyers and she dismissed the allegations as being trivial. 198 The National Executive met again on 12 January 2012 to consider the Union's response to the delegate's letter. During a break in the meeting Ms Jackson told Mr Brown that she was also a subject of the delegate's investigation and that she might need separate legal representation. Ms Jackson did not, however, so advise the National Executive. 199 On 14 January 2012 Ms Jackson decided to retain lawyers. She contacted Mr John Trew QC who was, at the time, a consultant to a firm of solicitors, Toomey Pegg. On 17 January 2012 Ms Jackson, or someone acting on her behalf, sent to Toomey Pegg some 250 pages of material by way of instructions. The material included the allegations, a copy of the Union Rules and a draft statement by Ms Jackson. On 18 January 2012 Ms Jackson formally retained Toomey Pegg to act for her at the HSU's expense. The firm immediately sought an extension of the 20 January 2012 deadline for a response. This extension was asked for on the ground that Toomey Pegg had only recently received a very lengthy draft statement prepared by Ms Jackson and that time was required to prepare a detailed response. 200 Toomey Pegg undertook work on Ms Jackson's response between 18 and 24 January 2012. On the latter day Ms Jackson attended the firm's offices for a conference. 201 The National Executive also convened on 24 January 2012. Ms Jackson attended the meeting. She did not advise the meeting about the receipt of the delegate's letter relating to her conduct. Nor did she advise that she had retained lawyers, at the Union's expense, to act for her. The meeting gave further attention to the Union's response to the allegations made against it. 202 Toomey Pegg continued to perform work for Ms Jackson between 25 and 31 January 2012. 203 On 31 January 2012 the firm raised an invoice relating to the work undertaken by it up to that time. 204 On 3 February 2012 Ms Jackson's response was delivered to the delegate. The firm had completed its work. 205 On 7 February 2012 Toomey Pegg sent a second and final invoice to Ms Jackson. 206 The sums claimed in the two invoices totalled $40,882.16. 207 The Finance Committee and the National Executive met again on 17 February 2012. Ms Jackson was present at both meetings. She did not inform either gathering that she had retained Toomey Pegg to prepare her response to the delegate. Nor did she report that the Union had received invoices from Toomey Pegg. 208 The Toomey Pegg invoices remained unpaid in early March 2012. A further invoice was raised. Ms Jackson forwarded that invoice to Mr Brown. Mr Brown, in turn, forwarded it to members of the Finance Committee. 209 At a meeting, held on 15 March 2012, the Finance Committee examined the invoices and determined to refer the question of whether or not they should be paid to the next meeting of the National Executive. 210 That meeting occurred on 29 March 2012. Ms Jackson told the meeting that her decision to retain Toomey Pegg was reasonable in the circumstances. She proposed a resolution ratifying her decision to retain the firm and authorising the payment of the invoices. The meeting did not accept this proposal. Instead, it adopted a resolution which stated that the retainer was unauthorised, that the Union did not accept any liability to pay the fees sought by Toomey Pegg and that payment should not be made. 211 The invoices remained unpaid in November 2012. Toomey Pegg then issued a letter of demand which was accompanied by a "without prejudice" offer to resolve its claim. Ms Jackson was asked by those acting for the HSU to provide any information which might assist the Union in defending the claim. She provided no such information. At that point the Union accepted that it did not have a good defence to the claim and resolved to settle the matter on the terms proposed by Toomey Pegg. The Union paid Toomey Pegg $34,725 to resolve the dispute. 212 The HSU contended that Ms Jackson had misused her ostensible authority as National Secretary to commit the Union to pay Toomey Pegg's fees. She had neither sought nor obtained the approval of the National Executive to retain the firm or pay its fees. 213 Ms Jackson sought to defend herself against the Union's claim under this head on a number of bases. 214 The first was that she had raised the prospect of her seeking independent legal advice at a meeting of national officers on 11 January 2012. She asserted, that, during the meeting, she told the officers that she had received a letter from the delegate, that she considered it appropriate for her to seek legal advice separately from that being obtained by the Union and that, when she raised these matters, no one at the meeting raised any objection. There was no evidence to support Ms Jackson's claims. The evidence went no further than that, after the meeting, Ms Jackson had had an informal discussion with another national officer, Mr Hill. He asked her whether she had received a letter from the delegate containing allegations against her. She said that she had received such a letter and that she was going to respond to it. She said nothing about engaging lawyers. 215 I do not accept that Ms Jackson provided the national officers' meeting with the information to which she refers in her Defence. She does not claim that the national officers provided her with authority to retain Toomey Pegg and, in any event, those officers had no power to grant such authority. Had Ms Jackson wished to obtain authority she could have done so on the following day when the National Executive met. She did not do so. 216 In her Defence Ms Jackson also placed reliance on Rule 32(n) of the Union's Rules which provides that the National Secretary shall "control and conduct the business of the Union" between meetings of the National Executive. This general power does not avail Ms Jackson. She retained Toomey Pegg in her own interests, not those of the Union. There was no need for her to do so between meetings of the National Executive. She had had the opportunity to obtain the necessary authority during meetings of the National Executive on 19 December 2011 and 12 January 2012 but had not done so. She could have advised the National Executive of her decision to engage Toomey Pegg when next it met, on 24 January 2012. She did not do so. 217 Ms Jackson next relied on delegations contained in the Financial Management Policy and Procedures ("FMPP") which had been adopted by the National Executive prior to the relevant events. 218 Clause 2.1 of the FMPP provided that: "The National Secretary is authorised to make and/or commit to expenditures within the context of normal operations and consistent with any policy or program direction issued by the National Executive or National Council." Ms Jackson contended that her decision to retain Toomey Pegg at the Union's expense was made "within the context of normal operations". This contention must be rejected. The requirement that Ms Jackson should respond to various allegations of misconduct, raised by the delegate was anything but "normal". On the contrary it was abnormal. Ms Jackson well knew, at the time at which she engaged Toomey Pegg, that the National Executive had authorised the engagement of other solicitors to act for it in dealing with the allegations to which the delegate had invited a response from the Union and, inferentially, to be responsible for the payment of the fees incurred. The National Executive had convened meetings which had, as their exclusive purpose, the consideration of the Union's response to the delegate. The issues under consideration and, in relation to which, legal advice was being obtained fell well outside any concept of the normal conduct of Union business. 