Health Services Union whistleblower Kathy Jackson delayed the royal commission into union corruption for more than an hour after she asked for a barrister to be stopped from cross-examining her because she had sex with him more than 20 years ago.
Ms Jackson submitted a statement outlining her sexual history with Mark Irving, SC, who was scheduled to cross-examine her about her alleged misuse of union funds on behalf of the Health Services Union.
Commissioner Dyson Heydon rejected the submission and questioned the relevance of the the sexual relationship, which took place in 1992.
"What do someone's personal relationships with A in 1992 have to do with the personal relationships with B in the 21st century?" he said.
He said the chronology of events surrounding Ms Jackson's objection to Mr Irving "undermines the credibility of the application".
He said if Ms Jackson "really had the fears and beliefs about Mr Irving that she claims to have, she would have protested at the time when Mr Irving first announced his appearance" and this was not done.
In an affidavit read out by Ms Jackson's legal representative, David Pritchard, SC, Ms Jackson declared she had a sexual relationship with Mr Irving in 1992 when he was acting for the union as an employee of law firm Maurice Blackburn.
Ms Jackson said she and Mr Irving in late 1992 "had a few too many drinks and went back to his place where we had a sexual relationship".
At the time, Ms Jackson said she was in an unhappy first marriage.
"Over the course of the next six to eight weeks, I would go back to his place after Friday night drinks and we would have sex," her statement said.
"I recall he lived near the cemetery and had a barber's chair in his lounge. After six to eight weeks I pulled back as I did not want to destroy my marriage and I began distancing myself from Mr Irving.
"I do not believe Mr Irving will be objective and in fact I believe he will be hostile to the point of furthering a personal vendetta against me.
"I note the active involvement of Mr Irving in the royal commission HSU hearing thus far has been essentially confined to attacking me."
Michelle Painter, SC, who stood in as representative for the HSU National during discussion of Mr Irving's representation, said there was nothing in the affidavit of any relevance to Mr Irving's conduct as a barrister.
"The only thing that an objective person looking at this would think was this was historical, it was long ago done with, it has no relevant application to the circumstances in which Mr Irving and Ms Jackson find themselves today, 21 years later," Ms Painter said.
"It is of no relevance save perhaps a prurient interest to observers to the matters which the commission is here to determine and it cannot have reasonably or responsibly any negative effect on Mr Irving's ability to do his job. It is time wasting and diversionary."
The surprise intervention stalled the hearings of the royal commission for more than an hour on Wednesday.
Ms Jackson claimed earlier she could not recall the purpose of a series of large cash withdrawals from the union slush fund.
She was questioned about a withdrawal of $80,000 for a US trip in 2004, involving a union course at Harvard University. She could not recall the purpose of a series of withdrawals made a short time before her trip to Hong Kong the same year.
Counsel assisting the royal commission, Jeremy Stoljar, pointed out that withdrawals totalling more than $100,000 between March 2008 and March 2010 matched the $102,000 Ms Jackson had paid her former husband Jeff Jackson as part of a divorce settlement. Ms Jackson denied there was any connection.
She had also been questioned about a $50,000 payment she made to Mr Jackson, using money from a slush fund she controlled.
When first asked about the payment, Ms Jackson said she could not remember what it was for, but in later evidence she said it was related to funding a union election campaign.
During cross-examination on Wednesday, Mr Jackson said the $50,000 was part of a divorce property settlement, but later admitted his memory was hazy.
In a sworn statement tendered as evidence, Ms Jackson said the purpose of the $50,000 payment was to help Mr Jackson fight a "bitter internal struggle for control" of the Victoria No.1 branch against its president, Pauline Fegan. Mr Jackson was branch secretary at the time.
She said the power struggle between Mr Jackson and Ms Fegan was a "proxy" for an internal struggle within the ALP right involving the now Opposition Leader Bill Shorten and senator David Feeney.
There were tense moments when Ms Jackson answered questions from Mr Irving, whose name she repeatedly stressed.
At one point during his cross examination, Mr Irving said: "you're just making this up, Ms Jackson". She replied: "Well, you would say that, Mr Irving."
Soon after, Ms Jackson said: "Don't sit there and tell me in that tone that that's what didn't happen when you well know what did happen because you've had access to the records, to my exercise book and everything else.
"If you want to delve into my tax affairs, feel free," she said.
