According to the ABC, the HSU claims that Kathy Jackson embezzled over $1.3 million of its funds.
Jackson’s case, which is being heard in the Federal Court, is based upon allegations that she used her union credit card to purchase personal items and pay for meals and holidays, which is said to have racked up hundreds of thousands of dollars in expenses.
The lawyer representing Jackson reportedly told the court that the spending was authorised by the HSU, but that the union had either lost or destroyed the evidence of the approval.
Federal Court Judge Richard Tracey asked the union on Monday what it was looking to achieve in its pursuit of Jackson, who has now declared bankruptcy.
Legal counsel for the HSU, Mark Irving SC, claimed that Jackson had been in possession of $278,000 in equity weeks before, and requested proof of the bankruptcy claim.
He added that the union was seeking $2.5 million from Jackson.
The trial was adjourned until Friday to allow for the trustee overseeing her bankruptcy to seek legal advice.
Last week, Jackson applied to have the case thrown out on the grounds that she was being targeted and attacked by senior Labor Party figures, as revenge for her blowing the whistle on former MP Craig Thomson.
Yesterday, Jackson was due to appear in court via video link from Sydney, but failed to do so.
Jackson’s partner, Michael Lawler – a Fair Work Commissioner – has said that he was “acutely embarrassed” by the legal proceedings.
“Since September 2011, Ms Jackson's enemies have been astute to seek to involve me publicly in relation to affairs affecting her, at every available opportunity,” he said.
Lawler also said that both he and Jackson had spent time in mental health units, due to the “enormous and sustained personal stress”.
Legal proceedings against Jackson are ongoing.
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The former national secretary of the Health Services Union (HSU) is facing a $2.5 million lawsuit over allegations of misappropriating union funds.