219 Ms Jackson also sought to rely on clause 3.1 of the FMPP. That clause read: "The National Secretary is authorised to make expenditure up to $10,000 on items or services of an extraordinary nature provided it is within the annual budget. Where such expenditures occur, they must be reported to the Finance Committee as soon as practicable and to the National Executive at its next meeting." Reference should also be made to clause 3.2 which provided that: "Expenditure over $10,000 but less than $50,000 on items or services of an extraordinary nature must be approved by the Finance Committee before being incurred and reported to the next meeting of the National Executive." 220 When, on 18 January 2012, Ms Jackson retained Toomey Pegg to act in her interests but at the expense of the HSU, Ms Jackson could not have known the quantum of fees which the firm would charge for carrying out her instructions. In her Defence she asserted that she "genuinely and reasonably believed that the cost of carrying out the Toomey Pegg instructions would be less than $10,000". The soundness of this claim is open to question. The complexity of the task which confronted Toomey Pegg led it to seek an extension of time within which to respond to the delegate on Ms Jackson's behalf. The complexity warranted the attention of senior counsel. It was necessary for the firm to consider 250 pages of material. 221 In any event, even if Ms Jackson reasonably believed, at the time at which she retained Toomey Pegg, that its fees would ultimately be less than $10,000, clause 3.1 did not authorise her to incur the expenditure. It only authorised her to "make" expenditure of an extraordinary nature. In this respect clause 3.1 may be compared with clause 3.2 which requires approval of expenditure of between $10,000 and $50,000 by the Finance Committee before that expenditure is "incurred". Furthermore, even if the words "make" in clause 3.1 and "incurred" in clause 3.2 are to be read in context as being synonymous, the National Secretary's authority, under clause 3.1, is conditioned by the requirement that the relevant expenditure "is within the annual budget" of the Union. There was no evidence which established that this condition had been satisfied. 222 It is also to be noted that any expenditure made under clause 3.1 had to be reported to the Finance Committee as soon as practicable and to the National Executive at its next meeting. Ms Jackson satisfied neither requirement. 223 I accept the HSU's claim that Ms Jackson contravened s 287(1) of the FWRO Act and s 182(1) of the Corporations Act by improperly using her position as National Secretary to commit Union funds in order to secure a personal advantage. She wished to obtain legal advice for her own purposes and from a solicitor of her choosing. She could have, but did not, retain Toomey Pegg at her personal expense. Instead, without authorisation, she used her ostensible authority to commit the Union to pay whatever fees might be charged by Toomey Pegg when acting on her instructions. Ms Jackson had many opportunities to seek formal approval of the retainer or prompt ratification of her actions from the National Executive. The fact that she chose not to do so until late in March 2012 strongly suggests that she considered that, had she sought approval from either the Finance Committee or the National Executive at any earlier stage, that approval would not have been forthcoming. 224 Ms Jackson should pay the HSU $34,725 by way of compensation. CREDIT CARD EXPENDITURE 225 At various times in the course of her employment by the HSU Ms Jackson was authorised to operate three credit card accounts. 226 Between 16 March 2003 and 4 August 2011 she held a Diners Club card. 227 Between 28 January 2004 and 25 June 2009 she held a CBA MasterCard. It was succeeded, on 26 June 2009, by another CBA MasterCard which she held and operated at least until 1 June 2012. It will be convenient to treat these two cards as a single CBA MasterCard. 228 Between 10 September 2003 and 10 April 2005 Ms Jackson held a Gold Citibank MasterCard account. On 11 April 2005 it was succeeded by a Platinum Citibank MasterCard account which Ms Jackson continued to hold until 4 August 2011. It will be convenient to treat the cards on these two accounts as a single Citibank MasterCard. 229 During the time she held these cards she incurred the following expenses which were paid, save for the amount of $11,860, by the Union: Travel expenses - $175,154. Retail expenses - $101,792. Food and alcohol expenses - $19,639. Health and fitness expenses - $5,237. Entertainment expenses - $40,133. 230 These amounts were calculated following an examination, by the HSU, of statements which had been obtained pursuant to subpoenas served on the card suppliers. Travel expenses 231 Between July 2003 and August 2011 Ms Jackson made 24 overseas excursions and 10 trips to domestic destinations. On some of these journeys she was accompanied by a family member. The bulk of the expenditure incurred in relation to these trips was made on airfares and hotel accommodation. 232 The following table identifies the various trips made by Ms Jackson between 2003 and 2011 and the charges made in relation to them. Some of these excursions (or part of them) were funded from sources, such as the NHDA account, apart from the credit cards. In the table double counting is avoided by acknowledging these additional sources and the amounts involved without bringing them to account. The dates of travel are drawn from travel records which were subpoenaed from Qantas Airways and the Department of Immigration and Border Protection. Date Amount Payment to Card (i) July 2003 NZ Holiday 2 July 2003 3,122 Qantas Holidays International Diner's Club 2 July 2003 1,272 Qantas Holidays International Diner's Club 9 July 2003 Melbourne to Christchurch 14 July 2003 115 Hertz Rent-a-Car Head Office, Ch Diner's Club 14 July 2003 Christchurch to Melbourne (ii) The 2003 Gold Coast Holiday 12 September 2003 89 Hyatt Regency Sanctuary Cove Diner's Club 12 September 2003 289 Noosa Village B-shop Diner's Club 21 September 2003 1,548 Avis Rent-A-Car from Maroochydore Airport Diner's Club (iii) The 2003-4 Hong Kong and US Holiday 22 November 2003 1,429 Ted's Camera Stores Diner's Club 5 December 2003 3,807 Jeffrey Jackson flight from Melbourne to Hong Kong and then Hong to JFK Diner's Club 5 December 2003 Melbourne to Hong Kong 29 December 2003 193 Body Map, Tullamarine Citibank MasterCard 30 December 2003 1,586 The Excelsior Hotel, Hong Kong Citibank MasterCard 8 January 2004 3,012 Paramount Hotel New York, New York Diner's Club 8 January 2004 81 Star Market - Brighton US Citibank MasterCard 10 January 2004 38 Resort Direct Dial - USA Citibank MasterCard 11 January 2004 834 Westin Hotel - Copley Place, Boston Diner's Club 12 January 2004 650 1336 Cambridge Massachusetts Citibank MasterCard 13 January 2004 296 Dana Hill Liquors - Cambridge US Citibank MasterCard 13 January 2004 189 Trattoria Il Panino - US Citibank MasterCard 14 January 2004 159 Star Market - Brighton US Citibank MasterCard 16 January 2004 926 1336 Cambridge Massachusetts Citibank MasterCard 17 January 2004 434 Radio Shack Cambridge US Citibank MasterCard 20 January 2004 293 Grafton Street Cambridge US Citibank MasterCard 21 January 2004 829 Harvard Coop Business Allston US Citibank MasterCard 21 January 2004 215 Star Market - Brighton US Citibank MasterCard 21 January 2004 154 The Wine Shop - Brighton US Citibank MasterCard 21 January 2004 83 Gap - The Boston US Citibank MasterCard 23 January 2004 65 Resort Direct Dial - USA Citibank MasterCard 26 January 2004 915 1336 Cambridge Massachusetts Citibank MasterCard 26 January 2004 42 Resort Direct Dial - USA Citibank MasterCard 1 February 2004 25 Resort Direct Dial - USA Citibank MasterCard 2 February 2004 59 Resort Direct Dial - USA Citibank MasterCard 6 February 