Kathy Jackson struggling as claim fails

Corruption whistleblower Kathy Jackson has suffered another setback as she fights legal battles on multiple fronts.

Kathy Jackson at the Federal court in Sydney this morning with an unidentified man.

Corruption whistleblower Kathy Jackson has suffered another setback as she fights legal battles on multiple fronts, losing a backdated workers’ compensation claim that could have netted her hundreds of thousands of dollars.

Ms Jackson based her unsuccessful claim, lodged late last year, on an alleged mental stress injury sustained three years ago shortly before she ceased her last paid job as a union official.

If her claim had been granted, she would have received workers’ compensation benefits backdated to 2012 and calculated at 80 per cent of her then $287,000 salary as the Health Services Union’s East branch executive president, capped at the maximum benefit of $110,760 a year.

The denial of her Victorian WorkCover claim is a significant blow as Ms Jackson seeks funds to cover substantial legal bills.

She faces a hefty penalty if she loses a further Federal Court claim against her resulting from a two-week hearing scheduled to start today, at which the HSU’s lawyers will allege she misused $1.4 million of union funds for personal expenses including holidays, shopping, gifts, entertainment, mortgage payments and part of a divorce settlement.

Ms Jackson shot to national prominence for exposing the large-scale corruption of now jailed HSU fraudster Michael Williamson. She is now facing scrutiny over her own financial dealings as a senior union leader, with the HSU’s current leadership claiming they were on a par with those of Williamson.

At a Federal Court hearing due to start today in Melbourne, possibly with a Sydney court videolink for Ms Jackson in Sydney, the HSU’s barrister Mark Irving intends to outline the case against Ms Jackson.

Ms Jackson, who has briefed a barrister for the hearing after unsuccessfully seeking to have the case thrown out as an abuse of court, is expected to defend vigorously her spending by arguing that it was legitimate and open to ­inspection by her then branch committee of management.

Besides Ms Jackson’s alleged big spending on union credit cards, Mr Irving is expected to focus on how Ms Jackson allegedly channelled $250,000 from the financial settlement of a backpay dispute with a Melbourne cancer hospital into her union’s general union accounts — and then into a personal bank account over which she had sole control.

The presiding Federal Court judge Richard Tracey is also expecte­d to rule during the hearing on an HSU application to freeze any sale or transfer of Ms Jackson’s assets, after it was ­revealed this month that she was attempt­ing to sell her current home at Wombarra, 65km south of Sydney, to her partner, Fair Work Commission vice-president Michae­l Lawler.

The HSU claims the proposed house sale was an attempt to put assets beyond the reach of the Federal Court if the union won its case against Ms Jackson.

The HSU has also referred Ms Jackson to Victoria Police based on a detailed submission alleging she fraudulently spent close to $1m of union funds.

As well, Ms Jackson’s behaviour as a union official is under investig­ation by the Royal Commission into Trade Union Governance and Corruption.

It will issue findings later this year after declining to do so in an interim report in December.

A further potential legal headache for Ms Jackson relates to her association with David Rofe QC, a prominent Sydney barrister with advanced dementia whose $30m estate is eventually expected to be the subject of a significant court battle over inheritance.

Ms Jackson was written into Mr Rofe’s will as the potential beneficiary of almost $3m early last year — less than two years after meeting the elderly barrister.

Other potential beneficiaries who could dispute any claim by Ms Jackson include Rofe relatives, and an estranged Rofe friend, Nick Llewellyn, who has been financiall­y supported by Mr Rofe.

Mr Lawler, who knew Mr Rofe before 2002 when they were barristers at Sydney’s Wentworth Selborne Chambers, has also been involved with Mr Rofe since late 2012 in helping him with the management of his $30m fortune.

On Mr Rofe’s behalf, Mr Law­ler bought a $1.3m property last year next door to the Lawler-Jackson house at Wombarra in which the couple now lives, after a minor fire damaged their own home in January.

Mr Rofe lives at Woollahra, in Sydney’s eastern suburbs, with full-time nursing care. Ms Jackson and Ms Lawler have made recent short visits to see Mr Rofe, including over the past week. With his health having deteriorated, supporters of Mr Rofe suggest he no longer recognises them, or others.

Lawyers for Mr Lawler and Ms Jackson told the Federal Court over the past fortnight about their shortage of funds available if money was needed to cover legal bills or penalties related to the HSU’s case against Ms Jackson.

Ms Jackson’s failed WorkCover claim against the HSU was based on an injury, due to stress, that she alleged occurred three years ago in her last paid job as a union official.

Ms Jackson has had no paid employment as a union official since mid-2012, when a Federal Court judge sacked her and other HSU officials as part of his decis­ion to put the union in the hands of an administrator to sort out its financ­es.

When the HSU was reconstit­uted in late 2012, Ms Jackson continued in an unpaid position as its honorary national secretary. She took unpaid sick leave for most of her term, and did not seek re-elect­ion in January this year.

Her workers’ compensation claim, first revealed in The Australian last October, was an unusual one because she requested a rule change in 2012 to make her position unpaid when she shifted from executive president of the dissolved HSU East branch to honorary HSU national secretary.

Any workers’ compensation claim therefore had to be backdated to at least 2012 if she was to receive payment for an alleged injury. If granted, she could have receiv­ed backdated payments exceeding $300,000, and ongoing payments set at the maximum of $110,760 a year.

Another unusual aspect of Ms Jackson’s claim was that — with Williamson serving a five-year jail term — the reporting employer next in line for Ms Jackson’s WorkCover claim against the HSU last October is understood to have been a former HSU assistant secretary, Marco Bolano.

Mr Bolano is Ms Jackson’s closest ally. He has been receiving workers’ compensation benefits since early 2013, based on his former salary of $201,000 — capped at the $110,760 annual maximum.

Another former HSU official and Jackson ally, Leonie Flynn, has also been receiving workers’ compensation benefits based on 80 per cent of her former $125,000 salary.

Mr Lawler has taken long per­iods of unspecified sick leave from his semi-judicial position at the Fair Work Commission, during which he has helped Ms Jackson with her Federal Court case, and has helped manage Mr Rofe’s finance­s.

Ms Jackson could appeal against the denial of her workers’ compensation claim to Victoria’s County Court.

She has so far declined to do so.