Controversial unionist Kathy Jackson will go on trial for the alleged theft of $1.4 million after a Federal Court judge rejected a bid to adjourn the civil case against Ms Jackson as her house caught fire last week.
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The house fire in Wombarra, north of Wollongong, is being treated by authorities as suspicious, and is the latest drama to involve Ms Jackson. Previously dubbed a "heroic" whistleblower by Tony Abbott for exposing corruption in the Health Services Union, she is now accused of large-scale fraud.
The Federal Court on Friday heard that Ms Jackson was now well enough for the case against her to proceed, after the trial was delayed in November due to her mental health problems.
She had been in a medical facility south of Sydney, under the care of her psychiatrist as a voluntary patient, and unable to give advice to her lawyers.
Justice Richard Tracey set a trial date of June 29 for the case and rejected a bid for an adjournment from Ms Jackson's lawyer Philip Beazley, as a result of the house fire.
An affidavit from Mr Beazley said the fire destroyed Ms Jackson's clothes and some personal effects. He said the fire may affect her mental health and Ms Jackson had an appointment with her psychiatrist next week.
Lawyer for the HSU, Mark Irving, said on Friday that they are seeking to expand the case against Ms Jackson after they said they found some more allegedly questionable transactions, although it is understood they are relatively small.
Central to the HSU's claim against Ms Jackson is a $250,000 payment her No.3 branch received in 2003 from the Peter MacCallum cancer hospital to settle a back-pay dispute. That money was then used as seed money for a bank account personally controlled by her, and from which she spent money on herself at David Jones, JB Hi-Fi, supermarkets, a paediatric dentist and $50,000 on her former husband.
Workers at the hospital did not receive any back-pay.
Another key part of the union's claim is that Ms Jackson allegedly used union credit cards and cash cheques to misappropriate more than $660,000 for her own use, including on overseas holidays, airline tickets, upmarket dinners, department stores and liquor shops.
Ms Jackson was a key witness last year in the royal commission into union corruption although, despite an interim report by Commissioner Dyson Heydon, is yet to deal with the allegations against her.
It comes as Ms Jackson, who has been on extended sick leave, was formally replaced as national secretary of the HSU on Friday by the acting national secretary, Chris Brown.
Mr Brown said now the "union can truly move forward unshackled by past scandals."