2004 74 Amtrak Boston South US Citibank MasterCard 9 February 2004 716 Westin Hotels Boston US Citibank MasterCard 10 February 2004 37 Resort Direct Dial - USA Citibank MasterCard 10 February 2004 66 Vacation Phone Citibank MasterCard 11 February 2004 845 Harvard Coop Square # 3 Cambridge US Citibank MasterCard 11 February 2004 61 Resort Direct Dial - USA Citibank MasterCard 13 February 2004 181 Amtrak Boston South US Citibank MasterCard 14 February 2004 1,172 Expedia Travel Citibank MasterCard 16 February 2004 224 Dana Hill Liquors - Cambridge US Citibank MasterCard 17 February 2004 896 1336 Cambridge Massachusetts Citibank MasterCard 18 February 2004 205 Radio Shack Cambridge US Citibank MasterCard 18 February 2004 226 Harvard Coop Square Cambridge US Citibank MasterCard 18 February 2004 359 Uhs Pharmacy Cambridge US Citibank MasterCard 19 February 2004 1,337 The Ups store Cambridge US Citibank MasterCard 20 February 2004 1,742 J. Crew No 542 Boston US Citibank MasterCard 20 February 2004 24 Resort Direct Dial - USA Citibank MasterCard 20 February 2004 744 Union Oyster House Boston US Citibank MasterCard 21 February 2004 452 The Ups store Cambridge US Citibank MasterCard 27 February 2004 1,105 Governors House Hotel Washington DC CBA MasterCard 27 February 2004 166 UPS Store Washington US Citibank MasterCard 1 March 2004 103 Mail boxes etc Albuquerque US Citibank MasterCard 4 March 2004 756 Bellagio Hotel & Casino, Las Vegas US Citibank MasterCard 5 March 2004 Cash withdrawal from NHDA in Las Vegas (676.80) CBA NHDA Account 8 March 2004 Cash withdrawal from NHDA in Seattle (678.89) CBA NHDA Account 8 March 2004 Cash withdrawal from NHDA in Seattle (678.89) CBA NHDA Account 10 March 2004 Cash withdrawal from NHDA in San Francisco (670.51) CBA NHDA Account 11 March 2004 410 Ups San Francisco US Citibank MasterCard 12 March 2004 Cash withdrawal from NHDA in San Francisco (683.29) CBA NHDA Account 12 March 2004 Cash withdrawal from NHDA in San Francisco (686.35) CBA NHDA Account 12 March 2004 167 American San Francisco US Citibank MasterCard 15 March 2004 Cash withdrawal from NHDA in Washington (701.21) CBA NHDA Account 15 March 2004 Cash withdrawal from NHDA in San Francisco (701.21) CBA NHDA Account 15 March 2004 Cash withdrawal from NHDA in Washington (691.71) CBA NHDA Account 19 March 2004 Washington to London 20 March 2004 London to Melbourne 22 March 2004 Dubai to Melbourne The June 2004 Singapore Holiday 10 June 2004 Melbourne to Singapore 16 June 2004 Singapore to Melbourne (iv) The October 2004 Hong Kong Holiday 15 October 2004 Large cash withdrawal from NHDA (8,000) CBA NHDA Account 21 October 2004 Large cash withdrawal from NHDA (5,000) CBA NHDA Account 21 October 2004 525 Balwyn Flight Centre Diner's Club 21 October 2004 Melbourne to Hong Kong 25 October 2004 Cash withdrawal from NHDA in Hong Kong (426.58) CBA NHDA Account 25 October 2004 Cash withdrawal from NHDA in Hong Kong (355.49) CBA NHDA Account 25 October 2004 Hong Kong to Melbourne (v) The April 2005 US Holiday 24 March 2005 4,539 Qantas - Melbourne to Los Angeles and Los Angeles to JFK Diner's Club 24 March 2005 434 Bellagio room, Las Vegas Diner's Club 1 April 2005 Melbourne to Los Angeles 5 April 2005 901 Bellagio Hotel & Casino, Las Vegas US Citibank MasterCard 8 April 2005 Los Angeles to New York 8 April 2005 10 April 2005 1,864 44th Street Cameras & Electronics, New York US Citibank MasterCard 13 April 2005 2,857 Wyndham Hotels 58th Street New York US Citibank MasterCard 17 April 2005 Los Angeles to Melbourne The May 2005 Hong Kong Holiday 11 May 2005 Melbourne to Hong Kong 14 May 2005 Hong Kong to Melbourne The June 2005 Hong Kong Holiday 22 June 2005 Melbourne to Hong Kong 27 June 2005 Hong Kong to Melbourne (vi) The July 2005 Mount Buller Holiday 5 July 2005 1,130 Mercure Grand Mt Buller Diner's Club (vii) The August 2005 Falls Creek Holiday 3 August 2005 13,000 Astra Alpine Lodge Falls Creek Citibank MasterCard 11 August 2005 4,650 Mt Hotham Falls Creek, Falls Creek Citibank MasterCard 15 August 2005 300 Fc Resort Management Falls Creek Citibank MasterCard 15 August 2005 745 Falls Creek Sports - Falls Creek Citibank MasterCard 18 August 2005 4,351 Astra Alpine Lodge Falls Creek Citibank MasterCard (viii) The September 2005 India Holiday 25 August 2005 1,377 Travel Talk International Diner's Club 12 September 2005 Melbourne to Hong Kong 26 September 2005 Hong Kong to Melbourne The December 2005 Singapore Holiday 9 December 2005 Melbourne to Singapore 14 December 2005 Hong Kong to Melbourne (ix) The April 2006 US Holiday 10 March 2006 300 STA Travel Citibank MasterCard 17 March 2006 3,852 STA Travel Diner's Club 17 March 2006 437 STA Travel Diner's Club 17 March 2006 3,570 STA Travel Citibank MasterCard 22 March 2006 Large cash withdrawal from NHDA (4,800) CBA NHDA Account 26 March 2006 365 Alaska A Seattle US Citibank MasterCard 26 March 2006 375 US Airwa Atlanta Citibank MasterCard 27 March 2006 138 United Atlanta US Citibank MasterCard 29 March 2006 Cash withdrawal from NHDA (800)) CBA NHDA Account 30 March 2006 288 STA Travel Citibank MasterCard 4 April 2006 Melbourne to Los Angeles 6 April 2006 2,086 Hitchock Seatle WA Citibank MasterCard 6 April 2006 260 Qfc Seattle WA Citibank MasterCard 7 April 2006 1,430 Twist Seattle WA Citibank MasterCard 20 April 2006 American Airlines – Los Angeles (681.27) CBA NHDA Account 21 April 2006 Wilshire Grand Hotel – Los Angeles (689.10) CBA NHDA Account 22 April 2006 439 Holiday Inn - City Centre Los Angeles MasterCard 20 April 2006 Los Angeles to Melbourne (x) The June 2006 North Queensland Holiday 8 June 2006 2,814 Jetstar flights Diners 15 June 2006 3,136 Avis Australia Citibank MasterCard 20 June 2006 503 Qantas Citibank MasterCard 20 June 2006 55 Qantas Citibank MasterCard 23 June 2006 Sydney to Mackay 26 June 2006 4,151 Raywhite Port Douglas Citibank MasterCard 27 June 2006 180 Sun Palm Express Port Douglas Citibank MasterCard 30 June 2006 522 Coles Port Douglas Citibank MasterCard 30 June 2006 72 Vintage Cellars Port Douglas Citibank MasterCard 1 July 2006 Mackay to Brisbane 1 July 2006 Brisbane to Sydney 3 July 2006 4,082 Sheraton Hotels Port Douglas Citibank MasterCard 8 July 2006 656 Sheraton Hotels Port Douglas Citibank MasterCard 10 July 2006 Bi-Lo (35.04) CBA NHDA Account 10 July 2006 Cash withdrawal from NHDA (100.00) CBA NHDA Account 28 July 2006 2,436 Port Douglas Car Hire Citibank MasterCard The August 2006 European Holiday 8 August 2006 $6000 Large cash withdrawal from NHDA CBA NHDA Account 15 August 2006 $3000 – Large cash withdrawal from NHDA CBA NHDA Account 18 August 2006 $5000 – Cash deposit into Westpac account Westpac 25 August 2006 Melbourne to Hong Kong 29 August 2006 Hong Kong to London 29 August 2006 London to Geneva 9 September 2006 Paris to London 9 September 2006 London to Melbourne (xi) The December 2006 Hong Kong Holiday 29 November 2006 826 STA Travel Citibank MasterCard 30 November 2006 Cash withdrawal from NHDA (5,500) CBA NHDA Account 30 November 2006 Melbourne to Hong Kong 4 December 2006 321 Wotif.com Abingdon Gb Citibank MasterCard 14 December 2006 1,983 Jia Boutique Hotel Hong Kong Citibank MasterCard 14 December 2006 Hong Kong to Melbourne (xii) The March 2007 European Holiday 22 March 2007 2,810 Airfare for Stephanie Jackson from Melbourne to Sydney and then Sydney to France Diner's Club 22 March 2007 2,110 Airfare for Stephanie Jackson to France Diner's Club 26 March 2007 Sydney to Frankfurt 27 March 2007 Frankfurt to London 27 March 2007 London to Paris 18 April 2007 Paris to Singapore 19 April 2007 Singapore to Melbourne (xiii) May 2007 US Holiday 4 May 2007 Melbourne to Los Angeles 4 May 2007 Los Angeles to JFK 12 May 2007 1,094 Hotel QT New York Citibank MasterCard 17 May 2007 1,996 Sorrento Hotel Seattle US Citibank MasterCard 16 May 2007 Los Angeles