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Trade Union Governance and Corruption—Royal Commission—Interim reports—Volume 2—15 December 2014


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TABLE OF CONTENTS

VOLUME 2

PART 8

CFMEU CASE STUDIES 1007 - 1566

8.1 INTRODUCTION

1007 - 1010

8.2 BORAL 1011 - 1115

A Overview and Summary 1014 - 1017

B Summary of Evidence 1017 - 1057

C Findings on Evidence 1057 - 1077

D Legal Issues 1078 - 1106

E Recommendations for Reform 1106 - 1115

8.3 CBUS LEAK TO THE CFMEU 1117 - 1242

A Overview 1119 - 1123

B Relevant Facts 1123 - 1209

C Conclusions 1209 - 1232

D Returning the Zanatta Spreadsheets 1232 - 1233

Annexure A: Examples of False Evidence Given by Ms

Butera

1234 - 1237

Annexure B: Examples of False Evidence Given by Ms

Zanatta

1238 - 1242

i

8.4 THE CONVERSATION OF 27 MARCH 2013 1243 - 1309

A Overview 1245 - 1246

B Relevant Facts 1246 - 1304

C Legal and Other Issues 1304 - 1309

8.5 CFMEU NSW DEALINGS WITH ALEX COMPANIES 1311 - 1327

A Introduction 1312

B Mr Barrios 1312 - 1327

8.6 CFMEU NSW BRANCH DESTRUCTION OF DOCUMENTS 1329 - 1395

A Introduction 1331 - 1333

B Deletion of Emails in June 2014 1333 - 1354

C The Instruction Given to Mr Holmes in

February 2013

1355 - 1395

8.7 UNIVERSAL CRANES 1397 - 1486

A Summary 1399 - 1400

B Relevant Facts 1400 - 1465

C Conclusions 1466 - 1486

8.8 HINDMARSH 1487 - 1492

A Overview 1487 - 1488

B Federal Circuit Court Proceedings: CFMEU

Submissions

1488

C Federal Circuit Court Proceedings: Counsel

Assisting’s Submissions

1488 - 1491

D Conclusion 1491 - 1492

ii

8.9 CFMEU TREATMENT OF FAIR WORK BUILDING INSPECTORS 1493 - 1525

A Summary 1527 - 1562

B Relevant Facts 1495 - 1511

C Conclusions 1511 - 1525

8.10 THE PENTRIDGE VILLAGE SITE 1527 - 1562

A Summary 1528

B Natural Justice 1529 - 1532

C Outline of Findings 1532 - 1533

D Relevant Facts 1533 - 1559

E Conclusions 1559 - 1562

8.11 ANDREW ZAF 1563

8.12 LIS-CON’S QUEENSLAND LOCKOUT 1565 - 1566

PART 9

HEALTH SERVICES UNION 1567 - 1613

9 RIGHT OF ENTRY PERMITS

1567 - 1613

A Introduction 1569 - 1570

B Right of Entry Testing 1570 - 1571

C Critical Factual Disputes 1571 - 1606

D Consequences of Factual Findings 1606 - 1612

E A Preliminary Point 1612 - 1613

PART 10 TRANSPORT WORKERS’ UNION OF AUSTRALIA 1615 - 1657

iii

10.1 INTRODUCTION 1615 - 1623

A Preliminary 1615 - 1617

B Background to the TWU 1617 - 1623

10.2 MEMBERSHIP ROLL OF THE TWU OF NSW

1625 - 1657

A Introduction 1625 - 1626

B Preliminary Point: The Terms of Reference 1626 - 1627

C Maintenance of Membership Roll 1627 - 1635

D Declaration of Member Numbers to ALP 1635 - 1657

PART 11 THE COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL,

PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA

1659 - 1669

11 CEPU INTRODUCTION

1659 - 1669

A Preliminary 1659 - 1660

B Background to the CEPU 1660 - 1669

PART 12 SHOP, DISTRIBUTIVE AND ALLIED EMPLOYEES ASSOCIATION

1671 - 1712

12 MISCELLANOUS PROBLEMS FOR SDA QUEENSLAND

1672 - 1712

A Introduction 1672 - 1673

B Relevant Facts 1673 - 1695

C Legal Issues 1696 - 1712

iv

APPENDICES 1713 - 1813

1 Letters Patent issued on 13 March 2014 by the Governor-General

1714 - 1718

2 Letters Patent issued on 30 October 2014 by the Governor-

General

1719 - 1720

3 Letters Patent issued on 24 March 2014 by the Governor of

Queensland

1721 - 1724

4 Letters Patent issued on 9 April 2014 by the Governor of

New South Wales

1725 - 1729

5 Letters Patent issued on 15 April 2014 by the Governor of

Victoria

1730 - 1735

6 Letters Patent issued on 13 May 2014 by the Governor of

Tasmania

1736 - 1740

7 Letters Patent issued on 22 May 2014 by the Governor of

South Australia

1741 - 1746

8 Letters Patent issued on 8 July 2014 by the Administrator of

Western Australia

1747 - 1750

9 Practice Direction 1 1751 - 1769

10 Practice Direction 2 1770 - 1773

11 Practice Direction 3 1774

12 List of witnesses and counsel 1775 - 1800

13 Stakeholder Engagement 1801 - 1802

14 Extracts from the Royal Commissions Act 1902 (Cth) 1803 - 1806

15 Extracts from the Corporations Act 2001 (Cth) 1807 - 1811

16 Extracts from the Fair Work Act 2009 (Cth) 1812 - 1813

v

17 Extracts from the Fair Work (Registered Organisations) Act 2009 (Cth) 1814 - 1817

vi

INTERIM

REPORT Volume 2

Royal Commission into Trade Union Governance and Corruption

vii

viii

PART 8: CFMEU CASE STUDIES

CHAPTER 8.1

INTRODUCTION

1. This Part analyses various case studies relating to the

Construction and General Division of the CFMEU.

2. The Interim Report has already dealt with two ‘relevant entities’

related to the CFMEU and its officers. One concerned Building

Industry 2000 Plus Limited and officers of the Victorian

Divisional Branch (see Chapter 3.4). The second concerned

BERT, BEWT, CIPL and QCTF and officers of the Queensland

and Northern Territory Divisional Branch (see Chapter 5.2).

3. The case studies concerning the CFMEU in this Part are directed

to a consideration of one or more of the following matters:

(a) whether officers of the CFMEU have engaged in

conduct which may amount to a breach of any law,

regulation or professional standard in order to procure

an advantage for the officer or another person or

detriment to a person or organisation;

1007

(b) whether there has been any bribe, secret commission or

other unlawful payment or benefit arising from

contracts, arrangements or understandings between an

employee association, or an officer of an employee

association, and any other party;

(c) which persons or organisations have participated in that

conduct; and

(d) matters reasonably incidental to that conduct.

4. The evidence in relation to the CFMEU case studies indicates

that a number of CFMEU officials seek to conduct their affairs

with a deliberate disregard for the rule of law.

5. That evidence is suggestive of the existence of a pervasive and

unhealthy culture within the CFMEU, under which:

(a) the law is to be deliberately evaded, or crashed through

as an irrelevance, where it stands in the way of

achieving the objectives of particular officials;

(b) officials prefer to lie rather than reveal the truth and

betray the union;

(c) the reputations of those who speak out about union

wrongdoing become the subject of baseless slurs and

vilification.

1008

6. The conduct undertaken by officers of the CFMEU has included:

(a) conduct which may constitute the criminal offences of

blackmail and extortion by officers of the CFMEU in

Victoria and Queensland;

(b) behaviour by officers of the CFMEU in Victoria and

Queensland which may give rise to contraventions of

the boycott, cartel and other provisions of the

Competition and Consumer Act 2010 (Cth);

(c) covert action undertaken by the New South Wales State

Secretary of the CFMEU to convince senior employees

of Cbus secretly to hand over to the CFMEU the private

information of Cbus members and the subsequent

misuse of that information by the State Secretary;

(d) the making of a death threat by one CFMEU

Construction and General New South Wales Divisional

organiser to a fellow organiser (Mr Brian Fitzpatrick),

the failure on the part of senior officials to undertake

any proper and considered investigation into the

incident, and the subsequent victimisation of the

complainant by those same officials;

(e) organising and engaging in industrial action in

deliberate defiance of orders made by the Fair Work

Commission and the Federal Circuit Court of Australia;

and

1009

(f) obstructing Fair Work Building inspectors in the

performance of their statutory duties through

intimidation, insults and generally threatening

behaviour.

7. The reasons why the conclusions concerning possible breaches of

the law have been expressed in the language of possibility is

explained in Chapter 1 of the Interim Report. In appropriate

cases, the Interim Report contains a recommendation that the

Interim Report be referred to the appropriate authority for

consideration of whether the CFMEU or relevant officials should

be prosecuted. A list of such recommendations is found in

Chapter 1 of the Interim Report.

1010

CHAPTER 8.2

BORAL

Subject Paragraph

A - OVERVIEW AND SUMMARY 1

B - SUMMARY OF EVIDENCE 6

Background 9

Boral learns of the CFMEU’s intention to implement black ban: the 2012 phone call 13

The events of 14 February 2013 15

The events of 15 February 2013 21

CFMEU ban in operation from 18 February 2013: general 25

CFMEU ban in operation from 18 February 2013: Oceania 29

CFMEU ban in operation from 18 February 2013: Cardinia Shire Offices 30

CFMEU ban in operation from 18 February 2013: Ferntree Gully Road 31

CFMEU ban in operation from 18 February 2013: Tarneit Shopping Centre 32

CFMEU ban in operation from 18 February 2013: Church 33

1011

Subject Paragraph

Street, Richmond

CFMEU ban in operation from 18 February 2013: Equiset 34

CFMEU ban in operation from 18 February 2013: Drive Projects 40

CFMEU ban in operation from 18 February 2013: Anglo Italian Concrete 45

CFMEU ban in operation from 18 February 2013: Kosta Concreting 52

CFMEU ban in operation from 18 February 2013: Squadron Concrete 57

CFMEU ban in operation from 18 February 2013: S & A Paving 59

The events of late March 2013: CFMEU’s ban expands beyond Boral Concrete 60

26 February-5 April 2013: Boral commences legal proceedings 65

Boral’s meeting with the CFMEU on 23 April 2013 72

Further steps taken by Boral in response to the ban: Supreme Court Proceeding 91

Further steps taken by Boral in response to the ban: involvement of regulators 98

Continuation of the CFMEU ban 102

Continuation of the CFMEU ban: Oceania - Williams Landing 103

Continuation of the CFMEU ban: BRC Piling - Olympic 108

1012

Subject Paragraph

Park

Continuation of the CFMEU ban: BRC Piling - Werribee Plaza 110

Continuation of the CFMEU ban: Town & Country - Werribee Plaza 117

Effect of the ban on Boral 121

C - FINDINGS ON EVIDENCE 128

Relevance of evidence being uncontradicted and procedural issues 128

The ACCC Federal Court Proceeding 153

Evidence of the Boral customer witnesses considered in its own right 159

Evidence of the Boral witnesses considered in its own right 160

The effect of the default judgment 163

D - LEGAL ISSUES 168

Secondary boycott provisions: Competition and Consumer Act 2010 (Cth), section 45D 169

Arrangements affecting the supply or acquisition of goods: Competition and Consumer Act 2010 (Cth), section 45E 191

Cartel provisions of Competition and Consumer Act 2010 (Cth) 206

Blackmail: Crimes Act 1958 (Vic), section 87 227

Possible contempts of court 242

1013

Subject Paragraph

E - RECOMMENDATIONS FOR REFORM 245

A - OVERVIEW AND SUMMARY

1. This chapter of the Interim Report deals with Boral Limited and its

related bodies corporate (together, Boral). To an unusually large

extent, there was no significant attack on the factual submissions made

by counsel assisting. That is because the CFMEU’s main point was

that no finding should be made until certain litigation was completed.

What follows is based on the submissions of counsel assisting. The

particular submissions of the CFMEU have been discussed at

appropriate places.

2. Boral supplies concrete and other products to persons within the

construction industry throughout Australia and overseas. Boral

Limited has four operating divisions: Boral Construction Materials and

Cement, Boral Building Products, Boral Gypsum and Boral USA. It is

a public company listed on the Australian Stock Exchange. In 2014

Boral’s profit after tax was $171 million1 and it had earnings before

interest and tax of $294 million.2

3. In Victoria, Boral operates a number of businesses through subsidiaries

including:

1 Boral MFI-2, Tab 1 (Boral Limited Annual Report to June 2014), p 4. This figure excludes significant items. 2

Boral MFI-2, Tab 1 (Boral Limited Annual Report to June 2014), p 4.

1014

(a) Boral Resources (Vic) Pty Ltd, trading as Boral Concrete

(Boral Concrete), which manufactures and supplies concrete

for use in construction;

(b) Alsafe Premix Concrete Pty Ltd, trading as Alsafe Pre-Mix

Concrete (Alsafe), which manufactures and supplies concrete

for use in construction;

(c) Boral Bricks Pty Ltd, trading as Boral Bricks, which

manufactures and supplies bricks for use in construction;

(d) Boral Masonry Ltd, trading as Boral Masonry, which

manufactures and supplies masonry for use in construction;

(e) Boral Australian Gypsum Ltd, trading as Boral Plasterboard,

which manufactures and supplies plasterboard products for

use in construction; and

(f) Boral Window Systems Ltd, trading as Boral Window

Systems, which manufactures and supplies window products

for use in construction.

4. The balance of this chapter is divided into four sections. Section B sets

out a summary of the relevant evidence before the Commission.

Section C contains the findings to be made in respect of that evidence.

Section D deals with the legal issues thrown up by the evidence.

Section E notes possible areas for reform.

1015

5. In summary:

(a) Since February 2013, the Victorian Branch of the

Construction and General Division of the Construction,

Forestry, Mining and Energy Union (the CFMEU) has black

banned Boral from CFMEU-controlled construction sites in

greater metropolitan Melbourne, as part of an ongoing ‘war’

between the CFMEU and Grocon Pty Ltd and its related

companies (Grocon).

(b) The CFMEU black ban has continued notwithstanding

injunctions obtained by Boral from the Supreme Court of

Victoria in February, March and April 2013 restraining the

CFMEU from carrying on the ban.

(c) By engaging in the ban, the CFMEU may have contravened

ss 45D and 45E of the Competition and Consumer Act 2010

(Cth) and ss 44ZZRF and 44ZZRJ of the Competition Policy

Reform (Victoria) Act 1995 (Vic).

(d) On 23 April 2013, Mr John Setka, State Secretary of the

CFMEU, and Mr Shaun Reardon, Assistant State Secretary of

the CFMEU attended a meeting with Mr Paul Dalton and Mr

Peter Head, officers of the Boral Group. During that meeting

Mr Setka demanded that Boral cease supplying concrete to

Grocon and threatened that if Boral did not stop supplying

concrete to Grocon the CFMEU would continue to escalate its

black ban, and ensure that Boral’s overall market share was

diminished.

1016

(e) By making that demand, Mr Setka may have committed the

criminal offence of blackmail contrary to s 87 of the Crimes

Act 1958 (Vic). Mr Reardon also may have committed the

offence of blackmail or may have aided and abetted Mr Setka

and may be liable as an accessory pursuant to s 323 of the

Crimes Act 1958 (Vic).

B - SUMMARY OF EVIDENCE

6. This section provides a summary of the evidence before the

Commission. That evidence principally consists of:

(a) The oral evidence given, and written statements provided, by

officers of Boral (the Boral witnesses), and

(b) Written statements provided by ten employees/officers of

various of Boral’s customers (the Boral customer witnesses).

7. Despite being provided with every opportunity to do so, the CFMEU

chose not to cross-examine any of the Boral witnesses or the Boral

customer witnesses and not to provide evidence to contradict the

evidence of those witnesses.

8. The CFMEU’s decision not to contradict or challenge the evidence

before the Commission could have an impact upon the factual findings

to be made.3

3 Paragraphs 128ff.

1017

Background

9. Boral is the exclusive supplier of wet concrete to Grocon.4 Grocon is a

privately owned corporate group which operates a large development,

construction and funds management business throughout Australia.

10. As at early 2013, the CFMEU had been engaged in a bitter and long-running industrial dispute with Grocon.5 From Grocon’s perspective,

the dispute appears to centre on Grocon’s refusal to employ CFMEU

union delegates (otherwise known as shop stewards) on its sites, and

its decision to employ representatives chosen by Grocon management

instead.6 From the CFMEU’s perspective, the dispute would appear to

centre on its contention that Grocon will not recognise the right of the

CFMEU to represent workers on industrial and safety matters.7

11. That dispute has given rise to separate proceedings in the Victorian

Supreme Court and the Federal Court:

(a) In late August and early September 2012, Grocon alleged that

misconduct by the CFMEU and some of its leaders took place

at several Grocon building sites in Victoria, including the

Myer Emporium site in Melbourne and the McNab Avenue

4 Linda Maney, witness statement, 9/7/14, para 6. 5 Paul Dalton, witness statement, 9/7/14, para 2; Linda Maney, witness statement, 9/7/14, para 6; Grocon Constructors (Victoria) Pty Ltd v CFMEU [2013] VSC 275 at [100] per Cavanough J. 6

See the findings in Grocon Constructors (Victoria) Pty Ltd v CFMEU [2013] VSC 275 at [100] per Cavanough J. 7 See the findings at Grocon Constructors (Victoria) Pty Ltd v CFMEU [2013] VSC 275 at [100] per Cavanough J.

1018

site in Footscray.8 On 17 August 2012, Grocon sought and

was granted temporary injunctive relief in the Victorian

Supreme Court against the CFMEU in relation to what was

said to be an obstructive picket at the McNab Avenue site.

That order was subsequently confirmed on 21 August 2012

and later extended on 22 August 2012 to prevent picketing of

the Myer Emporium site.

(b) Subsequently Grocon filed in the Supreme Court Proceeding

a number of summonses seeking orders that the CFMEU be

punished for contempt. Grocon ultimately brought 30

charges of contempt against the CFMEU centring on

allegations that the CFMEU disobeyed the Court’s orders by

picketing the Myer Emporium and McNab Avenue sites or

procuring others to do so. On 24 May 2013, Cavanough J

upheld each of the charges and made five findings of

contempt.9 In August 2013, his Honour made two further

findings of contempt. On 31 March 2014, his Honour

imposed penalties of $1.15 million against the CFMEU.10

The CFMEU appealed against his Honour’s orders and an

appeal was heard by the Victorian Court of Appeal on 25 and

28 July 2014. On 24 October 2014, the CFMEU’s appeal was

dismissed.11

8 See the summary recorded in Grocon Constructors (Victoria) Pty Ltd v CFMEU [2013] VSC 275 at [15] ff. 9

Grocon Constructors (Victoria) Pty Ltd v CFMEU [2013] VSC 275. 10 Grocon Constructors (Victoria) Pty Ltd v CFMEU (No 2) [2014] VSC 134. 11

CFMEU v Grocon Constructors (Victoria) Pty Ltd [2014] VSCA 261.

1019

(c) On 5 August 2012, following an investigation by Fair Work

Building and Construction, the Director of Fair Work

Building Industry Inspectorate commenced a proceeding in

the Federal Court arising out of the CFMEU’s conduct in

relation to the picketing of the Myer Emporium and McNab

Avenue sites. After a number of interlocutory applications,12

that proceeding was heard by Tracey J in August 2014 and on

8 October 2014. Judgment is reserved.

12. The relevance of Boral to the dispute between Grocon and the CFMEU

was explained in evidence in this way:

Grocon is a very large customer of Boral’s. We supply Grocon’s concrete exclusively and have done for some time. The CFMEU and Grocon were having a battle over control of Grocon’s sites. Concrete is a critical path item for Grocon’s builds and their business. It is a large component both structurally and dollar wise for their buildings. If the CFMEU was able to stop Grocon getting concrete from Boral this would have a significant impact on Grocon’s business.

The reason this would be so damaging to Grocon is that a lot of the work we [i.e. Boral] do for Grocon is high strength concrete, which is very challenging. Not all suppliers can supply concrete at such a high level of technical specification. If Boral stopped supplying to Grocon, that would mean that Grocon would not be able to operate without a lot of difficulty.13

Boral learns of the CFMEU’s intention to implement black ban: the 2012

phone call

13. In late 2012 Mr Paul Dalton, the Executive General Manager (Southern

Region) for Boral Construction Materials & Cement, received a

12 See CFMEU v Director of Fair Work Building Inspectorate [2014] FCAFC 101. 13 Linda Maney, witness statement, 9/7/14, paras 6-7.

1020

telephone call from Mr John Setka, State Secretary of the CFMEU. Mr

Dalton’s evidence was that Mr Setka said words to the effect: ‘This is

just a heads up that Boral’s going to run into some trouble with this

Grocon stuff. It’s nothing personal’.14

14. Mr Dalton understood this to mean the high-profile dispute between

Grocon and the CFMEU arising out of the Myer Emporium job in the

Melbourne CBD.15

The events of 14 February 2013

15. Mr Richard Lane, Senior Account Manager for Boral Concrete gave

the following evidence:

(a) On 14 February 2013 he received two phone calls from Boral

customers advising that Boral Concrete had been black

banned because of issues relating to Grocon.16 These phone

calls were from Mr Glen Kirkwood, manager at Drive

Projects Pty Ltd (Drive Projects), and Mr Brett Young,

General Manager at Anglo Italian Concrete (Anglo Italian).

The occurrence of the latter call was corroborated by Mr

Young.17

(b) Later the same day, Mr Lane had a conversation with Mr

Mark Milano, Sales Manager of Oceania Universal Paving

14 Paul Dalton, witness statement, 9/7/14, para 3; Paul Dalton, 9/7/14, T:9.13-16. 15 Paul Dalton, witness statement, 9/7/14, para 4. 16

Richard Lane, witness statement, 9/7/14, paras 4-10. 17 Brett Young, witness statement, 18/9/14, para 8.

1021

Pty Ltd (Oceania). Mr Milano advised that Boral had been

banned from a building project on the Cardinia Shire Offices

at Officer.18 That conversation was corroborated by Mr

Milano.19

(c) At 4 pm on the same day, Mr Lane had a conversation with

Mr Wally Gorlin, the CFMEU shop steward at Meridian

Construction Services Pty Ltd (Meridian). Mr Gorlin

informed Mr Lane that the CFMEU had decided to ban Boral

‘from all union controlled sites due to Boral’s reluctance to

support the union at the Grocon pour’.20

16. The evidence of Mr Dalton was that on 14 February 2013 Ms Linda

Maney, General Manager Sales (Southern Region) for Boral

Construction Materials and Cement advised him that a number of

Boral sales employees had been told that the CFMEU had

implemented a black ban on Boral supplying concrete to Melbourne

construction sites.21

17. Mr Peter Head, General Manager, Boral Concrete Southern Region,

gave evidence that a ‘black ban’ meant that Boral would not be

permitted to supply concrete to any project where there was a CFMEU

presence. This would be achieved either by stopping a truck carrying

Boral concrete at the gate to the site, or if a truck had already gained

18 Richard Lane, witness statement, 9/7/14, paras 11-14 19 Mark Milano, witness statement, 18/9/14, paras 6-7. 20

Richard Lane, witness statement, 9/7/14, para 21. 21 Paul Dalton, witness statement, 9/7/14, para 5.

1022

entry to the site, by the CFMEU shop steward directing employees not

to unload the concrete.22

18. An email from Ms Sheri Tarr, Regional HR Manager for Boral

Construction Materials copied to Mr Dalton on 14 February 2013

stated:

CFMEU had a meeting today of members (shop stewards) and organisers, they were told that as of Monday Boral will be turned away from all CFMEU sites due to Boral providing concrete to Grocon for a Sunday pour on 10/2/13. … This information came from Meridian Concrete.23

19. The email also listed a number of Boral’s customers who had been

advised by the CFMEU of its intended action, including Drive

Projects, Meridian, Anglo Italian, Equiset and Oceania.

20. A customer questionnaire completed by Mr Biondo records that Mr

Steve Richardson and Mr Bepi Murer at Equiset told him that the shop

steward at ‘Lyonsville [scil Lionsville] - Pascoe Vale Road’ told him

that the CFMEU had instructed ‘all their steward[s] to ban deliveries

by Boral concrete and anyone affiliated tp [scil to] them including

Alsafe’.24

The events of 15 February 2013

21. On 15 February 2013 Mr Head received a telephone call at 10 am from

Mr John Matthews, Production Manager of Boral Concrete in the

Melbourne CBD. Mr Matthews told Mr Head that Boral was being

22 Peter Head, witness statement, 9/7/14, para 3. 23 Paul Dalton, witness statement, 9/7/14, p 25. 24

Paul Dalton, witness statement, 9/7/14, p 27.

1023

banned from all construction sites because it was supplying concrete to

Grocon.25

22. Mr Head immediately telephoned Mr Frank Tringali, one of the

members of Boral’s lorry owner drivers’ committee, to find out if he

had heard about the issue. Lorry owner drivers are individual drivers

contracted by Boral to deliver concrete in trucks that are not owned by

Boral.26 During the call, Mr Tringali told Mr Head that his drivers

were telling him that the CFMEU had banned Boral concrete deliveries

from Monday (18 February 2013).27

23. Shortly thereafter at 11.30 am Mr Head received a telephone call from

Mr Murray Billings, a fleet owner of approximately six agitator trucks,

who contracts with Boral Concrete to provide transport services. Mr

Billings said words to the effect:

I have been told that we cannot deliver to the Oceania job in Officer, the Drive job at Swinburne Uni in Hawthorn, the Meridian job at Cragieburn shopping centre, or any of the Equiset jobs in the CBD. I can’t understand what this has to do with us and it’s not going to impact Grocon because they are going to get their concrete.28

24. Later that afternoon Mr Head spoke to Mr Ashley Martin, a lorry

owner driver who contracts with Boral Concrete, in Errol Street, North

Melbourne.29 Mr Head’s evidence was that Mr Martin asked him what

was going on with the CFMEU ban on Boral concrete deliveries. Mr

Martin stated, ‘I spoke to the guys at Drive Projects today and they told

25 Peter Head, witness statement, 9/7/14, para 4. 26 Peter Head, witness statement, 9/7/14, para 5. 27

Peter Head, witness statement, 9/7/14, para 6. 28 Peter Head, witness statement, 9/7/14, para 7. 29

Peter Head, witness statement, 9/7/14, para 8.

1024

me not to come back to site next week as no Boral trucks will be

allowed on.’30

CFMEU ban in operation from 18 February 2013: general

25. Mr Head gave evidence that on and from 18 February 2013 the

following long-term customers of Boral ceased ordering concrete for

ongoing major projects in the greater Melbourne metropolitan area:

(a) Oceania;

(b) Equiset Services Pty Ltd (Equiset);

(c) Drive Projects; and

(d) Meridian Construction Services Pty Ltd (Meridian).31

26. Mr Head’s evidence was that in his experience with Boral he was

unaware of any previous occasion where a customer had ceased

ordering concrete from Boral mid-project and had switched to another

supplier.32

27. An email from Mr John Biondo, Business Manager at Alsafe to Mr

Dalton on 18 February 2013 stated that Alsafe had lost approximately

50m3 in concrete orders over the next four days due to the ban.33 The

email also refers to Meridian receiving concrete from Pronto at

30 Peter Head, witness statement, 9/7/14, para 8. 31 Peter Head, witness statement, 9/7/14, para 9. See also Peter Head, 9/7/14, T:31.5-38. 32

Peter Head, witness statement, 9/7/14, para 9. See also Peter head, 9/7/14, T:31.40ff. 33 Paul Dalton, witness statement, 9/7/14, p 19.

1025

‘Craigieburn SC’ in excess of 100m3. Mr Dalton’s evidence was that

Pronto was a competitor of Boral’s and that the reference to

Craigieburn was a shopping centre at which, until that point, Boral had

been supplying concrete to Meridian. The project was already

underway at the time.34 By 21 February 2013, it was estimated that

Boral had lost 500m3 of concrete at the Craigieburn site.35

28. The existence of the CFMEU ban against Boral at this time was also

supported by the evidence of the Boral customer witnesses.

CFMEU ban in operation from 18 February 2014: Oceania

29. Prior to 2013 Boral was Oceania’s preferred concrete supplier and,

with the exception of a small family concreting project, Oceania used

Boral exclusively for its concrete in 2012.36 In 2012 Mr Mark Milano,

Sales Manager and Director of Oceania, began to review Oceania’s

concrete supply arrangements as he no longer wanted to have an

exclusive concrete supplier.

CFMEU ban in operation from 18 February 2013: Cardinia Shire Offices37

30. Mr Milano’s evidence was that in September and October 2012

Oceania started work on the Cardinia Shire Offices at Officer. That

project required environmental concrete and Boral was engaged to

supply its ‘greenstar’ concrete. In mid-February 2013, Mr Milano was

34 Paul Dalton, 9/7/14, T:10.41-11.27. 35 Paul Dalton, witness statement, 9/7/14, p 30 (email from Keith Hunt to Peter Head dated 21 February 2013). 36

Mark Milano, witness statement, 18/9/14, para 3. See also Peter Head, 9/7/14, T31.8-15. 37 Mark Milano, witness statement, 18/9/14, paras 5-9.

1026

contacted by Mr Linus Humphrey, the site supervisor, who told Mr

Milano that he had been advised by the ‘health and safety

representative that we cannot use Boral on site, we have to use

someone else’. Mr Milano called Mr Lane to ask what the issue was.

Mr Milano then spoke with the construction manager from Watpac to

discuss the difficulty which would arise if he could not use Boral. The

next day, the Watpac construction manager advised that ‘you can use

Boral for the vertical slabs and I am seeking dispensation to use Boral

for the suspended slabs’. A few days later, the construction manager

from Watpac advised that Oceania could still use Boral on the project

as there was no other supplier of ‘greenstar’ concrete in the region.

CFMEU ban in operation from 18 February 2013: Ferntree Gully Road38

31. In February 2013 Oceania was engaged on an office building on

Ferntree Gully Road in Nottinghill. The job was almost complete, but

a final pour was scheduled for a Saturday to complete some stairs. The

afternoon before the pour was scheduled, Mr Milano received a call

from Mr Humphrey, the supervisor of the site. Mr Humphrey said that

the builder, Hansen Yuncken, had said to him, ‘I have been told by the

union that there are issues using Boral on the site.’ Mr Milano

understood the union to be the CFMEU. Mr Milano telephoned Mr

Lane who suggested the solution of supplying concrete through Alsafe.

Mr Milano then rang the builder, Hansen Yuncken, to ask whether he

could use Alsafe. The builder advised him that it should be okay to use

Alsafe. Alsafe then supplied the concrete for the stairs the following

day.

38 Mark Milano, witness statement, 18/9/14, paras 11-13.

1027

CFMEU ban in operation from 18 February 2013: Tarneit Shopping

Centre39

32. Oceania started work on the Tarneit Shopping Centre in March 2013.

It had engaged Boral as the concrete supplier on the project. Around

late March or early April 2013, Mr Damien Milano - Mr Mark

Milano’s brother - called him from the site and said: ‘The issue is

spreading further, the organiser from the CFMEU has told me that we

cannot use Boral on the site.’ After this incident, Mr Milano decided

to change Oceania’s concrete supplier. He engaged Holcim

(Australia), one of Boral’s competitors, as he thought continuing with

Boral may cause delays and, as a result, have an impact on project

productivity.

CFMEU ban in operation from 18 February 2013: Church Street,

Richmond40

33. In about March 2013 Oceania started work on a project in Church

Street, Richmond. Mr Humphrey advised Mr Milano that the same

rumours relating to using Boral applied to this site. To begin with, Mr

Milano engaged Boral to supply concrete through either Hanson,

another of Boral’s competitors, or Holcim (Australia). However, this

became too onerous for Oceania. As Mr Milano did not want delays to

the project to be caused by using Boral, he changed to Holcim

(Australia) for the supply of concrete for the rest of this Project.

39 Mark Milano, witness statement, 18/9/14, paras 14-16. 40 Mark Milano, witness statement, 18/9/14, paras 20-22.

1028

CFMEU ban in operation from 18 February 2013: Equiset

34. Equiset was made up of people who had been long-term customers of

Boral.41

35. Mr Steven Richardson, formerly of Equiset, gave evidence in relation

to the origin of the black ban as follows:

In February 2013, there was a buzz in the construction industry and on site in relation to a threatened ban by the CFMEU of Boral on construction sites in Melbourne. The feedback coming from sites was that there had been a meeting that the CFMEU shop stewards had attended at which the CFMEU organisers had discussed Boral.42

36. At this time Equiset was engaged as the head contractor on six projects

in Melbourne. Alsafe was supplying concrete to three of these

projects: 82 Flinders Street, 27 Little Collins Street and Lionsville

Retirement Village in Essendon.

37. Mr Richardson first heard of the CFMEU’s intention to impose a ban

on Boral Concrete when he received a call on 15 February 2013 from

one of Equiset’s site managers. He was advised that the CFMEU shop

steward employed by Equiset had said words to the effect of ‘the

CFMEU would not allow Boral on site.’ Mr Richardson was also

advised that the ban would extend to Alsafe.43

38. Mr Richardson decided to delay a pour at 27 Little Collins Street until

more information could be obtained regarding the CFMEU ban. On

41 Peter Head, 9/7/14, T:31.24-26. 42 Steven Richardson, witness statement, 18/9/14, para 3. 43

Steven Richardson, witness statement, 18/9/14, para 6.

1029

Tuesday 19 February 2012 Mr Richardson had a phone conversation

with Mr Elias Spernovasilis, a CFMEU organiser. Mr Spernovasilis

neither confirmed nor denied the rumours that the CFMEU did not

want Boral or Alsafe on Equiset sites. When Mr Richardson stressed

that he was using Alsafe on the projects, and that the concrete mix was

critical to the projects, Mr Spernovasilis said words to the effect of:

‘you will be right.’44

39. The next day, Mr Richardson attended a concrete pour at the 82

Flinders Street project. The CFMEU shop steward said to him, ‘Alsafe

are not allowed by the CFMEU on site.’ Mr Richardson responded

that he was going to go ahead with the pour.45 Equiset continued to

use Alsafe on the projects. Both projects at 27 Little Collins and

82 Flinders Street required the concrete mixes to be of a consistent

colour and strength over the 12 month period.

CFMEU ban in operation from 18 February 2013: Drive Projects

40. Drive Projects was a long-term established customer of Boral, and was

placing regular orders for concrete up until 15 February 2013.46

41. Mr Anthony Simpson, Managing Director of Drive Projects, gave

evidence that in about July 2012 Drive Projects commenced work on a

construction project at Swinburne University in Hawthorn. Boral was

44 Steven Richardson, witness statement, 18/9/14, para 10. 45 Steven Richardson, witness statement, 18/9/14, para 12. 46

Peter Head, witness statement, 9/7/14, para 9.

1030

engaged to supply concrete for the project. The project involved

approximately $1.4 million worth of concrete.47

42. In around February 2013 Mr Glen Kirkwood (a project manager with

Drive Projects) stated to Mr Simpson that ‘there are problems with

Boral and the CFMEU.’48 Similar evidence was provided by Mr

Steven Richardson, who at the time was acting as a consultant to Drive

Projects in relation to the Swinburne University site. Mr Richardson’s

evidence was that he had attended a meeting with Mr Simpson and

Mr Kirkwood in relation to using Boral at the site, and at this meeting

Mr Kirkwood said that he had been told by Mr Phil Filado, the

CFMEU shop steward, ‘Don’t use Boral on site’.49

43. Mr Simpson’s evidence was that: ‘The project had been handed over

late to Drive Projects and the project could not afford any additional

delays due to the Boral issue.’50 Further, he stated:

We then switched to Alsafe concrete in the period immediately after we found out that there was an issue with Boral. However, the message that we received from site was that the issues in relation to Boral would not be resolved in the short term and that Alsafe was not a viable alternative to avoid the issues.51

44. Mr Simpson was informed by site personnel that ‘the CFMEU would

make life difficult for us on the Project if we used Boral’. For these

reasons Drive Projects decided not to take the risk of using Boral and

47 Anthony Simpson, witness statement, 18/9/14, para 4. 48 Anthony Simpson, witness statement, 18/9/14, para 5. 49

Steven Richardson, witness statement, 18/9/14, paras 13-15. 50 Anthony Simpson, witness statement, 18/9/14, para 7. 51

Anthony Simpson, witness statement, 18/9/14, para 8.

1031

looked for an alternate concrete supplier and/or solution.’52 This

evidence was corroborated by Mr Richardson.53

CFMEU ban in operation from 18 February 2013: Anglo Italian Concrete

45. Anglo Italian Concrete (Anglo Italian) purchases concrete from

various concrete suppliers in Victoria.

46. Around July 2012 Anglo Italian was engaged as a subcontractor on the

construction of a data centre at Radnor Drive, Derrimut.54 Anglo

Italian engaged Boral to supply concrete on the project as they required

‘envirocrete’. Envirocrete is Boral’s speciality and they had been

engaged to supply concrete for the project on this basis.

47. In February 2013 Mr Michael Newitt, the site supervisor for the

project, had a conversation with the CFMEU delegate, known as

‘Herbie’. Herbie approached Mr Newitt to say that the union did not

want Boral to supply the concrete and to ask whether Anglo Italian

could use someone else.55

48. The evidence of Brett Young (General Manager of Anglo Italian) was

that Mr Newitt rang him to advise that ‘Boral trucks will not be

allowed on site.’ Mr Young said that Mr Newitt advised that he had

52 Anthony Simpson, witness statement, 18/9/14, para 9. 53 Steven Richardson, witness statement, 18/9/14, para 18. 54

Brett Young, witness statement, 18/9/14, para 4. 55 Michael Newitt, witness statement, 18/9/14, paras 5-6.

1032

been told this by ‘Herb’ who was passing on the instructions from his

superiors at the CFMEU.56

49. Mr Young telephoned Mr Lane, his contact at Boral, to confirm

whether Boral trucks would be allowed onto the project. A significant

pour for a roof slab was due to occur on 21 February 2013 and

confirmation was needed before this could go ahead.57 Mr Lane was

unable to confirm whether the Boral trucks would be stopped at the

site. Accordingly, Mr Young was unwilling to risk the possibility of

the pour being interrupted or stopped and so decided to use Hanson to

provide the concrete instead.58 Mr Lane’s evidence corroborated Mr

Young’s account.59

50. Around 4 or 5 March 2013, Mr Lane contacted Mr Young to advise

that Boral could again supply concrete to the site. Boral supplied the

fourth and final pour for the roof slab on 6 March 2013.60

51. Around 24 April 2013, Mr Newitt was advised that the CFMEU did

not want Boral delivering to the site. Herbie said words to the effect, ‘I

have spoken to my office and they said they are still not happy for us to

56 Brett Young, witness statement, 18/9/14, para 7. 57 Brett Young, witness statement, 18/9/14, paras 8-9. 58

Brett Young, witness statement, 18/9/14, para 10. 59 Richard Lane, witness statement, 9/7/14, paras 7-10. 60

Brett Young, witness statement, 18/9/14, para 11.

1033

use Boral.’61 Accordingly, Anglo Italian completed the project using

Hanson as its concrete supplier.62

CFMEU ban in operation from 18 February 2013: Kosta Concreting

52. Mr Darren Dudley was a manager for Kosta Concreting. Mr Jaromir

Misztak was a foreman for Kosta Concreting.

53. Their evidence was that in early 2013 Kosta Concreting was engaged

on a job in Elizabeth Street, Melbourne which involved the

construction of a nine storey apartment building. Kosta Concreting

had engaged Boral to supply the concrete for the project.

54. Mr Misztak’s evidence was that in about February or March 2013 Lou,

the CFMEU shop steward on the project, had said to him words to the

effect of ‘No

Boral on site’.63

55. Mr Dudley’s evidence was that in early April 2013 he was told by his

boss Sam that Lou had told Sam words to the effect of ‘You can’t use

Boral on site.’64 Shortly after this, in a conversation Mr Dudley had

with Lou, he discussed using Boral on site. Lou said to Mr Dudley

words to the effect, ‘use Boral if you like, but it will take you all day to

unload one truck.’65

61 Michael Newitt, witness statement, 18/9/14, para 10. 62 Brett Young, witness statement, 18/9/14, para 12. 63

Jaromir Misztak, witness statement, 18/9/14, paras 9. 64 Darren Dudley, witness statement, 18/9/14, para 8. 65

Darren Dudley, witness statement, 18/9/14, para 9.

1034

56. As Kosta Concreting was not willing to risk the possibility of trucks

being turned away or stopped by the CFMEU or any delays to the

Elizabeth Street Project, Kosta Concreting had to find an alternative

concrete supplier.66 This led Kosta Concreting to set up an account

with HyTec, to whom they paid $8 more per cubic metre for concrete

than they had paid to Boral.67

CFMEU ban in operation from 18 February 2013: Squadron Concrete

57. Mr Fabrizio Ubaldi was a manager for Squadron Concrete. He

testified that in early 2013 Squadron Concrete was engaged as a

landscaping subcontractor on the Tower 8 Project at Lorrimer Street,

Port Melbourne. The project was an apartment building being built by

Mirvac. Alsafe was engaged by Squadron Concrete to supply

concrete.68

58. Towards the end of Squadron Concrete’s work on the project, in

around February 2013, the CFMEU shop steward on the project said to

Mr Ubaldi ‘there is an issue with companies associated with Boral

Concrete and you shouldn’t use them on site.’ Mr Ubaldi’s evidence

was that:

As I did not want any issues on site and did not want the CFMEU to cause any unnecessary delays to Squadron Concrete’s works on site I decided to change to a different concrete supplier for [the] balance of Squadron Concrete’s work on the Tower 8 Project. I did not want to take the risk that using Alsafe would cause issues with the CFMEU. I changed to

66 Darren Dudley, witness statement, 18/9/14, para 10; Jaromir Misztak, witness statement, 18/9/14, para 10. 67

Darren Dudley, witness statement, 18/9/14, para 14. 68 Fabrizio Ubaldi, witness statement, 18/9/14, para 3.

1035

Pronto for the following two orders of the remaining work of the Tower 8 Project.69

CFMEU ban in operation from 18 February 2013: S & A Paving

59. Mr Santi Mangano, Director of S & A Paving, gave the following

evidence. Around 2013 S & A Paving engaged Alsafe to supply

concrete on the Hawthorn Aquatic Centre Project. The CFMEU

delegate said to Mr Mangano words to the effect: ‘if you use Boral on

site, we are going to check up on the trucks.’70 Mr Mangano’s

evidence was that as he could not afford any delays on site, or to stop

and start concrete pours, he changed suppliers for the remainder of the

project.71

The events of late March 2013: CFMEU’s ban expands beyond Boral

Concrete

60. In late March 2013 the CFMEU’s black ban of Boral Concrete in

Melbourne widened to Boral more generally.

61. Mr Iain Weinzierl was Account Manager for Boral Quarries and Boral

Recycling in Melbourne. He gave the following evidence.72

62. At approximately 7.50 am on 27 March 2013, Mr Weinzierl was

informed by Mr Robert Gillespie (Sales Service Centre Manager, Boral

Concrete and Quarries) that two truckloads of crushed rock had been

69 Fabrizio Ubaldi, witness statement, 18/9/14, para 5. 70 Santi Mangano, witness statement, 18/9/14, para 3. 71

Santi Mangano, witness statement, 18/9/14, para 5. 72 Ian Weinzierl, witness statement, 9/7/14, paras 3-8.

1036

turned away at the Costco shopping centre at Market Street, Ringwood

(Costco Project) due to the CFMEU ban. Boral had been engaged by

CDL Constructions Pty Ltd (CDL) to supply crushed rock to the

project. Following this incident, Mr Weinzierl became concerned that

there may have been similar incidents affecting other customers and so

decided to contact Civi Works, a major customer of Boral Quarries and

Boral Concrete. At approximately 9.30 am on 27 March 2013, Mr

Weinzierl contacted Mr Jay Wilks, Senior Foreman at Civi Works to

discuss what he had heard about the CFMEU bans of Boral. Mr Wilks

advised that the CFMEU shop steward on a project which Civi Works

was starting work on in Richmond for Kane Constructions had told

Civi Works not to use Boral Asphalt or Boral Concrete. Mr Wilks said

that the ban was a complete ban of Boral:

It is a complete ban - the shop steward from Kane told me that the CFMEU will apply maximum force to black ban all Boral products on site - Boral Building Products, Quarries, Concrete and Asphalt. We have to use alternative suppliers.

63. Mr Weinzierl was concerned about the exchange and arranged to meet

Mr Wilks the next day. The conversation included the following

exchange:

Wilks: My understanding is that the CFMEU shop stewards have said to all the larger civil contractors in Melbourne and the major commercial builders in Melbourne to stay away from all Boral products on CFMEU sites and to cancel all supply agreements with Boral. Boral’s name is mud with the CFMEU at the moment. It is all in relation to the Grocon saga.

Weinzierl: What do you understand that to mean - we thought the issue was limited to Boral Concrete?

1037

Wilks: No, it relates to all of Boral - Boral Quarries, Concrete, Asphalt and Plasterboard. Anything that is delivered in a Boral truck and is identified as a Boral product.

64. Mr Weinzierl’s evidence concerning the Costco Project was

corroborated by Mr Ben Cifali, a site engineer for CDL at the Costco

Project. His evidence was that in late March 2013 CDL ordered two

truckloads of crushed rock from Boral for delivery the following

morning. That morning, Mr Cifali witnessed the Boral trucks being

refused entry to the site by the CFMEU shop steward. He spoke to the

shop steward who stated: ‘No Boral trucks onsite.’ From this point on,

CDL ordered crushed rock from a different supplier.73

26 February-5 April 2013: Boral commences legal proceedings74

65. On 26 February 2013, shortly after the ban came into effect, Boral

Concrete and Alsafe commenced proceedings in the Supreme Court of

Victoria against the CFMEU seeking damages and final injunctions

(Supreme Court Proceeding).

66. By summons filed the same day, Boral sought interlocutory

injunctions. One was an injunction which would restrain the CFMEU

from procuring or advising any person employed or engaged to

perform concreting work at specified construction sites not to perform

that work or to perform it otherwise than in the manner in which it

would customarily be performed. The specified construction sites

included:

73 Ben Cifali, witness statement, 18/9/14, paras 2-7. 74 See generally Boral MFI-I, Vol 1

1038

(a) the Craigieburn Shopping project site being carried on by

Meridian;

(b) the 27 Little Collins, 82 Flinders Lane and ‘Lyonsville’ [scil

Lionsville] Retirement Village project sites being carried on

by Equiset;

(c) the Tower 8 project site being carried on by Squadron

Concrete;

(d) the Swinburne University project site being carried on by

Drive Projects;

(e) the Radnor Drive, Derrimut project site being carried on by

Anglo Italian; and

(f) the Cardinia Shire Offices and Ferntree Gully Road project

sites being carried on by Oceania.

67. On 28 February 2013, Hollingworth J granted the interlocutory relief

sought. The CFMEU had been served. But it chose not to appear.

68. On 7 March 2013, Hollingworth J confirmed and extended the

injunction beyond the specified construction sites to any location in

Victoria. Again the CMFEU was served. But again it did not appear.

69. On 5 April 2013, Hollingworth J made orders joining a number of

related Boral entities to the proceeding. She granted Boral leave to

amend its Statement of Claim. Her Honour also granted a further

1039

extension of the injunction by expanding its reach beyond concrete.

The effect was to restrain the CFMEU from carrying on a black ban in

Victoria of any of Boral products. Once again, the CFMEU did not

appear.

70. Following the grant of the injunctions, Mr Dalton sent a letter on 11

April 2013 to Boral’s customers in the Victorian region informing

customers of the court’s orders.75 Mr Dalton received a number of

replies. One of the substantive replies from a Boral customer included

the following:

Unfortunately with the way the Union plays their game, we are still left in a crappy position regardless of court orders or decisions.

We have specifically been told by Union Shop Stewards on two projects that we cannot use Boral.

… We may have written protection from the courts but the final power still belongs to the Union.76

71. There was other evidence to show that notwithstanding the court’s

order, the CFMEU continued its ban at this time. For example, an

email from Ms Maney to Mr Dalton on 15 March 2013 recounted: ‘We

have had two instances today of Shop Stewards telling customers that

“Boral are banned”. In one case (Civiworks) 1m3 of concrete was

cancelled on-route by the customer (the customers instructed us to

dump the load and that he will pay for the concrete).’77 The evidence

75 Paul Dalton, witness statement, 9/7/14, p 46. 76 Paul Dalton, witness statement, 9/7/14, p 52. 77

Paul Dalton, witness statement, 9/7/14, p 45.

1040

provided by the Anglo Italian witnesses78 and the Kosta Concreting

witnesses79 is to the same effect.

Boral’s meeting with the CFMEU on 23 April 2013

72. In April 2013, Mr Head discussed with Mr Dalton the possibility of

speaking to CFMEU officials to resolve the situation which had arisen.

73. On 22 April 2013 Mr Head had lunch with Mr Vin Sammartino, a

director of Hacer Group Pty Ltd (Hacer), and a person with many

contacts in the construction industry. Mr Head raised the difficulties

which black ban was causing Boral.80

74. During the lunch, Mr Sammartino phoned Mr Reardon, Assistant State

Secretary of the CFMEU. After the call ended, Mr Head stated that Mr

Sammartino said:

the CFMEU’s issue is with Daniel Grollo and John Van Camp of Grocon…it’s now personal between Grollo, Van Camp and Setka.81

75. Mr Sammartino suggested that Mr Head provide this information to Mr

Dalton. He said that he would arrange for Mr Setka and Mr Dalton to

have a discussion. Mr Sammartino phoned Mr Head later that day,

advising that the CFMEU were keen to talk off the record.82

78 See paras 45 - 51 above. 79 See paras 52 - 56 above. 80

Peter Head, witness statement, 9/7/14, para 21-22. 81 Peter Head, witness statement, 9/7/14, para 25. 82

Peter Head, witness statement, 9/7/14, paras 27-28.

1041

76. On 23 April 2013 Mr Dalton and Mr Head met Mr Reardon and Mr

Setka to discuss these issues. The meeting lasted for around 45

minutes.83

77. Mr Reardon and Mr Setka said that the discussion was off the record.

No-one stated at any stage that the conversation was without

prejudice.84 However, Mr Head’s evidence was that at one stage Mr

Reardon said ‘I would be happy if the legal stuff stopped but Setka

does not give a stuff’.85 Mr Setka also made an indirect reference to

the proceedings by Boral against the CFMEU by saying that Boral’s

lawyers in the proceedings were ‘no good’.86

78. Mr Setka did most of the talking at the meeting. Mr Setka mentioned

the CFMEU’s planned day of action for 30 April, which was being

held to protest about fatalities on Grocon sites.87

79. Mr Setka also stated that there was a deep feeling in the CFMEU

against Mr Daniel Grollo, then Chief Executive of Grocon and Mr

John Van Camp, then head of Grocon’s Safety, Systems and Industrial

Relations Divisions.88

80. Mr Dalton stated that Mr Setka said:

83 Paul Dalton, witness statement, 9/7/14, para 44. 84 Paul Dalton, witness statement, 9/7/14, para 29; Peter Head, witness statement, 9/7/14, para 38. 85

Peter Head, witness statement, 9/7/14, para 38. 86 Paul Dalton, witness statement, 9/7/14, para 29. 87

Paul Dalton, witness statement, 9/7/14, para 31. 88 Paul Dalton, witness statement, 9/7/14, para 33.

1042

Concrete supply is like an intravenous drug. Builders can’t survive without it.

We’re at war with Grocon and in a war you cut the supply lines.

Boral Concrete is a supply line to Grocon.89

81. Similarly, Mr Head stated that Mr Setka said words to the effect of ‘the

CFMEU is at war with Grocon’ and ‘if you want to starve the enemy

you cut their supply lines … we have not started’.90

82. Mr Dalton also recalls Mr Setka stating:

The CFMEU has limited resources so we will focus on “the Green and Gold”.

We will impact you more and more. Truck emissions testing will be the next phase of the action the CFMEU will take against Boral.

We’ve been fighting with one arm behind our back and we’re willing to significantly ramp up our campaign.91

83. Mr Dalton stated that he understood Mr Setka’s reference to the ‘Green

and Gold’ to refer to Boral: these are Boral’s corporate colours and the

company is commonly referred to in the industry by this name.92

84. Mr Setka then said that if Boral did not cooperate with the CFMEU,

they would target membership of its concrete batchers. Concrete

batchers are employed at Boral’s plants and are responsible for mixing

the raw materials for the various grades of concrete that Boral supplies.

89 Paul Dalton, witness statement, 9/7/14, para 35. 90 Peter Head, witness statement, 9/7/14, para 42. 91

Paul Dalton, witness statement, 9/7/14, para 36. 92 Paul Dalton, witness statement, 9/7/14, para 37.

1043

Boral’s concrete batchers are generally covered by the Australian

Workers’ Union.93

85. Mr Head’s evidence was that during the meeting Mr Setka said words

to the following effect:94

Just stop supplying Grocon for two weeks and this will go away.

How about we all have a bit of fun and just stop the Grocon trucks at the plant and let the other trucks through?

86. Mr Dalton’s evidence was similar. He stated that, during the meeting,

Mr Setka said words to the following effect:95

All you [Boral] have to do is stop supply to Grocon for a couple of weeks.

We can facilitate this by blockading your concrete plants and stopping supplies for Grocon directly. No one would have to know that you have stopped supply.

87. Mr Dalton’s evidence was that he advised Mr Setka that Boral would

not be doing any deals with the CFMEU and would continue to support

Grocon.96 Mr Setka advised that:

All wars end and once peace is established the CFMEU will be at the table to divide up the spoils. The CFMEU will decide who gets what and what market share Boral will get.97

93 Paul Dalton, witness statement, 9/7/14, para 39. 94 Peter Head, witness statement, 9/7/14, para 43. 95

Paul Dalton, witness statement, 9/7/14, para 40. 96 Paul Dalton, witness statement, 9/7/14, para 41. 97

Paul Dalton, witness statement, 9/7/14, para 42.

1044

88. Mr Head’s evidence about what Mr Setka said was similar: ‘At the end

we will be divvying up the spoils and we’ll decide who supplies who.

Grocon won’t give a shit about Boral at that point.’98

89. Immediately after the meeting, both Mr Dalton and Mr Head took

notes of the meeting. Those notes were in evidence before the

Commission.

90. Mr Mike Kane, CEO of Boral Ltd, reacted to the meeting as follows:

I was asked as to what would our position be, because we were being asked to stop supplying Grocon by this union, and I informed the management of the Victorian operations that we do not take orders from anyone as to who our customers are and that if we were going to have this union tell us who our customers were we should give them the keys of the operation and let them run the business. But we weren't doing that, so the answer was no, you supply your customers, you stick with your commitments and that was the way we proceeded.99

Further steps taken by Boral in response to the ban:100 Supreme Court

Proceeding

91. On 20 May 2013, Boral obtained default judgment on its Amended

Statement of Claim with the CFMEU to pay damages to be assessed.

The Amended Statement of Claim pleaded causes of action for the torts

of intimidation and conspiracy.

92. On 22 August 2013, Boral filed a summons in the Supreme Court

Proceeding seeking orders that the CFMEU be punished for contempt.

98 Peter Head, witness statement, 9/7/14, para 45. 99 Mike Kane, 9/7/14, T:57.15-24. 100

See generally Boral MFI-1, Vol 1.

1045

The statement of charges alleged that on 16 May 2013 Mr Joseph

Myles had engaged in a blockade of a Regional Rail Link construction

site at Joseph Street, Footscray, in contravention of the injunction

granted on 5 April 2013. It was further alleged that the CFMEU was in

contempt by failing to publish a statement on the CFMEU’s webpage

setting out certain matters required by Hollingworth J’s orders.

93. On 9 September 2013, the CFMEU filed a Notice of Appearance in the

Supreme Court Proceeding, more than six months after the proceeding

was commenced.

94. On 14 October 2013, Boral filed a summons for assessment of

damages. This was based on the view that Boral was in a position to

quantify its loss in relation to projects affected by the black bans in

early to mid-2013.

95. On 8 November 2013, the CFMEU made an application to set aside the

default judgment which had been entered on 20 May 2013. The

CFMEU’s application to set aside default judgment was heard by

Derham AsJ in the Supreme Court of Victoria on 30 January 2014. On

10 September 2014 the Court dismissed the CFMEU’s application to

set aside the default judgment.101

96. On 23 September 2014 the CFMEU filed a Notice of Appeal appealing

against Derham AsJ’s decision to the Trial Division of the Supreme

Court.102 Only two grounds of appeal were stated. The first is a novel

101 See Boral Resources (Vic) Pty Ltd v Construction, Forestry, Mining and Energy Union [2014] VSC 429. 102

Boral MFI-2, Tab 3.

1046

ground that, despite copious contrary authority, the tort of intimidation

does not exist in Australian law. The second ground is that

Derham AsJ, in refusing to set aside the default judgment, erred in the

exercise of his discretion. Only the first ground is now being

pressed.103

97. In relation to the summons seeking relief for contempt the following

events took place:

(a) On 4 September 2013, the Attorney-General for Victoria

applied to be joined or to intervene in relation to the contempt

summons. That application was heard by Digby J on 19

September 2013. On 28 October 2013 Digby J granted leave

to the Attorney-General to be joined as a party.104 On 11

November 2013, the CFMEU sought leave to appeal from

Digby J’s order. On 13 December 2013, the Victorian Court

of Appeal heard and dismissed the CFMEU’s application for

leave to appeal.105

(b) On 2 October 2013, the Boral parties applied for discovery

against the CFMEU. On 23 October 2013, Daly AsJ refused

orders for discovery. On 1 November 2013, the Boral parties

appealed against Daly AsJ’s decision. That appeal was heard

by Digby J on 29 January 2014 and allowed on 25 March

103 Boral MFI-4, tab 1 (Letter dated 29 October 2014 from Slater & Gordon to Herbert Smith Freehills, responding to letter dated 28 October 2014 from Herbert Smith Freehills to Slater & Gordon). 104

Boral Resources (Vic) Pty Ltd v CFMEU [2013] VSC 572. 105 CFMEU v Boral Resources (Vic) Pty Ltd [2013] VSCA 378.

1047

2014.106 On 8 April 2014, the CFMEU applied for leave to

appeal Digby J’s decision ordering discovery. On 24 October

2014, the Victorian Court of Appeal delivered judgment

refusing the CFMEU leave to appeal.107

Further steps taken by Boral in response to the ban: involvement of

regulators

98. In April 2013 Boral brought the CFMEU’s conduct to the attention of

the Australian Competition and Consumer Commission (ACCC). Mr

Kane’s evidence to the Commission was that as at 7 July 2014 the

ACCC was conducting a formal investigation into these issues.108

99. In connection with that investigation, on 27 June 2013 the ACCC

issued the CFMEU with a notice under s 155(1)(c) of the Competition

and Consumer Act 2010 (Cth) requiring it to produce certain

documents in relation to possible contraventions of s 45D of that Act.

The ACCC subsequently issued notices to the CFMEU and its proper

officer, Yorick Piper, alleging that the CFMEU knowingly furnished

false or misleading information to the ACCC.

100. In June 2013, Boral brought the CFMEU’s conduct to Fair Work

Building and Construction’s attention. Mr Kane gave evidence that as

106 Boral Resources (Vic) Pty Ltd v Construction, Forestry, Mining and Energy Union [2014] VSC 120. 107

CFMEU v Boral Resources (Vic) Pty Ltd [2014] VSCA 261. 108 Mike Kane, Letter to Royal Commission, 9/7/14, p 6.

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at 7 July 2014 Fair Work Building and Construction was conducting a

formal investigation into these issues.109

101. On 21 May 2014, the Director of the Fair Work Building Industry

Inspectorate commenced a proceeding in the Federal Court against the

CFMEU and Mr Joseph Myles for pecuniary penalties for alleged

contraventions of the Fair Work Act 2009 (Cth) (Federal Court

Proceeding). The contraventions are said to arise from the alleged

blockade of the Regional Rail Link construction site at Joseph Street,

Footscray on 16 May 2013. The CFMEU and Mr Myles have applied

to stay the Federal Court Proceeding.

Continuation of the CFMEU ban

102. Notwithstanding the injunctions obtained by Boral in the Supreme

Court Proceeding, the CFMEU ban has largely continued.

Continuation of the CFMEU ban: Oceania - Williams Landing

103. In early February 2014, Boral successfully quoted for a job to supply

concrete to Oceania at the Williams Landing Shopping Centre Project.

Hacer was the builder on the project.

104. Mr Lane gave evidence that at some stage after Boral was awarded the

job, Mr Mark Milano spoke to him, saying:

I have met with Guy, the CFMEU Shop Steward on the site. He said to me that Boral is banned from the job. I pushed back and told him that Boral gives me the best commercial outcomes as I have based my pricing

109 Mike Kane, Letter to Royal Commission, 9/7/14, p 6.

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for the job on your offer to me based on our long term trading arrangements. Guy said he’d check with the CFMEU organiser, Drew McDonald. He later came back to me and told me that McDonald said there is no way Boral is allowed on this site.110

Mr Lane gave an account of this conversation to Ms Maney, who sent

an email to Mr Dalton on 5 March 2014 summarising Mr Lane’s

account at that time. The account in that email is consistent with Mr

Lane’s evidence.111

105. Boral decided to offer an incentive to Oceania of approximately

$20,000 worth of building material if Oceania could convince Hacer to

allow Boral to supply Oceania at the Williams Landing Shopping

Centre.112 Mr Sammartino of Hacer told Mr Milano that he needed to

speak with Mr Reardon of the CFMEU.113

106. Ultimately, Mr Milano attended a meeting with Mr Reardon on 4

March 2014 at which Mr Milano put his position to Mr Reardon and

Mr Reardon said words to the effect ‘ok, let me think about it’. Mr

Lane’s evidence, which is supported by Ms Maney’s email of 5 March

2014, is that Mr Milano reported that at that meeting Mr Reardon said

words to the effect of:

Boral will go down. By going legal, Boral has put the spotlight on the Union, costing us money. Boral will pay for this.

Leave it with me. I’ll be back to you before Thursday.114

110 Richard Lane, witness statement, 9/7/14, para 29. 111 Linda Maney, witness statement, 9/7/14, p 12. 112

Richard Lane, witness statement, 9/7/14, para 30. 113 Richard Lane, witness statement, 9/7/14, para 31; Mark Milano, witness statement, 18/9/14, para 27. 114

Richard Lane, witness statement, 9/7/14, para 32.

1050

107. Mr Reardon later confirmed that it was permissible for Oceania to use

Boral on the Williams Landing job.

Continuation of the CFMEU ban: BRC Piling - Olympic Park

108. Mr Dalton gave evidence that on 1 April 2014 he was advised that

BRC Piling (BRC) had cancelled an order of concrete at Olympic Park

‘because of union issues.’115 He instructed Mr Lane to initiate the

same process that Boral had adopted for Williams Landing to try to

avoid the CFMEU’s black ban.116 BRC had been a customer of

Boral’s for around 15 years. The relationship had developed over the

period from around January 2013 to a point where BRC bought

approximately 90% of its concrete from Boral.117

109. However, after further consideration, Boral calculated that it was not

feasible to offer a discounted rate of $136 per cubic metre to BRC,

given the low volume of the job.118 BRC engaged Boral’s competitor,

Holcim, for the Olympic Park project.

Continuation of the CFMEU ban: BRC Piling - Werribee Plaza

110. Around one week later, the same issue arose again with BRC on the

Werribee Plaza project.119 BRC had won the retention pile contract at

115 Paul Dalton, witness statement, 9/7/14, para 56. 116 Paul Dalton, witness statement, 9/7/14, para 57. 117

Richard Lane, witness statement, 9/7/14, para 35. 118 Paul Dalton, witness statement, 9/7/14, para 63. 119

Paul Dalton, witness statement, 9/7/14, para 65.

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the project.120 Mr Dalton gave evidence that Mr Craig Boam, the

Director of BRC, said to him: ‘If you give us that special rate for the

Werribee Plaza project, we’ll do our best to keep Boral on site

there.’121 Given BRC’s support, Boral decided to offer the discounted

rate of $136 per cubic metre to BRC for this project in order to win the

work.122

111. On 9 April 2014, BRC advised Boral that it had won the job to supply

concrete for the project.123

112. However, Mr Lane and Ms Maney gave evidence of conversations they

each had with Mr Boam on 15, 16 and 17 April 2014 to the effect that

the CFMEU and Straightline Excavations (BRC’s customer) had

applied pressure on Mr Boam to discontinue Boral’s services.124

113. On 17 April 2014 Mr Boam ordered six cubic metres of concrete to be

delivered at 2 pm the same day. The concrete was delivered and

poured apparently without incident.125

114. On 23 April 2014 Mr Lane and Ms Maney met with Mr Boam and

asked about the issues on the Werribee Plaza site.126 Mr Boam advised

120 Richard Lane, witness statement, 9/7/14, para 36. 121 Paul Dalton, witness statement, 9/7/14, para 65. 122

Paul Dalton, witness statement, 9/7/14, para 66. 123 Paul Dalton, witness statement, 9/7/14, para 67. 124

Linda Maney, witness statement, 9/7/14, paras 28-44; Richard Lane, witness statement, 9/7/14, paras 50-53. See also Linda Maney, witness statement, 9/7/14, p 16 (email from Linda Maney to Paul Dalton and others). 125

Linda Maney, witness statement, 9/7/14, para 46; Richard Lane, witness statement, 9/7/14, para 58.

1052

that Mr Tarkan Gulenc, a director of Straightline, had told him to

source another supplier by Monday. Despite their requests that he

push back against the CFMEU’s demands, Mr Boam stated that his

company could not afford the backlash or adverse effects from the

CFMEU. During the meeting, Mr Boam said:

Straightline is my client and they’ve told us to find another supplier straight after Easter because the union has put that much pressure on them. …

[Drew] MacDonald has been on site and has instructed us not to use Boral. He’s one of the union organisers and the boss of the Probuild shop steward on the project.127

As an alternative, the Boral representatives recommended that BRC

consider using Alsafe as a substitute supplier.

115. Mr Boam telephoned Mr Lane later that day, advising that Straightline

had agreed to allow Alsafe on site. He placed a to-be-confirmed order

for 2 pm on Monday 28 April 2014.128

116. On 28 April 2014 Mr Lane phoned Mr Boam several times, attempting

to confirm the job which was due to go ahead that afternoon.129 At

2.10 pm, Mr David McKerrell from BRC Piling called Mr Lane and

said words to the effect of:

126 Linda Maney, witness statement, 9/7/14, paras 47-62; Richard Lane, witness statement, 9/7/14, paras 60-68. 127

Richard Lane, witness statement, 9/7/14, paras 64, 66. 128 Linda Maney, witness statement, 9/7/14, para 63; Richard Lane, witness statement, 9/7/14, paras 68-69. 129

Richard Lane, witness statement, 9/7/14, paras 73-74.

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It’s all off. They won’t allow Alsafe here either and we’ve got to now find another supplier. You’ve given us an excellent rate here, it’s going to be hard for us to get that rate anywhere else.130

Continuation of the CFMEU ban: Town & Country - Werribee Plaza

117. Town & Country, a Ballarat-based concreting company, has a

longstanding relationship with Boral.131 Town & Country had won the

basement structural concrete contract for the Werribee Plaza project.

118. At the beginning of March 2014, Town & Country contacted Boral and

requested a quote for 4000m3 of concrete for the Werribee Plaza

project. On 14 April 2014, Mr Neil Phillips, Boral’s sales

representative for Town & Country, had a conversation with Mr Liam

Kinniburgh, part owner of Town & Country, during which Mr

Kinniburgh said:132

I have an issue with the Probuild shop steward on site. He asked me what concrete we would be using and when I said Boral he said ‘no way will Boral be on this site, they are suing us. If you push ahead with Boral expect trouble and hold ups on site’. I told him we would be using Boral.

119. On 1 May 2014 Mr Kinniburgh had a phone conversation in which he

told Mr Phillips that Town & Country would not be ordering from

Boral at the Werribee Plaza site:

Phillips: How is Werribee looking?

Kinniburgh: How do I put this, I have to be very careful what I say here, well, good for me but not for your guys.

Phillips: Why?

130 Richard Lane, witness statement, 9/7/14, para 77. 131 Paul Dalton, witness statement, 9/7/14, para 76. 132

Neil Phillips, witness statement, 9/7/14, para 14.

1054

Kinniburgh: Well the obvious, the same reason why the piling mob can’t use you guys.133

120. The following day, they met for lunch to discuss the situation. A

subsequent email sent from Mr Phillips to Ms Maney outlines the

conversation. In it, Mr Phillips notes that Mr Kinniburgh said to him

words to the effect: ‘there were witnesses to the Union telling Liam

that Boral is not to be on the site, but Liam does not want to be

involved in any way with this matter.’134

Effect of the ban on Boral

121. Mr Kane’s evidence was that since the start of the secondary boycott,

Boral has suffered an estimated loss in earnings (before interest and

tax) and in legal costs totalling approximately $8 million to $10 million

to the end of June 2014.135 His evidence was that as at 30 June 2014,

there were 80 CFMEU controlled construction projects underway in

Melbourne. Boral was only supplying concrete to five projects.

122. Further, in relation to construction projects in Melbourne exceeding

$50 million in value, there had been a decline in Boral’s market share

from around 35-40% in the 2011-2013 financial years to 9% in the

2014 financial year. There had been a decline in requests for quotes

from around 70-80% in the 2011-2013 financial years to 27% in the

2014 financial year.136

133 Neil Phillips, witness statement, 9/7/14, para 33 and p 34 (email from Neil Phillips to Lind Maney dated 1 May 2014). 134

Neil Phillips, witness statement, 9/7/14, p 34. 135 Mike Kane, Letter to Royal Commission, 9/7/14, p 3. 136

Mike Kane, Letter to Royal Commission, 9/7/14, p 15.

1055

123. In addition, Boral’s Melbourne concrete plant had experienced a 35%

reduction in capacity over the period of the ban and Boral’s lorry

owner drivers had experienced an average 18.4% reduction in earnings

for the three half year periods between 1 January 2013 and 30 June

2014 compared to the preceding half year period.137

124. Mr Kane summarised the impact of the CFMEU’s black ban on Boral

thus. He said the CFMEU had:

the ability to stop us, not only from delivering immediately onto many of these sites, an unheard of thing in the concrete world, that you could stop mid project and switch out concrete suppliers. But then once they were able to effect that result, they were able to intimidate our customer base to the point where we were no longer being solicited to bid on projects in this CBD context and high rise crane construction projects.138

125. In addition, he stated that in his 41 or 42 years’ experience in the

construction markets and building products and materials industry:

I've never seen a situation where you win work, you book it, you plan for it, you're ready to proceed, and then you're told by your supplier that they can't use you, not because there's a quality issue or anything with our work or our products, it's because a third party has told them that they're no longer allowed to use us. It's unheard of.139

126. In early June 2014 Ms Maney and the sales team prepared a

spreadsheet noting the status of each of Boral’s key customers.140

127. The sales team made phone calls to each of the customers with whom

they had a regular relationship. The spreadsheet records a number of

137 Mike Kane, Letter to Royal Commission, 9/7/14, pp 4-5. 138 Mike Kane, 9/7/14, T:58.32-39. 139

Mike Kane, 9/7/14, T:60.38-44. 140 Paul Dalton, witness statement, 9/7/14, para 86.

1056

comments regarding customers’ reluctance to use Boral due to the

CFMEU situation. These include: ‘Will use Boral on Non Union sites.

Will try on Union Jobs’; ‘Will not use Boral as Pronto do not have the

Union checking their trucks’; ‘Nervous about the Union issue and will

not use Boral on Union sites.’141

C - FINDINGS ON EVIDENCE

Relevance of evidence being uncontradicted and procedural issues

128. The CFMEU decided not to cross-examine the Boral witnesses or the

Boral customer witnesses. It also decided not to supply contradictory

evidence to counsel assisting with a view to his tendering it. These

decisions mean that the evidence of all of the witnesses is

uncontradicted.

129. In civil proceedings, the unexplained failure by a party who could, and

would be expected, to give evidence, call witnesses or tender

documents may properly allow a Court more easily to accept, and draw

inferences from, the evidence before the Court. The justification is

that the unexplained failure suggests that the party feared to adduce the

evidence because it would not have assisted. It is ‘plain

commonsense’.142

130. Although the proceedings of the Commission are not adversarial, a

principle akin to that in Jones v Dunkel can apply. An unexplained

failure by a person who would be expected to proffer testimony or

141 Paul Dalton, witness statement, 9/7/14, para 87. 142 Jones v Dunkel (1959) 101 CLR 298 at 321 per Windeyer J.

1057

documents contradicting other evidence before the Commission so that

it might be tendered by counsel assisting may properly allow the more

easy acceptance of the evidence, and may properly permit the

inferences to be drawn from it to be drawn more strongly.

131. The evidence squarely raises the possibility of contraventions of

various laws by the CFMEU and certain of its officers. The evidence

would be expected to be controverted by the CFMEU and its officers.

132. On 18 September 2014 senior counsel appearing for the CFMEU (who

also appeared for Mr Setka and Mr Reardon) advanced an explanation

for the CFMEU’s decision. It is the only explanation advanced. He

said he:

would not propose to cross-examine the Boral witnesses on the basis of the outstanding litigation where we and some of our members are defendants, and for that reason we have not put on statements from those members and we have not sought to deal with Boral in these proceedings, reserving our position in the curial proceedings.143

133. The reference to ‘the outstanding litigation’ would appear to be to the

Supreme Court Proceeding and the Federal Court Proceeding. So far

as the Commission is aware, as at 18 September 2014 they were the

only proceedings involving Boral and the CFMEU.

134. For a number of reasons, this is not a cogent explanation.

135. First, insofar as the Federal Court Proceeding and the charges of

contempt in the Supreme Court Proceeding are concerned, those

proceedings centre on specific allegations of conduct by Mr Joseph

143 Mr Agius, 18/9/2014, T:76.44-77.3.

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Myles on 16 May 2013. The Commission has no evidence before it in

relation to those matters. Accordingly, the existence of those

proceedings can provide no explanation for the CFMEU not seeking to

controvert the evidence before the Commission which concerns other

matters.

136. Secondly, insofar as the tort claims brought by Boral against the

CFMEU in the Supreme Court Proceeding are concerned it is difficult

to see how the giving of oral evidence by relevant officers and

members of the CFMEU to the Commission would affect that

proceeding, and cause prejudice to the CMFEU by giving Boral an

unfair advantage or otherwise create substantial injustice.

(a) At present, Boral has been completely successful. It has

obtained judgment by default. Unless and until that judgment

is set aside on appeal, there is no prospect of evidence on

liability, as distinct from quantum, being given in the

Supreme Court Proceeding.

(b) If the CFMEU’s appeal, which was heard by the Victorian

Court of Appeal on 10 December 2014, fails, then the

judgment stands and the Supreme Court Proceeding is

concluded (save for the assessment of damages). In that

event the Supreme Court Proceeding could not give rise to

any substantial injustice of a kind which would preclude the

expression in this Interim Report of concluded views in

respect of the Boral case study.

1059

(c) If the CFMEU’s appeal succeeds on the only ground now

pressed, that the tort of intimidation does not exist in

Australian law, then the Court of Appeal will have

determined that Boral’s amended statement of claim discloses

no cause of action. The cause of action pleaded in conspiracy

would collapse with the cause of action in intimidation

because it is dependent on it. If the Court of Appeal reaches

that conclusion, the amended statement of claim in the

Supreme Court Proceeding will be dismissed. In that event,

again, the Supreme Court Proceeding could not give rise to

any substantial injustice which would prevent the expression

of concluded views in the Interim Report in respect of the

Boral case study.

(d) Boral has not indicated that, if the appeal succeeds, the

Supreme Court Proceeding could continue on radically

amended pleadings alleging new causes of action. But even if

that course were theoretically possible, what prejudice

would the CFMEU suffer in the Supreme Court Proceeding if

certain of its officers had given evidence to the Commission?

That evidence could not sensibly be said to give Boral an

unfair advantage by opening up otherwise undiscovered lines

of inquiry. The availability of orders for discovery and

interrogatories, subpoenas, notices to produce and the

preparation of affidavits or outlines of evidence all serve to

ensure that both parties will be able to render themselves

aware of the case to be met before trial in the Supreme Court

and will be able to prepare for that trial.

1060

137. Thirdly, insofar as the CFMEU has documentary evidence which is

capable of controverting the evidence before the Commission, there is

no explanation why that evidence could not have been adduced.

