The NSW Nurses Association is expected to be asked to pick up the tab for the failed defamation proceedings launched by the union’s right-wing general secretary Brett Holmes against Andrew Fraser, MP for Coffs Harbour.

The libel action arose out of a letter Fraser sent to 629 constituents criticising the nurses’ leader during the March 2007 state election.

In the NSW Supreme Court last June, Holmes won his action and was awarded $70,000 damages plus costs. But in the NSW Court of Appeal two weeks ago, Justices Murray Tobias, Ruth McColl and John Basten overturned the lower court’s judgement, dismissed the proceedings, set aside the $70,000 damages and ordered Holmes to pay Fraser’s costs.

With total costs for Holmes and Fraser amounting to almost $100,000, the long suffering union membership is wondering how and why it got into this legal debacle.

If the court action initiated by Holmes related to the Nurses’ Association or to his role as the union’s general secretary, then there would a clear obligation on the membership to pay up.

But the issue is somewhat blurred. In Fraser’s letter he falsely accused Holmes of running a political campaign against the Howard Government’s Work Choices legislation in order to position himself to take a federal seat on behalf of the Labor Party at the next federal election. Fraser’s allegations were untrue and highly damaging, according to Holmes, and that is why he sued.

Some members of the association believe that Holmes was acting to defend his personal reputation and that the legal stoush was all about his membership of the Labor Party and not his role as the union’s general secretary. The issue is further complicated because the association is not affiliated to the NSW Labor Party and maintains an apolitical stance.

They argue that the cost of this hugely expensive legal exercise — the initial trial plus the appeal — should, at the very least, be shared between Holmes and the union’s membership.

Last year, Crikey revealed that the NSW Nurses’ Association had donated $5000 in sponsorship to the Hills District Women’s Football Club. The star striker in one of the club’s teams was Holmes’ daughter.

The money was donated from the union’s Nurse Power Fund comprising contributions from the association’s 51,000 members.

He dismissed calls for his resignation saying he had been upfront with the union executive about the conflict of interest, he had left the meeting when the donation was being discussed and he abstained from the vote.