to Melbourne 18 May 2007 Los Angeles to Melbourne July 2007 North Queensland Holiday 3 July 2007 Cashed cheque - $4800 - BCOM meeting Cheques 6 July 2008 Melbourne to Cairns 13 July 2008 Cairns to Melbourne (xiv) August 2007 Falls Creek Holiday 6 August 2007 3,366 Falls Creek Chamber of Falls Creek Citibank MasterCard 10 August 2007 365 Café Maximum Falls Creek Citibank MasterCard (xv) August 2007 North Queensland Holiday 29 August 2007 Port Douglas 29 August 2007 451 Jetstar – Sydney to Cairns – Cairns to Melbourne Diner's Club 29 August 2007 957 Qantas – Melbourne to Sydney – Sydney to Cairns Diner's Club 4 September 2007 147 The Sheraton Mirage, Port Douglas CBA MasterCard (xvi) Sydney Labour Day 2008 Holiday 6 March 2008 Large cash withdrawal from NHDA (6,000) CBA NHDA Account 6 March 2008 483 Need It Now Citibank MasterCard 6 March 2008 595 Qantas Citibank MasterCard 8 March 2008 1,000 Contemporary Hotels Darlinghurst Citibank MasterCard (xvii) June 2008 Hong Kong Holiday 1 May 2008 830 Qantas Citibank MasterCard 1 May 2008 781 Qantas Citibank MasterCard 1 May 2008 583 Wotif Citibank MasterCard 1 May 2008 723 Wotif Citibank MasterCard (xviii) July 2008 North Queensland Holiday 4 July 2008 Cashed cheque – no BCOM meeting (5,300) Cheque 6 July 2008 Melbourne to Cairns 7 July 2008 No Five – Port Douglas (275.00) CBA NHDA Account 8 July 2008 773 Virgin Blue – Cairns to Sydney – Sydney to Cairns Diner's Club 10 July 2008 414 Avis Rent a car - Cairns Airport Diner's Club 10 July 2008 235 Wotif com Pty Ltd Diner's Club 13 July 2008 4,160 Rydges Sabaya Resort Diner's Club 13 July 2008 Cairns to Melbourne 14 July 2008 Your Eye Dentity – Port Douglas (189.00) CBA NHDA Statement (xix) November 2008 US – Hong Kong Holiday 6 October 2008 560 Carrion Accessories at Tullamarine Citibank MasterCard 9 October 2008 Cashed cheque – BCOM meeting (8,000) Cheque 15 October 2008 391 Carrion Accessories Diner's Club 24 October 2008 435 Southwest – US Citibank MasterCard 24 October 2008 3,380 Qantas Citibank MasterCard 28 October 2008 Melbourne to Los Angeles 30 October 2008 666 Southwest US Citibank MasterCard 3 November 2008 601 The Ups Store Albuquerque USA Citibank MasterCard 5 November 2008 Baltimore to London 6 November 2008 London to Hong Kong 8 November 2008 548 Yunyichajugongyipindia Shenzen Cn Citibank MasterCard 8 November 2008 529 Zhuyufushi Shenzen Cn Citibank MasterCard 9 November 2008 429 Gordano Limited Hong Kong Citibank MasterCard 9 November 2008 354 Sz Luohu Dc Anny Shop Shenzen Cn Citibank MasterCard 9 November 2008 406 Sz Luohu Tiantian Groc Shenzen Cn Citibank MasterCard 10 November 2008 1,427 The Excelsior Hotel Hong Kong Diner's Club 10 November 2008 1,090 Nuance Watson Sound and Vision, Hong Kong Diner's Club 10 November 2008 Hong Kong to Melbourne 11 November 2008 583 Fed Ex Citibank MasterCard The March 2009 Hong Kong holiday 4 March 2009 Large cash withdrawal (7,500.00) CBA NHDA Account 6 March 2009 Melbourne to Hong Kong 11 March 2009 Hong Kong to Melbourne The April 2009 Hong Kong Holiday 27 March 2009 Cashed cheque – BCOM meeting Cheques 8 April 2009 Melbourne to Hong Kong 14 April 2009 Hong Kong to Melbourne The June 2009 Hong Kong Holiday 3 June 2009 Melbourne - Hong Kong 9 June 2009 Hong Kong to Sydney (xx) The September 2009 Gold Coast Holiday 15 September 2009 Melbourne to Gold Coast 15 September 2009 414 Jonday Holdings Pty Ltd, Thrifty, Coolangatta Citibank MasterCard 17 September 2009 829 Sheraton Mirage Resort Main Beach Gold Coast Queensland Citibank MasterCard 17 September 009 Gold Coast to Melbourne (xxi) The October 2009 Hong Kong Holiday 16 October 2009 Large cash withdrawal from NHDA (5,000.00) CBA NHDA Account 22 October 2009 Large cash withdrawal from NHDA (3,500.00) CBA NHDA Account 29 October 2009 Large cash withdrawal from NHDA (2,000.00) CBA NHDA Account 29 October 2009 Melbourne to Hong Kong 29 October 2009 427 Wotif.com Citibank MasterCard 3 November 2009 1,822 The Excelsior Hotel, Causeway Bay Hong Kong Citibank MasterCard 3 November 2009 Hong Kong to Melbourne (xxii) The April 2010 Hong Kong Holiday 15 March 2010 4,068 Qantas Citibank MasterCard 19 March 2010 576 Flora Floriculture Ltd, Hong Kong Citibank MasterCard 25 March 2010 6,236 Qantas Citibank MasterCard 9 April 2010 Cashed cheque – BCOM meeting (9,400) Cheques 10 April 2010 Melbourne to Hong Kong 16 April 2010 Hong Kong to Melbourne (xxiii) The August 2010 European Holiday 17 June 2010 6,896 Qantas CBA MasterCard 18 August 2010 8,382 Qantas Citibank MasterCard 18 August 2010 159 Wotif com Pty Ltd Citibank MasterCard 25 August 2010 1,400 Wotif.com Hotels Milton Citibank MasterCard 26 August 2010 891 Wotif.Com purchase in Euros CBA MasterCard 26 August 2010 Sydney to London 30 August 2010 London to Athens 18 September 2010 Paris to Miami 18 September 2010 Miami to Las Vegas 29 September 2010 Las Vegas to Los Angeles 1 October 2010 Los Angeles to Melbourne The December 2010 US Holiday 29 December 2010 Melbourne to Los Angeles 29 December 2010 Los Angeles to New York (xxiv) The July 2011 US Holiday 21 July 2011 Large cash withdrawal (2,100.00) CBA NHDA Account 22 July 2011 Melbourne - Los Angeles 22 July 2011 Los Angeles to New York 4 August 2011 1,015 Ebookers, an amount paid in Pound Sterling Citibank MasterCard 17 August 2011 London to Hong Kong 21 August 2011 Hong Kong to Melbourne TOTAL 175,154 233 The HSU did not allege that Ms Jackson used Union funds to pay for all of the holidays taken by her during the relevant period. Some, such as the May 2005 Hong Kong Holiday, are included in the table because they disclose dates on which she was absent from work on holidays. This is relevant to a related claim for overpayment of wages which will be dealt with separately later in these reasons. 234 The alleged holidays on which the Union contends its funds were spent have been identified using Roman numerals. This has been done because, in her Defence, Ms Jackson refers to the trips by these numbers. 235 In her Defence Ms Jackson admitted that some of these trips, such as the European journey undertaken in August 2010, were "genuine" holidays. Some, such as the 2003 trip to New Zealand were described as holidays "with work component". Others, such as the trip to France in March 2007, were said to be "within annual travel entitlement". No specific work-related activity was said to have occurred on such trips and this may be understood as an implicit admission that these were holiday trips. 236 In paragraph 128 of her Defence Ms Jackson dealt specifically with each of the alleged holidays which the HSU alleges were taken, in whole or in part, at Union expense. She pleaded that: "Referring to the list in paragraph 141 of the Further Amended Statement of Claim, Jackson says from her recollection, unaided by Victoria No 3 Branch financial records or BCOM minutes: (a) In relation to trip (iii), in 2004 [she] won a US State Department/NSW Trades & Labour Council sponsorship to attend the Harvard Train (sic) Union Training Program, the premiere professional development course for union officials in the world. The BCOM approved her attendance at that program and associated expenses not covered by the sponsorship. Time on the Program was properly treated as work time, not leave. Ms Jackson says that she was also entitled to spend money in accordance with the BCOM HESTA Fees Approval the Contractual Travel Entitlement in relation to that travel. Ms Jackson graduated from the Harvard course, delivering the graduation speech on behalf of the class. (b) In relation to trips (vii) and (xiv), the expenses were work-related and represent the costs associated with a seminar and team-building exercise for senior officers and employees of both the Victoria No 1 and Victoria No 3 Branches and subsequently approved as properly work-related. (c) In