138. Fourthly, at the first day of public hearings concerning the CFMEU on

7 July 2014, in response to certain press reports about the CFMEU’s

conduct regarding Boral, senior counsel for the CFMEU requested the

Commission to ‘make it plain’ that no conclusions adverse to the

interests of the CFMEU should be drawn until the CFMEU or those

adversely affected have had an opportunity to test and contradict the

evidence adverse to them.144 Senior counsel for the CFMEU declared:

the CFMEU, and in particular those individuals who may be adversely affected by the evidence, have a concern that their reputation will be trashed and that the press and the media will not reflect the fact that no adverse conclusions will be drawn until the union and/or those adversely concerned have had an opportunity to meet that evidence.145

139. This request and this declaration made by senior counsel appeared to

suggest that the CFMEU was very keen to bring forward any evidence

which would explain or contradict evidence adverse to its interests and

those of its officials and members, but felt aggrieved about the

consequences of not being able to do so in the week of 7 July. In fact

they have not done so. That suggests either that (a) their protestations

to the Commission on 7 July 2014 were confected - a view only to be

reached with extreme reluctance - and the CFMEU did not really want

an opportunity to contradict the evidence, presumably because there

was nothing exculpatory that could be said in response or (b) although

144 Mr Agius, 7/7/2014, T:6.27-34. 145 Mr Agius, 7/7/2014, T:7.10-16

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their protestations were genuine, again, there was nothing exculpatory

that could be said in response. Whichever is the correct conclusion, it

does not assist the CFMEU.

140. On 28 November 2014 senior counsel for the CFMEU endeavoured to

explain away the 7 July 2014 statement as follows:146

The CFMEU raised a complaint concerning denial of procedural fairness in that it did not have an opportunity to meet any allegations that may be made against it in a timely way. Counsel Assisting has treated this statement … as an indication that the CFMEU would volunteer evidence in the case study. This goes too far. On 7 July, the CFMEU had no way of knowing what would be the totality of the evidence that Counsel Assisting would call in the case study. They had no way of knowing, for example, that the hearsay letter from Mr [Kane] would, months later, be supplemented. A great deal of the evidence available at that time was hearsay. Much of it could never have been used in curial proceedings.

Direct evidence was only called months later when that supplementary evidence was put on. In those circumstances, nothing said on 7 July in those proceedings could properly be taken to be an indication that the CFMEU proposed to volunteer statements from witnesses in answer to the Boral allegations.

141. The so-called ‘direct’ evidence was in fact all put on just over two

months later. The submission that the 7 July statement could not have

been taken as an indication that the CFMEU would volunteer

statements in answer to the Boral allegations because on 7 July the

evidence relating to Boral was weaker than it later became is hard to

follow. Ordinarily where only weak evidence backs an allegation there

is less need to reply to it than when stronger evidence is put on.

142. The only response which the CFMEU has made to the Boral evidence

has been in the form of publicity, not proof. Mr Setka published the

following material on the CFMEU website:

146 Mr Agius, 28/11/14, T:29.17-36.

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US citizen Kane

Mike Kane, an American citizen who is paid $36,400 a week in his role as Boral CEO was allowed to deliver a political speech where he lectured everyone on how Australian laws need to be more like those in the US. He complained that industry was suffering as a result of the union’s power. What suffering? Last time I looked, the major construction companies were making massive profits.147

143. The only argument this contains is an assertion that the industry in

general (and presumably Boral in particular) had not suffered from

union power: yet Boral’s claims to have suffered, up to 30 June 2014,

to the extent of $8-10 million, does not seem implausible. Mr Setka’s

other points are merely ad hominem attacks. They command no

intellectual assent. They do not even seek to appeal to the intellect.

Their assembling of appeals to xenophobia, envy and political hatred

suggest that they can point to no substantive considerations. And the

evidence which Mr Setka complained about was not objected to by his

counsel: there was not a single objection to the letter in which some of

Mr Kane’s evidence was given, or to any question he was asked, or to

any answer he gave.

144. The CFMEU (together with Messrs Setka and Reardon) advanced two

other submissions which were put separately but have some

interlinking.

145. One was that the processes adopted in relation to the Boral study did

not give the CFMEU a fair time to consider and respond to the

allegations.148 The submission is based on the service of various

statements by Boral customers in the three weeks before the Boral

147 Boral MFI-3, tab 1. 148 CFMEU submissions, 14/11/14, Pt 8.2, para 8.

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hearing resumed on 18 September 2014 to continue the first hearing on

7 July 2014.149 That may explain a difficulty in cross-examining the

customers on 18 September 2014. It does not explain why no CFMEU

evidence was offered to counsel assisting with a view to the Boral-related evidence being answered. No application was made for the

fixing of further hearing days on which to cross-examine or have

further evidence received. Instead the CFMEU publicly indicated that

it would not challenge or respond to the statements from Boral’s

customers because of the litigation it was involved in with Boral.150

The CFMEU had previously adopted a contrary position on 7 July

2014, to the effect that it did want to respond to and challenge the

evidence. The CFMEU did not suggest on 18 September 2014 or at

any time prior to putting on its written submissions on 14 November

2014 that it wanted more time to put on responsive statements or

needed more time to investigate. The statements from Boral’s

customers were in respect of incidents which had already been dealt

with extensively in the statements of Boral witnesses in July 2014.

The Boral customers described the view from the Boral side, the

customers described the view from their side. The CFMEU has been

in a position to investigate and deal with those matters for over four

months.

146. The other CFMEU submission was that the rule in Jones v Dunkel

could not be applied because it was counsel assisting who had failed to

call witnesses and that there was no obligation on the CFMEU to

149 CFMEU submissions, 14/11/14, Pt 8.2, paras 7-8. 150 Mr Agius, 18/9/14, T:76.43-77.3.

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volunteer evidence.151 In consequence it was said that no findings

should be made against Messrs Setka and Reardon.152 Of course there

is no obligation on the CFMEU to volunteer evidence. The question is

what flows from its failure to take up an opportunity to do so. The

initial hearings on the Boral issue were in Melbourne in the week

beginning 7 July 2014. The hearings were regulated by Practice

Direction 1. Practice Direction 1 contemplated that following a

witness giving evidence, if any person wished to advance material

bearing on the accuracy of the evidence given by that witness, a second

witness could prepare a statement setting out the evidence that the

second witness would give if called. This procedure, which has been

used in previous Royal Commissions, balanced on the one hand the

need for a person affected by the evidence given by a witness to have

the opportunity to reply to it, and, on the other hand, the need to

identify and isolate the area of factual contest with a view to the

hearing proceeding more expeditiously.

147. Practice Direction 1, para 3, stated:

Where the Commissioner thinks it appropriate, he may dispense with or vary these practices and procedures, and any other practices or procedures that are subsequently published or adopted.

148. The CFMEU, Mr Setka and Mr Reardon made no application for a

variation to Practice Direction 1. Instead, senior counsel for the

CFMEU, Mr Setka and Mr Reardon made his declaration at the start of

the proceedings on 7 July about the CFMEU’s concern for the

151 CFMEU submissions, 14/11/14, Pt 1, paras 29-36. 152 CFMEU submissions, 14/11/14, Pt 8.2, paras 9-15.

1065

reputations of individuals who may be adversely affected by the

evidence, which was quoted above.153

149. The individuals to whom senior counsel referred must have included

Mr Setka and Mr Reardon. They were persons ‘who may be adversely

affected by the evidence’. The only reasonable conclusion to be drawn

from the quoted statement was that Mr Setka and Mr Reardon were

proposing to supply statements to counsel assisting in the ordinary

course. Had either of them done so, he would have been called by

counsel assisting to give that evidence.

150. At some point the CFMEU radically changed its strategy. The

CFMEU, Mr Setka and Mr Reardon chose not to contest any of the

evidence. Having made that tactical decision, and having chosen in

their own interests not to go into evidence, they cannot contend that

there should be no findings against them in the Interim Report. Nor

can they prevent any reliance on a principle analogous to Jones v

Dunkel.

151. The reasoning involved in that principle does not depend on using

inferences as a substitute for evidence. There is direct and

unchallenged evidence from the witnesses from Boral and Boral’s

customers. Because it is uncontradicted, it may more readily be

accepted. And where inferences can be drawn from it, there is no good

reason why those inferences should not be drawn more strongly. No

good reason was advanced to explain their decision not to challenge

that evidence. Further, in the CFMEU application for authorisation to

153 See paras 138-139 above.

1066

be represented it was said that its appearance would assist the

Commission in ‘enabling it to consider all relevant matters’. There is

no reason to doubt the bona fides of that assurance. In that event, if Mr

Setka or Mr Reardon had something relevant to contribute, they would

have done so. That they have not done so indicates that they cannot

contradict the Boral evidence and the evidence of the Boral customers.

152. The CFMEU submitted that the reasoning which led counsel assisting

to urge a delay in considering Katherine Jackson’s position pending the

outcome of civil litigation brought against her by a branch of the HSU

ought to produce the same consequence in relation to the litigation

brought by Boral against the CFMEU.154 This submission proceeds on

the incorrect premise that the two case studies are the same. A few

examples of the many differences may be selected. With Boral there is

a discrete body of uncontested factual material capable of assessment,

the CFMEU has judgment against it, and even if that judgment were

reversed, the suit against the CFMEU would be dismissed and the

proceedings would no longer exist. In the case of Katherine Jackson,

there is no judgment, the litigation appears destined to continue, there

is no discrete body of uncontested factual material capable of ready

assessment, and the opposing parties to the civil suit appeared before

the Commission and advanced contrary positions about the materials in

such a way as to make it more (rather than less) difficult for a

concluded view to be taken about them. In addition, the parties to the

HSU-Jackson civil case have each expressly concurred with the course

proposed by counsel assisting.

154 CFMEU submissions, 14/11/14, Pt 8.2, paras 33-36.

1067

The ACCC Federal Court Proceeding

153. An important event has taken place since the delivery of the CFMEU’s

written submissions on 14 November 2014. Since 7 October 2014 it

has been widely known that this Commission’s Interim Report will be

presented on 15 December 2014. The ACCC commenced Federal

Court proceedings against the CFMEU, Mr Setka and Mr Reardon on

20 November 2014. As the late Joseph Vissarionovich Stalin used to

say, this is no coincidence.

154. In those proceedings the ACCC seeks among things pecuniary penalty

orders and publication orders. The proceedings are civil in nature.155

The factual matters pleaded in the ACCC statement of claim are

similar to the factual matters recounted above. The ACCC has alleged

that the respondents engaged in conduct that involved a contravention

of s 45D of the Competition and Consumer Act 2010 (Cth) and an

attempt to induce Boral to contravene s 45E of that Act. The ACCC

does not allege the existence of a cartel between the CFMEU and the

Boral customers. That may be on the basis that it views the conduct of

the Boral customers as being independent, not concerted. In passing,

an argument that it is not necessary to establish the existence of

communications between all of the participants to a cartel arrangement

or understanding may be foreshadowed.156

155. The ACCC Federal Court proceeding is at a very early stage. It is

reasonable to expect that it will be some time before there is a trial.

The first directions hearing is listed for 12 December 2014. It is not

155 CEPU v ACCC (2007) 162 FCR 466. 156 See below paras 219 - 221.

1068

clear what factual and legal issues are in dispute. No doubt that will

become clearer when and if the CFMEU puts on a defence. At present,

however, it is unclear whether any of the factual matters alleged will be

in serious contest.

156. Even assuming that there turns out to be some factual issues, the

ACCC Federal Court proceeding will be heard by a judge. The court

which hears the matter will decide it on the basis of the particular body

of evidence tendered, having seen that evidence tested through cross-examination, and having heard detailed argument from the parties as to

what facts should be found on the basis of the evidence and as to how

the law is to be applied to those facts.

157. In those circumstances it is difficult to see, as a matter of ‘practical

reality’ as opposed to ‘theoretical tendency’,157 what risk any

expression of views in the Interim Report poses to the course of justice

in the Federal Court. This is not a case where the Commission has

attempted to summons a person who is the subject of a criminal charge

to give evidence, thereby impinging upon that person’s right to silence

at the criminal trial and thereby affecting the person’s defence.158

Attempts to compel Messrs Setka and Reardon to give evidence before

the Commission about matters which are in contest in the Federal

Court might cause issues of that kind to arise. But no attempt is being

made. Further, since this is not a case where the proceedings in

question will be determined by a jury, there can be no rational fear that

157 Hammond v Commonwealth of Australia (1982) 152 CLR 188 per Gibbs CJ. 158 Hammond v Commonwealth of Australia (1982) 152 CLR 188.

1069

the Interim Report and publicity about it would influence the outcome

of the proceedings.159

158. No real risk to justice has been identified by the CFMEU, even though

it raised the ACCC investigation as a basis for contending that this

Commission should not express conclusions. It is that investigation

which has led to the Federal Court Proceeding. In written submissions

dated 25 November 2014, counsel assisting invited the CFMEU to

make a further submission on this discrete subject if it wished. The

CFMEU did not apply for leave to deliver any further written

submission. In oral argument on 28 November 2014, it submitted only

that the Interim Report should not make findings of contraventions

against the respondents to the ACCC Federal Court proceeding. That

submission is acceded to for reasons discussed in Chapter 1. No

finding of a contravention of the Act has been stated. All that is said is

that certain behaviour may constitute a contravention.

Evidence of the Boral customer witnesses considered in its own right

159. In any event and irrespective of any analogy with Jones v Dunkel, the

evidence of the Boral customer witnesses is truthful and generally

reliable.

(a) None of the Boral customer witnesses have any motive

falsely to implicate the CFMEU, its members or officers. To

the contrary, they have a great material and financial interest

in exculpating and pacifying the CFMEU. Their evidence

159 Victoria v Australian Building Construction Employees’ and Builders’ Labourers’ Federation (1982) 152 CLR 25; Hammond v Commonwealth of Australia (1982) 152 CLR 188.

1070

against the CFMEU is strongly against the industrial and

financial interests of the businesses they work for. They

know that the CFMEU has a long memory. They know it has

an instinct for punishment. To adapt Mr Reardon’s words to

Mr Milano on 4 March 2014, like Boral, they ‘will pay for

this’.160

(b) To a very large extent the evidence of the witnesses is direct

evidence of what they saw at relevant construction sites,

evidence of what they were told by CFMEU shop stewards at

those construction sites, or evidence corroborating the

evidence of other witnesses who attest to what they were told

by CFMEU shop stewards.

(c) The reliability of the evidence given by the Boral customer

witnesses in relation to the CFMEU’s ban of Boral is

reinforced by the striking similarity of the CFMEU conduct

reported at the various construction sites.

Evidence of the Boral witnesses considered in its own right

160. Again, irrespective of any analogy with Jones v Dunkel, the evidence

of the Boral witnesses is truthful and reliable. They have no apparent

motive to lie. Where relevant contemporaneous documents exist their

evidence is consistent with those documents. Their evidence is

consistent with the general pattern of evidence given by the Boral

customer witnesses. In some cases it is directly corroborated by

evidence of the Boral customer witnesses. Those of the Boral

160 See para 106.

1071

witnesses who gave oral evidence were entirely satisfactory in

demeanour. They gave the strong impression of being very competent

and professional executives concerned only to ensure that their

employer could carry on its business with customers who never

complained about the quality of Boral products or service. They

showed no spite or animus against the CFMEU.

161. For obvious reasons, some of the evidence given by the Boral

witnesses is hearsay, consisting of reports made to them (or others) by

Boral customers about what was said to them by CFMEU officials on

site. Although the Commission is not bound by the rules of evidence,

it may of course have regard to those rules when assessing the

reliability of evidence. Even under the rules of evidence, and ignoring

the many exceptions to the hearsay rule as now applying under the

Evidence Act 2008 (Vic), the evidence of the Boral witnesses about

what customers reported to them is admissible to prove the fact of the

report of a CFMEU ban by the customer. The existence of numerous

reports of a CFMEU ban from a variety of sources over an extended

period is relevant to demonstrating, and is in fact very good evidence

of, the fact of the CFMEU ban.

162. In particular, the evidence of Mr Dalton and Mr Head concerning what

occurred and was said at the 23 April 2013 meeting was truthful and

reliable. Both men hold senior positions in Boral. Their accounts are

consistent. Thus they corroborate each other. Mr Kane’s evidence

plainly shows that the evidence was not of recent invention. Their

accounts are also confirmed by independently made contemporaneous

notes of the meeting. There is nothing inherently improbable or

1072

implausible in their evidence. Their accounts may be accepted in their

entirety.

The effect of the default judgment

163. It is safe to act on the evidence of both the Boral witnesses and the

Boral customer witnesses for another reason.

164. On 5 April 2013, Hollingworth J directed the CFMEU to file and serve

a defence by 4pm on Friday 17 May 2013. The CFMEU did not

comply with that direction. Her Honour gave judgment in default of

defence on 20 May 2013. Those events meant that the CFMEU was

taken to admit all the allegations of material fact in the amended

statement of claim. Among those allegations of material fact are those

made in paragraphs 4-11.161

4. It is and, at all material times, was the practice of the CFMEU to appoint, at each Victorian Construction Project site, a person or persons to fulfil the role of, or otherwise to act as, its “delegate”, “shop steward” or “job representative” for that site.

5. Each of the persons who, at times material to this statement of claim, was appointed as described in paragraph 4 above (each of whom is referred to, hereafter, as a “Delegate”) was authorised by the CFMEU to, amongst other things:

(a) liaise, on behalf of the CFMEU, with management representatives at the Victorian Construction Project site in connection with which they were so appointed; and

(b) communicate, implement and enforce - on behalf of the CFMEU and in howsoever a manner that they considered appropriate - the policies of the CFMEU at that Victorian Construction Project site.

161 Boral MFI-1, Vol 1, tabs 8, 9.

1073

6. On or about Thursday, 14 February 2013, the CFMEU adopted a policy, or otherwise resolved, to the effect that the entities, businesses and individuals that manage or perform work in connection with Victorian Construction Projects (hereafter, “Victorian Construction Principals and Subcontractors”) ought not to, in connection with such management or the performance of such work, receive, use or work with concrete supplied by either of Boral or Alsafe.

165. The particulars to paragraph 6 defined the expression ‘the Ban Against

Boral and Alsafe’ as the conduct described in paragraph 6. The

pleading continued:

6A. On or about - or, in any event, prior to - Wednesday, 27 March 2013, the CFMEU adopted a policy, or otherwise resolved, to the effect that Victorian Construction Principals and Subcontractors ought not to, in connection with the management of, or the performance of work in connection with, Victorian Construction Projects, receive, use or work with any products supplied by any of the plaintiffs.

166. The particulars to paragraph 6A defined the expression ‘The Ban

Against All Boral Products’ as the conduct described in paragraph 6A.

The pleading continued:

7. Since Thursday, 14 February 2013, the CFMEU has communicated to Victorian Construction Principals and Subcontractors the following, namely:

(a) the existence of the Ban Against Boral and Alsafe; and

(b) its intention to enforce - or, otherwise, to support - that ban by procuring or encouraging individuals who are employed or otherwise engaged to work at Victorian Construction Project sites and whose work includes, or would normally or otherwise include, receiving, using or working with concrete (hereafter, “Concrete Workers”), to refuse or fail insofar as involves concrete supplied by either of Boral or Alsafe, to perform that work as, if or when directed or required, by any person, to do so (which refusals or failures are referred to

1074

hereafter as, “Refusals by Concrete Workers to Work With Boral and Alsafe Concrete”).

7A. Since Wednesday, 27 March 2013, the CFMEU has communicated to Victorian Construction Principals and Subcontractors the following, namely:

(a) the existence of the Ban Against All Boral Products; and

(b) its intention to enforce - or, otherwise, to support - that ban by procuring or encouraging individuals who are employed or otherwise engaged to perform construction work at Victorian Construction Project sites (hereafter, “Construction Workers”), to refuse or fail, insofar as involves building products supplied by any of the plaintiffs, to perform that work as, if or when directed or required, by any person, to do so (which refusals or failures are referred to hereafter as, “Refusals by Construction Workers to Work With Boral Products”).

8. Each of the Concrete Workers is and/or, at all material times, was party to a contract pursuant to which he is and/or was employed - or, alternatively, engaged - to perform work at a Victorian Construction Project site.

8A. Each of the Construction Workers is and/or, at all material times, was party to a contract pursuant to which he is and/or was employed - or, alternatively, engaged - to perform work at a Victorian Construction Project site.

...

9. There are and, at all material times, were items of each of the contracts referred to at paragraphs 8 and 8A above, relevantly including that the individual Concrete Worker or Construction Worker who is and/or was party to each such contract will and/or would, at the Victorian Construction Project site at which he is and/or was employed or engaged - and in such manner as he is and/or was reasonably directed or required to by his employer or its nominee - perform tasks associated with the receipt or use of,

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and otherwise work with, products supplied by any of the plaintiffs (hereafter, “the Lawful Direction Clause”).

10. The procuring or encouraging of either or both of:

(aa) Refusals by Concrete Workers to Work With Boral and Alsafe Concrete; and

(ab) Refusals by Construction Workers to Work With Boral Products,

if carried out at or in connection with individual Victorian Construction Project sites, would involve, or would have involved, the CFMEU, by its Delegate or Delegates at each such site (or howsoever otherwise) - or, alternatively the Delegate or Delegates at each such site, in concert with the CFMEU:

(a) intentionally procuring the breach, by individual Concrete Workers or Construction Workers employed or engaged (as the case may be) to perform work at that site, of the Lawful Direction Clause of the contract pursuant to which each such worker was so employed or engaged; and

(b) hindering or preventing, contrary to sec. 45D of the Competition and Consumer Act 2010 (Cth), the acquisition, by Victorian Construction Principals and Subcontractors employed or engaged at that site, of (respectively):

(i) concrete from Boral and Alsafe (or one or other of them); and

(ii) building products from any one or more of the plaintiffs,

in each case for the purpose, and with the likely effect, of causing the plaintiffs’ businesses (or the business of one or more of the plaintiffs) substantial loss or damage.

11. Alternatively to paragraph 7 above:

(a) on or about Thursday, 14 February 2013 - and with the intention of causing each of Boral and Alsafe loss or damage - the CFMEU and Delegates from Victorian Construction Project sites conspired to communicate to Victorian Construction Principals and Subcontractors (or some of them) as follows, namely:

1076

(i) the existence of the Ban Against Boral and

Alsafe; and

(ii) the intention of the CFMEU and/or the Delegates to enforce - or, otherwise, to support - that ban by procuring or encouraging Refusals by Concrete Workers to Work With Boral and Alsafe Concrete,

(hereafter, the “Concrete Ban Communications”); and

(b) since Thursday, 14 February 2013 - and pursuant to the conspiracy pleaded at subparagraph (a) above - the Delegates (or some of them) have effected each of the Concrete Ban Communications.

11A. Alternatively to paragraph 7A above:

(a) on or about Wednesday, 27 March 2013 - and with the intention of causing each of the plaintiffs loss or damage - the CFMEU and Delegates from Victorian Construction Project sites conspired to communicate to Victorian Construction Principals and Subcontractors (or some of them) as follows, namely:

(i) the existence of the Ban Against All Boral

Products; and

(ii) the intention of the CFMEU and/or the Delegates to enforce - or, otherwise, to support - that ban by procuring or encouraging Refusals by Construction Workers to Work With Boral Products,

(hereafter, the “Boral-wide Ban Communications”); and

(b) since Wednesday, 27 March 2013 - and pursuant to the conspiracy pleaded at subparagraph (a) above - the Delegates (or some of them) have effected each of the Boral-wide Ban Communications.

1077

167. Those material facts, now admitted by the CFMEU, are consistent with

and supportive of the evidence of the Boral witnesses and the Boral

customer witnesses.

D - LEGAL ISSUES

168. The evidence gives rise to the potential contravention of a number of

legislative provisions.

Secondary boycott provisions: Competition and Consumer Act 2010 (Cth),

section 45D

169. Section 45D of the Competition and Consumer Act 2010 (the Act)

prohibits secondary boycotts. The section provides:

(1) In the circumstances specified in subsection (3) or (4), a person must not, in concert with a second person, engage in conduct:

(a) that hinders or prevents:

(i) a third person supplying goods or services to a fourth person (who is not an employer of the first person or the second person); or

(ii) a third person acquiring goods or services from a fourth person (who is not an employer of the first person or the second person); and

(iii) that is engaged in for the purpose, and would have or be likely to have the effect, of causing substantial loss or damage to the business of the fourth person.

(2) A person is taken to engage in conduct for a purpose mentioned in subsection (1) if the person engages in the conduct for purposes that include that purpose.

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(3) Subsection (1) applies if the fourth person is a corporation.

(4) Subsection (1) also applies if:

(a) The third person is a corporation and the fourth person is not a corporation; and

(b) The conduct would have or be likely to have the effect of causing substantial loss or damage to the business of the third person.

170. Contravention of s 45D is not a criminal offence. Instead, a person

who contravenes s 45D is liable to a pecuniary penalty: the Act, s

76(1). The maximum penalty payable is $750,000 in respect of a body

corporate and $500,000 in respect of a person who is not a body

corporate: the Act, ss 76(1A)(a), (1B)(b). In addition, a person who

suffers loss or damage by reason of conduct in contravention of s 45D

may recover the amount of the loss or damage: the Act, s 82. Section

87 also grants a power to order monetary relief. And s 80 creates a

power to grant injunctive relief.

171. The scope of s 45D is affected by s 45DC. That section provides that

where two or more persons, each of whom is a member or officer of

the same ‘organisation of employees’, engage in conduct in concert

with each other then, unless the organisation can prove otherwise, the

organisation is taken to have engaged in concert with those persons and

for the same purposes. ‘Organisation of employees’ means an

organisation that exists or is carried on for the purpose, or for purposes

that include the purpose, of furthering the interests of its members in

relation to their employment eg a trade union. The section creates a

rebuttable presumption that a trade union has engaged in conduct

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proscribed by s 45D if two or more of the participants in the conduct

are members or officers of the union.162

172. Section 45DD creates a number of defences to s 45D. Most relevantly,

s 45DD(2) provides that if an employee, or two or more employees

employed by the same employer, engage in conduct in concert with an

organisation of employees and the dominant purpose for which the

conduct is engaged in is substantially related to the remuneration,

conditions of employment, hours of work or working conditions of the

employee, or any of the employees engaging in the conduct, then

relevantly the organisation of employees does not contravene s 45D.

173. On the evidence before the Commission, the CFMEU’s conduct from

14 February 2013 onwards was conduct, which in concert with a

number of CFMEU shop stewards and senior officers:

(a) hindered or prevented a number of customers of Boral from

acquiring goods from Boral, with the purpose and effect, or

likely effect, of causing substantial loss or damage to Boral’s

business; and

(b) hindered Boral from suppling goods to Grocon with the

purpose and likely effect of causing substantial loss or

damage to Grocon’s business.

174. ‘Acting in concert’ involves ‘knowing conduct, the result of

communications between the parties and not simply simultaneous

162 ANL Container Line Pty Ltd v Maritime Union of Australia [2000] ATPR 41-769 at 41,079-41,080 per Lee J.

1080

actions occurring spontaneously’.163 Acting in concert can be inferred

from the conduct of the parties, as where there is such a concurrence of

time, character, direction and result as to lead to the inference that

apparently separate acts were the outcome of pre-concert.164

175. There is no direct evidence before the Commission of communication

between the various CFMEU shop stewards who implemented the

black ban at the various construction sites in Melbourne, The inference

is that their actions against Boral were part of a deliberate and

orchestrated course of conduct originating from the CFMEU. The

deliberate and orchestrated nature of the conduct is evident from the

widespread operation of the ban involving a number of Boral

customers at numerous construction sites over a lengthy period. It is

confirmed by the evidence as to what was said by Mr Setka at the 23

April 2013 meeting, in particular his reference to the CFMEU being

‘willing to significantly ramp up our campaign’.165 The evidence from

all of the Boral witnesses and Boral customer witnesses is to the effect

that the CFMEU, as an organisation, black banned Boral. The concept

of an organisation-wide ban, being carried on as a campaign, is the

very essence of conduct in concert.

176. ‘Hinder’ in s 45D ‘has received a broad construction, as in any way

affecting to an appreciable extent the ease of the usual way of

supplying or acquiring goods or services’.166 The conduct preventing

163 Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees’ Union (1979) 27 ALR 367 at 373 per Bowen CJ. 164

R v Associated Northern Collieries (1911) 14 CLR 387 at 400 per Isaacs J. 165 Paul Dalton, witness statement, 9/7/14, para 36. 166

Australian Wool Innovation v Newkirk (2005) ATPR 42-053; [2005] FCA 290 at [34] per Hely J.

1081

or hindering supply or acquisition need not be physical interference but

can consist of threat and intimidation.167

177. In some cases, the CFMEU’s conduct actually prevented the

acquisition of goods by Boral’s customers.168 In other cases, the

implicit or explicit threat was made by CFMEU shop stewards that if

the customer acquired concrete or other products from Boral, the trucks

would be stopped and the customer would experience delays in

unloading the goods, with consequent delays in construction.169 The

threatening and intimidatory conduct in question made it more difficult

for Boral’s customers to acquire goods from Boral, thereby hindering

the acquisition of goods from Boral.

178. Further, the ban also had the effect of making it more difficult for

Boral to supply concrete to Grocon. By targeting Boral’s customers,

the effect of the ban was to cause substantial economic loss to Boral.170

The suffering of that loss hindered, in the sense of restricted and

impaired, Boral’s ability to supply Grocon.

179. Section 45D(2) contemplates that a secondary boycott may be engaged

in for a number of purposes. It is sufficient if one of the purposes of

engaging in the relevant conduct is a proscribed purpose: s 45D(2).

167 Australian Broadcasting Commission v Parish (1980) 29 ALR 228 at 251 per Deane J, the other members of the Court agreeing on this point; Australian Builders’ Labourers’ Federated Union of Workers - Western Australian Branch v J-Corp Pty Ltd (1993) 42 FCR 452 at 459-460 per Lockhart and Gummow JJ. 168

See above paras 62-64. 169 See above, eg, paras 44, 55, 58, 59. 170

See paras 121-127 above.

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180. In the present case, the CFMEU had two purposes in engaging in the

ban of Boral. One was to cause substantial damage to Boral so as to

intimidate it into stopping supply to Grocon. The second was, by

intimidating Boral into ceasing supply to Grocon, to cause substantial

damage to Grocon. The existence of those purposes is evidenced by

Mr Dalton’s and Mr Head’s account of the 23 April 2013 meeting.171

The existence of the first purpose is supported by the ban against

Boral, its prolonged nature and its extension beyond Boral Concrete to

all Boral’s products. Additional evidence of the second purpose

includes Mr Setka’s initial call to Mr Dalton in late 2012.172

181. The proscribed purposes must be to cause substantial loss or damage to

the target corporation. To satisfy this requirement it is not necessary to

establish that the loss or damage would be a major blow to the target’s

business. It is sufficient to show that the loss or damage would be ‘real

or of substance and not insubstantial or nominal’.173 Being prevented

from carrying out a contract for reward is ‘substantial’ in the requisite

sense.174

182. Plainly, the actual loss suffered by Boral from the CFMEU’s conduct

may be substantial. Boral estimates it has suffered loss of between $8-

$10 million to the end of June 2014.175 It has clearly lost many orders

of concrete. A purpose of causing substantial damage can be inferred

171 See above paras 72-89. 172 See above para 13. 173

Building Workers’ Industrial Union of Australia v ODCO Pty Ltd (1991) 29 FCR 104 at 140 per Wilcox, Burchett and Ryan JJ. 174 A&L Silvestri Pty Ltd v CFMEU (2007) 165 IR 94; [2007] FCA 1047 at [78] per Gyles J. 175

See above para 121.

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from the amount of damage caused. In any event, the purpose of the

CFMEU’s ban was to inflict a substantial loss so as to intimidate Boral

into ceasing supply to Grocon. Anything less than a substantial loss to

Boral would be ineffective in achieving the CFMEU’s ultimate goal of

damaging Grocon.

183. The purpose of the CFMEU’s ban was to cause substantial damage to

Grocon. Adapting Mr Setka’s words, the CFMEU’s war against

Grocon was to be won by cutting the major supply line to Grocon,

which was concrete, because without it Grocon could not ‘survive’.176

Ms Maney’s evidence was that without concrete supplied by Boral,

Grocon would not be able to operate ‘without a lot of difficulty’.177

184. In addition to possessing the proscribed purpose, the conduct must be

conduct which ‘would have or be likely to have the effect, of causing

substantial loss or damage’ to the target. The language of the section is

clearly ‘forward looking’: the enquiry is not whether substantial loss or

damage is actually suffered.178 Accordingly, if the phrase ‘be likely to

have’ is to be given any work to do, it must mean something other than

on the balance of probabilities. The better view is that conduct will ‘be

likely to have the effect of causing substantial loss or damage’ to the

target if there is having regard to the circumstances ‘a real chance or

possibility that [the conduct] will, if pursued, cause such loss or

damage’.179 Whether conduct is likely in that sense ‘is a question to be

176 See above para 80. 177 See also para 12. 178

Building Workers’ Industrial Union of Australia v ODCO Pty Ltd (1991) 29 FCR 104 at 139 per Wilcox, Burchett and Ryan JJ. 179 Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees’ Union (1979) 27 ALR 367 at 381-382 per Deane J (FC).

1084

determined by reference to well-established standards of what could

reasonably be expected to be the consequence of the relevant conduct

in the circumstances’, relevant to which is the purpose for which the

conduct was engaged in.180

185. The argument above181 supports the view that the CMFEU’s conduct

satisfies this requirement of the section.

186. In relation to the effect or likely effect on Grocon, because Boral did

not succumb to the CFMEU’s pressure and intimidation and continued

to supply Grocon, there is no evidence before the Commission of any

specific loss suffered by Grocon as a result of the CFMEU’s conduct.

But that does not matter. The CFMEU’s purpose was to cause loss. It

could reasonably have been expected that Boral would succumb to the

CFMEU’s intimidation and pressure, as Boral’s customers did. Plainly

the CFMEU thought that Boral would succumb, since that is why they

started the ban in the first place. In that event, there would inevitably

have been substantial loss to Grocon.182

187. The defendant has the onus of establishing any defence under s 45DD

of the Act.183

180 Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees’ Union (1979) 27 ALR 367 at 382 per Deane J. 181

See para 182. 182 See para 12 above. 183

Mudginberri Station Pty Ltd v Australasian Meat Industry Employees’ Union(1985) ATPR 40-598 at 46,841; Rural Export & Trading (WA) Pty Ltd v Hahnheuser (2008) 169 FCR 583at [40]-[42] (FC).

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188. Given that none of the CFMEU shop stewards was employed by Boral

and the CFMEU has no coverage of Boral Southern Region

employees184 there is no prospect of any of the defences in s 45DD

applying to the secondary boycott of Boral.

189. In relation to the secondary boycott of Grocon, the persons who

implemented the black ban of Boral were CFMEU shop stewards

employed at sites other than Grocon sites. Accordingly, even if (as

might be asserted) the dominant purpose of the secondary boycott

related to safety on Grocon sites, the defence in s 45DD(2) could not

apply as that defence only relates to the working conditions of

employees engaged in the conduct constituting the secondary boycott.

190. Hence each of the CFMEU, and the various CFMEU shop stewards,

organisers and officers who implemented the ban (including Messrs

Setka and Reardon) may have contravened s 45D of the Act. Since the

ACCC has already commenced proceedings for contraventions of s

45D, the Interim Report does not include a separate recommendation

on this point.

Arrangements affecting the supply or acquisition of goods: Competition and Consumer Act 2010 (Cth), section 45E

191. Section 45E of the Act deals with conduct that indirectly leads to a

secondary boycott. There are two possibilities which are here relevant:

the prohibition in a supply situation (s 45E(2)) and the prohibition in

an acquisition situation (s 45E(3)). In summary, those subsections

relevantly provide that:

184 See Paul Dalton, witness statement, 9/7/14, para 2.

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(a) a person (the first person) who has been accustomed, or is

under an obligation, to supply goods or services to, or acquire

goods or services from, another person (the second person),

(b) must not, provided at least one of the first and second persons

is a corporation,

(c) make a contract or arrangement, or arrive at an understanding,

with an organisation of employees (eg the CFMEU),

(d) if the proposed contract arrangement or understanding

contains a provision included for the purpose (or for purposes

including the purpose) of preventing or hindering the first

person from supplying or continuing to supply such goods or

services to, or acquiring or continuing to acquire such goods

or services from, the second person.

192. The relevant legal principles are uncontroversial and were

conveniently summarised by Finn J in ACCC v CFMEU as follows

(omitting reference to the authorities):

First, for an ‘arrangement or understanding’ to be found, there must a ‘meeting of the minds’ of the parties under which one or both of them committed to a particular course of action … Secondly, a mere expectation, as a matter of fact, or a hope that something might be done or happen or that a party will act in a particular way, is not of itself sufficient to found an arrangement or understanding … Thirdly, the necessary consensus or meeting of minds need not involve, though it commonly will in fact embody, a reciprocity of obligation … Fourthly, as to the requirement that the provision be included in the arrangement or understanding for the proscribed purpose or for purposes which include that purpose, the test of purpose is a subjective one and the proscribed subjective purpose is to be had by each party to the arrangement or understanding … Fifthly, the purpose of conduct for present purposes is the end sought to be accomplished by the conduct and is to be

1087

distinguished from the motive for such conduct which is the reason for seeking that end … Sixthly, the term ‘hindering’ in s 45E(3) has been given a broad construction and encompasses conduct which in any way affects to an appreciable extent the ease of the usual way of suppling or acquiring an article or service.185

193. Like s 45D, s 45E is a penalty provision: the Act, s 76(1). Monetary

remedies lie under s 82 and s 87. Injunctive relief is available under s

80. The primary liability for a contravention of s 45E rests with the

person who has made the contract, arrangement or understanding with

the organisation of employees.

194. However, paragraphs (c) - (f) of s 76(1) of the Act create accessorial

liability in a trade union.186 In particular, a trade union that attempts to

induce (whether by threats or promises or otherwise), is knowingly

concerned, or party to, a contravention of s 45E by another person is

liable to a pecuniary penalty. The maximum penalty is $750,000: the

Act, s 76(1A)(a).

195. Where it is said that a person has attempted to induce a contravention it

is necessary to prove an intention to bring about the conduct which

constitutes the relevant contravention.187 Where it is said that a person

is knowingly concerned in or is party to a contravention it must be

shown that that person had knowledge of the essential elements

185 ACCC v CFMEU [2008] FCA 678 at [10]. 186 CEPU v ACCC (2007) 162 FCR 466, [188] at [191] per Weinberg, Bennett and Rares JJ. Section 76(2) prevents an officer of a trade union being an accessory to a contravention of s 45E. 187

Trade Practices Commission v Service Station Association Ltd (1992) 109 ALR 465 at 487-488 per Heerey J.

1088

making up the primary contravention, although that person need not

know that the conduct was a contravention.188

196. The application of the law to the evidence before the Commission

supports the following conclusions.

(a) The CFMEU, through Mr Setka and Mr Reardon, attempted

to induce Boral (the first person) to enter into an agreement or

understanding with the CFMEU which would contain a

provision the purpose of which was to hinder or prevent Boral

from supplying concrete to Grocon (the second person).

Accordingly, the CFMEU may have been liable pursuant to

s 76(1)(d) of the Act.

(b) Further:

(i) Boral’s customers (the first persons), arrived at an

agreement or understanding with the CFMEU which

contained a provision the purpose of which was to

hinder or prevent the customer from acquiring

concrete from Boral or its relevant subsidiary (the

second person). That conclusion would support a

finding that the relevant Boral customers may have

contravened s 45E.

(ii) The CFMEU may have been knowingly concerned

in, and party to, the contraventions of each of the

relevant Boral customers, thereby rendering the

188 Yorke v Lucas (1985) 158 CLR 661.

1089

CFMEU liable pursuant to s 76(1)(f) of the Act in

relation to each of the contraventions.

197. On the evidence before the Commission, at the 23 April 2013 meeting,

Mr Setka and Mr Reardon, on behalf of the CFMEU, attempted to

induce Mr Dalton and Mr Head, on behalf of Boral, to enter into an

arrangement or understanding with the CFMEU whereby Boral would

cease supplying concrete to Grocon. The inducement for Boral to

enter into the arrangement or understanding were threats that if Boral

did not agree (1) the CFMEU would continue its existing ban, (2) the

CFMEU would intensify its campaign, and (3) the CFMEU would

ensure that Boral’s market share was diminished. The sole purpose of

the proposed arrangement or understanding was to prevent Boral’s

supply of concrete to Grocon. Further, as a key supplier, Boral was

plainly a person ‘accustomed, or under an obligation’ to supply to

Grocon.

198. For the purposes of s 76(1)(d) the fact that Boral did not agree to enter

into the arrangement or understanding, and thereby did not itself

contravene s 45E, is irrelevant. The person who attempts to induce is

like the inciter at common law. Given the attempt by the State

Secretary and Assistant State Secretary to induce Boral’s entry into an

arrangement or understanding with the CFMEU, the CFMEU may

have had the relevant intention so as to render it liable under s 76(1)(d)

of the Act.

199. It is necessary now to turn to possible contraventions by Boral

customers. The reference to a ‘person who has been accustomed to

acquire’ goods or services from a second person includes:

1090

(a) a regular acquirer of such goods or services;

(b) a person who, when last acquiring goods or services, acquired

them from the second person; and

(c) a person who at any time during the immediately preceding 3

months, acquired such goods or services from the second

person: the Act, s 45E(7).

200. Boral or one of its subsidiaries was a regular supplier to each of

Meridian, Oceania, Drive Projects, BRC and Town & Country.189 In

relation to Equiset, Anglo Italian, Kosta Concreting, Squadron and S &

A Paving, the evidence supports the conclusion that they had each

acquired goods from Boral within the immediately preceding three

months190 and were hence within the definition of a person who has

been accustomed to acquire goods.

201. There is no direct evidence of an express contract, arrangement or

understanding having been made. However, an inference of such an

express arrangement may be drawn where the parties’ conduct exhibits

‘a concurrence of time, character, direction and result’.191

202. As a result of the threats and pressure from officers and shop stewards

of the CFMEU described earlier, the Boral customers agreed to the

demand or request made by the CFMEU (through its officers and shop

189 See paras 21, 25, 34, 40, 108, 117 above. 190 See paras 34, 46, 53, 57, 59 above. 191

Trade Practices Commission v David Jones (Australia) Pty Ltd (1986) 13 FCR 446 at 468 per Fisher J. See also Norcast S AR L v Bradken Limited (No 2) (2013) 219 FCR 14 at [263] per Gordon J.

1091

stewards) not to acquire goods from Boral without first obtaining the

CFMEU’s permission. That at least satisfies the requirements of ‘an

arrangement or understanding’.192 The Boral customers may not have

been happy with the arrangement or understanding reached but they

arrived at it nonetheless. The fact that the customers succumbed to the

union’s pressure and intimidation is not a reason to conclude that there

was no arrangement or understanding.193 If the CFMEU did not

threaten and pressure the Boral customers, the conclusion that there

was an arrangement or understanding contrary to s 45E is even

stronger.

203. In summary, on the evidence before the Commission, the CFMEU and

each of the Boral customers may have made an arrangement or

understanding pursuant to which the customer would not acquire goods

from Boral for use at a CFMEU-controlled site unless the CFMEU

gave its permission, and in return the CFMEU would allow and not

delay construction at the construction site. For the reasons developed

below,194 the relevant arrangement or understanding was not a series of

separate understandings between the CFMEU and the Boral customers,

but may have been a single understanding to which the CFMEU and

each of the Boral customers was a party, containing a separate

provision in relation to each Boral customer.

192 See para 192 above. 193 Gibbins v Australasian Meat Industry Employees’ Union (1986) 12 FCR 450, 470 (Smithers J). 194

See paras 219-221.

1092

204. In the case of each Boral customer, the subjective purpose of the

provision concerning the Boral customer may have been to prevent the

Boral customer acquiring goods from Boral.

205. Again, there can be little doubt that if there were contraventions of s

45E of the Act by the Boral customers as a result of entry into an

arrangement or understanding with the CFMEU, then the CFMEU

would have been a party to the contraventions. The CFMEU would

have been a party to the making of the arrangement or understanding

and would have had knowledge of the essential facts making up the

contravention.

Cartel provisions of Competition and Consumer Act 2010 (Cth)

206. Sections 44ZZRF and 44ZZRG of the Act respectively make it an

offence for a corporation to make, or give effect to, a contract,

arrangement or understanding which contains a cartel provision within

the meaning of s 44ZZRD.

207. Both offences are punishable on conviction by a fine not exceeding the

greater of: (a) $10 million, (b) three times the value of any benefits

obtained which are reasonably attributable to the commission of the

offence (where those benefits can be determined) or (c) where the

value of the benefits obtained cannot be determined, 10% of the

corporation’s annual turnover during the preceding 12 month period: ss

44ZZRF(3), 44ZZRG(3).

208. It is sufficient to establish that a contract, arrangement or

understanding contains a cartel provision if:

1093

(a) the provision has the purpose of directly or indirectly

allocating between any or all of the parties to the contract,

arrangement or understanding the persons or classes of

persons who have supplied, or are likely to supply goods or

services to any or all of the parties to the contract,

arrangement or understanding (s 44ZZRD(3)(b)(ii)); and

(b) at least two of the parties to the contract, arrangement or

understanding are, or are likely to be, in competition with

each other in relation to the supply of those goods or services

(by the supplier) (s 44ZZRD(4)(c)).

209. Sections 44ZZRF and 44ZZRG only apply to a ‘corporation’

(relevantly defined in s 4 of the Act to be a body corporate which is a

foreign, trading or financial corporations). However, the Act contains,

as Schedule 1, what is known as the ‘Schedule version of Part IV’

which contains versions of ss 44ZZRF and 44ZZRG that apply more

broadly to ‘persons’. Section 5 of the Competition Policy Reform

(Victoria) Act 1995 (Vic), read with ss 3(3) and 4 of that act and also s

17 of the Interpretation of Legislation Act 1984 (Vic), applies the

‘Schedule version of Part IV’ as a law of Victoria. The provisions

apply to and in relation to persons with a connection with Victoria:

Competition Policy Reform (Victoria) Act 1995, s 5.

210. The Schedule versions of ss 44ZZRF and 44ZZRG are relevantly

identical to ss 44ZZRF and 44ZZRG except that the reference to a

‘corporation’ is replaced with a reference to a ‘person’. A body

corporate which commits an offence against those sections is subject to

the same maximum penalty as a corporation which commits an offence

1094

against the non-Schedule versions of the sections. An offence

committed against those provisions by a person who is not a body

corporate is punishable by 10 years’ imprisonment or a maximum fine

of $340,000 or both: ss 44ZZRF(4), 44ZZRG(4).

211. Section 79 of the Act also imposes criminal liability on persons who

are accessories to a contravention of ss 44ZZRF or 44ZZRG. The

maximum penalty for a person who is not a body corporate is 10 years’

imprisonment or a maximum fine of $340,000 or both: s 79(1)(e).

Where the person is a body corporate, the penalty is the same as for a

corporation.

212. The provisions of the Criminal Code (Cth) apply to the offences under

ss 44ZZRF and 44ZZRG, and also to the offences created by the

Competition Policy Reform (Victoria) Act 1995 (see s 25 of that act).

Under the Criminal Code (Cth), Commonwealth offences consist of

physical elements and fault elements: Criminal Code (Cth), s 3.1(1).

For each physical element it is necessary to prove the existence of a

fault element.

213. Section 44ZZRF has two physical elements: (a) the making of the

contract or arrangement or the arriving at an understanding and (b) the

circumstance that the contract, arrangement or understanding contains

a cartel provision. The fault element for the first physical element is

intention: Criminal Code, s 5.6(1). The fault element for the second

physical element is knowledge or belief: s 44ZZRF(2). Thus to

establish a contravention of s 44ZZRF it must be shown that the

alleged offender intended to make the contract etc, and had knowledge

1095

or belief that the contract etc contained a provision which is a cartel

provision. A similar analysis applies in relation to s 44ZZRG.

214. Sections 44ZZRJ and 44ZZRK of the Act create pecuniary penalty

provisions which mirror ss 44ZRF and 44ZRG respectively. There are

also Schedule versions of those sections which apply to persons.

215. The ACCC may apply under s 77 of the Act for pecuniary penalties

under s 76. The maximum penalty for contravention of those sections

by a body corporate is the same as for a corporation under ss 44ZZRF

or 44ZZRG: s 76(1A)(aa). The maximum penalty for a contravention

by a person who is not a body corporate is $500,000: s 76(1B)(b).

216. To establish a contravention of the pecuniary penalty cartel provisions

in the present case three elements would need to be established:

(a) The existence of a contract, arrangement or understanding

between the CFMEU and Boral customers;

(b) The contract, arrangement or understanding must contain a

provision which has a purpose of directly or indirectly

allocating between the Boral customers the class of CFMEU

approved concrete suppliers; and

(c) Two or more parties to the contract, arrangement or

understanding must be in competition.

217. In addition, to establish criminal liability under the Criminal Code

(Cth), it must be shown that the alleged contravener intended to make

1096

the contract, arrangement or understanding and must have known or

believed that the contract, arrangement or understanding contained a

cartel provision.

218. There is little law concerning the operation of the cartel provisions. In

Norcast S AR L v Bradken Ltd,195 Gordon J stated that the first three of

Finn J’s propositions quoted above196 applied also to the requirement

of an arrangement or understanding under ss 44ZZRJ and 44ZZRK. In

particular, her Honour stated that for an arrangement or understanding

to exist it was necessary for there to be ‘evidence of a consensus or

meeting of the minds of the parties under which one party or both of

them must assume an obligation or give an assurance or undertaking

that it will act in a certain way which may not be enforceable at

law’.197

219. Her Honour did not consider the question whether in establishing the

necessary consensus in the case of a multi-party arrangement or

understanding it is necessary that all of the parties to the arrangement

or understanding communicated with each other or whether it is

sufficient to establish that (a) each party communicated with at least

one other party to the arrangement or understanding and (b) through

those communications each of the parties arrived at a common

understanding (ie a consensus). In the context of provisions designed

to stop cartel activity, there is no reason why it should be necessary to

establish communication between all of the parties to the cartel,

provided the necessary consensus can be established. This was

195 (2013) 219 FCR 14. 196 See para 192. 197

Norcast S AR Lv Bradken Ltd (2013) 219 FCR 14 at [263].

1097

accepted by Gray J in Australasian Meat Industry Employees Union v

Meat & Allied Trades Federation of Australia198 in the context of s

45E:

It is clearly possible for an arrangement or understanding to be constituted when the only communication between the various parties is via a single intermediary. If that intermediary communicates to various persons an intention that each of them should act in a particular way with respect to a particular transaction or situation, and each thereafter acts in that particular way in the hope or belief that the other persons will act similarly, an arrangement or understanding will exist. It is necessary to be careful, however, in distinguishing that situation from one in which the intermediary enters into separate arrangements or understandings which each of the persons.

220. In the present case, on the evidence before the Commission, each of

the Boral customers may have come to a common understanding with

the CFMEU that they would cease to acquire Boral’s products.

Although there is no evidence of communication between the

customers, the whole concept of a ban depends on collective action.

The natural inference to be drawn from the circumstances is that each

of the Boral customers may have come to an understanding with the

CFMEU in the belief that their competitors had a similar understanding

with the CFMEU. In that context this is sufficient to establish that

there was an understanding between the CFMEU and the Boral

customers by which each customer undertook not to acquire goods

from Boral on CFMEU-controlled construction sites.

221. The understanding identified in the previous paragraph, by seeking to

exclude non-CFMEU approved concrete suppliers (eg Boral) from the

market, had the purpose of allocating between the Boral customers the

class of CFMEU approved concrete suppliers.

198 (1991) 32 FCR 318 at 330.

1098

222. There is a question whether the required purpose must be ‘subjective’

or ‘objective’. Dicta in relation to the now-repealed s 45A, which

concerned price-fixing arrangements, and therefore has some similarity

with the cartel provisions, suggested that the required purpose of price-fixing in relation to s 45A was a subjective one.199 However,

s 44ZZRD(3) is not directed at price-fixing and the words ‘has the

purpose of directly or indirectly’ suggest that an objective purpose is

sufficient. Further, having regard to the mischief to which the cartel

provisions are directed there is no reason why the requirement of

purpose should be construed as limited to ‘subjective purpose’.

223. The Boral customers are in competition for the supply of concrete

laying services and would appear to be in competition for the

acquisition of concrete from concrete suppliers, such as Boral.

224. In relation to the mental elements required under the Criminal Code,

there is insufficient evidence before the Commission to determine

whether the Boral customers had a sufficient intention to enter into the

relevant understanding with the CFMEU. However, the evidence of

the 23 April 2013 meeting supports a conclusion that the CFMEU had

the relevant intention and knowledge to render it criminally liable

under s 44ZZRF or s 44ZRG of the Competition Policy Reform

(Victoria) Act 1995 (Vic).

225. Accordingly, the CFMEU (assuming that it is a body corporate which

is not a corporation) may have contravened s 44ZZRF or s 44ZZRG of

the Competition Policy Reform (Victoria) Act 1995 (Vic).

199 ACCC v Australian Medical Association Western Australian Branch Inc (2003) 199 ALR 423 at [243]-[247].

1099

226. It is recommended that this Interim Report be referred to the

Commonwealth Director of Public Prosecutions in order that

consideration may be given to whether the CFMEU should be charged

with and prosecuted for cartel conduct contrary to ss 44ZZRF and

44ZZRG of the Competition Policy Reform (Victoria) Act 1995 (Vic).

Blackmail: Crimes Act 1958 (Vic), section 87

227. Section 87 of the Crimes Act 1958 (Vic) makes it an offence for a

person to blackmail another person. The maximum penalty is 15

years’ imprisonment. Section 87 relevantly provides:

(1) A person is guilty of blackmail if, with a view to gain for himself or another or with intent to cause loss to another, he makes any unwarranted demand with menaces; and for this purpose a demand with menaces is unwarranted unless the person making it does so in the belief—

(a) that he has reasonable grounds for making the demand; and

(b) that the use of the menaces is proper means of reinforcing the demand.

(2) The nature of the act or omission demanded is immaterial, and it is also immaterial whether the menaces relate to action to be taken by the person making the demand.

228. There are relevantly four elements to the offence. There must be (1) a

demand (2) made with intent to cause loss to another (3) with menaces

(4) which is unwarranted.

229. Section 323 of the Crimes Act 1958 (Vic) provides that a person who

aids, abets, counsels or procures the commission of an indictable

offence may be tried or indicted and punished as a principal offender.

1100

230. Mr Setka, by making a demand with menaces at the 23 April 2013

meeting with the intention of causing loss to Grocon, may have

committed the offence of blackmail. In addition, Mr Reardon either

may have committed the offence of blackmail, or may be liable as an

accessory pursuant to s 323 of the Crimes Act 1958 (Vic).

231. On Mr Head’s account of the 23 April 2013 meeting, Mr Reardon said

in relation to the CFMEU’s targeting of Boral trucks ‘this is easy. Just

stop supplying Grocon for two weeks’.200 His evidence was that Mr

Setka made a similar statement: ‘Just stop supplying Grocon for two

weeks and this will go away’.201 Mr Dalton’s evidence of what Mr

Setka said was similar: ‘All you [Boral] have to do is stop supply to

Grocon for a couple of weeks’.202

232. This evidence supports the conclusion that an express demand was

made by Mr Setka and Mr Reardon for Boral to stop supply of concrete

to Grocon. However, even if it were concluded that there was no

express demand, it may be that an implicit demand was being made to

Mr Dalton and Mr Head for Boral to cease supply to Grocon. As a

matter of law it is well established that for the purposes of the section a

demand need not be express, but can be implicit from the

circumstances.203

200 Peter Head, witness statement, 9/7/14, para 41. 201 Peter Head, witness statement, 9/7/14, para 43. 202

Paul Dalton, witness statement, 9/7/14, para 40. 203 R v Collister (1955) 39 Cr App R 100 at 105 per Hilbery J; R v Clear [1968] 1 QB 670 (CA) at 675; R v Lambert [2010] 1 Cr App R 21 (CA) at [8].

1101

233. On the evidence before the Commission, the demand by Mr Setka for

Boral to cease supply to Grocon was made with an intention to cause

loss to Grocon. Mr Head remembered the words: ‘the CFMEU is at

war with Grocon and that if you want to starve the enemy you cut off

their supply’.204 Mr Dalton remembered the words: ‘We’re at war

with Grocon and in a war you cut the supply lines. Boral Concrete is a

supply line to Grocon’.205 That is consistent with the other evidence

concerning the ongoing dispute between the CFMEU and Grocon.206

The inference is open that he may have had the same intention as his

superior at the CFMEU.

234. The word ‘menaces’ is to be ‘liberally construed and not as limited to

threats of violence but as including threats of any action detrimental to

or unpleasant to the person addressed. It may also include a warning

that in certain events such action is intended.’207 Menaces may be

established by a threat to property208 or to take action adversely

affecting a company’s share price.209

235. The evidence from Mr Dalton and Mr Head210 supports a conclusion

that Mr Setka’s demand was coupled with three threats: (1) a threat

that the CFMEU black ban of Boral would continue (2) a threat that

204 Peter Head, witness statement, 9/7/14, para 40. 205 Paul Dalton, witness statement, 9/7/14, para 35. 206

See paras 11-12 above. 207 Thorne v Motor Trade Association [1937] AC 797 at 817 per Lord Wright. See Jessen v R [1997] 2 Qd R 213 at 219 per Thomas J, White J agreeing. 208

Director of Public Prosecutions v Kuo (1999) 49 NSWLR 226; DPP v Curby [2000] NSWSC 745 at [5]. 209 R v Boyle [1914] 3 KB 339 at 343. 210

See Paul Dalton, witness statement, 9/7/14, paras 35-39, 42-43; Peter Head, witness statement, 9/7/14, paras 42, 44-45.

1102

there would be intensification of the CFMEU’s campaign against

Boral, and (3) a threat that the CFMEU would ensure that Boral’s

market share was diminished. Each of these threats may have

constituted menace within the meaning of the section.

236. As provided by the section, every demand with menaces is

unwarranted unless the person making the demand ‘does so in the

belief -- (a) that he has reasonable grounds for making the demand;

and (b) that the use of the menaces is a proper means of reinforcing the

demand.’ The accused has the evidentiary onus of raising one or both

of these matters. Once that onus is discharged, the prosecution must

negative at least one of the requirements.

237. It is not clear on the evidence how Mr Setka could have believed that

he had reasonable grounds for making the demand to Boral. It may be

Mr Setka had concerns about the safety of workers at the Grocon site

and believed that demanding Boral cease supply to Grocon was a

reasonable way of ensuring that Grocon addressed those concerns.

However, the connection between the two is remote.

238. In any event, on the available evidence, Mr Setka could not have

believed the menaces (ie the threats made) were a ‘proper means of

reinforcing the demand.’ Proper means must, at a minimum, be

lawful.211

239. As at 23 April 2013, the Supreme Court of Victoria had issued

injunctions restraining the CFMEU from any interference with the

supply or possible supply of goods or services by Boral at any

211 R v Harvey (1981) 72 Cr App R 139 at 142.

1103

construction site in Victoria. Plainly then, Mr Setka’s threats to

continue his black ban and to intensify it may have been unlawful. The

strong inference from the evidence is that Mr Setka may have been

aware of the injunctions, and therefore aware of the illegality of his

threats:

(a) Mr Setka referred to Boral’s lawyers in proceedings.212 Mr

Reardon referred to Mr Setka not giving ‘a stuff’ about ‘the

legal stuff’.213 Those proceedings could only have been the

proceedings in which Boral was seeking an injunction;

(b) As State Secretary of the CFMEU he may have been aware of

those orders which had been served on the CFMEU.214

240. Further, it is not possible to see how the threat to ensure the Boral’s

market share was diminished may have been a proper means of

reinforcing the demand. The evidence supports a conclusion that Mr

Setka believed his threats to be unlawful, or at the least not ‘proper

means of reinforcing the demand.’

241. Mr Reardon also made a demand. It was made with the same intention

as Mr Setka ie to cause loss to Grocon. He threatened that the CFMEU

‘will target Boral trucks’.215 The analysis above in relation to Mr

212 Paul Dalton, witness statement, 9/7/14, para 29. 213 Peter Head, witness statement, 9/7/14, para 38. 214

Before Derham AsJ, the CFMEU conceded the effective service of the Supreme Court’s orders: see Boral Resources (Vic) Pty Ltd v Construction, Forestry, Mining and Energy Union [2014] VSC 429 at [15]. See also Boral MFI-2, Tabs 4, Plaintiff’s Outline of Submissions dated 23 December 2013, [58]-[59] and Defendant’s Outline of Submissions in Reply dated 23 January 2014, [41]. 215

Peter Head, witness statement, 9/7/14, para 41.

1104

Setka would support a possible finding of blackmail by Mr Reardon

also. In the alternative, Mr Reardon may have aided and abetted Mr

Setka: he was present at the commission of the offence and may have

intentionally participated and assisted Mr Setka in his threats.

Accordingly, if not himself separately liable for blackmail he may be

liable as an accessory under s 323 of the Crimes Act 1958 (Vic). It is

recommended that this Interim Report be referred to the Director of

Public Prosecutions of Victoria for consideration of whether Mr Setka

and Mr Reardon should be prosecuted for those offences.

Possible contempts of court

242. The evidence concerning the conduct of the CFMEU shop stewards in

April 2013 at the Anglo Italian project site at Radnor Drive,

Derrimut216 and at the Kosta Concreting project site at Elizabeth Street,

Melbourne217 and the CFMEU’s later conduct in 2014218 suggest that

there may have been a continuing and flagrant contempt of

Hollingworth J’s orders by an organisation which treats itself as above

the law. Plainly court orders seem to count for little or nothing so far

as the CFMEU is concerned.

243. In his letter to the Commission, Mr Kane made this statement:

Mr Setka has been quoted acknowledging openly that the CFMEU’s tactics involve breaking the law. Following the finding against the CFMEU for breaching court orders in relation to the blockage of the Myer Emporium site in 2013, Setka is reported to have said “It’s not the first time or the last time a union is found guilty of contempt”, “We don’t set

216 See para 51 above. 217 See paras 55-56 above. 218

See paras 103-120 above.

1105

out deliberately to break the law, but unfortunately sometimes it’s going to happen … Our members have been seasoned to expect that. They want us to maintain a militant union”.219

244. The CFMEU’s approach raises important questions about the

enforceability of court orders.

E - RECOMMENDATIONS FOR REFORM

245. Given the extension of the Commission’s final reporting deadline, it is

premature to make recommendations for reform.

246. However, the CFMEU’s conduct in relation to Boral suggests that

there may be a number of deficiencies with the existing legal and

regulatory framework in relation to secondary boycotts, the

enforcement of court orders, the regulation of trade unions generally

and the regulation of, and the duties owed by, trade union officers.

247. In particular, the conduct suggests the existence of the following

possible problems:

(a) The ineffectiveness of the current secondary boycott

provisions in ss 45D and 45E of the Competition and

Consumer Act 2010 (Cth) to deter illegal secondary boycotts

by trade unions.

219 Mike Kane, Letter to Royal Commission, 9/7/14, p 7.

1106

(b) The absence of specific provisions making it unlawful for the

competitors of the target of a secondary boycott knowingly to

supply a product or service in substitute for a supply by the

target.

(c) An inability or unwillingness by the regulatory authorities to

investigate and prosecute breaches of the secondary boycott

provisions by trade unions speedily. There may be a number

of root causes for this problem: difficulties in obtaining

documentary evidence, lack of co-operation of witnesses who

may fear repercussions from giving evidence, the potential

overlap between the roles of a number of regulators and

difficulties in ensuring compliance with court orders made in

relation to secondary boycott conduct.220

(d) The absence of any speedy and effective method by which

injunctions granted by a court restraining a trade union from

engaging in an illegal secondary boycott can be enforced.

The Byzantine complexity of the law of contempt, and its

ineffectiveness to deter secondary boycott conduct by a trade

union, is amply demonstrated by the contempt proceedings

commenced by Grocon and Boral in the Victorian Supreme

Court.221

220 See the public submission by the ACCC, Supplementary submission to the Competition Policy Review, 15 August 2014 (http://competitionpolicyreview.gov.au/files/2014/08/ACCC_3.pdf) at pp 6-7. 221

See, eg, CFMEU v Grocon Constructors (Victoria) Pty Ltd [2014] VSCA 261.

1107

(e) The absence of a single statutory regulator dedicated to the

regulation of trade unions with sufficient legal power to

investigate and prosecute breaches of the secondary boycott

provisions.

(f) The absence of appropriate legal duties owed by the officers

of trade unions to their members, and the absence of

appropriate mechanisms by which such officers can be held

accountable to their members.

248. It is also necessary to consider possible improvements in relation to the

administration of the law by both regulators and courts.

249. The course of the Supreme Court Proceeding222 demonstrates rather

extraordinary delay after the initial orders made by Hollingworth J in

February to April 2013. Both the parties and the Court have a duty to

seek to facilitate the just, efficient, timely and cost-effective resolution

of the issues in dispute: Civil Procedure Act 2010 (Vic), ss 7, 10.

Having regard to the conduct alleged by Boral, the alleged contempts

by the CFMEU, and the amount of damage that may have been caused

both to Boral and the wider economy, the proceedings ought to have

been resolved very speedily.

250. The CFMEU, which Boral alleges is in contempt of court, have

criticised Boral for not doing more than instituting one contempt

application to enforce the injunctions against the CFMEU, and for

prosecuting that slowly.223 The CFMEU also submitted that Boral had

222 See paras 76-71, 91-97 above. 223 CFMEU submissions, 14/11/14, Pt 8.2, paras 20-26.

1108

not displayed any energy in seeking expedition of the non-contempt

aspect of the Supreme Court Proceeding.224 There is a little force in

this criticism. If a plaintiff claims to be the victim of a black ban, it is

incumbent on that plaintiff to react as ruthlessly and as speedily as

possible. But these paradoxical CFMEU submissions do not assist the

CFMEU. For the criticisms which the CFMEU makes of Boral can be

put a hundred times more strongly against the CFMEU.

251. The CFMEU has in numerous respects engaged in conduct which has

had the effect of delaying the proceedings. In relation to the contempt

application, it opposed the joinder of the Attorney-General and sought

leave to appeal against Digby J’s order joining the Attorney-General as

a party. It sought leave to appeal against Digby J’s order ordering

discovery of documents which could have been obtained by subpoena.

Both applications for leave were unsurprisingly refused. In relation to

the main part of the proceeding, the CFMEU did not appear until 9

September 2013, more than 6 months after it was on notice that

proceedings had been commenced. Even then, it did not seek to set

aside the default judgment entered against it on 20 May 2013 until 8

November 2013. The fear of having to pay money by way of damages

seemed a sharper stimulus to the CFMEU than the fear of punishment

for acting in contempt of Hollingworth J’s three injunctions and other

orders. Mr Kane called the CFMEU’s failure to appear in the

proceedings a contempt of court.225 Strictly speaking it was not a

contempt of court, but it is scarcely the way an organisation of the

224 CFMEU submissions, 14/11/14, Pt 8.2, para 28. 225 Michael Joseph Kane, 9/7/14, T:58.41-59.1.

1109

CFMEU’s size, power and status should behave. It is more typical of

recalcitrant debtors of the least meritorious kind.

252. The CFMEU’s application by summons to have the default judgment

set aside was filed as long as two months after it had filed its notice of

appearance. On 27 November 2013, instead of dealing with the

application instantly, Derham AsJ directed the filing of written

submissions and fixed 30 January 2014 as the date for the hearing of

the CFMEU’s summons.

253. The summons relied on three grounds.226 The second ground was:

‘No affidavit proving the alleged default was filed, in breach of Rule

21.02(2)’. This was a captious point, since the Supreme Court of

Victoria could see for itself from its own file that no defence had been

filed. It was a ground which proved too ridiculous even for the

CFMEU, since that second ground was not pressed in its Outline of

Submissions dated 13 December 2013.

254. The first ground, which was pressed, was that the CFMEU ‘was not

required to file a defence because it had not filed its appearance’. As

Derham AsJ said in his judgment of 10 September 2014, that point

‘involves the proposition that compliance with an order of the Court is

optional. That is to say, the order need only be complied with if the

defendant chooses to enter an appearance’.227 The learned Associate

Justice correctly rejected that absurd proposition. But it is a

proposition that is entirely characteristic of the whole of the CFMEU’s

226 Boral MFI-1, Vol 1, tab 26. 227 Boral Resources (Vic) Pty Ltd v Construction, Forestry, Mining and Energy Union [2014] VSC 429 at [31].

1110

attitude to the substantive law and to the legal system which is

supposed to enforce it. The CFMEU appears to treat compliance with

both rules of law and court orders as optional.

255. The third ground on which the CFMEU relied was that Boral’s

amended statement of claim did not disclose a cause of action. In part

that ground contended that even if there were available causes of

action, they had been poorly pleaded. If that contention were sound,

the deficiencies were curable, and speedily. But the ground also

contended that in Australian law there is no tort of interference with

business by unlawful means and no variant of it known as the tort of

intimidation. That was an argument that a tort recognised by numerous

courts in Australia, by the House of Lords, by leading academic

writers, with a history tracing back to the early 17th century, should be

held not to exist. The argument rested on the illogical proposition that

because Australian courts have not yet accepted the broader tort of

interference with trade by unlawful means which has been recognised

in England, of which it has been said that intimidation is a species, the

Australian cases actually recognising the tort of intimidation must not

be followed. Why the tort should not exist was not explained.

Obviously it can operate adversely to union interests.

256. With respect, the CFMEU’s submission ought not to have been put to

the learned Associate Justice, other than formally. That is because

there are ample indications in the High Court and other appellate

courts, to which the learned Associate Justice referred, that the tort

exists. The judges who have held that view include such distinguished

lawyers as Mason CJ and Jacobs J. With respect, it would not be right

for any court below the High Court of Australia to overturn the

1111

assumption almost all Australian lawyers have operated on since Rookes

v Barnard was decided in 1964228 that there is a tort of intimidation.

257. Apart from the delays by the CFMEU, the time taken by Derham AsJ to

deliver judgment refusing to set the default judgment aside was more than

seven months.229 There is doubtless some good reason why judgment was

not delivered on the day of the CFMEU’s application or shortly thereafter.

However, in the ordinary course it might be expected that an application to

set aside default judgment would be dealt with speedily. In particular, it

ought to have been dealt with as soon as it was made. The problem with the

orders, then, is not only that it took so long for them to be made, but that it

took so long for the question to be considered by the court. When a major

black ban is proceeding unimpeded by the grant of injunctions, and the

defendant fails to enter an appearance for over six months, an application to

set aside a default judgment should be dealt with very differently. The

CFMEU had formulated three reasons why the default judgment should be

set aside. One was abandoned even before the hearing before Derham AsJ.

Another was abandoned on 29 October 2014.230 The third - that the tort of

intimidation is not known to Australian law - is, with respect, a very

ambitious point. The defendant had apparently not complied with at least

the court’s procedural orders. If it had a case for the default judgment to be

set aside, it was a case which should have been dealt with brevi manu - on

the spot, no

228 [1964] AC 1129. 229 Boral MFI-1, Tab 37. 230

Boral MFI-4, tab 2 (Letter from Slater & Gordon to Herbert Smith Freehills, 29 October 2014).

1112

timetables, no written submissions, no arcane day-long

argument, and no reservation. There should not have been the

slightest tardiness in either speedily affirming the status quo of

the default judgment or, if the CFMEU could make out its

extraordinarily unconvincing case, speedily setting the default

judgment aside.

258. More recently the pace has quickened, over the opposition of the

CFMEU. At a directions hearing on 16 October 2014, the CFMEU

submitted that no steps should be taken in relation to the assessment

of damages until an appeal to a single judge against the Associate

Justice’s refusal to set aside the default judgment as concluded. The

Associate Justice did not accede to that submission. He made

directions about particulars being given by 5 December 2014 and

subpoenas being issued by 31 October 2014. Further, Forrest J, who

had carriage of the CFMEU appeal against Derham AsJ’s

unsurprising refusal to set aside the default judgment, has expressed

concern about the delays. He indicated on 23 October 2014, over

the CFMEU’s opposition, that there would be a hearing in

November and that the whole process in the Supreme Court

(including any appeal to the Court of Appeal) would be completed

by Easter 2015. The matter was listed for hearing on 24 November

2014 before Bell J. Then on 3 November 2014, Boral moved for an

order that the appeal to a single judge be reserved for the

consideration of the Court of Appeal. However, the CFMEU

opposed that order, in the course of lengthy argument on 6

November 2014. Despite that, Bell J made the order on 7 November

2014. But on 28 November 2014 the CFMEU indicated that it

would oppose the grant of leave by the Court of Appeal for it to

1113

was no compelling reason, such as urgency, to bypass the Trial

Division. Does not the passing of nearly two years generate a little

urgency?

259. In relation to the activities of Fair Work Building and Construction,

there is little material before the Commission apart from that

summarised above231 to explain what has been occurring. It is worth

noting that nearly two years have passed since the black ban began.

However, it is clear that public regulators are likely to have grave

difficulties in obtaining evidence where witnesses are reluctant to

speak against parties to illegal conduct in view of the risk of retaliation.

260. A legal system which does not provide swift protection against the type

of conduct which Boral alleges it has suffered at the hands of the

CFMEU, and which does not have a mechanism for the swift

enforcement of court orders, is fundamentally defective. The defects

are so great as to make it easy for those whose goal is to defy the rule

of law. The defects reveal a huge problem for the Australian state and

its numerous federal, State and Territory emanations. The defying of

the Victorian Supreme Court’s injunctions for nearly two years, and

the procedural history outlined above, will make the Australian legal

system an international laughing stock. A new form of ‘sovereign risk’

is emerging - for investors will not invest in countries where their legal

rights receive no protection in practice. At least so far as the courts are

concerned, it may be appropriate for consideration to be given to

procedures which ensure the swift determination of contempt

231 See paras 100-101.

1114

applications, complemented where necessary by appropriate court rules

and legislation.

1115

1116

CHAPTER 8.3

CBUS LEAK TO THE CFMEU

Subject Paragraph

A - OVERVIEW 1

B - RELEVANT FACTS 5

The business of Cbus 5

Relevant Cbus staff 8

Lis-Con 19

The Gaske leak of June 2013 23

Cbus debt collection processes in June 2013 27

CFMEU ‘war’ on Lis-Con 48

Instructions from Mr Parker to Mr Fitzpatrick 52

The McWhinney table 55

Mr Parker seeks and obtains the Zanatta spreadsheets: general 58

18 July 2013 59

22 July 2013 69

1117

Subject Paragraph

24 and 25 July 2013 78

26 July 2013 88

Conversations between Mr Parker and Mr Fitzpatrick 106

29 July 2013 115

Mr Parker’s receipt and use of the documents 124

The Gaske leak of 30 July 2013 131

Complaint from Lis-Con and the reactions to that complaint 133

False evidence given by witnesses to the Commission 147

The fictional position adopted up to the mid-afternoon of 3 October 2014 150

Ms Zanatta’s evidence on 3 October 2014 160

Disposing of what little remains of the fictional account 167

Ms Butera’s false evidence 182

Ms Zanatta’s false evidence 187

Mr Parker’s false evidence 189

A few further observations on the false evidence 204

Mr Roberts 207

KPMG findings of widespread disclosures 240

Mr Atkin 244

1118

Subject Paragraph

C - CONCLUSIONS 245

Privacy Act 1988 (Cth) breaches 248

Cbus trust deed 261

Contracts with members 264

Cbus privacy policy 265

Privacy issues: analysis 267

Breach of trust and contract and inducement by Mr Parker 286

Possible breaches of the law and of CFMEU’s professional standards 288

Cultural problems within Cbus 290

D - RETURNING THE ZANATTA SPREADSHEETS

312

ANNEXURE A: EXAMPLES OF FALSE EVIDENCE GIVEN BY MS BUTERA

ANNEXURE B: EXAMPLES OF THE FALSE EVIDENCE GIVEN BY MS ZANATTA

A - OVERVIEW

1. This chapter deals with the wrongful disclosure by Cbus of the

private information of its members to Mr Brian Parker, the

Secretary of the New South Wales Branch of the Construction

1119

and General Division of the CFMEU (NSW Branch) in July

2013.

2. The Cbus employees involved in the matter were senior ones -

Ms Lisa Zanatta (Senior Adviser - Member Relationships,

Workplace Distribution) and Ms Maria Butera (Executive

Manager). The principal CFMEU officer in question is Mr

Parker.

3. The factual issues in this Chapter, unlike many Chapters, were

highly controversial. However, the submissions of counsel

assisting were, despite the attacks of the CFMEU and various of

its officers, Mr Parker, Cbus and (to some extent) Ms Butera,

substantially correct. The findings set out below are based on

their submissions.

4. Ms Zanatta has publicly admitted giving evidence to the

Commission, which she knew to be false at the time she gave it.

Appropriate recommendations will be made in respect of this

aspect of Ms Zanatta’s evidence in due course. In addition, it

appears likely at this stage that recommendations may be made in

relation to others, such as Ms Butera. While these are important

questions, it is possible that the Commission will receive in the

future further evidence concerning or in relation to the matters

the subject of this Chapter. These questions should not be

resolved until all relevant evidence has been received.

Accordingly, the Commission will not in this Interim Report

make any recommendations concerning whether criminal or other

breaches of the law may have occurred. Resolution of these

1120

issues, the making of any recommendations and the terms of

those recommendations will be deferred to a future report. For

present purposes, the conclusions are as follows.

