Julia Gillard had an obligation to her client the AWU to act in its interests. When Bruce Wilson an employee of her client started a personal relationship with Ms Gillard and her personal interests started to intermingle with Mr Wilson's she developed a potential conflict of interest.
When she commenced to act personally for Mr Wilson and Mr Blewitt to create an incorporated entity that passed itself off as being a subsidiary of the AWU and used its name (but was controlled by Mr Wilson) she crystallised the conflict of interest.
As you know, McHugh J provides excellent advice to lawyers who might find themselves dealing with clients with shady intentions.
"When the lawyer goes beyond advice and draws documents for the purpose of enabling a client to achieve an objective, it is, I think, almost impossible to contend that the adviser does not aid the commission of any offence which results."
Julia Gillard has been very keen to promote the view that she simply gave advice to Wilson and Blewitt about the incorporation of an Association. Here are a few quotes from her "marathon" press conferences where she "exhausted the questions from the nation's journalistic elite".
This graphic from the Australian Financial Review shows us what Ms Gillard said to her managing partner Peter Gordon in a recorded exit interview on her departure from the firm. She confirms that she took instructions on Slater and Gordon's behalf from Bruce Wilson to incorporate the Association, she drafted the documents and submitted the rules to the relevant WA Government authority for the incorporation. She goes on to confirm that the WA Government had written back stating that the Association was ineligible for incorporation. Gillard goes on to confirm that on that event, she took further instructions from Wilson and prepared a response for the WA Government that she then submitted to the WA Government again on Wilson's instructions. She confirms to her boss that he is correct in stating that the AWU Workplace Reform Association was incorporated by Slater and Gordon on Wilson's instructions.
Ms Gillard is correct in noting the distinction between a lawyer providing advice, and a lawyer getting involved with a shonky client and drafting documents that lead to and are instrumental in the achievement of fraud.
Had she adopted the path she took before her romantic involvement with Mr Wilson the result may have been more like what happened on 20 August, 1991. Ms Gillard's romantic involvement with Mr Wilson developed later that year - so the legal advice we reviewed yesterday is (reproduced below) is a useful norm for the purposes of comparison.
It's clear in this letter that Ms Gillard's role in this instance was limited to providing advice. She gave Mr Wilson all of the background and interpretation about the Rules of the AWU and Industrial Law and left any final decision and instructions to take further action up to him.
And that letter marks the completion of Ms Gillard's involvement in that matter. That is what a lawyer "providing advice" looks like.
She opened a file recording the matter number 2519, that the Industrial Unit had carriage and that she was the partner responsible
And she confirms at the start of the letter precisely what her client's instructions to her were, namely that she provides advice on the issue.
That letter to Wilson was sent in August 1991 at the start of their romance. Ms Gillard did not disclose the change in circumstances and conflict of interest that developed towards the end of 1991, that one of the major professional contacts she had within her client the AWU was now her lover and that as a result his personal interests and her personal interests were commencing to intermingle. This placed her and her partners in a dangerous position should it later be discovered that any advice or action she provided for Wilson was to the detriment of the AWU.
If Ms Gillard was telling the truth when she said "I provided advice about the incorporation of an association", then perhaps her letter would have looked something like this, with thanks to the range of lawyers and others who have contributed.
4 April, 1992
Dear Mr Wilson,
You have asked me to provide you with advice about the options available to you in order to establish and maintain a fund to raise money for election expenses that you and other AWU officials will incur in the upcoming elections within the AWU.
I note that due to our changed domestic circumstances I have declared a conflict of interest in my relationship with an official of the AWU and that as a result I have excused myself from any further professional dealings with you on this matter. My colleague Mr Murphy will be in contact with you to confirm you instructions.
Having taken your instructions I have been authorised to provide you with legal advice on this final occasion. I have opened a file on this matter and any of our partners will be able to assist you as the matter progresses.
As you noted in our meeting of earlier this year on this matter, election to a paid office within the AWU is a personal benefit to successful candidates, and expenses associated with any election campaign are personal expenses. No part of any AWU asset, property or income may be used in any way in an official's election campaign. Election expenses must be met from your personal resources and your fundraising ability in your own name or the name of a body corporate that is clearly not passed off as part of the AWU. You should speak with your accountant about the tax deductibility of those expenses.
You have asked me to advise you about the use of the name Australian Workers' Union in your fund-raising vehicle.
AUSTRALIAN WORKERS’ UNION: Ownership of the Name
The Australian Workers’ Union was a registered organisation and incorporated pursuant to Sec 192 the Industrial Relations Act 1988.
