Police raids on the Australian Workers' Union were not part of a politically motivated attack on then-opposition leader Bill Shorten, a Federal Court judge has ruled.
But he found the investigation of the union - to which the raids were linked - was "invalid".
Justice Mordecai Bromberg on Friday rejected the union's claim the investigation by the Registered Organisations Commission was made to "embarrass or politically harm" Mr Shorten.
He said the union watchdog's executive director Chris Enright did not improperly assist Senator Michaelia Cash, who had urged him to investigate allegations made in The Australian newspaper in August 2017.
"I have concluded that the evidence before the court does not establish that the decision made to conduct the investigation was made for the improper purpose contended for by the AWU," Justice Bromberg told the court.
In October 2017, Australian Federal Police raided the union's offices in Melbourne and Sydney, seizing documents relating to donations made to activist group GetUp! in 2006 and 2007, when Mr Shorten was AWU leader.
The raids were filmed by the media, who arrived at the scene before officers after getting a tip from the staff of Senator Cash, who was then employment minister.
The AWU swiftly mounted a legal challenge, preventing the documents from being accessed.
In his written judgment, Justice Bromberg said Mr Enright thought Senator Cash wanted Mr Shorten "discredited, embarrassed or politically harmed".
"Most people with an understanding of the relevant political landscape and the strategies commonly utilised by politicians would have assumed that Minister Cash saw political mileage for her side of politics," Justice Bromberg states.
"As an experienced investigator, Mr Enright was well attuned to informers having their own agendas and there is nothing surprising about Mr Enright having ascribed an agenda to Minister Cash."
However, Justice Bromberg said the basis upon which Mr Enright decided to conduct the investigation was "flawed".
After four years, if an alleged contravention of union rules had not been acted upon it was "deemed to have been in compliance" with the rules.
An investigation could only be made if there were "reasonable grounds" but he said Mr Enright only had a "suspicion".
"The commissioner did not proceed reasonably in forming the opinion or state of satisfaction he was required," Justice Bromberg said, noting the raid was "affected by jurisdictional error and invalid".
He said further hearings, most likely to be held in November, would determine whether the search warrants were invalid.
Mr Shorten said the investigation was a waste of taxpayers' money.
"This witchhunt cost millions and the Government cowboys running it did not even stop to check if their investigation was legal," he tweeted after the judgment was handed down.
Senator Cash noted Friday's judgment.
"The AWU's pursuit of the minister was always a political game," a spokesman said in a statement.
"Despite the political attack by the AWU, the minister has been cleared of any political influence over the ROC's decision."
AWU national secretary Daniel Walton said he was pleased with the court's ruling.
"We have said from the very beginning that this investigation was invalid, that it never should have commenced," he said in a statement.
"We were determined to bring the facts in this case to light, and that has taken a huge effort."
Opposition Labor MP Tony Burke said the court's "invalid" finding meant the government's Registered Organisations Commission was compromised.
"The Australian public simply cannot have any faith in its competence or its impartiality," he said.
"It's a politicised and discredited body set up by the Liberals for the sole purpose of attacking unions."
Australian Associated Press