(a) Cbus is a superannuation fund over which the CFMEU

exercises considerable influence. CFMEU officers are

on the board of United Super Pty Ltd, the trustee for

Cbus. Some Cbus employees once worked for or came

from a CFMEU background. This has led to serious

cultural problems within Cbus, under which the interests

of the CFMEU are put before those of Cbus and its

members.

(b) In mid-2013, the CFMEU was engaged in an aggressive

national campaign against Lis-Con Concrete

Constructions Pty Ltd and Lis-Con Services Pty Ltd

(together, Lis-Con). One of the elements in the dispute

between Lis-Con and the CFMEU is that the latter

considered that the former was persistently late in

making superannuation payments to Cbus. They

disagreed on when the payments should have been

made. It should be stressed at the outset that punctual

payments by employers of superannuation contributions

is essential. The CFMEU is entirely right in insisting on

this. But that insistence cannot extend to the use of

illegal means.

(c) Mr Parker knew that Cbus held the personal contact

details of the Lis-Con employees. As part of that

1121

campaign, Mr Parker wished to obtain the personal

contact details of Lis-Con employees so that union staff

could contact those employees and encourage them to

harass Lis-Con over unpaid entitlements. He wanted

action of this kind to be taken because of the national

campaign that was then underway. In his view,

upsetting Lis-Con employees would have the maximum

adverse effect on Lis-Con. In the ordinary course, the

matter of delay in payment was for Cbus to deal with

through the usual debt recovery processes it had in

place.

(d) Mr Parker endeavoured to obtain the personal contact

details of the Lis-Con employees with the assistance of

two senior Cbus employees, Ms Zanatta and Ms Butera.

He did so knowing that he was asking them to act

improperly.

(e) Ms Zanatta and Ms Butera complied with Mr Parker’s

request. They embarked upon a covert exercise to obtain

the information and deliver it to Mr Parker, knowing

that what they were doing was improper. The covert

exercise involved, amongst other things, Ms Zanatta

flying from Melbourne to Sydney on 29 July 2013 for

the sole purpose of hand delivering the relevant

documents, known as the ‘Zanatta spreadsheets’ to the

CFMEU.

1122

(f) Once Mr Parker had the information, he provided it to

Mr Fitzpatrick, a CFMEU organiser, and instructed him

to use that information as planned. This involved Mr

Fitzpatrick ringing a number of Lis-Con employees on

30 July 2013. He pretended to be a Cbus representative,

and informed those employees that their employer had

not paid their superannuation entitlements on time.

(g) Mr Fitzpatrick admitted his part in these events to this

Commission at an early stage. However, Ms Zanatta,

Ms Butera and Mr Parker each gave false evidence to

this Commission about their involvement. Ms Zanatta

went so far as to create an entirely fictitious account of

why she came to Sydney on 29 July 2013 and what she

did while she was there. When those lies were exposed,

she admitted she had committed perjury in order to

protect Mr Parker and others. By giving this false

evidence, Ms Zanatta, Ms Butera and Mr Parker have

put the Commission and third parties to great

inconvenience and expense.

B - RELEVANT FACTS

The business of Cbus

5. Cbus provides superannuation services to construction, building

and allied industry workers and retirees, their families and

employers. The trustee of the Cbus superannuation fund is

United Super Pty Ltd. As at 31 March 2014, it managed

1123

approximately $26 billion of member funds. It publicises its

activities very widely.

6. Superpartners Pty Ltd is retained by Cbus to act as the

administrator of its member and employer records.

7. Cbus has close links to the trade union movement. Its board of

directors includes representatives from a number of trade unions,

particularly the CFMEU. Currently, three CFMEU officials sit

on the Cbus board: Ms Rita Mallia, Mr Frank O’Grady and Mr

David Noonan.

Relevant Cbus staff

8. Mr David Atkin is the chief executive officer of Cbus, and was so

at the relevant time.

9. In July 2013, Ms Butera held the position of Executive Manager,

Workplace Distribution with Cbus. She holds a Bachelor of

Commerce degree, and commenced working for Cbus 17 years

ago.1 Before that she had been a development executive with the

Construction Industry Development Agency between 1991 and

1995. Between 1995 and 1997, she was executive director of the

Australian Construction Industry Council. Between 2004 and

2012, she sat on the board of the Royal Women’s Hospital.2

1 Maria Butera, 7/7/14, T:67.32ff. 2 Submissions in Reply on behalf of Maria Butera, 21/11/14, para 7.

1124

10. Ms Butera reported directly to Mr Atkin, and therefore sat at the

second highest level of management in Cbus.3 Much of her time

was spent working with the Building Industry Group in step with

Mr Atkin.4

11. Ms Butera emphasised many times in her evidence that she did

not have the role of dealing with operational matters, including

dealing with employer arrears, on a day to day basis.5 But she

did adopt that role in late July 2013 in relation to Mr Parker.

12. Ms Butera is an accountant by training and a senior manager of a

financial services provider by profession. Members of the

CFMEU do not commonly have this profile. Those callings have

little to do with construction, forestry, mining and energy. Yet

Ms Butera has been a member of the CFMEU since starting

employment with Cbus. She joined the union as part of a ‘culture

of collaboration’ that exists within Cbus. She wanted to show the

CFMEU that she wished to work closely with it.6 Whether these

explanations are displaced or supplemented by another

consideration - the promotion of sponsorship by Cbus of the

CFMEU - is a topic which has been proposed for future

exploration by the Commission.7

3 Maria Butera, 23/10/14, T:934.11ff. 4 Submissions in Reply on behalf of Maria Butera, 21/11/14, para 6(c). 5

Maria Butera, 7/7/14, T:72.4ff, 73.3-4. 6 Maria Butera, 23/10/14, T:970-973. 7

O’Neill/Lis-Con submissions, 14/11/14, para 10.

1125

13. In July 2013, Ms Zanatta held the position of Senior Adviser -

Member Relationships, Workplace Distribution within Cbus.8 In

that role she was responsible for overseeing the day to day

activities of the National Coordinator Team.9

14. She reported to Ms Cath Noye (General Manager, Key

Relationships), who in turn reported to Ms Butera. This put Ms

Zanatta at the fourth highest management tier within Cbus.10 It

was a senior advisory position.11

15. Ms Zanatta has at all times been a member of the CFMEU,12

even though her profile, as a manager working in the financial

services sector, is unusual for the CFMEU.

16. Ms Zanatta began her employment at Cbus in 1998, and as such,

by mid-2013, had been with the company for 15 years. She was

a highly experienced Cbus employee. She, therefore, had an

intimate knowledge of its workings and systems.

17. Initially, Ms Zanatta was employed by Cbus as a member co-ordinator, providing services and advice to employers and

members,13 and interacting with the CFMEU regularly. Ms

Zanatta was more than capable of handling an enquiry from a

8 Lisa Zanatta, 7/7/14, T:17.5-6. 9 Lisa Zanatta, 7/7/14, T:18.4-6. 10

Lisa Zanatta, 7/7/14, T:18.9ff. 11 Lisa Zanatta, 7/7/14, T:19.6-8. 12

Lisa Zanatta, 7/7/14, T:17.26-30. 13 Lisa Zanatta, 7/7/14, T:17-32-18.6.

1126

union in relation to arrears. Indeed, it was her ‘bread and

butter’.14

18. Ms Zanatta’s employment with Cbus has now been terminated as

a result of the role she played in the matters described below.

Lis-Con

19. The Lis-Con companies are sub-contractors in the construction

industry and operate across Australia, with a focus on formwork,

concreting and steel fixing services.

20. On average, Lis-Con Concrete Constructions Pty Ltd employs

approximately 40 workers. Lis-Con Services Pty Ltd employs

approximately 300 workers. Most Lis-Con employees are not

members of the CFMEU.

21. Mr Eoin O’Neill is the construction manager, tender manager and

an authorised spokesperson for the Lis-Con companies.

22. Cbus was the default superannuation fund for Lis-Con from

about 2003 to 2013.15 As a result of the matters the subject of this

chapter of the submissions, Lis-Con workers voted to abolish

Cbus as its default superannuation fund.16

14 Maria Butera, 23/10/14, T:936.8-14. 15 Eoin O’Neill, witness statement, 15/7/14, para 41. 16

Eoin O’Neill, 15/7/2014, T:58.6- 9.

1127

The Gaske leak of June 2013

23. As at June 2013, issues had arisen in relation to the extent to

which Lis-Con was paying workers’ superannuation entitlements

on time. Officers of the CFMEU had taken an interest in that

matter.

24. To this end, on 18 June 2013, Mr Steve Gaske, who was both a

Cbus employee and the honorary President of the Queensland

Branch of the Construction and General Division of the CFMEU,

sought and obtained from Superpartners certain information in

relation to the extent of the arrears for the two Lis-Con

companies.17

25. The information provided came in two forms. First, there were

two emails from Ann-Marie Hughes from Superpartners setting

out the aggregated arrears position of each particular Lis-Con

company; that is, the total amounts owed by the company for

particular months. Secondly, attached to each email was a

schedule which identified the names of the Lis-Con employees,

their Cbus membership number, their date of birth, and

superannuation entitlements for each Lis-Con company. No

personal contact details in the nature of email or home addresses

or telephone numbers were disclosed.

26. Mr Gaske passed Ms Hughes’ emails and their attachments on to

Mr Toyer, a CFMEU organiser in Queensland, by email on 18

17 Zanatta MFI-1, 7/7/14, tabs 1 and 2.

1128

June 2013.18 The first email to Mr Toyer read ‘Here ya go mate.

Call if you need any clarification’. Mr Gaske signed off on those

emails as a Cbus co-ordinator.

Cbus debt collection processes in June 2013

27. The debt collection activities of Cbus were managed by its

appointed debt collection agent, Industry Funds Credit Control

(IFCC).19

28. On 18 June 2013, solicitors retained by IFCC sent

correspondence to Lis-Con in relation to its arrears position.20

29. Mr O’Neill responded to that letter on 20 June 2013 advising that

he had already paid the superannuation entitlements for February

2013 and would pay March 2013 by 27 June 2013. It was agreed

by IFCC that Lis-Con would have until that date to make that

payment.21

30. Some days later, however, on 25 June 2013, Mr Gaske contacted

Ms Hughes and requested that Lis-Con’s files be ‘referred to

legal’ - that is, referred to lawyers for action.22 Since Mr Gaske

had recently been in communications with the CFMEU about

Lis-Con and arrears, and since Mr Gaske was himself an

18 Zanatta MFI-1, 7/7/14, tab 1A, pp 1A-1H and tab 2, pp 7-9. 19 Lisa Zanatta, 7/7/14, T:19.46. 20

Atkin MFI-1, 3/10/14, tab 5, p 5. 21 Atkin MFI-1, 3/10/14, tab 5, p 5. 22

Atkin MFI-1, 3/10/14, tab 5, p 5.

1129

honorary official of the CFMEU, it may reasonably be inferred

that the ‘referral to legal’ was the CFMEU’s idea, and Mr Gaske

was prepared to ensure that this action was taken.

31. Ms Hughes obliged. She asked Mr Andrew Grabski (an

employee of IFCC) to arrange for the Lis-Con files to be

‘referred to legal’.23

32. Two days later, on 27 June 2013, Ms Zanatta met with IFCC.

She asked to be advised of all payment terms on any future

arrears, and that this had been requested because of ongoing

issues the CFMEU was having with Lis-Con.24

33. Later that same day she called IFCC and requested an email

setting out the current arrears position, the estimated debt, and

the implications of issuing proceedings or holding off.25

34. While this was occurring on 27 June 2013, Mr O’Neill called Mr

Grabski and advised that Lis-Con would not commit to monthly

superannuation payments and that the payments for April 2013

and May 2013 would be paid by 27 June 2013 as per the

guidelines from the Australian Tax Office.26

35. That same day, in answer to Ms Zanatta’s request described

above, Mr Grabski sent an email to Ms Zanatta with the Lis-Con

23 Zanatta MFI-1, 7/7/14, tab 3, p 10 and tab 4, p 18. 24 Atkin MFI-1, 3/10/14, tab 5, p 4. 25

Atkin MFI-1, 3/10/14, tab 5, p 4. 26 Zanatta MFI-1, 7/7/14, tab 5, p 22-23.

1130

arrears information. He also took the opportunity to advise her of

the results of his conversation with Mr O’Neill.27

36. Mr Grabski set out in this email the nature and extent of the

arrears position for Lis-Con. He identified that one Lis-Con

company was four months behind and the other was three months

in arrears. Precisely calculated estimates were given in respect of

the total amount owed by each company for those months.

37. The arrears information in this email was ‘aggregated’

information. It stated the total amounts owed by each company

for particular months. It was not broken down by reference to

individual employees of the company.

38. The following day, 28 June 2013, Ms Zanatta forwarded Mr

Grabski’s email to Mr Jade Ingham, the Assistant Secretary of

the Queensland Branch of the Construction and General Division

of the CFMEU. 28

39. Ms Zanatta’s email to Mr Ingham read ‘Jade please read update

below regarding Lis Con. If you are available to chat now please

call on [phone number]. Thanks lisa’. Ms Zanatta’s evidence

was that Mr Ingham had asked her for a current update on Lis-Con’s arrears.29

27 Zanatta MFI-1, 7/7/14 tab 5, p 22. 28 Zanatta MFI-1, 7/7/14, tab 5, p 22. 29

Lisa Zanatta, 7/7/14, T:23.19-26.

1131

40. Ms Zanatta had no qualms about sending quite detailed arrears

information of this kind, not involving personal details, to the

CFMEU. She was perfectly able to deal with an arrears query

coming from a very senior official of the CFMEU. None of this

called for any form of secret communications or subterfuge.

Nothing had to be hand delivered. Ms Zanatta did not need to fly

it to Brisbane to give to Mr Ingham. The information was simply

sent by Ms Zanatta by email. This is how a request from a senior

CFMEU official to Ms Zanatta for arrears information would be

handled, and how she would be expected to handle it.

41. That same day, 28 June 2013, this email chain was then

forwarded on by Mr Ingham to Mr Michael Ravbar, the Secretary

of the Queensland Branch of the Construction and General

Division of the CFMEU. Mr Ravbar in turn sent it to Mr Dave

Noonan, the CFMEU’s National Secretary.

42. After Mr Noonan received this email chain he sent it on to Mr

Atkin. Mr Atkin said in his evidence that he must have spoken

with Mr Noonan about the email, but that he could not recall

what was said.30

43. Mr Ravbar also had a conversation with Mr Atkin about it.31 In

that conversation, Mr Ravbar said that he wanted further

information from Cbus about the extent of the arrears. Mr Atkin

30 David Atkin, 23/10/14, T:844.20-24. 31 Michael Ravbar, 23/9/14, T:253.44-46.

1132

says that he subsequently gave Mr Ravbar aggregate arrears

information during a trip to Brisbane.32

44. Mr Atkin then sent this email chain of 28 June 2013 on to Ms

Butera, with a request that she touch base with him about it.33

These contacts at the highest executive levels of Cbus (Mr Atkin

and Ms Butera) and at the highest levels of the CFMEU (Mr

Noonan, Mr Ravbar and Mr Ingham) point towards a close

cultural affinity between the two institutions.

45. Later that same day Ms Butera sent an email on to Ms Noye (a

Cbus manager who sat in the management chain between Ms

Zanatta and Ms Butera) and said ‘Cath - can you please follow

up. M’.34 This was at 11.29am.

46. At 11.33am, that is only several minutes later, Ms Zanatta sent an

email to IFCC advising that the CFMEU in Queensland had

‘requested’ that Cbus ‘go ahead with legal proceedings ASAP’.35

In a telephone call a few moments later, Ms Noye said to IFCC

that ‘the union wanted files referred to legal asap’.36 Proceedings

were then commenced on 19 July 2013 in the District Court of

New South Wales.37

32 David Atkin, 23/10/14, T:844.38ff. 33 Zanatta MFI-1, 7/7/14, tab 5, p 21. 34

Zanatta MFI-1, 7/7/14, tab 5, p 21. 35 Atkin MFI-2, 23/10/14; David Atkin, 23/10/14, T:891.28-40. 36

Atkin MFI-7, 23/10/14, p 1. 37 Atkin MFI-1, 3/10/14, tab 7.

1133

47. It is plain that the CFMEU played a significant role in the

decision that was made by Cbus to commence proceedings

against Lis-Con. Indeed the evidence demonstrates that Cbus

was, in substance, acting at the direction of the CFMEU.

Counsel for the trustee of Cbus, United Super Pty Ltd, denied

this. They pointed to the duty of the trustee to enforce the

payment of debts due promptly, to the allegedly consistent

lateness of Lis-Con in payments, to the size of the outstanding

payments, and to the fact that the decision to institute

proceedings depended on instructions from IFCC and on the

work of Gregory Falk & Associates, solicitors, who had to certify

pursuant to s 347 of the Legal Profession Act 2004 (NSW) that

there were reasonable grounds for instituting proceedings.38 Yet

these propositions are not inconsistent with those of counsel

assisting, and they do not constitute any reason not to accept

them.

CFMEU ‘war’ on Lis-Con

48. At about the same time, on 25-27 June 2013, executives from the

Construction and General Division of the CFMEU were

participating in a Divisional Executive Meeting.

49. The meeting was attended by Mr Parker, Mr Ravbar, Mr Dave

Noonan, Mr Tom Roberts (Senior National Legal Officer), Mr

Fitzpatrick (an organiser from the NSW Branch) and a large

number of other officials from around the country.

38 Outline of submissions of United Super Pty Ltd as trustee for Cbus, 14/11/14, para 26.

1134

50. The minutes of the meeting note that there were various

discussions in relation to Lis-Con, that the union had received

complaints of breaches of awards and statutory entitlements, and

that the branches were requested to provide information of

breaches to the National Office via Mr Roberts.39

51. The minutes paint an overly cultivated picture of what was

actually discussed and agreed at the meeting. What was agreed,

in substance, was that the CFMEU would ‘go to war’ with Lis-Con.40 Everyone who attended the meeting agreed with this

course.41 The CFMEU submitted that there was no evidence of

any ‘war’.42 It submitted that Mr Fitzpatrick had said it was only

his ‘terminology’.43 It pointed out that others denied or did not

recall that the expression was used. But by their fruits shall ye

know them. The use eventually made of the Zanatta spreadsheets

was a tactic employed in what was in substance a war which Mr

Parker hoped would be successful.

Instructions from Mr Parker to Mr Fitzpatrick

52. At the June 2013 National Executive Meeting, it was agreed that

Mr Parker, with Mr Fitzpatrick’s assistance, would obtain certain

39 Parker MFI-1, 3/10/14, p 76. 40 Brian Fitzpatrick, witness statement, 15/7/14, para 97-98. 41

Brian Fitzpatrick, 15/7/14, T:40.26-46. 42 CFMEU submissions in reply to Lis-Con submissions, 21/11/14, paras 1-4. 43

Brian Fitzpatrick, 15/7/14, T:40.34.

1135

information in relation to Lis-Con and that this information

would be passed onto the other States as part of this ‘war’.44

53. Mr Parker admitted that he told Mr Fitzpatrick that he wanted to

find out information about Lis-Con's workers and use that

information to try and attack Lis-Con.45

54. Mr Fitzpatrick was told that the plan was to ‘get contact details

for Lis-Con employees off Cbus and then contact the employees

and encourage them to stir up trouble with Lis-Con over unpaid

entitlements’.46 By ‘contact details’ it was meant personal

information capable of being used to communicate with the

employees.

44 Brian Fitzpatrick, witness statement, 15/7/14, para 99. 45 Brian Parker, 3/10/14, T:637.25-27. 46

Brian Fitzpatrick, witness statement, 15/7/14, para 102.

1136

The McWhinney table

55. In July 2013, after taking instructions from Mr Parker, Mr

Fitzpatrick contacted Mr Bob McWhinney of Cbus and asked

him what information he could provide to the CFMEU about Lis-Con. Mr McWhinney advised he could email Mr Fitzpatrick with

the names and amount of the last payment for the Lis-Con

employees.47

56. On 12 July 2013, Mr McWhinney sent this information to Mr

Fitzpatrick as an attachment to an email.48 The attached

documents (McWhinney table) were schedules which set out the

name, Cbus number, date of birth and superannuation payment

information in respect of particular Lis-Con employees for each

Lis-Con company. The McWhinney table was a relatively short

document, and did not contain any personal contact information

for Lis-Con employees. It was radically different, in terms of

appearance, length and content, from the documents that Mr

Parker later obtained from Ms Zanatta. It was probably,

however, in breach of cl 6.4 of the Cbus trust deed.49

57. Upon receiving the McWhinney table, Mr Fitzpatrick reported

back to Mr Parker. He noted that the information he was able to

get did not include what Mr Parker had wanted in terms of details

47 Brian Fitzpatrick, witness statement, 15/7/14, para 103. 48 Zanatta MFI-1, 7/7/14, tab 10, p 38-45. 49

So submitted by Mr O’Neill and the Lis-Con companies, 14/11/14, para 3(1), and accepted by Outline of Submissions of United Super Pty Ltd in Reply to the Submissions of Lis-Con, 21/11/14, paras 1(1) and 5(3).

1137

capable of being used to contact Lis-Con employees. Mr Parker

told Mr Fitzpatrick that he would talk to Mr McWhinney. 50

Mr Parker seeks and obtains the Zanatta spreadsheets: general

58. In the period from 18 to 29 July 2013, Mr Parker sought and

obtained from Cbus the personal contact details of the Lis-Con

employees. He did so by enlisting the help of Ms Zanatta and Ms

Butera. The events which occurred are described below.

Although occasional passing references are made in this section

of this chapter to the false evidence given by Ms Butera, Ms

Zanatta and Mr Parker, for the most part their false evidence is

addressed in a separate section of this chapter.

18 July 2013

59. On the morning of 18 July 2013, at 8.35am, Mr Parker called Mr

Atkin.51 Their conversation was a short one, during which Mr

Parker asked Mr Atkin for assistance in terms of providing

further information about Lis-Con’s arrears history. Mr Atkin

said he would see what Cbus could do to help the union where it

could.52 According to Mr Atkin, Mr Parker did not tell Mr Atkin

that he wanted detailed records to enable him to contact

employees of Lis-Con.53 Mr Parker submitted that there was

50 Brian Fitzpatrick, witness statement, 15/7/14, para 105. 51 Parker MFI-1, 24/10/14, p 26. 52

David Atkin, 3/10/14, T:772.31-32; David Atkin, 23/10/14, T:868.26-33. 53 David Atkin, 3/10/14, T:772. 21-24.

1138

nothing improper in his request.54 But on what lawful basis did

he make the inquiry? He did not act on behalf of any CFMEU

members. He had not contacted Lis-Con to complain on their

behalf. His only purpose can be inferred from the use to which

the personal contact details in the Zanatta spreadsheets were

eventually put. That purpose was to advance the CFMEU

campaign against Lis-Con by improper means. Later in Mr

Parker’s submissions there is an admission that the information

requested, whether it was ‘ordinary, or innocent, information’, or

‘confidential, personal information’, was to ‘be used in pursuing

the CFMEU’s interests in relation to Lis-Con’.55 The CFMEU

did not demonstrate that it had any interests in relation to

CFMEU members employed by Lis-Con. Its interests in relation

to Lis-Con were the effective waging of war.

60. Mr Atkin reported his conversation, whatever its content was, to

Ms Butera, Ms Butera then spoke to Ms Zanatta about it. There

is no direct evidence of what the content of the conversation

between Ms Butera and Ms Zanatta was. In written submissions,

Ms Butera has insinuated that Mr Parker said what Mr Atkin

denied, and that Mr Atkin passed Mr Parker’s request to Ms

Butera and Ms Zanatta. That fits with the circumstantial

probabilities.

54 Submissions on behalf of Brian Parker, 19/11/14, para 13(c). 55 Submissions on behalf of Brian Parker, 19/11/14, para 70 (read with para 17).

1139

61. At 2.06pm the same day, Ms Zanatta called Mr Parker. They

spoke for a little over seven minutes.56 Ms Zanatta made no

mention of this conversation with Parker when she gave evidence

on 7 July 2014.

62. Within half an hour of the conclusion of that call, Ms Zanatta

sent an email to Mr Walls of Superpartners asking him to run an

enquiry for the accounts for Lis-Con for the past 12 months.57

63. When Mr McWhinney had earlier sought and obtained the

McWhinney table from Superpartners, he had been careful to set

particular limits on the information that was to be provided by

Superpartners to him.58

64. Ms Zanatta’s request of Mr Walls on 18 July 2013 contained no

such limitation. She simply asked for a ‘query’ to be run. As Mr

Walls explained in his evidence, the effect of this was to request

Superpartners to conduct an automated trawl of its database that

would result in the extraction of all of the information on that

database in respect of Lis-Con employees.59 It was obvious to

someone of Ms Zanatta’s vast experience within Cbus that the

results of such a query would include the personal contact details

of the employees in question.

56 Zanatta MFI-2, 3/10/14, p 2. 57 Zanatta MFI-1, 7/7/14, tab 11, p 46. 58

Zanatta MFI-1, 7/7/14, tab 9, p 36. 59 Anthony Walls, 7/7/14, T:108.

1140

65. The query that Ms Zanatta caused Mr Walls to run was the only

query run by Superpartners in relation to Lis-Con in the relevant

period.60 Although various less intrusive searches of the

Superpartners’ database were undertaken through the period, this

was the only full query. Thus it was the only search that

produced results which included the personal contact details of

the Lis-Con employees.

66. The very fact of the 7 minute call from Ms Zanatta to Mr Parker

referred to above (which immediately prompted Ms Zanatta to

proceed to request the Superpartners’ query soon after) was

highly unusual. Mr Parker was the most senior CFMEU official

in the whole of New South Wales. Ms Zanatta was in Cbus’

management. Routine requests for arrears information about a

company were not usually handled in this way.

67. The pre-18 July 2013 events, and the events which transpired

after that date, make it probable that during this telephone call on

18 July 2013 Mr Parker told Ms Zanatta that he wanted to obtain

a full set of Cbus’s records in relation to Lis-Con, and that in

particular he wanted to get hold of information that would enable

the CFMEU to contact Lis-Con employees. Counsel for Mr

Parker submitted that he only asked for details other than the

personal contact details, but Ms Zanatta either misunderstood

him or improperly failed to remove the personal contact

information.61 So far as these are possibilities, they are remote

60 Butera MFI-2, 23/10/14. 61 Submissions on behalf of Brian Parker, 19/11/14, para 44.

1141

and theoretical only. They are inconsistent with the probabilities

suggested by the circumstantial background. Mr Parker’s

submission assumes that Ms Zanatta passed on information to Mr

Parker he did not request and did not want. But why would she

do that unless he had asked for it? If he did not request it and did

not want it, why did he not return it? The stealthy nature of later

events suggests that both she and he knew the dealing was

wrong. There was only one reason why it was wrong: it

involved personal contact details which Cbus was obliged not to

disclose.

68. Ms Zanatta subsequently told Ms Butera that this is what was

being arranged. So much is obvious from the events of 24 July

2013 and following, as set out shortly.

22 July 2013

69. On 22 July 2013, Mr Walls sent Ms Zanatta an email with the

results of the query she had requested on 18 July 2013. The

email attached two large spreadsheets.62 Those documents

contained information in respect of a large number of Lis-Con

employees, including their names, email addresses, telephone and

mobile numbers.

62 Zanatta MFI-1, 7/7/14, tab 14, p 51.

1142

70. Those spreadsheets were excel documents, capable of

manipulation in various ways, including the removal of

columns.63

71. Included in the evidence before the Commission are two original

printed spreadsheets with handwriting upon them in blue and

black ink.64 They will be referred to below as the Zanatta

spreadsheets. They are in identical form to the spreadsheets

attached to Mr Walls’ email of 22 July 2013 to Ms Zanatta, save

that various columns have been removed so as to reduce the

width of the document. The column containing the telephone

numbers of the Lis-Con employees was not removed. That is a

significant fact - telling in and of itself.

72. When Mr Walls sent his email of 18 July 2013 to Ms Zanatta, he

copied Mr McWhinney into the email.65

73. This caught Ms Zanatta by surprise, because when she had made

the request of Mr Walls, she had been careful not to include any

other person as an addressee. She did not want anyone else to

know about it.

74. Upon receiving the information and becoming aware that it had

also been copied to other people, Ms Zanatta emailed Mr

63 Anthony Walls, 7/7/14, T:116.22-24. 64 Fitzpatrick MFI-3, 24/9/14. 65

Zanatta MFI-1, 7/7/14, tab 14, p 51.

1143

McWhinney and stated ‘Bob please don’t pass this on at this

stage. Thank you’. Mr McWhinney replied ‘OK’.66

75. Ms Zanatta also replied to Mr Walls stating ‘Thank you Anthony

this request was private. I would have appreciated if was okey

[sic] before ccing others’ (emphasis added).67

76. It is plain from these communications that Ms Zanatta had

intended that her request of Mr Walls be kept a secret. She did so

because she understood, at the time, that it was wrong for her to

be seeking and obtaining documents which contained personal

contact details for the purpose of supplying it to Mr Parker to

assist the CFMEU in its war with Lis-Con.

77. Mr Walls replied to Ms Zanatta’s reprimand by way of a short

email in which he said ‘I’m so sorry about that. I thought Cc’ing

Bob would be ok given that he asked for the same query 2 weeks

ago but changed his mind. My apologies, I’ll remember for next

time’.68 Ms Zanatta then replied stating ‘No problem at all. I

understand exactly why you did it. I have sorted it’.69 Ms

Zanatta’s reference to having ‘sorted it’ was a reference to the

fact that she had requested and obtained Mr McWhinney’s

assurance not to pass it on at that stage.70

66 Zanatta MFI-1, 7/7/14, tab 15, p 112. 67 Zanatta MFI-1, 7/7/14, tab 16, p 113. 68

Zanatta MFI-1, 7/7/14, tab 16, p 113. 69 Zanatta MFI-1, 7/7/14, tab 16, p 113. 70

Zanatta MFI-1, 7/7/14, tab 15, p 112.

1144

24 and 25 July 2013

78. On 24 July 2013, Ms Zanatta emailed Ms Butera stating:71

We now have the data requested by Brian Parker.

I have spoken to Anthony for passing it on to others without consent.

How would you like to proceed with the information?

I’ll catch up with you to discuss tomorrow if you are available.

Thank you

79. The email attached the ‘query’ results documents that Mr Walls

had sent to Ms Zanatta on 22 July 2013. The reference in Ms

Zanatta’s email to Ms Butera to the ‘data requested by Brian

Parker’ was that information.

80. Later that same day, Ms Butera emailed back requesting that they

discuss the matter the following day. Ms Zanatta agreed.72

81. The following day, 25 July 2013, Ms Butera and Ms Zanatta had

the meeting as planned.

82. The fact and sequence of the above communications are

important in a number of respects.

71 Zanatta MFI-1, 7/7/14, tab 18, p 119. 72 Zanatta MFI-1, 7/7/14, tab 19, p 173.

1145

83. First, they make it clear that the data on the spreadsheets from Mr

Walls was data that Mr Parker had requested. Both women knew

that to be so. Ms Zanatta said so in terms in her email of 24 July

2013.

84. Secondly, the email of 24 July 2013 demonstrates that Ms

Butera, who was senior to Ms Zanatta, was playing the lead role

in this subterfuge. Ms Zanatta was reporting back to her, and her

question to Ms Butera in the email of 24 July 2013 was ‘how

would you like to proceed with the information?’ (emphasis

added).

85. Thirdly, the communications demonstrate complicity between Ms

Zanatta and Ms Butera in relation to the covert nature of Mr

Parker’s request and Cbus’ response to it. Secrecy was the order

of the day, to the point where meetings were being organised

between two senior Cbus employees to discuss how to ‘proceed

with the information’. The disclosure of arrears information

would not be improper and would not call for secrecy. The

wrongful disclosure of sensitive information would. The

sensitive information held by Ms Zanatta in this case was the

personal contact details of the Lis-Con workers.

86. The only reason why Ms Butera and Ms Zanatta needed to meet

on 25 July 2013 was that they both knew that the information that

Mr Parker had asked for was highly sensitive information which

they were not supposed to be handing over and the possession of

which in their hands had to be kept secret. A discussion about

1146

how to get such information to Mr Parker could not take place

via email or in casual office conversation.

87. It is probable that Ms Zanatta and Ms Butera met on 25 July 2013

in order to discuss how to convey that sensitive information to

Mr Parker without getting caught. It is probable that they then

agreed that Ms Zanatta would act as a courier and take it up to

Mr Parker in Sydney. It is probable that they agreed it could not

be emailed or couriered in the ordinary way, because to do so

would leave a paper trail leading back to them. Counsel for Mr

Parker submitted that these conclusions are speculative.73 On the

contrary, they are reasonable inferences from the circumstances.

26 July 2013

88. On Friday, 26 July 2013, Ms Zanatta was not in the Cbus office

in Melbourne. She was travelling to and from Geelong.74

89. At 2.30pm that afternoon, Ms Zanatta telephoned Mr Parker

while she was on the road.75 They spoke for four and a half

minutes.

90. At 2.37pm, Ms Zanatta sent an iMessage to Ms Butera’s mobile

phone in the following terms:76

73 Submissions on behalf of Brian Parker, 19/11/14, para 51. 74 Lisa Zanatta, 3/10/14, T:742.18-20. 75

Zanatta MFI-3, 3/10/14, p 198/422, item 254. 76 Butera MFI-3, 28/10/14, p 2, item 26.

1147

I have made arrangement [sic] to drop off information to Brian Parkers PA . he is expecting a call from you . When you can .

91. That contemporaneous record, in the context in which it was

written, reveals that during the 2.30pm phone call between Ms

Zanatta and Mr Parker, arrangements were made for the Zanatta

spreadsheets to be dropped off by Ms Zanatta to Mr Parker’s

personal assistant on 29 July 2013. Ms Zanatta was telling Mr

Parker that she was planning to fly the documents to Sydney and

deliver them to Mr Parker’s assistant. The reason why Mr

Parker’s personal assistant needed to receive the documents was

that Mr Parker was not going to be in the CFMEU NSW Branch

Lidcombe office that day.

92. Ms Butera did not write back expressing any confusion as to the

subject matter of the iMessage. She did not ask what information

was being referred to.77 She did not communicate back to Ms

Zanatta asking her what she was supposed to say in the call to Mr

Parker.78 She knew exactly what was being planned, and what

Ms Zanatta had been discussing with Mr Parker. The plan was

for Ms Zanatta to take the Zanatta spreadsheets and drop them off

at the NSW Branch office at Lidcombe with Mr Parker’s

personal assistant.

93. At 2.40pm, Ms Butera telephoned Mr Parker.79 The call lasted

for 2 minutes. There is no direct evidence of its contents. But it

77 Maria Butera, 28/10/14, T:1136.34-39. 78 Maria Butera, 28/10/14, T:1137.6-10. 79

Butera MFI-1, 23/10/14, p 162/422, item 104.

1148

is probable that she warned him of the need for secrecy and care

in using the Zanatta spreadsheets. That inference follows from

an iMessage at 2.43pm.

94. That 2.43pm iMessage was sent by Ms Butera to Ms Zanatta in

response to her iMessage of 2.37pm referred to above. In that

message Ms Butera said:80

Done - he understands completely and is committed to using info very carefully. M

95. That iMessage records the substance of the phone conversation

that Ms Butera had with Mr Parker at 2.40pm that day. It is clear

that Ms Butera considered that the information that was being

delivered to Mr Parker’s personal assistant was very sensitive,

and she wanted to ensure that Mr Parker would use that sensitive

information very carefully. Mr Parker committed to doing so.

Arrears information is not sensitive information. Arrears

information does not need to be personally delivered by Ms

Zanatta in order to avoid detection. The information that was

sensitive was the personal contact details of the Lis-Con workers.

That was the information that Ms Butera was so concerned about,

and was what she discussed with Mr Parker. For her part, Ms

Zanatta did not ask whatever it was that had been done, what it

was that Mr Parker understood completely, what the information

was, and why it had to be used very carefully. She knew the

answers to all these questions.

80 Butera MFI-3, 28/10/14, p 2, item 27.

1149

96. While Ms Zanatta had been waiting for this response, and at

2.37pm on 26 July 2013, having just finished her conversation

with Mr Parker, Ms Zanatta then called Jackie Heintz, Project

Officer at Cbus.81

97. Within 20 minutes of that call, Ms Heintz had arranged flights for

Ms Zanatta from Melbourne to Sydney (return) for the following

Monday, 29 July 2013.82 The booking form described the

purpose of the trip as a ‘union meeting’. Ms Zanatta’s electronic

diary for 29 July 2013 records she had flights to and from Sydney

that day.83

98. At 2.56pm on 26 July 2013, Ms Zanatta made a further call to Ms

Heintz.84

99. About an hour later, at 3.57pm, an express courier service was

booked by Cbus for the purpose of delivering a package from the

Cbus office to Ms Zanatta’s home address.85 The package was

collected at 4.40pm and was delivered at 5.20pm.

100. The package contained the Zanatta spreadsheets, which had been

printed out at the Cbus office. Since Ms Zanatta was away from

the office on the afternoon of 26 July 2013, arrangements had to

be made for them to be delivered to her so that she could take

81 Zanatta MFI-3, 3/10/14, p 198/422, item 255. 82 Zanatta MFI-4, 3/10/14. 83

Zanatta MFI-1, 3/10/14. 84 Zanatta MFI-3, 3/10/14, p 198/422, item 258. 85

Zanatta MFI-5, 3/10/14.

1150

them to Sydney and deliver them to Mr Parker’s office on the

following Monday, 29 July 2013.

101. At 5.47pm that evening Ms Zanatta sent an iMessage to Mr

Parker. It read as follows:86

Hey Comrade just confirming that Jenny or is it Jennifer operates out of the Lidcombe office. Is that correct? In unity lisa cbus.

102. Mr Parker responded with an iMessage of his own at 6.10pm to

Ms Zanatta, which read:87

Jennifer comrade thank you

103. The name of Mr Parker’s personal assistant was Jennifer Glass.

Ms Zanatta’s iMessage to Ms Butera of earlier in the day referred

to the fact that she was going to deliver the information to Mr

Parker’s personal assistant. The reference to Jennifer in these

messages between Mr Parker and Ms Zanatta is clearly a

reference to Ms Glass.

104. Arrangements had to be made for someone other than Mr Parker

to take receipt of the documents being delivered by Ms Zanatta

on 29 July 2013 because he was going to be in Canberra that

day.88

105. Counsel for Mr Parker submitted that there was no objective

evidence about the content of several of those calls, and that Mr

86 Parker MFI-1, 28/10/14, item 1. 87 Parker MFI-1, 28/10/14, item 2. 88

Brian Parker, 24/10/14, T:996.40.

1151

Parker could not recall them.89 A more realistic proposition is

that Mr Parker said he could not recall them. Either Mr Parker

has a very bad memory or he was being untruthful. A man who

rose to be State Secretary of the CFMEU, with the numerous

cares and detailed tasks turning on the receipt of many telephone

calls and the conducting of many meetings characteristic of that

office, would need a very good memory. But, again, the

probabilities support the conclusions stated above about what

was said, whether or not Mr Parker genuinely could not

remember.

Conversation between Mr Parker and Mr Fitzpatrick

106. It is convenient to interrupt the narrative to explain the place in it

of some important evidence of Mr Fitzpatrick. Mr Fitzpatrick

gave evidence that Mr Parker told Mr Fitzpatrick in July 2013

that he had arranged for two women at Cbus secretly to give him

private information about Lis-Con's employees.

107. Mr Fitzpatrick’s evidence was that Mr Parker said to him ‘words

to the effect “We are getting what we want. I’ve spoken to her

and she has agreed to give it to us on the quiet”’.90 Mr

Fitzpatrick recollected that Mr Parker mentioned the first name of

a woman in Cbus and that it was ‘Liz’91 or ‘Lisa’.92

89 Submissions on behalf of Brian Parker, 19/11/14, paras 53, 54 and 60. 90 Brian Fitzpatrick, witness statement, 15/7/14, para 107. 91

Brian Fitzpatrick, witness statement, 15/7/14, para 107. 92 Brian Fitzpatrick, 15/7/14, T:44.16.

1152

108. Mr Parker told Mr Fitzpatrick that one of the Cbus women

involved was one of the bosses and that she had not told her own

boss about what she was doing because it was illegal. Mr Parker

said words to the effect of:

We have gotta be very careful we don't tell anyone about it. If this comes out I'm dead, the girls are dead and they'll be sacked and I’ll be sacked.93

109. Mr Fitzpatrick’s evidence in relation to this conversation with Mr

Parker has now been corroborated by the iMessages of 26 July

2013 referred to above (which neither Mr Fitzpatrick nor the

Commission staff knew anything about when Mr Fitzpatrick gave

his evidence). It is to be accepted. His prediction, too, has,

unfortunately, come to pass in part - and the end game has not

yet been played.

110. The initial thesis of the CFMEU and Mr Parker (at a time when

they were represented by the same counsel) was one which it was

assumed, without denial from counsel, was being propounded on

instructions, though Mr Parker never provided an evidence

statement.94 The thesis was that Mr Fitzpatrick had obtained the

Zanatta spreadsheets from Cbus himself and in order to protect

his source and bring Mr Parker down, he had nominated Mr

Parker as the person who gave them to him. The answer, given

with impressive sincerity, was: ‘I completely and utterly reject

that as nonsense’.95 A further element in the initial thesis of the

93 Brian Fitzpatrick, witness statement, 15/7/14, para 107. 94 Brian Fitzpatrick, 24/9/14, T:307.21-27. 95

Brian Fitzpatrick, 24/9/14, T:299.24.

1153

CFMEU and Mr Parker was that Mr Fitzpatrick had given the

Zanatta spreadsheets to Mr Roberts, solicitor for the CFMEU, on

15 July 2013. Mr Fitzpatrick repeatedly denied this.96

111. The truth of these denials by Mr Fitzpatrick is now clear in view

of the revelations that took place during the evidence of Ms

Zanatta and Ms Butera. In final address, Mr Parker, however,

now separately represented, ran a line which seemed to defy

these revelations. It was submitted:97

It is not surprising that [Mr Fitzpatrick] would wish to minimise his role in the obtaining of the information, and in the deceitful use of that information. It is not surprising that he would seek to shift or distribute the blame to others (such as Parker). Fitzpatrick has a very strong incentive to implicate others - particularly those senior to him like Parker - in his wrongful and deceitful behaviour. In those circumstances, his evidence should be approached with considerable caution. It should not be relied upon (at least where there is no objective evidence to support what he alleges).

112. The first point is that now there is objective evidence to support

what Mr Fitzpatrick said and to destroy what Mr Roberts said

about being given the Zanatta spreadsheets by Mr Fitzpatrick on

15 July 2013. The second point is that it was Mr Fitzpatrick who

drew attention to the Zanatta spreadsheets. But for that, his

involvement in the Cbus scandal would never have come to light.

To compare him to some criminal seeking to minimise his own

role by blaming others is a quite false analogy. If he had

remained silent, the Cbus scandal would never have been

uncovered, and his own discreditable role in it would have

96 Brian Fitzpatrick, 24/9/14, T:308.37-46, 320.43-45. 97 Submissions on behalf of Brian Parker, 19/11/14, para 23.

1154

remained secret as well. He broke the news not to shift the blame to

others, but to seek to purify the CFMEU, even at the cost of his own

reputation. Mr Fitzpatrick’s counsel concluded his submissions on the

Cbus affair thus:98

Parker is no longer in the CFMEU camp or represented by their lawyers. Clearly Parker has been cast aside because the CFMEU knows that, in light of Zanatta’s evidence, he has no chance of survival. Not though, according to Mr Parker’s new legal team. It brings to mind the comedy of Monty Python and the Holy Grail where the Black Knight has had all his limbs cut off but continues to badger his attackers: “it’s just a flesh wound … right I’ll do you for that! … Come here! … I’m invincible!”

113. That is unconventional advocacy. But it has considerable force.

114. The fact is that quite apart from the support which Mr Fitzpatrick’s

evidence in its substantive aspects receives from the course of

events, his demeanour was excellent. On points of detail his

memory was often revealed to be good. For example, Mr

Fitzpatrick was cross-examined to suggest that he had said certain

things to Mr Nicholas Fodor, a Cbus co-ordinator. The cross-examiner was relying on Mr Fodor’s statement. Mr Fitzpatrick

denied saying these things.99 When Mr Fodor entered the witness

box after Mr Fitzpatrick, he corrected the passages on which the

cross-examiner had relied. He said he had given the corrections to

his solicitor at 9.15am that day - before Mr Fitzpatrick had entered

the witness box at 9.35am.100 Though

98 Submissions on behalf of Brian Fitzpatrick in reply to those made on behalf of the CFMEU and Brian Parker, 21/11/14, para 25. 99

Brian Fitzpatrick, 24/9/14, T:330.34-331.30. 100 Nicholas Fodor, 24/9/14, T:377.23-378.42.

1155

differences remained between Mr Fitzpatrick and Mr Fodor, this

evidence, albeit on a minor issue, was a significant pointer to Mr

Fitzpatrick’s general credibility.

29 July 2013

115. On the morning of 29 July 2013, Ms Zanatta caught her flight

from Melbourne to Sydney, taking with her the Zanatta

spreadsheets. She landed in Sydney at about 10.55am.101

116. As the taxi records demonstrate, through the GPS co-ordinates,

Ms Zanatta travelled in the taxi from Sydney airport to the

CFMEU’s office at Lidcombe.102 The taxi arrived at 11.33am. It

waited for her for 2 minutes, after which she returned to the taxi

at 11.35am and was taken back to the airport for her flight home.

117. As Ms Zanatta ultimately admitted, she personally delivered

documents to the CFMEU office at Lidcombe at 11.33am on 29

July 2013,103 with a request that they be provided to Mr

Parker.104 When asked whether the documents were the Zanatta

spreadsheets she said: ‘I suspect so, yes’. By that stage, her

admissions of earlier perjury had placed her in so great a state of

belligerence and distress that by ‘suspect’ she meant ‘knew’. She

was not going to give a lying denial. She was not going to

concede knowledge frankly. So she selected ‘I suspect so, yes’.

101 Zanatta MFI-4, 3/10/14. 102 Zanatta MFI-7, 3/10/14. 103

Lisa Zanatta, 3/10/14, T:754.22-25, 768.1-32. 104 Lisa Zanatta, 3/10/14, T:754.35-41.

1156

But she meant ‘knew’. She identified no other document that

could have been delivered by her on that day. She positively

rejected the suggestion raised by the CFMEU’s counsel that the

documents she delivered could have been the totality of the

attachment to the email of 22 July 2013 from Mr Walls.105 It

should be noted that Mr Parker’s submissions admit that he never

denied that information may have been dropped off to his

personal assistant on 29 July 2013.106

118. At 11.46am that day, Ms Butera sent Ms Zanatta an iMessage. It

read:107

Everything ok? M

119. Ms Zanatta immediately responded to that message with her own

iMessage, which read:108

Yes thank you - done delivered.

120. This contemporaneous record demonstrates that Ms Butera knew

that Ms Zanatta was in Sydney delivering the Zanatta

spreadsheets to Mr Parker’s personal assistant.

121. Ms Zanatta caught her flight back to Melbourne on 29 July 2013

at about 2:00pm.109

105 Lisa Zanatta, 3/10/14, T:766-7. 106 Submissions on behalf of Brian Parker, 19/11/14, para 53. 107

Butera MFI-3, 28/10/14, p 2, item 32. 108 Butera MFI-3, 28/10/14, p 2, item 31.

1157

122. When she arrived home, at 4.53pm that day, she telephoned Mr

Parker (who was out of the office that day) and they spoke for

three and a half minutes.110 She was ringing Mr Parker to tell

him that she had dropped off the documents to Ms Glass earlier

that day.

123. The following morning, 30 July 2013, Mr Parker called Ms

Zanatta, and they spoke for a further three minutes.111 Mr Parker

was now back in the CFMEU Lidcombe office, having not

returned to the office the previous evening.112 He had taken

receipt of the documents Ms Zanatta had dropped off the

previous day. He was ringing to let her know that he had

received the documents.

Mr Parker’s receipt and use of the documents

124. On 30 July 2013, Mr Parker provided Mr Fitzpatrick with the

Zanatta spreadsheets.

125. Counsel for Mr Parker submitted: ‘There is no evidence that

Parker received the documents, other than Fitzpatrick’s

unreliable account’.113 But Mr Fitzpatrick was not unreliable.

There is no reason to doubt that a bulky document delivered for

109 Zanatta MFI-4, 3/10/14. 110 Zanatta MFI-3, 3/10/14, p 233/426, item 11. 111

Parker MFI-1, 24/10/14, p 32. 112 Brian Parker, 24/10/14, T:999.47-1000.16. 113

Submissions on behalf of Brian Parker, 19/11/14, para 65.

1158

Mr Parker on 29 July 2013 would have been given to him when

he returned to the office on 30 July 2013.

126. Mr Parker told Mr Fitzpatrick that he had received the lists from

Cbus headquarters in Melbourne and told Mr Fitzpatrick to

‘follow up on it’.114 This meant that Mr Fitzpatrick was to use the

contact details in the documents provided to contact employees

of Lis-Con and carry out the plan to attack Lis-Con.

127. On 30 July 2013, Mr Fitzpatrick made a number of telephone

calls to employees of Lis-Con.115 The numbers he rang appear

on the Zanatta spreadsheets. They do not appear on any other

documents which were provided by Cbus to the CFMEU.

128. On those calls Mr Fitzpatrick advised the employees that Lis-Con

was behind in paying their entitlements using words to the

effect:116

I’m from Cbus. I’m letting you know that your Bus and ACIRT payments, I believe your ACIRT payments are the same, are well behind. You should do something about it.

129. The purpose of these calls was to get these employees to contact

Mr O’Neill about outstanding superannuation payments.117 This

was the tactic agreed between himself and Mr Parker in order to

114 Brian Fitzpatrick, witness statement, 15/7/14, para 111. 115 CFMEU MFI-7, 24/10/14, p 2. 116

Brian Fitzpatrick, 24/9/14, T:303.35-38. 117 Brian Fitzpatrick, witness statement, para 112.

1159

achieve the ‘best and quickest response’.118 This conduct was

not creditable to Mr Fitzpatrick, though his admission of it does

enhance the credibility of his evidence.

130. Ms Zanatta and Mr Parker spoke again on the phone later on 30

July 2013 - at 4.42pm119 for one minute and again at 4.43pm for

four minutes.120 Counsel assisting submitted that Mr Parker was

telling her that the plan they had discussed had been put into

action, and the Zanatta spreadsheets had been very useful.

Counsel for Mr Parker submitted that there was no evidence to

support this.121 But the probabilities do support the conclusion

that something like that was said.

The Gaske leak of 30 July 2013

131. On 30 July 2013, Mr Gaske sought and obtained further

information from Ms Hughes of Superpartners in relation to Lis-Con arrears. Ms Hughes responded, providing Mr Gaske with an

email of the same date listing the employees of Lis-Con Services

by name and identifying amounts owed to them. The information

did not include any of the personal contact details of the Lis-Con

118 Brian Fitzpatrick, 24/9/14, T:305.32-33. 119 Parker MFI-1, 24/10/14, p 32. 120

Zanatta MFI-3, 3/10/14, p 224/426, item 31. 121 Submissions on behalf of Brian Parker, 19/11/14, para 66.

1160

employees.122 But the disclosure of financial information was

probably in breach of cl 6.4 of the Cbus trust deed.123

132. Upon receipt of that email on 30 July 2013, Mr Gaske sent it on

to Mr Gareth Baines, who was the construction manager at Civil,

Mining and Construction Pty Ltd.124 He stated in that email: ‘I

think we have covered off on information you requested. If there

is anything else don’t hesitate to call. Cheers’.

Complaint from Lis-Con and the reactions to that complaint

133. On 1 August 2013, Cleary Hoare, the solicitors for Lis-Con,

wrote to Mr Noonan of the CFMEU and raised concerns that Mr

Gaske had obtained confidential information in respect of Lis-Con and forwarded that information externally to Cbus.125 In

that correspondence, Cleary Hoare noted that a number of Lis-Con’s workers had been contacted from telephone numbers that

originated in Bowen Hills (the suburb of Brisbane in which the

Queensland Divisional Branch has its office), and that those

workers had reported that they had been threatened by CFMEU

officials.

122 Zanatta MFI-2, 7/7/14, tab 42, p 368. 123 As submitted by Mr O’Neill and the Lis-Con companies, 14/11/14, para 3(3) and accepted in Outline of Submissions of United Super Pty Ltd as trustee for Cbus in Reply to the Submissions of Lis-Con, 21/11/14, paras 1(1) and 5(2). 124

Zanatta MFI-2, 7/7/14, tab 42, p 367. 125 Zanatta MFI-2, 7/7/14, tab 37, p 351.

1161

134. On the same day, Cleary Hoare also sent correspondence of a

similar kind to Mr Atkin at Cbus.126 The letter to Mr Atkin

attached a copy of Mr Gaske’s email of 30 July 2013 to Mr

Baines. Several days later Cleary Hoare also wrote to Mr Bracks,

the Cbus chairman.127

135. When Mr Atkin received the Cleary Hoare letter on 1 August

2013, he forwarded it on to Ms Butera. He said ‘This has just

come through this afternoon. Could we discuss how best to

respond’.128

136. Ms Butera then forwarded this email on to Ms Zanatta at 5.17pm.

The text of her email to Ms Zanatta read: ‘In-confidence. I need

to speak to you about this. M’.129

137. At 5.23pm, Ms Butera rang Ms Zanatta and they had a 5 minute

telephone conversation.130 There is no direct evidence of the

content of the conversation. But it may be inferred that they

discussed the Cleary Hoare complaint.

138. The next day, 2 August 2013, the following telephone calls took

place:

126 Zanatta MFI-2, 7/7/14, tab 42 p 365. 127 Zanatta MFI-2, 7/7/14, tab 42 p 364. 128

Zanatta MFI-1, 7/7/14, tab 28, p 219. 129 Zanatta MFI-1, 7/7/14, tab 28, p 219. 130

Butera MFI-1, 23/10/14, p 164/426, item 21.

1162

7.29am Ms Zanatta rang Mr Parker (7 minutes 30

seconds);131

12.00pm Ms Butera rang Ms Zanatta (4 minutes);132

3.21pm Mr Parker rang Ms Zanatta (6 minutes);133

3.57pm Ms Butera rang Ms Zanatta (5 minutes).134

139. This flurry of communication was quite out of the ordinary.

Plainly Ms Butera and Ms Zanatta were afraid that they were

going to be caught out, and that the Lis-Con complaint had really

arisen because of the use that had been made of the Zanatta

spreadsheets that Ms Zanatta had delivered on 29 July 2013. The

complaint from Lis-Con had, however, directed attention to Mr

Gaske, and they wanted things to stay that way. These

conversations between the parties to this intrigue were about

these matters.

140. While this was going on, and in response to the complaint from

Lis-Con, Mr Atkin asked Ms Thurston, the Cbus Executive

Manager of Governance and Risk, to undertake an investigation

131 Zanatta MFI-3, 3/10/14, p 224/426, item 50. 132 Butera MFI-1, 23/10/14, p 165/426, item 25. 133

Parker MFI-1, 24/10/14, p 34. 134 Butera MFI-1, 23/10/14, p 165/426, item 29.

1163

into the matter.135 Ms Butera and Ms Zanatta were called upon

to assist in that process.136

141. Following the completion of the brief internal investigation by

Cbus into Mr Gaske’s position, Cbus’s lawyers (Holding

Redlich) were instructed to send a letter to Cleary Hoare on 7

August 2013 noting that Cbus accepted it was inappropriate for

Mr Gaske to have acted as he did, but indicating that Cbus was

‘satisfied that this incident is an isolated occurrence’.137 That

letter was sent following a conference with Holding Redlich

attended by Mr Atkin, Ms Butera, Ms Zanatta and Ms

Thurstans.138

142. The complaint about the leakage of Lis-Con workers’

information to the CFMEU so shortly after their own escapade of

late July 2013 had given Ms Butera and Ms Zanatta a fright.

They were anxious to ensure that there would be no further

complaints from Lis-Con that might result in a further

investigation and a revelation of their own misconduct.

143. Records of activity on 8 August 2013 establish the following

occurred:

135 David Atkin, 3/10/14, T:783.10-16. 136 David Atkin, 23/10/14, T:914.21-23. 137

Zanatta MFI-2, 7/7/14, tab 47A, p 424D. 138 Lisa Zanatta, 7/7/14, T:56.19; Maria Butera, 7/7/14, T:94.27-31; Maria Butera, 28/10/14, T:1128.8-13.

1164

8.41am Ms Zanatta rang Mr Parker (1 minute 30 second

call);139

11.52am Ms Butera rang Ms Zanatta (30 second call);140

11.53am iMessage from Ms Butera to Ms Zanatta:141

‘Lisa - did BP call you back? M’;

11.53am iMessage from Ms Zanatta to Ms Butera:142

‘No ill call him now’;

11.54am Mr Parker rang Ms Zanatta (1 minute call);143

11.55am Mr Parker rang Ms Zanatta (4 minute call);144

11.59am iMessage from Ms Zanatta to Ms Butera:145

‘Everything is still safe in his hands only’.

144. Counsel for Mr Parker submitted that his denial that he said this

to Ms Zanatta146 should be accepted.147 But why should Mr

139 Zanatta MFI-3, 3/10/14, p 225/426, item 128. 140 Butera MFI-1, 23/10/14, p 165/426, item 52. 141

Butera MFI-3, 28/10/14, p 3, item 39. 142 Butera MFI-3, 28/10/14, p 3, item 38. 143

Parker MFI-1, 24/10/14, p 36. 144 Parker MFI-1, 24/10/14, p 36. 145

Butera MFI-3, 28/10/14, p 3, item 40.

1165

Parker’s claimed recollection be preferred to Ms Zanatta’s

contemporary note, particularly in light of the events which

preceded it as earlier discussed?

145. These records demonstrate that Ms Butera and Ms Zanatta were

anxious, on 8 August 2013, to ensure that Mr Parker still had the

Zanatta spreadsheets and that there would be no more activity

that could result in their exposure. Mr Parker gave them that

comfort, telling Ms Zanatta that everything was still safe and in

his hands only.

146. The fact that Mr Gaske had been caught out was the source of

some amusement for Mr Parker. Mr Parker told Mr Fitzpatrick

that Mr O’Neill might mistakenly suspect that the trouble that Mr

Fitzpatrick and Mr Parker were causing was caused by someone

in the Queensland Branch of the CFMEU.148 Mr Parker found

this amusing at the time, and he had a chuckle with Mr

Fitzpatrick about it.149 But the broader significance of these

numerous telephone calls between Ms Zanatta and Mr Parker on

2 and 8 August 2013 is that they tend to corroborate Mr

Fitzpatrick’s evidence.

146 Brian Parker, 28/10/14, T:1188.36-1189.30. 147 Submissions on behalf of Brian Parker, 19/11/14, para 68. 148

Brain Fitzpatrick, witness statement, 15/7/14, para 114. 149 Brain Fitzpatrick, witness statement, 15/7/14, para 114.

1166

False evidence given by witnesses to the Commission

147. A striking feature about this case study has been the willingness

displayed by a number of the witnesses who have been called to

give false evidence. There was a lot of false evidence in very

many areas of the present inquiry, but the scale of dishonesty in

relation to this Cbus matter was exceptional and staggering.

148. The following witnesses gave false evidence - Ms Butera, Ms

Zanatta and Mr Parker.

149. Why and in what way were the accounts of these witnesses false?

The recitation of the key events in the chronology set out above

did not deal with these questions in any detail. To do so would

have disrupted the orderly flow of a section devoted to an

identification of the facts. But that exposition having been given,

it is now convenient to turn and address the evidence of these

witnesses and why it should be treated as dishonest.

The fictional position adopted up to the mid-afternoon of 3 October 2014

150. Mr Parker, Ms Butera and Ms Zanatta presented a fictional

account of the relevant events in the evidence given by each of

them up to the mid-afternoon of 3 October 2014 when Ms

Zanatta was recalled.

151. According to Ms Zanatta’s evidence given on 7 July 2014, the

sequence of events was that:

1167

(a) she had been asked by Ms Butera to ‘review the company’s

arrears’ because Mr Atkin had received a call from Mr

Parker raising serious concerns about Lis-Con’s arrears;150

(b) she was surprised by the volume of personal information

contained in the spreadsheets sent to her by Mr Walls on

22 July 2013 and sought to take action to make sure it did

not get leaked;151

(c) she provided Ms Butera with an update on 25 July 2013

and told her that Lis-Con was four months in arrears and it

was agreed that Ms Zanatta would call Mr Parker to tell

him that;152

(d) she called Mr Parker and said ‘Lis-Con is four months in

arrears’;153

(e) she was not personally involved in the provision by Cbus

of any information concerning the employees of Lis-Con to

the CFMEU.154 She said she did not know what

information had been released to the CFMEU, had never

150 Lisa Zanatta, 7/7/14, T:28.42-29.41. 151 Lisa Zanatta, 7/7/14, T:35-36. 152

Lisa Zanatta, 7/7/14, T:38.45-46. 153 Lisa Zanatta, 7/7/14, T:40.2-3. 154

Lisa Zanatta, 7/7/14, T:21.7-9, 21.30-32.

1168

seen the data that was released, and did not know who had

released it.155

152. Ms Butera’s evidence on 7 July 2014 was that:

(a) Mr Atkin told her that Mr Parker had spoken to him and

expressed a concern about the arrears status of Lis-Con.

The conversation was no more specific than that;156

(b) she asked Ms Zanatta to make enquiries in relation to the

arrears status of Lis-Con.157 The enquiry that Ms Zanatta

was being asked to make was a routine enquiry,158 and

would involve Ms Zanatta collating the arrears information

and ringing Mr Parker to tell him about the results, and this

is what occurred;159

(c) the query and the response to it was ‘unremarkable’;160

(d) she did not know how the personal information of Lis-Con

employees ended up with Mr Parker.161

155 Lisa Zanatta, 7/7/14, T:35.3, 35.28. 156 Maria Butera, 7/7/14, T:76.11-15. 157

Maria Butera, 7/7/14, T:77.24-26. 158 Maria Butera, 7/7/14, T:79.5. 159

Maria Butera, 7/7/14, T:82.17-19, 83.44-46. 160 Maria Butera, 7/7/14, T:83.41. 161

Maria Butera, 7/7/14, T:83.33-35.

1169

153. Mr Parker’s account of events, as given to the Commission on

the morning of 3 October 2014, was that:

(a) he rang Mr Atkin and asked him to ‘provide documentation

from Cbus that would assist’ the CFMEU in its

investigations into Lis-Con arrears;162

(b) he had a conversation with Ms Zanatta during which she

told him that Lis-Con was four months in arrears, but by

this stage he already knew that to be so from discussions

with Mr Fitzpatrick.163

154. Ms Zanatta and Ms Butera were later caught out by reference to

documents not available to the Commission on 7 July. But

independently of those documents, the sequence of events thus

described by these witnesses beggared belief in light of the

objective facts and circumstances.

155. First, Mr Fitzpatrick had given Mr Parker the McWhinney table

of 12 July 2013. That set out the Lis-Con arrears position -

indeed, it set it out in far greater detail than the usual aggregated

position, by identifying what each individual worker was owed.

That being so, Mr Parker had no reason at all to be ringing Mr

Atkin on 18 July 2013 to ask for information about the Lis-Con

arrears position. He already knew what it was. He wanted

162 Brian Parker, 3/10/14, T:639.5-8. 163 Brian Parker, 3/10/14, T:640.3-9.

1170

something more. He wanted private contact details of the Lis-Con employees.

156. Secondly, as at 18 July 2013, Ms Butera and Ms Zanatta already

knew that Lis-Con was 4 months in arrears. They had both

participated in the email traffic between the highest members of

the CFMEU and Cbus executives in late June 2013. Ms Zanatta

had thereafter been extensively involved in an examination of the

precise Lis-Con position and, indeed, had only recently taken

instructions directly from the CFMEU to commence legal

proceedings against Lis-Con to recover those very arrears. There

was no need for Ms Zanatta to run a full query through

Superpartners for Mr Parker on 18 July 2013 in order to find out

what the arrears position was. She already knew it, and so did

Ms Butera. They could have told Mr Parker on 18 July 2013 that

not only was Lis-Con four months in arrears (which, indeed, he

already knew), but the CFMEU had already instructed Cbus to

commence litigation against Lis-Con, and the matter had been

referred to IFCC and its lawyers.

157. Thirdly, Ms Zanatta was a senior and highly experienced Cbus

manager. The suggestion that she needed guidance or approval

from Ms Butera on 25 July 2013 about how to tell Mr Parker that

Lis-Con was 4 months in arrears is not believable. It was her

‘bread and butter’.

158. Fourthly, if the communications between Ms Butera, Ms Zanatta

and Mr Parker were so innocent, there would have been no need

1171

for the secretive approach evident from the email of 24 July 2013

referred to above.

159. As to the third and fourth points just noted, the terms of the 24

July 2014 email from Ms Zanatta to Ms Butera make it clear that

each of them were aware, as at that date, that the ‘data Brian

Parker had requested’ was highly sensitive, and the two of them

needed to meet face to face about how they were to ‘proceed with

the information’.

Ms Zanatta’s evidence on 3 October 2014

160. As noted above, when Ms Zanatta gave evidence on 7 July 2014

she denied any involvement in or knowledge of the leak. She

made no mention of a visit to Sydney on 29 July 2013. She made

no mention of her telephone conversation with Mr Parker on 18

July 2013 in advance of the request of Mr Walls to run a query

on Lis-Con. She made no mention of her telephone

conversations with Mr Parker on 29 July 2013 and 30 July 2013,

which immediately followed the delivery of the Zanatta

spreadsheets. She made no mention of her five calls with Mr

Parker in early August 2013 at the time of the Lis-Con complaint.

She made no mention of her iMessages with Ms Butera on 26

July 2013, 29 July 2013 and 8 August 2013. She made no

mention of her iMessages with Mr Parker on 26 July 2013.

Indeed there are a number of these matters which she has never

acknowledged.

1172

161. When Ms Zanatta was recalled to give evidence on 3 October

2014, she was aware of the fact that the Commission had called

for and reviewed her diary for 29 July 2013, her flight itinerary

for the trip to Sydney and her telephone records.

162. She knew she needed to explain her visit to Sydney. In that

knowledge, Ms Zanatta concocted a story as to why she had

come to Sydney on that day. She told that story in her evidence

to the Commission on 3 October 2014.

163. Ms Zanatta’s story was that she had come to Sydney to attend an

audit briefing Cbus Property and joint unions meeting in the

Sydney city office of Cbus at 343 George Street, had been

dropped off by a taxi at York Street because it could not drop her

in George Street, had asked the taxi driver to wait while she

checked where the meeting would be, had rung from a public

phone (because her mobile phone was flat and the taxi driver

would not lend her his for fear that she would steal it) for a few

dollars, and discovered that the meeting had been cancelled

without notice by Danny Gardiner from Cbus Property. She had

then returned to the taxi and been driven back to the airport to

catch her flight to Melbourne.164

164. This entrancing tale was crammed with circumstantial detail. But

as she spun the yarn, questions insistently welled up in the minds

of those familiar with the splendours and miseries of modern

Sydney life. When did any Sydney taxi driver worry about

164 Lisa Zanatta, 3/10/14, T:732-735.

1173

prohibitions on stopping to drop a passenger? When was there

last a public telephone in York Street? Even if there was still

one, what were the chances of it not having been vandalised?

Even if it had not been vandalised, what were the chances of it

being in working order? Why would a very short local call cost a

few dollars? And there were gaps in the tale. The normal

reaction of a business executive who had been brought from

Melbourne to Sydney on a wild goose chase would have been

fury, but Ms Zanatta did not seem to express any.

165. The York Street tale is, of course, a scandalous lie, like almost all

of Ms Zanatta’s evidence to that point.

166. When confronted with the evidence available to the Commission

as to her movements on 29 July 2013 Ms Zanatta admitted that

she had secretly delivered the documents to Sydney for the

attention of Mr Parker. She admitted to having lied to the

Commission on many occasions during the course of her

evidence.165 She said she had done so in order to protect a

number of individuals, including Mr Parker.166

165 Lisa Zanatta, 3/10/14, T:750.31-38, 752.1-5. 166 Lisa Zanatta, 3/10/14, T:750.43ff.

1174

Disposing of what little remains of the fictional account

167. Almost nothing of the fictional account of Ms Zanatta, Ms Butera

and Mr Parker remained in the aftermath of these admissions.

168. On 3 October 2014, Ms Zanatta attempted a fighting retreat. But

it was to no avail. She tried to suggest that Mr Parker had not

told her that he wanted to obtain records showing the personal

contact details of Lis-Con employees,167 and contended that Ms

Butera was not one of the people she had been trying to

protect.168

169. When Mr Parker and Ms Butera were subsequently recalled after

3 October 2014, they too tried to suggest they knew nothing

about any request or supply of information as to the private

contact details of the Lis-Con workers by Ms Zanatta to the

CFMEU office in Lidcombe.

170. Their evidence as to that matter beggared belief even before the

discovery of the evidence which led to Ms Zanatta’s further

examination and admissions on 3 October 2014.

171. It had now become even more problematic.. The landscape had

changed. Now, on top of all of the problems which bedevilled

that evidence prior to 3 October 2014, there was direct evidence

of a secret delivery of the Zanatta spreadsheets to the union’s

office for the attention of Mr Parker. There was no need for

167 Lisa Zanatta, 3/10/14, T:756.24-26. 168 Lisa Zanatta, 3/10/14, T:756.38-40.

1175

covert behaviour of this kind if it was just routine arrears

information that had been sought and provided. Mr Parker

accepted that to be so.169 Ms Zanatta would hardly take it upon

herself to act in this clandestine, furtive and improper way in

order to supply information that nobody had ever asked for.

172. These conclusions are reinforced by the further materials

produced to the Commission on 24 October 2014, being the

iMessages set out earlier in these submissions. They evidence a

deeply held concern by each of Ms Butera, Ms Zanatta and Mr

Parker in July and August 2013 that the information that the Cbus

officers would be providing, and did provide, was highly

sensitive and needed to be handled carefully. They also reveal

the panic that set in when they became aware of Lis-Con’s

complaint that employees were being contacted by CFMEU

officials, and Mr Parker’s assurance that the information

remained safe in his hands.

173. Ms Butera’s and Mr Parker’s involvement in the leak is obvious

from the iMessage records now before the Commission. In order

to demonstrate that fact, it is necessary to recall, if only

summarily, some of the evidence already addressed.

174. In this regard, the important matters for consideration include the

following:

169 Brian Parker, 28/10/14, T:1175.25.

1176

(a) as previously explained, Mr Parker had no reason to ask

Cbus for information about Lis-Con’s arrears position

on 18 July 2013. He already knew what that was. Mr

Fitzpatrick had only just told him and given him the

McWhinney table;170

(b) each of Ms Zanatta and Ms Butera knew that Lis-Con

was four months in arrears as at July 2013. If that was

all Mr Parker was asking for, they could have told him

that on 18 July 2013 and that would have been the end

of the matter;

(c) Mr Parker told Mr Fitzpatrick that he was getting what

he wanted from Cbus and they had agreed to give it to

him ‘on the quiet’.171 Arrears information would not

have to be dealt with in this way. Only sensitive

information would need to be given ‘on the quiet’;

(d) on 24 July 2013, Ms Butera received a guarded email

from Ms Zanatta about ‘the data requested by Brian

Parker’, and calling for a meeting the next day in order

to agree on how ‘to proceed with the information’,

which meeting took place;172

170 Fitzpatrick MFI-1, 15/7/14, p 103-107. 171 Brian Parker, 24/10/14, T:992.37-41. 172

Zanatta MFI-1, 7/7/14, tab 18, p 119.

1177

(e) there was no need for these dealings between Ms

Zanatta and Ms Butera if all Ms Zanatta had to do was

pass on arrears information to Mr Parker;

(f) the sensitive information which Ms Zanatta had at that

time, which could not be dealt with in a routine way,

and which would need to be dealt with ‘on the quiet’,

was the personal contact details of the Lis-Con workers;

(g) that sensitive information was actually attached to the

email that Ms Zanatta sent Ms Butera on 24 July

2013;173

(h) Ms Zanatta sent Ms Butera an iMessage on 26 July

2013 telling her she had made arrangements to drop off

the information to Brian Parker’s personal assistant, and

that Mr Parker was expecting a call from Ms Butera;174

(i) Ms Butera then rang Mr Parker,175 and after doing so,

sent an iMessage to Ms Zanatta that Mr Parker

understood completely and was committed to using the

information carefully;176

(j) on the very day Ms Zanatta was in Sydney dropping the

Zanatta spreadsheets off to Mr Parker’s assistant, Ms

173 Zanatta MFI-1, 7/7/14, tab 18, p 119. 174 Butera MFI-3, 28/10/14, p 2, item 26. 175

Butera MFI-1, 23/10/14, p 162/422, item 104. 176 Butera MFI-3, 28/10/14, p 2, item 27.

1178

Butera sent an iMessage to Ms Zanatta asking if

everything was okay, to which Ms Zanatta responded

‘Yes thank you - done delivered’;177

(k) Ms Butera’s immediate response upon hearing of a

complaint by Lis-Con about a leak from Cbus was to

send Ms Zanatta an email headed ‘In-confidence’

saying that they needed to speak.178 They then had a 5

minute conversation.179 This led to a flurry of calls

between Ms Zanatta and Mr Parker and between Ms

Zanatta and Ms Butera the following day, 2 August

2013;180

(l) when Cbus wrote back to Lis-Con indicating that the

leak had come from Mr Gaske alone, and was an

isolated occurrence, there was then another flurry of

calls between Ms Zanatta and Ms Butera, and also

between Ms Zanatta and Mr Parker.181 In between

those calls, Ms Butera sent an iMessage to Ms Zanatta

indicating she was worried about whether Ms Zanatta

had been able to speak with Mr Parker, and Ms Zanatta

177 Butera MFI-3, 28/10/14, p 2, items 31 and 32. 178 Zanatta MFI-1, 7/7/14, tab 28, p 219. 179

Butera MFI-1, 23/10/14, p 164/426, item 21. 180 See above para 138. 181

See above para 143.

1179

sent an iMessage back saying that ‘everything is still

safe in his hands only’.182

175. Each of Ms Butera and Mr Parker knew in July and August 2013

that Ms Zanatta had made arrangements to drop information off

to Mr Parker’s personal assistant. Not only are there

documentary records of Ms Zanatta having made these

arrangements with Mr Parker, and a record of Ms Zanatta telling

Ms Butera that she had done so, but there is also a record which

establishes that Ms Butera herself had made a highly remarkable

telephone call to Mr Parker (the most senior officer of the

CFMEU in New South Wales) to obtain a personal commitment

from him to use very carefully the information that was to be

delivered. And, of course, the evidence is that Ms Zanatta did

deliver the documents for Mr Parker’s attention on 29 July 2013.

176. These events were relatively recent, and striking. It was a most

unusual series of events that led to the delivery of the Zanatta

spreadsheets. According to Mr Parker, there had never been

another case where an arrangement was made for a Cbus

employee to drop a document off in the Lidcombe office for his

personal assistant (‘no, definitely, no’).183 It was a ‘very unusual’

event.184

182 Butera MFI-3, 28/10/14, p 3, items 38, 39 and 40. 183 Brian Parker, 28/10/14, T:1175.45. 184

Brian Parker, 28/10/14, T:1179.34-35.

1180

177. The memorable nature of those events would have been

accentuated by the scare that Ms Butera, Ms Zanatta and Mr

Parker obviously received not long after, when allegations started

to be made by Lis-Con about the leaking of information from

Cbus. Mr Parker agreed that he would have remembered events

of this kind if they had occurred.185

178. In these circumstances, these unusual events of August 2013

could not have, and had not, drifted out of the memories of any

one or more of Ms Butera, Ms Zanatta or Mr Parker by the time

they were called to give their evidence in mid-2014. They

remembered the events clearly. Yet they came to this

Commission and gave untruthful evidence about these matters.

The very fact they have done so is, of itself, telling.

179. To all of this must be added Mr Fitzpatrick’s original evidence to

the effect that:

(a) Mr Parker told him that he was getting the information

from two women at Cbus,186 a ‘Liz or Lisa’ and ‘one of

the bosses’, who would be sacked if they were caught

out;

185 Brian Parker, 28/10/14, T:1171.41-45. 186 Brian Fitzpatrick, witness statement, 15/7/14, p 107; Brian Fitzpatrick, 15/7/14, T:44.7-8.

1181

(b) Mr Parker had said that he wanted to get the contact

details for Lis-Con workers so that the CFMEU could

ring them;187 and

(c) Mr Parker gave him the Zanatta spreadsheets for that

purpose.188

There is no reason to doubt that this is what occurred. Mr

Fitzpatrick’s account of the events has been corroborated by the

materials produced to this Commission since he gave his

statement.