The Act gave the organisation a corporate status and the organisation operated pursuant to rules of the organisation and these rules had general requirements as prescribed by the Act.
The Australian Workers’ Union is Australia’s oldest union tracing its history back to the formation of the Australian Shearers Union on 14 June 1886 in Victoria.
The union changed its name to the Australian Workers’ Union following an amalgamation between the Australian Shearers Union and the General Labourers Union in 1894. The origin of the name came from a newspaper published by the union at that time – the Australian Worker.
The Australian Workers’ Union became a registered organisation under the Conciliation and Arbitration Act 1904 (the predecessor of the Industrial Relations Act 1998) on the 16 May 1904, the second union in Australia to be so registered under the Conciliation and Arbitration Act 1904.
At that time it was Australia’s largest union and until the 1960’s the Australian Workers’ Union remained Australia’s largest union.
In 1992 the registered rules of the Australian Workers’ Union describes itself as an Association bearing the title of the Australian Workers’ Union as follows:
“Rule 1 – Name
The Association formed under these rules and hereinafter referred to as the Union shall be known by the title of The Australian Workers’ Union and is registered under the Industrial Relations Act 1988”.
The title of the Australian Workers’ Union over many years has been abbreviated to the initials AWU and in Rule 89 – Definitions:
“The AWU or “Union” means The Australian Workers’ Union”
The title of the Australian Workers’ Union describes the Association registered under the Industrial Relations Act 1988 and this title is owned by the union. The title to the name of a legal entity indicates the ownership of that name.
The Association described as the Australian Workers’ Union has been in existence as federally registered union since 1904 and uses the words Australian Workers’ Union or AWU to describe itself and represent itself to the world.
In 1991 and so far this year the Australian Workers’ Union as a legal entity was a respondent to hundreds of legally binding Federal Awards and industrial agreements throughout Australia in the many industries and callings covered by its membership.
The Federal Union owns properties throughout Australia. It enters into legally binding contracts and incurs debts on behalf of the organisation.
Any legal entity using the name of the Australian Workers’ Union in its title without its authority would be in breach of the common law tort of passing off and possibly in breach of the criminal law.
Authority to Use Title
Only the AWU Annual Convention, which represents the highest deliberative body of the union, has the authority to permit and give the consent of the union to any incorporated association that is independent of the union to use the name of the Australian Workers’ Union in its title.
Governance of the Australian Workers’ Union
The rules of the union required that it is governed by elected officials and delegates and under those rules the governing bodies elected by the members were as follows:
- The Annual Convention of delegates and officials was the highest deliberative body of the union.
- The Executive Council (sometimes known as the National Executive) conducted the Management of the affairs of the union subject to the authority of the Convention.
- Each State branch executive committee could decide any questions affecting only the branch.
Rule 31: Powers of Convention
The convention of the AWU is the highest deliberative body of the union and shall have the power to decide and direct the policy of the union in matters affecting the interests of the members in all industrial, political and municipal concerns.
The convention meets annually no later than 14 February each year. This year's meeting has now passed.
Members of the Convention consist of the National President, General Secretary, Assistant General Secretary and delegates elected annually from each branch in proportion to the financial membership of each branch.
Pursuant to Rule 33 in order that the Convention members may consider matters of policy for industrial and administrative matters affecting the interests of the members, the General Secretary must receive policy proposals not later than 1 December prior to the Convention.
Any proposals for the Convention may be submitted by:
- The Executive Council
- A Branch Executive
- Any Branch General Meeting or Branch Delegates meeting
- Any Local or Section Committee duly constituted
- Any properly called meeting of members wherever held consisting of not less than 15 financial members
- The President, Vice President, General Secretary or assistant General Secretary.
All proposals passed at meetings of at least 15 members, wherever held, under this rule must stipulate the name of the place at which the meeting was held, the date of the meeting and must be signed by the Chairperson.
The authority to use of the name the Australian Workers’ Union by an incorporated association anywhere in Australia is a matter of policy for the Convention members to decide and any Convention resolutions are based on proposals submitted to the Convention in accordance with the rules of the union.
Under the rules of the union the Annual Convention as the highest deliberative body of the union would have the power to decide as a matter of union policy that it permits and authorises an incorporated Association under State laws to use the name of the Australian Workers’ Union in its title describe the name of the incorporated association.
However any such authority given would be subject to the Convention members being satisfied that the Association bearing its name is consistent with the Objects of the union including Rule 4 (c) namely, that such an incorporated association would be promoting the general and material welfare of AWU members.
We note that the 106th Annual convention of the Australian Workers’ Union was held in January 1992 and its deliberations were reported in The Australian Worker, the official newspaper of the union.
