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Monday, 23 December 2013

Ms Gillard presents the AWU Workplace Reform Association as a legitimate entity created pursuant to her legal advice

It will help Ms Gillard if she can demonstrate the lawful basis for her role in setting up the AWU Workplace Reform Association Inc.

In determining whether her actions have the character of wholly honest legal advice provided by an ethical lawyer I'd imagine some of the issues to be weighed would include:

  • her expertise and experience as a partner in a major law firm engaged wholly in the practice of industrial relations law
  • her knowledge of the AWU's rules and relevant legislation
  • the identity of the client she was acting for
  • what she said at the time and since about her actions
  • what her client(s) say about their instructions to her and her advice to him/them

Ms Gillard joined Slater and Gordon in October, 1987.   In 1990 she was made a partner in the firm's industrial relations practice.

In mid-1991 the AWU Western Australia branch engaged Slater and Gordon as its lawyers.

Where a lawyer is retained by an entity, the duties are owed to that entity as it is the client.

Client notes

By November 1991 Ms Gillard and the AWU WA Secretary Bruce Wilson were involved in a personal relationship.

Ms Gillard says this of her her role in the creation of the AWU Workplace Reform Association Inc.

My role was as a legal adviser providing advice about the incorporation of that association.

As to who she was acting for - The Australian newspaper's graphic below sets out various statements on the matter - you can see it full size at The Australian's website here: The oz graphic

Hindsight's a wonderful thing, isn't it? It's a wonderful thing over 20 years. But put yourself in my shoes incorporating that association. This did not strike me as a non-standard transaction; unions incorporate associations to support the re-election of union officials.

"The people I was dealing with - Mr Blewitt and Mr Wilson - were both office holders of the AWU."

"My client in creating the Workplace Reform Association was Mr Wilson and Mr Blewitt acting as representatives of a team of officials who were going to run together for election in the trade union. But did I separately advise the AWU that this was occurring, well of course I didn't. The people I was dealing with were elected officials of the AWU."

"I was not incorporating this association on the instructions of the AWU."

" The two people I was dealing with were office-bearers of the AWU and therefore I think I'm entitled to say the AWU, people who were office-bearers of the AWU, knew about it."

There's no doubt the incorporated entity was used as the vehicle for a fraud.  That being so, what does the reasonable person make of Ms Gillard's actions in setting it up?   Were they the actions of an ethical lawyer acting in accordance with the law and her duty?This scholarly Australian paper gets to the heart of the status of trade union "entities".   It was written in 1979 and the principles in it were very much in play in 1992.   A partner in a law firm engaged in the practice of industrial law would reasonably be expected to be conversant with the legal themes in this paper.   Ms Gillard demonstrates her familiarity with the relevant legal notions in her actions in various court cases involving the AWU's genuine interests (see next post). A PERSONALITY CRISIS: THE TRADE UNION ACTS, STATE REGISTERED UNIONS AND THEIR LEGAL STATUS
Under the test set out in WA's Associations Incorporation Act, the AWU Workplace Reform Association Inc was a trade union.   Thus the Commissioner's protest at the attempt to gain incorporation under the Associations Incorporation, and not the Trade Union provisions.   This alone should have alarmed a legal adviser, exposing her clients to expensive and uncertain litigation as to the beneficial ownership of money held by their entity.
Put to one side the taking and using of the AWU name.   Ms Gillard had considerable experience in the incorporation, conduct and management of incorporated associations, having argued the merits for the Socialist Forum's incorporation in August 1984 and acted as its public officer until 1993.By setting this incorporated association up in the way she did, with the union's name in the title, Ms Gillard brought the entity within the ambit of state-based industrial laws in Western Australia.   Ms Gillard later appeared in the Australian Industrial Relations Commission and given the arguments raised in this matter, Ms Gillard will find some difficulty in claiming she was not at least aware of the potential legal pitfalls for her clients in their incorporated association.As StephenJ said (not our StephenJ but StephenJ ruling in a 1979 matter involving the AWU):....as a result of the A.W.U. case it becomes important for a
union to ensure strict compliance with procedures for amalgamation and
registration in the Trade Union Acts-otherwise the very capacity of a
union to sue or be sued is in doubt. This case has highlighted the precarious
position of amalgamated unions whose legal existence and capacity to sue
could be the subject of challenge by parties to the litigation, as in the
A.W.U. case, or even by factions within the new amalgamation.In her record of interview with her Managing Partner on 11 September, 1995, Ms Gillard explained some of the rationale she said led to her legal advice arguing for an incorporated association:

The thinking behind the forming of incorporated associations is that it had been our experience that if you did it in a less formal way, you just had someone, say Fred Bloggs, say, oh look, I'll just open a bank account and everybody can put the money into there, the problem developed that when the leadership team fractured, as relatively commonly happens, you got into a very difficult dispute about who was the owner of the monies in the bank account, so it was better to have an incorporated association, a legal entity, into which people could participate as members, that was the holder of the account.