180. By way of summary, there are nine key matters to remember:

(a) the terms of the communications described above

involving Ms Butera and Ms Zanatta;

(b) the fact Ms Zanatta went to extraordinary lengths to

convey documents to Mr Parker’s office in person and

in secret;

(c) the fact Ms Butera and Mr Parker knew about that;

(d) the fact Ms Butera and Mr Parker knew that the

documents that were secretly delivered contained

sensitive information that had to be handled very

carefully;

187 Brian Fitzpatrick, witness statement, 15/7/14, para 102. 188 Brian Fitzpatrick, witness statement, 15/7/14, para 111.

1182

(e) the fact that the information in those documents that

was sensitive was the personal contact details of Lis-Con workers;

(f) the fact that Ms Zanatta, Ms Butera and Mr Parker were

prepared to go so far as to lie on their oath about these

matters in the witness box in order to conceal the true

position;

(g) the fact that the story about a routine arrears query on

18 July 2013 makes no sense when assessed against

what Mr Parker, Ms Butera and Ms Zanatta actually

knew by that date about Lis-Con’s arrears;

(h) the fact that Ms Zanatta said she lied to protect Mr

Parker - for if Mr Parker had done nothing wrong there

would be nothing to protect him from and no need to

lie; and

(i) Mr Fitzpatrick’s evidence as to what Mr Parker said he

was obtaining from Cbus, and whom he was obtaining it

from.

These nine key matters all point overwhelmingly to the

conclusion that Ms Zanatta, Ms Butera and Mr Parker knew that

the information provided to Mr Parker, and about which such

care needed to be taken, was the personal contact information of

the Lis-Con workers. They knew about it both in July and

August 2013, and they had not forgotten by the time they gave

1183

their evidence to this Commission in 2014. In fact, as each new

development unfolded - a newspaper article in May 2014

reporting Mr Fitzpatrick’s claims, Mr Fitzpatrick’s statement in

July 2014, the production of the documents which led to Ms

Zanatta’s recall on 3 October 2014, the collapse of Ms Zanatta on

3 October 2014, the recall of Ms Butera on 23 October 2014, the

discovery of the iMessages on 24 October 2014, and the third

visits to the witness box of Ms Butera and Mr Parker on 28

October 2014 - the most acute pressures on them to search their

recollections built up. It is not easy to forget unpleasant things

when a recurring series of sharp reminders of them takes place.

181. Having regard to the fact that Ms Butera was Ms Zanatta’s

superior within Cbus, and the terms of the 24 July 2013 email

addressed to Ms Butera from Ms Zanatta in which the latter

asked Ms Butera how she would like Ms Zanatta to proceed with

the information, it is clear that Ms Butera not only knew what Ms

Zanatta was doing, but positively approved and authorised it.

Ms Butera’s false evidence

182. The nature and extent of Ms Butera’s false evidence in this

Commission is deeply regrettable.

183. When all of the evidence described above was laid before her, the

only credible course for Ms Butera to have taken was to admit

the falsity of her evidence to that point (which Ms Zanatta had

done in some measure) and provide truthful evidence that would

actually assist the Commission (which Ms Zanatta did to a lesser

1184

extent). Ms Butera declined the opportunity to take that course

several times. She may have done that because of the fate of Ms

Zanatta when she took that course - dismissal. Much of her

evidence seemed to reflect a determination to give very vague

answers which, she might have thought, would not sustain a

perjury charge. But Ms Butera’s rejection of Ms Zanatta’s course

caused her to aggravate the position and potentially to expose

herself to consequences far more severe than would otherwise

have been the case.

184. Of particular note was Ms Butera’s evidence in relation to the

matters the subject of the iMessage communications with Ms

Zanatta.

185. Take, for example, the iMessage of 26 July 2013 from Ms

Zanatta to Ms Butera, in which Ms Zanatta reported to her that

she had made arrangements to drop off the information to Mr

Parker’s personal assistant and that he was expecting Ms Butera’s

call,189 (which iMessage was sent immediately after Ms Zanatta

had, in fact, spoken with Mr Parker190):

(a) before Ms Butera was shown the iMessage, she said that

if such information had been communicated to her that

would be a ‘very significant thing’, and that such a thing

189 Butera MFI-3, 28/10/14, p 2, item 26. 190 Zanatta MFI-3, 3/10/14, p 198/422, item 254.

1185

had never happened.191 She rejected such a thing ever

happened;192

(b) after she was shown the iMessage (which recorded the

communication she had denied and which she said she

would have remembered if it had occurred) she said ‘I

don’t remember any of this’;193

(c) she proceeded to deny, in the face of the iMessages, that

she was acting in concert with Ms Zanatta;194

(d) she also proceeded to deny, in the face of the iMessages,

that she knew Ms Zanatta was going to Sydney;195

(e) when she was shown the iMessage, and in the face of it,

she said she did not know what ‘information’ Ms

Zanatta was talking about through the

communication,196 and said she did not know what

‘information’ Ms Zanatta was dropping off;197

(f) when she was given every fair opportunity to give

truthful evidence on the matter, and retract her previous

191 Maria Butera, 28/10/14, T:1122.42-1123.4. 192 Maria Butera, 28/10/14, T:1126.4-11. 193

Maria Butera, 28/10/14, T:1131.19. 194 Maria Butera, 28/10/14, T:1131.21-23. 195

Maria Butera, 28/10/14, T:1131.28-30. 196 Maria Butera, 28/10/14, T:1134.5-6. 197

Maria Butera, 28/10/14, T:1134.40, 1135.42.

1186

evidence about having had no prior knowledge,

involvement or participation in the release of the

information, she declined to take it, and instead said

‘You’ve heard my evidence’.198

186. This is but one example. There would be little to be gained by

setting out, in this Interim Report, in exhaustive fashion, the full

length and breadth of Ms Butera’s false evidence. Some of the

other more egregious examples appear in Annexure A to this

Chapter.

Ms Zanatta’s false evidence

187. The most notable perjury committed by Ms Zanatta has been

described above, when dealing with her evidence of 3 October

2014.

188. Other examples of false evidence given by Ms Zanatta are set out

in Annexure B to Chapter 8.3.

Mr Parker’s false evidence

189. Mr Parker also gave false evidence. The evidence he gave as to

his lack of involvement of and awareness in the Cbus leak was

not true.

190. Mr Parker was a shrewd, capable and cunning man. He had

numerous stock phrases which he used to admit what he thought

198 Maria Butera, 28/10/14, T:1132.10, 19.

1187

counsel would know, but not concede anything else. His evidence was

in a state of constant movement. It shifted here and there as more

evidence adverse to him came to light.

191. In August 2014, Mr Parker told Ms Mallia that he had telephoned Mr

Atkin in July 2013 to get information about Lis-Con compliance, and

then had ‘no further contact with anyone from Cbus about Lis-Con’.199

He did not mention a single phone conversation with Ms Zanatta or Ms

Butera, despite the large number he actually had.

192. On 3 October 2014, that position had changed. On that date he

accepted there had been a brief phone call to Cbus for Lis-Con arrears

information and a brief phone call back from Cbus with that

information.200 This conveniently dovetailed with Ms Zanatta’s

evidence to that point.

193. Then, when Ms Zanatta made her admissions on 3 October 2014 after

Mr Parker had given evidence earlier that day, other ‘possibilities’ or

‘probabilities’ began to admit themselves to Mr Parker’s mind. On

occasion Mr Parker would advance different possibilities in answer to

the one question - for example ‘I didn’t’, ‘I can’t recall’ and ‘I’m not

privy to’ in answer to the same question within the space of about 15

seconds.201 In the end, Mr Parker typically sought sanctuary in the

harbour of ‘I

199 Rita Mallia, witness statement, 25/8/14, para 91. 200 Brian Parker, 3/10/14, T:639.42ff. 201

Brian Parker, 28/10/14, T:1187.21-34.

1188

don’t recall’. Mr Parker presented as a witness who was not

prepared to tell the truth, but at the same time wanted to avoid

perjury charges.

194. In this regard, on 24 October 2014, Mr Parker said in his

evidence:

(e) he ‘probably’ told Mr Fitzpatrick that he was getting

what he wanted from Cbus and they had agreed to give

it to him on the quiet;202

(f) he ‘possibly’ asked Ms Zanatta to get some information

about Cbus members who were Lis-Con employees;203

(g) Ms Zanatta ‘could have’ told him on 26 July 2013 that

she was coming to Sydney to give him documents, but

he could not recall;204

(h) Ms Zanatta ‘possibly’ told him in the phone call on the

afternoon of 29 July 2013 that she had flown to Sydney

on his behalf and had then returned to Melbourne, and

she probably told him she had dropped all the material

he wanted into the office at Lidcombe;205

202 Brian Parker, 24/10/14, T:992.37-44. 203 Brian Parker, 24/10/14, T:992.12-14. 204

Brian Parker, 24/10/14, T:993.32-36. 205 Brian Parker, 24/10/14, T:1000.35-38.

1189

(i) he either ‘probably’, or ‘possibly’, had a discussion with

Ms Zanatta on 30 July 2013 about the fact she had

dropped some documents off, and what was happening

with them, but he could not recall.206

195. After the revelation of the iMessages to Mr Parker on 28 October

2014, he said that:

(a) he ‘could not recall’ the phone conversation recorded in

Ms Butera’s iMessage of 26 July 2013 about him

‘understanding completely’ and being ‘committed to

using the information very carefully’;207

(b) he denied having a recollection of it being arranged with

Ms Zanatta on Friday, 26 July 2013 that she would drop

off documents to his personal assistant in Lidcombe the

following Monday, 29 July 2013;208

(c) he denied having said to Ms Zanatta on 8 August 2013

that everything was still safe in his hands, even though

that is precisely what Ms Zanatta reported to Ms Butera

in an iMessage of that date, sent immediately following

a telephone call between Ms Zanatta and Mr Parker.209

He was prepared to deny that even though, on his own

evidence, he could ‘not recall’ what was said in the

206 Brian Parker, 24/10/14, T:1002.34-37. 207 Brian Parker, 28/10/14, T:1179.8, T:1183.45, 1186.40. 208

Brian Parker, 28/10/14, T:1181.32. 209 Brian Parker, 28/10/14, T:1188.32-47.

1190

conversation.210 When the iMessage was shown to him

and he was again asked if he had said this, his evidence

was ‘I wouldn’t have a clue’.211 On that evidence, Mr

Parker appeared to accept that he may well have said it

- he just would not know. If his answer does not mean

that, it is yet another evasive, nonsensical and ultimately

meaningless answer from Mr Parker in circumstances

where he refused to give the only sensible answer that

could be given, namely an admission.

196. His remaining denials, as has been explained above, are

incapable of acceptance. Mr Parker avoided saying what he

knows about the Cbus leak in order to protect himself.

197. Mr Parker, who had been represented by counsel for the CFMEU

for most of the inquiry, was separately represented from 6

November 2014 on. The circumstances of the change might bear

some examination in future, but not in this Interim Report. The

change attracts some sympathy for Mr Parker, and it placed his

new team in considerable difficulties, with which they coped

admirably. Nothing more could have been said on Mr Parker’s

behalf. However, their factual arguments must be rejected. His

new counsel advanced elaborate submissions to the effect that Mr

Parker never requested personal contact details from Cbus, he

never received the personal contact details contained in the

Zanatta spreadsheets, and that the things which are said in and

210 Brian Parker, 28/10/14, T:1189.20-22. 211 Brian Parker, 28/10/14, T:1190.40.

1191

can be inferred from the iMessages were the products of

misunderstandings capable of innocent explanation. In short, the

submissions did not seek to defend Ms Butera and Ms Zanatta,

only Mr Parker. But they are unconvincing.

198. With respect, the points just summarised do not meet the strong

circumstantial case against Mr Parker. Why was the information

not emailed to him, rather than being brought by a clandestine

messenger who lied about it? Why did Ms Butera request him to

use care? Why did Ms Zanatta seek and get an assurance that

‘everything was still safe in his hands only’? Why disbelieve Mr

Fitzpatrick? These questions were not adequately answered. In

particular, there was an unfortunate attack on Mr Fitzpatrick. Mr

Fitzpatrick’s general credibility was in fact excellent. The main

points of his evidence, both in relation to Cbus and in relation to

the death threat shortly to be discussed, were convincing, even if

on one or two points of detail he was not reliable. It is true that

he should not have used the personal contact information, but his

evidence was against his interests and Mr Parker’s was self-serving. The contention that what Mr Parker wanted was only

information about arrears, not personal contact details, overlooks

the fact that the former type of information could not be used to

stir up Lis-Con’s employees against their employer.

199. Mr Parker’s submissions relied on the proposition that it was ‘a

legitimate part’ of his role ‘to seek and obtain certain kinds of

information from Cbus relating to employees of Lis-Con; and, if

1192

necessary, to use that information in dealings with Lis-Con.’212

In reply, Mr O’Neill and Lis-Con submitted:213

Mr Parker was not acting on behalf of any CFMEU members: there was no evidence that he made any enquiry as to whether any Lis-Con worker affected by the disclosure he sought was also a CFMEU member. Mr Parker did not obtain information for his use in “dealings with Lis-Con”. He had no such dealings … The union made no approach to Mr O’Neill or to Lis-Con in any legitimate, direct way to discuss any issue about superannuation. The purpose of Mr Parker obtaining the information was to use it to stir up trouble for Lis-Con with its workforce, to intimidate or harass its workers with unauthorised contacts and impostures and to provoke industrial disputation or disquiet about Lis-Con from behind the scenes. The way the ’war-footing’ campaign was conducted belied the complaints which the CFMEU Queensland had made that Lis-Con workers were too afraid to speak up for their rights: the success of the Parker/Fitzpatrick gambit relied on the workers doing just that.

200. There is no answer to those arguments.

201. Mr Parker’s case received a damaging blow in Ms Butera’s

submissions in reply. While blaming Ms Zanatta and Mr Parker

and preserving a degree of silence about her own role, Ms Butera

submitted that the leak could only have taken place on a request

or instruction to give Mr Parker the personal contact details, and

it was complied with in a pro-union environment where leaks to

212 Submissions on behalf of Brian Parker, 19/11/14, para 10. 213 O’Neill/Lis-Con Submissions in Reply to Submissions by Interested Parties, 21/11/14, para 34.

1193

unions by Cbus were not generally frowned upon.214 Ms Butera was

more forthcoming in the following submission:215

Read together, the submissions filed on behalf of Cbus and Parker ask the Commission to accept that Zanatta and Butera breached their duties as Cbus employees and engaged in a subterfuge to deliver personally to Parker private information about Cbus members in circumstances where nobody instructed them to deliver the information to Parker, and where Parker did not ask for nor want the information. Such a conclusion defies the evidence as well as logic and the Commission should reject it.

202. The submission positively intimates that Mr Parker asked for and

wanted the information, and raises the question: Who within Cbus had

the power to make the request or give the alleged instruction to deliver

the information? It assumes the answer: only Mr Atkin. Those

submissions correspond with the evidence that Mr Parker spoke to Mr

Atkin on 18 July 2013, though, according to Mr Atkin, no request was

made for personal contact details. The submissions are not

inconsistent with the evidence that Mr Parker spoke to Ms Zanatta on

18 July 2013. At least so far as Mr Parker’s submissions are claiming

that he had never requested personal contact details are concerned,

those of Ms Butera refute them. The question of who within Cbus was

giving instructions need not be dealt with in this Interim Report.

203. What is stated above in relation to Ms Butera’s submissions in reply is

by way of observation only. The Commission does not rely on those

submissions in making any conclusion adverse to Mr

214 Submissions in Reply to other affected parties on behalf of Maria Butera, 21/11/14, para 9. The key passage is quoted below at para 309. 215

Submissions in Reply to other affected parties on behalf of Maria Butera, 21/11/14, para 11.

1194

Parker or Mr Atkin, who have not yet had the opportunity to deal

with these particular submissions.

A few further observations on the false evidence

204. Before leaving the topic of the false evidence of Ms Butera, Ms

Zanatta and Mr Parker, a few further observations should be

made.

205. First, if these witnesses had told the truth at the outset, the

Commission would have been spared great expense, and the case

study could have been concluded swiftly and economically. The

cost, trouble and difficulty that this Commission has had to go to

in dealing with this false evidence may be of considerable

significance in any subsequent prosecution. There has also been

a cost for third parties. An example concerns the numerous

banks, courier, airline and taxi businesses who received notices to

produce with a view to collecting evidence about Ms Zanatta’s

movements on 26 and 29 July 2013. To comply with a notice to

produce requires a search. Searches, successful or not, cost

businesses time and money.

206. Secondly, the fact that Ms Butera, Ms Zanatta and Mr Parker

were prepared not only to give untruthful evidence in answer to

Mr Fitzpatrick’s evidence, but to sit back and allow what they

knew to be wild allegations to be made against Mr Fitzpatrick

(which allegations he rightly described as ‘nonsense’ and

1195

‘rubbish’216), makes their conduct all the more unsavoury. It also

makes regrettable the CFMEU’s inappropriate public criticism of

what it said it perceived to be the Commission’s position in

relation to Mr Fitzpatrick.217 Those comments should now be the

subject of public apologies from the CFMEU to both the

Commission and Mr Fitzpatrick.

Mr Roberts

207. The last witness deserving of attention is Mr Thomas Roberts.

208. Mr Roberts is the senior legal officer of the Construction and

General Division of the CFMEU nationally. In the witness box

he gave the impression of being shrewd, cautious and intelligent.

As events unfolded, the evidence he originally gave turned out to

be quite unreliable and incorrect. But counsel assisting went

further and launched a strong attack on his credibility along the

following lines.

209. The CFMEU provided the Commission with a statement from Mr

Roberts. Mr Roberts subsequently gave evidence that the

statement was true.

216 Brian Fitzpatrick, 24/9/14, T:299.20-24, 340.26-33. 217 Brian Fitzpatrick, 24/9/14, T:341.32-38.

1196

210. In that statement, Mr Roberts asserted that he received a yellow

folder from Mr Fitzpatrick on 15 July 2013 containing various

documents, including two copies of the Zanatta spreadsheets.218

211. Mr Roberts annexed what he said was a copy of the contents of

the yellow folder he received on 15 July 2013 to his statement, at

annexure TR-9.

212. The original yellow folder was subsequently produced by the

CFMEU, and was tendered as Fitzpatrick MFI-2, 24 September

2014.

213. Annexure TR-9 to Mr Roberts’ statement was thicker than the

yellow folder.219 CFMEU’s senior counsel stated that the

originals of the Zanatta spreadsheets, plus one photocopy, had

been in the yellow folder.220

214. Mr Roberts did not refer to the Zanatta spreadsheets anywhere in

the body of his statement. The fact that his evidence was to this

effect, and the significance of that evidence in the context of this

case study, was not highlighted by the CFMEU or Mr Roberts

when the statement was provided. The fact and significance of

this evidence would only have been apparent to a keen eye

undertaking a careful review of the bulky exhibits to his

218 Thomas Roberts, witness statement, 23/9/14, paras 17-18. 219 24/9/14, T:314.13-14. 220

Mr Agius SC, 24/9/14, T:314.30-43.

1197

statement, keeping in mind at the time of that review the precise

chronology in respect of the Cbus leak.

215. Mr Roberts’ evidence was advanced in order to support a theory

to the effect that Mr Fitzpatrick must have had the Zanatta

spreadsheets before 18 July 2013 (the date of Ms Zanatta’s

request of Mr Walls), and as such, he must have got them himself

and from some ‘secret source’ within Cbus before Ms Zanatta

began her work on 18 July 2013.221 The forensic enterprise was

to try to distance Mr Parker from the conduct of Ms Zanatta on

and after 18 July 2013.

216. This was done in circumstances where Mr Parker had decided not

to provide a statement denying anything that Mr Fitzpatrick had

said. Without anything from Mr Parker, the CFMEU needed

some shred of direct evidence to challenge Mr Fitzpatrick in the

way described above. Mr Roberts’ statement served this purpose.

217. Mr Roberts’s statement that he had received the Zanatta

spreadsheets from Mr Fitzpatrick on 15 July 2013 looked highly

questionable at the time he made it. In this regard, at that time:

(a) there was no record to indicate that anyone had sought

and obtained from Superpartners or Cbus any document

containing the private contact details of Lis-Con

employees prior to Ms Zanatta’s request of Mr Walls on

18 July 2013;

221 Brian Fitzpatrick, 24/9/14, T:299.20-23.

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(b) the various internal Cbus and Superpartners emails

already in evidence in the period from 18 to 24 July

2013 created a strong impression that the Zanatta

spreadsheets had been created out of the documents that

Mr Walls sent Ms Zanatta on 22 July 2013. They were

identical, save that some columns had been deleted, and

evidence had already been given by Mr Walls that his

document was able to be manipulated in this way;222

(c) Mr Walls’ documents of 22 July 2013 were sent by Ms

Zanatta to Ms Butera by email on 24 July 2013,

referring to the documents as the data that Brian Parker

had requested.223

218. All of those matters were known to Mr Roberts at the time he

prepared his statement on 15 August 2014, and when he came to

give his evidence on the first occasion on 23 September 2014.

He was the most senior lawyer in the entire Division.224 He had

been closely following the hearings and evidence pertaining to

his Division.225

219. All of those matters would have given reasonably minded

persons in Mr Roberts’s position cause to have real doubt as to

whether they received the Zanatta spreadsheets from Mr

Fitzpatrick on 15 July 2013, and prior to 22 July 2013.

222 Anthony Walls, 7/7/14, T:116.22ff. 223 Zanatta MFI-1, 7/7/14, p 119ff. 224

Thomas Roberts, 24/10/14, T:1027.31-36. 225 Thomas Roberts, 24/10/14, T:1028.15-24.

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220. However, Mr Roberts was not minded to express any real doubt.

In the witness box on 23 September 2013, not only did he say

that his statement was true, he went further and said he was ‘very

sure’ about when he got the Zanatta spreadsheets from Mr

Fitzpatrick, and that he could ‘be sure of those matters’.226

221. There was no reason for Mr Roberts to have any confidence

about such matters. He had no diary note in which he recorded

receipt of those particular documents. There was no

contemporary correspondence. He was working off memory.

Even on his own evidence, he had only glanced at the documents

in the yellow folder that Mr Fitzpatrick handed him, and then put

them on his shelf where they proceeded to gather dust for almost

a year.227 His evidence was that he effectively did nothing with

these materials when they were given to him in July 2013, even

though he had been the one given responsibility by the National

Executive for marshalling the materials to use in the union’s fight

against Lis-Con.228

222. Mr Roberts’ evidence, therefore, lacked credibility when given.

In light of the matters set out above, known to Mr Roberts on 23

September 2014, he could not have been sure that the yellow

folder he received from Mr Fitzpatrick on 15 July 2013 included

the Zanatta spreadsheets. His evidence to the contrary was

226 Thomas Roberts, 23/9/14, T: 211.31-212.20. 227 Thomas Roberts, 23/9/2014, T:216.22-23, 216.44, 217.35-36. 228

Parker MFI-1, 3/10/14, p 76; Thomas Roberts, 23/9/14, T:218.34-35.

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exaggerated in order to assist his union and protect Mr Parker’s

position.

223. The credibility of Mr Roberts’ evidence is now in tatters, as a

result of events which have transpired since 23 September 2014,

including Ms Zanatta’s evidence of 3 October 2014, his own

performance in the witness box when recalled on 24 October

2014, and the content of the iMessages between Ms Butera, Ms

Zanatta and Mr Parker which were located later that day and

tendered on 28 October 2014.

224. On 3 October 2014, Ms Zanatta admitted that she had personally

delivered documents for Mr Parker on 29 July 2013. She said

she ‘suspected’ (i.e. knew) the documents she delivered were the

Zanatta spreadsheets, and she did not identify any other

documents as being ones she may have delivered. She positively

rejected a suggestion raised by the CFMEU’s counsel that the

document she delivered was a print out of the totality of the

attachment to Mr Walls’ email of 22 July 2013. That possibility

appears to have been raised in an attempt to save Mr Roberts’s

evidence and credit. That attempt failed.

225. Mr Roberts was summoned to be examined again on 24 October

2014 in light of the admissions of Ms Zanatta, and in light of

certain other evidence, including a Superpartners query log which

indicated that the only query that had been run in respect of Lis-Con was the one Mr Walls had run on 22 July 2013.

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226. On 24 October 2014, Mr Roberts was afforded the opportunity to

consider a substantial list of matters which all weighed strongly

against Mr Roberts having received the Zanatta spreadsheets in

the yellow folder on 15 July 2013.229 He was asked to agree that

reasonably minded persons would have accepted that their

recollection was probably faulty on that matter, and that if they

did get those documents, they must have received them sometime

after 22 July 2013.

227. Again, Mr Roberts proved to be not so minded. While he

accepted that his memory is not infallible, he was not prepared to

do better than to say that it was ‘possible’ that his recollection

was faulty.230

228. His refusal to make obviously appropriate concessions was

unimpressive. It reflected poorly on his credit. He was too

interested in trying to protect himself, Mr Parker and the

CFMEU’s cause. When this was put to him, and reference was

made to the fact that Ms Mallia had described working as a

lawyer for the CFMEU as a vocation rather than a job, Mr

Roberts played word games and pretended he did not understand

what the word vocation meant in that context.231 This, too,

reflected poorly on him.

229 Thomas Roberts, 24/10/14, T:1023ff. 230 Thomas Roberts, 24/10/14, T:1027.22-23. 231

Thomas Roberts, 24/10/14, T:1027.41ff.

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229. It is telling that, when Mr Roberts was recalled on 24 October

2014, he said he had something he wished to say by correction or

clarification. It concerned a conversation with Mr O’Grady

about the fact there was a file in his room.232 He said he made

this further statement out of a desire to be ‘open’.233 But this had

no real bearing on any issue.

230. The subject matter of this short new oral statement was

something he said had occurred to him after hearing Ms Zanatta’s

evidence on 3 October 2014.234 Mr Roberts was quite unable to

explain why, if he was seized with a spirit of openness, he did not

explain why this new information was held back from the

Commission until he stepped into the witness box on 24 October

2014.235

231. Worse for Mr Roberts, although saying he wished to be ‘open’,

his short additional oral statement did not allude to the fact that,

quite contrary to the evidence he gave on 23 September 2014 to

the effect that he was certain that he received the Zanatta

spreadsheets on 15 July 2013, since 3 October 2014 his state of

mind had changed, and he was now of the view that he was

possibly wrong about that. This was not volunteered by Mr

Roberts. He was not being open at all.

232 Thomas Roberts, 24/10/14, T:1021.32ff. 233 Thomas Roberts, 24/10/14, T:1039.24-25. 234

Thomas Roberts, 24/10/14, T:1038.26ff. 235 Thomas Roberts, 24/10/14, T:1039.17ff.

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232. When Mr Roberts was pressed further about the Zanatta

spreadsheets, and shown the originals, he admitted that he did not

know where those originals had come from, and whether they

had been in the records of the CFMEU at any time prior to the

preparation of his statement, and as such he was unsure whether

they had come from out of the yellow folder that Mr Fitzpatrick

said he had given him on 15 July 2013.236

233. It was then put to Mr Roberts that all he could really say was

what had been in his yellow folder when he handed it over to the

CFMEU’s lawyers in 2014. That was obviously the true

position. He evaded answering that question, and ultimately fell

back on the evidence he gave ‘on the last occasion’. The

problem with that answer was that the evidence he gave in

September 2014 was entirely different from that which he gave

on 24 October 2014.

234. So much for the submissions of counsel assisting.

235. Senior counsel for the CFMEU and Mr Roberts did not submit

that any of the arguments of counsel assisting attacking Mr

Parker, Ms Butera and Ms Zanatta were wrong. Nor did senior

counsel for the CFMEU and Mr Roberts submit that the yellow

folder he received on 15 July 2013 contained copies of the

Zanatta spreadsheets. Instead he submitted that Mr Roberts

believed that the yellow folder he received that day contained

236 Thomas Roberts, 24/10/14, T:1033.17-37.

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copies of the Zanatta spreadsheets.237 And he submitted that

there were documents available which might have formed the

reasonable basis of a view that the Zanatta spreadsheets had been

generated before 15 July 2013 and that this possibility had not

been foreclosed by the time Mr Roberts’s statement was provided

to the Commission.238 That last submission matured into a

submission that there was ‘an inference available that Mr

Fitzpatrick came into possession of similar or identical material’

to the Zanatta spreadsheets before 15 July 2013. Those last two

submissions must be rejected, because there is very little to

support them. But what of the primary submission about Mr

Roberts’s belief?

236. It is certainly correct that Mr Roberts did himself no favours by

the stubbornness with which he pursued the impossible task of

defending his memory against the relevant evidence. Early in his

evidence on 24 October 2014, six times Mr Roberts was asked

whether in the light of what had become known by that date, it

was likely or probable that his recollection of the yellow folder of

15 July 2013 contained the Zanatta spreadsheets was incorrect.

Each time he accepted that it was possible but not probable or

likely.239 The furthest he would go - and this was 25 pages of

transcript later - was to accept that the evidence suggesting that

the Zanatta spreadsheets did not come into existence until after

237 CFMEU submissions, Pt 8.3, 21/11/14, para 3. 238 CFMEU submissions, Pt 8.3, 21/11/14, paras 10-12. 239

Thomas Roberts, 24/10/14, T:1025.35-1027.23.

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15 July 2013 was ‘strong and there is a prospect that my recollection is incorrect’.240

237. A more convincing approach might have been to accept the strength of

the external evidence, to say that his memory was as it was, but to

concede readily and quickly that his memory had probably led him into

error. There is nothing shameful in that. Not only would the approach

have been more convincing, it would have caused less trouble for

himself. His evidence creates doubts about his intelligence. But does

it destroy his credibility?

238. The question of Mr Roberts’s credibility is not central to the issues

surrounding Cbus. Those issues are resolved by examining the

contemporary documents and circumstances, the express evidence of

Mr Fitzpatrick, and the lies of Mr Parker, Ms Butera and Ms Zanatta.

Whatever is to be made of Mr Roberts counts for very little either way

on those issues.

239. Counsel assisting submitted that Mr Roberts had exaggerated his

evidence about continuing to believe that the yellow folder contained

the Zanatta spreadsheets in order to assist the union and Mr Parker. To

reach that conclusion, even on the balance of probabilities, is a serious

thing in relation to an experienced solicitor. It would have grave

consequences for Mr Roberts, as senior counsel for the CFMEU

submitted.241 Senior counsel also pointed to the absence of cogent

evidence that Mr Roberts would

240 Thomas Roberts, 24/10/14, T:1052.22-23. 241 CFMEU submissions, Pt 8.3, 21/11/14, para 15.

1206

knowingly give false evidence for the benefit of another. To these

points might be added the fact, though senior counsel for the CFMEU

did not, that Mr Fitzpatrick thought Mr Roberts was ‘a very good

person’, and he thought him to be ‘straightforward’ up ‘until yesterday’

- Mr Roberts’s first visit to the witness box.1 Although, for the reasons

given by counsel assisting, there are grounds for not accepting Mr

Roberts’s evidence, the arguments outlined above lead to the conclusion

that, on balance, no finding should be made that Mr Roberts was lying

when he claimed to have the belief he did.

KPMG findings of widespread disclosures

240. On 11 May 2014, an article was published in the Sydney Morning

Herald titled ‘Super fund in union leak claim’ alleging that the private

financial details and home addresses of hundreds of non-union workers

employed by Lis-Con were disclosed by a Cbus employee to a whistle-blower, Mr Fitzpatrick, and to Mr Parker without authorisation. Cbus

subsequently engaged KPMG to provide forensic investigation services

on this matter.

241. A KPMG preliminary findings report of 25 June 2014 identified a

number of incidents relating to the improper release of private

information.2 The KPMG report revealed that between 1 January 2013

and 12 May 2014, there were 59 incidents where Cbus members'

personal information was e-mailed externally

1 Brian Fitzpatrick, 24/9/14, T:297.24-28. 2 Zanatta MFI-2, 7/7/14, tab 60, pp 613-638.

1207

from Cbus email accounts. In some instances, members’

information including tax file numbers was disclosed to trade

union officials. None of the incidents, however, appears to be

comparable with the leak under consideration in this Chapter.

242. The KPMG report244 did not identify the transmissions of the

information received by Ms Zanatta by email to any other parties.

However, the report notes that the nature of the information

provided to Ms Zanatta is similar to the information the subject

of the 11 May 2014 article. The report also noted that it had not

conducted further procedures to determine if the information was

leaked through other means such as hard-copy printouts or the

transfer of data using portable memory devices.

243. The submission of United Super Pty Ltd set out numerous

remedial and other measures which have been taken both before

and since October 2014.245 One of them was the dismissal of Ms

Zanatta. Another is a direction to Ms Butera not to perform any

duties and a placement of her on leave.246

Mr Atkin

244. No submissions adverse to Mr Atkin were made other than those

of Ms Butera and those of Mr O’Neill and the Lis-Con

companies. Ms Butera’s submissions strongly insinuate that Mr

244 Zanatta MFI-2, 7/7/14, tab 60, pp 625-626, para 3.4.2. 245 Outline of submissions of United Super Pty Ltd as trustee for Cbus, 14/11/14, paras 34-35. 246

Outline of submissions of United Super Pty Ltd as trustee for Cbus, 14/11/14, para 38.

1208

Atkin had instructed Ms Butera and Ms Zanatta to ensure

delivery of personal contact details to Mr Parker personally. The

O’Neill/Lis-Con submissions made several detailed points

questioning Mr Atkin’s evidence justifying the provision of

information by Cbus to the CFMEU and distancing himself from

the Butera/Zanatta disclosure.247 There are reasons why it is

undesirable to make findings about Mr Atkin at this stage. First,

Mr Atkin’s position is central to the debate between counsel

assisting and United Super Pty Ltd about the cultural problems, if

any, of Cbus. No findings one way or the other are being made

on that topic in this Interim Report. Secondly, Mr Atkin’s

position is central to the issue of what reasonable steps were

taken to preserve privacy. No findings one way or the other are

made on that either. It is desirable to stand over consideration of

the Butera insinuation and the O’Neill/Lis-Con criticisms in

relation to Mr Atkin until a future report.

C - CONCLUSIONS

245. Counsel assisting then turned to the conclusions to be drawn

from the facts in terms of the unlawful conduct of Mr Parker and

others, and also to deal with some broader policy issues

concerning Cbus.

246. Counsel assisting identified issues with respect to:

247 O’Neill/Lis-Con submissions, 14/11/14, paras 3(4), 11-21. See Outline of Submissions of United Super Pty Ltd in Reply to the Submissions of the Lis-Con Parties, 21/11/14, paras 7-10.

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(a) breaches of the Privacy Act 1988 (Cth) by Cbus;

(b) breaches of the Corporations Act 2001 (Cth) by Ms

Zanatta, Ms Butera and Mr Parker;

(c) breaches by Mr Parker of professional standards

expected of an officer of a registered organisation; and

(d) perjury.

247. Counsel assisting also identified two broader policy issues.

These were:

(a) cultural problems within Cbus, including the unhealthy

loyalty that Cbus employees have to the CFMEU; and

(b) problems with the current Cbus privacy policy and the

lack of policies and procedures within Cbus to prevent

occurrences of the kind dealt with in this case study

from occurring in the future.

Privacy Act 1988 (Cth) breaches

248. The Privacy Act 1988 (Cth) was substantially amended by the

Privacy Amendment (Enhancing Privacy Protection) Act 2012

(Cth). However, these amendments only commenced operation

on 12 March 2014, after the date of the leak of the material by

Cbus to the CFMEU. The conduct of Cbus and others falls to be

1210

assessed under the legislation in force as at July 2013. It is this

(now superseded) legislation that is addressed below.

249. Section 16A of the Privacy Act 1988 (Cth) provided that an

‘organisation’ must not do an act, or engage in practice, that

breached an approved privacy code that bound the organisation

or, if the organisation was not bound by an approved privacy

code, the National Privacy Principles (NPPs).

250. Section 13A further provided that an act or practice of an

organisation is an interference with the privacy of an individual if

the act or practice breaches an NPP that relates to the individual

(or an approved privacy code if it is covered by one).

251. The term ‘organisation’ was defined to include a body corporate

that is not a small business operator, registered political party,

agency, State or Territory authority or prescribed instrumentality

of a State or Territory (s 6C). A small business operator was one

with an annual turnover of $3 million or less in a financial year (s

6D).

252. As United Super Pty Ltd as trustee of Cbus is a body corporate

with an annual turnover of over $3 million, it was an

‘organisation’ under the Act. Further, as Cbus was not bound by

an approved privacy code, the NPPs applied in respect of

information held by it.

253. The NPPs, which were provided as a Schedule to the Privacy Act

1988 (Cth), provided principles regarding, among other things,

1211

the collection, use, disclosure and handling of ‘personal

information’. Section 6 of Privacy Act 1988 (Cth) defined

personal information as information or an opinion, whether true

or not, about an individual whose identity is apparent, or can

reasonably be ascertained from the information or opinion.

254. As to the disclosure of personal information, NPP 2.1 provided

that, subject to various exceptions, an organisation must only

disclose personal information for the primary purpose of

collection.

255. The Guidelines to the National Privacy Principles (NNP

Guidelines) in relation to NPP 2.1 recognised that:

(a) when an individual provides and an organisation

collects personal information they almost always do so

for a particular purpose - for example, to buy or sell a

particular product or receive a particular service;

(b) how broadly an organisation can describe the primary

purpose will need to be determined on a case by case

basis and it will depend on the circumstances.

256. Disclosure for a purpose other than the primary purpose (the

‘secondary purpose’) was not permitted unless it fell under the

following exceptions:

(a) where both of the following applied:

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(a) the secondary purpose was related to the primary

purpose of collection and, if the personal

information was sensitive information, directly

related to the primary purpose of collection; and

(b) the individual would reasonably expect the

organisation to use or disclosure the information

for the secondary purpose;248 or

(b) where the individual had consented to the disclosure;249

(c) where the organisation had reason to suspect that

unlawful activity had been, or was being or may be

engaged in, and used or disclosed the personal

information as a necessary part of its investigation of

the matter or in reporting its concerns to relevant

persons or authorities;250 or

(d) where the disclosure was required or authorised by or

under law.251

257. The NPP Guidelines dealt with the operation of these exceptions,

providing that, amongst other things:

248 National Privacy Principles 2.1(a). 249 National Privacy Principles 2.1(b). 250

National Privacy Principles 2.1(f). 251 National Privacy Principles 2.1(g).

1213

(a) for a secondary purpose to be related to the primary

purpose, it must be something that arose in the context

of the primary purpose. The test for what the individual

would ‘reasonably expect’ would be applied from the

point of view of what an individual with no special

knowledge of the industry would expect;252

(b) consent to the use of disclosure could be express or

implied. Implied consent would arise where the consent

may reasonably be inferred in the circumstances from

the conduct of the individual and the organisation. If the

organisation’s use or disclosure had serious

consequences for the individual, the organisation would

have to be able to show that the individual could have

been expected to understand what was going to happen

to information about them and gave their consent.253

258. NPP 4.1 provided that an organisation holding personal

information must take such steps as are reasonable in the

circumstances to protect the information from misuse,

unauthorised access or disclosure.

259. The APP Guidelines stated whether reasonable steps have been

taken to secure personal information will depend on the

organisation’s particular circumstances, including the sensitivity

252 Office of the Federal Privacy Commissioner, Guidelines to the National Privacy Principles, p 35-36. 253

Office of the Federal Privacy Commissioner, Guidelines to the National Privacy Principles, p 37.

1214

of the personal information, the harm that is likely to result to

people if there is a breach of security, how the organisation

stores, processes and transmits the personal information, and the

size of the organisation (the larger the organisation, the greater

the level of security required).254

260. NPP 5.1 required an organisation to set out a publicly available

privacy policy setting out the organisation’s general information

handling practice, as well as handling notices to people whose

information is collected setting out matters such as the purpose of

collection. This policy had to set out the main purposes for which

the organisation held the information and whether it contracted

out services that involved disclosing personal information.255

Cbus trust deed

261. The terms of the Cbus superannuation fund are set out in a trust

deed in respect of which United Super Pty Ltd, the trustee, is a

party.256

262. Clause 6.4 of the trust deed provides as follows:

Privacy

In accordance with the Relevant Law, the Trustee will hold, and treat as confidential, all records and information it may hold, receive

254 Office of the Federal Privacy Commissioner, Guidelines to the National Privacy Principles, p 45. 255

Office of the Federal Privacy Commissioner, Guidelines to the National Privacy Principles, p 47. 256 Atkin MFI-1, 3/10/14, tab 1.

1215

or become aware of in its capacity as Trustee in relation to Employers, Members or Beneficiaries and shall not disclose or make known any such records or information to any third party except as may be required in relation to the administration of the Fund or to facilitate the provision of services or Benefits to Members or as may be required by the Relevant Law or as it may otherwise be lawfully required to do except that a Member may authorise the Trustee to release information pertaining to that Member to a third party.

263. The term ‘Relevant Law’ is the subject of a lengthy definition

and includes, amongst other things the Privacy Act 1988 (Cth).

Contracts with members

264. The Member Declaration in Cbus’ Product Disclosure Statement

of 1 July 2013, which forms part of the suite of contractual

documents executed when a person becomes a member of the

Cbus fund, includes the following statement in relation to

privacy:257

Cbus collects, stores and discloses the personal information you provide for the specific purpose of administering your account and in accordance with the Fund Privacy Policy. Except where required by law, the Fund will not use your personal information for any other purpose. You can access the Cbus Privacy Policy at www.cbussuper.com.au or contact the Fund for a copy to be sent to you. By signing this application I consent to the use of my personal information for the establishment and ongoing administration of my superannuation account.

257 Supplementary Tender, Cbus Member Handbook for Industry Superannuation Product Disclosure Statement: 1 July 2013, 31/10/14.

1216

Cbus privacy policy

265. At the relevant time, Cbus had a member privacy policy. It was

referred to in the passage from the member declaration quoted

above. That policy included the following relevant passage:258

Cbus outsources the administration of its member and employer records to an external superannuation administration company and contracts with life insurers and other service providers to provide services to you. They are authorised to only use your personal information under the strictest confidence.

Cbus believes it is important that employer contributions are paid regularly and any late or non-payments are identified so steps can be taken to recover late contributions. As part of the process of monitoring contributions Cbus, from time to time, supplies fund sponsors with information on contributions received for members who are working on sites where an award, industrial agreement or enterprise bargain agreement is in place.

The Fund’s debt collection agency may also be provided with access to information for the purposes of collecting outstanding contributions. Confidentiality agreements with staff and service providers ensure your details are not passed on to any unauthorised third party.

Your personal information will not be used or disclosed for any other purpose without your consent, except where required by law.

266. The paragraph of the policy dealing with disclosure of

information to fund sponsors (such as the CFMEU) provided

only that Cbus supplies ‘information on contributions received’

to sponsors ‘as part of the process of monitoring contributions’.

Further, the only entity to which information would be provided

for the purpose of chasing arrears was the fund’s debt collection

agency.

258 Zanatta MFI-2, 7/7/14, tab 55, p 535.

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Privacy issues: analysis

267. It is useful to set out what United Super Pty Ltd, the trustee of

Cbus, thought of the conduct of Ms Butera and Ms Zanatta. It

submitted259 that their conduct:

was in breach of their duties to Cbus and the terms of their contracts of employment. For example:

(1) both Ms Butera and Ms Zanatta were in breach of their undertaking to keep Confidential Information (as defined) subject to limited permitted disclosures;

(2) Ms Butera acted contrary to the Code of Conduct, which included to “ensure that the Fund complies with all legal requirements” and “to maintain confidential information of the Fund”;

(3) each has breached their implied duty of fidelity to Cbus “not to engage in conduct which impedes the faithful performance of [her] obligations, or is destructive of the necessary confidence between employer and employee”; and

(4) Ms Butera has also breached her duty, as a senior employee, to disclose acts of misconduct by fellow employees. (footnotes omitted)

268. That is correct. The submissions of the trustee also accept,

correctly, the factual reasoning of counsel assisting.

269. What of Cbus? Counsel assisting submitted that Cbus breached

the Privacy Act 1988 (Cth), the Trust Deed, its own privacy

policy and its contracts with members. Mr Parker induced each

of those breaches, and that finding is quite independent of the

259 Outline of submissions of United Super Pty Ltd as trustee for Cbus, 14/11/14, para 31.

1218

question whether it was a crime or a civil wrong for him to have

done so.

270. First, the telephone numbers and other personal contact details of

employees of Lis-Con set out in the documents provided by Cbus

to Mr Parker constituted ‘personal information’ of ‘individuals’

within the meaning of those expressions in the Privacy Act 1988

(Cth).

271. Secondly, with regard to NPP 2.1, on a broad view, the primary

purpose of the personal information of each member was for the

proper administration by the trustee of that member’s account

within the superannuation fund. On a narrower view, the primary

purpose was to enable Cbus staff to contact the member in

relation to his or her superannuation account.

272. Thirdly, that information was used or disclosed by Cbus to Mr

Parker for quite a different purpose. It was disclosed in order to

meet a request by Mr Parker for that information so that CFMEU

staff could use that information to ring those individuals directly

and speak to them about whether Lis-Con was in arrears in

payment of superannuation entitlements, and if so, by how much.

273. That behaviour by the CFMEU forms no part of the proper

administration of the fund by Cbus or the administration of

services to Cbus members. Cbus had its own staff, including a

large number of former CFMEU organisers who became Cbus

organisers, who could contact members and deal with defaulting

employers. It also had a retained debt recovery agency that could

1219

pursue employers for arrears. What was contemplated by Mr

Parker, Ms Zanatta and Ms Butera was the use of personal

information in an entirely inappropriate and unauthorised way,

hence the secrecy at the time and the campaign of concealment

which continued all the way up to Ms Zanatta’s confession on 3

October 2014.

274. Fourthly, the circumstances were not such as to bring Cbus

within one of the exceptions to the general statutory prohibition

on disclosure of the information.

275. The consent exception in NPP 2 has no application. At no point

did any Lis-Con employees consent to Cbus disclosing their

personal contact details to the CFMEU for any purpose, let alone

for the purpose of enabling officers of the CFMEU to contact

them directly.

276. The privacy policy, as earlier noted, did not contemplate such a

disclosure. The only possible disclosure of information to the

CFMEU identified in that policy was of ‘information on

contributions received’, and only ‘as part of the process of

monitoring contributions’. As such, it was not suggested that

personal contact details of members would be disclosed to the

CFMEU. Further and in any event, the personal contact details

were not disclosed to the CFMEU for the purpose of monitoring

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contributions. The CFMEU already had information for this

limited purpose, in the form of the statement of arrears.260

277. The privacy policy further expressly provided that in respect of

chasing arrears, information may be provided to the trustee’s debt

collection agency (i.e. not the CFMEU). It also expressly stated

that the information would not otherwise be disclosed without the

member’s consent. No such consent was given.

278. As to the ‘secondary purpose’ exception in NPP 2, for much the

same reasons it has no application. For that exception to apply,

the secondary purpose would need to be related to the primary

purpose and the member would have to reasonably expect Cbus

to use or disclosure the information for that secondary purpose.

279. Neither of these requirements can be satisfied in circumstances

where Cbus’ own privacy policy expressly provides for

disclosure of limited information to the CFMEU for a limited

purpose (neither which applies in the present case for reasons

given above), and where the policy expressly stated that the

information would not otherwise be disclosed without the

member’s consent.

280. Having regard to the express terms of the privacy policy, the

reasonable expectation of members would be that, if their

260 Even if this were not so, a member’s signature on the application form does not constitute an informed consent of the kind required. The application form provides for a ’bundled consent’ of a kind which the Privacy Act regulator has indicated will not constitute an informed and effective consent for the purposes of the legislation.

1221

employer fell into arrears, Cbus would pursue the employer, if

necessary with the aid of its retained debt collection agency.

281. On no sensible basis could it be said that members of a

superannuation fund would reasonably have expected their

private telephone numbers to be handed out by the trustee of their

superannuation funds to a trade union so that trade union officials

could contact them directly, and out of the blue, to discuss their

superannuation position. The submissions of United Super Pty

Ltd accept this.261

282. Those calls and the retention of their private contact details by a

trade union, is a significant invasion on the privacy of these

members.

283. Counsel assisting submitted that Cbus acted inconsistently with,

and thus breached, the NPPs set out in subclause 2.1 and 4.1 by

providing the information to Mr Parker. This, in turn, constituted

a contravention by Cbus of section 16A of the Privacy Act 1988

(Cth). The submissions of counsel assisting set out above are

accepted.

284. Counsel for United Super Pty Ltd pointed out that the conduct of

Ms Butera and Ms Zanatta was in breach of their duties to Cbus

and unauthorised by Cbus. They also pointed to its clandestine

character. They in effect denied that Cbus had failed to take

reasonable steps within the meaning of NPP 4.1, while accepting

261 Outline of submissions of United Super Pty Ltd as trustee for Cbus, 14/11/14, para 43.

1222

that the steps taken had been insufficient. But they accepted that

Cbus had to take further steps to protect its members’

information from misuse, unauthorised access or unauthorised

disclosure. They looked to the Samuel Governance Review for

assistance along these lines.262

285. It is probably true that there has been under-analysis of the

internal position of Cbus, of how Ms Butera and Ms Zanatta

came to offend, and of what steps had been taken to stop that

type of conduct. Instead the focus has been on the relations

between officers of Cbus and the CFMEU. For that reason it is

desirable not to make a finding one way or the other until further

evidence comes to light.

Breach of trust and contract and inducement by Mr Parker

286. However, the reasoning of counsel assisting in relation to the

Privacy Act 1988 (Cth) does support the conclusion that Cbus has

acted in breach of clause 6.4 of Cbus’s trust deed, its own privacy

policy and the terms of its contracts with the Lis-Con members.

The submissions of United Super Pty Ltd accept this.263

287. It is not clear one way or the other whether Mr Parker had

sufficient notice of the terms of the contracts with Lis-Con

262 Outline of submissions of United Super Pty Ltd as trustee for Cbus, 14/11/14, para 45. 263

Outline of submissions of United Super Pty Ltd as trustee for Cbus, 14/11/14, para 46.

1223

members to render him liable for the tort of interference with

contract.

Possible breaches of the law and of CFMEU’s professional standards

288. The submissions of counsel assisting and the various parties deal

with possible breaches of the law, including in particular the

offences of perjury under s 6H of the Royal Commissions Act

1902 (Cth) and breaches of the Corporations Act 2001 (Cth).

The question of whether Mr Parker breached the CFMEU’s

professional standards was also debated.

289. As noted above, these are important questions. In due course, the

Commission will consider them in detail and make appropriate

recommendations. However, it is possible that further evidence

will be called in relation to the matters the subject of this Chapter

in 2015. In these circumstances, the Commission will not in this

Interim Report deal with these issues. Rather, resolution of these

issues, and conclusions as to whether recommendations will be

made, and if so on what terms, will be reserved for a future

report.

Cultural problems within Cbus

290. Counsel assisting posed two questions. Why did this happen?

Why did two senior employees, one an executive manager (a

direct report to the Chief Executive Officer) and a ‘responsible

1224

person’264 with 16 years of service, and the other, a senior adviser

with 15 years of service, carry out a most serious breach of the

fund’s policies and their clear duties to its members? Counsel

assisting then put the following submissions.

291. This is not a case of inadvertence or even recklessness. It is a

case of conduct undertaken by senior leaders with full knowledge

at the relevant time that their actions were so seriously improper

that discovery would put their future employment in jeopardy.

Nor can the conduct be attributed to a mere failure of corporate

governance by virtue of some deficiency in the privacy policies

and procedures of Cbus.

292. The conduct can only be explained as a symptom of an unhealthy

culture in play within at least the Workplace Distribution team at

Cbus.

293. In all organisations, culture is critical to compliance with the law.

Compliance policies and procedures are worthless in an

organisation where the underlying norms of behaviour and

attitude are in conflict with the intent of the policies.

294. Culture is a responsibility of leadership. Leaders set the tone. In

a corporation the board sets the tone from the top. The

Commission has not examined nor considered the function of the

264 Ms Butera was in a sufficiently senior role to be designated as a ‘responsible person’ for the purposes of CBUS’s ‘Fit and Proper Policy’ and compliance with Prudential Standard SPS 520 supervised by the Australian Prudential Regulation Authority.

1225

board of Cbus and makes no comment on it other than to note

that its composition, so divided in interests and agendas, poses

particular challenges in a modern corporate governance

environment.

295. The Commission is, however, well-placed to comment on the

operations of the Workplace Distribution team led by Ms Butera.

Whether or not the following observations reflect on the

performance of the Cbus board or the broader operations of Cbus

is not the subject of these submissions.

296. The Workplace Distribution team at Cbus does not have a strong

culture focussed on the integrity of Cbus, the interest of Cbus’

members, and strict compliance with rules and procedures.

297. Indeed the real problem is that there is no strong and independent

Cbus culture at all. The environment at management and

operational level is infected by the separate private interests of

the CFMEU, and a deep seated loyalty to those interests. Those

interests and loyalties are all pervasive, and prevent the

development of a true Cbus culture, where Cbus and its members

come first, at the expense of the CFMEU.

298. The scale of the cultural corruption is evident from the fact that

the relevant misconduct was carried out at the upper echelons of

management. It was not carried out by a wayward junior staff

member who did not know better. The fact senior management

are prepared to behave in this fashion is a strong indicator of the

existence of an invasive cultural problem. It is not just that they

1226

acted as they did. Their actions betray underlying attitudes. And

those attitudes would manifest themselves through the behaviour

of these managers in the workplace on a daily basis, across a

whole range of tasks, and would rub off on to the staff they are

supposed to be leading.

299. The problem is exacerbated by the fact that many of those staff

members (whose behaviour the leadership is influencing) are

highly receptive to misguided attitudes of this kind. This is

because many of the staff who are exposed to these attitudes and

behaviours from senior management are themselves former

employees or members of the CFMEU. They come with strong

loyalties to the CFMEU. Following their arrival, they are led by

senior managers who share those loyalties.

300. The problem is further aggravated by the fact that Cbus is, at

least to a degree, commercially dependent upon the CFMEU. It

relies on the CFMEU to promote it to builders, subcontractors

and workers. It relies on the fact that the CFMEU pattern

enterprise bargaining agreements nominate Cbus (and not one of

its competitors) as the default superannuation fund.

301. All businesses are dependent on their customers. In the ordinary

course, this leads businesses to seek to accommodate the wishes

of those customers. However, in the ordinary course, businesses

have a culture and a set of rules and policies that enable its

management and workers to know where to draw the line in

terms of the level of accommodation that can be given. That

culture does not exist in Cbus.

1227

302. Ultimately, the root cause of this cultural failure is the symbiotic

relationship between the CFMEU and CBUS. Many of the

employees of the Workplace Distribution team of CBUS are

drawn from the retired ranks of the CFMEU. Some of those

employees have concurrently held honorary positions with the

CFMEU. This creates a significant risk of conflict of interest.

Cbus’s current conflict policies have not been sufficient, on their

own, to deal with this at the operational level.

303. If Cbus is to recruit from the ranks of the CFMEU, much more

will need to be done by it to ensure that these workers receive a

strong and continuous injection of an independent and law

abiding Cbus culture through training, performance reviews, and

substantive exposure to employer representatives and non-union

members of Cbus so that they can develop a more balanced

perspective. Those injections will need to be administered by

senior managers who are (and who are seen to be) sufficiently

divorced from the CFMEU.

304. Counsel for United Super Pty Ltd denied the propositions set out

above. The submissions of United Super Pty Ltd are full of

interesting detail about the superannuation industry in general

and Cbus in particular, though these are largely beside the present

point.

305. Counsel for United Super Pty Ltd made several criticisms of the

submissions of counsel assisting. One was that to criticise the

role of CFMEU former employees or members sat uncomfortably

with equal opportunity and freedom of association laws. Another

1228

was that it overlooked the historical role played by unions in

promoting superannuation entitlements for employees and

monitoring employer compliance. Another criticism concerned

the reference to the division of the board ‘in its interests and

agendas’.265 These criticisms were not entirely convincing.

They did not face up to a fundamental point raised by Mr O’Neill

and Lis-Con - the need to ensure that Cbus employees are not

placed in a position of conflict between duty and interest or duty

and duty.266

306. However, it was submitted that no adverse finding should be

made about ‘cultural corruption’ at Cbus. For the moment, that

submission should be accepted, but only for the moment. A

longer consideration of the evidence, particularly in view of the

Cbus board’s recent appointment of the Samuel Governance

Review, may cast further light on the problems which weigh on

counsel assisting. It may also be necessary to return to consider

the position of Cbus if further evidence emerges, whether from

the Samuel Governance Review or otherwise.

307. It is desirable to remember one point on which counsel assisting

and counsel for United Super Pty Ltd collide. Counsel for United

Super Pty Ltd submitted:267

265 Outline of submissions of United Super Pty Ltd as trustee for Cbus, 14/11/14, paras 39, 40. 266

O’Neill/Lis-Con Submissions in Reply to Submissions by Interested Parties, 21/11/14, para 18. 267 Outline of submissions of United Super Pty Ltd as trustee for Cbus, 14/11/14, para 41.

1229

Mr Atkin noted that culture was an issue that should be reviewed by Cbus as part of its review, but he did not agree there was a widespread cultural issue.268 It was not put to Mr Atkin that there were systemic cultural issues at Cbus. Mr Atkin did not agree that there was a “cultural difficulty … because of their background with a particular union”. Rather, Mr Atkin said that “the fact that they come from a union background assists their understanding of the environment that they work within and I’ve got confidence in the work that they do”.269 Cbus’ results in the Great Place to Work Institute’s 50 Best Workplaces study also suggest that there are no systemic cultural issues, with 95% of staff surveyed this year indicating that they are “proud to tell others I work at Cbus”, and where credibility, respect and fairness are all rated above 80. 270

308. In reply, counsel assisting submitted:271

While Cbus contends that the Butera/Zanatta leak was, in effect, an isolated act by rogue employees, that contention does not address the fact that Ms Butera and Ms Zanatta were members of senior management, who held views so strongly supportive of the CFMEU that they were unable to look after the interests of Cbus and its members. It is likely that these prejudicial views and tendencies manifested themselves on a daily basis in their attitudes to their work, towards employers, and in response to favours and views expressed by CFMEU officers. The fact that Ms Zanatta and Cbus [were] prepared to comply without question with the CFMEU’s instructions to sue Lis-Con is an illustration of this. It is difficult to see how these deeply engrained prejudices held by senior management could not have permeated through to the more junior staff who looked up to and learned from these member of management, particularly where the more junior staff were themselves recruits from the CFMEU. The fact there may have been many occasions upon which information has leaked from Cbus to the CFMEU is supportive of this proposition.

Mr Atkin, the Cbus CEO, accepted in his evidence that KPMG had identified a ’cultural disconnect’, that departures from policies and procedures often relate to such cultural problems, that one of the cultural issues that Cbus needed to address was the fact that a large number of Cbus employees are former union employees, and that

268 David Atkin, 23/10/14, T:908.31-34. 269 David Atkin, 23/10/14, T:907.36-40. 270

Cbus Annual Report 2013/2014, p 65. 271 Submissions in reply to Cbus of counsel assisting, 25/11/14, paras 27-28.

1230

the evidence was sufficient to demonstrate the need for an examination of this cultural issue.272

309. Ms Butera, too, criticised Mr Atkin’s claim that there was no

conflict of loyalties in Cbus staff who were members, former

members or employees of the CFMEU being loyal to the union

but also having to be loyal to Cbus. She said that claim was

unsupported.273 This is true. Ms Butera, whose written

submissions were much more frank than much of what she said

in her testimony, also criticised the Cbus approach of treating

herself and Ms Zanatta as rogue employees responsible only for

an isolated incident unrelated to the Cbus/CFMEU culture. She

pointed to her distinguished record, which involved working

closely with employer groups as well as unions throughout her

professional life. She claimed to be devoted to her job, to have a

high professional reputation, to be loyal to the interests of Cbus,

and to be deeply respected there. There is no reason to doubt

these claims. Nor, she submitted, was the Butera/Zanatta

incident isolated. She pointed to the McWhinney leak, the Gaske

leaks, and the findings of the KPMG report which ‘details an

apparently liberal approach taken by the unions to requesting

member information from Cbus, and a history of Cbus complying

with the union’s requests’.274 Hence, Ms Butera submitted that

she was unlikely to have acted as a rogue in blind loyalty to the

CFMEU in disregard of her professional obligations and the

272 David Atkin, 23/10/14, T:907-908. 273 Submissions in reply on behalf of Maria Butera, 21/11/14, para 2-4. 274

Submissions in reply on behalf of Maria Butera, 21/11/14, paras 5.

1231

interests of Cbus members.275 Therefore, she submitted that the

‘more likely thesis’ was:276

(a) The leak to Parker of the personal details of Cbus members who were Lis-Con employees cannot logically be isolated to the behaviour of two rogues inside Cbus who surreptitiously operated independently of instructions. The leak could only have taken place on a request or instructions to give Parker private details of the relevant Cbus members in a pro-union working environment where leaks to unions were not generally frowned upon; and

(b) The leak of the Cbus private member details to Parker in those circumstances was a function of the cultural dilemma inside Cbus between loyalty to members and loyalty to the unions (especially the CFMEU) rather than a demonstration of the absence of the cultural dilemma. Zanatta’s actions represent a cultural loyalty to the union movement inside Cbus. Her behaviour was not the anomalous behaviour of a rogue.

310. While Ms Butera did not explain explicitly where she herself fits

into this thesis, it may have considerable force.

311. The friction between these competing points of view may

generate some useful energy in the coming months.

D - RETURNING THE ZANATTA SPREADSHEETS

312. Mr Roberts accepted that the Zanatta spreadsheets, which the

CFMEU had in its possession, were not the CFMEU’s. He said

that the CFMEU would not give them back because they were

being used for the purposes of the inquiry. He said there were no

copies of the Zanatta spreadsheets ‘floating around’ Slater &

275 Submissions in reply on behalf of Maria Butera, 21/11/14, para 8. 276 Submissions in reply on behalf of Maria Butera, 21/11/14, para 9.

1232

Gordon. He also said that the only copies in the possession of the

CFMEU were copies that exist for the purposes of the

Commission and they were part of the files of the lawyers.277

Some may think it strange, after this doubtless sincere but

somewhat informal testimony, that no precise audit of the Zanatta

spreadsheets seems to have taken place with a view to the

CFMEU informing Cbus of how many are retained and why, and

returning to Cbus those which are surplus to legitimate

requirements. The CFMEU treats itself as the victim of rogue

activity by Ms Butera, Ms Zanatta and Mr Fitzpatrick. It makes

no claim that it was entitled to receive the Zanatta spreadsheets.

It is, therefore, strange that it does not return them or explain why

it should not have to.

277 Thomas Roberts, 24/10/14, T:1041.4-1042.32.

1233

ANNEXURE A

EXAMPLES OF FALSE EVIDENCE GIVEN BY MS BUTERA

Examples of the false evidence given by Ms Butera in the hearings on 7

July 2014, 23 October 2014 and 28 October 2014 include:

(a) she asked Ms Zanatta to make enquiries in relation to

the arrears status of Lis-Con.278 The enquiry that Ms

Zanatta was being asked to make was a routine

enquiry,279 and would involve Ms Zanatta collating the

arrears information and ringing Mr Parker to tell him

about the results, and this is what occurred;280

(b) the query and the response to it was ‘unremarkable’;281

(c) she did not know how the personal information of Lis-Con employees ended up with Mr Parker;282

278 Maria Butera, 7/7/14, T:77.23-26. 279 Maria Butera, 7/7/14, T:79.5-6. 280

See, for example, Maria Butera, 7/7/14, T:77.24-26, 83.44-46. 281 Maria Butera, 7/7/14, T:83.40-42. 282

Maria Butera, 7/7/14, T:83.33-35.

1234

(d) ‘I had no prior knowledge, involvement or participation

in the release of that information’.283 This was

something she repeated, even in the face of the

iMessages of 26 July 2013, and even after she was

given an open opportunity to retract this evidence in the

face of those messages;284

(e) that the only discussion she had with Ms Zanatta was

about her telling Mr Parker what the arrears position

was, and they discussed nothing else;285

(f) that she had ‘no idea’ that Ms Zanatta was making

arrangements about a trip to Sydney;286

(g) that her phone call with Mr Parker at 2.40pm on 26 July

2013 was to say no more than that she had actioned his

request on the Lis-Con arrears, and to discuss a

sponsorship program;287

(h) that she rang Mr Parker on this occasion (even though

she knew Ms Zanatta had been tasked to tell him about

the Lis-Con arrears) as a ‘goodwill’ gesture;288

283 Maria Butera, 23/10/14, T:934.1-2. 284 Maria Butera, 28/10/14, T:1132.8-19. 285

Maria Butera, 23/10/14, T:954.40-955.5. 286 Maria Butera, 23/10/14, T:958.38-39. 287

Maria Butera, 23/10/14, T:959.16ff. 288 Maria Butera, 23/10/14, T:960.31-32.

1235

(i) she had no discussion with Ms Zanatta about what she

had done on Monday, 29 July 2013;289

(j) she was not involved in the leak and did not work in

concert with Ms Zanatta (‘I totally refute that’);290

(k) Ms Zanatta acted on her own and off her own bat

entirely;291

(l) to her knowledge, Ms Zanatta did not involve anyone

else at Cbus;292

(m) Ms Zanatta was acting without her knowledge and

approval;293

(n) Ms Zanatta never communicated with her about

dropping off information to Brian Parker’s PA;294

(o) she did not set about with Ms Zanatta working out how

to get that information to Mr Parker (which she said

even in the face of the iMessages of 26 July 2013);295

289 Maria Butera, 23/10/14, T:965.47-966.2. 290 Maria Butera, 23/10/14, T:967.43-47. 291

Maria Butera, 23/10/14, T:968.2-4. 292 Maria Butera, 23/10/14, T:968.12-14. 293

Maria Butera, 23/10/14, T:968.21-23. 294 Maria Butera, 28/10/14, T:1122.42-44. 295

Maria Butera, 28/10/14, T:1132.44-46.

1236

(p) she did not know on 26 July 2013 that Ms Zanatta was

going to go to Sydney (which she said even in the face

of the iMessages of 26 July 2013);296

(q) she did not know what information Ms Zanatta was

dropping off (which was said in the face of the

iMessages of 26 July 2013);297

(r) the words in the iMessage that she sent to Ms Zanatta

on 26 July 2013 ‘could mean anything’;298

(s) she did not know what information Ms Zanatta dropped

off.299

296 Maria Butera, 28/10/14, T:1131.28-30. 297 Maria Butera, 28/10/14, T:1134.40. 298

Maria Butera, 28/10/14, T:1135.8. 299 Maria Butera, 28/10/14, T:1135.42.

1237

ANNEXURE B

EXAMPLES OF THE FALSE EVIDENCE GIVEN BY

MS ZANATTA

The false evidence given by Ms Zanatta included the making of the

following affirmed statements:

(a) that she was not personally involved in the provision of

information concerning Lis-Con employees to the

CFMEU;300

(b) that there was never an occasion on which she

participated in the release of members’ information to

anyone at the CFMEU;301

(c) that she had never provided the CFMEU with members’

addresses and telephone numbers;302

(d) that when Mr Walls sent her the query results she was

overwhelmed by the amount of private information that

300 Lisa Zanatta, 7/7/14, T:21.7-9. 301 Lisa Zanatta, 7/7/14, T:21.27-32. 302

Lisa Zanatta, 7/7/14, T:21.34-36.

1238

was provided and she wanted to make sure it was

secure;303

(e) that she had been told that there was data released to the

CFMEU, but she could not confirm that the data in the

attachments to Mr Walls’ email of 22 July 2013 was

released to the CFMEU;304

(f) that she did not know the contents of the data that was

released to the CFMEU;305

(g) that she had not seen the contents of the data that was

released to the CFMEU;306

(h) that she was unaware when the data was released to the

CFMEU;307

(i) that she was unaware who released the data to the

CFMEU;308

(j) that she had ‘no idea’, ‘absolutely none’ about the

disclosure of the information to CFMEU;309

303 Lisa Zanatta, 7/7/14, T:34.4-7. 304 Lisa Zanatta, 7/7/14, T:34.42-44. 305

Lisa Zanatta 7/7/14, T:35.3-4. 306 Lisa Zanatta, 7/7/14, T:35.3-4. 307

Lisa Zanatta, 7/7/14, T:35.28. 308 Lisa Zanatta, 7/7/14, T:35.28.

1239

(k) that she did not know how the information found its

way to the CFMEU in New South Wales;310

(l) that the information did not come from her to the

CFMEU;311

(m) that at no stage did she pass the information on to the

CFMEU;312

(n) that she has never released Cbus data to a third party

containing the addresses, mobile phone numbers and

email addresses of members;313

(o) that she did not pass on the data to CFMEU;314

(p) that she was unaware that the query that she received

from Mr Walls had been leaked anywhere. ‘I had no

idea. How many times do I need to tell you that’;315

(q) that she did not know what methods were employed to

enable the material to be passed from Cbus to the

CFMEU;316

309 Lisa Zanatta, 7/7/14, T:36.17-22. 310 Lisa Zanatta, 7/7/14, T:38.22-24. 311

Lisa Zanatta, 7/7/14, T:38.26-28. 312 Lisa Zanatta, 7/7/14, T:39.16-17. 313

Lisa Zanatta, 7/7/14, T:43.40-42. 314 Lisa Zanatta, 7/7/14, T:45.7. 315

Lisa Zanatta, 7/7/14, T:49.37-39.

1240

(r) that she had come to Sydney on 29 July 2013 for the

purpose of a Cbus Property and joint unions meeting

and had gone to the locations and made the calls

described earlier in these submissions;317

(s) that she had not made up the false story described in the

previous sub-paragraph;318

(t) that she did not arrange for Ms Heintz to book her trip

to Sydney on 26 July 2013 (‘I absolutely did not’);319

(u) that she did not ring Mr Parker and tell him that she

would bring the Zanatta spreadsheets to Sydney (‘That’s

absolutely incorrect’);320

(v) that she did not arrange for the Zanatta spreadsheets to

be couriered to her home so that she could take it to

Sydney the following Monday;321

(w) that she had not arranged with Mr Parker for her to

bring the Zanatta spreadsheets to Sydney;322

316 Lisa Zanatta, 7/7/14, T:59.43-46. 317 Lisa Zanatta, 3/10/14, T:732.38ff. 318

Lisa Zanatta, 3/10/14, T:736.7-10. 319 Lisa Zanatta, 3/10/14, T:742.37-39. 320

Lisa Zanatta, 3/10/14, T:742.44-47. 321 Lisa Zanatta, 3/10/14, T:744.44-745.13. 322

Lisa Zanatta, 3/10/14, T:745.25-26.

1241

(x) that (even after being shown the taxi records indicating

she had gone to the CFMEU office) her recollection was

that the meeting with Cbus Property (which she had

made up) was to be held on 29 July 2013.323 This

shows that, but for the adjournment that was then

granted, Ms Zanatta would have attempted to continue

to give false evidence to the Commission about what

had occurred.

323 Lisa Zanatta, 3/10/14, T:748.4-6.

1242

CHAPTER 8.4

THE CONVERSATION OF 27 MARCH 2013

Subject Paragraph

A - OVERVIEW 1

B - RELEVANT FACTS 4

Brian Fitzpatrick 4

Brian Parker 7

Darren Greenfield 10

Defaults by ‘Active and ‘Elite’ companies in 2013 12

Knowledge and inaction of Mr Greenfield 22

Action taken by Mr Fitzpatrick 26

Mr Fitzpatrick receives a death threat 46

Mr Greenfield’s version of the call 85

Initial failure to investigate 124

Initial attack on Mr Fitzpatrick 130

The McDonald Report 133

Ms Mallia’s report 144

1243

Subject Paragraph

Persistent attempts to remove Mr Fitzpatrick 156

Mr Parker’s misleading statements to the public and members 186

The Slevin investigation 195

C - LEGAL AND OTHER ISSUES 198

Use of a carriage service to make a death threat 198

Use of a carriage service to menace 203

Common assault 208

Unprofessional conduct of Mr Greenfield, Ms Mallia and Mr Parker 214

1244

A - OVERVIEW

1. This chapter concerns the conduct of officers of the New South Wales

Branch of the Construction and General Division of the CFMEU

(NSW Branch) towards Mr Brian Fitzpatrick, then an organiser in that

branch. The officers in question are Mr Darren Greenfield (organiser),

Mr Brian Parker (State Secretary) and Ms Rita Mallia (State President).

Its title has been selected in deference to the CFMEU’s opposition to

the title ‘death threat’ by Mr Greenfield in the corresponding part of

counsel assisting’s submissions.1

2. There was a conflict of testimony between Mr Fitzpatrick and Mr

Greenfield which was in a sense narrow, but was sharp and not easy to

resolve. Counsel assisting submitted that it should be resolved in the

following way. Their analysis is generally sound, but the submissions

of the CFMEU, Mr Parker, Mr Greenfield and Ms Mallia will have to

be examined at relevant points.

3. The findings include the following:

(a) on 27 March 2013 Mr Greenfield made an anonymous,

violent and abusive telephone call to Mr Fitzpatrick, during

which he threatened to kill him;

(b) by so acting, Mr Greenfield may have committed several

criminal offences and may have breached the CFMEU’s

published standards of behaviour in a most egregious way;

1 CFMEU submissions, 14/11/14, Pt 8.4, para 1.

1245

(c) Mr Parker shied away from carrying out any rigorous or

comprehensive investigation into the incident, avoided

arriving at any properly considered conclusion, and generally

sought to whitewash the incident rather than discipline Mr

Greenfield appropriately;

(d) Mr Parker set about marginalising and attempting to remove

Mr Fitzpatrick from the CFMEU after he complained about

the way in which the incident had been handled and about the

nature and extent of the union’s dealings with companies

associated with Mr George Alex; and

(e) the failure of Mr Parker to take any appropriate action in

response to Mr Fitzpatrick’s complaints about the death threat

incident represented a dereliction of his duty as a union

official and, coupled with his attempts to have Mr Fitzpatrick

removed, fell short of the professional standards expected of

him as an officer of the CFMEU.

B - RELEVANT FACTS

Brian Fitzpatrick

4. Mr Fitzpatrick is a veteran of the union movement. He started working

at the NSW Branch in 1988, and remained there for the following 25

years.2 In his closing oral submission, his counsel correctly described

him as ‘an old school trade unionist who lived and breathed the

2 Brian Fitzpatrick, witness statement, 14/7/14, para 9.

1246

CFMEU for more than 25 years. He fought very hard for workers’

rights’. His counsel said that Mr Fitzpatrick ‘went that extra yard

because he actually cared.3 Senior counsel for the CFMEU, in his

closing oral submissions which immediately succeeded those of Mr

Fitzpatrick’s counsel, did not challenge that characterisation.

5. For much of his long career with the CFMEU, Mr Fitzpatrick was an

organiser, or a co-ordinator of teams of organisers, responsible for

ensuring that workers were being appropriately looked after by their

employers.

6. During 2013, and for many years prior to that, he was based at the head

office of the NSW Branch at Lidcombe.

Brian Parker

7. Mr Parker was elected Secretary of the NSW Branch by the members

in late 2011. He works out of the Lidcombe office of the NSW

Branch. He has been an official of the Branch for 25 years. He held

various elected positions before 2011. He was well regarded by Mr

Donald McDonald AM, a distinguished former Secretary of the

Branch, in point of integrity, commitment, honesty and high standing

among the members.4

8. Mr Fitzpatrick and Mr Parker were long-time friends, having started at

the union at about the same time and having worked closely alongside

each other across many years.

3 Morrison, 28/11/14, T:5.27-30. 4 Donald Patrick McDonald, witness statement, 15/8/14, para 17.

1247

9. Although Mr Parker comes from a strong labour family and has been a

unionist for a long time, his lifestyle and tastes are perhaps not those of

the ordinary worker. According to Mr Fitzpatrick, he has a reputation

for mixing with the rich and famous,5 and is nicknamed ‘Sparkles’. At

one point his wife was part owner of a race horse along with the wives

of Jim Byrnes and a criminal identity Denis Delic (now deceased). Mr

Parker read the eulogy at Mr Delic’s funeral.

Darren Greenfield

10. Darren Greenfield is an organiser who works for the NSW Branch. He

was elected to that position in 2012. Unlike Mr Parker and Mr

Fitzpatrick, he is based in the Sydney city office of the NSW Branch.

Mr Greenfield has had extensive experience in the construction

industry for over 30 years. In his years as a scaffolder, he served as a

delegate for the NSW Branch for 12 years, and was on the Branch

Committee of Management in the years 2000-2004.6 Mr Greenfield

used to work for a scaffolding company. When that company went out

of business in about 2010, Mr Parker recruited him to become an

organiser for the union. According to Mr Fitzpatrick, Mr Greenfield

came to the union with a fierce reputation for assaulting people.7

There is no evidence that he actually has a disposition for physical

violence. But whether he actually has does not matter: it is relevant to

the events of 27 March 2013 that Mr Fitzpatrick believed that he had

that reputation.