relation to trip (viii), the trip was work-related and involved a series of meetings with US union officials. The trip was expressly authorised by the Victoria No 3 Branch BCOM and expenditure was supported, not only by that approval, but also by the BCOM HESTA Board Fees Approval and or the Annual Travel Entitlement. (d) In relation to trip (ix), in 2006 with the approval of the Victoria No 3 Branch BCOM, Ms Jackson travelled to the US as a representative of HESTA to attend an advisory board meeting of one of HESTA's main investment managers. HESTA has a policy that allowed the cost of the business class fare to which the board member was entitled to be applied against two economy tickets to facilitate partner or family member to travel. Ms Jackson took her daughter Stephanie with her pursuant to that policy. The flights were charged to one of the three Victoria No 3 credit cards but then reimbursed by HESTA. Other expenditure was supported by the BCOM HESTA Board Fees Approval and or Annual Travel Entitlement. (e) In relation to trip (x), the expenses were incurred in relation to a staff in-service retreat and work-related and was authorised and approved by the Victoria No 3 Branch BCOM with expenditure also supported by BCOM HESTA Board Fees Approval. (f) In relation to trip (xii), the trip was within the Annual Travel Entitlement. (g) In relation to trip (xv), the travel was work-related and involved Jackson travelling to provide industrial representation to members working in the aboriginal health service and in relation to industrial issues involving radiographers. (h) In relation to trip (xvi), the travel related to Jackson's attendance at a HREA conference at which she delivered an address to health professionals. (i) In relation to trip (xvii), expenses associated with the trip were supported by the Annual Travel Entitlement. (j) In relation to trip (xviii), the travel was work-related and to a staff development workshop for a number of Victoria No 3 Branch staff, was approved by the BCOM with expenditure covered by that approval and/or covered by the BCOM HESTA Board Fees Approval. (k) In relation to trip (xix), in 2008, the approval of the Vic 3 Branch BCOM, Ms Jackson travelled to the US to work on the Obama campaign. Many unions send staff or officials to work on a US presidential campaign to obtain the invaluable experience, directly useful to a union operating in the contemporary labour movement, that can be gained in that fashion. Ms Jackson was not on leave when she was working on the Obama (sic). Pursuant to the BCOM resolution approving her trip to the US for that purpose, the trip counted as work time. Expenditure also supported by BCOM HESTA Board Fees Approval and or the Annual Travel Entitlement. (l) In relation to trip (xx), the expenses were incurred in connection with Jackson's attendance at a work-related conference, approved by the Victoria No 3 Branch BCOM. (m) In relation to trip (xxi), the expenditure related to a work-related conference attended by a number of Victoria 3 Branch staff and covered by the BCOM HESTA Board Fees Approval. (n) In relation to trips (xxiii) and (xxiv), the expenditure relied upon by the Union was supported by the Annual Travel Entitlement. (o) Ms Jackson cannot now recollect with any certainty the work related purpose of the trips (i), (ii), (iv), (v), (vi), (xi) and (xiii)." 237 A number of observations may be made about these claims. The first is that they are unsupported by evidence. The next is that they are, generally speaking, lacking in detail. Trips (vii) and (xiv) to Falls Creek are said, in paragraph 128(b) of Ms Jackson's Defence, to have been work-related. These expenses were said to be related to "a seminar and team-building exercise for senior officers and employees of both the Victoria No 1 and Victoria No 3 Branches …". The officers are not identified. The nature of the team-building "exercise" is not explained. Similarly, trip (xv) to Port Douglas is said, in paragraph 128(g), to have related to the provision, by Ms Jackson, of "industrial representation to members working in the aboriginal health service" and to "industrial issues involving radiographers". The aboriginal health service concerned is not identified. Nor is its location. No details of the industrial issues affecting radiographers is given. Nor is there any explanation as to why Ms Jackson was required to provide advice in relation to those issues. The trip lasted for a week. No attempt is made to explain why the work-related activities took so long. 238 Trip (ix) to the United States in 2006 was made, according to Ms Jackson, to attend an advisory board meeting of one of HESTA's main investment managers. The venue and the timing of the meeting are not provided. The trip extended over six weeks. No attempt is made to explain how much of this period was devoted to the meeting. A significant part of trip (xix) to "work on the Obama campaign" was spent in London and Hong Kong. I leave aside the questions of how working on such a presidential campaign in the United States would be "directly useful to a union operating in the contemporary labour movement" and what part Ms Jackson played in the campaign. 239 Ms Jackson does not seek to justify many of the trips as being work-related. Rather, she seeks to justify them pursuant to alleged approvals by either the Branch Committee of Management or the National Executive. More specifically, she claims that the trips had been undertaken: "pursuant to the BCOM HESTA Board Fees Approval …"; "pursuant to the Annual Travel Entitlement …"; and "as part of approved annual leave with expenditure during the trip authorised by the BCOM HESTA Board Fees and or the Annual Travel Entitlement." 240 The "BCOM HESTA Board Fees Approval" was allegedly given in 1999 by the Branch Committee of Management of the Victoria No 3 Branch. It was said to be an allowance which she was permitted to spend at her discretion. The amount of the allowance was equal to board fees which were payable to her as a director of the HESTA superannuation fund. 241 The "Annual Travel Entitlement" was said to have arisen from a decision made, in late 2002, by the Committee of Management of the Victoria No 3 Branch. It was expressed by Ms Jackson, in her Defence, to be "an entitlement to spend up to $28,000 per annum on travel for conference and sabbatical purposes, which travel counts as time at work for leave entitlement purposes, including authority to expend monies on the costs of travel for accompanying family members." 242 Ms Jackson asserted an entitlement to the payment of these allowances both during and after her employment within the Branch. 243 There was no evidence before the Court to support the claim that these allowances had been granted by the Branch Committee of Management. Ms Gountras had no knowledge of any of the resolutions pursuant to which these allowances were granted. She deposed that: "I have no recollection of attending a meeting where the BCOM resolved to approve Ms Jackson spending an amount of approximately $28,000 per year on Union credit cards or otherwise on travel. Whilst I may have been absent from a meeting where such a resolution was passed, I would have remembered a resolution that agreed to pay for travel for 'accompanying family members'. Such an unusual inclusion would strike me as odd. I would also have remembered a resolution that allowed Ms Jackson to go on various travels and have that travel 'count as time at work for leave entitlement purposes'. Again that is the sort of arrangement that I would remember as it appears to allow Ms Jackson to go on holidays and for the holidays not to be taken from her annual leave. I also do not have any recollection of being told about such a resolution being passed by the BCOM." 244 There was also other evidence which rendered it unlikely that any such allowances had been granted. The granting and payment of such allowances were not reported in the Union's accounts between 2000 and 2010 as forming part of Ms Jackson's remuneration. An examination of the minutes of the Branch Committee of Management between 2008 and 2010 disclosed no mention of any such allowances. In 2010 Ms Jackson's salary was reviewed by an external consultant. In order for the consultant to provide advice it was necessary for her to be provided with details of Ms Jackson's existing remuneration. Documentary exchanges occurred in relation to this matter. None of them disclosed the receipt by Ms Jackson of any allowances. It is also notable that Ms Jackson did not disclose receipt of any of the alleged allowances as income in her taxation returns for the financial years between 2003 and 2011. 