Rather than avoid dispute as to who was the owner of the money in the AWU WRA inc, by her path to incorporation, Ms Gillard exposed the entity's ultimate beneficial owners to potential expensive and uncertain litigation.   And all because of the apparently non-negotiable inclusion of the words "Australian Workers' Union" in the title.   Which has to give rise to a reasonable suspicion that it was central to the proposed role of the entity that it have those words in its name in order to achieve the true purpose for which it was established - further that any reasonable person in the circumstances would have at least questioned her clients further on the issue.

And this:

That account, as you've said, is an account which was the account belonging to an incorporated association by the same name which was incorporated by Slater & Gordon at (Bruce) Wilson's, on Wilson's instructions following your advice to him which you described earlier.

JULIA GILLARD: That's right.

PG: And that happened in or about mid-1992.

JG: That's right.

PG: And last Monday I think you gave to Paul Mulvaney a follow-up which demonstrates that Slater & Gordon had drafted model rules for, for that, had submitted those rules to the relevant Western Australian government authority, that there'd been a letter from the authority suggesting that it might be a trade union and therefore ineligible for incorporation under that legislation, and that we had prepared a response submitted on Wilson's instructions to that authority suggesting that in fact it wasn't a trade union and arguing the case for its incorporation. My recollection is that all of that happened in or about mid-1992. Is that right?

JG: I wouldn't want to be held to the dates without looking at the file, but whatever the dates the file shows are the right dates, so .


JG: No, I obtained, I had just in my own personal precedent file a set of rules for Socialist Forum which is an incorporated association in which I'm personally involved. Tony Lang and I drew those rules some years ago. Tony more than me. And I've just kept them hanging around as something I cut and paste from for drafting purposes, and I obtained, I don't quite recall how now but I obtained the model rules under the WA act and I must have done the drafting just relying on those two sources. I don't have any recollection of sitting down with Tony or any other practitioner and talking through the draft of the rules.

PG: Do you recall whether when it was necessary to argue the case with the, with the relevant Western Australian authority, whether you consulted anyone else in the firm as to what would or would not get, become acceptable or appropriate?

JG: I once again don't recall talking to anybody else in the firm about it.

PG: Beyond that, and it seems from the file that after that letter it was successfully accepted as an incorporated association and duly was created and presumably accounts were set up. I should ask did we have anything to do with the setting up of the accounts or was that done by the officers of the incorporated association?

JG: Slater & Gordon didn't have anything, did not have anything to do with setting up bank accounts for that association. We attended to the incorporation.

PG: Can I ask you then following the last thing that we did to setting up the incorporation, which appears from the file to be the letter arguing that it ought to be not construed as a trade union, did you have anything personally to do with that incorporated association afterwards?

JG: No I did not.

PG: Right, to the best of your knowledge did anyone at Slater & Gordon?

JG: To my knowledge no one at Slater & Gordon had anything to do with it post that time.

In our next post I'll take you through several real cases in the Federal Court of Australia, some involving Ms Gillard, that set out the effect at law of even sounding like a union.

I'll leave you here with Ms Gillard's admission to her boss about her knowledge of union rules and union resources being used for personal benefits like re-election funds.

Bruce was acting secretary of the Victorian branch of the AWU so his substantive position was as secretary of the Western Australian branch. At some point, and I must admit I don't recall when, but some point past the transition to Victoria, he became permanently appointed as Victorian secretary of the AWU. Under the AWU's rules it's not possible to hold two elected positions, so Ralph became the Western Australian secretary of the AWU so, at Bruce's behest if you like, he filled . . .

(Half a page redacted.)

It's, it's common practice, indeed every union has what it refers to as a re-election fund, slush fund, whatever, which is the funds that the leadership team, into which the leadership team puts money so that they can finance their next election campaign. It is not proper to use union resources for election campaigns so you need to finance them yourself.

It is not proper to use union resources for election campaigns.   

Or to rip off a few hundred grand.   More soon.



Where it Started

Gillard & the AWU scandal

Interview with Bob Kernohan