5 Brian Fitzpatrick, witness statement, 14/7/14, para 29. 6 Darren Greenfield, witness statement, 15/8/14, paras 2-5. 7

Brian Fitzpatrick, witness statement, 14/7/14, para 32.

1248

11. Initially Mr Greenfield’s areas of responsibility as a union organiser

were spread across various different areas. However at some point Mr

Parker agreed to give Mr Greenfield exclusive responsibility for the

scaffolding sector.8

Defaults by ‘Active’ and ‘Elite’ companies in 2013

12. As at mid-March 2013 Mr George Alex was one of the persons who

stood behind a number of companies in the construction industry. One

of those companies was Active Labour Pty Ltd (Active Labour). It

was a labour hire company. Another company was Elite Holdings

Group Pty Ltd (Elite Holdings), a scaffolding company. Those

companies had entered EBAs signed by officers of the CFMEU.

13. The relationships between, on the one hand, Mr Alex, his companies

and associates, and, on the other hand, the CFMEU and its officials, is

the subject of an ongoing investigation to be continued next year.

What is said here does not prejudge the outcome of that investigation.

What is said here is said only as a background to the conversation of

27 March 2013.

14. In mid-March 2013 both Active Labour and Elite Holdings were in

arrears in relation to moneys owed by them in respect of workers’

entitlements, including superannuation and redundancy payments.

15. Mr Sammy Manna and Mr Jock Miller were the two organisers with

day to day carriage of labour hire issues. Each reported to Mr

8 Brian Fitzpatrick, witness statement, 14/7/14, para 33.

1249

Fitzpatrick, who was a co-ordinator. Mr Greenfield was the organiser

with day to day responsibility for the scaffolding sector.

16. In mid-March 2013, a union delegate working on a building site in

Crows Nest, Sydney, met Mr Fitzpatrick at the Lidcombe head office.

He said to Mr Fitzpatrick:9

I need some help. I’ve got blokes on the site who are not being paid on time and whose entitlements are not being paid. It’s the scaffolders and the body hire men. Greenfield has been out and promised to fix the problem, but weeks have gone by and nothing’s been done.

17. Mr Fitzpatrick undertook to look into the matter.

18. Mr Fitzpatrick came to learn that the labour hire company was Active

Labour, and the scaffolding contractor was Elite Holdings. He was

familiar with Active Labour and knew that Mr Alex was behind that

company. It was at this time that he came to discover that Mr Alex

was also behind Elite Holdings.10

19. In the course of his investigations into the matter, he followed his

regular procedure of checking with Cbus (the superannuation fund

manager to which Mr Alex’s companies were supposed to be making

contributions) and ACIRT (a redundancy fund to which Mr Alex was

supposed to be making payments per employee) to see whether Active

Labour and Elite Holdings were in fact paying employee

entitlements.11

9 Brian Fitzpatrick, witness statement, 14/7/14, para 41. 10 Brian Fitzpatrick, witness statement, 14/7/14, para 42. 11

Brian Fitzpatrick, witness statement, 14/7/14, para 44.

1250

20. He discovered, through this process, that those companies had not been

paying employees their entitlements. Indeed they were very

substantially in arrears. The deficit was in the hundreds of thousands

of dollars.12

21. Elite Holdings had not paid workers’ entitlements to ACIRT and Cbus

for the period September to November 2012 or for March 2013. About

$100,000 was owed.13 Active Labour was also heavily in arrears.

Knowledge and inaction of Mr Greenfield

22. One of the concerns raised for Mr Fitzpatrick’s attention was that Mr

Greenfield knew about the arrears but was not taking any action.

23. Mr Greenfield has given conflicting accounts over time as to what he

knew about the extent of Elite Holdings’s arrears, and action taken by

him in respect of those arrears in late 2012 and early 2013. Indeed the

accounts have been markedly different.

24. Ms Mallia interviewed Mr Greenfield in relation to this subject on 16

May 2013. On that occasion, as Ms Mallia’s contemporaneous notes

of the meeting make plain, Mr Greenfield effectively admitted his

inaction in the period prior to mid-March 2013, but sought to explain it

away on the basis that he had been heavily committed on other matters,

including in particular issues arising during the decline of Action

Scaffolding and Built Scaffolding.14 Mr Greenfield’s oral evidence

12 Brian Fitzpatrick, witness statement, 14/7/14, para 44 13 Greenfield MFI-2, p 38. 14

Greenfield MFI-2, pp 7-11.

1251

that he had given a different explanation to Ms Mallia15 stands in

contrast with the detailed nature of the notes taken by Ms Mallia.

25. In his evidence, Mr Greenfield set out an entirely different version of

events, namely that he knew about the Elite Holdings’ arrears position

in 2012 and took action to ensure that some outstanding payments were

made.16 First, it is inconsistent with the account he gave Ms Mallia in

May 2013. Secondly, it is not supported by any documents. The

union’s wage claim records in relation to Elite Holdings post-date

March 2013, and there is no wage claim record at all in respect of

2012. Thirdly, Mr Greenfield’s evidence is inconsistent with the fact

that Elite Holdings was heavily in arrears throughout the last quarter of

2012. But for present purposes it is unnecessary to resolve these

conflicts.

Action taken by Mr Fitzpatrick

26. Mr Fitzpatrick responded to the complaint made to him in respect of

the Crows Nest site by contacting Mr Doug Westerway, who he

understood to be one of the people Mr Alex had put forward to ‘front’

Active given that Mr Alex was himself an undischarged bankrupt.17

Mr Greenfield knew Mr Westerway and understood him to be

employed as a manager of Elite.18

15 Darren Greenfield, 3/10/14, T:703.8. 16 Darren Greenfield, 3/10/14, T:702.6-20; Darren Greenfield, witness statement, 15/8/14, paras 15-20. 17

Brian Fitzpatrick, witness statement, 14/7/14, paras 47-48. 18 Darren Greenfield, witness statement, 15/8/14, para 22.

1252

27. Mr Fitzpatrick did not get a clear answer from Mr Westerway as to

when the outstanding entitlements would be paid. He therefore

contacted Mr Alex directly and told him that he had 24 hours to pay all

of his labourers up to date, and that he had a week to fix up three out of

the five months that he was behind on superannuation and redundancy

payments.19

28. Mr Alex responded: ‘Look, that’s alright. I will fix that up. I’ve got a

cheque coming from Ralan Constructions on Friday. That will enable

me to pay 3 months of Cbus (super) and ACIRT (redundancy) for the

body hire.’20

29. On the Friday Mr Alex had indicated payment would be made, Mr

Fitzpatrick telephoned Mr Steve Nolan, the principal from Ralan

Constructions, to check that he had made the payment to Mr Alex. In

that conversation Mr Nolan said that there was no amount due to be

paid to Mr Alex that day.21

30. Later that same day Mr Fitzpatrick received a call from Mr Westerway

to say that Mr Alex was aggravated about the fact that Mr Nolan had

been spoken to. Mr Fitzpatrick said ‘Well mate, so be it, but my

concern is not with him. My concern is with my job and what I have

got to do, and that’s part of our work and we will do it.’22

19 Brian Fitzpatrick, witness statement, 14/7/14, para 48. 20 Brian Fitzpatrick, witness statement, 14/7/14, para 49. 21

Brian Fitzpatrick, witness statement, 14/7/14, para 50. 22 Brian Fitzpatrick, witness statement, 14/7/14, para 51.

1253

31. Mr Alex then rang Mr Fitzpatrick and spoke to him in an angry and

threatening tone. He told Mr Fitzpatrick not to ring his clients, and a

heated argument ensued. During the course of that argument Mr

Fitzpatrick indicated that he did not think much of the fact that workers

had not been paid what they were owed.

32. Mr Fitzpatrick then told Mr Alex ‘how things were going to work from

the union’s point of view’.23 Mr Alex’s reaction to this was to say ‘You

will do as you are told.’24 Mr Alex also said words to the effect that he

wouldn’t put up with the union ‘not keeping its deals’.

33. After the telephone call between Mr Fitzpatrick and Mr Alex, the

former went to see Mr Parker immediately to describe what had

occurred, and said ‘You better get the bloke in here. We have got to

read him the riot act because he is going to start telling us how to run

things.’25 Mr Parker acquiesced.

34. The following week a meeting took place at the union’s Lidcombe

office between Mr Parker, Mr Fitzpatrick, Mr Alex, Mr Westerway and

Mr Joe Antoun (an associate of Mr Alex who has since been shot

dead).26 Mr Fitzpatrick noted that Mr Alex was ‘very much in charge

of this group and did the talking’.27

23 Brian Fitzpatrick, witness statement, 14/7/14, para 52. 24 Brian Fitzpatrick, witness statement, 14/7/14, para 52. 25

Brian Fitzpatrick, witness statement, 14/7/14, para 53. 26 Brian Fitzpatrick, 15/7/14, T:23.39-43; Brian Fitzpatrick, witness statement, 14/7/14, para 54. 27

Brian Fitzpatrick, witness statement, 14/7/14, para 55.

1254

35. Mr Alex’s mood and demeanour were markedly different from those

which Mr Fitzpatrick had experienced in their telephone conversation.

Mr Alex was conciliatory. He said that he did not want problems. He

said that he would fix matters. He said he was prepared to sit down

with the union and representatives from Cbus and ACIRT. Mr

Fitzpatrick agreed to arrange that meeting.28

36. After the meeting, Mr Fitzpatrick tried to speak with Mr Greenfield

over the telephone. He did so because Mr Greenfield was the

scaffolding organiser and Mr Fitzpatrick wanted him to get involved in

the discussions going forward so that both the labour hire and the

scaffolding issues could be sorted out. Mr Greenfield did not answer

Mr Fitzpatrick’s call.29

37. Mr Fitzpatrick thought this was unusual, and raised it with Mr Parker.

Mr Parker told him: ‘Greenfield won’t talk to you’. Mr Fitzpatrick

said he could not understand why.30

38. Mr Fitzpatrick saw it as unusual that Mr Greenfield refused to talk to

him at this point, and that Mr Parker was apparently indifferent to this

state of affairs. In Mr Fitzpatrick’s own words, ‘The union policy is if

you've got a problem with an organiser, you talk to him. Greenfield

never spoke to me. He refused to speak to me’.31

28 Brian Fitzpatrick, witness statement, 14/7/14, para 55. 29 Brian Fitzpatrick, witness statement, 14/7/14, para 56. 30

Brian Fitzpatrick, witness statement, 14/7/14, para 57. 31 Brian Fitzpatrick, 24/9/14, T:354.14-16.

1255

39. Mr Greenfield gave evidence that during this period he heard reports

that Mr Fitzpatrick had been chasing Mr Alex for arrears owed by

Active. He was told that while Mr Fitzpatrick was doing so, he would

also take up with Mr Alex the issue of Elite’s arrears.32

40. This concerned Mr Greenfield because scaffolding was his area of

responsibility, and he did not like the fact that Mr Fitzpatrick was

‘getting involved’ in that area.33

41. According to Mr Greenfield, he raised these concerns with Mr Parker

and Mr Kera, and they told him that they would deal with it and that

Mr Fitzpatrick had been instructed not to get involved in scaffolding

issues.34

42. No witness from the CFMEU has testified that either Mr Parker or Mr

Kera gave such an instruction to Mr Fitzpatrick. Further, Mr

Fitzpatrick’s evidence is, as described above, to the effect that he was

trying to ring Mr Greenfield to discuss the Elite matter, that Mr

Greenfield would not speak with him, and that Mr Parker had

confirmed that Mr Greenfield would not speak with him.

43. Further, Mr Greenfield spoke to Ms Mallia on 16 May 2013 in terms

which indicated that he was having to do a lot of work on his own, and

would have appreciated help from other organisers.35 Counsel

assisting submitted that if that was so, it is unlikely that he would have

32 Darren Greenfield, witness statement, 15/8/14, para 23. 33 Darren Greenfield, witness statement, 15/8/14, para 24. 34

Darren Greenfield, witness statement, 15/8/14, para 24. 35 Greenfield MFI-2, p 11.

1256

been complaining to Mr Parker and Mr Kera about Mr Fitzpatrick

involving himself in recovering arrears from Elite simply because the

scaffolding area was Mr Greenfield’s area not Mr Fitzpatrick’s. Mr

Greenfield’s irritation that Mr Fitzpatrick was ‘getting involved’ in

relation to the Elite matter must have been based on some other

concern, such as a concern that Mr Fitzpatrick was taking action

against Mr Alex’s interests. However, again, it is not necessary, for

present purposes, to reach any conclusion about Mr Greenfield’s

evidence in these respects, or whether the taking of action by Mr

Fitzpatrick against Mr Alex’s interests was the cause of Mr

Greenfield’s irritation.

44. The meeting with the ACIRT and Cbus representatives that Mr

Fitzpatrick had promised to organise took place, although Mr Alex did

not attend on that occasion. Mr Fitzpatrick was the only union official

who attended that meeting. Mr Greenfield did not attend.36

45. Following that meeting Mr Fitzpatrick came to an arrangement with

Mr Alex that would see workers paid their full entitlements in the short

term.

36 Brian Fitzpatrick, witness statement, 14/7/14, para 58.

1257

Mr Fitzpatrick receives a death threat

46. On 27 March 2013, at 5.07pm, Mr Fitzpatrick was sitting in his office

at Lidcombe when his mobile telephone rang.

47. Mr Fitzpatrick picked up his phone and answered it. A voice screamed

at him:37

You have gone too far this time you fucking fat cunt!! You’re dead!! I’m going to kill you!! You understand?! I don’t care how many police you’ve got with you, I’m coming over there tomorrow and I’m going to kill you!! You’re dead!!

48. The voice on the other end was ‘fever pitch, screaming … in an

absolute rage’.38 In his subsequent triple zero call, Mr Fitzpatrick

described the caller to the police as ‘absolutely screaming ballistic’ and

described the call as a ‘blitzkrieg of hate and anger’. He thought the

person on the other end of the phone sounded ‘wild and dangerous’.39

49. Mr Greenfield gave a different account of events. For reasons later

described, that account cannot be accepted.

50. The CFMEU’s contention, made clear in its cross-examination of Mr

Fitzpatrick, is that Mr Fitzpatrick ‘made up’ a story that the person that

had called him had threatened to kill him, and in doing so had ‘added’

to and ‘augmented’ what had really been said, and having done so, was

then ‘trapped’ with that ‘story’ and ‘had to go on with that’.40 This

37 Brian Fitzpatrick, witness statement, 14/7/14, para 61. 38 Brian Fitzpatrick, 15/7/14, T:25.22-23. 39

Brian Fitzpatrick, witness statement, 14/7/14, para 63. 40 Counsel for CFMEU, 24/9/14, T:351.1-352.29.

1258

untenable contention is entirely contradicted by the uncontroversial

surrounding circumstances (such as the nature of Mr Fitzpatrick’s

response to the call as observed by Ms Raju and Mr Thomas, as shortly

described). It should be rejected.

51. Mr Fitzpatrick was, in fact, very shaken by the call. To use his words,

the call had hit Mr Fitzpatrick like a shot,41 and he was ‘seriously

worried’.42

52. At the time of this call Mr Fitzpatrick had the protection of an

apprehended violence order (AVO) that had been obtained following

threats he had previously received from a CFMEU member called Ian

Fraser. Mr Fitzpatrick could not tell from the call whose voice it was,

but given his history with Ian Fraser, assumed that he must have been

the caller. Mr Fitzpatrick later recalled the voice on the phone did not

sound like Mr Fraser.43

53. When Mr Fitzpatrick had obtained the AVO, the police had told him

that if Mr Fraser ever threatened him again, he should call the police

straight away. As a result, after receiving the call Mr Fitzpatrick

immediately called Ms Radhika Raju, a solicitor employed by the

CFMEU who worked in an office upstairs from Mr Fitzpatrick. He told

her that she needed to come and see him urgently. She was about to go

home, but he said ‘it can’t wait until tomorrow.’44

41 Brian Fitzpatrick, 15/7/14, T:26.12. 42 Brian Fitzpatrick, witness statement, 14/7/14, para 63. 43

Brian Fitzpatrick, 15/7/14, T:25.35-36. 44 Raju MFI-1, p 13.

1259

54. Ms Raju then went downstairs and into Mr Fitzpatrick’s office, and

heard about what had occurred. She noticed that Mr Fitzpatrick looked

distressed and his face was red.45 He was ‘very, very upset.’46

55. After this discussion, Ms Raju went to speak to her superior in the

legal team, Ms Leah Charlson. She told her what had happened. Ms

Charlson instructed her to call the police immediately.

56. Ms Raju then returned to Mr Fitzpatrick’s office and said that she was

going to call the police. She proceeded to do so.

57. By this time Mr Fitzpatrick had asked for Mr Peter Thomas to come

into his room to examine his mobile phone. Mr Thomas worked in the

union’s technology department. He had previously been involved in

analysing calls and messages Mr Fitzpatrick had received from Mr

Fraser. He knew the numbers that Mr Fraser had been using.47

58. Mr Thomas noted that Mr Fitzpatrick was ‘very unsettled’ and

‘shaken’ and not like his normal self.48

59. Ms Raju first called Auburn police station directly and she reported the

death threat. The police told her they would send an officer but could

not provide an estimated time of arrival. Ms Raju then told Mr

Fitzpatrick that the police seemed relaxed and could not give a time of

45 Radhika Raju, 15/7/14, T:80.27-38. 46 Raju MFI-1, p 37. 47

Brian Fitzpatrick, witness statement, 14/7/14, para 68. 48 Peter Thomas, 15/7/14, T:104.44-105.35.

1260

arrival. Mr Fitzpatrick, worried about the death threat and the potential

for it to be carried out very soon, told Ms Raju to call triple zero.49

60. In view of one of the submissions advanced by the CFMEU and Mr

Greenfield, it is desirable to set out the whole of the call as

transcribed.50

OPERATOR: Please go ahead, Telstra.

TELSTRA: 269040.

OPERATOR: Thanks, Telstra. Police emergency. This is Lisa.

MS RAJU: Hi Lisa. Look, my name is Radhika Raju. I’m

calling from the construction union. I’m a lawyer here. We’ve had a matter where one of our members - his name is Ian Taylor - sorry, Ian Fraser.

OPERATOR: Ian Fraser, yep.

MS RAJU: He is a very, very - he’s got a history of crime

and violence. He’s threatened one of our officials here, Brian Fitzpatrick, a death threat - various death threats. The police have been investigating and the police today took an AVO out on Brian Fitzpatrick’s behalf, as well as charged him. Now Ian Taylor called at 5 o’clock - Ian Fraser called at 5 o’clock today and indicated that tomorrow he’ll be killing Brian Fitzpatrick.

OPERATOR: Okay. Do you have an address. Where are you calling from, sorry, Radhika?

MS RAJU: I’m calling from the CFMEU, the construction union.

OPERATOR: The CFMU.

49 Fitzpatrick MFI-1, 15/7/14, Vol. 2, Tab 11, p 34. 50 Fitzpatrick MFI-2, 15/7/14.

1261

MS RAJU: And, look, the threats were really, really bad on the phone. That’s why we’re calling you.

OPERATOR: Alright then. Now, the threat has now been made from Ian Fraser, who’s a member of yours.

MS RAJU: Yes, that’s correct.

OPERATOR: Towards Ryan Fitzpatrick.

MS RAJU: Brian, Brian, B --

OPERATOR: Oh Brian.

MS RAJU: Yes.

OPERATOR: B-R-Y- or B-R-I?

MS RAJU: B-R-I-A-N.

OPERATOR: Brian Fitzpatrick, is it?

MS RAJU: Yes, that’s correct.

OPERATOR: And who is Brian Fitzpatrick? He is -

MS RAJU: He is an officer of the union.

OPERATOR: So he is an official?

MS RAJU: Yes, yes.

OPERATOR: Alright then. Ian Fraser. Okay. And what did Ian say?

MS RAJU: I’ll actually give you to Brian Fitzpatrick to tell you the exact words.

OPERATOR: Okay.

OPERATOR: I think we need to send -

MR FITZPATRICK: Yeah, hello.

OPERATOR: Hello. Brian, is it?

1262

MR FITZPATRICK: Yeah. Look, he just rang me about 5.00, 5.05, me mobile, he’s got me mobile now. He’s been ringing the office, but he rang me mobile this afternoon - obviously he’s got it - and he just let fly, launched with a blitzkrieg of hate and anger and said, “I don’t give a fuck how many people are there, I’m going to kill you tomorrow, you’re gone, you bastard, you fat so-and-so” and he went absolutely screaming ballistic.

OPERATOR: Alright. What we need to do is organise for police to come out and see you.

61. As Ms Raju was speaking with the police on the telephone, Mr Thomas

recognised that the phone number of the death threat caller was not the

number of the phone that Mr Fraser had used previously. Mr

Fitzpatrick then looked at the union telephone list that he had on his

desk and identified the number as Mr Greenfield’s.51

62. Understandably, Mr Fitzpatrick, Ms Raju and Mr Thomas were

shocked.52

63. With the police already on their way, Ms Raju said that Mr Parker was

still in his office. Mr Fitzpatrick said ‘Can you go and get him because

he needs to get involved. This situation is crazy.’53 Ms Raju agreed.

64. Mr Parker was in a meeting at the time, and Ms Raju interrupted him

and indicated that there was a personal matter that required urgent

51 Brian Fitzpatrick, witness statement, 14/7/14, paras 69-70. 52 Raju MFI-1, p 20. 53

Brian Fitzpatrick, witness statement, 14/7/14, para 71.

1263

attention.54 Mr Parker told Ms Raju that he was in a meeting and to

come back later. When Ms Raju went back to report this to Mr

Fitzpatrick, he told her to go back and interrupt Mr Parker again

because the matter was extremely urgent.

65. Ms Raju did so, and in due course Mr Parker attended at Mr

Fitzpatrick’s office and was told what had occurred. Ms Raju noted

that Mr Parker was frustrated and upset that the police had been called.

At one stage in her evidence Ms Raju said Mr Parker had said

something to the effect that he was ‘pissed off’ that the police had been

called, although later she sought to retreat from this evidence.55 Ms

Raju repeatedly gave the impression, both during her private

examination on 30 May 2014 (the transcript of which was

subsequently tendered) and her public examination of 15 July 2014

that she was fearful of saying things which might upset her superiors

within the union and result in her losing her job.56 She gave the fate of

Brian Fitzpatrick as an example.

66. Ms Raju claimed that this and the many other changes she made to her

evidence during her public hearing were justified on the ground that

she had not slept for three days before the private hearing. Senior

counsel for Ms Raju, in attacking the submission of counsel assisting

just summarised, relied on the three days without sleep to explain the

changes in her evidence. He also submitted that her evidence about

fear for her job related to her failure to challenge a public statement by

the union executive, which she had no duty to do, and that that was in a

54 Brian Parker, 3/10/14, T:606.15-17. 55 Raju MFI-1, p 20; Radhika Raju, 15/7/14, T:82.6-37, 89.2-19, 92.4-6. 56

Raju MFI-1, p 37; Radhika Raju, 15/7/14, T:93.11-94.13.

1264

different category from her duty to give true evidence, and to correct

earlier evidence if necessary. He further made the point that she had

been called to give her evidence at the private hearing viva voce,

without any statement being prepared.57 The reference to not sleeping

for three days is an obvious exaggeration. While the distinction which

senior counsel for Ms Raju drew is sound in theory, the fact is that Ms

Raju made a larger number of corrections which cannot readily be

explained either by fatigue or the fact that she gave her evidence viva

voce. She did have a statement, prepared within three weeks of 27

March 2013, on 17 April 2013, and so far as she was asked about

fresh matters, the forensic experience of the years suggest that answers

to unforeseen questions are more likely to be truthful than the answers

of witnesses who have been taken through multiple drafts of a

statement. The submission of counsel assisting that what she said in

the private hearing was her honest and accurate recollection of events

is correct.

67. Mr Parker denied being irritated that the police had been called, and

said his real concern ‘would have been’ that nobody had told him that

the police had been called.58 This makes no sense. Ms Raju did tell

Mr Parker that the police had been called. If what Mr Parker meant to

say was that nobody told him that the police were going to be called, it

was hardly necessary for anyone to get Mr Parker’s approval before

calling the police to respond to a death threat. The fact that Ms

Charlson, Ms Raju and Mr Fitzpatrick did not hesitate to call the police

57 Submissions on behalf of Radhika Raju, 13/11/14, paras 1-6. 58 Brian Parker, 3/10/14, T:606.36-38.

1265

demonstrates this to be so. Mr Parker was irritated the police had been

called.

68. Mr Fitzpatrick said to Mr Parker:59

Listen mate, you better go and talk to him and tell him to back off because this ain’t going away. You need to get a meeting between us so we can sort out what’s behind it all.

69. The meeting that Mr Fitzpatrick suggested was the sort of meeting that

was typically held between executives and employees when there is a

significant disagreement, and provides an opportunity for the parties

concerned to ‘clear the air’ and settle their differences.

70. Mr Fitzpatrick also said to Mr Parker ‘I'm going to have to follow it up

because I can't leave this go because we're talking about a person who

is dealing with George Alex’.60 Mr Fitzpatrick was worried about the

fact Mr Greenfield appeared to have an association with Mr Alex and

that Mr Alex was someone with a ‘colourful’ history.61

71. Mr Parker then left the room, and Mr Fitzpatrick understood he was

going back to his office to ring Mr Greenfield. About 10 minutes later

Mr Parker returned to Mr Fitzpatrick’s office. At this point Mr

Thomas left the room.

72. Ms Raju gave evidence that after Mr Parker had returned to Mr

Fitzpatrick’s office, he reported on what Mr Greenfield had said to

59 Brian Fitzpatrick, witness statement, 14/7/14, para 72. 60 Brian Fitzpatrick, 15/7/14, T:29.32-34. 61

Brian Fitzpatrick, 15/7/14, T:29.34-36; Brian Fitzpatrick, 24/9/2014, T:355.36-38, T:357.7-10.

1266

him. Mr Parker did not give any indication at this point that Mr

Greenfield had denied making the death threat.62 Mr Parker then asked

Ms Raju to leave, and she did so.

73. Mr Parker closed the door and they had the following conversation:63

Parker: No good mate, he’s not going to back off and he said he’s going to destroy you.

Fitzpatrick: What does that mean? Physically?

Parker: No. He said he’s going to destroy you on the building sites.

Fitzpatrick: Well, hang on mate. You’re the secretary of this union. What are you going to do about it? Are you going to accept that?

Parker: Well, what can I do if two people don’t like each other?

Fitzpatrick: Well, you can stand him down for a start to get to the bottom of this and you can’t accept it. You’re the secretary of the union.

Parker: I’m not going to do that.

74. Mr Parker also told Mr Fitzpatrick that Mr Greenfield had denied

making a death threat.64

75. Mr Fitzpatrick was shocked by Mr Parker’s indifference to what had

occurred and his reluctance to discipline Mr Greenfield.

76. Mr Fitzpatrick asked Mr Parker ‘Are you prepared to get a meeting

tomorrow set with yourself, myself, and Rita Mallia, the president,

62 Radhika Raju, 15/7/14, T:96.10-12. 63 Brian Fitzpatrick, witness statement, 14/7/14, para 75. 64

Brian Fitzpatrick, 15/7/14, T:29.45-46.

1267

with our solicitors, Taylor and Scott, to go through this?’.65 This was

the general union practice for resolving differences between two

officials. Mr Parker refused to set up a meeting.66

77. Mr Fitzpatrick then told Mr Parker to either bring a lie detector in to

see whether he or Mr Greenfield was telling the truth about the death

threat or to talk to the solicitors to investigate the matter further

because he was not prepared to leave it.67

78. At some stage two police officers arrived. Ms Raju let them in and

took them to see Mr Fitzpatrick and Mr Parker.

79. Mr Fitzpatrick said to the police that he was sorry and that it had been

a false alarm. When they asked him what he meant by that, Mr

Fitzpatrick said that he had received a death threat, but it had come

from a fellow official, not Mr Fraser.

80. Mr Fitzpatrick then recounted what had occurred and the police

indicated that they could take a report of the incident. After hearing the

facts, the police said ‘Well, look, we can prove the call took place but

we can’t prove who said what. It’s you versus them. We can’t make an

arrest, simple as that’.68

81. Mr Fitzpatrick was aware that if he asked the police to follow up on Mr

Greenfield’s death threat, the union would punish him for calling the

65 Brian Fitzpatrick, 15/7/14, T:30.7-10. 66 Brian Fitzpatrick, 15/7/14, T:30.32-33. 67

Brian Fitzpatrick, 15/7/14, T:30.35-42. 68 Brian Fitzpatrick, 15/7/14, T:31.15-20.

1268

police on a ‘mate’.69 However, Mr Fitzpatrick felt that he wanted a

report to be made so it would be on the record in case something

happened in the future.70

82. Mr Fitzpatrick was clearly still fearful of the death threat and felt he

needed to make a police report even though he knew there would be

repercussions from the union.

83. There can be no question that Mr Fitzpatrick was very shaken by the

fear engendered in his mind by the call, and by the perplexing

indifference exhibited by Mr Parker.

84. Indeed Ms Raju was so concerned about Mr Fitzpatrick’s wellbeing

given his reaction to these events that she rang and spoke to a former

union official, Mr Peter McClelland, who ran an enterprise called

Mates in Construction that assists workers experiencing difficulty.71

Mr Greenfield’s version of the call

85. Mr Greenfield has admitted making an abusive call to Mr Fitzpatrick

but denies making a death threat. The version of the telephone call

given by Mr Greenfield to the Commission was as follows:72

It’s Greenfield here. You fucking fat cunt. You’re a slimy piece of shit. You’re a racist and a bully. Don’t undermine me. I’ve sat back and watched you tread on everyone else’s toes in this organisation and if

69 Brian Fitzpatrick, 15/7/14, T:31.24-26. 70 Brian Fitzpatrick, witness statement, 14/7/14, para 76; Brian Fitzpatrick, 15/7/14, T:31.27-31. 71

Raju MFI-1, pp 36-37. 72 Darren Greenfield, witness statement, 15/8/14, para 27.

1269

you’re now coming after me I’ll fucking tread on your toes starting tomorrow.

86. Counsel assisting submitted in chief that for a number of reasons this

evidence cannot be accepted.

87. First, there are marked differences between Mr Greenfield’s version of

this call and that of Mr Fitzpatrick. It is highly unlikely that Mr

Fitzpatrick, a seasoned and hard-nosed union official, would have

responded to the call in the way he did had the call been as Mr

Greenfield described. According to Mr Greenfield he identified

himself and did not make any death threat. Yet Mr Fitzpatrick was

visibly shaken and upset. He told people straight away that he had

received a death threat. The police were called.

88. All of this behaviour is consistent with Mr Fitzpatrick having received

the call he describes. None of it is consistent with him having received

a call of the kind Mr Greenfield describes, in which Mr Greenfield

introduces himself and speaks of ‘treading on toes’.

89. Secondly, the version of the phone call given by Mr Greenfield in

evidence is different in a number of material respects from the version

he described to Ms Mallia in May 2013. In Ms Mallia’s note, she set

out in quotes what she was told by Mr Greenfield about this call. In

that version, Mr Greenfield is quoted as saying ‘Its Greenfield here you

fat piece of shit, sat back and watch you tread on everyone else’s toes

in this organisation, you are now coming after me, I’ll tread on yours

starting tomorrow’.73

73 Greenfield MFI-2, p 2.

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90. In this version Mr Greenfield does not call Mr Fitzpatrick a ‘fucking

fat cunt’. He does not call him a ‘slimy shit’. He does not call him a

‘racist and a bully’. He does not say ‘Don’t undermine me’. In other

words in this (earlier) version of the call Mr Greenfield does not

include four of the first five sentences appearing in the version

advanced in his evidence to the Commission. The fact Mr Greenfield

has given quite inconsistent accounts of the conversation at different

times counts against the credibility of his evidence.

91. Thirdly, Mr Fitzpatrick’s evidence has generally been shown to be

credible, and the version of events he has given has, in due course,

been corroborated. His evidence in relation to the Cbus leak is a good

example of this (as to which see Chapter 8.3).

92. Fourthly, Ms Raju gave evidence that in a discussion she had with Mr

Greenfield she spoke to him about whether he had identified himself to

Mr Fitzpatrick, and Mr Greenfield said ‘I didn’t need to. He knew who

it was’.74 This contradicts Mr Greenfield’s evidence about how the

call began. There is no reason why Ms Raju would make something

like that up, and it is difficult to see how she could have been in any

way confused about what was said to her. Mr Greenfield denied this

conversation,75 but Ms Raju’s evidence on the subject should be

preferred. Mr Greenfield’s evidence was motivated by self-interest;

Ms Raju’s was not.

93. Fifthly, Mr Greenfield’s version of events rests on the premise that he

was angered by the fact that Mr Fitzpatrick was continuing to involve

74 Radhika Raju, 15/7/14, T:96.47-97.25. 75 Darren Greenfield, 3/10/14, T:693.18.

1271

himself in the scaffolding sector when that was Mr Greenfield’s area of

responsibility, and it was upon hearing about this again from Mr

Westerway that he became angry and rang Mr Fitzpatrick. When

describing the fact he was very angry in his evidence, he said ‘Mr

Fitzpatrick had not called me to discuss Elite or warn me about

meeting with Elite’.76

94. However the proposition that Mr Greenfield was angry about Mr

Fitzpatrick involving himself in a scaffolding sector matter (of itself) is

difficult to accept for the reasons earlier set out. Mr Greenfield’s

complaint to Ms Mallia was that he did not have enough help.

95. Further, even if the fact that Mr Fitzpatrick was doing some work in

the scaffolding sector did irritate Mr Greenfield as he alleges, it was a

fact known to Mr Greenfield well prior to 5.07pm on 27 March 2013.

That fact had not led him to any abusive telephone calls to Mr

Fitzpatrick before that time.

96. Sixthly, Mr Greenfield’s evidence rests on the premise that he received

a call from Mr Westerway shortly before making his abusive call to Mr

Fitzpatrick, during which Mr Westerway told him that Mr Fitzpatrick

had criticised Mr Greenfield for not doing his job and had caused

confusion as to who Elite Holdings had to deal with from the CFMEU.

Mr Greenfield said this made him ‘very angry’, and led to him ringing

Mr Fitzpatrick and abusing him.77

76 Darren Greenfield, witness statement, 15/8/14, para 26. 77 Darren Greenfield, witness statement, 15/8/14, para 25-26.

1272

97. However that sequence of events is not correct. Further, his evidence

as to what Mr Westerway told him on that call conflicts with a prior

statement made by him about that matter. In this regard:

(a) the notion that Mr Greenfield was enraged by the call from

Mr Westerway and reacted by ringing Mr Fitzpatrick is not

correct. Phone records demonstrate that Mr Greenfield rang

Mr Parker’s phone immediately prior to calling Mr

Fitzpatrick, and had a two minute phone call.78 Mr

Greenfield rang Mr Fitzpatrick within a matter of seconds

after this call to Mr Parker’s phone;

(b) neither Mr Parker nor Mr Greenfield was prepared to admit

participating in this two minute call. A vague suggestion was

made by Mr Parker that Ms Wray might have been in

possession of and answered Mr Parker’s phone,79 although

Mr Parker said elsewhere that it was ‘possible’ that he had

spoken with Mr Greenfield immediately before Mr Greenfield

rang Mr Fitzpatrick.80 Mr Greenfield said he ‘didn’t recall’

ringing Mr Parker81 - this from a witness who said he had a

‘very good recollection’ of what happened that day,82 who

had plainly been alerted to the issue by his lawyers in advance

of giving evidence83 but who had avoided it in the statement

78 Parker MFI-7, 3/10/14, p 1. 79 Brian Parker, 3/10/14, T:609.27-34. 80

Brian Parker, 3/10/14, T:606.42. 81 Darren Greenfield, 3/10/14, T:695.47-696.1. 82

Darren Greenfield, 3/10/14, T:697.4-10. 83 Darren Greenfield, 3/10/14, T:699.5-8.

1273

he provided to the Commission. Mr Greenfield and Mr

Parker feigned ignorance in relation to this critical call which

immediately preceded the call from Mr Greenfield to Mr

Fitzpatrick;

(c) in any event, whether Mr Greenfield spoke to Mr Parker or

Ms Wray, this intervening two minute discussion puts an

altogether different complexion on the sequence of events.

Mr Greenfield had engaged with someone else - either Mr

Parker or Ms Wray - between speaking with Mr Westerway

and Mr Fitzpatrick. This unexplained intervening substantive

communication makes it much more difficult to accept that

Mr Greenfield simply flew off the handle at Mr Fitzpatrick

after having spoken with Mr Westerway. There was more to

the sequence of events, and whatever else occurred between

the Westerway and Fitzpatrick calls has not been revealed by

Mr Greenfield or anyone else;

(d) Mr Greenfield gave a different description of the call from Mr

Westerway when he spoke with Ms Mallia in May 2013.84

On that occasion he said that Mr Westerway had said that Mr

Fitzpatrick had claimed credit for a recent payment that he,

not Mr Greenfield, had chased up.

98. Seventhly, Mr Greenfield’s recollection of the sequence of events has

been found wanting in other respects. He has consistently said since

May 2013 that immediately after he called Mr Fitzpatrick he

84 Greenfield MFI-2, p 2.

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telephoned Mr Parker and reported what he had done. He repeated this

in testimony to the Commission. However this is not supported by the

phone records. The call to Mr Fitzpatrick was at 5.07pm. In the

following half hour Mr Greenfield spoke with Mr Kera on a number of

occasions.85 Mr Greenfield did not take or receive a call from Mr

Parker until 5.44pm, when Mr Parker rang him and they spoke for a

couple of minutes. Mr Greenfield’s memory is not a reliable source of

information.

99. What submissions did the CFMEU and Mr Greenfield advance against

these submissions?

100. They quite properly submitted that to find in favour of Mr Fitzpatrick’s

version and against Mr Greenfield’s version involved making a serious

finding against Mr Greenfield. So serious a finding should only be

made with caution.86

101. The submissions of the CFMEU and Mr Greenfield drew attention to

the differences between Mr Fitzpatrick’s evidence of what Mr

Greenfield said in the 5.07pm call, and what Mr Fitzpatrick is recorded

as having said to Lisa of Police Emergency, taking the call from Ms

Raju and Mr Fitzpatrick a little later. So far as there are similarities, of

course, they support Mr Fitzpatrick. But the CFMEU/Greenfield

submissions concentrated on the differences. It is these differences

that underlie the repeated references in those submissions to Mr

Fitzpatrick’s ‘latest account’.87 The submissions contrast this with Mr

85 Parker MFI-7, 3/10/14, p 1. 86 Briginshaw v Briginshaw (1938) 60 CLR 336. 87

Submissions on behalf of CFMEU, Pt 8.4, paras 17, 23.

1275

Greenfield’s denials of any death threat on various occasions up to and

including his testimony.88 The CFMEU/Greenfield submissions

contend that the differences have not been explained. They contend:

‘It is open to conclude that Mr Fitzpatrick has embellished his account

for the purpose of giving testimony to the Royal Commission.’89

102. Prima facie this is a reasonable submission. But it overlooks several

points. First, what Mr Fitzpatrick said to Lisa did not purport to be a

verbatim account. That follows from the metaphors and words of

summary Mr Fitzpatrick employed - ‘he just let fly’, ‘launched with a

blitzkrieg of hate and rage’, ‘went absolutely screaming ballistic’.

Secondly, Mr Fitzpatrick resorted to euphemism - ‘so and so’.

Speaking to Lisa in the presence of Ms Raju, it is not surprising that a

man of Mr Fitzpatrick’s generation omitted the two obscenities he

testified to - one even now regarded as serious, one he may have

regarded as a very shocking word to use in the presence of women.

Thirdly, the CFMEU/Greenfield submission is that Mr Fitzpatrick has

engaged in a deliberate falsification of what happened. Even in places

strictly bound by the rules of evidence, which the Commission is not, it

is permissible to rebut allegations of afterthought by pointing to prior

consistent statements. One recollection of what Mr Fitzpatrick’s

earlier accounts of the incident were was that of Ms Raju. In the

statement, made only three weeks after the 27 March 2013 phone call,

88 Submissions on behalf of CFMEU, Pt 8.4, para 29. 89 Submissions on behalf of CFMEU, Pt 8.4, para 24.

1276

which was received at her private hearing, she recalled Mr Fitzpatrick

saying to Lisa:90

he said to me “You fat f*cking c*nt. I’m going to kill you, I’m going to come after you. I’m going to get you tomorrow regardless of the police being there just call him and sort it out with him. I’ve written his number down. Here it is.

103. Now that is not what Mr Fitzpatrick is recorded as having said to Lisa.

But it is a reasonable inference that Ms Raju heard Mr Fitzpatrick give

that account to her and has mistakenly attributed it to the call to Lisa.

Another recollection which Ms Raju recorded in her near

contemporary statement is that the first thing Mr Fitzpatrick said to her

when she came to his room straight after the call from Mr Greenfield

was: ‘I’ve been threatened again by Ian Fraser and he was serious this

time. He’s coming to kill me tomorrow. He said he doesn’t care about

the police.’ That certainly establishes consistency in its reference to a

death threat. And it is consistent both with the call to Lisa and with Mr

Fitzpatrick’s testimony in speaking of a threat to kill Mr Fitzpatrick

which would be carried out no matter how much protection - whether

‘police’ or ‘people’ - Mr Fitzpatrick had.

104. Fourthly, a claim to absolute precision in recollecting a conversation,

and mechanically flawless consistency in narrating it, are more

commonly badges of invention than of truth.

105. Fifthly, it is clear that Ms Raju believed, based on Mr Fitzpatrick’s

appearance, conduct and statements, that Mr Fitzpatrick had received a

death threat, whatever words it was couched in.

90 Radhika Raju, witness statement, 17/4/13, para 7, tendered as Fitzpatrick MFI-1, 15/7/14, pp 33-36.

1277

106. Another argument advanced in the CFMEU/Greenfield submissions

can conveniently be dealt with at this point. The argument is that

neither Mr Fitzpatrick nor counsel assisting offer any explanation of

why the caller eventually identified as Mr Greenfield would refer to

police in the call.91 One answer is that those threatened with death

often ask for and sometimes get a measure of police protection.

Another is that a reference to police is a colourful method of stressing

how determined the person using the threat is to carry it out.

107. The next CFMEU/Greenfield submission was that while Mr Fitzpatrick

was frightened by the call for so long as he believed the caller to have

been Mr Ian Fraser, he:

changed his mood and demeanour after learning that it was Mr Greenfield who made the call. He stated to Mr Parker that he was willing to accept an apology from Mr Greenfield for the phone call and was willing to meet with Mr Greenfield to sort out what was behind it. Clearly once he knew that the call was made by Mr Greenfield he did not regard the conversation in the call as a threat to his life.92

108. That submission is not supported by the evidence with precision. Mr

Fitzpatrick seemed to have remained in a state of distress for some

time, even after his suggestion of a meeting with Mr Greenfield.

109. The CFMEU/Greenfield submission then submitted:93

[Mr Fitzpatrick’s] evidence is that he told the police what happened and that he wanted to report it. If such a report exists the Royal Commission has not provided it. It is however telling that once Mr Fitzpatrick discovered that the call came from Mr Greenfield he regarded it as a false alarm.

91 Submissions on behalf of CFMEU, Pt 8.4, para 23. 92 Submissions on behalf of CFMEU, Pt 8.4, para 26. 93

Submissions on behalf of CFMEU, Pt 8.4, para 27.

1278

110. This misrepresents Mr Fitzpatrick’s evidence. When the police came,

Mr Fitzpatrick’s evidence as to what happened was as follows:94

I said to the police that I was sorry and it had been a false alarm. They asked me what I meant. I said that I had got a death threat, but not from the person who had been threatening me previously. They then asked who it was and I told them that it was somebody I worked with, a fellow official. They asked me what happened and I told them. They said they could take a report of it. I said that I wanted them to do that so there would be something on the record in case anything else happened.

111. That is, Mr Fitzpatrick was not saying to the police: I want to make a

report to you at some future stage.’ He was saying: ‘I want you to

“take a report of it” now.’ He wanted to ensure that something was

placed on the record as a result of what he actually said to the police

there and then.

112. Then the CFMEU/Greenfield submissions asserted that counsel

assisting did not refer to evidence from Mr Greenfield and Mr

Westerway that the latter had told the former that Mr Fitzpatrick had

said disparaging things about him.95 That is not correct. Counsel

assisting did deal with the preceding call from Mr Westerway to Mr

Greenfield.96 Those submissions pointed out at some length that there

was an intervening call, seemingly between Mr Greenfield and Mr

Parker, which has not been explained or clarified. The failure of the

CFMEU/Greenfield submissions to notice and deal with the

submissions relating to Mr Westerway does not engender confidence in

the balance of them. Other problems in Mr Greenfield’s account raised

by counsel assisting have likewise not been dealt with.

94 Brian Fitzpatrick, witness statement, 14/7/14, para 76. 95 Submissions on behalf of CFMEU, Pt 8.4, para 30. 96

Submissions of counsel assisting, 31/10/14, paras 97-98.

1279

113. Finally, the CFMEU/Greenfield submissions contrasted Mr

Fitzpatrick’s evidence that he had tried to call Mr Greenfield a number

of times to talk about the Elite Scaffolding arrears with phone records

showing that there was only one call, on 15 March, lasting 38 seconds.

Does the existence of only one call contradict evidence that Mr

Fitzpatrick ‘tried’ a number of times? It depends what is meant by

‘tried’. If there is a contradiction, how does it advance Mr

Greenfield’s side of the controversy about what was said on 27 March

2013? It could only do so if it went to credit in a damaging way.

114. It is convenient to turn to considerations of credit at this point.

115. Counsel assisting did not attack Mr Greenfield’s general credibility

save by reference to particular problems in his testimony. Nor is there

any reason to doubt Mr Greenfield’s general credibility. But

submissions were made attacking Mr Fitzpatrick’s credibility,

particularly but not only by Mr Parker.

116. First, it was said that Mr Fitzpatrick should not be believed about the

27 March 2013 incident because of his role in using the personal

contact details in the Zanatta spreadsheets to contact Cbus members in

order to make them disgruntled with Lis-Con.97 It is true that his

conduct was unsatisfactory, but his revelation of it against his own

interests enhanced his credibility. And it does not lie well in the mouth

of Mr Parker, the most powerful person in the branch, or in the mouth

of the union itself, to rely on Mr Fitzpatrick’s conduct when Mr Parker

97 Submissions on behalf of Brian Parker, 19/11/14, paras 20-32; Submissions on behalf of CFMEU, 14/11/14, Pt 8.4, para 53(b).

1280

was not only at least a party to it, but was a person without whose

consent it could not have taken place.

117. Secondly, it was said that Mr Fitzpatrick should not be believed about

the 27 March 2013 incident because he was embittered and had fallen

out with the union leadership.98 That must be weighed with the fact

that it was the failure of the union leadership to respond properly to the

27 March 2013 incident that had made him embittered.

118. The CFMEU also criticised Mr Fitzpatrick for a number of minor

errors in his evidence, and for disclosing to Mr Fodor that he had given

evidence in private.99 Mr Fitzpatrick apologised for the latter lapse

voluntarily and on his own initiative. And the minor errors do not

defeat Mr Fitzpatrick’s reliability on the central aspects of his

testimony.

119. The fact is that Mr Fitzpatrick’s credibility was in fact good overall.

His demeanour was very good. His credibility in relation to the 27

March 2013 phone call issue was significantly strengthened by his

vindication on the key points in relation to the Cbus scandal. Initially

his version was denied by the CFMEU and Cbus, but it has been

completely confirmed by subsequent events. Aspects, large and small,

of his good credibility were discussed in that connection.100

98 Submissions on behalf of CFMEU, 14/11/14, Pt 8.4, para 45. 99 Submissions on behalf of CFMEU, 14/11/14, Pt 8.4, para 53. 100

See Chapter 8.3.

1281

120. Counsel for Mr Fitzpatrick argued that the position of the CFMEU and

Mr Parker was as follows:101

Brian Fitzpatrick did not receive a death threat, according to both the CFMEU and Parker. Fitzpatrick was doing Darren Greenfield’s work without permission. This caused Greenfield to get upset and abuse him and no more. Fitzpatrick knew that Greenfield was the person who had simply abused him. He then feigned real fear to his colleagues and had the Police called. He plotted to tell Police the caller was Fraser and pretended he had received a death threat from him. Fitzpatrick then feigned shock when it was discovered that the caller was Greenfield. He then continued the plot, informing Parker that Greenfield had threatened to kill him, when the truth was that he had only been abused. When the police arrived Fitzpatrick told them it was a false alarm because it was Greenfield not Fraser who had made the call.

121. Counsel for Mr Fitzpatrick then posed a series of questions:102

What possible reason would Fitzpatrick have for calling the police unless he had received the death threat and believed it was authentic? If he knew the call was from Greenfield what possible reason did he have for saying he believed it came from Fraser? What motivation did he have to harm Greenfield? If he had motivation to harm Greenfield why did he name Fraser? If he wanted to harm Greenfield why did he then tell the police it was a false alarm?

122. The answer to the second last question is that it is impossible to say.

The answer to the other questions must be in the negative. Counsel for

Mr Fitzpatrick then argued:103

Fitzpatrick was aware of the union policy of keeping disputes in-house, which was precisely why he asked for Parker the moment he discovered the caller was Greenfield. He wanted Parker to intervene and find out why Greenfield had threatened to kill him. Fitzpatrick did not tell the police it was a false alarm because a death threat had not been made. It was

101 Submissions on behalf of Brian Fitzpatrick in reply to those made on behalf of CFMEU and Brian Parker, 21/11/14, para 7. 102

Submissions on behalf of Brian Fitzpatrick in reply to those made on behalf of CFMEU and Brian Parker, 21/11/14, para 9. 103 Submissions on behalf of Brian Fitzpatrick in reply to those made on behalf of CFMEU and Brian Parker, 21/11/14, para 10.

1282

because he had discovered the caller was Greenfield, not Fraser, and because he wanted to observe union policy to deal with the matter in-house.

123. The reasons advanced by the CFMEU and Mr Greenfield for preferring

Mr Greenfield’s version are not convincing. The reasons advanced by

counsel assisting and counsel for Mr Fitzpatrick are. The finding must

be that in substance Mr Fitzpatrick’s version is correct.

Initial failure to investigate

124. As has already been described, Mr Parker’s initial response to the

incident was as follows. He spoke to each of Mr Fitzpatrick and Mr

Greenfield quickly. He concluded that it was a case of one person’s

word against another. He took no further action. Counsel for Mr

Parker defended this response, on the ground that the police said they

could not make an arrest because it was word against word.104 But

even if the police response was satisfactory, the CFMEU had the

ability to probe more deeply. Mr Greenfield could have refused to

answer police questions. In a practical sense it would be much harder

to refuse to answer Mr Parker’s questions.

125. Counsel for Mr Parker submitted that whatever the need for an urgent

response to a threatening act thought to be from Mr Ian Fraser, there

was ‘less objective cause for concern’ when it became apparent that the

caller was Mr Greenfield.105 It is not clear why. This suggests that a

threat from one official to another can be ignored, even when the

104 Submissions on behalf of Brian Parker, 21/11/14, paras 10, 16. 105 Submissions on behalf of Brian Parker, 21/11/14, para 14.

1283

victim repeatedly but unsuccessfully seeks the intervention of senior

union officials.

126. That was a grossly deficient response from the Secretary of the NSW

Divisional Branch of the CFMEU. Mr Quirk later complained about

this in writing to Mr O’Connor, the National Secretary of the

CFMEU.106

127. Neither Ms Mallia nor Mr Parker, the two most senior figures in the

NSW Divisional Branch, took any further step to investigate the matter

until complaints were made by individuals within the union as to the

lack of investigation that had been undertaken.

128. It is remarkable that neither Mr Parker nor Ms Mallia sought to create,

in the immediate aftermath of the incident, a written report

incorporating a record of Mr Greenfield’s and Mr Fitzpatrick’s version

of events. In order to find the first written record of Mr Greenfield’s

account of what occurred, one has to travel forward almost two

months, to Ms Mallia’s note of 16 May 2013. Counsel for Mr Parker

called this ‘minor’.107 That is not so. A record of what had been said

very soon after it had been said would have been much more accurate

than records created months later.

129. The lack of investigation, analysis and recording on the day of the

incident and in the days which followed indicates that neither Mr

Parker nor Mr Mallia regarded it as particularly worrying that one

official had allegedly threatened to kill another. This is remarkable.

106 Fitzpatrick MFI-1, 15/7/14, p 247. 107 Submissions on behalf of Brian Parker, 21/11/14, para 18.

1284

Initial attack on Mr Fitzpatrick

130. Having received the death threat Mr Fitzpatrick then found himself

under attack within the CFMEU. Mr Fitzpatrick noted that ‘it was right

on from there’ and that ‘there was a full frontal attack to get me out’.108

131. On 12 April 2013, a Committee of Management meeting was held that

included an agenda item raised by Mr McNamara regarding union

officials ringing police on another official. The Committee of

Management did not discuss the death threat itself. They only

discussed the fact that a union official had rung the police about

another official. This was not on the agenda, but is recorded in the

minutes.109

132. Mr Fitzpatrick had been invited to attend the meeting as a visitor but

was told to leave the room during discussions on the relevant agenda

item.110

The McDonald Report

133. Faced with some criticism about the lack of response to Mr

Fitzpatrick’s complaints, Ms Mallia agreed to appoint Mr Donald

McDonald AM, a respected and retired former leader of the Branch, to

look into the matter.

108 Brian Fitzpatrick, 15/7/14, T:31.30-35. 109 Fitzpatrick MFI-1, 15/7/14, Vol. 1, p 27 (‘Officials ringing police’). 110

Brian Fitzpatrick, 15/7/14, T:33.4-8.

1285

134. Mr McDonald was not engaged by Mr Parker or Ms Mallia to conduct

a thorough investigation into whether Mr Greenfield had behaved as

Mr Fitzpatrick had alleged. He was engaged to conduct a type of

investigation, but not a thorough one. That can be inferred from the

McDonald Report itself.111 The vast majority of the McDonald report

does not concern the death threat incident at all. It concerns, instead,

the existence of a series of ‘powerful forces’ operating against the

union and contains a large number of statements with respect to the

way in which officials of the union should behave in meeting a series

of broad challenges facing the union. Indeed the report is entitled ‘The

Challenge Ahead’.

135. It emerged from Mr McDonald’s examination that his investigation

into the death threat incident took place in meetings held over the

course of part of a day.112 In his report, Mr McDonald indicated that

the discussions with witnesses were of ‘an informal nature’, and that

the matters raised in those discussions ‘were not able to be tested or

fully substantiated’.113 The report does not contain any detailed

statement as to what each interviewee had said to him during the

informal discussions. Mr McDonald said in his evidence that, while he

took some notes during those discussions, he destroyed them

afterwards.114

111 Rita Mallia, witness statement, 15/8/14, annexure RGM 15. 112 Donald McDonald, 24/9/14, T:391.41-393.45. 113

Rita Mallia, witness statement, 15/8/14, annexure RGM 15, p 362. 114 Donald McDonald, 24/9/14, T:393.7-32.

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136. Mr McDonald made it clear in his report that it was ‘not intended to be

judgmental’.115 In keeping with that approach, Mr McDonald did not

express any view in his report as to what had occurred as between Mr

Fitzpatrick and Mr Greenfield. Instead, he suggested that ‘like golf’,

‘the advice is that you should never think of your last shot, just

concentrate on your next shot’.116 Plainly, Mr McDonald’s approach

was to encourage those involved to look ahead.

137. No criticism is made of Mr McDonald for failing to undertake a

penetrating investigation. As he indicated in his evidence, he was not

asked to undertake such an investigation.117

138. It must have been immediately obvious to Ms Mallia and Mr Parker,

and any reader of the McDonald report, that he had not been asked to

undertake, and had not undertaken, any real investigation into the

events to determine what had happened.

139. However on receipt of that report, neither Ms Mallia nor Mr Parker

made any complaint. They did not send Mr McDonald back to

investigate further. They did not ask him to do anything else.118 By

this time Ms Mallia’s report had been commissioned.

140. At a high level, some of the statements in the McDonald report must

have only encouraged inaction. Mr McDonald referred to the fact that

the leadership was operating in difficult times and this required ‘ALL

115 Rita Mallia, witness statement, 15/8/14, annexure RGM 15, p 362. 116 Rita Mallia, witness statement, 15/8/14, annexure RGM 15, p 367. 117

Donald McDonald, 24/9/14, T:394.45-395.1. 118 Donald McDonald, 24/9/14, T:395.15-27.

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OFFICIALS AND STAFF TO CLOSE RANKS’, stated that it was

‘NECESSARY FOR EVERYONE WHO REPRESENTS THE

UNION TO BE LOYAL, COOPERATIVE AND ACCEPT AND

IMPLEMENT THE DECISIONS OF THE LEADERSHIP’.119

141. The McDonald report reflects a deeply engrained attitude within the

CFMEU that the union is to be protected at any cost, and that officials

should not speak out against the leadership.

142. Such sentiments, while no doubt strongly held and well meant by Mr

McDonald and others, do not provide a healthy environment within

which officials and employees can feel free to voice their concerns

about potential misconduct by the leadership and officials who are

closely aligned with the leadership. They have the opposite effect.

They assume that the leadership and other high ranking officials will

not engage in misconduct.120

143. The McDonald report was tabled at a 7 May 2013 extraordinary

meeting of the Committee of Management. The members of that

management committee do not appear to have taken it upon themselves

to complain that there had been no real investigation into the death

threat incident. It may have been that they were heeding Mr

McDonald’s advice to close ranks. Or they may have been waiting for

Ms Mallia’s report.

119 Rita Mallia, witness statement, 15/8/14, annexure RGM 15, p 369. 120 Donald McDonald, 24/9/14, T:399.26-30.

1288

Ms Mallia’s report

144. Ms Mallia ultimately undertook a separate inquiry into the death threat

incident. She has never explained why it took her so long to do so.

145. Ms Mallia is a trained lawyer.121 She appreciated that it was important,

for there to be a proper investigation into the matter, for account to be

taken of the objective circumstances.122 Yet she did not do this when

dealing with Mr Fitzpatrick’s complaint against Mr Greenfield.

146. As part of the investigative process Ms Mallia obtained statements

from Mr Thomas on 16 April 2013 and Ms Raju the next day. Ms

Mallia then interviewed Mr Greenfield on 16 May 2013.123

147. A few days prior to interviewing Mr Greenfield, Ms Hamson (Branch

Finance Officer) sent an email to Steve Kamper in relation to Mr

Fitzpatrick. The email attached Ms Hamson’s calculations of what the

union would have to pay in the event Mr Fitzpatrick was terminated on

31 May 2013.124 Ms Hamson indicated she understood that Mr Parker

and Ms Wray had been speaking to Mr Kamper about it, and added

that Ms Mallia had asked that Mr Kamper have a look at the

calculations and advise on options.

148. The fact is that Ms Mallia, Mr Parker and others were, on the one hand,

working out what it would cost to terminate Mr Fitzpatrick’s

121 Rita Mallia, 25/9/14, T:436.27-29. 122 Rita Mallia, 25/9/14, T:436.31-34. 123

Rita Mallia, witness statement, 15/8/14, para 49. 124 Mallia MFI-1, 25/9/14, p 1-1.

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employment, and, on the other hand, conducting a somewhat limited

investigation into Mr Fitzpatrick’s complaint. It is difficult to see how

an investigation could be carried out in good faith in such

circumstances. It was all about appearance, not substance. The

CFMEU submitted that this was only a coincidence, and that Mr

Fitzpatrick was having discussions with various officials and former

officials about leaving the union.125 When the events of 2013 are

viewed as a whole, the contemporaneity of Mr Fitzpatrick’s slide out

of the union, the ineffectual reports into the 27 March 2013 incident,

and Mr Fitzpatrick’s growing persecution is not just a coincidence.

149. Ms Mallia’s report was tabled at a Committee of Management meeting

on 31 May 2013.126

150. In her report, Ms Mallia concluded that, on the balance of probabilities,

it could not be concluded that Mr Greenfield had made a death threat.

She said that Mr Greenfield used ‘harsh words, in a threatening

manner’.127

151. Although Ms Mallia made reference in her report to the balance of

probabilities, and well understood the meaning of that expression, she

did not undertake any real weighing exercise when considering the

evidence before her. In fairness to her, of course, some of the evidence

tendered to the Commission was not before her. And what evidence

she did have has probably been examined much more thoroughly by

the four sets of lawyers (now five since Mr Parker’s separate

125 Submissions on behalf of the CFMEU, 14/11/14, Pt 8.4, para 45. 126 Fitzpatrick MFI-1, 15/7/14, pp 68-80. 127

Fitzpatrick MFI-1, 15/7/14, p 78.

1290

representation) who have examined it in the Commission. Four of

those lawyers (those for the CFMEU, Mr Parker, Ms Raju and Mr

Fitzpatrick) were deeply adversarial in approach.

152. In this regard, there were a number of significant factors weighing in

favour of Mr Fitzpatrick’s version of events. They are set out. They

include Mr Fitzpatrick’s account of the incident, the nature of Mr

Fitzpatrick’s immediate response, and accounts given by Ms Raju and

Mr Thomas about how Mr Fitzpatrick had reacted, what he had said,

and how shocked he appeared.

153. There was, in contrast, really only one piece of evidence to the

contrary, namely the account given by Mr Greenfield. That account, as

already noted, was not consistent with the nature and extent of Mr

Fitzpatrick’s reaction to the events as recounted by him and observed

by others.

154. Ms Mallia did not undertake any review of the phone records, even

though they were at her disposal. A review would have shown that Mr

Greenfield had spoken to someone on Mr Parker’s phone (either Mr

Parker or Ms Wray) for almost two and a half minutes prior to the

death threat call. That review would also have shown that Mr

Greenfield did not, contrary to his statement to Ms Mallia, ring Mr

Parker immediately after the death threat call.

155. Ms Mallia was in a less advantageous position than the Commission.

But even if she found it hard to accept Mr Fitzpatrick, it is very

difficult to see why she did not either accept Mr Fitzpatrick or

conclude that it was not possible to choose between him and Mr

1291

Greenfield. To conclude that Mr Greenfield was the more likely

verges on the irrational, with respect.

Persistent attempts to remove Mr Fitzpatrick

156. In and after May 2013 Mr Fitzpatrick continued to pursue Mr Alex

about his outstanding entitlements to his workers. He continued to

raise difficult questions concerning the nature and extent of the union’s

dealings with companies associated with Mr Alex. There were now

published reports about Mr Alex associating with criminals. It was

clear that Mr Alex was a phoenix operator who ran various businesses

through one insolvency after another.

157. There then began a sustained campaign within the NSW Branch to

force Mr Fitzpatrick out of the union.

158. As earlier noted, consideration was being given to Mr Fitzpatrick’s

removal and calculations as to the cost of that exercise were well

underway in May 2013.

159. Mr Fitzpatrick was then demoted and had many of his responsibilities

taken away.128 In this regard, on 1 July 2013 there was a Committee of

Management meeting where it was agreed that Mr Fitzpatrick’s role

would be abolished.129

128 Brian Fitzpatrick, 15/7/14, T:37.39-41. 129 Brian Fitzpatrick, witness statement, 14/7/14, para 78; Submissions of counsel assisting, 31/10/14, paras 97-98; CFMEU submissions, chapter 8.4, para 39.

1292

160. On 1 July 2013, there was a joint meeting between the Branch’s

Committee of Management and the union organisers.130

161. Mr Fitzpatrick was barred from attending the part of the meeting that

concerned the incident. He later discovered that some of those

attending the meeting —Mr Steve Costigan and Mr Denis

McNamara— had pressed for Mr Fitzpatrick to be sacked.131 Mr

Costigan and Mr McNamara were friends of Mr Parker. They had

obtained seats on the Committee of Management through Mr Parker.132

Counsel for Mr Parker submitted that he could not be responsible for

the actions of his friends.133 This is to take one incident for which Mr

Parker may have limited responsibility in isolation. In fact it is one of

a long series of incidents, many of which Mr Parker had a

responsibility for.

162. On 1 July 2013,134 Mr Fitzpatrick was vilified by a committee of

management worker as an ‘arsewipe’ and a ‘dog’.135

163. Then, after July 2013 Mr Parker began threatening Mr Fitzpatrick with

the sack. However Mr Fitzpatrick pointed out to Mr Parker that in

circumstances where he knew what Mr Parker had done in relation to

the leak of the Zanatta spreadsheets by the Cbus employees, Mr Parker

would not dare to sack him. And so it proved to be.

130 Brian Fitzpatrick, 15/7/14, T:31.42-43. 131 Brian Fitzpatrick, 15/7/14, T:31.44-46; Brian Fitzpatrick, witness statement, 14/7/14, para 78. 132

Brian Fitzpatrick, witness statement, 14/7/14, para 78. 133 Submissions on behalf of Brian Parker, 21/11/14, para 22. 134

Corrected by Rita Mallia, witness statement, 15/8/14, para 111. 135 Brian Fitzpatrick, witness statement, 14/7/14, p 179; Fitzpatrick MFI-1, 15/7/14, p 229.

1293

164. With the threat to sack Mr Fitzpatrick having come to nothing, a new

strategy was deployed. Mr Ferguson, who was no doubt perceived by

Mr Parker and others to have the respect of Mr Fitzpatrick, went to see

Mr Fitzpatrick in his office.

165. According to Mr Fitzpatrick, at some time which is not entirely clear,

they had the following conversation:136

Ferguson: Look, you’re 69 mate. You’re only a few months off 70. Why don’t you just go?

Fitzpatrick: The only way you are going to get rid of me is to sack me. If they sack me, I will take them on. The union has got no right to be treating me this way. I’m staying.

Ferguson: They’re going to make your life hell, you know. You will be digging holes from here until the end.

Fitzpatrick: Well, so be it. I’ve made my mind up. That’s it.

Ferguson: Look, I can get you 12 months wages and conditions, help minimise it legally with the tax system and all that sort of thing.

Fitzpatrick: I’m not interested in that. I want to see my time out and leave on my own terms. I deserve that. I have been here a lot of years. What’s happening is wrong.

Ferguson: Look, how long is your term to go before the next elections. Is it about 2 1/2 years? I’ll go for that. Get you pay, wages and conditions for that period.

166. At this point in the conversation Mr Fitzpatrick was taken aback about

the value of the offer being put to him. It was a proposal which, in

dollar terms, was of the order of $300,000. This made Mr Fitzpatrick

136 Brian Fitzpatrick, witness statement, 14/7/14, para 117.

1294

Feel uncomfortable, and he therefore refused the offer. The

conversation then continued:137

Ferguson: I’m very confident I can get you your balance and wages for the full 3 year term.

Fitzpatrick: That’s something I couldn’t come at. I don’t deserve it and it would look like a pay off or whatever you call it. I don’t want my 25 years seen to be finishing up where I’m taking 3 years of money for a payout.

167. Sometime later Mr Ferguson returned and said that he had spoken to

Mr Parker and Ms Mallia about it and he was able to confirm the offer

previously made. Mr Fitzpatrick said ‘Look Andrew, we’ve been

through this. I’ve got an hour and a half to waste if you have, but

nothing is going to change. I’m not taking it. That’s it.’ 138 Mr

Ferguson said he would let Mr Parker and Ms Mallia know.

168. Mr Ferguson denied some aspects of these conversations. However he

did ultimately accept, after some obfuscation, many parts of the

conversation that Mr Fitzpatrick described.

169. In particular, it is now not controversial that Mr Ferguson approached

Mr Fitzpatrick at Mr Parker’s request, and that the discussion

concerned Mr Fitzpatrick’s possible exit from the union, and the terms

upon which that might occur. Further, it is not controversial that Mr

Fitzpatrick was not persuaded, at that time, to resign.

170. On 16 September 2013, an organiser, Mr Terry Kesby, wrote to Mr

Parker and Ms Mallia complaining of the treatment being meted out to

137 Brian Fitzpatrick, witness statement, 14/7/14, para 117. 138 Brian Fitzpatrick, witness statement, 14/7/14, para 118.

1295

Mr Fitzpatrick, and saying that he was appalled at what he described as

a conspiracy to discredit or terminate Mr Fitzpatrick.139

171. The threat of sacking Mr Fitzpatrick had failed. Mr Parker’s approach

to Mr Fitzpatrick through Mr Ferguson had also not borne fruit. Yet

another strategy was invoked, this time issuing formal correspondence

to Mr Fitzpatrick about alleged misbehaviour around the office.

172. In this regard, Mr Parker signed and sent to Mr Fitzpatrick a letter

dated 3 September 2013.140

173. The letter began by stating that there were ‘a number of issues in

relation to your conduct that have arisen recently’. The issues were

said to be of a ‘serious nature’ and a written response was demanded

within 48 hours. A number of alleged incidents were then set out.

Shortly stated, the allegations were that (a) on one occasion Mr

Fitzpatrick wandered up and down the corridors of the office speaking

loudly about the unavailability of union officials, (b) Mr Fitzpatrick

sought access to the union’s wage claims file for Action ‘without any

legitimate reason for doing so’, (c) Mr Fitzpatrick had demanded a

meeting with Mr Parker about an email that he thought was

demeaning, (d) Mr Fitzpatrick showed animosity and acted

inappropriately towards another employee, Ms Wray.

174. It would be difficult to conceive of a more contrived and less

convincing disciplinary letter from one officer of the CFMEU to

another. All but the last were relatively minor personality-related

139 Fitzpatrick MFI-1, 15/7/14, p 229; Brian Fitzpatrick, witness statement, 14/7/14, p 179. 140 Fitzpatrick MFI-1, 15/7/14, pp 224-225.

1296

incidents that senior and seasoned unionists, dealing with large scale

industrial and workplace conflict on a daily basis, would be well able

to manage without correspondence of the kind that Mr Parker

generated.

175. This letter was sent to Mr Fitzpatrick out of the blue. He had not had

prior discussions with Mr Parker or others about the matters in the

letter. Mr Fitzpatrick’s behaviour in and around the office had not

altered in any material way across his 25 years of service (although in

his letter to Mr Parker and Ms Mallia of 16 September 2013 Mr Kesby

described Mr Fitzpatrick as having mellowed in recent years). 141 He

was outspoken. He was gruff. No doubt he had the propensity to

ruffle feathers from time to time. There was nothing new in any of

this. The union prides itself on having representatives who are not

renowned for their diplomacy, and they live with and manage the

personality issues that arise as a result. They had done so in the case of

Mr Fitzpatrick for many years. The change in management’s

behaviour only occurred after Mr Fitzpatrick had agitated over the

union’s relationship with Mr Alex, and after attempts to remove Mr

Fitzpatrick had failed.

176. A further letter was sent by Mr Parker to Mr Fitzpatrick on 13

September 2013.142 This letter complained that Mr Fitzpatrick had

been talking to other people about the letter of 6 September 2013, and

that this somehow constituted a ‘serious breach of your obligations as

an employee’. That allegation was absurd. There was no reason why

141 Fitzpatrick MFI-1, 15/7/14, p 229; Brian Fitzpatrick, witness statement, 14/7/14, p 179. 142 Fitzpatrick MFI-1, 15/7/14, p 227.

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Mr Fitzpatrick could not discuss his position with colleagues if he

chose to do so. Mr Parker’s earlier letter of 3 September 2013 did not

make any request for confidentiality.

177. On 16 September 2013 Mr Fitzpatrick sent a letter to Ms Mallia

responding to the allegations and denying wrongdoing on his part.143

178. After all of these events had occurred, Mr Fitzpatrick received a

telephone call from Mr Frank O’Grady. Mr O’Grady was a long time

union representative based in Melbourne. He was someone Mr

Fitzpatrick had known for many years and regarded well. This was no

doubt common knowledge in the CFMEU office. Ms Mallia had

arranged for Mr O’Grady to become involved.144 Mr O’Grady told Mr

Fitzpatrick that he was coming to Sydney and would like to have a

meeting with him. Mr Fitzpatrick agreed.145

179. During the meeting that was arranged, they had the following

conversation:146

O’Grady: Look mate, they are going to sack you. You should not go out like this.

Fitzpatrick: They aren’t going to sack me mate. Just drop the crap.

O’Grady: Look I can get you paid the rest of the term, 3 years and throw in the car too.

143 Fitzpatrick MFI-1, 15/7/14, p 228. 144 Mallia MFI-1, 25/9/14, p 13. 145

Brian Fitzpatrick, witness statement, 14/7/14, para 124. 146 Brian Fitzpatrick, witness statement, 14/7/14, para 125.

1298

Fitzpatrick: Mate, I’m not going to take it. I can’t take it. The moment I leave they will say that I was corrupt and they had to pay me off to get rid of me.

180. The conversation then continued for some time. Mr Fitzpatrick was

able to discuss his experiences with someone he knew and trusted.

During the discussions Mr O’Grady continued to express his view that

the best thing for Mr Fitzpatrick was to leave. Mr Fitzpatrick started to

feel persuaded that accepting a redundancy would be better than

fighting further. He said to Mr O’Grady that he had proven to himself

and those around him that the union had not been able to sack him.

181. Ultimately Mr Fitzpatrick was persuaded that accepting a redundancy

package was something he could live with. He said, ‘Alright I’ll leave.

Pay me 12 months of my conditions and it’s done.’147 Mr O’Grady

asked him whether he wanted the car thrown in as well, and Mr

Fitzpatrick said he would take it if it could be organised.

182. They then returned to the Lidcombe office and Mr O’Grady said he

would go and speak with Mr Parker. Five or so minutes later Mr

O’Grady came back to Mr Fitzpatrick and said ‘It’s a deal. A year and

the car.’148

183. By the end of that week the terms of the severance between Mr

Fitzpatrick and the CFMEU had been agreed, and a deed of settlement

dated 26 September 2013 was executed.149 The deed provided for Mr

Fitzpatrick to resign from his position forthwith, and for him to receive

147 Brian Fitzpatrick, witness statement, 14/7/14, para 127. 148 Brian Fitzpatrick, witness statement, 14/7/14, para 128. 149

Fitzpatrick MFI-1, 15/7/14, pp 232-237.

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an eligible termination payment of $132,266.89 together with accrued

entitlements totalling $49,301.61.

184. On the following day, 27 September 2013, Mr Fitzpatrick sent a letter

to the committee of management of the NSW Branch resigning from

the position of branch organiser and as delegate to the national

conference.150

185. Counsel for Mr Parker submitted that there is no adequate evidence

that any of the dealings with Mr Fitzpatrick about the terms on which

he would leave his employment with the CFMEU was connected with

the alleged death threat incident, because there were many other factors

involved.151 But the death threat incident was a crucial incident,

leading to two ineffective inquiries in 2013 and much ill-will towards

Mr Fitzpatrick.

Mr Parker’s misleading statements to the public and members

186. In early 2014 Mr Fitzpatrick was interviewed by members of the press

and gave an account of the way in which he was treated.

187. In response, Mr Parker issued a series of contrived and misleading

statements to the public,152 and to the members of the CFMEU.153

150 Fitzpatrick MFI-1, 15/7/14, p 238. 151 Submissions on behalf of Brian Parker, 21/11/14, para 23. 152

Parker MFI-1, 3/10/14, pp 159-160. 153 Parker MFI-1, 3/10/14, pp 161-163.

1300

188. Mr Parker declared to the public and to the union’s members that

‘these are the facts’ in relation to the death threat incident. The so-called ‘facts’ were set out in six short bullet points:

• The CFMEU legal department called the police as soon as Mr Fitzpatrick alerted them to it.

• He did not pursue the matter with the police and as far as I am aware the police did not pursue the matter.

• An investigation was conducted internally.

• Mr Greenfield denied making the threat. The union could not form a conclusion that Mr Fitzpatrick’s allegations were true.

• The union took steps to remind officials of their responsibilities and the expected code of conduct in the union.

• Mr Fitzpatrick did not pursue a review of the outcome through the processes available to him in the Union.

189. The fourth bullet point was misleading, in that though Mr Greenfield

denied making the threat on many occasions, he does not seem to have

denied it to Mr Parker in the late afternoon of 27 March 2013.154

190. Mr Parker’s six bullet points also reflect a very selective slice of the

facts actually known to him at the time.

191. Other critical facts known to Mr Parker but withheld from the public

and the union’s members included that:

(a) to the observation of both Mr Thomas and Ms Raju on 27

March 2013, Mr Fitzpatrick was greatly shaken by the call,

requested immediate aid from lawyers and police and

154 Radhika Raju, 15/7/14, T:93.25-95.13.

1301

continued to be greatly shaken even after it was discovered

that the caller was not Mr Fraser but Mr Greenfield. Anyone

who was informed of these facts would have had little

difficulty appreciating from all of the relevant circumstances

that Mr Greenfield had made, at the very least, an extremely

aggressive and highly personal threat directed to Mr

Fitzpatrick’s safety;

(b) on any reckoning, Mr Greenfield had called Mr Fitzpatrick

that day and abused and threatened Mr Fitzpatrick on the

phone call, and worse, to Mr Parker’s knowledge, had

threatened to ‘destroy’ Mr Fitzpatrick. Again, none of these

facts were revealed by Mr Parker’s statements to members

and the public. Indeed the very fact that there had even been a

telephone call between Mr Greenfield and Mr Fitzpatrick on

the day in question was not disclosed in the announcements.