245 Ms Jackson also contended that each trip was "expressly approved by the BCOM and or the National Executive." She provided no evidence to support this assertion. To the extent that it relates to the Committee of Management of the Victoria No 3 Branch, Ms Gountras's evidence was that no such approvals were given by that body. 246 I accept the HSU's contention that these expenses were incurred by Ms Jackson on holidays or to facilitate travel by her for personal purposes. 247 Ms Jackson should pay the HSU $175,154 by way of compensation. Retail expenses 248 The retail expenses were incurred at large department stores such as Myer and David Jones, electrical, computer and camera stores, stores which sold clothing, shoes, accessories and children's wear and at home ware and furniture outlets. There were other purchases at a party warehouse and car dealerships. 249 The cards were used at the Myer and David Jones stores as follows: Date Card Amount Outlet 22 November 2003 Diner's Club 474 Myer Melbourne 10 November 2004 Citibank MasterCard 100 Myer Melbourne 25 November 2004 Diner's Club 203 Myer Melbourne 26 December 2004 Citibank MasterCard 3,000 Myer Megamart Chadstone 26 December 2004 Diner's Club 4,000 Myer Megamart Waverley 29 December 2004 Diner's Club 4,154 Myer Megamart Waverley 19 December 2005 Citibank MasterCard 2,400 Myer Melbourne 20 December 2005 Citibank MasterCard 500 Myer Melbourne 30 July 2006 Diner's Club 2867 Myer Doncaster 19 December 2006 Citibank MasterCard 1600 Myer Doncaster 31 December 2007 CBA MasterCard 99 Myer Doncaster 5 April 2010 CBA MasterCard 558 Myer Sydney 10 November 2004 Citibank MasterCard 321 David Jones Melbourne 8 May 2006 Diner's Club 89 David Jones Melbourne 26 March 2008 Diner's Club 200 David Jones Melbourne TOTAL $20,565 250 Another group of expenses was incurred at retail outlets which sold electrical goods, computer equipment and cameras. The cards were used as follows: Date Card Amount Outlet 15 March 2003 Diner's Club 1,098 Harvey Norman Electrical 17 November 2003 Diner's Club 3,260 Tasman AV Pty Ltd 15 December 2003 Citibank MasterCard 325 Harvey Norman Electrical 10 July 2004 Citibank MasterCard 960 Betta Electronics Pty Ltd 23 January 2007 Citibank MasterCard 670 Camberwell Electrical 17 October 2007 CBA MasterCard 946 Clive Peters Electrical 21 April 2008 Citibank MasterCard 1,070 JB Hi-Fi Essendon 21 July 2008 Citibank MasterCard 3,514 Camberwell Electrical 15 April 2004 Citibank MasterCard 66 Ted's Cameras Melbourne 20 May 2004 Citibank MasterCard 84 Ted's Cameras Melbourne 3 December 2004 Citibank MasterCard 69 Ted's Cameras Melbourne 6 May 2005 Citibank MasterCard 5,800 Next Byte Apple Store 11 September 2005 Diner's Club 2,684 Michael's Camera & Video 11 September 2005 Diner's Club 1,249 Ted's Cameras Melbourne 7 November 2007 Citibank MasterCard 5,999 Dell Computer Pty Ltd 22 March 2010 Citibank MasterCard 648 National On-Line Geographic 22 November 2008 Citibank MasterCard 9,100 Apple Store, Chadstone 30 June 2009 CBA MasterCard 4,000 Apple Computers, Sydney 30 June 2009 CBA MasterCard 879 Apple Computers, Sydney 11 June 2010 CBA MasterCard 1,156 Progressive Radio, Retravision TOTAL $43,577 251 A third group of retail purchases was made at a variety of businesses including some selling children's toys, baby wear and home wares. These were: Date Card Amount Outlet 29 September 2004 CBA MasterCard 270 Poppyshop – dolls & toys 9 March 2007 CBA MasterCard 255 Poppyshop 9 October 2004 Citibank MasterCard 25 L&L Shoes 10 March 2007 CBA MasterCard 322 Seed Clothing Store 30 September 2003 Citibank MasterCard 200 Crumpler, bags & accessories 19 February 2006 Citibank MasterCard 118 Smiggle 25 February 2006 Citibank MasterCard 84 Smiggle 17 June 2006 Citibank MasterCard 79 Smiggle 15 September 2006 Citibank MasterCard 107 Smiggle 30 September 2006 Citibank MasterCard 66.10 Smiggle 21 January 2007 Citibank MasterCard 118 Smiggle 5 August 2007 CBA MasterCard 90 Smiggle 24 September 2009 Citibank MasterCard 139 Baby Stitch 6 May 2010 Citibank MasterCard 1,439 Baby Bunting TOTAL $3,312.10 252 A fourth group of retail purchases was made at businesses selling, home wares, furniture and party goods. These purchases were: Date Card Amount Outlet 21 December 2005 Citibank MasterCard 90 Bellbird Garden Design 9 June 2006 Citibank MasterCard 350 Enjo Pty Ltd 16 June 2006 Citibank MasterCard 880 Enjo Pty Ltd 24 November 2004 Citibank MasterCard 81 Kleen Design 17 November 2005 Citibank MasterCard 213 Kleen Design 25 May 2006 CBA MasterCard 1,235 Kleen Design 19 September 2007 Citibank MasterCard 1,290 Kleen Design 8 October 2007 CBA MasterCard 238 Minimax 12 August 2010 Citibank MasterCard 1,800 Vintage Posters Only 13 October 2010 Citibank MasterCard 1,000 Vintage Posters Only 15 October 2010 Citibank MasterCard 255 The Frame Shop 20 June 2004 CBA MasterCard 160 Lombard's Party Warehouse 10 December 2004 Citibank MasterCard 379 Lombard's Party Warehouse 29 December 2005 Citibank MasterCard 192 Lombard's Party Warehouse 8 December 2004 Citibank MasterCard 330 The House of Christmas 7 December 2010 CBA MasterCard 945 The House of Christmas 14 August 2004 CBA MasterCard 300 The Rock Framing Studio 8 October 2007 CBA MasterCard 133 The Works – Bed, Bath and Table 25 December 2007 CBA MasterCard 89 RG Madden Giftware 16 June 2008 Citibank MasterCard 679 Metropolitan Museum Art Shop 23 August 2008 Citibank MasterCard 1,915 Compleat Interiors 30 January 2009 Citibank MasterCard 4,636 Lawson Menzies, Annandale, Fine Art Auctioneers 10 February 2009 Citibank MasterCard 1,650 Compleat Interiors TOTAL $18,840 253 A final group of purchases was made at car dealerships and at a shop which sold luxury watches and pens. These purchases were: Date Card Amount Outlet 10 February 2006 Diner's Club 420 Mont Blanc – luxury watches & pens 21 September 2006 Diner's Club 440 Mont Blanc 2 June 2007 Diner's Club 5,000 Silverstone Jaguar 8 December 2009 Citibank MasterCard 1,149 Silverstone Jaguar 31 March 2010 Citibank MasterCard 2,985 Silverstone Jaguar 23 March 2011 Citibank MasterCard 2,320 Silverstone Jaguar 7 October 2007 CBA MasterCard 641 CR Camberwell 15 February 2007 Citibank MasterCard 650 Paypal 29 December 2010 Diner's Club 1,893 Downtown Duty Free TOTAL $15,498 254 In her Defence Ms Jackson pleaded that each of the retail expenses was "work related, properly incurred and properly approved." She specifically denied that any of the purchases was for personal purposes and had, improperly, been paid for with Union funds. 