In its report of the 106th Annual Convention no resolution was passed authorising and permitting you to use the title the "Australian Workers’ Union" in any proposed Workplace Reform Association.
For AWU Convention members to authorise the union name to be used by an incorporated association they would have to be satisfied as to the purposes of the association , who were its office holders and be satisfied that the operation of the association would promote the welfare of AWU members.
Any AWU Convention member who proposed to incorporate an association whose purpose was described as promoting workplace reform amongst construction and maintenance workers or whose purpose was to develop changes to work to achieve safe workplaces would be met with the response that these purposes were already covered by the AWU and its objects.
No other governing body of the union has the power to authorise and permit an incorporated association to use the name of the Australian Workers’ Union to describe the name of the association.
Pursuant to Rule 36 the Executive Council of the union has the power to manage the affairs of the Union, subject to the direction of Convention.
The Executive Council does not have the power to determine the policy of the union that would permit an incorporated association to use the name of the union. This decision to allow you to use the AWU title would be a matter of policy for the union.
The Executive Council of the union has no power to authorise the title of the union be used to describe the name of an incorporated association.
Pursuant to Rule 43 (a) Branch Executive shall have power to decide any question affecting such Branch which may arise within the rules of the Australian Workers’ Union.
No Branch Executive has the power to authorise an incorporated association to use the name of the union to describe the name of an incorporated association. Thus we cannot accept your instructions to incorporate any legal entity bearing the title AWU or the words Australian Workers' Union as those instructions would exceed your authority within the union.
Under the rules of the AWU, no Branch officer has the ostensible or implied authority to authorise an association to use the title of the Australian Workers’ Union to describe the name of an incorporated association.
No lawyer retained by the AWU could form a bona fide opinion that in the absence of a resolution from the AWU Annual Convention that a Branch officer could have any authority to permit an unrelated association to the union to use its name to describe an association.
Your Instructions that you Require an Incorporated Association for your purposes
You have instructed us that you are aware of an industrial company that wishes to pay money to your personal re-election account and not to the account of the union. You have instructed us that the industrial company recommends that you establish an incorporated association as the appropriate body corporate to issue invoices, to maintain bank accounts, to enter into an agreement with the industrial company and to fund your expenses in any election campaign.
You have instructed us that you have submitted an Application to Incorporate the Australian Workers' Union Workplace Reform Association and that the Commissioner for Corporate Affairs in Western Australia has rejected your application. You have asked us to "overcome the technical difficulties" the Commissioner has nominated in your application.
For the foregoing reasons about the use of the AWU name and other compelling considerations, we advise you that we agree with the Commissioner's advice to you and we further advise that this firm could not lawfully take instructions from you to achieve the end of incorporating an association bearing the words Australian Workers' Union in its title.
The WA Associations Incorporation Act provides that an Association shall not be incorporated unless it has more than 5 members, yours has only 2 (Part II Section 4 (1) of The Act).
You mentioned that the industrial company proposes to pay you on the raising by your incorporated association of invoices. Section 4 (2) of the Act states, "An Association for the purpose of trading or securing pecuniary profit for the members from the transactions of the Association is not eligible for incorporation under this Act". You should consider a proprietary company limited by shares or some other legal structure if you wish to raise invoices and trade for profit.
Section 4 (3) of the act states that a Trade Union will not be registered under this Act. The definition for what constitutes a Trade Union is the definition contained in the WA Trade Unions Act of 1903 and the incorporated association you propose fits that definition and is thus ineligible for incorporation. You have suggested we write to the Commissioner to vouch for the bona fides of the proposed Association in this regard. We cannot take your instructions as it would be unlawful to mislead the Commissioner.
You have suggested to us that an incorporated association would provide more certainty for you and like minded officials of the AWU who may wish to contribute funds to the re-election fund. Unfortunately the WA Associations Incorporation Act provides that every Association includes a rule to the effect that no part of the Association's income or property can be distributed directly or indirectly to any member of the Association. Even if the Association was wound up the proceeds of any assets liquidated would be donated under the law to another charitable association. You and other contributors could never legally recover any money you paid in to the Association.
We urge you to reconsider any further submission to the WA Corporate Affairs Commissioner for the incorporation of the AWU Workplace Reform Association. We should advise you that the potential for such an entity to be misused in passing itself off as an authorised unit of the AWU is so great that we would feel duty bound immediately to report any further attempts at registration to the AWU and potentially the police.
All the best for an honest, open and transparent future!
Partner, Slater and Gordon
PS - dinner at The Windsor Hotel tonight, on me!