It was studiously avoided;

(c) to many people outside the union movement the call, even on

Mr Greenfield’s account of it, would have been extremely

alarming. The press release gives a rather bland impression.

It misled the public as to the true nature of the call even on

Mr Greenfield’s ‘innocent’ version; and

(d) Mr Greenfield had spoken to someone on Mr Parker’s mobile

phone for two and a half minutes immediately prior to his

threatening call to Mr Fitzpatrick.

1302

192. The statements issued by Mr Parker included that the union could not

tell whether ‘Mr Fitzpatrick’s allegations were true’. This, coupled

with the incomplete account of the relevant events, carried with it the

implicit suggestion that Mr Fitzpatrick (not Mr Greenfield) was the one

whose word could not be believed.

193. Mr Parker, Ms Mallia and the many other union officials and press

advisers who were involved in the preparation of this statement did not

want the public or members to be informed of all of the facts so that

they could make their own assessment.

194. This betrays a consciousness, on the part of Mr Parker and Ms Mallia,

that a revelation of all relevant facts would demonstrate the likelihood

that Mr Fitzpatrick’s version of events was correct.

The Slevin investigation

195. In early 2014, Mr Tony Slevin of counsel was retained by CFMEU’s

solicitors, Slater & Gordon Lawyers, to investigate a number of issues.

One was the union’s response to the death threat allegation. Mr Slevin

was supported by Mr Thomas Roberts, senior national legal adviser,

Construction and General Division, CFMEU.

196. When news of the death threat incident became public, the CFMEU

made much of the fact that Mr Slevin had been commissioned to

undertake an investigation.

197. What the union did not make clear was that Mr Slevin had been

instructed not to undertake any investigation into the death threat

1303

incident itself. This is apparent from the terms of his report, and the

fact that he was not instructed to speak with key witnesses to the event,

such as Ms Raju or Mr Thomas. Mr Slevin’s instructions were limited

to considering the adequacy of the Branch’s investigation into the

incident.

C - LEGAL AND OTHER ISSUES

Use of a carriage service to make a death threat

198. Under section 474.15 of the Criminal Code 1995 (Cth) it is an offence

to use a carriage service to threaten to kill another with the intent to

lead the other to fear the threat will be carried out.

199. The penalty for a contravention of this section is imprisonment for 7

years.

200. Section 7 of the Telecommunications Act 1997 (Cth) defines a carriage

service as ‘a service for carrying communications by means of guided

and/or unguided electromagnetic energy’. A telephone call clearly

constitutes use of a carriage service.

201. Section 474.15(3) of the Criminal Code 1995 (Cth) states that it is not

necessary that the person receiving the threat actually fear that the

threat will be carried out.

202. In this regard, Mr Greenfield may have used a carriage service, namely

his telephone, to threaten to kill Mr Fitzpatrick. He may have done so

1304

with an intention that Mr Fitzpatrick would fear that the threat would

be carried out.

Use of a carriage service to menace

203. Under section 474.17 of the Criminal Code 1995 (Cth) it is an offence

to use a carriage service in a way reasonable persons would regard as

menacing, harassing or offensive in the circumstances.

204. The penalty is imprisonment for 3 years.

205. As previously discussed, a telephone call constitutes use of a carriage

service.

206. In JL Holland v GJ Cocks & Anor,155 it was held that the word

‘menace’ does not have a clear definition, and that generally speaking

it is clear that ‘menace’ means a threat and should be construed liberal

so as to encompass more than the threat of physical violence.

207. The call made by Mr Greenfield to Mr Fitzpatrick on 27 March 2013

was one which reasonable persons may regard as menacing, harassing

or offensive in the circumstances. This is so regardless of which

version of the call one accepts. Even on Mr Greenfield’s version, the

call was very threatening, harassing and offensive. It is recommended

that this Interim Report be referred to the Commonwealth Director of

Public Prosecutions in order that consideration may be given to

whether Darren Greenfield should be charged with and prosecuted for

155 Unreported, NSWSC, Hidden J, 1997.

1305

offences against s 474.15 and s 474.17 of the Criminal Code 1995

(Cth).

Common assault

208. A threat to kill can constitute common assault. Under Section 61 of the

Crimes Act 1900 (NSW), it is an offence to assault a person without

occasioning actual bodily harm. The penalty is two years

imprisonment.

209. The elements of common assault are found at common law. In Pemble

v R,156 Owen J set out the elements of assault as follows:

(a) the actus reus of assault consists in the expectation of physical

contact which the offender creates in the mind of the person

whom he threatens; and

(b) the mens rea consists in the realisation by the offender that his

demeanour will produce that expectation.

210. The threat must create the expectation of immediate violence.157

Assault may be committed through a telephone call.158

211. By calling Mr Fitzpatrick and using the language he did, Mr Greenfield

created an expectation of immediate harm in Mr Fitzpatrick’s mind.

156 [1971] HCA 20. 157 R v Knight (1988) 35 A Crim R 314. 158

R v Ireland [1998] AC 147.

1306

This is apparent from his reaction witnessed by Ms Raju and Mr

Thomas and the fact the police were called.

212. Mr Greenfield, in clearly articulating a death threat and a screaming

tone of voice, may have realised that his demeanour would create an

expectation of fear in Mr Fitzpatrick’s mind and may have intended

that it do so.

213. It is recommended that this Interim Report be referred to the New

South Wales Director of Public Prosecutions in order that

consideration may be given to whether Darren Greenfield should be

charged with and prosecuted for common assault contrary to s 61 of

the Crimes Act 1900 (NSW).

Unprofessional conduct of Mr Greenfield, Ms Mallia and Mr Parker

214. The NSW Branch published code of conduct for officers provides that

no officer engaged by the union shall converse in an abusive or

derogatory manner towards any person.

215. Clause 51(b) of the Rules for the Construction and General Division of

the CFMEU provides that any officer of a divisional Branch may be

removed from office by a two thirds majority of the divisional Branch

management committee where the officer has been charged and found

guilty of ‘gross misbehaviour or gross neglect of duty’.

216. Mr Greenfield’s conduct towards Mr Fitzpatrick may have been a

serious breach of the code of conduct and may have constituted gross

1307

misbehaviour within the meaning of that expression in clause 51(b) of

the Rules.

217. Notwithstanding the way in which Mr Greenfield acted, and the

unsurprising effect it had on Mr Fitzpatrick, no meaningful disciplinary

action was taken against Mr Greenfield. His word was effectively

preferred to that of Mr Fitzpatrick, notwithstanding the weight of

evidence to the contrary. He was given the mildest possible reprimand,

and merely provided with a copy of the officers’ code of conduct that

he had breached so comprehensively.

218. Mr Fitzpatrick meanwhile, the victim of the attack, was marginalised

and made the subject of repeated attempts to remove him from the

union because he was prepared to speak out in respect of the union’s

questionable behaviour.

219. By ignoring the death threat incident and not ensuring the proper

investigation of it, and by instead turning on Mr Fitzpatrick and

embarking on a campaign to have him removed from the union (which

campaign began before there had even been an investigation into the

matter), Mr Parker may have engaged in a ‘gross neglect of duty’

within the meaning of that expression in the Rules. In doing so he may

have breached the professional standards expected of them. By so

acting, he may have demonstrated an unwillingness or inability to

conduct himself to a standard that is expected of them by members of

the CFMEU and the community at large.

220. It is recommended that this Interim Report be referred to the

Management Committee of the New South Wales Divisional Branch of

1308

the Construction and General Division of the CFMEU in order that

consideration may be given to whether any action should be taken

against Mr Parker under r 51 of the Rules for the Construction and

General Division of the CFMEU.

221. Counsel for Mr Parker submitted that the Interim Report should

contain no findings that Mr Parker had breached the Code of Conduct.

They submitted that it was for the union itself ‘to weigh up all the

relevant considerations from an internal perspective in deciding what

order would be “appropriate action”. The Royal Commission cannot

put itself in that position and should therefore not make any findings

on the basis of the Code of Conduct’.159

222. Given the point made in the first sentence, it is desirable for the

Divisional Branch Management Committee to examine the question.

The making of the recommendation just indicated does not involve

behaviour of the kind to which Mr Parker’s submission objects.

223. It is not proposed to make a like recommendation in relation to Ms

Mallia. Compared to Mr Parker, she lacks real power. Her report was

not satisfactory, but it was made in difficult circumstances. It does not

seem just to describe it as a ‘gross neglect of duty’. And it is not

proposed to make a recommendation for Mr Greenfield. To do so

might involve an element of double jeopardy.

159 Submissions on behalf of Brian Parker, 21/11/14, para 5.

1309

1310

CHAPTER 8.5

CFMEU NSW DEALINGS WITH ALEX COMPANIES

Subject Paragraph

A - INTRODUCTION 1

B - MR BARRIOS 2

George Alex and companies associated with him 2

Active 8

Metropolis 20

Capital 23

Events involving Mr Barrios 28

18 August 2014 telephone call between Mr Barrios and Mr Parker 29

20 August 2014 communications between Mr Parker and Mr Hourani 31

20 August 2014 telephone call from Mr Alex to Mr Barrios 34

COM decision to withdraw the applications 37

Mr Parker’s reactions to the COM decision 38

Gross misconduct by Mr Parker 49

1311

A - INTRODUCTION

1. The written submissions of counsel assisting describe the progress of

investigations into dealings between Mr Parker, Mr Greenfield and Mr

George Alex. Because the investigation will continue next year, it is

undesirable to say anything about these dealings, save in one respect.

The submissions of counsel assisting are factually uncontroversial.

The CFMEU said of the views expressed by Mr Parker about Mr

Barrios, which are quoted below, that they ‘are indefensible and the

CFMEU does not condone or adopt them in any way’.1 This is a

strong thing for the CFMEU to say of its own State Secretary. The

facts are as follows.

B - MR BARRIOS

George Alex and companies associated with him

2. Mr Alex is a Sydney based undischarged bankrupt. He reportedly has

relationships with convicted criminals. He was made bankrupt on 19

April 2011 following the hearing of a creditor’s petition filed by the

Deputy Commissioner of Taxation.2

3. A photograph published in the Sydney Morning Herald on 10 March

2013 showed Mr Alex arm in arm with various persons attending a

1 CFMEU submissions, 14/11/14, Pt 8.5, para 6. 2 CFMEU MFI-6, 28/10/14.

1312

$3,000 a head private event with the former world champion boxer

Mike Tyson.3

4. In the photograph, Mr Alex has his right arm around Mr Bilal Fatrouni.

That gentleman has been convicted and jailed in relation to steroid and

gun charges. Pictured on the other side of the group is Mr Sam

Hamden, a former Commancheros bikie, and Mr Khaled Sharrouf, a

man convicted and jailed in relation to a terror plot. The article reports

that Mr Alex was once in business with Mr Peter Sidirourgous, a

convicted amphetamine manufacturer.

5. Mr Alex has, and has had, an underlying interest in and control over

various businesses operating in the commercial construction industry

in NSW. Of particular relevance for present purposes are:

(a) a labour hire business run through companies using the name

‘Active’. As the business becomes insolvent, one Active

company is wound up and another is created to take its place.

The most recent Active company has only just failed;

(b) recently failed labour hire, traffic management and security

businesses run by a company called ‘Metropolis’.

6. Questions have also been raised as to whether Mr Alex has an interest

in or exercises some control over a labour hire, traffic management and

security business run by a company called Capital, which has

essentially had the Active and Metropolis business and assets

3 Parker MFI-1, 3/10/14, p 61.

1313

transferred to it following the financial collapse of those two

companies.

7. A little history of the Active, Metropolis and Capital businesses is

needed in order to place the events of August 2014 concerning Mr

Parker and Mr Barrios in some context.

Active

8. A company called Active Workforce (NSW) Pty Ltd (Active

Workforce NSW) was registered on 2 November 2009.4 Mr Alex’s

sister, Ms Athina Alex, was appointed a director of this company on 29

March 2010. The shareholders of Active Workforce NSW were, at the

relevant time, various corporations, including another ‘Active’ entity.

9. Active Workforce NSW was granted an initial enterprise bargaining

agreement by the CFMEU in April 2010. It was granted a further

agreement on or about 7 June 2011. The latter agreement had a

nominal expiry date of 30 June 2014.

10. On 20 April 2012 (that is, only some 9 months into the life of the

second agreement and long before its expiry date) administrators were

appointed to Active Workforce NSW. The company entered into a

deed of company arrangement in June 2012 and subsequently, on 28

February 2014, liquidators were appointed.5

4 Parker MFI-2, 3/10/14, Tab 3, p 36. 5 Parker MFI-2, 3/10/14, Tab 3, pp 39-40.

1314

11. Not long before the appointment of administrators to Active Workforce

NSW, a new Active company, Active Labour Pty Ltd (Active Labour)

was incorporated.6 It was registered on 3 February 2012. At that time

its directors and shareholders included Ms Alex, Mr Joe Antoun and

(subsequently) Mr Mazen Hourani. Mr Hourani is now the sole

director and shareholder.

12. Shortly after that, and on 5 June 2012, another Active company, Active

Site Payroll Services (NSW) Pty Ltd was incorporated (Active

Payroll).7 Mr Alex was not recorded on the Australian Securities and

Investments Commission (ASIC) register as a director or shareholder.

13. In October 2012 the CFMEU entered into an enterprise bargaining

agreement with Active Payroll. The agreement had a nominal expiry

date of 30 June 2014.

14. In 2013 Active Payroll ran into financial difficulties and liquidators

were appointed to it on 6 August 2013.8 Large sums of money were

owed to its workers.

15. Arrangements were then made for the employees of Active Payroll to

be transferred across to Active Labour. On 16 September 2013, Ms

Rita Mallia, the NSW Branch President, met Mr Hourani and Mr Alex.

6 Parker MFI-2, 3/10/14, Tab 20, p 360. 7 Parker MFI-2, 3/10/14, Tab 17, p 284. 8

Parker MFI-2, 3/10/14, Tab 17, p 285.

1315

It was agreed that Active Labour would meet the arrears that had been

accrued under Active Payroll.9

16. By the end of 2013 and into the start of 2014, the promise by Active

Labour to pay Active Payroll’s arrears had not been honoured. Active

Labour itself was falling behind.

17. An email dated 22 January 2014 from Mr Dennis Matthews of the

Australian Construction Industry Redundancy Trust (ACIRT) reveals

that Active Labour had made an ACIRT payment for December 2013,

but the cheque had been dishonoured. He indicated that the only other

payment that had been received was for July 2013. But that cheque

had also been dishonoured. The email concluded with confirmation

that the company had effectively made no payment since 1 July 2013.10

18. Documents produced by the CFMEU reveal that progress was only

made when a factoring agency called FIFO Capital, a director of which

was Mr Lindsay Kirschberg, ultimately agreed to provide financial

assistance to Active Labour. On about 20 January 2014 Mr Kirschberg

sent confirmation to the CFMEU, at Mr Hourani’s request, of the fact

that substantial payments had been made to meet some of Active

Payroll’s arrears.11

19. The drain on Active Labour in making such a substantial payment in

respect of arrears in January 2014 took a heavy toll on the company.

9 Rita Mallia, 25/9/14, T:443.18-35. 10 Greenfield MFI-2, 3/10/14, p 48. 11

Greenfield MFI-2, 3/10/14, pp 46-47.

1316

By the middle of June 2014 Active was again in arrears. Its position

continued to deteriorate. Active Labour is now in administration.12

Metropolis

20. Another group of businesses in which it has been suggested that Mr

Alex has had an interest were those run by Metropolis Traffic Control

Pty Ltd (Metropolis).13 These are labour hire, a traffic management

and security businesses.

21. Each of Mr Douglas Westerway and Mr James Kendrovski said in his

evidence that Mr Alex has an ultimate stake in those businesses, even

though he is not recorded on ASIC’s register as being either a

shareholder or director.14

22. As with Active Labour, the Metropolis businesses were under great

financial stress during 2014, again to the point where moneys owed by

builders to the company have had to be paid directly to the CFMEU.

Metropolis ended up heavily in arrears in meeting employee

entitlements, and had receivers and managers appointed to it in July

2014.15

12 Parker MFI-2, 3/10/14, Tab 20, p 363. 13 Parker MFI-2, 3/10/14, Tab 38, p 605. 14

Douglas Westerway 1/9/2014 T:62-63; James Kendrovski, 1/9/2014, T:101. 15 Parker MFI-2, 3/10/14, Tab 38, p 608.

1317

Capital

23. A new company, Capital Workforce Pty Ltd (Capital), arrived on the

scene in 2014.16 That was a time when both Active Labour and

Metropolis were struggling financially. Mr Hourani is a director of

Capital.

24. Records in respect of the arrears owed by Metropolis and Active

Labour demonstrate that both were obtaining financial assistance from

Mr Kirschberg (who has now left FIFO Capital and established his

own company Agon Enterprises Pty Ltd) and that they were pooling

the companies’ funds for distribution in accordance with the agreement

of all concerned.

25. In this regard, Ms Keryn McWhinney (Senior Industrial Officer at the

CFMEU) met with Mr Hourani and others to discuss the affairs of

Metropolis and Active Labour. The notes of that meeting appear to

refer to Mr Hourani saying that he wanted Active Labour’s money to

go to Metro superannuation and ACIRT.17 Those notes include a

diagram showing arrows going from both Metropolis and Active

Labour to Capital.18

16 Parker MFI-2, 3/10/14, Tab 41, p 709. 17 Mallia MFI-1, 25/9/14, p 23. 18

Mallia MFI-1, 25/9/14, p 24.

1318

26. Mr Parker understood that the intention was for Capital to assume the

business of Active Labour and Metropolis. He said so in a telephone

conversation that he had with Mr Barrios on 18 August 2014.19

27. On 8 August 2014 Mr Parker signed three enterprise bargaining

agreements with Capital and caused applications to be filed with the

Fair Work Commission for those agreements to be approved by it.20

Events involving Mr Barrios

28. Mr Barrios is a carpenter. He works for Brookfield Multiplex. He has

acted as a CFMEU delegate for the last 19 years.21 He is a long

serving member of the NSW Branch’s Committee of Management, and

before that the union’s State Council.22 In August 2014 he was to

become embroiled in the Capital/Mr Alex matter, and be vilified by Mr

Parker, in a way he could not have anticipated.

18 August 2014 telephone call between Mr Barrios and Mr Parker

29. On 18 August 2014 Mr Barrios had a telephone conversation with Mr

Parker. During that conversation they discussed the Capital enterprise

bargaining agreements.23

19 Parker MFI-6, 3/10/14, pp 7-8. 20 Parker MFI-2, 3/10/14, Tab 47, p 802ff. 21

Mario Barrios, 1/9/2014, T:125.39. 22 Mario Barrios, 1/9/2014, T:126.1-12. 23

Parker MFI-6, 3/10/14, pp 7-10.

1319

30. During the telephone conversation on 18 August 2014 Mr Parker and

Mr Barrios discussed the emergence of Capital. They discussed

whether Mr Alex was associated with it. They also discussed whether

Mr Parker had done the right thing in signing agreements in favour of

Capital. In this context, Mr Barrios made the following statements:

I think they’re just bullshitting to us.

I just think that they’re just having a go at us. I just think that it’s the same people involved, with the same excuses as before, and I hope you don’t end up with egg on your face and in another six, seven months’ time they’re behind again.

You know, these - these people, they just keep rebirthing themselves with a different name, take over, take over, and they haven’t fixed the problem from three companies ago, never mind the last one.

20 August 2014 communications between Mr Parker and Mr Hourani

31. A couple of days after that conversation, Mr Parker rang Mr Hourani, a

director of Capital, and left a message saying that it was important that

they speak.24

32. Mr Hourani then rang Mr Parker back. During that conversation Mr

Parker referred to the fact that a journalist had started raising questions

about Capital and Mr Alex, and that ‘one of my committee of

management has been fucking on a tangent about this…constantly all

the time. He’s been saying to me that “No, George Alex is involved in

all these companies”’.25

24 Parker MFI-5A, 3/10/14. 25 Parker MFI-5B, 3/10/14

1320

33. Mr Parker agreed that he possibly told Mr Hourani, at some point, that

Mr Barrios was the committee of management member to whom he

was referring.26

20 August 2014 telephone call from Mr Alex to Mr Barrios

34. In the early evening of that same day, 20 August 2014, Mr Alex

telephoned Mr Barrios’s mobile phone. The two had never spoken or

met before.

35. According to Mr Barrios, Mr Alex said words to the following effect:27

It’s George Alex here. I want to come and visit you. I want to know why you’re talking so much shit about me. I know you’re in bed with Tony Balisto. Where do you work? I’m a very patient person, Mario, but I’m running out of patience with you. Where do you work? I will see you tomorrow.

36. After receiving this call from Mr Alex, Mr Barrios contacted Ms

Mallia and Mr Parker and alerted them to it. He then went to the

police station and reported the incident to the police.28

COM decision to withdraw the applications

37. About a week or so after this incident, and in late August 2014, the

Branch Committee of Management met and decided that the

application for approval of the Capital enterprise bargaining

agreements that Mr Parker had initiated should be withdrawn. This

26 Brian Parker, 3/10/14, T:598.8. 27 Mario Barrios, 1/9/14, T:127.12-27. 28

Mario Barrios, 1/9/14, T:126.29-34.

1321

decision was made based on the complaints that Mr Barrios had

raised.29

Mr Parker’s reactions to the COM decision

38. Mr Parker contacted Mr Hourani and reported this event to him. In

that discussion Mr Parker said that he was ‘devastated about pulling

the EBAs’.30 Mr Parker’s devastation was such that he said he was in

a ‘heat of rage’.31

39. On 28 August 2014 he spoke to Mr Rob Kera, the NSW Branch

Assistant Secretary. In that conversation the following exchanges took

place:32

Parker: I’ve just got to stop myself from fucking bashing fucking the other bloke today.

Kera: Who is that?

Parker: Barrios.

Kera: Oh okay. Fair enough.

Parker: I’ve got to stop meself because I will. The tension is pretty fucking high and Rita is a bit worried, you know. I said ‘Well, don’t be worried because it will be all over in fucking - five seconds.’ I said, ‘You’ve never seen me unleash.’ I said, ‘I’ve been building up this up for a fortnight’, you know. I said, ‘The problem is if I fucking end up doing it, you know, it will end up - you know, he’ll end up fucking doing a stint in hospital, I’m fucking telling you, because I won’t stop.’

29 Brian Parker, 3/10/14 T:598.21, T:599.8. 30 Brian Parker, 3/10/14 T:600.15. 31

Brian Parker, 3/10/14 T:585.45, T:586.28. 32 Parker MFI-3, 3/10/14, pp 3-4.

1322

40. In his examination on 3 October 2014 - that is, only about five weeks

after this explosive conversation - Mr Parker was asked whether he

had ever told others that he wanted to bash up Mr Barrios, and whether

he had ever said that he had to stop himself from bashing Mr Barrios

otherwise he would end up doing a stint in hospital. His answer to

each of these questions was ‘no’.33

41. It is inconceivable that, when he gave this evidence, only a handful of

weeks after having spoken in so violent a way about his feelings

towards Mr Barrios, Mr Parker would not have had a recollection of

having done so. His sworn denials were not true, and he knew that to

be so when he gave the evidence. Mr Parker submitted that there was

insufficient evidence to conclude that he had engaged in deliberate

falsehoods.34 The submission relied on Mr Parker’s own evidence.35

That submission must be rejected.

42. If the position is otherwise, Mr Parker is an individual who is so

accustomed to making statements about bashing up fellow officials of

the CFMEU, and considers conversations of that kind to be so

forgettable, that behaviour of this kind is of no moment at all.

43. Whichever the position, the conduct is not that of a person who is

suitable to hold office as Secretary of a Divisional State Branch of a

registered organisation.

33 Brian Parker, 3/10/2014, T:578.32-38. 34 Submissions on behalf of Brian Parker, 21/11/14, para 37. 35

Brian Parker, 3/10/14, T:579.22-26.

1323

44. This was not to be the only occasion upon which Mr Parker would

speak ill of Mr Barrios.

45. Following the report that Mr Barrios made to the police of the call he

had received from Mr Alex, the matter came to the attention of this

Commission and Mr Barrios was summoned to give evidence. He did

not volunteer. He did not provide any statement. He was compelled to

attend and was obliged to provide truthful answers to questions asked

of him. He gave his evidence on 1 September 2014.

46. Notwithstanding all of these matters, on 7 September 2014 Mr Parker

spoke with his daughter on the telephone on Father’s Day. In the

course of that conversation, in reference to Mr Barrios, he made the

following comments:

‘what a dog’

‘he’s a fucking dog’

‘he’s a fuckwit’

‘he makes out like he’s a great fucking trade unionist’

‘that fucking imbecile Mario is so gullible’

‘he is so fucking dumb’

‘the whole of the fucking team, you know, the whole of his union hate him now, think he’s a fucking dog’.36

47. It was totally inappropriate to unleash this tirade of abuse about a man

who had received a disturbing call from Mr Alex and reported it, who

had been compelled to attend the Commission, who had honoured his

oath to speak the truth, and who had raised entirely legitimate

36 Parker MFI-4, 3/10/14.

1324

questions in relation to Capital and Mr Alex (being questions

consistent with the CFMEU’s publicly stated position in relation to

labour hire and phoenix operators).

48. It is scandalous that a Secretary of a Divisional Branch of the CFMEU

would hold these views about Mr Barrios, let alone express them.

Gross misconduct by Mr Parker

49. Clause 8 of the NSW Branch published Code of Conduct for Officers

provides that no officer engaged by the Union shall converse in an

abusive or derogatory manner towards any person.37 Clause 9 provides

that officers shall not make statements that impugn the character and

integrity of fellow officers.

50. Clause 51(b) of the Rules for the Construction and General Division of

the CFMEU provide that any officer of a divisional Branch may be

removed from office by a two thirds majority of the divisional Branch

management committee where the officer has been charged and found

guilty of ‘gross misbehaviour’.

51. The provision of the Rules recognises, unsurprisingly, that conduct

capable of being characterised as gross misbehaviour is conduct which

falls below the standards of professionalism expected of a union

officer.

52. By speaking about Mr Barrios in the manner described earlier in these

submissions, Mr Parker may have engaged in ‘gross misconduct’ and

37 CFMEU MFI-3, 24/10/14.

1325

may have also breached clauses 8 and 9 of the NSW Branch Code of

Conduct.

53. It is recommended that this Interim Report be referred to the Divisional

Branch Management Committee of the New South Wales branch of the

Construction and General Division of the CFMEU in order that

consideration may be given to whether Mr Parker has conversed in an

abusive or derogatory manner towards any person, has made

statements which impugn the character and integrity of fellow officials,

has engaged in gross misbehaviour or has grossly neglected his duty,

and whether he should be removed from office.

54. Counsel for Mr Parker said that to characterise the conversations as a

breach of a code of conduct went beyond the Terms of Reference.38

Counsel for Mr Parker were making two points. The first was that

findings should not be framed in terms suggesting that there had

actually been breaches. The recommendation does not do this. The

second point was that the Royal Commission was not able to put itself

in the position of the Divisional Branch Management Committee. The

recommendation does not seek to do that.

55. Counsel for Mr Parker also submitted that while the conversations

were about Mr Barrios, they were not directed at Mr Barrios.39 The

CFMEU made a similar submission.40 This point is no answer in

relation to clause 9. It may arguably be an answer in relation to clause

38 Submissions on behalf of Brian Parker, 21/11/14, paras 3, 4, 35. 39 Submissions on behalf of Brian Parker, 21/11/14, para 36. 40

CFMEU submissions, 14/11/14, Pt 8.5 para 5.

1326

8. That is a controversy best left to the Divisional Branch Management

Committee.

1327

1328

CHAPTER 8.6

CFMEU NSW BRANCH DESTRUCTION OF DOCUMENTS

Subject Paragraph

A - INTRODUCTION 1

B - DELETION OF EMAILS IN JUNE 2014 7

The Notices to Produce of 30 May 2014 7

CFMEU’s incomplete response to the Notices 14

Correspondence on the CFMEU’s incomplete response 18

The CFMEU email server 24

Instructions to delete emails 26

Failure to store emails elsewhere 33

The deletion process 56

Some general observations 58

Offences under s 6K of the Royal Commissions Act 1902 (Cth) 63

C - THE INSTRUCTION GIVEN TO MR HOLMES IN FEBRUARY 2013 77

The context 77

1329

Subject Paragraph

The investigation by Mr Slevin and call for Branch files 78

Instruction from Ms Charlson to Mr Holmes 83

Mr Holmes’s response to Ms Charlson’s instruction 91

Ms Charlson’s credibility 100

Events of 10 March 2014 101

Ms Charlson’s version of the events of 10 March 2014 112

Mr Holmes’s document of 11 March 2014 132

The lack of response to the 11 March 2014 document 140

The 2 April 2014 conversation 153

The 2 April 2014 email and the related conversation 161

Incomplete records observed by Mr Slevin and others 167

Returning to the competing evidence as to the February 2014 instruction 171

Mr Holmes 172

Ms Charlson 174

Ms McWhinney 176

The submissions of the CFMEU and Ms Charlson 191

Conclusions 208

1330

A - INTRODUCTION

1. This chapter deals with the destruction of documents by officers and

employees of the NSW Branch of the Construction and General

Division of the CFMEU (Branch). The events took place either

during or shortly prior to the commencement of the Royal

Commission.

2. Two case studies are considered. The first concerns the destruction of

almost all of the emails of the officers and employees of the Branch in

June 2014. That destruction took place during the life of the

Commission. It took place at a time when the CFMEU had received,

and was likely to continue receiving, Notices to Produce from the

Commission calling for the production of emails. The second concerns

the creation of an incomplete copy of the Branch’s wage claim files in

February 2014 for the purposes of passing on that incomplete copy to

Mr Slevin (a barrister retained by the National Office of the CFMEU to

conduct an investigation into certain matters relating to the Branch).

3. In substance the submissions of counsel assisting should be accepted.

The submissions on behalf of the CFMEU, Ms Mallia, Ms Wray and

Ms McWhinney, as well as those of Ms Charlson, who was separately

represented from a fairly late point in proceedings, will be dealt with at

appropriate places.

4. The submissions of counsel assisting were to the following effect.

5. So far as the first case study is concerned, a process was undertaken by

officers and employees of the Branch in the period from 23 June 2014

1331

to at least 25 June 2014 which resulted in the destruction of almost

every electronic email held by the Branch at that time, including emails

dating back to at least the start of 2013. Counsel assisting, possibly

with excessive charity, submitted that the evidence does not support a

finding that the documents were deliberately destroyed in order to

avoid their production to the Commission, or recklessly destroyed.

The submission is accepted. But the conduct of Ms Kylie Wray, Ms

Rita Mallia and Ms Leah Charlson, by their respective acts and

omissions in relation to this document destruction process, was

extremely careless. If it had been characterised as reckless, they may

have committed offences under s 6K of the Royal Commissions Act

1902 (Cth). The line between extreme carelessness and recklessness is

difficult to draw, and reasonable minds will differ as to whether the

conduct of these individuals fell on one side of the line or the other.

6. So far as the second case study is concerned, Mr Slevin asked for

certain files. In February 2014, Ms Charlson gave Mr David Holmes

an instruction to remove documents from the Branch’s wage claim

files for Active Labour and Elite Scaffolding. The instruction was to

remove, and not copy for Mr Slevin, documents that Mr Holmes

considered to be incriminating or unpalatable. Between 100 and 150

documents were removed from the wage claim files by Mr Holmes.

He cannot recall the content of any of these documents. Neither Ms

Charlson nor any other person from the CFMEU (other than Mr

Holmes) has been prepared to admit these matters. No-one will say

what has become of the documents that were removed from the files.

Therefore, it is not possible to know what has become of the

documents removed. They may not have been incriminating, but it is

now impossible to say whether any of them were. In consequence, it is

1332

not possible to be confident that all of the documents that were held by

the Branch in mid February 2014 that bear upon the nature and extent

of the relationship between, on the one hand, the CFMEU and its

officers with, on the other hand, Active Labour, Elite Scaffolding, Mr

Alex and his associates more generally have been produced to this

Commission.

B - DELETION OF EMAILS IN JUNE 2014

The Notices to Produce of 30 May 2014

7. On 30 May 2014, three Notices to Produce were issued to the Proper

Officer of the CFMEU. Each required documents to be produced to

the Solicitor Assisting the Commission at or before 10.00am on 6 June

2014.

8. The first Notice to Produce, numbered 98, sought various ‘Documents’

recording, referring or relating to the CFMEU’s investigations into

various allegations that had been made in respect of corrupt conduct by

officers of the Branch.1

9. The second Notice to Produce, numbered 103, sought ‘Documents’ of

various kinds in relation to the fighting funds of the CFMEU.2

10. The third Notice to Produce, numbered 104, required the production of

various categories of ‘Documents’ concerning the relationship between

the CFMEU and companies associated with Mr Alex, including labour

1 Wray MFI-1, 2/9/14, p 1. 2 Wray MFI-1, 2/9/14, p 8.

1333

hire companies called ‘Active’ and scaffolding companies called

‘Elite’.3

11. The term ‘Documents’ was defined in each Notice to Produce to

include anything from which images or writings can be reproduced

with or without the aid of anything else. Thus it included electronic

versions of emails.

12. Each Notice to Produce also contained a specific provision dealing

with the production of electronic documents. It provided that

The Commissioner has published Practice Direction 1 dealing with specific and important matters concerning the production of electronic documents. If you have electronic documents to produce, you should read Practise Direction 1 carefully. A copy of the practice direction is available at the Commission’s website…or if you have no internet access, by contacting office of the Commission on 1800 221 245.

13. In these circumstances, to the extent the CFMEU held email records in

electronic form falling within the description of the documents to be

produced in answer to the Notices to Produce, they were to be

produced in accordance with the Practice Direction 1 regime for the

production of electronic documents.

CFMEU’s incomplete response to the Notices

14. The General Manager of the Branch is Ms Kylie Wray.4 Part of her

role as at May and June 2014 was to ensure compliance by the Branch

with Notices to Produce issued by the Commission.5

3 Wray MFI-1, 2/9/14, p 14. 4 Kylie Wray, 2/9/14, T:36.30-33.

1334

15. Ms Wray knew, at the time the Notices to Produce were served on the

Branch, that they required the production of electronic documents.6

16. The CFMEU gathered and produced various documents in answer to

the three Notices to Produce.

17. Those documents were then received and assessed by staff at the

Commission. Through that process it was observed that the CFMEU

did not appear to have complied with Practice Direction 1. It required

all electronic documents, such as emails, to be produced in electronic

form. This was an important requirement given that not all emails are

printed out and retained in hard copy form.

Correspondence on the CFMEU’s incomplete response

18. In consequence, on 25 June 2014, the Solicitor Assisting the

Commission wrote to Slater & Gordon, the solicitors for the CFMEU,

and raised a concern about the matter. The letter indicated that the

Commission required production of all electronic documents in their

native form.7

19. On 30 June 2014, Slater & Gordon responded.8 The response was

relatively lengthy and contained 17 numbered paragraphs. The whole

of the first page of the letter and a good deal of the second page of the

letter contained observations as to the time within which the CFMEU

5 Kylie Wray, 2/9/14, T:38.42-44. 6 Kylie Wray, 2/9/14, T:40.17-19, 42.10-12. 7

Wray MFI-1, 2/9/14, p 21. 8 Wray MFI-1, 2/9/14, pp 23-24.

1335

had to respond to the Notices to Produce and the various logistical

issues associated with the production of electronic documents.

20. In amongst the numerous matters raised, and in paragraph 12 of the

letter, the following statement was made:

Further, on Monday 23 June 2014 the Branch became aware during the course of the afternoon that external emails were not being received. Upon investigation, it was found that the email server had effectively crashed as a result of a “disc space error”. It was subsequently found that the email server had not been backing up for a period of up to 2 years. The problem affected certain personnel’s inboxes to a lesser or greater degree. In order to fix the problem the only way to address the issue was to free up disc space with a number of emails being deleted. The branch has no way of assessing the data that has been lost as a result of this incident.

21. No previous indication had been given by the CFMEU to the

Commission that the CFMEU had engaged in a deliberate process of

destroying emails. It was remarkable, to say the least, that this matter

would be addressed, almost in passing, in paragraph 12 of a letter

which, itself, had only been sent because of a query raised by staff at

the Commission about the inadequate production by the CFMEU. The

matter was treated by the CFMEU and its lawyers as if it was of only

passing interest, affecting only ‘a number’, ie a small number, of

emails, and requiring no further consideration. The number was

actually very large. The matter was actually extremely important. A

letter of that kind sent in commercial litigation would have aroused the

deepest suspicions.9

9 See Registrar of Equity Division, Supreme Court of New South Wales v McPherson [1980] 1 NSWLR 688 .

1336

22. In due course, the Solicitor Assisting the Royal Commission required

the CFMEU to serve a comprehensive affidavit explaining the facts

and circumstances relating to the deletion of emails.10

23. On 27 August 2014, Kylie Wray affirmed an affidavit. It gave an

explanation of sorts as to what had occurred in relation to the

destruction of emails. That explanation and various other items of

evidence in relation to the matter are canvassed below.

The CFMEU email server

24. According to Ms Wray’s evidence, on the afternoon of Monday 23

June 2014, she became aware that the Branch was not receiving any

external emails. It appeared to her that this had been the case during

the day, but nobody had noticed it because employees of the Branch

were still able to send emails, and were still able to receive internal

emails. The problem, therefore, was of a limited kind. It only

prevented the receipt of emails sent from an external source.11

25. An investigation into the problem revealed that there was insufficient

space on the server to enable external emails to be received. The

system had not ‘effectively crashed’, as had been reported by Slater &

Gordon on 30 June 2014, and repeated by Ms Wray in paragraph 7 of

her affidavit. Rather, the system was ‘full’ to such an extent that,

whilst the email system still functioned and emails could be sent and

internal emails received, external emails could not be received.

10 Wray MFI-1, 2/9/14, p 25. 11 Kylie Wray, affidavit, 2/9/14, para 7 (Wray MFI-1, 2/9/14, p 28).

1337

Instructions to delete emails

26. At some stage during the course of 23 June 2014, after having become

aware of the storage problem described above, Ms Wray started telling

some of the employees at the NSW Branch to begin deleting their

emails.12 That was less than four weeks after the three Notices to

Produce had been issued.

27. The following day, 24 June 2014, Ms Wray sent an email to all staff at

the Branch at 6.33pm.13

28. The recipients included Mr Parker and Mr Greenfield. Each of them

was under direct consideration by the Commission in relation to their

relationship with Mr Alex and companies and individuals associated

with him. In fact, these were the very matters being investigated

through Notices to Produce numbered 98 and 104 referred to above.

That fact was apparent from the terms of those Notices.

29. A number of persons with legal qualifications who were working for

the NSW Branch were also sent Ms Wray’s email. They included Ms

Charlson (the Senior Legal Officer of the Branch), Ms Raju (solicitor

in the legal department of the Branch) and Ms Mallia (the Branch

President).

30. The subject line of Ms Wray’s email read ‘URGENT: email cleanout’.

31. The text of the email was as follows:14

12 Kylie Wray, 2/9/14, T:48.23, 49.25-27, 50.6-8. 13 Kylie Wray, affidavit, 2/9/14, annexure KW1 (Wray MFI-1, 2/9/14, p 31).

1338

Hi everyone

I think Peter has been to see many of you today to request everyone cleans out their mailboxes. We currently are not receiving any emails at all from outside the CFMEU. This is due to the fact that the mailbox store is full.

The only way we will be able to receive external email again is if everyone puts in an effort to clean out their mail.

Some tips:

Sort them by size and delete the big ones first

Putting your email into folders in your inbox still counts them in the size total and is not going to help

Clean out your sent items

Clean out the deleted items folder.

As we are days away from the royal commission kicking off and there is a LOT going on, we need everyone to make this a priority please. If you need assistance with this please speak to myself or Peter.

32. The Commission had in fact already kicked off. The Letters Patent

was issued on 13 March 2014. The opening hearing, attended by

senior counsel for the CFMEU, took place on 9 April 2014. Some

days of evidence in public and some days of evidence in private

(including evidence from CFMEU witnesses) had been taken. On 1

May 2014, the CFMEU made an application for authorisation to appear

at the hearings. The application stated:

Part 5 - Assistance to the Commission

(a) Will the person appearing or to be represented be in a better position to assist the Commission if authorisation to appear is granted? If so, how?

14 Kylie Wray, affidavit, 2/9/14, annexure KW1 (Wray MFI-1, 2/9/14, p 31).

1339

…If authorisation to appear is granted, the Commission will be assisted by having one point of contact for all Divisions and Branches of the CFMEU.

In addition, if authorisation to appear is granted, access to the Court Book will permit the CFMEU to more efficiently respond to the proceeding of the Commission and documentation under its consideration.

(b) Please specify precisely the nature and extent of any assistance that will be provided to the Commission if authorisation is granted.

The Commission will have easier access to the CFMEU, its Divisions and Branches through a single legal team. The CFMEU has already assisted the Commission in answering to date the Notice to Produce issued on 31 March 2014 (“Notice”) by coordinating the production of documents and communications with the Commission through its legal representatives.

Failure to store emails elsewhere

33. Ms Mallia read Ms Wray’s email almost immediately after it was sent

on 24 June 2014. On reading it she understood that the request from

Ms Wray would involve the deletion of a very large number of emails

off computers operated by officers and employees of the branch.15

34. Within minutes, Ms Mallia had sent an email back to Ms Wray in the

following terms:16

Any way we can save them externally I’d happily delete everything if there was a way to save them somewhere

15 Rita Mallia, 25/9/14, T:414.24-27. 16 Mallia MFI-1, 25/9/14, p 16.

1340

35. Ms Mallia accepted that, at the time she sent this email, she was

concerned to ensure that there was a complete set of emails that had

been retained in pristine form on some external hard drive.17

36. Ms Charlson was also acutely aware of the undesirability of deleting

emails of any importance. She took steps to have many of her own

emails saved elsewhere on the system. She did that in conjunction

with information technology staff at the CFMEU.18

37. Ms Charlson, a lawyer carrying out ongoing matters for the CFMEU,

said she did that because she wanted to ensure that her documents in

respect of ongoing matters were not deleted. The idea of deleting

documents relating to matters in fact worried her. She could not give

any sensible explanation as to why she took no step to ensure that the

other lawyers in her team did the same.19

38. The immediate responses from Ms Mallia and Ms Charlson made it

clear that they were both acutely aware that, as at 24 June 2014, it was

undesirable for there to be a wholesale deletion of all emails held by

CFMEU staff and officials. It is also clear that both immediately

appreciated that there would be ways and means of retaining the

existing records while at the same time clearing space on the server.

They had communications about that very fact. This reveals that the

Slater & Gordon letter of 30 June 2014 contained a further material

inaccuracy for in it the CFMEU asserted that the deletion of the emails

was ‘the only way’ to deal with the problem.

17 Rita Mallia, 25/9/14, T:415.7-10. 18 Leah Charlson, 24/10/14, T:1095.9-11, 26-29, 45-47. 19

Leah Charlson, 24/10/14, T:1099.25-1100.12.

1341

39. The awareness of Ms Mallia and Ms Charlson on 24 June 2014 that the

emails could be stored elsewhere, rather than being deleted, comes as

no surprise. It is common knowledge that electronic data can be

extracted from one source and saved on to an external storage device.

40. It is inconceivable that Ms Wray did not know and think about this at

the time. Not only was she the General Manager of a Divisional

Branch of the CFMEU (a substantial administrative role) but also, on

her own evidence, she was given responsibility of overseeing the IT

department of the Branch and playing a role in providing back-up IT

services to assist the Branch’s IT officer when required.20

41. Ms Wray said that when she sent her email on the evening of 24 June

2014 she did not give any consideration to using such an external

storage device.21

42. However, even if that were true (which is difficult to accept), she

certainly had reason to (and did) consider such an option following

receipt of Ms Mallia’s email to her of the same date. Ms Mallia raised,

expressly, the prospect of saving the emails externally.

43. Ms Wray gave evidence that her response to Ms Mallia’s email was to

ask Mr Peter Thomas from the IT department, who was referred to in

the 24 June 2014 email, to give Ms Mallia a hand saving some

material. She did nothing else.22

20 Kylie Wray, affidavit, 2/9/14, para 2 (Wray MFI-1, 2/9/14, p2). 21 Kylie Wray, 2/9/14, T:57.24-26. 22

Kylie Wray, 2/9/14, T:62.2-4.

1342

44. The excuse Ms Wray gave for not taking any further action to ensure

that the emails of all of the other CFMEU staff and officials were not

saved in the same way was that she took Ms Mallia’s concern ‘to be

solely regarding her own mailbox’.23

45. That evidence is not credible. Ms Mallia was the Branch President.

She raised through her email a matter of general application in respect

of all electronic documents the subject of Ms Wray’s email of three

minutes before. If she had not thought of it before, Ms Mallia’s email

could only have raised in Ms Wray’s mind the possibility of dealing

with all emails in this way, particularly in circumstances where the

Commission was in existence. The fact Ms Wray was aware of the

existence of the Commission is apparent from the text of her own

email of 24 June 2014.

46. Certainly Ms Mallia appreciated that her email was of general

application in respect of all emails.24 However, apart from sending her

query email of 24 June 2014 to Ms Wray, she took no further action.

She did not contact Ms Wray to make sure that her suggestion was

taken up. She did not follow up on it at all, and, to use her words, she

‘didn’t take the issue any further’.25 She accepted that she could have

given a direction to Ms Wray and all of the other staff to stop the

deletion process and ensure that no emails were destroyed. She did not

23 Kylie Wray, 2/9/14, T:62.16-17. 24 Rita Mallia, 25/9/14, T:415.7-10. 25

Rita Mallia, 25/9/14, T:415.12-27.

1343

do this, even though she knew the Commission was underway.26 She

provided no meaningful explanation for her inaction.

47. Ms Charlson was similarly inactive. This is so even though she was

the Senior Legal Officer in the NSW Branch and knew that, at the

time, the Commission was on foot.27

48. Ms Charlson’s evidence was that she was aware, as at 24 June 2014,

that:

(a) the Commission was on foot;28

(b) from time to time it was likely that the CFMEU would be

required to produce emails to the Commission;29

(c) there were emails that were generated that were not printed out

by CFMEU staff and thus unavailable in hard copy form;30

(d) a Notice to Produce was a document that required the CFMEU to

produce documents to the Commission;31 and

(e) officers of the CFMEU were under consideration by the

Commission.32

26 Rita Mallia, 25/9/14, T:416.5-17. 27 Leah Charlson, 24/10/14, T:1093.26-28. 28

Leah Charlson, 24/10/14, T:1093.26-28. 29 Leah Charlson, 24/10/14, T:1093.30-33. 30

Leah Charlson, 24/10/14, T:1093.35-39. 31 Leah Charlson, 24/10/14, T:1098.27-28.

1344

49. Notwithstanding that body of knowledge, Ms Charlson took no step to

call a halt to the email deletion process that Ms Wray had initiated,

other than to make arrangements for some of her own documents to be

retained for other purposes.

50. At first Ms Charlson sought to explain her inaction on the basis that

she thought, at the time, that the documents that were likely to be

required by the Commission had already been produced because there

had been a number of Notices to Produce served prior to 24 June

2014.33

51. Counsel assisting submitted that that evidence is not credible. Ms

Charlson is an experienced solicitor. She revealed herself to be a

witness of considerable intelligence. She accepted that she had been

aware, throughout the life of the Commission, that it would be likely

that the CFMEU would be required to produce documents from time to

time.34 There would have been no rational basis for her to believe, as

of 24 June 2014, that the CFMEU would not be called upon to produce

any further documents.

52. It was put to Ms Charlson that she was not giving truthful evidence on

the subject. Ms Charlson then gave evidence designed to create the

impression that she had not, in fact, turned her mind to the question of

whether there would be further notices issued by the Commissioner.35

32 Leah Charlson, 24/10/14, T:1098.30-33. 33 Leah Charlson, 24/10/14, T:1097.23-46. 34

Leah Charlson, 24/10/14, T:1093.30-33. 35 Leah Charlson, 24/10/14, T:1098.35-43.

1345

She said she was not involved in the Royal Commission process.36 But

so senior a lawyer must have appreciated its importance. She must

have appreciated the probability that as documents were produced new

leads might emerge, to be followed by further Notices to Produce. Ms

Charlson tended to seek to debate her way out of the particular

proposition that confronted her at any particular moment, even if that

involved some shift away from the position she had previously adopted

in order to deal with an earlier problem. Unfortunately, it is not

possible to accept her evidence that all the documents that were likely

to be required had already been produced. But even if her evidence

were accepted, her behaviour would reflect a lack of proper care and

concern for the processes of the Commission.

53. Ms Charlson said that she ‘would have thought that the only emails

that people were deleting would be trivial emails, not serious, not

important emails’.37 She also submitted that Ms Wray’s email was

ambiguous.38 It was not ambiguous. And it did not draw that

distinction. Instead it drew a distinction between ‘big ones’ and others;

the former were to be deleted first.

54. Ms Charlson also submitted that if she were to have stopped the

document destruction process directed by Ms Wray, she would have

had ‘to go outside the chain of command’.39 Unfortunately, it is the

unhappy fate of the in-house solicitor to suffer the wrath of those

higher up the chain of command by intervening to point out some

36 Leah Charlson, 24/10.14, T:1098.8-17. 37 Leah Charlson, 24/10/14, T:1094.33-35. 38

Ms Leah Charlson’s submissions, 19/11/14, para 16. 39 Ms Leah Charlson’s submissions, 19/11/14, para 25.

1346

tiresome legality. That is the whole point of in-house solicitors. And

she was the head in-house solicitor.

55. The position is that neither Ms Mallia, nor Ms Charlson nor Ms Wray

took any action to prevent the destruction of emails (other than some of

Ms Charlson’s and Ms Mallia’s emails).

The deletion process

56. Ms Wray’s evidence was that the email deletion process commenced

on 23 June 2014, continued throughout 24 June 2014 up to the point in

time in which she sent her email on the evening of that day, and then

continued again on 25 June 2014.40

57. A team of no less than nine people in the branch were charged with

responsibility for going through the email accounts of a large number

of organisers and officials, including Mr Parker and Mr Greenfield,

and deleting all of the emails in those accounts.41

Some general observations

58. Officers and employees of the Branch engaged in a deliberate

document destruction process in the period from 23 June 2014 to at

least 25 June 2014.

59. The volume of emails deleted must have been vast. The quantity of

emails is apparent from the fact that their existence had caused the

40 Kylie Wray, 2/9/14, T:48-51. 41 Kylie Wray, 2/9/14, T:49.9-19.

1347

server to become full on 23 June 2014. The emails in question dated

back to at least the beginning of 2013, because that was the last

occasion upon which there had been a request made for a clean out of

mail boxes by CFMEU staff and officials.42

60. On this point, it is to be remembered that 2013 is a critical period of

time under consideration by this Commission in terms of the

relationship between Mr Parker, Mr Greenfield, Mr Alex and

individuals and companies associated with Mr Alex. That was well

known by the officers of the Branch. The fact had been highly

publicised. It had been the subject of two internal CFMEU inquiries.

61. The fact that emails, including emails from the email accounts of Mr

Parker and Mr Greenfield, were deleted in this wholesale and

indiscriminate fashion, during the course of the Commission,

particularly in light of the matters that were actually under

investigation at the time, is deeply worrying.

62. No official within the CFMEU has appreciated the serious nature of

what has occurred. It was treated as a relative triviality in

correspondence from CFMEU’s lawyers to the Commission on 30 June

2014. No proper explanation for what had occurred was provided.

The Commission had to insist upon an affidavit being provided. And

even then, the subsequent public examination of the deponent of that

affidavit, Ms Wray, made it clear that the affidavit was less than

comprehensive, and had not dealt with a number of matters, which

only raised cause for greater concern in relation to what had occurred.

42 Kylie Wray, 2/9/14, T:46.4-38.

1348

Offences under s 6K of the Royal Commissions Act 1902 (Cth)

63. Section 6K of the Royal Commissions Act 1902 (Cth) provides as

follows:

(1) A person commits an offence if:

(a) the person acts or omits to act; and

(b) the act or omission results in a document or other thing being:

(i) …destroyed…; and

(c) the person knows, or is reckless to whether, the document or thing is one that:

(i) is or may be required in evidence before a Commission; or

(ii) the person has been, or is likely to be, required to produce pursuant to a summons, requirement or notice under section 2.

(2) An offence under sub-section (1) is an indictable offence and, subject to this section is punishable on conviction by imprisonment for a period not exceeding 2 years or by a fine not exceeding $10,000.

(3) Notwithstanding that an offence under sub-section (1) is an indictable offence, a court of summary jurisdiction may hear and determine proceedings in respect of such an offence if the court is satisfied that it is proper to do so and the defendant and the prosecutor consent.

(4) Where, in accordance with sub-section (3), a court of summary jurisdiction convicts a person of an offence of sub-section (1), the penalty that the court may impose is a fine, not exceeding $2,000 or imprisonment for a period not exceeding 12 months.

64. The sole submission of the CFMEU was that no finding should be

made on the email destruction issue because of the work which Mr

Solomon is undertaking. He is endeavouring to recover the deleted

emails.43 Ms Charlson adopts those submissions.44 However, under s

43 CFMEU submissions, 14/11/14, Pt 8.6, para 5. 44 Ms Leah Charlson’s submissions, 19/11/14, para 6(b).

1349

6K, the question is whether a document was concealed, mutilated,

destroyed or rendered indecipherable. The deletion of the emails from

the inboxes fell within those words. The possibility that Mr Solomon

may be able to recover the emails does not alter the fact of what

happened from 23 June 2014. Ms Charlson then took a point which

she said should not be seen as ‘unduly technical’. Even if it is, it is

none the worse for that. Section 6K operates in the realm of criminal

law. In that field, technicality is the bulwark of liberty. Ms Charlson

submitted that, whatever her mental state, it had not been established

that the destroyed documents might be required in evidence or were

likely to be produced under a Notice to Produce. That is because it is

not known what documents, or even classes of documents were

destroyed.45

65. The submission must be upheld. This conclusion reveals how narrow s

6K is. Section 6K is concerned with documents which may have been

destroyed, concealed, mutilated or rendered illegible. Hence, it is

concerned with documents which by definition may be incapable of

specific identification. That definition tends to exclude many instances

of circumstantial reasoning towards contravention of s 6K. The

definition makes it impossible to take a document and say: ‘Just by

looking at the document, one can see that the accused must have

known that the document might be required in evidence or under a

summons.’ That is because the document is non-existent or

unreadable. Proof of contravention in those circumstances would

depend on admissions or on secondary evidence from other witnesses

45 Ms Leah Charlson’s submissions, 19/11/14, paras 7-12.

1350

of the contents of the document. But these consequences cannot affect

the construction of s 6K as it stands.

66. Counsel for Ms Charlson then submitted that if that conclusion were

reached, it was not necessary to make any finding about Ms Charlson’s

mental state.46 It was submitted that it became ‘simply irrelevant’.

That submission must be rejected. For reasons explained below, the

document destruction process is within the Terms of Reference, and so

is the mental state of those who devised it or failed to interfere with it.

67. Counsel assisting put the following submissions. Ms Wray took action

that resulted in emails being destroyed. That action included deleting

emails herself, instructing other staff within the Branch to delete emails

on 23 June 2014, and giving a written instruction to the same effect to

all officials and staff at the Branch by her email of 24 June 2014.

68. Ms Mallia and Ms Charlson each failed to take action. Those

omissions resulted in emails being destroyed. Ms Mallia was the

Branch President. She failed to take action to ensure that the emails

were maintained and stored on an external device. The action she took

in this regard was insufficient. She sent an email to Ms Wray

suggesting that course. But she then failed to take any further action to

ensure emails were preserved in this way. Ms Charlson,

notwithstanding her position as the senior lawyer in the Branch, failed

to give an instruction to all staff and officials to cease destroying their

emails following receipt by her of Ms Wray’s email of 24 June 2014.

46 M Condon SC, 28/11/14, T:35.15-22, 36.37-40.

1351

69. At the very least, at the time of acting or omitting to act, each of these

individuals were very careless (and possibly reckless) as to whether

one or more of the electronic documents that were deleted were ones

that were to be produced in answer to one or more of the three Notices

to Produce described above, or would be likely to be required to be

produced pursuant to subsequent Notices to Produce.

70. When a complaint was made on 25 June 2014 about the CFMEU’s

failure to produce those documents in answer to the Notices, the

various explanations proffered by the CFMEU as to its failure to

produce included the fact that the electronic versions of emails had

been destroyed on and after 23 June 2014. In that way the CFMEU

admitted that documents that had been required to be produced

pursuant to those Notices to Produce had been destroyed. However, it

is an admission of no weight, because the destruction of documents

prevented it knowing what the documents were.

71. What documents were likely to be produced in answer to subsequent

Notices to Produce? As at 24 June 2014, the Commission was in its

relative infancy. Officers of the CFMEU were the subject of

investigation by the Commission. Some Notices to Produce had

already been served on the CFMEU. It would have been obvious to

any person standing in the position of any of Ms Wray, Ms Mallia and

Ms Charlson that it was likely that further Notices to Produce would be

served, and that such Notices would be likely to call for the production

of emails. It is true to say that they could not predict, as at 24 June

2014, which particular emails would be the subject of subsequent

Notices. However, there can be no serious doubt that some emails

1352

would be called for by the Commission under future Notices. Their

behaviour in the face of this reality was at least very careless.

72. In order for them to have committed an offence under s 6K of the

Royal Commissions Act 1902 (Cth) through the acts and omissions

described above, it would be necessary to conclude that their actions

were more than very careless. Recklessness or deliberate wrongdoing

would be required.

73. The evidence raises nagging suspicions, but it does not support a

finding of deliberate wrongdoing. As counsel assisting submitted,

there is no evidence, and no basis for finding, that Ms Mallia, Ms Wray

and Ms Charlson knew, or were reckless as to whether, any particular

email within the body of emails that was destroyed was, or was likely

to be, required to be produced pursuant to a Notice to Produce.

74. As counsel assisting also submitted, the evidence does not support a

finding that any of these individuals knew that a particular damaging

document existed, and that by some deliberate or reckless act or

omission on their part, they arranged for that document to be destroyed

in order to avoid it being produced to the Commission.

75. Whether their conduct is properly characterised as very careless, or

instead reckless, is a difficult question to answer. Reasonable minds

will differ on the subject. These individuals behaved with a substantial

lack of care and concern for the processes of the Commission. But

they were not reckless. That submission of counsel assisting should be

accepted. When the consequences of a finding of recklessness are

1353

taken into account, it is not possible on the present evidence to

conclude positively that the conduct is to be characterised as reckless.

76. Ms Charlson submitted that there should be no finding that she had

acted with a substantial lack of care either. She submitted that no

finding of that kind was within the Terms of Reference. She also

submitted that that finding was a serious one for a legal practitioner.47

The last point is correct. But given that the conduct of the CFMEU

prima facie falls within the Terms of Reference, the level of care and

concern for the processes of the Commission which the CFMEU

applied in responding to the Commission is within para (k) of the

Terms of Reference. The deliberate or reckless destruction of

documents which may be caught by compulsory processes of

production is a grave matter. Ms Charlson did not do that. But

carelessness and an omission to have proper consideration for the

possibility of compulsory processes of production (or worse,

consciousness of that possibility coupled with a failure to respond

accordingly) is also fairly grave. Conduct of that kind makes the

processes of a body like the Commission unworkable. The very

submission under consideration reveals a lack of consciousness of

these important points.

47 Ms Leah Charlson’s submissions, 19/11/14, paras 34-35.

1354

C - THE INSTRUCTION GIVEN TO MR HOLMES IN

FEBRUARY 2013

The context

77. The issue raised by the second case study is whether documents were

withheld from Mr Tony Slevin of counsel in mid to late February 2014.

At that time Mr Slevin had been instructed by officers of the National

Office of the CFMEU to conduct an investigation into various

complaints that had been made by Mr Andrew Quirk. Mr Quirk was

an organiser in the Branch. His complaints related to the conduct of

various other officers in that Branch, including Mr Parker and Ms

Mallia. The incident occurred in mid-February 2014. On 10 February

2014, the Prime Minister announced that the Commission would be

created. On 13 March 2014, the Letters Patent was issued.

The investigation by Mr Slevin and call for Branch files

78. As described in Chapter 8.4, in early 2014, Mr Slevin of counsel was

retained to undertake an investigation into the conduct of various

officials in the Branch. He had been instructed to do so by officers

from the National Office of the CFMEU based in Melbourne.

79. In October 2013, Mr Quirk had written to Mr Michael O’Connor, the

National Secretary of the CFMEU, raising a series of concerns.

Among them, there were three that relate to the Commission. One

concern was the way in which Mr Fitzpatrick had been treated by Mr

Parker and others following the receipt by Mr Fitzpatrick of a death

threat from Mr Greenfield in March 2013. Another was the lack of any

1355

proper investigation undertaken by the Branch officials in relation to

such matters. A third was the nature and extent of relationships

between Mr Parker, Mr Greenfield and Mr Alex (and individuals and

companies associated with him).48 There had been some media

attention to the last matter.

80. Mr O’Connor sent a letter dated 20 February 2014 to Mr Parker (the

Branch Secretary). Mr O’Connor referred to the fact that Mr Slevin

had been retained to investigate various matters, and requested the

Branch’s assistance in the process.49 To that end, he attached to the

letter a list setting out the files and documents that Mr Slevin had

requested.

81. The attached schedule identified a number of different categories of

files and other documents. Amongst other things, the schedule

included two sub-headings, one referring to a company called Elite

Scaffolding, and the other to a company called Active Labour. Both

companies were associated with Mr Alex. The matters Mr Slevin had

been asked to investigate included the way Mr Parker and others had

dealt with these companies.

82. The files and documents requested by Mr Slevin in the schedule

included ‘Any files…associated with any arrears in employee

entitlements owed by the employer operating as [Elite Scaffolding or

Active Labour] in March 2013.’50

48 Brian Fitzpatrick, witness statement, 15/7/14, tab 10, p 157. 49 Roberts MFI-1, 23/09/14, tab 7.1, p 42-1. 50

Roberts MFI-1, 23/09/04, tab 7.1, p 42-3.

1356

Instruction from Ms Charlson to Mr Holmes

83. A copy of the schedule of files and documents requested by Mr Slevin

found its way to Ms Charlson, the Senior Legal Officer in the

Branch.51 Ms Charlson was responsible for co-ordinating the process

by which documents were to be gathered and sent on in answer to Mr

Slevin’s request.52

84. Mr Holmes was a legal secretary administrative assistant who worked

for Ms Charlson and other lawyers in the Branch. His evidence as to

what happened next is as follows.

85. Mr Holmes said that Ms Charlson asked him to come into her office.

She then asked him if he was busy the next day and he said he was not.

Ms Charlson then said to him words to the following effect:53

I need you to do something tomorrow, which is to pull all of the files associated with these companies from the wage claim system and go through them and remove anything that is incriminating or unpalatable. You then need to make a copy of those files without those documents. Documents need to go to the National office and they need to go through me and Rita. It has to be done by the end of tomorrow.

86. As later described, within a month of receiving this instruction he

recorded the fact of it in a document. That document,54 dated 11

March 2014, is a powerful near contemporaneous indicator of the fact

that such an instruction was given.

51 Leah Charlson, 24/10/14, T:1086.7-11. 52 Keryn McWhinney, 2/10/14, T:520.12-14. 53

David Holmes, witness statement, 2/10/14, para 13. 54 David Holmes, witness statement, 2/10/14, attachment D.

1357

87. There is no controversy that an instruction of some sort was given to

Mr Holmes in mid February 2014 to separate out some documents

from the wage claim files.

88. The very fact that he was given an instruction to separate out

documents from the wage claim files is, of itself, revealing. As

described above, the request from Mr Slevin did not require or request

anyone from the Branch to undertake a review of the contents of the

Active and Elite wage claim files. The request called for the

production of ‘any files… associated with any arrears in employee

entitlements owned by the employer…’.

89. A wage claim file satisfied this criterion. Ms Charlson accepted this to

be so.55 She further accepted that she understood that Mr Slevin was

saying that if the Branch had a file like that, he wanted someone to pull

it off the shelf and give it to him.56 As a result, there was no need for

anyone to be riffling through wage claim files with a view to removing

any documents. The appropriate response to Mr Slevin’s query was to

take the file off the shelf and pass it on to him.

90. After giving Mr Holmes the instruction described above, Ms Charlson

then provided Mr Holmes with a list which had, amongst other things,

the name of Active Labour, and various other companies, written on it.

He no longer has a copy of that list.57

55 Leah Charlson, 24/10/14, T:1087.10-22. 56 Leah Charlson, 24/10/14, T:1087.27-31. 57

David Holmes, witness statement, 2/10/14, para 13.

1358

Mr Holmes’s response to Ms Charlson’s instruction

91. The following day, Mr Holmes said he went and saw Ms McWhinney,

a Senior Industrial Officer working at the Branch.58 Ms McWhinney

worked in the wage claims area.

92. Mr Holmes then asked Ms McWhinney to produce a list of all the

wage claim files that were tied to the list of employers that Ms

Charlson had given him. Ms McWhinney did so.59

93. Mr Holmes then retrieved the wage claim files from the shelves. He

went through and removed about 100 to 150 documents that he thought

might be considered incriminating or unpalatable. He then copied the

balance of the files. He said he worked on that task for the whole of

the day, starting from about 8.30am and finishing at about 5.30pm.60

94. Mr Holmes told this Commission that when he had finished the job of

removing documents from the wage claim files and copying what

remained, he took the copies of the filleted files and put them outside

Ms Charlson’s office on a desk. He put the original documents that he

had removed from the files in a separate pile. The following day he

identified these materials to Ms Charlson.61

95. At that time Mr Holmes did not give much more thought to the

incident. He treated it as a job that he had been asked to do, and which

58 Keryn McWhinney, 2/10/14, T:512.35-37. 59 David Holmes, witness statement, 2/10/14, para 14. 60

David Holmes, witness statement, 2/10/14, para 14. 61 David Holmes, witness statement, 2/10/14, paras 15-16.

1359

he had done. He did not regard it as a day that was particularly

different from any other.62

96. Mr Holmes was challenged about this during the course of cross

examination by the CFMEU’s counsel. It was suggested to him that if

he was being asked to remove evidence of a criminal offence from a

file that would have struck him as being something that was wrong

(and thus out of the ordinary). Mr Holmes gave a cogent response. He

said that he did not know why he was being asked to behave as he was.

He said that, for all he knew, the union may have wanted to look at the

documents he selected so that they could be dealt with in some

appropriate way. He was not aware that the documents were being

collated for the purposes of the Slevin inquiry.63 Therefore, he did not

consider that he was being asked to do anything wrong.

97. This is one of many occasions on which Mr Holmes demonstrated his

credit in the face of vigorous attack. He did not suggest anywhere in

his statement, or in his oral evidence, that he had any recollection as to

the contents of any of the documents. He did not suggest anywhere in

his statement, or in his oral evidence, that he could say with any degree

of certainty that the author of the documents he had removed was an

officer or an employee of the CFMEU. He did not seek to embellish

his evidence about any of these matters. He described what he could

actually recall of what he saw and did nothing more. He was not

engaged in a process of seeking to justify, ex post facto, his own

actions. He was, therefore, not faced with the temptation of

62 David Holmes, witness statement, 2/10/14, para 17. 63 David Holmes, 2/10/14, T:501.30-35.

1360

consciously or subconsciously reconstructing events in a manner that

would cast him in the best possible light.

98. Ms Charlson and Ms McWhinney each gave very different accounts

from Mr Holmes of what occurred in mid-February 2014, and who said

what to Mr Holmes in relation to the wage claim file exercise. In turn,

Ms Charlson’s and Ms McWhinney’s accounts are not the same.

99. For reasons that will be explained subsequently, the evidence of Mr

Holmes should be preferred to that of Ms Charlson and Ms

McWhinney. In short, Mr Holmes presented as a more credible

witness, and there were fewer difficulties associated with his evidence

and credit.

Ms Charlson’s credibility

100. As earlier indicated, Ms Charlson was highly intelligent and capable.

She was also quick-witted and eloquent. But she adopted a somewhat

de haut en bas tone towards the junior counsel assisting who conducted

her examination. Unfortunately, it is necessary to say that the virtues

referred to at the start of this paragraph also became testimonial vices,

for they tended to demonstrate a lack of credibility in dealing with

unpleasant circumstances. She was mercurial and unconvincing in

adapting her answers to whatever forensic necessity she perceived.

Events of 10 March 2014

101. Mr Holmes gave evidence that from 18 September 2013 up to 10

March 2014, he had been bullied by Ms Sherri Hayward, a solicitor in

1361

the Branch who worked for Ms Charlson.64 Ms Hayward and Ms

Charlson are more than mere work acquaintances. For example, they

have been out to dinner together on a number of occasions. Ms

Hayward has minded Ms Charlson’s house when the latter went on

holidays.65 Their relationship was certainly much closer than the

relationship either of them had with Mr Holmes.

102. Mr Holmes said that Ms Hayward’s behaviour towards him was such

that he had begun to experience an increased state of anxiety and

stress. This led him to submit a formal bullying complaint in writing

to Ms Charlson, Ms McWhinney and Ms Mallia on 10 March 2014.66

103. The letter ran to a little over 7 pages. It set out Mr Holmes’s

complaints in respect of Ms Hayward’s behaviour in some detail.

Indeed the letter included a table in which Mr Holmes not only

identified the various different categories of behaviour he had

experienced, but also gave examples of behaviour falling within each

of those categories.

104. In her evidence, Ms Charlson was reluctant to accept the proposition

that Mr Holmes’s complaint set out his concerns in some detail. She

avoided answering the question twice, as if wanting to leave room for

manoeuvre, before ultimately accepting that Mr Holmes had, in fact,

64 David Holmes, witness statement, 2/10/14, para 4. 65 Leah Charlson, 24/10/14, T:1068.23-1069.1. 66

David Holmes, witness statement, 2/10/14, para 5 and attachment A.

1362

detailed his complaints in that letter.67 Mr Holmes did not behave this

way when giving evidence.

105. Shortly after Mr Holmes provided his letter to Ms Charlson, he

observed Ms Charlson and Ms Hayward talking together in Ms

Charlson’s office with the door closed. The meeting lasted for about

30 minutes. He suspected, correctly, that the meeting was about his

bullying complaint that had just only been submitted.68

106. Later that day, an email alert came up on Mr Holmes’s computer

screen indicating that Ms Hayward had sent Ms Charlson an email. Mr

Holmes, like all the other staff in the legal team, had access to the

emails of everyone else in the team.69

107. Mr Holmes suspected that the email may have concerned his

complaint. He was curious to find out what it said. He read the email.

He noticed that it attached a list of issues that Ms Hayward had

prepared in respect of Mr Holmes’s work performance.

108. The email was entitled ‘List’ and commenced, without any preamble or

explanation, ‘I have attached my list of issues.’70

109. That email was sent by Ms Hayward to Ms Charlson at 12.36pm.

67 Leah Charlson, 24/10/14, T:1068.3-19. 68 David Holmes, witness statement, 2/10/14, para 6. 69

David Holmes, witness statement, 2/10/14, paras 6-7. 70 David Holmes, witness statement, 2/10/14, attachment B.

1363

110. Later that same day, Ms Hayward sent an email to a friend of hers in

which she indicated that Mr Holmes made a formal complaint of

bullying against her. She made the following statement:71

We have to go through a whole process now which is fucked and exactly what I need at the moment. Leah says I have nothing to worry about but its [sic] really screwing me up. (emphasis added)

111. Ms Charlson did not deal with this matter in her statement. She must

have appreciated it was not something which a person involved in an

investigation of Mr Hayward’s conduct should have said before it was

complete. It prejudged the matter.

Ms Charlson’s version of the events of 10 March 2014

112. Ms Charlson said in paragraph 9 of her statement that she had a

conversation with Ms Hayward on the morning of 10 March 2014. In

it Ms Hayward said that she had had a really bad weekend. She then

volunteered, without having yet heard of Mr Holmes’s bullying

complaint, that she could understand how her conduct towards Mr

Holmes could be perceived by him as bullying. This, according to Ms

Charlson, gave her the entrée into telling Ms Hayward that Mr Holmes

had just made a formal complaint of bullying. Ms Charlson says that,

at this point, her discussion with Ms Hayward simply ended, with Ms

Hayward asking her nothing about Mr Holmes’s complaint, Ms

Charlson not telling her anything about the substance of that complaint,

and the two of them not discussing the preparation by Ms Hayward of

a list of concerns about Mr Holmes. This was a remarkably short

conversation.

71 David Holmes, witness statement, 2/10/14, attachment C.

1364

113. That version of events is an unlikely one.

114. It would be a remarkable coincidence if, just after Ms Charlson

received a formal and detailed complaint of bullying from Mr Holmes

on 10 March 2014, Ms Hayward would suddenly present herself in Ms

Charlson’s office, have a chat about the weekend, and happen to

volunteer (against her own interests) that she had been considering

whether she had been bullying Mr Holmes.

115. Ms Charlson’s evidence did not demonstrate that, prior to this meeting

on 10 March 2014, Ms Charlson had told Ms Hayward that Mr Holmes

had accused her of bullying him. That makes the coincidence all the

more difficult to accept.

116. According to Ms Charlson, there had been some communications on

the previous Friday, 7 March 2014. However, even on her own

account of those conversations, Ms Hayward was not told that Mr

Holmes thought that she was bullying him.

117. The relevant alleged prior conversation is set out in paragraph 6 of Ms

Charlson’s statement. That evidence is that on 7 March 2014:72

(a) Mr Holmes said to Ms Charlson that Ms Hayward’s stress was

affecting him;

(b) Ms Charlson, Ms Wray and Ms Hayward later discussed a

number of matters relating to Mr Holmes’s performance;

72 Leah Charlson, witness statement, 24/10/14, para 6.

1365

(c) in that conversation, Ms Charlson told Ms Hayward in passing

that Mr Holmes had said that Ms Hayward’s stress was affecting

him; and

(d) Ms Charlson asked Ms Hayward to prepare a list of complaints

about Mr Holmes.

118. On no view of this evidence could the alleged passing comment from

Ms Charlson to Ms Hayward on 7 March 2014 have been taken by Ms

Hayward as an indication that Mr Holmes had complained that she was

bullying him. On Ms Charlson’s own account, it was no more than an

indication that Ms Hayward’s stress was affecting Mr Holmes. That is

an entirely different proposition from a proposition that Ms Hayward

was bullying Mr Holmes.

119. When the implausibility of the version of events set out in paragraph 9

of Ms Charlson’s statement was put to her, particularly given the

content of paragraph 6 of her statement,73 Ms Charlson then began to

shift her emphasis and suggest that, whilst she did not recall using the

word ‘bullying’ in this conversation of Friday 7 March 2014, she may

well have done so,74 and that as a result, it might have been the case

that on that Friday Mr Holmes had spoken to Ms Charlson in terms that

he had indicated that he had a concern about being bullied by Ms

Hayward.75

73 Leah Charlson, 24/10/14, T:1069ff. 74 Leah Charlson, 24/10/14, T:1070.22ff, . 75

Leah Charlson, 24/10/14, T:1071.34-37, 1074.7-13.

1366

120. If that is right, the sequence of events is that Mr Holmes first

complained about bullying and asked Ms Charlson to help him, that

subsequently Ms Hayward complained about Mr Holmes’s

performance and was immediately warned by Ms Charlson that Mr

Holmes had been complaining about her, and that there then followed a

request from Ms Charlson to Ms Hayward to put her concerns about

Mr Holmes in writing.

121. On this basis, regardless of whether that sequence of events occurred

on Friday 7 March 2014 or Monday 10 March 2014, the position

would be that Mr Holmes’s bullying concerns were raised first in time,

and that when Ms Hayward was put on notice of it by Ms Charlson, the

idea of Ms Hayward preparing a list of concerns about Mr Holmes was

discussed between Ms Charlson and Ms Hayward. This was the very

impression that Ms Charlson had been seeking to avoid by setting

matters out in the sequence she did in her statement. However, by

changing emphasis in the manner described above in order to deal with

the implausibility of paragraph 9 of her statement (as described above),

that impression was again emerging.

122. When that was put to Ms Charlson during her examination, she sought

to retreat from the proposition that there may have been a conversation

about bullying on Friday 7 March 2014, and that instead his complaint

had been ‘much, much milder’.76 By retreating in this way, she was

again exposing the inherent implausibility of the conversation as

described in paragraph 9 of her statement.