255 While making the general claim that the various retail expenses were "work related" Ms Jackson did not descend to any particularity in respect to the individual transactions. It is difficult to imagine that the HSU stood in need of $20,000 worth of goods of a kind normally sold in major department stores. Equally difficult to appreciate is why the Union would have need of cameras and electrical goods or babywear. Were it to be asserted that such items as might be purchased at such outlets were needed for staff gifts questions would arise as to the number of such purchases having regard to the size of the Branch office staff and questions would also arise as to the propriety of using members' funds to purchase staff gifts. There was, in any event, no approval of these purchases (or any of them) by the Branch Committee of Management or the National Executive. This is a matter to which I will return. Food and alcohol purchases 256 Between 2004 and 2008 Ms Jackson used the credit cards on at least 15 occasions to make purchases from supermarkets and liquor stores near her home. In addition large amounts were spent at liquor and grocery outlets between 2003 and 2010. 257 Purchases in the former category were: Date Card Amount Outlet 20 June 2004 CBA MasterCard 441 Safeway Balwyn 16 August 2004 Citibank MasterCard 200 Coles Balwyn 19 March 2005 Citibank MasterCard 342 Coles Box Hill 18 June 2005 Citibank MasterCard 904 Safeway Liquor Balwyn 30 December 2005 Citibank MasterCard 729 Safeway Balwyn 12 August 2006 Diner's Club 630 Safeway Balwyn 27 December 2006 Citibank MasterCard 707 Safeway Balwyn 8 October 2007 CBA MasterCard 443 Safeway Balwyn 30 May 2008 Citibank MasterCard 603 Safeway Balwyn 30 May 2008 Citibank MasterCard 65 Safeway Liquor 15 June 2008 Diner's Club 206 Coles Balwyn 21 August 2010 CBA MasterCard 802 Safeway Balwyn 18 June 2005 Citibank MasterCard 904 Safeway Liquor Balwyn 30 May 2007 Citibank MasterCard 740 Estate Cellars Balwyn 15 November 2008 Citibank MasterCard 200 Safeway Liquor Balwyn TOTAL $7,916 258 Larger liquor and food purchases were: Date Card Amount Outlet 6 September 2003 Diner's Club 752 Purvis Wine Cellars 29 October 2004 Diner's Club 764 McCoppins 9 December 2004 Citibank MasterCard 361 Brunetti Cakes 9 December 2004 Citibank MasterCard 564 Marazits Bros Delicatessen 5 December 2004 Diner's Club 550 Dan Murphy's Kew 21 December 2005 Citibank MasterCard 1,071 Wine Clearance Warehouse 20 December 2006 Citibank MasterCard 743 McCoppins 8 November 2007 Citibank MasterCard 1,080 Vintage Cellars 24 November 2007 CBA MasterCard 1,682 Purvis Wine Cellars 23 May 2008 Citibank MasterCard 303 Cloud Wine Cellars 24 October 2008 Citibank MasterCard 464 Vintage Cellars 25 October 2008 Citibank MasterCard 353 Estate Cellars Balwyn 8 November 2010 CBA MasterCard 1,162 Costco Supermarket 3 December 2010 CBA MasterCard 976 Costco Supermarket 21 December 2010 CBA MasterCard 898 Vintage Cellars TOTAL $11,723 259 Ms Jackson contended, in her Defence, that each of the food and alcohol purchases was "work related, properly incurred and properly approved." She denied that any of them was made for personal purposes or had, improperly, been paid for from Union funds. 260 The purchases in the first group were made at premises close to Ms Jackson's then residence. In the absence of evidence to the contrary, I consider it more likely than not that Ms Jackson made the former category of purchases for domestic purposes. The number and the monetary amount of liquor purchases and the absence of any evidence which suggested that consumption occurred at Union functions makes it difficult to conclude that any of the second group of purchases was made for Union purposes. I do, however, consider it to be appropriate for there to be a discount to allow for the possibility that some of the food and liquor, purchased using Ms Jackson's credit cards, was used at events conducted under the auspices of the Union. I would reduce the total claim by $5,000. Health and fitness expenses 261 Between 2004 and 2008 Ms Jackson used some of the credit cards to pay for services and equipment from gymnasia and health facilities. 262 These payments were as follows: Date Card Amount Outlet 17 June 2004 CBA MasterCard 605 Beach House Fitness 7 October 2005 Citibank MasterCard 2,240 Space Health Clubs 30 September 2006 Citibank MasterCard 529 Aroma Science Pty Ltd 10 July 2007 Citibank MasterCard 430 Treadmill Hire and Sale 4 October 2007 Citibank MasterCard 1,065 Treadmill Hire and Sale 31 May 2008 Citibank MasterCard 368 Skintrition Day Spa TOTAL $5,237 263 In her Defence Ms Jackson said that all of these expenses had been "work related, properly incurred and properly approved ...". She said further that these expenses "related to other staff and were expenses incurred pursuant to express BCOM approval in relation to a staff health and well-being programme". She also asserted that the treadmills had been purchased for the Branch office for health purposes and that the expenditure had been approved by the Branch Committee of Management. There was no evidence to support these claims. Entertainment expenses 264 Ms Jackson also expended large sums at restaurants and bars in and around Melbourne. 265 Some of the restaurants were described by the HSU as "hatted" or "upmarket". Others were less expensive. 266 The "hatted" restaurants at which the cards were used were: Date Card Amount Outlet 14 December 2003 Citibank MasterCard 14,000 Fenix Restaurant 27 September 2008 Citibank MasterCard 2,200 Press Club Restaurant and Bar 10 November 2004 Diner's Club 400 Sarti Restaurant 5 June 2005 Citibank MasterCard 750 Sarti Restaurant 19 August 2005 Citibank MasterCard 280 Sarti Restaurant 20 October 2006 Citibank MasterCard 120 Sarti Restaurant 19 December 2006 Citibank MasterCard 1,470 Sarti Restaurant 7 December 2006 Citibank MasterCard 500 Sarti Restaurant 15 August 2007 CBA MasterCard 180 Sarti Restaurant 26 March 2008 Diner's Club 601 Sarti Restaurant 8 May 2008 Citibank MasterCard 199 Sarti Restaurant 27 June 2008 Citibank MasterCard 326 Sarti Restaurant 22 December 2009 Citibank MasterCard 1,190 Sarti Restaurant 24 July 2004 CBA MasterCard 743 Café Distasio TOTAL $22,959 267 Other restaurants attended by Ms Jackson were: Date Card Amount Outlet 25 June 2008 Citibank MasterCard 550 Sharkfin Inn Restaurant 7 August 2006 Citibank MasterCard 1,550 The Undertaker Restaurant 6 February 2007 Citibank MasterCard 520 Italian Restaurant 14 November 2008 Citibank MasterCard 833 Town Hall Hotel 21 July 2010 Citibank MasterCard 480 Syracuse Restaurant 26 November 2010 CBA MasterCard 450 Churasco Restaurant 19 December 2003 Citibank MasterCard 859 Village City Centre 20 December 2005 Citibank MasterCard 1,605 Village City Centre TOTAL $6,847 268 The HSU abandoned claims in relation to expenditure on food and beverages incurred at the Lincoln Hotel in Carlton and the Commercial Travellers Association Business Club in Sydney. These were venues used regularly by Union members on social occasions or for accommodation. 269 Ms Jackson defended the remaining claims on the ground that each of the purchases was "work related, properly incurred and properly approved". She expressly denied that the purchases had been made for her personal use or had improperly been paid for from Union funds. 270 Again, Ms Jackson did not descend to any particularity in seeking to establish that each of these restaurant bills arose from work-related entertainment. Nor was there any evidence to support a claim that restaurant entertainment for Union purposes had been authorised by the relevant Branch Committee of Management either generally or in respect of particular occasions. 271 During the period in which these entertainment expenses were incurred Ms Jackson was the holder of either or both offices of the National Secretary and the Secretary of the Victoria No 3 Branch. I am prepared to assume in her favour (and I did not understand the HSU to contend otherwise) that some of these expenses might be justified under Rules 36(b) and 60(d) as being reasonably incidental to the general administration of the Union or the Branch. A discount of 30 percent of this claim should be made. The "properly approved" Defence 272 In the defences relied on by Ms Jackson in respect to particular categories of expenditure, she advanced a defence that each purchase had been "properly approved". These approvals had been obtained, she said in her Defence, from the Branch Committee of Management upon presentation by her of each credit card statement to which was attached each supporting voucher. 