76 Leah Charlson, 24/10/14, T:1072.31.

1367

123. Although she was not prepared to accept it, in the witness box, Ms

Charlson was seeking to shift the emphases in her evidence over time,

in order to deal with the immediate problem that confronted her in

relation to any question.77

124. A further difficulty with Ms Charlson’s evidence as to her conversation

with Ms Hayward on 10 March 2014 is that she invites acceptance of

the proposition that, when she did tell Ms Hayward that Mr Holmes

had lodged a formal complaint of bullying, Ms Hayward did not even

ask her what the complaint was about, and the entire conversation on

that subject came to an end.78

125. According to Ms Charlson, on the morning of 10 March 2014, Ms

Hayward was more composed, did not appear to be distraught about

the fact of the complaint and asked no more about it.79 This was,

apparently, in contrast to her condition on the previous Friday, 7 March

2014, when, in respect of precisely the same individual (Mr Holmes),

Ms Hayward was described as crying and being very upset.80

126. It was then put to Ms Charlson that there must have been more to her

conversation with Ms Hayward on 10 March 2014 because only

shortly after that conversation, Ms Hayward had sent an email to one

77 Leah Charlson, 24/10/14, T:1072.38-45. 78 Leah Charlson, 24/10/14, T:1078.34-1079.9. 79

Leah Charlson, 24/10/14, T:1078.14-28. 80 Leah Charlson, witness statement, 24/10/14, para 6.

1368

of her friends telling her that ‘Leah says I have nothing to worry

about’.81

127. Ms Charlson’s answer was to say that she thought there may have been

another conversation on the same day where she said to Ms Hayward ‘I

don’t think you need to be overly concerned’.82 She did not mention

this conversation in her statement.

128. Ms Charlson was not prepared to accept that, having seen from Ms

Hayward’s email of 10 March 2014 recording Ms Charlson having told

her she had nothing to worry about in relation to Mr Holmes’s

complaint, Mr Holmes would have been concerned about whether his

complaint was going to be dealt with properly and fairly.83 This was

an illuminating illustration of Ms Charlson’s inability to deal openly

and credibly with the events the subject of her evidence.

129. Ms Charlson was then asked whether she thought it was appropriate for

her to be saying to Ms Hayward, the subject of a bullying complaint,

that she, who was responsible for investigating that complaint, did not

seem to be overly concerned, before any investigation into the

complaint had been undertaken. She endeavoured to justify her

behaviour by saying that she spoke to Ms Hayward in this way because

she was very unstable and very upset.84

81 Leah Charlson, 24/10/14, T:1079.14; David Holmes, witness statement, 2/10/14, attachment C, p 3. 82

Leah Charlson, 24/10/14, T:1079.17-18. 83 Leah Charlson, 24/10/14, T:1081.31-1082.16. 84

Leah Charlson, 24/10/14, T:1079.20-23.

1369

130. Again, Ms Charlson’s evidence had begun to move about and modify

itself in order to suit the particular question in front of her. Having

explained away the remarkably short conversation in paragraph 9 of

her statement on the grounds that Ms Hayward was not distraught, she

then endeavoured to excuse her own behaviour in providing an

assurance to Ms Hayward about Mr Holmes’s bullying complaint on

that same morning on the ground that Ms Hayward was very upset.

131. Ms Charlson’s evidence on these matters was unsatisfactory. The

probabilities are that the relationship between Ms Hayward and Mr

Holmes prior to 10 March 2014 was not a particularly happy one. For

his part, Mr Holmes felt that he was being bullied, and on 10 March

2014 made a formal complaint about that matter and provided with Ms

Charlson with a copy of it. Ms Charlson’s reaction to the receipt of

that complaint was to have a private meeting with Ms Hayward during

which she told Ms Hayward about the fact of the complaint and said to

Ms Hayward that she had nothing to worry about, and the two of them

then discussed the preparation of a list by Ms Hayward setting out a

series of performance concerns with respect of Mr Holmes.

Mr Holmes’s document of 11 March 2014

132. Regardless of the precise sequence of events on 10 March 2014, there

is no doubt that Mr Holmes intercepted and read a copy of Ms

Hayward’s email of that day to Ms Charlson, and the attached list of

concerns about his performance.

1370

133. Mr Holmes took that matter seriously. He set about preparing a

document with his responses to each of the grounds of concern set out

in Ms Hayward’s list.85

134. Mr Holmes completed that document on 11 March 2014. On that day

he attended a meeting with Ms Mallia, Ms Wray and Mr Kesby during

which his bullying complaint and his performance were discussed.86

At that meeting, Mr Holmes handed over a copy of the document

prepared in response to Ms Hayward’s list of concerns.87

135. One of the matters Ms Hayward raised in her list of concerns was that

Mr Holmes was accused of having extended absences away from his

desk. Mr Holmes endeavoured to deal with that in his responsive

document. Mr Holmes set out in his document examples of occasions

where he had been required to be away from his desk for extended

periods of time.

136. One of the occasions was the occasion in mid-February 2014 where he

had been called upon by Ms Charlson to go through the wage files,

remove certain documents and photocopy the balance.

137. In relation to that matter, he stated in his document of 11 March 2014

as follows:88

In or about mid-February 2014 … I was required to drop all other tasks for the entire day to search, copy and remove any incriminating or unpalatable

85 David Holmes, witness statement, 2/10/14, paras 10-11. 86 David Holmes, witness statement, 2/10/14, para 19. 87

David Holmes, witness statement, 2/10/14, para 20. 88 David Holmes, witness statement, 2/10/14, attachment D, p 3, item d.

1371

material from the Wage Claim files relating to Active Labour and the legal manifestations of same.

This entailed taking the entire day away from my desk, both for privacy with respect to the task and because the photocopier unit in the level 1 print room was being repaired.

138. As earlier pointed out, the fact that he recorded this in his document of

11 March 2014 is a powerful near contemporaneous indicator of the

fact that such an instruction had been given.

139. Mr Holmes’s account of this matter in this document was not intended

to damage the union in any way. He was responding, in a fairly

mechanical fashion, to a range of concerns that had been raised in

relation to his performance. He was doing no more than explaining

why it was he had been away from his desk on a particular day. The

actual activity he conducted at that time was not a matter of particular

concern to him.

The lack of response to the 11 March 2014 document

140. At an early stage in the evidence there appeared to be a three week

delay in Ms Charlson’s response to Mr Holmes’s 11 March 2014

document - for it was not until 2 April that she had a discussion with

Ms McWhinney about it. When Ms Mallia received Mr Holmes’s 11

March 2014 document, she read through it. She then had a discussion

with Ms Wray and Ms Charlson about how to resolve the issue. She

regarded the allegation in relation to what Mr Holmes had been asked

to do in mid-February 2014 as a serious one. She gave clear evidence

in her statement that Ms Charlson’s attention was drawn to the

1372

allegation on 11 March 2014.89 She said she gave Ms Charlson a copy

of Mr Holmes’s document on 11 March 2014 and asked Ms Charlson

to follow it up.90 In her oral evidence, Ms Mallia confirmed that she

left the matter with Ms Charlson to deal with.91

141. At the same time Ms Mallia’s statement to the above effect was

delivered to the Commission, the CFMEU also delivered a statement

from Ms Charlson. In paragraph 18 of that statement Ms Charlson

said that to the best of her recollection, it was during the week

commencing 10 March 2014 that she became aware of Mr Holmes’s

response and the allegation about the instruction of mid-February

2014.92 This is entirely consistent with Ms Mallia’s evidence. It also

creates the three week delay problem.

142. Ms Charlson was overseas when Ms Mallia was examined at the

Commission. One of the serious matters raised for Ms Mallia’s

attention during that examination was the fact that no action appeared

to have been taken in respect of Mr Holmes’s allegation in his 11

March 2014 document in relation to the February 2014 instruction for

some three weeks.93

143. On 24 October 2014, when Ms Charlson came to be examined, she

immediately indicated a desire to change her witness statement by

altering the date 10 March 2014 to 25 March 2014, thus reducing that

89 Rita Mallia, witness statement, 2/10/14, para 8. 90 Rita Mallia, 2/10/14, T:549.16-552.3; Rita Mallia, witness statement, 2/10/14, para 8. 91

Rita Mallia, 2/10/14, T:551.1-20. 92 Leah Charlson, witness statement, 24/10/14, para 18. 93

Rita Mallia, 2/10/14, T:550.43ff.

1373

three week delay to a smaller (albeit still revealing) lapse in time

between her alleged discovery of the allegation and the taking of any

action.

144. She attempted to explain this change in position by reference to a

photocopy of one of the many copies of Mr Holmes’s 11 March 2014

document which contained upon it handwriting to the effect that the

document had been received on 25 March 2014.

145. Ms Charlson’s revised evidence (which conveniently narrowed the

three week delay by a significant period) is entirely at odds with Ms

Mallia’s evidence on this matter as set out above.

146. The most likely explanation is that Ms Mallia did provide Ms Charlson

with a copy of Mr Holmes’s document on or about 11 March 2014. In

this regard, Ms Charlson was the Senior Legal Officer of the Branch.

It is thus likely that Ms Mallia would have provided her with a copy of

the document straight away. Ms Mallia indicated that she was, at the

time, going to be interstate for the next two weeks.94 This makes it

more likely that she would have given the document to Ms Charlson to

deal with in her absence.

147. It may well be that Ms Charlson received more than one copy of the

document. She may have received a copy on 25 March 2014 and made

a notation on it. That does not mean that she did not also receive a

copy on 11 March 2014.

94 Rita Mallia, 2/10/14, T:551.1.

1374

148. On balance, Ms Charlson’s evidence to the effect that she received Mr

Holmes’s document on 25 March 2014 should not be preferred to the

evidence of Ms Mallia. Ms Charlson was endeavouring to reconstruct

what must have occurred with the aid of a document that had the

handwritten date on it. However that clashed with her own initial

independent recollection of what occurred, as set out in paragraph 18

of her statement as produced. She was overly anxious to accept a

reconstruction of events in which the date of paragraph 18 was 25

March 2014 and not 10 March 2014 because she was aware of the

difficulties created by the three week delay.

149. In any event, whether the date she first received Mr Holmes’s

document was 10 March 2014 or 25 March 2014, it appears that Ms

Charlson did nothing about it until, by chance, she had a discussion

with Ms McWhinney on 2 April 2014.95 This period of delay on Ms

Charlson’s part, whether that delay be one of three weeks or some

shorter period, suggests that she preferred to sit on the matter rather

than undertake any real investigation into it. This is consistent with her

recognition of the fact that she had given the instruction to Mr Holmes

in mid-February 2014.

150. According to Ms Charlson, when she received the document she was

‘very concerned’ and later said to Ms McWhinney and Mr Holmes

‘My heart stopped when I read this and I’m sure Keryn’s did too’.

That evidence is inconsistent with the fact that Ms Charlson did not, in

fact, take action when she received the document. Her evidence as to

these matters should not be accepted. The only thing that concerned

95 Leah Charlson, witness statement, 24/10/14, para 19; Leah Charlson, 24/10/14, T:1084.18-20.

1375

Ms Charlson when she read Mr Holmes’s document of 11 March 2014

was that he had recalled the instructions she had given him in mid-February 2014.

151. This was put to Ms Charlson at a time when she had already changed

her evidence as to the date of receipt of Mr Holmes’s 11 March 2014

document, though she had to pay the price of giving evidence

conflicting with Ms Mallia on the point. Ms Charlson then attempted

to go even further by raising some doubt as to whether she even read

the document on 25 March 2014, and suggesting the possibility that

she did not read it until some later date.96

152. Ms Charlson was a highly professional and experienced solicitor. It is

most unlikely that the 11 March 2014 document would have been

provided to Ms Charlson, with its serious allegation about file

alteration, in a manner which would have led Ms Charlson to be

unaware of its contents on the date she received it. The document

raised a serious matter that was troubling the Branch President. It is

inherently unlikely that this would not have been drawn to Ms

Charlson’s attention either at or before the time when the document

was given to her. Ms Charlson’s own statement constitutes evidence

that she was aware of the issue on receipt of the document.97 Again,

the shifting nature of Ms Charlson’s evidence was unimpressive.

96 Leah Charslon, 24/10/14, T:1092.7-16. 97 Leah Charlson, witness statement, 24/10/14, para 18.

1376

The 2 April 2014 conversation

153. The next significant event took place on about 2 April 2014. On that

day Mr Holmes, Ms Charlson and Ms McWhinney discussed Mr

Holmes’s claim about the instruction he received in February 2014.

154. According to Mr Holmes, at this meeting, Ms Charlson tried to suggest

that she had not given the instruction. She raised for consideration the

possibility that Ms McWhinney may have done so. Mr Holmes’s

evidence is that he then said to Ms Charlson ‘The instruction came

from you. Keryn had nothing to do with it’. To this, Ms Charlson said

‘We’ll have to sort this out later’.98

155. Ms Charlson was prepared to accept that, during this conversation,

they did talk about the fact that Mr Holmes had been asked to ‘separate

out the documents which we needed to look at more closely’.99

Similarly, in paragraph 20 of her statement, Ms Charlson accepted that

Mr Holmes said at this meeting that his instruction was to remove

documents from the files and put them in a separate pile.100

156. The fact that Ms Charlson was prepared to accept that there were

conversations in which reference was made to Mr Holmes being asked

to separate out the documents supports a finding that that is, in fact,

what Mr Holmes was told to do.

98 David Holmes, witness statement, 2/10/14, para 21. 99 Leah Charlson, witness statement, 24/10/14, para 19. 100

Leah Charlson, witness statement, 24/10/14, para 20.

1377

157. There is, in fact, little in the way of difference between Mr Holmes’s

account of the 2 April 2014 conversation and that of Ms Charlson, save

that Ms Charlson’s version is worded to create the impression that the

instruction given to Mr Holmes in mid-February 2014 had come from

Ms McWhinney (and not Ms Charlson). Ms Charlson’s account of this

conversation of 2 April 2014 cannot be preferred to that of Mr Holmes.

It is probable that the instruction was given by Ms Charlson, not Ms

McWhinney.

158. Ms McWhinney gave a substantially different version of the 2 April

2014 conversation, thus immediately raising concerns as to its

reliability. According to Ms McWhinney, Ms Charlson said that Mr

Holmes had already told her (prior to this conversation) that Ms

McWhinney had instructed him to ‘remove and destroy’ documents

from the wage claim files.101 This should not be accepted. No other

witness suggested that Mr Holmes had been instructed to destroy

documents, or had told anyone that he had been asked to destroy

documents. Indeed Ms McWhinney’s own email correspondence of

the time does not indicate it was ever suggested that Mr Holmes had

been instructed to destroy documents.102 Ms McWhinney’s evidence

embellished the contemporary record.

159. Ms McWhinney endeavoured to advance the proposition that Mr

Holmes remained mute during the whole of this conversation, even

101 Keryn McWhinney, witness statement, 2/10/14, para 20. 102 Keryn McWhinney, witness statement, 2/10/14, annexure KMW2 (p 9).

1378

though the matter concerned a significant statement that he had made

that was now under consideration.103 This is not credible.

160. For these reasons, Ms McWhinney’s account of the 2 April 2014

meeting should not be accepted.

The 2 April 2014 email and the related conversation

161. Ms McWhinney, Ms Charlson and the CFMEU place reliance upon an

email dated 2 April 2014 from Ms McWhinney to Ms Charlson.104

162. The polite characterisation of this email is that in it Ms McWhinney

asserted that Mr Holmes had said various things in a private discussion

between the two of them. The blunt characterisation is that she

verballed him. According to that email, Mr Holmes told Ms

McWhinney that her instruction was not about financial arrangements

and, in his opinion, ‘my instruction’ was about copying relevant wage

claims and internal file notes and identifying any areas of bad

behaviour like robust or offensive language.

163. The email sets out an over-decorated version of the conversation of Ms

McWhinney and Mr Holmes. It was prepared by Ms McWhinney for

the purpose of protecting the position of the CFMEU. The fact that she

had no confidence in its accuracy is evident from her decision not to

copy Mr Holmes in on the email or not to ask him, ever, whether he

agreed that the email accurately recorded what he had said.

103 Keryn McWhinney, witness statement, 2/10/14, paras 20-23. 104 Keryn McWhinney, witness statement, 2/10/14, annexure KMW2.

1379

164. It is quite likely that Mr Holmes did say to Ms McWhinney that he had

been instructed to remove offensive documents from the wage claim

files, and in this respect, what is set out in the email of 2 April 2014 is

not controversial.

165. However, the adornments include matters such as the assertion that the

instruction came from Ms McWhinney and not Ms Charlson, and the

suggestion that the instruction would not have extended to ‘financial

arrangements’. Indeed the statement in the email ‘my instruction was

not about financial arrangements’ does not make much sense. It is not

at all clear what this means. Nor is at all clear how it could be that the

alleged instruction from Ms McWhinney could have ever been

understood to have had that carve out.

166. Whatever the purpose of the 2 April 2014 email, it would seem that

neither Ms McWhinney nor Ms Charlson wanted Mr Holmes to

consider and assess its accuracy or otherwise. This may be inferred

from the fact that neither of them were prepared to send it to Mr

Holmes for his consideration. It was simply filed away.

Incomplete records observed by Mr Slevin and others

167. On 4 March 2014, Taylor & Scott, the solicitors acting on instruction

from officers of the NSW Branch, sent Mr Michael O’Connor and Mr

Thomas Roberts of the CFMEU’s National Office a copy of the

documents that they had retrieved in response to Mr Slevin’s

1380

request.105 This included the incomplete copy of the wage claim files

that Mr Holmes had prepared for Ms Charlson.

168. Further, documents were then provided by Taylor & Scott to Mr

O’Connor on 18 March 2014. None of those documents were

documents from any wage claim file.106

169. On 10 April 2014, Mr O’Connor wrote back to Taylor & Scott noting

the limited information that had been provided in relation to the wage

claims and asking if there were any other documents available.107

Taylor & Scott responded by letter of 24 April 2014 noting that the

Branch had not been able to find any other documents of that kind.108

170. In his report, Mr Slevin made various observations in relation to the

incomplete state of certain wage claim records.109

105 Roberts MFI-1, 23/9/14, p 47. 106 Roberts MFI-1, 23/9/14, p 75. 107

Roberts MFI-1, 23/9/14, p 166. 108 Roberts MFI-1, 23/9/14, p 168. 109

Roberts MFI-1, 23/9/14, p 213.

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Returning to the competing evidence as to the February 2014 instruction

171. Earlier it was concluded that Mr Holmes’s evidence in relation to the

events of mid-February 2014 should be preferred to that of Ms

Charlson and Ms McWhinney. The additional reasons for this

advanced by counsel assisting are set out below. Then the submissions

of persons other than Mr Holmes will be considered.

Mr Holmes

172. The Holmes version of events has already been described.

173. Mr Holmes presented as a witness of truth. He did not prevaricate in

the witness box. He did not seek to give overly clever, contrived,

lengthy, or non-responsive answers to the questions he was asked. He

did not present an embellished account of events. For example, he did

not pretend that he could recall the contents of any of the documents he

removed from the files. His version of events was corroborated by a

near contemporaneous record, being his document of 11 March 2014.

That document was not created to harm the union, and the record he

made of the instruction served no great purpose at the time. It merely

recorded one of a large number of occasions where he had been

required to do work away from his desk.

1382

Ms Charlson

174. Ms Charlson’s evidence was that she did not give any instruction to Mr

Holmes, and merely asked him to give Ms McWhinney whatever help

she required in responding to Mr Slevin’s request.110

175. Ms Charlson’s evidence and performance in the witness box was

unsatisfactory. As explained at various different points above, Ms

Charlson presented as a talented but not particularly credible witness.

Her evidence appeared contrived. Under examination she continually

sought to change the shade of her evidence to suit the immediate

question before her. Examined as a whole, the tone and tint of these

shades are clashing, not harmonious.

Ms McWhinney

176. Ms McWhinney said in paragraph 14 of her statement that she said to

Mr Holmes:111

I’m going to take you through what you need to do concerning the request for production of documents. The two companies are Elite Scaffolding and Active Labour. We want only the types of documents from the files that I have marked in yellow on the documents request, for example, spreadsheets, anything relating to Cbus and ACIRT, correspondence and emails, company searches, any other type of calculations, employee lists and receipts. This will be just about all the documents in a wage claim file. You will need to keep the documents in two separate bundles being the original files and the copy files. Do you understand?

177. Ms McWhinney said that Mr Holmes indicated he understood this

request, but that after a couple of hours she found that Mr Holmes was

110 Leah Charlson, witness statement, 24/10/14, paras 16-17. 111 Keryn McWhinney, witness statement, 2/10/14, para 14.

1383

confused and not doing the task properly. As a result, she just asked

him to photocopy the files.112

178. There are a number of problems associated with Ms McWhinney’s

evidence. Some have already been described in earlier parts of these

submissions. Additional difficulties are set out below.

179. First, as earlier noted, Mr Slevin’s request was simple enough. It was a

call for the wage claim files for Active Labour and Elite Scaffolding.

Ms Charlson understood that. All that it required was for the files to be

pulled from the shelves and sent to Mr Slevin. There was no need for

the elaborate instruction Ms McWhinney claims she gave.

180. The alleged instruction to Mr Holmes described in paragraph 14 of Ms

McWhinney’s statement, if made, was quite bizarre. According to her,

the specific kinds of documents she says she listed out to Mr Holmes

were, in essence, all of the documents that she expected the wage claim

files would contain. If that were so, why give an instruction in those

terms in the first place? Why not just get the files and pass them on?

Ms McWhinney did not offer any explanation in her statement as to

why she would have said what she alleges she said.

181. When examined, Ms McWhinney changed her evidence as to the terms

of the alleged conversation with Mr Holmes. She asserted that her

instruction was to remove anything from the files that did not relate to

112 Keryn McWhinney, witness statement, 2/10/14, para 16.

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Active and Elite and which had been accidentally included in the wage

claim files for those companies.113

182. This new version in Ms McWhinney’s oral evidence was

unimpressive.

183. First, it represented a different account of the alleged conversation to

that set out in paragraph 14 of Ms McWhinney’s statement. The

conversation described in her statement was to the effect that she had

highlighted particular kinds of documents on Mr Slevin’s list of

documents and only wanted Mr Holmes to copy those documents.

However, now she described a different kind of conversation, in which

Mr Holmes was effectively instructed to copy the contents of the wage

claim files, save for any document that might have been misfiled.

184. Secondly, the new version is not believable. In the ordinary course of

events, the file would be expected to contain the appropriate records.

The fact that there might be a rare misfiling of a document would be a

matter of no real consequence. It would not have given rise to any

concern. It certainly would not have given rise to a concern that would

have led Ms McWhinney to think it necessary to task anyone to sift

through all of the files in search of a piece of paper that just might have

been misfiled.

185. There were other problems with Ms McWhinney’s evidence.

186. One example is that the version of the instruction set out in her

statement proceeded on the basis that she gave Mr Holmes a copy of

113 Keryn McWhinney, 2/10/14, T:515.19-24.

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Mr Slevin’s document request with certain kinds of documents

highlighted, and that he was only to search for those highlighted

documents in the wage claim files (even though that was not what Mr

Slevin had asked for). The highlighted categories included emails and

audits. She also said that, in her oral instruction, she told Mr Holmes

to locate correspondence, emails and other categories of documents

from the wage claim files.

187. However, in her examination, Ms McWhinney said that wage claim

files were just clerical or administrative files that would only contain

spreadsheets,114 and would not contain emails from the officers who

were working on the files.115 She was not able to give a credible

explanation as to why she would have asked Mr Holmes to locate and

copy documents in the wage claim files of a kind which, according to

her, would not be on those files.116 This suggests that the conversation

Ms McWhinney described in her statement did not take place.

188. From time to time Ms McWhinney showed discomfort in having to

answer questions, and displayed a strong desire to refer back to and

rely on her statement in lieu of giving a direct answer to the

questions.117 This indicated her lack of confidence in her ability to

stick to the version of events that had been put in her statement. It

indicated her fear that she would say something inconsistent.

114 Keryn McWhinney, 2/10/14, T:519.20-24. 115 Keryn McWhinney, 2/10/14, T:519.24-26. 116

Keryn McWhinney, 2/10/14, T:536.30-39. 117 Keryn McWhinney, 2/10/14, T:514.1, 515.35.

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189. There was another unimpressive aspect of Ms McWhinney’s evidence.

She stated that Mr Holmes had allegedly been given a very simple

instruction to take out of the wage claim files documents that did not

relate to the companies in question. But she stated that that instruction

was ‘a bit too difficult for him to understand’. She said Mr Holmes

had been confused about what he was supposed to be doing.118

190. Mr Holmes gave evidence in a calm and considered way. He

expressed himself in terms which indicated reasonable intelligence.

The fact of his intelligence is also obvious from the terms of the

documents he prepared on 10 and 11 March 2014. Ms Charlson

attacked these propositions by contending that Mr Holmes was in poor

physical and mental health.119 That contention does not refute them.

The suggestion by Ms McWhinney that Mr Holmes is someone who

would not be capable of understanding a simple request of the kind Ms

McWhinney says she gave is not credible. The event she described did

not occur. Her evidence on this particular topic was condescending,

and unpleasant. It was untrue.

118 Keryn McWhinney, 2/10/14, T:517.28, 518.45-46. 119 Ms Leah Charlson’s submissions, 19/11/14, para 52.

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The submissions of the CFMEU and Ms Charlson

191. The CFMEU submitted that this matter is outside the Terms of

Reference.120 Ms Charlson supported the submission.121 The CFMEU

submitted that the question of what occurred in February 2014 is at

best tangential to the Alex case study referred to in Chapter 8.5. The

conduct is at least within para (k), as reasonably incidental to the Alex

case study, which it is accepted is within the Terms of Reference.

192. The CFMEU also submitted that even if the matter were within the

Terms of Reference, it should be left for resolution at the same time as

the Alex issue.122 However, factually the February 2014 inquiry seems

to be complete from the evidentiary point of view. Hence, it may as

well be dealt with now.

193. Turning to factual questions, Mr Holmes, not surprisingly, supported

the submissions of counsel assisting.123

194. Ms Charlson began her submissions by relying on Briginshaw v

Briginshaw.124 It is understandable that she did so. It is a serious thing

for a solicitor to suppress documents. Ms Charlson also relied on

120 CFMEU submissions, 14/11/14, Pt 8.6, paras 14-18. 121 Ms Leah Charlson’s submissions, 19/11/14, paras 2, 113. 122

CFMEU submissions, 14/11/14, Pt 8.6, para 18. 123 Mr Holmes’s submissions, 13/11/14, paras 1-3. 124

(1938) 60 CLR 336.

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Wilson v Foxman in support of the proposition that human memory of

conversations is fallible.125

195. The CFMEU’s written submissions126 boil down to four points. One is

that Mr Holmes has a motive to make accusations against Ms Charlson

because she criticised his work on 28 August 2014.127 Although this

charge was specifically denied by Mr Holmes,128 Ms Charlson also

supported this.129 The second point is that, when considered alongside

other witnesses, Mr Holmes is ‘simply unreliable’130 and ‘vague’.131

The third is that Mr Holmes’s evidence that he spent a day removing

100-150 documents, but cannot recall one of them is incredible.132 The

fourth is that it is:133

inherently unlikely that people in the position and with the standing of Ms McWhinney and Ms Charlson, a senior lawyer, would have taken Mr Holmes into their confidence and asked him to remove documents from files in circumstances where he would have to exercise his judgment about the nature and import of the documents and where that activity was designed to deceive the person who had sought the files and documents.

196. To those considerations, Ms Charlson added another - Mr Holmes’s

distress, deteriorating health and lack of ability to function normally,

125 (1995) 49 NSWLR 315 at 318. 126 Various oral submissions made by the CFMEU correspond with some of those made by Ms Charlson: J Agius SC, T:15.29-21.14. 127

CFMEU submissions, 14/11/14, Pt 8.6, para 21. 128 David Holmes, 2/10/14, T:508.21-27. 129

Ms Leah Charlson’s submissions, 19/11/14, paras 47-50. 130 CFMEU submissions, 14/11/14, Pt 8.6, para 34; see also para 29. 131

CFMEU submissions, 14/11/14, Pt 8.6, para 35. 132 CFMEU submissions, 14/11/14, Pt 8.6, paras 30, 34. 133

CFMEU submissions, 14/11/14, Pt 8.6, para 35.

1389

putting in doubt his ability to record accurately oral statements, and

leading to the conclusion that he is the victim of a misunderstanding.134

197. There is a tension between these five points. Unreliability, vagueness

and ill health fall into one category. Motives to accuse, lack of

credibility and inherent unlikelihoods fall into another. There is no

reason at all to conclude that Mr Holmes was lying, whether because

motivated by hatred or any other considerations. That leaves

unreliability. It is necessary to compare Mr Holmes’s reliability with

that of others. That comparison is favourable to Mr Holmes.

198. Ms Charlson’s submissions, incidentally, exaggerated Mr Holmes’s

health difficulties. The submissions quoted the following words about

himself from his letter of 10 March 2014 to the effect that he had been

‘unable to complete basic work tasks, spelling simple words and have

even had trouble remembering [his] own name’.135 The submission

then spoke of Mr Holmes’s ‘profound problems’.136 But the

submissions omitted the words preceding that quotation from the 10

March 2014 letter: ‘On receipt of information I have felt so

humiliated; undermined and unwanted that I have been’. In the words

quoted in Ms Charlson’s submissions, Mr Holmes was not offering a

general description of himself. He was describing only his reaction to

particular incidents. The documents he wrote on 10 and 11 March

2014, and the evidence he gave, are quite inconsistent with the words

quoted selectively by Ms Charlson’s submissions.

134 Ms Leah Charlson’s submissions, 19/11/14, para 39. 135 Ms Leah Charlson’s submissions, 19/11/14, para 39. 136

Ms Leah Charlson’s submissions, 19/11/14, para 39.

1390

199. Ms Charlson’s submissions did not explain her tardiness, and that of

the CFMEU generally, in responding to the 11 March 2014 document.

She said she was not responsible for that matter, but that is contrary to

Ms Mallia’s very precise evidence on this point.137

200. Ms Charlson’s submissions stress the absence of any contemporary

record of the February conversation between herself and Mr

Holmes.138 They attack Mr Holmes for his lack of recollection

independently of his document of 11 March 2014.139 But they do not

adequately explain why that document is to be discounted. It is true

the document does not name Ms Charlson, but there is other evidence

that she issued the instruction to Mr Holmes. Ms Charlson drew

attention to the following words in that document: ‘I was required to

drop all other tasks for the entire day to search, copy and remove any

incriminating or unpalatable material.’ Ms Charlson submitted:140

It is difficult to understand why any employee of the CFMEU, such as Ms Charlson, might wish, simultaneously, to withhold documents whilst procuring a copy of them. In the normal course a person who desires to cover up documents does not first create additional copies.

201. This supposed reductio ad absurdum seeks to construe the 11 March

2014 email remorselessly. It construes it to mean that the instruction

was first to copy the whole of the wage claim files and then remove

incriminating or unpalatable material. But Mr Holmes was speaking

informally and not necessarily describing events chronologically. It is

clear that the task was to search the files, remove some material and

137 Rita Mallia, witness statement, 2/10/14, para 8; Rita Mallia, 2/10/14, T:549.22-551.20. 138 Ms Leah Charlson’s submissions, 19/11/14, paras 41, 72. 139

Ms Leah Charlson’s submissions, 19/11/14, paras 45, 75. 140 Ms Leah Charlson’s submissions, 19/11/14, para 73.

1391

copy the balance. Ms Charlson’s submissions about the 11 March

2014 document continued:141

It is equally improbable that the task of selecting “incriminating” documents … was entrusted to someone who had not the training to determine what was, or was not, incriminating; a fortiori when his performance was under review. The far more likely reason why a junior employee was tasked with reviewing the files was that he was engaged upon what ought to have been the comparatively undemanding task of removing documents that had nothing to do with Elite or Active (as Ms McWhinney contends).

202. Mr Holmes may have been a junior employee, and he was, unlike Ms

Charlson and others, not a solicitor. But it takes no legal skill to decide

what was unpalatable. And he had legal training - a fact which Ms

Charlson, rather inconsistently, seeks to invoke to her advantage

elsewhere.142 That legal training would have been of some assistance

in guiding him to decide what was incriminating.

203. Ms Charlson made some specific attacks on Mr Holmes’s credit. She

submitted that he fell into a contradiction. In his oral evidence he said

that because of Ms Charlson’s request in February he had to look at ‘a

lot of documents in a very short amount of time’.143 But in his list of

complaints144 he said this ‘entailed taking the entire day away from my

desk’. Ms Charlson submitted that an entire day is not a ‘very short

period of time’. She attacked his testimony as wrong.145 Attacks of

this level of pedantry tend to support the victim, not the attacker. The

141 Ms Leah Charlson’s submissions, 19/11/14, para 74. 142 Ms Leah Charlson’s submissions, 19/11/14, para 83. 143

David Holmes, 2/10/14, T:502.1-2. 144 David Holmes, witness statement, 2/10/14, Annexure D, para 2(d). 145

Ms Leah Charlson’s submissions, 19/11/14, paras 43-44.

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two statements are not inconsistent. As counsel assisting submitted in

reply:146

The first statement is a relative one. It depends upon a variety of factors. One obvious factor is how many files and documents he was given to deal with in the time. Other factors include how long he had [actually to] review them relative to the other tasks to be attended to in order to carry out the job assigned to him, including arranging for lists of files to be obtained, getting those files located, working his way through the files, copying portions of them, organising the different piles of materials and arranging for files to be returned.

204. The next inconsistency Ms Charlson alleges is that in his statement Mr

Holmes said that he ‘had been raising complaints [about bullying]

informally since October 2013’.147 In his written complaint of 10

March 2014, Mr Holmes said he failed to address bullying.148 Ms

Charlson submitted:149

These two versions are directly contradictory; either Mr Holmes had been complaining for a number of months, (which is denied by Ms Charlson), or he had “failed to address” the matter. Both cannot be true.

205. But the first proposition relates to the informal complaints he made, the

second to the formal complaints he did not make. No inconsistency

was ever suggested in cross-examination.

206. Ms Charlson’s submissions attacked Mr Holmes on the ground that in

the witness box he could not remember what Ms Charlson said to him

in February 2014.150 That evades the point: what could he remember

on 10 March 2014? And the submission misrepresents the effect of

146 Counsel assisting’s written submissions in reply to Ms Charlson, 25/11/14, para 30. 147 David Holmes, witness statement, 2/10/14, para 4. 148

David Holmes, witness statement, 2/10/14, Annexure A (p 2). 149 Ms Leah Charlson’s submissions, 19/11/14, para 46. 150

Ms Leah Charlson’s submissions, 19/11/14, para 49.

1393

David Holmes’s evidence by referring to only a sliver of it. Read as a

whole, his evidence strongly supports the conclusion that he was told

to delete whatever was ‘incriminating or unpalatable’.151

207. The competing submissions on the factual aspects of this case study

were very detailed. There was no crucial issue decisive of the whole

case study. It is a matter of assessing the total effect of the

submissions. In all the circumstances, the submissions of counsel

assisting preferring Mr Holmes’s version are to be accepted.

Conclusions

208. It is more probable than not that Ms Charlson gave Mr Holmes an

instruction in February 2014 to remove documents from wage claim

files that Mr Slevin had asked for. The instruction was to remove, and

not copy for Mr Slevin, documents that Mr Holmes considered to be

incriminating or unpalatable.

209. The purpose of this instruction was to ensure that Mr Slevin and the

National Office were given a sanitised version of the Branch’s records.

The purpose was to reduce the prospect of Mr Slevin finding materials

that might be harmful to the Branch and its officers and employees.

210. Between 100 and 150 documents were removed from the wage claim

files on this basis. Ms Charlson has not been prepared to admit this, or

say what has become of these documents. Nor has any other person

from the CFMEU, except Mr Holmes.

151 David Holmes, 2/10/14, T:499.44-500.24.

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211. It is, therefore, not possible to know what has become of the removed

documents, and whether any of them were, in fact, incriminating, or

otherwise evidenced conduct by officers of the CFMEU falling within

the Terms of Reference.

212. In these circumstances, and particularly given that the wage claim files

concerned Active Labour and Elite Scaffolding, it is not possible to be

confident that all of the documents that were held by the Branch in

mid-February 2014 that bear upon the nature and extent of the

relationship between the CFMEU and its officers with these companies

(and with Mr Alex and his associates more generally) have been

provided to this Commission.

213. This can only be determined when the Branch, through Ms Charlson or

otherwise, identifies the documents that were removed.

1395

1396

UNIVERSAL CRANES

CHAPTER 8.7

Subject Paragraph

A - SUMMARY 1

B - RELEVANT FACTS 5

Smithbridge and Universal Cranes: the background 5

Purchase of Universal Cranes in 2002 13

BERT and CIPQ 19

Discussions following expiry of 2003 EBA term 24

Introduction of workplace agreement in 2006 27

2008 Collective Agreement 35

2012 non-union EBA 39

CFMEU campaign in response 44

Indooroopilly project 48

Attacks in July 2012 61

Threats by Mr Close to Mr Smith in July 2012 67

Attacks in August 2012 70

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Subject Paragraph

August 2012 meeting with Mr Ravbar and others 72

Mr Smith bows to union pressure 74

Mr Close’s rejection of the proposal 81

Request and further threat in September 2012 94

Further attacks in October 2012 99

Rejected offer to sign CFMEU pattern agreement 110

Threats in July 2013 115

Attacks concerning Smithbridge 126

Dealing with the credit of Mr Ravbar and his denials 153

Rejection of CFMEU’s theories as to customers’ behaviour 177

The CFMEU’s submissions 202

C - CONCLUSIONS 206

What does Australian law have to say about the CFMEU’s behaviour? 206

Extortion 206

Count 1 for Mr Ravbar - 8 July 2013 208

Count 2 for Mr Ravbar - 28 February 2014 215

Count 1 for Mr Close - July 2012 223

Count 2 for Mr Close - 14 August 2012 229

Count 3 for Mr Close - 3 September 2012 235

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Subject Paragraph

Breach of s 359 of the Criminal Code Act 1899 (Qld) 244

Breach of s 343 of the Fair Work Act 2009 (Cth) 249

Breach of s 340 of the Fair Work Act 2009 (Cth) 259

Breach of s 228 of the Fair Work Act 2009 (Cth) 271

Breach of s 45E of the Competition and Consumer Act 2010 (Cth) 272

Breach of s 45D of the Competition and Consumer Act 2010 (Cth) 281

A - SUMMARY

1. This chapter concerns the conduct of officers of the Queensland

Branch of the Construction and General Division of the CFMEU

towards companies in a group headed by the Smithbridge Group Pty

Ltd. A reference to Smithbridge Group is a reference to one or more

companies in this group.

2. The officers in question are Mr Michael Ravbar (Branch Secretary)

and organisers Mr Peter Close, Mr Shane Treadaway, Mr Andrew

Sutherland, Mr Michael Robinson and Mr Ben Loakes.

3. Counsel assisting’s submissions to the following effect are accepted.

1399

4. Mr Ravbar and the others pursued a campaign against Smithbridge

Group in order to force companies in that group to enter into enterprise

agreements with the CFMEU on terms which required the companies

to make payments to BERT, BEWT and CIPQ. The campaign

involved CFMEU officials (i) dictating to customers of the

Smithbridge Group that Smithbridge Group be removed from their

sites, and otherwise applying pressure designed to turn those customers

away from Smithbridge Group, and (ii) threatening to kill off

Smithbridge Group through such action unless they signed the union’s

form of enterprise agreement and arranged for all employees to

become union members. In the course of that conduct Mr Ravbar and

Mr Close engaged in a deliberate and protracted campaign of industrial

blackmail and extortion. By so acting, Mr Ravbar and Mr Close may

have committed offences under s 359 and s 415 of the Criminal Code

1899 (Qld). In addition, Mr Ravbar and the other CFMEU officers

referred to above may have contravened s 228, 340 and 343 of the Fair

Work Act 2009 (Cth) and s 45D and s 45E of the Competition and

Consumer Act 2010 (Cth).

B - RELEVANT FACTS

Smithbridge and Universal Cranes: the background

5. Smithbridge Group is managed by Albert Smith. It is owned by the

trustees of his family trust. The company owns shares in various other

corporations that operate in the mobile crane and construction

industries.

1400

6. In relation to the crane businesses, the largest company is Universal

Cranes Pty Ltd (Universal Cranes). It is a wholly owned subsidiary

of Smithbridge Group. The other crane companies in the group are

part-owned by Smithbridge Group and part-owned by the local

managers of those companies. They include Gold Coast Cranes Pty

Ltd, Universal Cranes (Townsville) Pty Ltd, Universal Cranes

(Sunshine Coast) Pty Ltd, Universal Cranes Ballina Pty Ltd and

Universal Mini Cranes Pty Ltd.

7. The construction work of the Smithbridge Group is carried on by

Smithbridge Australia Pty Ltd (Smithbridge).

8. Mr Smith is the managing director of Smithbridge. He is the sole

director of Universal Cranes. He has over 30 years’ experience in

owning and operating businesses in the construction and crane

industries in Australia, New Zealand, Guam, Papua New Guinea and

New Caledonia. His long career in these industries has been

successful.

9. Since 2007 Mr Smith has sat on the National Board of the Crane

Industry Council of Australia, the national peak body for the industry.

He was President of the Queensland branch of that organisation from

2007 to 2011.

10. Mr Smith’s experience in the industry extends to owning and operating

a training school in Queensland. In this regard, he established Lifting

Skills Pty Ltd in 2004 to provide training for crane drivers. That

company is a registered training organisation.

1401

11. Mr Smith was raised and educated in New Zealand. He obtained a

Bachelor of Engineering degree from the University of Canterbury in

1980. After that he moved to Brisbane and worked as a design

engineer on the Gateway Bridge and on the Dalrymple Coal Terminal.

He then worked as an employee of a small construction company. He

started his own construction business in 1982. In the mid 1980’s his

father wished to retire from his crane and construction business in New

Zealand. Mr Smith returned to New Zealand and commenced

managing that business in his father’s place.1

12. At that point the New Zealand business had about 50 employees. Mr

Smith built up the business, and within 3 or 4 years it had more than

100 employees. By early 2001 that number had doubled again. Mr

Smith, despite his relocation to Australia in about April 2002,

continues to operate the crane rental division of that business.2

Purchase of Universal Cranes in 2002

13. Not long after moving to Australia in about April 2002, Mr Smith

purchased the Universal Cranes business from its then owners. By that

time - 2003 - the Universal Cranes business had been in operation for

about 10 years. Mr Smith’s purchase of that business was completed

on 1 October 2003.3

14. Following this purchase, Mr Smith added some additional employees

of his own to the employees of the business. The business has

1 Albert Smith, 4/8/14, T:22.6-24.1. 2 Albert Smith, 4/8/14, T:23.41-44. 3

Albert Smith, witness statement, 4/8/14, para 16.

1402

operated continually in the industry, and the number of workers

employed by it has grown over time. There are now over 300

employees in the various Universal Cranes companies. Universal

Cranes itself has become one of the largest operators in the Queensland

crane market.4

15. Mr Smith and his companies are not ‘fly by night’ operators. They are

genuine and established players in the industry. They have provided

substantial long term employment for a large number of workers.

16. Mr Smith’s unchallenged evidence is that he has taken regular steps to

ensure that employees understand their rights.5 He provides them with

copies of, and explains, proposed employment agreements. He

corresponds with them on a reasonably regular basis to ensure that they

are familiar with their rights. In addition, he organises a weekly

meeting, held every Monday morning, with all employees at every site.

The meeting typically starts as a safety meeting, and then turns to

address any matters concerning employment terms, workplace rights

and workloads.6

17. Mr Smith came to learn, after purchasing the business, that the

previous owners had orally agreed with the CFMEU that the company

would enter into an enterprise agreement with the union and the

company’s employees.7

4 Albert Smith, witness statement, 4/8/14, para 23. 5 Albert Smith, 4/8/14, T:24.42-25.39. 6

Albert Smith, 4/8/14, T:24.42-25.39. 7 Albert Smith, witness statement, 4/8/14, para 19.

1403

18. As Mr Smith was new to the Australian industry and had no experience

with the way in which the CFMEU operated, he did not oppose the

company entering into the EBA. Therefore, in early 2004 Universal

Cranes entered into an EBA with the CFMEU to cover the period from

8 February 2003 to 31 October 2005 (2003 EBA).8

BERT and CIPQ

19. The 2003 EBA obliged Universal Cranes to contribute set amounts per

week per employee into a redundancy scheme called the Building

Employees Redundancy Trust operated by B.E.R.T Pty Ltd (BERT).9

It also contained a term which gave Universal Cranes the option of

either paying particular forms of sick leave or alternatively paying a

premium to CIPQ (an operator of a sick leave and income protection

insurance business) for each employee.10

20. Mr Smith was not familiar with either BERT or CIPQ at the time the

2003 EBA was executed. In due course, however, he came to

understand more about their workings. He formed the view that it was

not in the interests of his business and its workers for payments to be

made to BERT and CIPQ.11

21. Mr Smith undertook some research into the schemes. As part of that

process, he contacted Bill Wallace, the General Manager of BERT.

They met in late 2005 or early 2006. As a result of those discussions

8 Albert Smith, witness statement, 4/8/14, para 20. 9 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 1, p 37. 10

Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 1, p 37. 11 Albert Smith, witness statement, 4/8/14, paras 21, 25, 28.

1404

and his own research and consideration, Mr Smith decided that he did

not want to make contributions to the BERT redundancy scheme or

pay premiums to CIPQ.12

22. Amongst other things, Mr Smith did not approve of the fact that the

interest earned on the BERT members’ redundancy funds was not

added to the members’ accounts. Instead, the earnings of the fund were

taxed at the highest rate in the hands of the fund manager. Much of

what was left over was distributed to the CFMEU to undertake

training. A significant portion of the money so distributed was spent

on administration costs rather than actual training activity.13 All of his

observations were accurate.14

23. He calculated that it was much more cost effective for an employer of

his size to offer a self-funded benefit than to contribute to CIPQ. He

developed an in-house self-funded two year extended sick leave

entitlement scheme. He worked out that he could offer the same

benefits to his employees at a lower cost to the company. His evidence

was: ‘I did my own calculations. All I was trying to do was establish

value for money from the [CIPQ] fund and what I understood to be the

real cost of the benefit and the fee to pay via that, via the [CIPQ] fund,

it was obvious to me it was more economically viable to self insure’.15

12 Albert Smith, witness statement, 4/8/14, paras 25-28. 13 Albert Smith, witness statement, 4/8/14, paras 27-28. 14

See Chapter 5.2 concerning BERT, BEWT, CIPQ and QCTF. 15 Albert Smith, 4/8/14, T:55.41-46; Albert Smith, witness statement, 4/8/14, para 30.

1405

Discussions following expiry of 2003 EBA term

24. When the 2003 EBA expired, he had decided that he did not want

either a BERT clause or a CIPQ clause.

25. Towards the end of the express term of the 2003 EBA, Mr Smith held

various discussions with representatives of the CFMEU about the

possibility of entering into a new EBA with the CFMEU on terms that

did not include these provisions. The union however, would not agree.

26. During this process Mr Smith also spoke with his workers about his

attitude towards BERT and CIPQ, and the alternative self-funded

schemes he wished to put in place. On one occasion he organised an

early morning breakfast meeting that was attended by all of the

workers. He invited representatives from the CFMEU to attend so that

they could present their alternative position to employees. During that

meeting the union representatives became vocal and derogatory

towards Mr Smith. He thought the meeting was degenerating. As a

result, he left the meeting and allowed the union representatives to

speak to his employees about the advantages of having a BERT and

CIPQ clause in their employment terms. On a separate occasion Mr

Smith arranged for someone from the BERT fund to come and speak to

employees.16

Introduction of workplace agreement in 2006

27. Following these information sessions, Mr Smith decided to introduce a

workplace agreement to Universal Cranes employees. That workplace

16 Albert Smith, 4/8/14, T:26.3-29.36.

1406

agreement matched the 2003 EBA terms, but did not include BERT or

CIPQ clauses. Instead it provided for redundancy and sick leave to be

self-funded within the business. The redundancy obligation sat as a

liability on the balance sheet of Universal Cranes. Extended sick leave

was treated as a cost at the time it was incurred. The workplace

agreement also included an innovative shiftwork allowance, greater

RDO flexibility, and a different employee classification system from

that set out in the form of agreement proposed by the CFMEU.17

28. The differences between the CFMEU form of EBA and the workplace

agreement prepared by Universal Cranes were drawn to the attention of

the company’s employees. As noted above, there had been a series of

meetings attended by Mr Smith, CFMEU representatives and a BERT

fund representative for this very purpose.

29. During these meetings and discussions, one of the key points of

difference identified to the employees was the fact that redundancy

payments made into the BERT scheme would be preserved in the

hands of BERT and remain available to employees in the event that

Universal Cranes was wound up in insolvency. By way of contrast,

employees were made aware that this same level of security would not

be available through the redundancy scheme proposed by Universal

Cranes.18

30. Mr Smith offered personal guarantees to his employees in respect of

redundancy entitlements, but the employees were not particularly

interested in taking him up on that offer. He then discovered that the

17 Albert Smith, witness statement, 4/8/14, para 31. 18 Albert Smith, 4/8/14, T:39.10-41.40.

1407

Federal Government provided a guarantee for employees in respect of,

amongst other things, their redundancy entitlements if their employer

was wound up. The employees’ position was therefore protected, even

under the Universal Cranes scheme.19

31. There was debate amongst the employees and then with Universal

Cranes, the CFMEU and others about the various advantages and

disadvantages of the BERT scheme on the one hand and the Universal

Cranes scheme on the other.20

32. It is to be remembered that Mr Smith and Universal Cranes were long

term players in the industry. Mr Smith was not a phoenix operator. He

had a successful track record. For its part, Universal Cranes was an

asset rich business with a large fleet of cranes and other equipment,

and had a balance sheet capable of supporting the redundancy and sick

leave scheme implemented by Mr Smith.21 The business did carry

debt, but was only geared to about 50%.22

33. Having drafted the workplace agreement, Mr Smith then informed

workers of its existence and that they would have the choice of

working under its terms or instead remaining employed under the

terms of the expired 2003 EBA. New employees would be employed

on the terms set out in the workplace agreement.

19 Albert Smith, 4/8/14, T:39.10-41.40. 20 Albert Smith, 4/8/14, T:41.6-29. 21

Albert Smith, 4/8/14, T:40.1-15. 22 Albert Smith, 4/8/14, T:45.7-28.

1408

34. At the time of the introduction of the workplace agreement there were

about 100 employees in the Universal Cranes workforce. Of those,

approximately 20 moved across to the workplace agreement

immediately, on the day it first came available.23 Over time, almost all

of the balance of the existing employees elected to transfer away from

the 2003 EBA terms and take up the workplace agreement conditions.

By the end of 2007 there were only about 6 or 7 employees who

remained employed under the terms of the 2003 EBA.24

2008 Collective Agreement

35. After 2007, an alternative industrial relations regime was introduced

under which an employer could enter into a collective agreement with

its employees. As a result, Mr Smith took steps to introduce a

collective agreement at Universal Cranes.

36. Mr Smith made the CFMEU aware that Universal Cranes wished to

introduce a collective agreement and embark upon a negotiation

process with its employees. The CFMEU and the AWU each gave

notice of their desire to negotiate on behalf of employees, and the

employees were notified of this fact. No employee indicated that he or

she wished for the CFMEU to negotiate the terms of the collective

agreement on their behalf.25

37. As with the earlier workplace agreement, prior to the employees

deciding whether or not to accept the terms being offered by Universal

23 Albert Smith, 4/8/14, T:26.41-27.7. 24 Albert Smith, 4/8/14, T:27.9-13. 25

Albert Smith, witness statement, 4/8/14, paras 33-34.

1409

Cranes in 2008, there was debate involving the employees, Mr Smith

and CFMEU representatives about the advantages and disadvantages

of the form of agreement being proposed by Universal Cranes. The

debate included the differences between the BERT and CIPQ schemes

and the self-funded redundancy and sick leave schemes of Universal

Cranes.26

38. Universal Cranes proceeded to enter into a collective agreement with

its employees. That agreement was approved by the Australian

Government Workplace Authority in about July 2008 (2008 Collective

Agreement).27 The 2008 Collective Agreement remained in force for

a period of about 4 years.

2012 non-union EBA

39. At the expiry of the term of the 2008 Collective Agreement, and in

about mid-2012, Universal Cranes sought to negotiate a new form of

enterprise agreement with its employees. A copy of the draft form of

agreement was provided to the CFMEU. Mr Smith invited the

CFMEU to join in the discussion and talk to employees.28

40. Invitations of this kind were nothing new. Since 2004, Mr Smith had

always welcomed the CFMEU to the Universal Cranes premises. He

permitted them to talk to Universal Cranes employees, one on one, in

company time. He invited union officials to call meetings with the

workers using the company’s facilities. Union representatives also had

26 Albert Smith, 4/8/14, T:41.6-40. 27 Albert Smith, witness statement, 4/8/14, para 35. 28

Albert Smith, witness statement, 4/8/14, para 39.

1410

an open invitation to attend the company’s Monday morning weekly

team meetings.29

41. The workers at Universal Cranes did not elect for the CFMEU or any

other union to act on their behalf in the negotiation of the new

enterprise agreement. The employees dealt directly with Universal

Cranes. The result was a non-union enterprise agreement voted in by a

majority of the employees, and approved by Fair Work Australia in

August 2012 (2012 EBA).30

42. As with the workplace agreement in 2006 and the 2008 Collective

Agreement, the 2012 EBA followed discussion and debate between the

employees of Universal Cranes, Mr Smith and CFMEU

representatives about the differences between the BERT and CIPQ

schemes and the self-funded redundancy and sick leave schemes

offered by Universal Cranes.31

43. The 2012 EBA did not contain a BERT, or CIPQ clause. Instead, like

the 2008 Collective Agreement and the workplace agreement that

preceded it, the 2012 EBA contained different provisions regulating

matters such as redundancy, sick leave and income protection.

29 Albert Smith, witness statement, 4/8/14, para 41. 30 Albert Smith, witness statement, 4/8/14, para 43; Annexure AS-1 Tab 4. 31

Albert Smith, 4/8/14, T:41.6-40.

1411

CFMEU campaign in response

44. At around the time the workers of Universal Cranes voted in the 2012

EBA which made no reference to BERT or CIPQ, the CFMEU

retaliated by applying pressure to Universal Cranes in the marketplace.

45. There is a factual contest as to the nature and extent of the CFMEU’s

response. One particular question is: did the CFMEU’s campaign

include seeking to apply pressure to customers of Universal Cranes and

other companies in the group so as to have them removed from work

sites?

46. There are some relevant background matters. The CFMEU wanted

Universal Cranes to enter into an EBA with the CFMEU on terms that

included the BERT clause, the CIPQ clause, and a further clause that

required the employer to make payments into a welfare fund managed

by B.E.W.T Pty Ltd (BEWT). Under the BERT, BEWT and CIPQ

schemes, substantial monies flowed out of those schemes and into the

CFMEU for various purposes. The CFMEU thus had a motive to take

action that would lead to Universal Cranes signing an EBA obliging it

to make payments to BERT, BEWT and CIPQ. In and after 2012, the

CFMEU deliberately pursued a ‘campaign’ to have Universal Cranes

and the companies in the group enter into the CFMEU form of EBA in

place of the 2012 EBA the employees had voted for.32 The creation of

the 2012 EBA which did not contain the BERT, BEWT and CIPQ

clauses that the CFMEU had been pressing on Universal Cranes was

contemporaneous with the commencement of actions on work sites

32 Michael Ravbar, witness statement, 6/8/14, para 47.

1412

which led to Universal Cranes being removed from those sites. There

is much contemporaneous material making repeated reference to the

fact and nature of a CFMEU ‘ban’ or ‘boycott’ on Universal Cranes.

This includes a series of direct emails of complaint to CFMEU

officers. There is not a single written record through which any of

those CFMEU officers denied the existence of the ban or boycott

complained of. The CFMEU criticized these as lengthy, discursive and

self-serving, and submitted that its failure to reply to them was not an

acceptance of their contents.33 Unfortunately for the CFMEU, its

silence must be treated in the same way as the silence of any

commercial or industrial participant in a chain of correspondence.

47. The ‘campaign’ the CFMEU waged against Universal Cranes involved

two steps. One was the officers of the CFMEU threatening to apply

pressure to customers of Universal Cranes to stop dealing with

Universal Cranes unless and until the Union’s demands that Universal

Cranes and others enter into the Union’s form of EBA were satisfied.

The other involved the CFMEU acting on those threats when its

demands were not satisfied by entering work sites and shutting down

the operations of Universal Cranes or Smithbridge on those sites.

Indooroopilly project

48. In the period leading up to the creation of the 2012 EBA, Gold Coast

Cranes (one of the companies in the Universal Cranes group)

undertook work at the Indooroopilly Shopping Centre site. The builder

on the site was Multiplex. Multiplex had sub-contracted various works

33 CFMEU submissions, 14/11/14, Pt 8.7, para 39.

1413

to Bastemeyers Earth Moving, and in turn Bastemeyers had engaged

Gold Coast Cranes.

49. Mr Smith was only one of the three directors of Gold Coast Cranes.

The other directors were Mr Paul McCormack and Mr Ian Bourner.

50. Mr McCormack and Mr Bourner met with Mr Shane Treadaway, a

CFMEU organiser, at the CFMEU’s office in Bowen Hills on 4 May

2012. At that meeting, Mr Treadaway agreed that Gold Coast Cranes

would not be able to sign the union form of EBA because the rates in

that form of agreement would put the company at a disadvantage in the

Gold Coast market. He indicated that a different form of EBA, in

terms that would mirror the EBA of another crane company (Metro

Lift Cranes) would be acceptable to the CFMEU. That form of

agreement would not make provision for BERT, BEWT or CIPQ.34

51. Not long after that meeting, and on 22 May 2012, Mr Bourner received

a telephone call from an operator of a crane on hire from Gold Coast

Cranes to Bastemeyers at the Indooroopilly site. He was told that the

union representative on site had stopped the crane, and had said that

they were not allowed to continue on site because the company did not

have a union EBA. Mr Bastemeyer received a call to the same effect.

He was told that the union officials who had taken this action included

Shane (Treadaway).35

34 Ian Bourner, witness statement, 3/9/14, paras 14-15; Paul McCormack, witness statement, 3/9/14, para 20. 35

Ian Bourner, witness statement, 3/9/14, paras 17-18; John Bastemeyer, witness statement, 22/9/14, para 19.

1414

52. Mr Bastemeyer’s company had prior experience of union intimidation

on the site. Mr Treadaway and Mr Mike Davies had met him and Ms

Julie McKee (a Bastemeyer employee) to discuss signing a CFMEU

form of EBA. Ms McKee gave the following evidence about what Mr

Mike Davies, a BLF organiser, said:36

In response to our questions Mike told us how wonderful the unions are and how they could benefit the business. I was angry that they were demanding Bastemeyer sign the Union Agreement during the meeting so I responded to Mike “yeah right, what a joke”.

Mike then said to me: “You think it’s fucken funny, if you don’t fucken sign this I guarantee you won’t be working on the Indooroopilly shopping centre site”.

53. Ms McKee’s evidence was that she was ‘shocked and outraged at the

bullying, intimidation and threats by the unions … to sign the Union

Agreement during the meeting’.37 In her oral evidence Ms McKee said

she had a clear recollection of the words used. She then gave the

following evidence:38

Q. You have been at many business meetings where people have talked in those terms?

A. No.

Q. Do you regard that as unusual?

A. I was quite offended.

Q. And it was directed towards you, in the sense that it was in response to something you had just said?

A. That’s correct, sir.

36 Julie McKee, witness statement, 3/9/14, paras 11-12. 37 Julie McKee, witness statement, 3/9/14, para 16. 38

Julie McKee, 3/9/13, T:569.17-31, 37-45.

1415

Q. How did you feel when that was said?

A. Horrified and, to be totally honest, I turned to the side - (witness demonstrates) - and just looked the other way.

Q. I am asking you this because it has been put, I think, that those statements were not said …. In any event, as you sit here today, you have a very clear recollection do you?

A. I have never been spoken to so horribly by someone I do not know and I felt this - (witness demonstrates) - big. It was - the man leaned across. The way we were sitting at the table, he leaned across and intimidated me completely.

54. The second demonstration of the witness involved her placing the end

of her thumb a very small distance away from the end of her index

finger. Ms McKee was a very impressive witness. Her evidence was

completely credible. Beyond one question formally complying with

the rule in Browne v Dunn, counsel for the CFMEU made no attempt

to shake Ms McKee in cross-examination.39 That was the product of a

wise and skilful exercise of professional judgment. The CFMEU did

not provide a statement from either Mr Davies or Mr Treadaway

contradicting the evidence of Ms McKee. It only provided a statement

from Mr Doug Spinks, who was not present during the whole of the

meeting and agreed that there may well have been things said that day

that he did not hear.40 Ms McKee’s evidence is to be accepted

independently of Mr Bastemeyer’s evidence to the same effect.41 It is

therefore unnecessary to resolve a conflict between Mr Bastemeyer and

another witness going only to credit, and which, since

39 Julie McKee, 3/9/14, T:570.7-11. 40 Douglas Spinks, 4/9/14, T:709.22-29. 41

John Bastemeyer, witness statement, 22/9/14, para 13.

1416

Mr Bastemeyer’s credit is immaterial, is outside the Terms of

Reference.42

55. Returning to the Gold Coast Cranes incident on 22 May 2012, when

Mr Bastemeyer received the call that a union representative had shut

down Gold Coast Cranes on site, he went down to the site and heard a

union representative yelling and screaming, saying ‘fucking stop you

cunts, you’re not working, you’re not allowed on site, you don’t have

an EBA so fuck off’ and ‘they have been banned from all sites in

Brisbane and you will be next’. They said to Mr Bastemeyer: ‘You

can’t use Gold Coast Cranes, they haven’t signed an EBA. You need

to use one of these companies [handing a list across]…Read your EBA

you dickhead’.43 This evidence was not contradicted. It was not the

subject of cross-examination. There is no reason not to accept it.

56. Mr Bourner received a call from Mr Bastemeyer at this time and was

asked what the situation was with the company’s EBA. Mr Bourner

said that the company was in discussions with the CFMEU and the

company was waiting for a document. That was a reference to the 4

May meeting referred to above and the fact that the CFMEU had not

yet sent the Metro Lift form of EBA to Gold Coast Cranes. Mr

Bastemeyer then handed his phone to Mr Treadaway, and Mr

Treadaway spoke to Mr Bourner. Mr Bourner reminded Mr

Treadaway about the 4 May meeting. Mr Treadaway said he had to

talk to Mr Ravbar and that the crane could not restart.44

42 Mark O’Brien, witness statement, 4/9/14, para 5. 43 John Bastemeyer, witness statement, 22/9/14, paras 20, 22. 44

Ian Bourner, witness statement, 3/9/14, paras 21-23.

1417

57. The attack on Universal Cranes was a co-ordinated one. Mr

Treadaway’s conduct on the day is evidence that he was not acting

alone, and was taking direction from Mr Ravbar. The telephone

records indicate that Mr Close, a senior CFMEU organiser who worked

closely with Mr Ravbar on this matter, had various telephone

conversations with Mr Treadaway and with the CFMEU delegate on

site (‘Scoob’) on the day of the incident.

58. On 1 June 2012 Mr McCormack, a director of Gold Coast Cranes, sent

Mr Smith an email.45 In that email Mr McCormack said that Gold

Coast Cranes had been removed from the Indooroopilly site. He also

reported that there had been discussions with the union in the context

of that removal, during which Mr Ravbar had indicated that Gold

Coast Cranes had to sign a full CFMEU form of enterprise agreement.

59. Mr Smith obtained further information about this matter in an email on

20 June 2012 from Ian Bourner.46

60. As Gold Coast Cranes was no longer permitted on site by the CFMEU,

it had to cross-hire the job to Metro Lift in order to meet the contract it

had with Bastemeyers.47 Gold Coast Cranes lost about 3 months of

work as a result.48

45 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 5. 46 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 6. 47

Ian Bourner, witness statement, 3/9/14, para 24. 48 Paul McCormack, witness statement, 3/9/14, para 25.

1418

Attacks in July 2012

61. On 26 July 2012 Mr Smith received an email from a Universal Cranes

employee called Adam Courtney.49 In that email Mr Courtney

recounted a few examples of some of the union problems Universal

Cranes had experienced on sites.

62. One site referred to by Mr Courtney was at Longland Street, Newstead,

where Universal Cranes was performing work for FKP Constructions.

Mr Courtney reported that he had received a telephone call from Peter

Scott (the crane operator). Mr Scott said that the site foreman Scott

Houston had instructed him to ‘boom the crane right down’ because

they were getting asked questions by union representatives about the

name on the side of the crane. The email indicated that subsequently,

Matt Parker (project manager) had told Mr Courtney that the crane had

been off-hired and should be demobilised and taken off site.

63. Another project referred to by Mr Courtney in his email was the

Transcity JV project, where a crane was on ‘dry hire’ to Bauer

Foundations. The term ‘dry hire’ signifies that a crane is being hired

out as a piece of machinery alone, and without any operating staff.

Bauer employees reported to Mr Courtney that Transcity had instructed

that all work stop because the crane belonging to Universal Cranes had

to be off-hired. The Bauer employees reported that the rumour was

that the unions were making it too hard for Transcity because of

Universal Cranes’ name being on the machinery.

49 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 7.

1419

64. A third example given by Mr Courtney in his email concerned cranes

that were on hire to Brady Marine and Civil for the Port Connect

project. Mr Courtney reported that Paul Bolger had indicated that the

union representative on site on 24 July 2012 had made it quite difficult

for Mr Bolger because a crane from Universal Cranes was being used.

65. The problems on site at the Transcity project were also raised by Mr

Schalck, the General Manager of Universal Cranes, in an email he sent

to Transcity JV on 26 July 2012.50 He reported that he had been

advised by supervisors working for Transcity and Bauer that Universal

Cranes were no longer to be used as the CFMEU had put a ban on the

use of Universal Cranes. He recorded that the ban had even resulted in

cranes on ‘dry hire’ being demobilised from project sites. He referred

to the last demobilisation being on the Victoria Park Road project, a

‘dry hire’ job, where Bauer employees had been stopped in the middle

of a lift. Mr Schalck had said Universal Cranes had received very clear

verbal communication that this was due to the union ban on Universal

Cranes.

66. That email of 26 July 2012 was sent by Mr Smith to the Fair Work

Building Commission. Through the email Mr Smith also informed Mr

Hogan that the CFMEU had banned Universal Cranes from the

Transcity site and that the union was also pushing those on the Port

Connect project to ban Universal Cranes.

50 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 8.

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Threats by Mr Close to Mr Smith in July 2012

67. In July 2012 Mr Smith had a conversation with Mr Close, a senior

CFMEU organiser. In that conversation Mr Close advised Mr Smith

that he understood Mr Smith was ‘nearly on his knees’ and that Mr

Close would keep his campaign against Universal Cranes up until it

signed an agreement with the CFMEU on Mr Close’s terms. Mr Close

admitted that his actions were ‘illegal’, but stated that the CFMEU

would continue to do ‘what they need to do’ in order to make

Universal Cranes support the union and the BERT Fund.

68. Mr Smith recorded this conversation in an email dated 26 July 2012.51

He confirmed in his evidence that it accurately recorded what Mr Close

had said to him at about this time.52

69. Mr Close denied having spoken to Mr Smith in these terms. Those

denials cannot be accepted. During his examination Mr Close

demonstrated on a number of occasions that he was not a witness of

truth, and was prepared to make wild statements about Mr Smith that

could not be justified. He denied matters that were obvious on the

documents. He said on his oath that Mr Smith was ‘demented’.53 He

repeated that absurd allegation when given the opportunity to retract

it.54 In a rare moment of candour Mr Close made an admission that

was destructive of his credit - he accepted that he was prepared to say

anything he liked, regardless of whether or not it was true, at least in

51 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 9. 52 Albert Smith, 4/8/14, T:30.19-21. 53

Peter Close, 4/9/14, T:647.28-30. 54 Peter Close, 4/9/14, T:647.32-34, T:648.8-10.

1421

regard to ‘the questions that are put to me and Mr Smith’s statement’.

He accepted this proposition four times.55

Attacks in August 2012

70. The contemporaneous email records demonstrate that the position

deteriorated further in August 2012.

71. Westfield Design and Construction was carrying out works at the

Westfield Carindale site. It had sub-contracted some of those works to

a landscaper called Scape Shapes, who intended to use Universal

Cranes on the job. However on 1 August 2012 Mr Noumann sent an

email to Universal Cranes indicating that Westfield Design and

Construction had advised that Scape Shapes was not permitted to use

Universal Cranes.56 Mr Noumann said that he had asked the Westfield

staff why that was so, and the Westfield staff would not give him an

answer. Had there been a legitimate reason for the position adopted by

Westfield, an explanation would have been forthcoming.

August 2012 meeting with Mr Ravbar and others

72. Against this background, in August 2012 Mr Smith attended a meeting

at the Bowen Hills office of the CFMEU with Mr Ravbar, Mr Ingham,

Mr Sutherland and Mr Close.57

55 Peter Close, 4/9/14, T:648.12-31. 56 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 12. 57

Albert Smith, witness statement, 4/8/14, para 69.

1422

73. At that meeting Mr Ravbar said he wanted Universal Cranes to sign up

to the CFMEU pattern agreement. Mr Ravbar asserted that Mr Smith

had been ‘playing games’ for long enough, and it was time for him to

stop. Mr Ravbar also stated that the CFMEU would make it very hard

for Universal Cranes to operate if it did not come across to the CFMEU

pattern agreement.58

Mr Smith bows to union pressure

74. In the face of the large number of reports - all to the effect that officers

of the CFMEU had pressured Universal Cranes’ customers into

removing Universal Cranes from worksites - and having heard Mr

Close’s and Mr Ravbar’s threats to keep the CFMEU campaign against

Universal Cranes up until the company signed a CFMEU form of

EBA, Mr Smith bowed to the pressure and agreed to accept the

principal clauses the CFMEU had been insisting on - in particular the

BERT clause.

75. To this end, Mr Smith sent Mr Close an email on 14 August 2012.59

76. In that email Mr Smith referred to ‘our recent conversations regarding

the CFMEU boycott of Universal Cranes’. Mr Smith complained that

that action was having significant effect on the Universal Cranes

business and would result in the company being forced to terminate

employees in the near future. Mr Smith confirmed that ‘you have

previously indicated that you would lift the ban on us if we force our

employees to join the BERT Fund and the BEWT Fund.’

58 Albert Smith, witness statement, 4/8/14, paras 69-72. 59 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 13.

1423

77. In this and various subsequent emails Mr Smith used the expression

‘ban’. That was an appropriate and convenient short-hand description

of how the CFMEU was treating (and threatening to treat) Universal

Cranes. As Mr Smith stated in his evidence, the CFMEU officials with

whom he dealt took care to avoid using this precise language in the

discussions they had, and probably did not use the word ‘ban’.60

78. The threat was, in substance in the nature of a ‘ban’, even though this

word might not have been stated. If they were not using the word, they

were doing the thing. That is very clear from the way in which the

CFMEU had conducted itself and continued to conduct itself on sites

where Universal Cranes was to be found. It is also clear from the

actual language that Mr Ravbar was recorded as using through this

period, which as later described, includes phraseology such as

‘kicking’ companies off sites and ‘killing’ companies, and statements

that the CFMEU ‘had its ways’ and that Mr Smith would ‘feel the

effects of the applied pressure’.61

79. Mr Smith indicated that he was prepared to put to the vote of his

employees an amended form of EBA providing for payments to BERT

and BEWT. He added that employees were well aware of the fact that

Universal Cranes would be forced to reduce its workforce significantly

if the union would not lift its ‘ban’ and that, as such, he was confident

that the employees would support the amended agreement.

60 Albert Smith, 4/8/2014, T:50.31-51.6. 61 See Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tabs 34, 51; Albert Smith, 4/8/14, T:33.26-35.47.

1424

80. He asked Mr Close to advise whether ‘the CFMEU will lift its ban on

Universal Cranes if we proceed with this modified agreement’.62 He

also indicated that if there were any further changes the CFMEU

required to get the issue resolved, Mr Close should advise him so that

Universal Cranes could consider the matter further.

Mr Close’s rejection of the proposal

81. Mr Close responded to Mr Smith’s request that the CFMEU lift its ban

if Universal Cranes proceeded with the proposed modified agreement

by saying that the union ‘will also want you to fix the membership if

we are to move forward. After all you killed the membership off’.63

82. The substance of Mr Close’s response, then, was not to deny the ban

referred to in Mr Smith’s email. It was to indicate that the ban would

continue unless Universal Cranes not only signed a form of EBA

acceptable to the union, but also ‘fixed the membership’. Mr Close was

adding to the list of demands that would have to be satisfied before the

ban could be lifted.

83. Mr Smith’s response to Mr Close’s aggressive riposte was to suggest a

side deal where he would guarantee either a number of members or a

percentage of employees to have membership. He asked what

percentage or number the CFMEU would accept.64

62 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 13 (emphasis added). 63 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 13. 64

Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 14.

1425

84. Mr Close sent an email back stating that Mr Ravbar and he needed to

meet with Mr Smith to discuss and that he ‘would want all workers as

members like I used to have under the previous Universal regime’.65

85. Mr Smith answered saying that he could not get all employees to join

and suggested that a fair target be set. Mr Close’s response was ‘90% I

reckon that’s fair for me’. Mr Smith replied saying that he thought that

50% would be doable. Mr Close then stated again that they would

need to meet with Mr Ravbar. He asked how many workers would

become CFMEU members if 50% of the Universal Cranes’ workforce

joined the union.66

86. Mr Ravbar was aware of the interchanges. Through his email of 14

August 2012, Mr Smith was asking Mr Close to end the CFMEU

campaign against Universal Cranes. Mr Ravbar admitted that Mr

Close would come to him to get approval to end any ‘campaign’

against the company, and any decision in that matter would come ‘via’

him.67

87. It is probable that Mr Ravbar was made aware of Mr Smith’s request of

Mr Close, and approved Mr Close’s response. Mr Ravbar admitted

that it looked as though that had occurred.68

88. On 20 August 2012 Mr Smith wrote to Mr Close in relation to a

potential meeting between the two and Mr Ravbar. Mr Smith again

65 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 14. 66 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 14. 67

Michael Ravbar, 7/8/14, T:395.21-35. 68 Michael Ravbar, 7/8/14, T:402.4.

1426

asked Mr Close to advise prior to the anticipated discussion ‘what else

you require from Universal Cranes above my proposed agreement

changes to get the ban on us lifted’.69 Mr Close did not write back

denying there was any ban.

89. Later the same day Mr Smith sent a further email to Mr Close in

relation to making arrangements for a further discussion.70 Yet again

he noted that ‘our objective is to get you to lift the current CFMEU ban

on Universal Cranes, but to retain as much as possible of our current

agreement. Once we know exactly what you require we will either

modify the agreement to meet your needs, and put it to the vote with

our employees, or we will choose to accept the consequences of your

ban on Universal Cranes and not seek work on the sites that you

control’. Again, there was no response from Mr Close to suggest the

position was anything other than as Mr Smith had described.

90. The discussion planned between Mr Close and Mr Smith proceeded by

telephone on 20 August 2012. After that call Mr Smith sent Mr Close

an email to confirm various matters.71 As the email describes, during

the call Mr Close indicated that the union was only interested in

considering its own pattern agreement with some possible minor

adjustments, and that the draft modified agreement that Universal

Cranes had prepared (and which made provision for BERT and

BEWT) would not be good enough. Mr Smith stated in his email that

‘in the interests of getting the ban lifted on Universal Cranes and our

sister companies’ he had asked for a copy of the CFMEU pattern

69 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 15 (emphasis added). 70 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 16 (emphasis added). 71

Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 17.

1427

agreement to be prepared and marked up showing changes that

Universal Cranes had proposed. He added ‘please also advise if we

can get an interim lift of the Universal Cranes and Gold Coast Cranes

ban while we try to resolve this issue. It is causing significant

financial issues for our company and our employees and soon have

negative effects on us all here at Universal Cranes if you cannot give

us a break’.72

91. Mr Close did not write back denying the existence of the CFMEU ban.

He did not write back denying or challenging Mr Smith’s recount of

what the CFMEU had insisted upon.

92. On 21 August 2012 Mr Smith wrote to Bechtel indicating that he

wished to speak to them about industrial relations policies before

deciding on a strategy to deal with the dispute he was having with the

CFMEU.73 He stated that Universal Cranes was currently the target of

a CFMEU ban on many sites in the greater Brisbane area and the

company was deciding whether to stand up to the union and suffer the

resulting loss or whether it should simply bow to the union’s demands.

93. On 24 August 2012 Mr Smith wrote again to Mr Hogan of the FWBC

‘in relation to the CFMEU boycott on Universal Cranes’.74 He said it

was extremely unlikely that Universal Cranes would accept the union

demands and that he would call on the FWBC when the company got

to the wire.

72 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 17 (emphasis added). 73 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 21. 74

Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 19.