273 There was no evidence to support the existence of any such practice. On the contrary, Ms Gountras deposed that Ms Jackson's credit card statements were not provided to the Branch Committee of Management and were not examined by it. 274 Ms Jackson's contention that her credit card purchases had been "properly approved" must be rejected. Compensation 275 Ms Jackson used the credit cards substantially for her own personal purposes. She did so in her capacity, either as Branch Secretary of the Victoria No 3 Branch or as National Secretary. In doing so she acted improperly and contravened s 187 of the FWRO Act and s 182 of the Corporations Act. I find that Ms Jackson incurred the following expenses on the Union credit cards for her own personal purposes: Travel related expenses – $175,154. Retail expenses – $101,792.10. Food and alcohol expenses – $14,639. Health and fitness expenses – $5,237. Entertainment expenses – $20,864.20. 276 Ms Jackson should pay the HSU $305,828.30 by way of compensation for these contraventions. This figure takes into account reimbursements made by Ms Jackson of $11,858. OVERPAYMENT OF WAGES 277 The overseas and domestic holidays which were taken by Ms Jackson between July 2003 and April 2010 occupied 241 days. Whilst on these holidays Ms Jackson was paid wages at her normal hourly rate. She did not claim against her accrued entitlements to annual leave. Had she done so she would have been entitled to a higher amount made up of her normal hourly rate and an annual leave loading. 278 In its written submissions, the Union conceded that it was only entitled to claim for holidays up to January 2008 as the Victorian No 3 Branch did not pay Ms Jackson's wages after January 2008. As a result the Union's claim for overpaid wages should not have included a claim for any holidays after January 2008. The Union accepted that this reduced the relevant days to 202. This figure, however, included five working days on a holiday in July 2008 which was erroneously identified in the Union's submissions as a holiday in July 2007. Not taking these days into account, the Union's amended claim was for holidays totalling 197 working days or 1497 hours. 279 On five occasions between January and December 2009 Ms Jackson received payments totalling $141,767 for untaken annual leave and accrued days off. Ms Jackson also received $13,114.89 for annual leave loading. These payments covered 1931 hours of accrued annual leave. 280 The HSU claimed that, had Ms Jackson taken the annual leave to which she was entitled during the various holidays, she would not also have been entitled to the wages paid to her while she was on leave. She was entitled to the leave payments. These leave payments had been given to her in 2009. She was not, therefore, entitled to the wages paid in respect of the same days. 281 Some of the holidays which could and should have been taken as annual leave occurred after the payments of accrued entitlements which occurred in 2009. Had those entitlements not been cashed out part of them would have remained available for use during the holidays taken in 2010 and 2011: the entitlements which were "cashed out" exceeded by 434 hours the total number of working hours during which Ms Jackson was on holidays for the whole of the relevant period. 282 The Union submitted that the value of its claim under this head was equal to the payment of the wages for each of the periods of leave. In 2003 Ms Jackson was paid a base wage rate of $45.36 per hour for a 76 hour fortnight. Later pay slips and general ledger entries show that the base rate increased over the relevant period. To simplify calculations, the Union was prepared to accept that the claim be assessed using the 2003 rate of pay. Adopting this rate, the value of the Union's claim is $67,912 for 197 overpaid working days. 283 The HSU claimed the $67,912 of wages paid during Ms Jackson's holidays as money had and received by her for the use of the Union. The gist of this cause of action is the restoration to the applicant of that which has been transferred from the applicant to the respondent thereby unjustly enriching the respondent at the expense of the applicant: cf Commissioner of State Revenue (Vic) v Royal Insurance Australia Limited (1994) 182 CLR 51 at 75 (Mason CJ). Ms Jackson could and should have taken annual leave during the periods of her holidays. Instead she chose to receive her salary and not to claim any annual leave entitlements. As a result these entitlements accrued and she chose to make claims for payments for untaken leave. 284 As Branch Secretary Ms Jackson was responsible for the oversight of Branch funds and it was she who made the decisions to accept normal wage payments during periods she was absent on holidays and to accumulate annual leave entitlements and, periodically, to draw on them. In these circumstances I would also have found her to have contravened s 287 of the FWRO Act and s 182 of the Corporations Act. 285 The HSU's claim for $67,912 should be accepted. GENERAL DEFENCE – DEED OF RELEASE 286 In the wake of the dissolution of the merged Branches in 2012 and the loss by Ms Jackson of her position as Executive President of the HSU East Branch, a dispute arose relating to her entitlement to some payments by way of salary and other benefits during the period of the merger. Following negotiations a deed of settlement and release was entered into on 28 November 2012. The parties to the deed were Ms Jackson and the New South Wales registered Health Services Union acting through its administrator. 287 In her Defence Ms Jackson pleaded that the deed provided her with an "answer to the whole of the Union's claim, and each of its components." She expressly relied on the release, given in clause 2.5 of the deed and the bar to proceedings provided for in clause 2.6. 288 This defence must be rejected. 289 Clause 2.5 of the deed provided that: "The Union releases [Ms Jackson] from all Claims." Clause 2.6 relevantly provided that Ms Jackson "may …. plead this deed as a complete answer to any proceedings commenced by the Union in respect of any Claim". 290 The "Union" referred to is the New South Wales registered Health Services Union, not the Health Services Union which is registered under the FWRO Act. The two bodies are separate legal entities: cf Moore v Doyle (1969) 15 FLR 59. "Claim" is defined in clause 1.1 of the deed. The definition did not extend to most of the claims made against Ms Jackson by the HSU in the present proceedings. 291 The HSU was not a party to the deed. It is not bound by it. The deed does not, as a result, afford any defence to Ms Jackson to the claims made against her by the HSU. CONCLUSION 292 Compensation orders totalling $1,406,538.16 should be made in favour of the Union. This figure is made up as follows: the NHDA transfers – $284,500; the cashed cheques – $238,937; the Honorarium – $63,000; the Elliott Memorandum – $411,635.86; the Toomey Pegg matter – $34,725; the credit card expenditure – $305,828.30; and the overpayment of wages – $67,912. 293 Outstanding issues relating to costs and interest will need to be dealt with in the light of the foregoing reasons. The HSU should make written submissions relating to these issues within 14 days of the handing down of this judgment. I certify that the preceding two hundred and ninety-three (293) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey. Associate: Dated: 19 August 2015