1428

Request and further threat in September 2012

94. The next correspondence of significance took place on 31 August

2012.75 On that date Mr Schalck of Universal Cranes wrote to Mr Jade

Ingham of the CFMEU. In that email Mr Schalck said that ‘We are

still very keen in doing a deal so that we can have this ban lifted’. He

set out various proposed terms for an EBA with the union. Again, the

proposed terms included Universal Cranes making payments to BERT,

the establishment of policies and procedures to encourage employees

to become union members and the direct payment of union

membership fees. Mr Schalck added ‘we simply cannot agree to the

100% employee membership with the CFMEU’. The email concluded

‘please confirm that you will lift the ban on Universal Cranes if we

continue on the Universal Cranes agreement with the change to

participate in the BERT fund and the union right of entry as per

above.’76

95. Mr Ingham did not write back to Mr Schalck denying the existence of a

union ban on Universal Cranes. He would have done so if the position

was not as Mr Schalck had described.

96. Mr Schalck’s email found its way to Mr Close who, on 3 September

2012, stated ‘Unless we have our 2 hour clause untouched NO DEAL.

Balls in your court. I was in Sydney on the weekend and had a look to

see if your cranes were at Bangaroo????’ (sic).77

75 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 20. 76 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 20. 77

Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 20.

1429

97. This email is revealing. First, the deal that Mr Schalck had proposed -

namely a lift of the union’s ban if Universal Cranes agreed to a

modified form of an EBA - was rejected. To use Mr Close’s language,

there was ‘no deal’. Mr Close did not suggest in any way in his

response that there was no ban. To the contrary, the tenor and language

of his email provides positive confirmation that a ban was in place. Mr

Close was threatening to advance the scope of the ban to include

Universal Cranes at the Barangaroo site. This is how Mr Smith took

the comment.78 He was right to do so.

98. When giving evidence Mr Close tried to pretend that his reference to

Barangaroo was ‘of a passing nature only, that is general chit chat’.79

Even before his repeated admissions that he was prepared to say

whatever he liked, whether or not it was true, this statement was not

believable. His explanation does not account for the four question

marks that he placed at the end of his email. Those question marks are

not in the nature of general chit chat. They signal a threat as to the

future of Universal Cranes on the site. Further, none of Mr Close’s

emails contain ‘chit chat’ - they are extremely short and punchy.

Further attacks in October 2012

99. For so long as Universal Cranes withstood the demands of the

CFMEU, its woes continued.

100. On 16 October 2012 a CFMEU organizer rang Mr Jason Zoller, of

BMD Constructions (one of the joint venturers on the Port Connect

78 Albert Smith, witness statement, 4/8/14, para 80. 79 Peter Close, witness statement, 4/9/14, para 65.

1430

project). He said that he had an issue with Universal Cranes and he

was going to stop the cranes from working on site.80

101. Shortly after that call, employees of Universal Cranes drove a crane

from the company’s depot to the Port Connect site. After they arrived

at the site and were about to start work, they were approached by two

officers of the CFMEU who had followed them in a car. They parked

their car so as to block the gate and cause a safety issue.81

102. Mr Zoller went to the gate to investigate. On his arrival he saw two

CFMEU officials. The CFMEU was holding up work and preventing

the crane from working. One official replied that that was his

intention. Another union official said that they had followed the crane

from the yard, and that similar action was intended to be taken on a

number of other sites. Mr Zoller said that the CFMEU officials had no

right to be there. He asked them to leave. They did not leave. It was

clear to Mr Zoller that they intended to remain for as long as the

Universal Cranes equipment was there.82

103. The action of these officials was causing congestion on the site. This

raised safety issues. As a result Mr Zoller was forced to tell the

Universal Cranes employees to head back to the depot. Mr Zoller did

not want to take this action, but he needed to clear the area so that

other works could continue.83 The CFMEU submitted that: ‘It was Mr

Zoller who asked Universal Cranes to leave the site. He clearly had an

80 Jason Zoller, witness statement, 3/9/14, para 11. 81 Jason Zoller, witness statement, 3/9/14, para 12. 82

Jason Zoller, witness statement, 3/9/14, paras 13-18. 83 Jason Zoller, witness statement, 3/9/14, para 20.

1431

interest in blaming the CFMEU for his decision.’84 This is a total

distortion of the evidence. Further, Mr Zoller was available to be

cross-examined by counsel for the CFMEU, but was not requested to

attend.

104. These events were subsequently recorded in a right of entry report

dated 17 October 2012.85

105. On 17 October 2012, Mr Schalck and other Universal Cranes

employees met with staff on the Port Connect project. They were

informed that an Andrew Sutherland and another CFMEU organiser

had threatened to come back to the site and stop work again unless

Universal Cranes were removed for good.

106. Mr Schalck recorded these events at the time in a written statement

which he signed.86

107. In that statement Mr Schalck noted that, as a result of the union

pressure, Port Connect had ‘off-hired’ the Universal Cranes on 19

October 2012 and that Port Connect had informed Mr Schalck that it

would not engage Universal Cranes on day shifts but would continue to

take the services of Universal Cranes on night shifts because it did not

believe the CFMEU would be ‘out’ on the night shifts.

108. On 27 October 2012 Mr Smith sent an email to Mr Schalck and Mr

Jones (of Bechtel).87 Mr Smith reported that Leightons (a contractor

84 CFMEU, written submissions, 14/11/14, Pt 8.7, para 54. 85 Jason Zoller, witness statement, 3/9/14, para 27 and Annexure B. 86

Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 22.

1432

on a project) had been visited on site by the CFMEU, who had

threatened to shut down the project if Universal Cranes’ machinery or

people were still on site on 29 October 2012.

109. Mr Smith recorded in his email that the threat in relation to the Curtis

Island project was the last straw for Universal Cranes, who could no

longer continue to stand up against the union action. Therefore the

union pattern EBA for crane drivers and riggers would be signed. He

also recorded that Mr Close had advised him that, in the circumstances,

there would be no action against Universal Cranes or its clients that

week.

Rejected offer to sign CFMEU pattern agreement

110. On October 2012 Mr Schalck sent an email to Mr Close and Mr

Ingham stating that he had ‘really noticed the pressure that you guys

have applied to our clients lately; especially Legacy Way, Port

Connect, Barangaroo and lately Curtis Island’.88 He said that the

company had been evaluating its options and had ‘concluded that we

have no other option than to sign the CFMEU pattern agreement’.

111. The CFMEU did not accept that position. Instead, Mr Close told Mr

Schalck that unless all associated entities of Universal Cranes,

including Smithbridge, signed the CFMEU pattern agreement, there

would be ‘no deal’. In addition, the union demanded 100% employee

membership from all branches and associated entities. Mr Schalck

87 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 25. 88 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 24.

1433

confirmed these matters in an email of the same day to Mr Hogan and

Mr Smith.89

112. The decision Mr Smith had made to buckle to the union pressure and

have Universal Cranes agree to sign a CFMEU pattern agreement was

made under very considerable economic duress. The CFMEU attack

on the company had caused substantial loss for the company and the

workers. Universal Cranes’ equipment was sitting in the yard because

the company could not get onto sites. The company’s workers were

‘scratching to get 40 hours a week work’ with a consequence that the

company was having to start putting workers off.90 Mr Smith’s view

was that he had no alternative but to sign the agreement.91

113. The union’s demand for an increase in membership amongst Universal

Cranes employees also placed great pressure on the workers. As Mr

Smith indicated, his workers were used to doing 50 to 55 hours per

week and getting paid overtime but, as a result of the union boycott

activity, the same workers were struggling to get 40 hours work a

week. In this environment, the workers were prepared to do anything

to keep their jobs and to get their work hours back up, including

becoming union members. Mr Smith was appreciative of this fact and,

in a memorandum he issued to his employees, he passed on his thanks

and indicated that he would increase their pay by $1 per hour to cover

89 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 24. 90 Albert Smith, 4/8/14, T:31.43-47. 91

Albert Smith, 4/8/14, T:32.20-22.

1434

the cost of the CFMEU membership fees that they would have to

pay.92

114. The conduct of the CFMEU in the course of its dealings with Mr Smith

does not make pleasant reading. It cannot be regarded as the

‘legitimate use of industrial muscle’. It cannot be regarded as bona

fide negotiation - for every move by Mr Smith towards consensus was

met by the introduction of an entirely fresh demand. It cannot be

regarded as justified in the interests of employees - for many of the

benefits generated by BERT do not flow to the employees whose

employer provides BERT with its funding. It would be kind to call the

CFMEU’s conduct paltering. It was nothing but a brutal and ruthless

drive for complete capitulation.

Threats in July 2013

115. In that fashion Universal Cranes eventually capitulated to the 2012

CFMEU campaign against it and ultimately agreed to sign the CFMEU

form of EBA. But the other crane hire companies in the Smithbridge

Group were reluctant to do so. For example, Gordon Willocks, a

shareholder and Managing Director of Universal Cranes Townsville,

was not prepared to sign the CFMEU form of EBA. As Mr Smith

recorded in his email of 31 October 2012, Universal Cranes Townsville

could not afford to enter into the Agreement because market prices in

Townsville were significantly lower than both the CFMEU rates and

the Universal Cranes rates.93 The Rockhampton branch of Universal

Cranes was in a similar position, as recorded in an email of 25

92 Albert Smith, 4/8/14, T:32.31-47. 93 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 28.

1435

November 2012 from the Rockhampton Manager Mick Smith to Mr

Schalck and Mr Smith.94

116. This reluctance on the part of entities in the group other than Universal

Cranes to sign a union form of EBA resulted in further pressure being

applied by the CFMEU. So the 2012 campaign of the CFMEU against

Universal Cranes was succeeded by a 2013 campaign of the CFMEU

against entities in the group other than Universal Cranes.

117. In May 2013 Mr Ravbar of the CFMEU advised Mr Smith that the

union would continue to apply boycotts to all Universal Cranes

operations unless it arranged for all the branches and subsidiaries to

become parties to a union agreement.

118. Mr Smith recorded this fact in a letter of 8 July 2013 to Mr Ravbar.95

In that letter Mr Smith asked for a written assurance from Mr Ravbar

that the CFMEU would cease all boycotts and other interference in the

business. Mr Smith added ‘Michael I appeal to you to work with us…

we have loyal employees who have great respect for our business and

for your organization and we plan to be long term participants in the

crane industry in Queensland’.

119. Mr Ravbar gave no such written assurance. Indeed he did not supply

any written response at all. Mr Ravbar did not write back denying the

existence of the ban and boycott that Mr Smith described in his letter.

Yes he surely would have done had the position not been as Mr Smith

described.

94 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 31. 95 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 33.

1436

120. Mr Smith then met with Mr Ravbar on 8 July 2013 at the union’s

office in Bowen Hills. Mr Smith prepared a written record of what was

said at this meeting within an hour of its conclusion.96 The fact he did

so is established by his oral evidence.97 It is also established by an

email of 8 July 2013 which attaches a copy of his notes.98

121. The notes of the meeting taken by Mr Smith record that Mr Ravbar

said that if Universal Cranes Townsville did not enter into a union

form of enterprise agreement, the union would ‘kick’ the company off

the Darwin and Townsville sites and would ‘kill’ them in Darwin.

122. Further, the note recorded that two union organisers, Michael Robinson

and Andrew Sutherland, were planning to have a discussion the

following morning in order to confirm the plan to ban the company in

Townsville by making sure the company was kicked off any jobs in the

area. Mr Ravbar said that Universal Cranes Townsville needed to sign

up ‘now’.

123. Mr Smith further confirmed these matters were raised at the meeting in

an email of 8 July 2013 to an industrial relations adviser and other staff

members.99 He recorded that Mr Ravbar’s position was that unless

Universal Cranes Townsville signed up to the CFMEU Agreement the

union would recommence bans, including in Darwin and Townsville.

96 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 34. 97 Albert Smith, 4/8/14, T:33.26-38.47. 98

Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 34. 99 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 34.

1437

124. Mr Ravbar denied that he had said the matters that were recorded in Mr Smith’s notes and emails of the day. Mr Ravbar’s evidence is rejected for the following reasons.

(a) Mr Ravbar’s recollection of the meeting was poor. He

thought the meeting had taken place at Murarrie. In fact, it

had taken place at the head office of the union at Bowen

Hills.100

(b) There is no reason to conclude that Mr Smith’s

contemporaneous record of the conversation, and his email

shortly after the conversation, do not constitute an accurate

record of what was said. There is no basis for thinking that

the notes he made on the day were mistaken or fabricated.

There is no basis for thinking that Mr Smith had taken it upon

himself to write out a note of the meeting which bore no

resemblance to what had actually transpired

(c) There are significant portions of the file note taken by Mr

Smith which are not disputed by Mr Ravbar. They must be

accepted as accurately recording those parts of the meeting.

That being so, the suggestion that Mr Smith somehow

misunderstood what happened or fabricated the content of

other parts of the notes becomes all the more difficult to

accept.

(d) The language used at the meeting and recorded in Mr Smith’s

file note is consistent with the language that had been used in

100 Michael Ravbar, 7/8/14, T:421.9-22.

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various other complaints made through the relevant period by

Mr Smith and others from Universal Cranes. It had been an

ongoing source of complaint. Not one of those written

complaints and allegations was ever denied by Mr Ravbar, Mr

Close, Mr Ingham and others in any written answer given to

those complaints. Indeed, in many cases, the written

responses implicitly accepted that the position that had been

outlined by Mr Smith and others in their emails was accurate.

(e) Mr Ravbar did not have any notes of the meeting.101 He

acknowledged understanding the importance of keeping a

written record of events.102 The fact he did not keep a written

record on this occasion is consistent with the fact that the

matters he was discussing were ones that he did not wish to

be recorded because a written record would be harmful to him

and the CFMEU.

(f) For reasons set out later, Mr Ravbar was not a witness of

credit. His evidence cannot be preferred to that of Mr Smith.

125. On Mr Smith’s evidence, the CFMEU’s subsequent attempts to impose

bans on Universal Cranes Townsville have been largely unsuccessful

due to the fact that Townsville is a small market and not many projects

are CFMEU based.103

101 Michael Ravbar, 7/8/14, T:421.42-47. 102 Michael Ravbar, 7/8/14, T:418.47-419.2. 103

Albert Smith, witness statement, 4/8/14, para 128.

1439

Attacks concerning Smithbridge

126. More recently, there have been communications between the CFMEU

and Mr Smith in relation to the Smithbridge arm of Mr Smith’s

enterprise.

127. Smithbridge was awarded work by Hutchinson Builders on their

project at the Gladstone Harbour boardwalk. The contract between the

two was negotiated in about August 2013 and Smithbridge began work

on the project in the following month. Mr Smith’s unchallenged

evidence was that from October 2013 through to December 2013, and

for two weeks in January 2014, Smithbridge worked on the project

without any significant issues (other than the pressure that was being

applied on site by CFMEU organisers for employees to become

members of the union).104

128. In late 2013 Mr Moses, a CFMEU organiser based in Gladstone, had a

conversation with Mr Swift, Hutchinson’s Site Manager for the project.

Mr Moses referred to the fact that the CFMEU was in discussions with

Smithbridge in relation to an EBA, but those discussions were not

going the way the CFMEU wanted. He told Mr Swift that if things did

not work out there ‘might be a storm coming’.105

129. On 7 January 2014 Mr Smith received a text message from Mr Schalck

informing him that Mr Ravbar had told Mr Close that he was going to

104 Albert Smith, witness statement, 4/8/14, para 157. 105 Robert Swift, witness statement, 3/9/14, para 5.

1440

start banning Universal Cranes again because Smithbridge did not have

a concluded enterprise agreement with the CFMEU.106

130. This led Mr Smith to send an email to Mr Ravbar on 7 January 2014.

He stated that he understood that ‘the CFMEU have advised somebody

that you intend to re instate (sic) the bans on Universal Cranes working

on CFMEU controlled job sites because we have not signed up an

agreement with the CFMEU for Smithbridge’.107

131. Mr Ravbar did not respond to this email denying his intention to

reinstate bans on Universal Cranes. He would have done if Mr Smith’s

email did not reflect the truth.

132. Later in February 2014 Mr Smith received a telephone call from Mr

Schalck. Mr Schalck informed him that Mr Sutherland of the CFMEU

had visited Universal Cranes and advised that secondary boycotts of

Universal Cranes would recommence if Smithbridge did not sign the

CFMEU’s form of EBA.108 Mr Sutherland told Mr Schalck that Mr

Smith’s failure to agree to an EBA for Smithbridge on the terms the

CFMEU wanted was ‘jeopardising Universal Cranes relationship with

the union’.109

133. Although Mr Sutherland did himself no credit by refusing to admit

this,110 he was intimating through these words that unless Smithbridge

106 Albert Smith, witness statement, 4/8/14, para 158. 107 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 50. 108

Albert Smith, witness statement, 4/8/14, para 162. 109 Andrew Sutherland, 4/9/14, T:691.33-692.12. 110

Andrew Sutherland, 4/9/14, T:694.10-33.

1441

signed the EBA there would be trouble for Universal Cranes. There is

no other sensible explanation. Mr Schalck was the general manager of

Universal Cranes. Mr Sutherland got on well with him. There was no

reason why that would change.111 Smithbridge was an entirely

different company. Whatever Mr Smith did at Smithbridge could

have no logical impact on the relationship between the CFMEU and

Universal Cranes. The question as to how the CFMEU related to

Universal Cranes was a matter for the CFMEU, not Smithbridge.

134. On 27 February 2014 Mr Loakes, another CFMEU organiser, and Mr

Churchman, a CFMEU delegate, came on to the Gladstone site to ‘shut

down’ Smithbridge. This involved demanding that the Smithbridge

employees stop working.112 This led to the Smithbridge employees

and Mr Loakes and Mr Churchman discussing the matter with Mr

Swift, Hutchinson’s Site Manager for the project. The venue was Mr

Swift’s office.

135. In that discussion Mr Loakes said that he had spoken to the

Smithbridge employees about not getting the entitlements that workers

got under the Hutchinson EBA. The Smithbridge employees

responded saying that they were happy with what they were being paid

and wanted to get back to work. Mr Loakes told them that they would

not be going back to work and might as well go home.113

111 Andrew Sutherland, 4/9/14, T:693.3-5, T:693.38-47. 112 Robert Swift, witness statement, 3/9/14, paras 8-12; Brent Dowton, witness statement, 3/9/14, paras 7-10; Leanne McLean, witness statement, 3/9/14, paras 9-14; Nicolas Navarrete, witness statement, 3/9/14, paras 76, 77 and 79. 113

Robert Swift, witness statement, 3/9/14, para 8.

1442

136. The Smithbridge employees then repeated that they were happy with

the entitlements they were receiving and wanted to get back to work.

Mr Loakes said that this would not happen and they might as well buy

their tickets back to Brisbane.114

137. One of the Smithbridge employees asked Mr Swift for a formal

direction to leave the site. Mr Swift refused, for the simple reason that

he did not want them to go. He said it was not his decision to stop

them from working; it was the union’s decision. Mr Swift did not want

to stand in the way of the CFMEU. He expected that if he put his foot

down he would get aggravation from the CFMEU and Hutchinson’s

relationship with the union would have soured, resulting in trouble and

delays on the Gladstone site and potentially other Hutchinson sites.115

138. Mr Loakes gave curious evidence on this matter. According to him, he

merely ‘requested’ the Smithbridge employees to ‘stop work pending

the resolution of the dispute concerning non-compliance’, that the

workers said they wanted to keep working and finish the job, but then

decided of their own volition to do as Mr Loakes had ‘requested’.116

He was inviting belief in the proposition that, after he made a request

to workers who (i) were happy with their conditions, (ii) had nearly

finished their job and (iii) wanted to keep working, the workers

decided to do as requested and stop working rather than carry on with

their duties to their employer and Hutchinson. This proposition is not

believable. Mr Loakes told them they had to stop and leave the site.

Mr Swift’s evidence was accurate.

114 Robert Swift, witness statement, 3/9/14, para 9. 115 Robert Swift, witness statement, 3/9/14, paras 10-11. 116

Ben Loakes, witness statement, 22/9/14, paras 4 - 7.

1443

139. On 28 February 2014 Mr Smith sent Mr Ravbar an email complaining

about the union’s conduct towards Smithbridge and Universal Cranes

at the Gladstone Boardwalk site.117 In that email he reminded Mr

Ravbar that all of the Smithbridge and Universal Cranes employees on

site were members of the CFMEU. He also said that all of the

Universal Cranes employees onsite had been employed under the terms

of the CFMEU’s form of EBA. As such they were paid up members of

BERT, BEWT and CIPQ.

140. The email indicates that Mr Smith and Mr Ravbar had discussed the

matter over the telephone that morning. During the discussions Mr

Ravbar had:

(a) demanded that the non-union EBA between Smithbridge and

its employees be terminated and replaced with the CFMEU

form of agreement;

(b) indicated that the CFMEU may commence a campaign of

bans against Smithbridge and Universal Cranes similar to

those applied in 2012; and

(c) said that he ‘had his ways’ and that while the union would not

be ‘openly’ banning Smithbridge or Universal Cranes, those

companies would feel the effects of the union’s ‘applied

pressure’.

141. Mr Ravbar did not write back denying any of the matters that Mr Smith

had outlined in his email. He did not deny what the CFMEU was

117 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 51.

1444

reported to have done on the Gladstone site. He did not deny having

said any of the things outlined in Mr Smith’s email. He did not deny

that the CFMEU had imposed bans. He did not deny that he had

threatened to continue those bans unless Smithbridge signed the EBA.

142. Further, Mr Smith was not cross-examined about his version of the

conversation as set out in his email of 28 February 2014. Mr Ravbar’s

statement of evidence did not deny these contemporaneously recorded

events. That was so even though Mr Ravbar had satisfied himself that

he had been able to address everything that Mr Smith had raised in his

statement.118

143. On 1 March 2014 there was a further email from Mr Smith to Mr

Robinson and Mr Moses of the CFMEU.119 Mr Smith made the same

series of complaints. He added that he had recently spoken with Mr

Moses who had indicated that there would be no union approval for

either Smithbridge or Universal Cranes to do any work on the

Gladstone site until he received instructions otherwise from ‘higher up

in the union organisation’. Neither Mr Moses nor Mr Robinson

responded to that email denying any of the matters raised in it.

144. A couple of days later, on 3 March 2014, Mr Smith sent Mr Ravbar

and Mr Robinson an email. That email recounted the difficulties that

were being experienced on the Gladstone site.120 Mr Smith said Mr

Easterbrook of Hutchinson had indicated that neither Smithbridge nor

118 Michael Ravbar, 6/8/14, T:309.11-13. 119 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 52. 120

Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 54.

1445

Universal Cranes would be allowed back on site until the CFMEU

directly advised Hutchinson of its approval.

145. Mr Smith also recorded the fact that he had spoken to Mr Robinson,

who had told him that neither Universal Cranes nor Smithbridge

employees would be allowed back on the project until Mr Smith had

agreed to sign an EBA with the CFMEU which covered the whole of

the Smithbridge business over all of Australia. Mr Smith added

‘please advise me as soon as possible if I have misunderstood the

situation’.121

146. Mr Ravbar gave no such advice in response. He did not write back

denying any matters raised in Mr Smith’s email.

147. Mr Robinson gave evidence in which he vehemently denied having

spoken with Mr Smith on 3 March 2014.122 He alleged that Mr Smith

had not just given false evidence about the conversation, but had gone

so far as to make up the conversation in his email of 3 March 2014. He

alleged that even though Mr Smith actually copied Mr Robinson into

the email, and specifically asked for advice in that very email as to

whether he had misunderstood the position. Mr Robinson said, on the

basis of these assertions, that Mr Smith was not an ‘honourable

person’.123

121 Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 54. 122 Michael Robinson, 4/9/2014, T:602.4-7; 605.18-20. 123

Michael Robinson, witness statement, 4/9/14, para 11; Michael Robinson, 4/9/14, T:605.28-32.

1446

148. Since Mr Robinson brought up the subject of dishonourable persons, it

must be questioned whether it was Mr Robinson rather than Mr Smith

who fits that description. Mr Smith’s telephone records reveal that he

did have a telephone conversation with Mr Robinson on 3 March

2014.124 Mr Robinson dissembled and suggested this may have been a

voice mail message. That, of course, was inconsistent with the

evidence he had previously given that Mr Smith had not rung him.125

Other phone records revealed that, despite Mr Robinson’s assertions

that he had nothing to tell Mr Smith and was too busy with domestic

duties on 1 or 2 March 2014 to speak to Mr Smith,126 he had a

conversation with Mr Ravbar on 1 March 2014 which ran for more

than 7 minutes.127 Mr Robinson was quite unreliable on these issues.

149. The ban on the Gladstone project continued. On 8 March 2014 Mr

Smith sent a further email to Mr Ravbar and Mr Robinson.128 He

recorded the fact that Mr Sutherland had told Mr Schalck that he had

been instructed to recommence the previous campaign against the

Universal Cranes business in order to pressure Mr Smith into signing

an agreement with the CFMEU for the Smithbridge business. Mr Smith

observed that this was consistent with Mr Ravbar’s earlier oral advice

that action would begin soon if Mr Smith did not agree to his demands

regarding a CFMEU agreement for the Smithbridge employees. Mr

Smith pleaded with Mr Ravbar not to proceed with the proposed bans

124 Robinson MFI-2, 4/9/14, p 1. 125 Michael Robinson, 4/9/2014, T:602.4-10; 605.18-20; Michael Robinson, witness statement, 4/9/14, para 11. 126

Michael Robinson, witness statement, 4/9/14, para 9. 127 Robinson MFI-3, 4/9/14, p 1. 128

Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 56.

1447

on Universal Cranes in support of his dispute with Smithbridge as it

would unnecessarily hurt Universal Cranes employees, most of whom

were CFMEU members.

150. Again, Mr Ravbar did not respond to that email denying any of the

matters raised. Counsel assisting submitted that he said he deliberately

chose not to read it. The evidence referred to129 said: ‘I had long since

stopped reading Mr Smith’s emails or responding to them.’ This is not

an efficient way of dealing with employers. In those circumstances

failure to deny a proposition can often, as here, be taken as acceptance

of it.

151. Fortuitously for Smithbridge and its contracting party, it was able to

complete its sub-contract work on 8 March 2014 by undertaking the

work at a time unknown to the CFMEU.130

152. Most recently, John Hanna, the Managing Director of Universal Cranes

Sunshine Coast, has indicated to Mr Smith that the company has been

taken off a Mirvac project and replaced by another crane company as a

result of pressure being applied to Mirvac from the CFMEU because of

the union’s dispute with Universal Cranes.131

129 Michael Ravbar, witness statement, 6/8/14, para 79. 130 Robert Swift, witness statement, 3/9/14, para 14; Albert Smith, witness statement, 4/8/14, para 181. 131

Albert Smith, witness statement, 4/8/14, para 184; Annexure AS-1 Tab 58; John Hanna, witness statement, 3/9/14, para 16.

1448

Dealing with the credit of Mr Ravbar and his denials

153. Mr Ravbar gave evidence that the CFMEU never applied pressure to

have Universal Cranes removed from sites. He testified that there was

never a ban imposed by the CFMEU on Universal Cranes.132

154. Mr Ravbar’s evidence was expressed in these absolute terms.

155. It became clear at an early point in Mr Ravbar’s examination that he

did not know whether those statements were true. As a result, the fact

that Mr Ravbar was prepared to give (and maintain) evidence of this

kind reflects poorly on his credit.

156. Although willing to state in absolute terms that the CFMEU had never

banned Universal Cranes or applied pressure to have Universal Cranes

removed from work sites, he admitted that, in the case of the very first

matter the subject of complaint, namely the removal of Gold Coast

Cranes from the Indooroopilly site, he was not aware that Gold Coast

Cranes had been on the site.133 He also had to concede that he had ‘no

knowledge’ about what had happened to Gold Coast Cranes on that

site.134

157. He ultimately accepted that, on the question of whether the union had

put pressure on Bastemeyers to remove Gold Coast Cranes from the

site, he could not ‘say yes or no’.135 That evidence was fundamentally

132 Michael Ravbar, 6/8/14, T:366.2-368.46. 133 Michael Ravbar, 6/8/14, T:370.33-47. 134

Michael Ravbar, 6/8/14, T:372.4-374.43 (emphasis added). 135 Michael Ravbar, 7/8/14, T:381.40-44.

1449

different from the sworn positive evidence he had previously given to

the effect that there had never been pressure applied.

158. Indeed, Mr Ravbar’s evidence on this topic deteriorated further.

Having admitted that he was not in a position to say one way or

another whether a union representative had applied pressure to

Bastemeyers to remove Gold Coast Cranes from the Indooroopilly site,

Mr Ravbar then returned to saying that ‘based on my knowledge’ the

statement that Gold Coast Cranes had been kicked off the site was

‘false’.136 However he was then immediately forced to concede, again,

that he had ‘no knowledge’ of the facts.137

159. The examination then proceeded to the next project about which a

complaint had been made in the contemporaneous correspondence,

being the FKP Project at Longland Street, Newstead. Again, although

being prepared to swear in absolute terms there had been no ban

imposed by the CFMEU on Universal Cranes, it emerged that Mr

Ravbar did not know whether or not there had been any ban at this

site.138

160. The next project about which complaint had been made in 2012 was

one involving Bauer and Transcity at the Legacy Way Tunnel project.

Contrary to his initial evidence, Mr Ravbar had to concede that he did

136 Michael Ravbar, 7/8/14, T:382.30-34. 137 Michael Ravbar, 7/8/14, T:382.36-45. 138

Michael Ravbar, 7/8/14, T:385.43-386.20.

1450

not know whether representatives of the unions had applied pressure

on that site.139

161. The position was the same in relation to work that was being

conducted by Universal Cranes for Brady Marine & Civil at the Port

Connect project. The complaint made at the time of the incident was

that a union representative had made it difficult for Brady Marine &

Civil due to the fact that the cranes on hire were from Universal

Cranes. Mr Ravbar claimed he did not even know who the union

representative at the Port Connect site was.140 If that questionable

evidence was correct, it would follow that it was not possible for him

to deny (as he did) that the union had applied pressure to Universal

Cranes’ contractor on that site.

162. The next project that had been the subject of complaint at the time was

the Westfield site at Carindale, where Universal Cranes’ customer was

a company called Scape Shapes. Again, Mr Ravbar had ‘no

knowledge’ of anything associated with Scape Shapes at the Westfield

Carindale site.141

163. It therefore appears that Mr Ravbar, from a position of alleged

ignorance as to the relevant events, was prepared to make a series of

absolute denials. This cavalier approach reflected poorly on Mr

Ravbar’s credit.

139 Michael Ravbar, 7/8/14, T:386.30-43. 140 Michael Ravbar, 7/8/14, T:388.17-18. 141

Michael Ravbar, 7/8/14, T:393.25-28.

1451

164. While Mr Ravbar was a courteous witness, other aspects of his

evidence were equally unsatisfactory.

165. He did not give candid evidence in relation to the fact that the CFMEU

had made a demand upon Universal Cranes to increase the number of

its employees who were members of the union.

166. As earlier observed, Mr Close’s response to Mr Smith’s request that

the CFMEU cease the ban on Universal Cranes on the basis Universal

Cranes would agree to enter into an EBA that included the BERT and

CIPQ clauses, was to say ‘will also want you to fix the membership’.

Mr Ravbar was aware of and approved this response.

167. When examined about this, Mr Ravbar went so far as to deny that the

expression ‘fix the membership’ was a reference to increasing

membership numbers. He argued that the expression simply meant

having Mr Smith ‘go out there and have a productive, cooperative

relationship and …talk to your workers’.142 This statement bore no

resemblance to the true position known to Mr Ravbar, and obvious

from the documents.

168. It was put to Mr Ravbar that what the CFMEU wanted, and what was

being sought through the email correspondence of August 2012, was to

have all Universal Cranes employees as CFMEU members. Mr Ravbar

said ‘that has never been a position of ours’.143 But later he admitted

that ‘in any workplace you want 100% membership that’s what unions

142 Michael Ravbar, 7/8/14, T:399.20-400.33. 143 Michael Ravbar, 7/8/14, T:400.9-14.

1452

seek to do’.144 Indeed Mr Close’s own email of 14 August stated

‘would want all workers as members like I used to have under the

previous Universal regime’.145

169. Having been given unsatisfactory evidence on these matters, Mr

Ravbar then dissembled further. He tried to allege that it was Mr

Smith who was offering ‘blood money’ in the form of union

membership fees. Mr Ravbar said that ‘at the end of the day as long as

we have access, we have good relationships’ with employees, the

union would be happy.146

170. These statements should be rejected. It is plain from Mr Close’s own

emails of 2012 that the union was demanding that Mr Smith bring

more employees to the union. Mr Smith’s unchallenged and

uncontradicted evidence was that he gave representatives of the

CFMEU regular and open access to employees.147

171. Mr Ravbar also tried to pretend that it was Mr Smith who had been

offering the CFMEU 100% membership.148 That was not true. Its

untruth is demonstrated by the email exchanges of 14 August 2012 in

which Mr Smith made it plain on various occasions that he would be

144 Michael Ravbar, 7/8/14, T:400.9-14. 145 See above para 84; Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 14. 146

Michael Ravbar, 7/8/14, T:401.17-35. 147 See above paras 26 and 40; Albert Smith, 4/8/14, T:26.3-29.36; Albert Smith, witness statement, 4/8/14, paras 39, 41. 148

Michael Ravbar, 7/8/14, T:402.39-41.

1453

unable to achieve anything of the order demanded and that all he

would be able to do would be to set a target of the order of 50%.149

172. There is another significant matter counting against Mr Ravbar, Mr

Close and other CFMEU officials. Not one of them ever wrote back to

Mr Smith or Mr Schalck to deny the serious allegations that they were

making to the effect that the CFMEU was banning Universal Cranes

and applying pressure to its customers. Mr Ravbar was someone who

had been involved with business for a long time and he admitted that

he well understood the importance of reducing communications to

writing so there is a clear record.150

173. If the position was not as Mr Smith and Mr Schalck had described in

their various emails and letters of complaint to the CFMEU, these

experienced union campaigners would have responded in writing to

make clear that the allegations were denied. No one ever did this.

174. Mr Ravbar’s treatment of this issue during the course of his

examination was unimpressive.

(a) At first he admitted that there was not one response at any

time from the CFMEU denying the allegations of boycotts

and bans that have been made by Universal Cranes.151

149 Michael Ravbar, 7/8/14, T:402.43-47; Albert Smith, witness statement, 4/8/14, Annexure AS-1 Tab 14. 150

Michael Ravbar, 7/8/14, T:418.39-419.2. 151 Michael Ravbar, 7/8/14, T:425.12-14.

1454

(b) He then refused to accept an obvious proposition, namely that

it would have been easy to do a one line email back to Mr

Smith or Mr Schalck stating that the allegations made were

denied.152

(c) He then went back on his earlier evidence that he did not

know of one response denying the allegations, and said that

there had been ‘verbal’ denials.153 By the time of this reversal

in his evidence he had appreciated that the absence of any

denial of Mr Smith’s allegations throughout the whole of

2012 and 2013 was harmful to the CFMEU.

(d) Mr Ravbar’s evidence later stated that he had actually given

instructions to the CFMEU employees not to respond to Mr

Smith’s written allegations, because he had heard rumours

that Mr Smith was working with the FWBC.154 If he was

concerned that Mr Smith’s emails were inaccurate and that

Mr Smith was trying to trap the CFMEU, it would have been

all the more important to write back, clearly stating the

position.155

(e) When this was put to Mr Ravbar he changed his evidence

again, and said that he did not respond to Mr Smith’s emails

152 Michael Ravbar, 7/8/14, T:425.16-18. 153 Michael Ravbar, 7/8/14, T:425.20-33. 154

Michael Ravbar, 7/8/14, T:430.8-13. 155 Michael Ravbar, 7/8/14, T:431.19-23.

1455

in which complaints and allegations were made because he

‘did not have time’.156

175. The matters pertaining to Mr Ravbar’s credit as set out in the

submissions concerning the BERT funds are also of relevance (as to

which see Chapter 5.2).

176. For these reasons Mr Ravbar was not a witness of credit. His evidence

cannot be preferred to that of Mr Smith.

Rejection of CFMEU’s theories as to customers’ behaviour

177. The CFMEU advanced various theories to seek to explain why it was

that the many different contractors with whom Universal Cranes and

Smithbridge dealt in 2012 and 2013 removed those companies from

the sites they were working on.

178. The evidence given by witnesses from Smithbridge Group and its

customers demonstrates that those theories are wrong. However, for

the sake of completeness, it is worth describing what the CFMEU

theories were and why they were misconceived in any event.

179. One theory put forward by the CFMEU concerned the existence of a

‘sub-contractor clause’ in some of the EBAs that the CFMEU has with

some builders.

180. The clause in question reads as follows:

156 Michael Ravbar, 7/8/14, T:431.25-36.

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35 EMPLOYMENT SECURITY, STAFFING LEVELS, MODE OF RECRUITMENT AND REPLACEMENT LABOUR

35.1 The employer recognises that in certain circumstances the use of contractors and labour hire may effect the job security of employees covered by this agreement.

The use of contractors and the use of supplementary labour hire requirements in this clause shall not apply to projects currently under construction before the signing of this agreement.

The application of these requirements shall recognise geographical and commercial circumstances that may result in a competitive disadvantage to the employer and its capacity to secure the project. In these circumstances the Employer and the Union(s) agree to vary these requirements on a project by project basis. Negotiations are to be conducted in good faith and agreement will not be unreasonably withheld.

35.2 Use of Contractors

If the company wishes to engage contractors and their employees to perform work in the classifications covered by this agreement, the company must first consult in good faith potentially affected employees and their union. Consultation will occur prior to the engagement of sub-contractors for the construction works.

If, after consultation, the company decides to engage bona fide contractors, these contractors and their employees will receive terms and conditions of engagement (or terms no less favourable) as they would receive if they were engaged as employees under this agreement performing the same work. The use of sham sub-contracting arrangements is a breach of this agreement.

181. CFMEU’s theory proceeded on the basis that because this clause

existed, and because neither Universal Cranes nor Smithbridge had a

CFMEU form of EBA, contractors on projects would have been

obliged to refuse to engage Universal Cranes and Smithbridge, and

would have decided not to use them for this reason.

1457

182. There was no evidence advanced by the CFMEU to support this

theory. It ran counter to the evidence of the witnesses from

Smithbridge Group and its customers.

183. Further, the theory was fundamentally misconceived.

184. First, taking the case of the Multiplex project at the Indooroopilly

shopping center, the EBA between the CFMEU and Multiplex was not

entered into until late 2012.157 This was over 6 months after the period

when Gold Coast Cranes were removed from that site. As such, the

sub-contractor clause in that EBA could have had nothing to do with

the treatment of Gold Coast Cranes in May 2012. The CFMEU’s

questioning of Mr Smith therefore proceeded on the incorrect basis

that the Multiplex EBA bound that company to act in a particular way

towards Universal Cranes.158

185. Secondly, in many cases, the Universal Cranes or Smithbridge

company in question was not engaged by a head contractor who may

have had a union form of EBA with the ‘sub-contractor clause’ in it.

Rather, the Universal Cranes or Smithbridge company was retained by

a sub-contractor.

186. As such, even if the Multiplex EBA with the CFMEU had existed at

the relevant time (which it did not), the sub-contractor clause in that

EBA was irrelevant to the position of Gold Coast Cranes. This is

because the sub-contractor clause would only have related to the

157 Michael Ravbar, witness statement, 6/8/14, Annexure Tab MR04. The CFMEU later sought to tender an earlier EBA with a Multiplex company. That is not relevant, because it is an EBA with a different Multiplex company. 158

See for example, Albert Smith, 4/8/14, T:68.3-69.26.

1458

position as between the builder and contractor. It did not purport to

regulate, in any way, the position as between the contractor and Gold

Coast Cranes.

187. Thirdly, at around the very time when Universal Cranes and Gold

Coast Cranes experienced the difficulties Mr Smith described, the sub-contractor clause had been the subject of litigation between Multiplex

and the CFMEU. Multiplex and the CFMEU were, at that time, in the

middle of negotiations that ultimately led to the EBA executed by them

in late 2012. In the course of those negotiations, Multiplex had

contended that the sub-contractor clause had no operation where

Multiplex did not have its own employees to carry out the works to be

sub-contracted. That contention was well founded in circumstances

where section 172 of the Fair Work Act 2009 (Cth) provides that an

enterprise agreement must concern matters pertaining to the

relationship between an employer and its employees, where the clause

was concerned with the ‘employment security’ of Multiplex’ own

employees, and where the machinery in clause 35.2 required

consultation with ‘affected employees’ (of which there could be none

if Multiplex did not have employees for the sub-contract works).

188. Multiplex’s contentions about the limited scope of operation of the

sub-contractor clause were accepted by Fair Work Australia on 16 May

2012 in Construction, Forestry, Mining and Energy Union v Brookfield

Multiplex Australasia Pty Ltd.159

159 [2012] FWA 4051.

1459

189. As a result of this published decision, Multiplex and other head

contractors would have been well aware that the sub-contractor clause

had no application where the sub-contractor to be retained by the head

contractor would carry out work which the head contractor did not

have its own staff to perform.

190. There is no suggestion in any evidence that any of the head contractors

employed their own crane operators. That being so, in light of the

published decision of the day, no contractor would have considered the

sub-contractor clause in the EBA to be relevant to Universal Cranes or

Gold Coast Cranes performing work onsite. Multiplex was, at this very

time, acutely aware that the clause was irrelevant. It had championed

that view. Hence it is not correct to suggest that the clause motivated

Multiplex (or any other head contractor) to treat Gold Coast Cranes in

a particular way.

191. Fourthly, Universal Cranes and Smithbridge were already working on

the sites in question. Indeed, in some cases, they had been working for

many months. They had not been excluded from the site or working on

the project by reason of the employment terms of the company. That

would surely have been a matter addressed at the outset of the project.

Indeed Mr Ravbar confirmed this in his oral evidence, noting that to

the extent conversations between the union and contractors take place,

they occur ‘when these projects are started’ and once undertaken by

contractors to ensure they ‘get the right subbies’.160

160 Michael Ravbar, 7/8/14, T:384.16-20.

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192. Fifthly, there is no evidence to demonstrate that any head contractor or

sub-contractor considered that the terms of the 2012 EBA between

Universal Cranes and its employees were less favourable than those

enjoyed by the head contractor.

193. The proposition that simply because the 2012 EBA made provision for

a self-funded redundancy and sick leave scheme rather than for

contributions to BERT and CIPQ, Universal Cranes’ employees were

receiving terms and conditions no less favourable than those of any

given head contractor does not follow. And there is no evidence to

indicate that head contractors believed that it followed.

194. In the case of sick leave and income protection, for example, as Mr

Smith succinctly explained: ‘I offered my employees exactly the same

benefits as the CIPQ fund but because I have to minimise my costs to

stay in business, I devised a way to do it at a lower cost’.161 That

evidence was not challenged.

195. A consideration of whether the terms and conditions of engagement of

an employee by Universal Cranes were no less favourable would

involve an analysis of all of the integers of the employment contract

including, for example, rates of pay, flexibility of working hours and

so on. In this sense, the sub-contract clause appears to be almost

unworkable save for the most obvious of cases where all of the

employment terms of a given sub-contractor are worse than those

enjoyed by employees of the head contractor.

161 Albert Smith, 4/8/14, T:58.7-9.

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196. Yet another problem with the CFMEU theory is that, on occasion, the

contract under which Universal Cranes was operating was for ‘dry-hire’ - that is, Universal Cranes was simply hiring cranes without

providing any workers. Yet even here, a space in which the sub-contractor clause could have no possible scope for operation, Universal

Cranes was refused access to worksites. Mr Ravbar admitted this to be

so,162 thus admitting the CFMEU theory to be one incapable of

acceptance, at the very least in respect of the ‘dry hire’ incidents.

197. For each and all of these reasons, the CFMEU ‘sub-contractor clause’

theory is quite untenable. It is an attempt by the CFMEU to explain

away the on-site treatment of Universal Cranes and Smithbridge in

circumstances where every contemporaneous record and the evidence

of many witnesses points to the conclusion that the treatment of these

companies was the result of a deliberate banning campaign launched

by the CFMEU.

198. Perhaps aware of the shortcomings in the sub-contractor clause theory,

the CFMEU appeared to offer up an alternative explanation through

Mr Ravbar. That explanation was that, ‘when asked’, CFMEU officials

would inform persons retaining Universal Cranes that Universal

Cranes refused to pay into BERT.163

199. This alternative explanation is no more plausible than the sub-contractor theory.

162 Michael Ravbar, 7/8/14, T:387.16-32. 163 Michael Ravbar, witness statement, 6/8/14, para 45.

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200. To begin with, there is no evidence of any occasion upon which any

contractor made such an inquiry of the CFMEU. The fact Mr Ravbar

and others were unable to provide a single example of such an

occurrence is telling. There is no substance to the union position. It

ran counter to the evidence of the witnesses from Smithbridge Group

and their customers.

201. Further, the explanation makes no sense. As earlier indicated, in most

cases Universal Cranes and Smithbridge had been working on the site

for many months. Any inquiry made by a head contractor of the

CFMEU would have been made at the outset of the project and

certainly before Universal Cranes was engaged. The theory is also

illogical given the fact some of the contracts were ‘dry hire’ only.

The CFMEU’s submissions

202. The primary approach of the CFMEU’s written submissions was to

complain about instances where witnesses had not been called, where

hearsay was relied on and where counsel assisting was ‘unbalanced’.

In general it may be said that none of these points descends to any

grappling with the detail of what counsel assisting submitted. Even if

these points had been correct, how did they invalidate the reasoning in

counsel assisting’s submissions? In any event, they were not correct.

The witnesses not called were either non-essential or non-traceable.

The limited amount of hearsay relied on was almost always first-hand.

And counsel assisting were not unbalanced. The greater part of the

CFMEU’s submissions merely advocated adoption of whatever

evidence was against the evidence on which counsel assisting relied,

without explaining why the evidence it favoured should be preferred.

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203. On more than one occasion the CFMEU submissions misrepresented

the evidence. It would be odious to multiply examples. But one may

be given. The CFMEU submitted, in accordance with Mr Ravbar’s

evidence, that ‘the CFMEU did not approach Universal Cranes

customers’.164 With that may be compared the evidence that a

CFMEU official came onto the Indooroopilly site and ejected Gold

Coast Cranes. In doing so he said that the company had been banned

from all sites in Brisbane. He acted in this way contrary to the wishes

of the customer of Gold Coast Cranes (who actually suffered losses as

a result). Multiple witnesses gave firsthand (not hearsay) evidence that

the CFMEU official on the Gladstone project came onto the site and

unilaterally determined that the Smithbridge workers would not

continue work, even though Smithbridge’s customer wanted them to

stay and continue the work.

204. The CFMEU submitted that procedurally it suffered unfairness because

of the speed with which evidence had to be prepared from 25 July 2014

before a hearing in Brisbane commencing on 4 August 2014 and

because of a lack of notice to some witnesses of findings that might be

made against them. The contention about the first item of supposed

unfairness is rejected. The submission is not linked to the position of

any particular witness or any particular evidence. The second

contention culminates in the submission that no findings that Messrs

Loakes, Cradden or Toyer acted contrary to law be made. Counsel for

the CFMEU does not act for Mr Cradden or Mr Toyer. However, no

findings of that kind are made against Mr Cradden or Mr Toyer. If the

submission is that no finding should be made against Mr Treadaway

164 CFMEU submissions, 14/11/14, Pt 8.7, para 36.

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either, who did not give evidence and for whom the CFMEU’s counsel

do not act, the position is that no findings of breaches of the law are

made against Mr Treadaway. But his role in the unfolding of events is

dealt with independently of its legal character. Mr Loakes is in a

different position. He is employed by the CFMEU, who was

represented before this Commission. The CFMEU gave Mr Loakes

copies of the statements that affected him, and its lawyers appeared

throughout the course of Mr Loakes’ evidence. The CFMEU admits165

that he supplied a statement prepared by the CFMEU lawyers working

on the Commission’s inquiry responding to the material put on by the

Royal Commission, and gave oral evidence. It may be inferred that he

had been informed of all the statements having an impact on his

position. The CFMEU submits: ‘He was not forewarned that

submissions would be made that his actions were contrary to the

law’.166 But the CFMEU’s legal advisers were in a position to put

before him all the material from which a conclusion that his conduct

may have been against the law is available, and it appears they did so.

The CFMEU also submits that he was ‘entitled to be heard in

opposition to any potential adverse finding’.167 The submissions of

counsel assisting fulfilled any requirement of notice sufficient to

enable him to claim that entitlement.

205. Accordingly the submissions of counsel assisting set out above are

accepted.

165 CFMEU written submissions, 14/11/14, Pt 8.7, para 43. 166 CFMEU written submissions, 14/11/14, Pt 8.7, para 23. 167

CFMEU written submissions, 14/11/14, Pt 8.7, para 23.

1465

C - CONCLUSIONS

What does Australian law have to say about the CFMEU’s behavior?

Extortion

206. Section 415 of the Criminal Code Act 1899 (Qld) provides as follows:

(1) A person (the demander) who, without reasonable cause, makes a demand -

(a) with intent to -

(i) gain a benefit for any person (whether or not the demander); or

(ii) cause a detriment to any person other than the demander; and

(b) with a threat to cause a detriment to a person other than the demander;

commits a crime.

Maximum penalty -

(a) if carrying out the threat causes, or would be likely to cause serious personal injury to a person other than the offender - life imprisonment; or

(b) if carrying out the threat causes, or would be likely to cause substantial economic loss in an industrial or commercial activity conducted by a person or entity other than the offender (whether the activity is conducted by public authority or is a private enterprise) -life imprisonment; or

(c) otherwise - 14 years imprisonment.

(2) It is immaterial that -

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(a) the demand or threat is made in a way ordinarily used to inform the public rather than a particular person; or

(b) the threat does not specify the detriment to be caused; or

(c) the threat does not specify the person to whom the detriment is to be caused or specifies this in a general way; or

(d) the detriment is to be caused by someone other than the demander.

(3) A reference to making a demand includes causing someone to receive a demand.

(4) A reference to a threat to cause a detriment to any person other than the demander includes the statement that gives rise to a threat of detriment to the other person.

(5) A prosecution for an offense in which it is intended to rely on a circumstance of aggravation mentioned in paragraph (a) or (b) of the penalty can not be commenced without the consent of the Attorney-General.

(6) In this section - threat includes statement that may reasonably be interpreted as a threat.

207. Mr Ravbar and Mr Close may have committed various offences under

section 415 of the Criminal Code.

Count 1 for Mr Ravbar - 8 July 2013

208. As earlier described, on 8 July 2013 Mr Ravbar said to Mr Smith that

the CFMEU would kick Universal Cranes off Darwin and Townsville

sites and would kill the company’s operations in Darwin if Universal

Cranes (Townsville) did not enter into an EBA with the CFMEU on

terms acceptable to the CFMEU.

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209. This communication contained a demand accompanied by a threat, the

terms of which are self-evident from the express terms of the

communication. The demand was for Universal Cranes (Townsville)

to enter into the CFMEU’s form of EBA. The threat was that, if this

did not occur, the CFMEU would take action that would have the

effect of removing Universal Cranes off sites they worked on in

Darwin and Townsville and kill off the company’s operations in

Darwin. Such action would obviously be detrimental to Universal

Cranes companies.

210. The capacity for the CFMEU to take such action, and the nature of that

action, is apparent from the evidence of witnesses such as Mr Zoller,

Mr Swift, Mr Bastemeyer, Mr Bourner and others, and the fact that the

CFMEU could and did act in this way was well known to each of Mr

Smith and Mr Ravbar at the time of this conversation. The threat was

specific and real.

211. Did Mr Ravbar intend to gain a benefit or cause detriment to someone

by making the demand and threat? He was motivated to act as he did

by a strong desire to have Smithbridge Group companies sign EBAs in

terms which obliged them to make payments they would not otherwise

have to make to BERT, BEWT and CIPQ, a substantial portion of

which would, in due course, flow through to the CFMEU itself for

various purposes.168 He was, therefore, in making the demand and

threat, intending to benefit each of those entities.

168 See Chapter 5.2.

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212. Hence an offence against s 415 of the Criminal Code may have been

committed.

213. The penalty for extortion varies depending on a number of factors.

One of those factors is whether carrying out the threat would be likely

to cause substantial economic loss in an industrial or commercial

activity. In such a case, the maximum penalty is life imprisonment

(that is, greater than the 14 year maximum sentence in most other

cases).

214. It is recommended that this Interim Report be referred to the

Queensland Director of Public Prosecutions in order that consideration

may be given to the prosecution of Mr Ravbar in respect of an offence

under s 415 of the Criminal Code. There was no close consideration to

the economic loss to Universal Cranes in the event Mr Ravbar’s threat

was carried out. It is not possible to make a finding about what the

precise loss was. But it may well have been substantial. It would

certainly be loss in an industrial or commercial activity. These issues

ought to be and doubtless will be explored further by the Queensland

Director of Public Prosecutions.

Count 2 for Mr Ravbar - 28 February 2014

215. On 28 February 2014 Mr Ravbar and Mr Smith had a telephone

conversation earlier described. Its substance was recorded in an email

of the same date from Mr Smith to Mr Ravbar.

216. Mr Ravbar demanded that Smithbridge enter into the CFMEU form of

EBA, and said to Mr Smith that while he would not be openly banning

1469

Smithbridge if the EBA was not signed, the CFMEU ‘had its ways’,

Smithbridge and Universal Cranes would feel the effects of the

CFMEU’s pressure, and the pressure would be of the same kind that

Universal Cranes had previously experienced.

217. Again, the elements of an offence under s 415 of the Criminal Code

are made out.

218. First, there was a demand, namely for Smithbridge to enter into the

CFMEU form of EBA.

219. Secondly, there was a threat to cause detriment to Smithbridge and

Universal Cranes. Having regard to what Mr Ravbar said to Mr Smith

as described above, it is clear that he was communicating to Mr Smith

that the CFMEU would have organisers attend on sites where

Smithbridge and Universal Cranes were working and stop their

operations, just as they had done in the past (as demonstrated by

evidence from Mr Zoller, Mr Swift, Mr Bastemeyer, Mr Bourner and

others). This would be obviously detrimental to these companies.

220. Thirdly, for reasons previously given, it is clear that Mr Ravbar acted

in this way in an attempt to gain advantages for BERT, BEWT and

CIPQ, and in due course, the CFMEU, in the form of the payments that

would flow to those entities (directly or indirectly) if the CFMEU form

of EBA was signed by Smithbridge.

221. An offence may have been committed under s 415 of the Criminal

Code in relation to the incident on 28 February 2014. What was said

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of the penalty provisions in relation to the 8 July 2013 incident is

repeated here.

222. It is recommended that this Interim Report be referred to the

Queensland Director of Public Prosecutions in order that consideration

may be given to the prosecution of Mr Ravbar for an offence against s

415 of the Criminal Code.

Count 1 for Mr Close - July 2012

223. In July 2012 Mr Close telephoned Mr Smith. He told him that he

understood that Universal Cranes was nearly on its knees. He told him

he would keep his campaign against Universal Cranes up until it signed

an agreement with the CFMEU on CFMEU’s terms. Mr Close was

making a demand on Universal Cranes that it sign the CFMEU’s form

of EBA.

224. He coupled that demand with a threat, namely that he would keep his

campaign against Universal Cranes up. The ‘campaign’ to which Mr

Close was referring was one under which CFMEU officials had been,

up to that point, attending at worksites such as Indooroopilly,

Newstead, and the Transcity tunnel and stopping Universal Cranes

from operating. This is evident from the fact that such activity had

actually been occurring up to that point. It is also evident from the fact

that in this conversation Mr Close referred to Mr Smith being nearly on

his knees, and also said that he understood that the action being taken

by the CFMEU was illegal.

1471

225. Plainly the threat was to cause detriment to Universal Cranes, and

equally clearly, Mr Close’s intention was to secure a benefit for

BERT, BEWT, CIPQ and the CFMEU.

226. In these circumstances, Mr Close may have committed an offence

under s 415 of the Criminal Code in July 2012.

227. It is recommended that this Interim Report be referred to the

Queensland Director of Public Prosecutions in order that consideration

may be given to the prosecution of Mr Close for an offence under s

415 of the Criminal Code.

228. What was said above at paragraphs 213 and 214 on the question of

penalty is repeated.

Count 2 for Mr Close - 14 August 2012

229. On 14 August 2012 Mr Smith sent Mr Close an email asking him to

advise whether the CFMEU would lift its ban on Universal Cranes if

the company signed an EBA with the union on certain terms. Mr

Close responded ‘Will also want you to fix the membership if we are to

move forward…’.

230. By responding to Mr Smith’s particular request in these particular

terms, in the general context in which the response was written, Mr

Close was communicating to Mr Smith two demands. One was that

the CFMEU’s attack on Universal Cranes would continue until an

acceptable form of EBA had been signed. The other was that it would

1472

continue until Mr Smith had arranged for a larger number of

employees of Universal Cranes to become members of the CFMEU.

231. That communication necessarily also conveyed both and a threat to

cause detriment to Universal Cranes (the continuation of the CFMEU

treatment of Universal Cranes on work sites). Given the history of the

dealings between the individuals and the fact that the attack was

centered on securing an EBA on terms that included the BERT, BEWT

and CIPQ clause, and was now further expressly centered on

increasing CFMEU’s membership base, it is clear that Mr Close was

intending, by the communication, to gain a benefit for the CFMEU,

BERT, BEWT and CIPQ.

232. In these circumstances, Mr Close may have committed an offence

under s 415 of the Criminal Code on 14 August 2012.

233. It is recommended that this Interim Report be referred to the

Queensland Director of Public Prosecutions in order that consideration

may be given to the prosecution of Mr Close for an offence under s

415 of the Criminal Code.

234. What was said above at paragraphs 213 and 214 on the question of

penalty is repeated.

Count 3 for Mr Close - 3 September 2012

235. On 3 September 2012 Mr Schalck sent to Mr Close a copy of an email

he had previously sent to Mr Ingham, in which he proposed ‘a deal so

that we can have this ban lifted’, in which he set out a proposal for

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entering into an EBA on particular terms, and in which he had asked

whether ‘you will lift the ban on Universal Cranes’ if Universal Cranes

agreed to enter into such an EBA. Amongst other things, the proposed

form of EBA did not contain the CFMEU’s standard 2 hour clause.

236. Mr Close responded by email of 3 September 2012 saying ‘unless we

have our 2 hour clause untouched NO DEAL. Balls in your court. I

was in Sydney over the weekend and had a quick look to see if your

cranes were still at Bangaroo???? (sic)’.

237. By communicating in those terms, Mr Close conveyed a number of

things to Universal Cranes.

238. First, he demanded that Universal Cranes enter into an EBA on

particular terms.

239. Secondly, he indicated that unless that demand was satisfied, the

CFMEU’s attack on Universal Cranes would continue, and specifically

at the Barangaroo site. This is evident from the following combination

of matters.

(a) The background to this email: the CFMEU had been

attacking Universal Cranes on worksites because of its refusal

to enter into the union’s EBA.

(b) The ‘deal’ that Mr Close was rejecting in his email was the

one that Mr Schalck had proposed, namely the lifting of the

ban in return for an EBA in particular terms.

1474

(c) The reference to the Barangaroo site and the use of four

question marks, in the last sentence of Mr Close’s email,

constituted a veiled threat that if Universal Cranes did not

conform to the CFMEU’s demand, the next site affected

would be Barangaroo.

240. By behaving in this way, Mr Close was intending to gain an advantage

for the CFMEU, in the form of an EBA in the terms it wanted.

241. In these circumstances, Mr Close may have committed an offence

under s 415 of the Criminal Code on 3 September 2012.

242. It is recommended that this Interim Report be referred to the

Queensland Director of Public Prosecutions in order that consideration

may be given to the prosecution of Mr Close for an offence under s

415 of the Criminal Code.

243. What was said above at paragraphs 213 and 214 on the question of

penalty is repeated.

Breach of s 359 of the Criminal Code Act 1899 (Qld)

244. Section 359 of the Criminal Code (Qld) provides that any person who

threatens to cause any detriment to another with intent to compel him

to perform an act which he is lawfully entitled to abstain from doing is

guilty of a misdemeanor.

245. The maximum penalty for breach of s 359 is 5 years imprisonment.

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246. Messrs Ravbar and Close each may have contravened s 359 of the

Criminal Code.

247. Each one made the threats attributed to them above.169 Each threat was

one to cause detriment to one or more company in the Smithbridge

Group. Each threat was made deliberately with the intention of

compelling one or more company in the Smithbridge Group to enter

into an EBA with the CFMEU (and in some cases also compelling the

company to arrange for its employees to become CFMEU employees)

in circumstances where the entity in question was lawfully entitled to

refuse to do so.

248. It is recommended that this Interim Report be referred to the

Queensland Director of Public Prosecutions in order that consideration

may be given to the prosecution of Messrs Ravbar and Close in respect

of offences under s 359 of the Criminal Code.

Breach of s 343 of the Fair Work Act 2009 (Cth)

249. Section 343 of the Fair Work Act 2009 (Cth) provides that a person

must not organise or take, or threaten to organise or take, any action

against another person with the intent to coerce the other person, or a

third person, to exercise or not exercise, a workplace right.

169 See paragraphs 208, 209, 215, 216, 219, 220, 223-225, 229-231, 235, 236, 239.

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250. A person has a ‘workplace right’ if the person is, inter alia, entitled to

the benefit of, or has a role or responsibility under, a workplace law.170

‘Workplace law’ includes the Fair Work Act 2009 (Cth).171

251. There are two essential elements to s 343. First, a person must

organise or take, or threaten to organise or take, action against another

person. Secondly, the first person must have so acted with the intent to

coerce the other person, or a third person, to exercise or not exercise a

workplace right.

252. The action which officers of the CFMEU organised or took, or

threatened to organise or take, was as follows. Mr Ravbar and Mr

Close each threatened to take the threatened action which has been

dealt with already in the context of offences under the Criminal Code.

The organisers, namely Messrs Robinson, Sutherland and Loakes all

took the threatened action on worksites against a Smithbridge Group

company which resulted in the company being shut down on the site.

Mr Ravbar and Mr Close organised the taking of the threatened action.

That may be inferred from the supervisory role they played relative to

the organisers, the making of the threats, and the inherent

improbability that the organisers would have each acted of their own

accord in the particular way they did, either generally, let alone in the

particular overarching circumstances

253. The action so taken was undertaken for a specific purpose. It was to

try to coerce one or more Smithbridge Group companies to enter into

an EBA with the CFMEU in particular terms. So much is obvious

170 Fair Work Act 2009 (Cth), s 341. 171 Fair Work Act 2009 (Cth), s 341.

1477

from the conduct itself, the nature of the threats that were made, and

the surrounding circumstances.

254. One of the workplace rights which the Smithbridge Group companies

were being coerced not to exercise was the right to make an enterprise

agreement with its employees without the interference of the CFMEU.

Another was the right to seek to make an enterprise agreement on

terms other than those proposed by the CFMEU.172

255. Section 343 is a civil remedy provision under the Fair Work Act 2009

(Cth), which means that under s 539, action may be taken against the

CFMEU and its officers by an inspector in the Federal Court or the

Federal Circuit Court.

256. The maximum penalty is 60 penalty units, which equals $10,200. This

appears to be manifestly deficient for coercive conduct of the kind

described.

257. A breach of s 343 may have taken place.

258. It is recommended that this Interim Report be referred to

Commonwealth regulatory authorities in order that consideration may

be given to the prosecution of Mr Ravbar and Mr Close in respect of

breaches of s 343.

172 Fair Work Act 2009 (Cth), s 341.

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Breach of s 340 of the Fair Work Act 2009 (Cth)

259. Section 340 of the Fair Work Act 2009 (Cth) prohibits a union or union

officer from taking ‘adverse action’ against another person (a) because

the other person has a ‘workplace right’ or has or has not exercised that

right, or proposes to exercise or not exercise that right, or (b) to prevent

the exercise of that right by the other person.

260. A union takes ‘adverse action’ against a person if it, inter alia, takes

action that has the effect, directly or indirectly, of prejudicing the

person in the person’s employment or prospective employment.173 An

officer takes ‘adverse action’ in the same circumstances.

261. Hence a union will take adverse action against an employee of a

company where it prevents the employee’s employer from undertaking

paid work of a kind it would otherwise undertake to such an extent that

the employee’s employment is prejudiced. The same is true of an

officer.

262. This is because, although the action is primarily directed to the

employer (here Universal Cranes), it has a direct effect on its

employees, and either directly, or at least indirectly, prejudices the

employees’ employment. Their employment is prejudiced because the

employer earns less money than it otherwise would and thus has less

money and work opportunities to be able to keep the employee in

employment.

173 See Fair Work Act 2009 (Cth), Item 7 s 342(1).

1479

263. This is precisely the sort of action that the CFMEU and its officials

took against workers in the employ of Universal Cranes, some of

whom were CFMEU members. The CFMEU was attacking

employees, some of whom were its own members.

264. Mr Smith’s uncontested evidence was that Universal Cranes had to

start putting workers off because of the volume of work that the

company lost as a result of the union’s action in shutting down the

company on work sites up to October 2012.

265. Action up to that point had been taken by at least Mr Sutherland at Port

Connect, and CFMEU officials whose identities it has been impossible

to determine on various other sites. That action was organised by Mr

Ravbar and Mr Close.

266. That ‘adverse action’ was taken because of each and all of the

following:

(a) The employees of Universal Cranes had workplace rights,

namely the right to have an EBA with their employer on the

terms that were then in place, and the right to have an EBA on

terms other than those the CFMEU was looking to force upon

the company and its employees.

(b) The employees had exercised those rights.

(c) The CFMEU desired to prevent the employees from

exercising their right to continue to have an EBA with their

1480

employer on the existing terms, and to decline to have an

EBA on the terms the CFMEU was seeking to impose.

267. The CFMEU and each of Mr Ravbar, Mr Close and Mr Sutherland

may have breached s 340 of the Fair Work Act 2009 (Cth).

268. That provision is a civil remedy provision under the Fair Work Act

2009 (Cth), which means that under s 539, action may be taken against

the CFMEU and its officers by an inspector in the Federal Court or the

Federal Circuit Court.

269. The maximum penalty is 60 penalty units. Again, that appears to be

manifestly deficient.

270. It is recommended that this Interim Report be referred to the

Commonwealth regulatory authorities in order that consideration may

be given to proceedings against Mr Ravbar, Mr Close and Mr

Sutherland in respect of a breach of s 340.

Breach of s 228 of the Fair Work Act 2009 (Cth)

271. Section 228(1)(e) of the Fair Work Act 2009 (Cth) provides that a

bargaining representative for a proposed EBA must refrain from

capricious or unfair conduct that undermines freedom of association or

collective bargaining. The CFMEU may have failed to meet this

standard by acting in the manner described in these submissions. The

provision is not a civil remedy provision. It does not appear that any

punitive action can be taken against the CFMEU in respect of this

misconduct.

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Breach of s 45E of the Competition and Consumer Act 2010 (Cth)

272. Among other things, s 45E prohibits a person who has been

accustomed or is under an obligation to acquire goods or services from

another person, from making a contract or arrangement or arriving at

an understanding with an employee organisation which contains a

provision preventing or hindering the person from acquiring or

continuing to acquire goods or services from that other person,

provided the person or the other person (or both) are corporations.

273. Each of the Universal Cranes and Smithbridge customers identified

above174 were accustomed to acquiring services from Universal

Cranes.

274. As a result of pressure from officers of the CFMEU of the kind

described above175 those customers arrived at an arrangement or

understanding with the CFMEU and its officers that they would not

insist on acquiring the services of Universal Cranes and Smithbridge.

275. The fact that the builders were placed under pressure from the CFMEU

to act as they did does not detract from the proposition that an

arrangement or understanding was reached.176 They would not have

been happy with the understanding that had been arrived at (in that

their own preference would have been to continue to acquire the

services) but, rather than standing up to the CFMEU organisers and

174 See paras 48, 134, 162, 210 and 219. 175 See paras 44, 47, 74, 107, 110, 152, 157, 158, 160, 161, 162 and 172. .

176 See Gibbins v Australasian Meat Industry Employees’ Union (1986) 12 FCR 450, 470 (Smithers J).

1482

take on the risk of industrial action in response, they arrived at the

understanding nonetheless.

276. This understanding prevented or hindered those customers from

acquiring or continuing to acquire services from Universal Cranes and

Smithbridge.

277. The result is that each of the Universal Cranes and Smithbridge

customers may have contravened s 45E. The fact that the

understanding was entered into by the customers under pressure from

the CFMEU officials would be a strong factor militating against any

action being taken against them. No recommendation is made that

their role be referred to the Australian Competition and Consumer

Commission.

278. The CFMEU may have been a party to, or knowingly concerned in,

each of the contraventions by the customers. The CFMEU may have

been the other party to the arrangement or understanding and may have

had knowledge of all of the elements of the contraventions by the

customers. Accordingly, the CFMEU may be liable pursuant to s

76(1)(e) of the Competition and Consumer Act 2010 (Cth) in respect of

each contravention by a customer.

279. It is recommended that this Interim Report be referred to the Australian

Competition and Consumer Commission in order that consideration

may be given for the taking of proceedings against the CFMEU.

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280. The maximum pecuniary penalty payable by the CFMEU in respect of

each contravention by a customer in which its secondary participation

is established is $750,000.

Breach of s 45D of the Competition and Consumer Act 2010 (Cth)

281. Section 45D relevantly provides that a person must not, in concert with

a second person, engage in conduct that hinders or prevents a third

person from acquiring services from a fourth person where that

conduct is engaged in for the purpose, and would have or be likely to

have the effect of, causing substantial loss or damage to the business of

the fourth person.

282. Section 45DC provides that if two or more persons are officers of the

same organisation of employees and engage in conduct in concert with

each other, the organisation is taken to have engaged in that conduct in

concert with the employees unless the organisation proves otherwise.

283. Section 45D may have been contravened by Mr Ravbar, Mr Close,

Mr Sutherland, Mr Loakes and the CFMEU itself.

284. The conduct in question was that which resulted in the shutting down

of Universal Cranes and Smithbridge on worksites on which they were

operating. That conduct hindered or prevented the builders on those

sites from acquiring the services of Universal Cranes and Smithbridge.

285. That conduct comprised two elements. The first was a decision by Mr

Ravbar and Mr Close that such action would be taken and the giving of

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directions to organisers for that action to be taken.177 The second was

the taking of that action by those organisers (Mr Sutherland at the Port

Connect site, Mr Loakes at the Gladstone site, and unknown organisers

at the Newstead Transcity and Carindale sites). Senior management

and lower level organisers thereby acted in concert to achieve the shut

downs.

286. The purpose of the ban was to cause substantial, in the sense of not

insubstantial and not nominal,178 damage to the Universal Cranes and

Smithbridge businesses. Anything other than substantial damage

would be insufficient to cause Universal Cranes and its related entities

to enter into the EBAs as the CFMEU desired.

287. The shutting down of Universal Cranes and Smithbridge would have

the effect of causing substantial damage to those companies. The very

nature of the conduct was to prevent these companies from working for

their customers on commercial building sites. The CFMEU’s conduct

did have that effect.

288. The maximum pecuniary penalty payable by the CFMEU if its

contravention is established is $750,000.

289. The maximum pecuniary penalty payable by each of the CFMEU

officers if their respective contraventions are established is $500,000.

177 See paras 57 and 252 above. 178 See Building Workers’ Industrial Union of Australia v ODCO Pty Ltd (1991) 29 FCR 104, 140; A&L Silvestri Pty Ltd v CFMEU (2007) 165 IR 94; [2007] FCA 1047, [78].

1485

290. It is recommended that this Interim Report be referred to the Australian

Competition and Consumer Commission in order that consideration

may be given to the taking of proceedings against Mr Ravbar, Mr

Close, Mr Sutherland and Mr Loakes in respect of contraventions of s

45D.

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CHAPTER 8.8

HINDMARSH

Subject Paragraph

A - OVERVIEW 1

B - FEDERAL CIRCUIT COURT PROCEEDINGS: CFMEU SUBMISSIONS 3

C - FEDERAL CIRCUIT COURT PROCEEDINGS: COUNSEL ASSISTING’S SUBMISSIONS

5

D - CONCLUSION 6

A - OVERVIEW

1. This chapter deals with the conduct of officers of the Queensland

Branch of the Construction & General Division of the CFMEU

on the Brooklyn on Brookes project in Fortitude Valley,

Brisbane, towards Hindmarsh Construction Australia Pty Ltd

(Hindmarsh).

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2. The officers in question are Mr Ravbar (Branch Secretary), Mr

Hanna (Branch President), Mr Ingham (Assistant Secretary) and

Mr Bragdon (Organiser).

B - FEDERAL CIRCUIT COURT PROCEEDINGS: CFMEU

SUBMISSIONS

3. The CFMEU points out that there are proceedings before the

Federal Circuit Court to do with the Hindmarsh project. They are

entitled ‘Director, Fair Work Building Inspectorate v

Construction, Forestry, Mining and Engineering Union’. Among

the other respondents are Mr Ingham and Mr Bragdon. The file

number of the proceedings is BRG 318/2014. The proceedings

are set down for hearing on 1-11 June 2015. The CFMEU

submits that no finding should be made while this litigation about

the Hindmarsh project is before the Court.1

4. This submission goes too far, but is to be accepted up to a point.

C - FEDERAL CIRCUIT COURT PROCEEDINGS: COUNSEL ASSISTING’S SUBMISSIONS

5. Counsel assisting advanced the following submissions2

[T]he Commission should avoid making findings if there is a substantial risk that reporting on the case study will cause substantial injustice in the court proceeding.[3] The fact that the

1 CFMEU submissions, 14/11/14, Pt 8.8, paras 3-7. 2 Submissions in reply of counsel assisting, 25/11/14, paras 6-9, 12-13. 3

Victoria v Australian Building Construction Employees’ and Builders’ Labourers’ Federation (1982) 152 CLR 25 at 56, 95, 99 and 137.

1488

court proceeding will be heard by a judge, trained and able to exclude irrelevant matters from their consideration and make findings on the basis of the evidence presented before him or her, is a relevant consideration.[4]

The CFMEU’s submission goes too far by claiming that the matters traversed in Counsel Assisting’s submissions are the subject of the Federal Circuit Court proceeding.

The question of whether unauthorised industrial action was undertaken on site in April 2014, and if so, whether officers of the CFMEU organised such action, has been directly raised both in the Federal Circuit Court proceeding and in this Commission.

However, in respect of other issues, there is no material overlap, and no reason why the Commission should not proceed to address the matters that have been raised by Counsel Assisting.

These matters include:

(a) [certain] behaviour of Mr Hanna … [assessment of it] does not depend upon the accuracy or otherwise of the allegations made in the Federal Circuit Court proceeding;

(b) the credit findings in respect of Mr Ravbar’s evidence with respect to Mr Busch. The CFMEU remarkably contend in other parts of their submissions,[5] and for the purposes of addressing a different case study, that Mr Ravbar was an ‘impressive witness’. For a great many reasons that submission is ill-conceived. One of those reasons is the poor evidence he gave about Mr Busch, which reflects generally on his credit for reasons set out in Counsel Assisting’s Submissions in Chief. His evidence on this subject does not depend upon the accuracy or otherwise of the allegations made in the Federal Circuit Court proceeding;

(c) the credit findings in respect of Mr Bogunovic on the same subject. The shabby treatment by CFMEU representatives of individuals who speak out against the CFMEU should be a matter of great concern to this Commission, and Mr Bogunovic’s behaviour is an instance of this;

4 BLF Case (1982) 152 CLR 25 at 58 (Gibbs CJ), 100-101 (Mason J), 136 (Wilson J, Aickin J agreeing). 5

CFMEU submissions, Pt 8.7, para 63.

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(d) the findings in respect of Mr Ravbar’s evidence as to his attitude to the behaviour displayed on video footage of a demonstration at the site on 7 April 2014... While the events captured on the video relate to the matters the subject of the claims in the Federal Circuit Court proceeding, the conduct of the CFMEU official, captured on video, cannot credibly be denied, and dealing with the matter of principle and attitude that arises in the question and answer in paragraph 81 of Counsel Assisting’s submissions in chief does not require the Commission to express an opinion as to the proper legal characterisation of the effect of the conduct of that CFMEU officer captured on the video. The question of principle and attitude, the answer to which both affects Mr Ravbar’s credit and broader questions under consideration by this Commission, is whether the most senior official of the CFMEU in Queensland has any issue at all with another CFMEU official behaving in the way shown in the video in circumstances where there is an injunction in place.

In principle there would be no substantial risk of injustice in the Federal Circuit Court proceeding by this Commission expressing ultimate opinions as to what appears to be the position on the evidence before it in relation to these overlapping matters. The judge who hears that matter would be capable of deciding the matter on the evidence before him or her, and excluding from his or her mind the opinions expressed by the Commission.

Although in those circumstances the Commission would be at liberty to proceed to express such ultimate opinions at this time, there are a number of specific circumstances which would justify a decision by the Commission to decline to do so in its [I]nterim [R]eport, and on balance, Counsel Assisting consider that is the better approach to take. The particular circumstances influencing this view include the following:

(a) the Federal Court proceeding is fixed for a final hearing in the relatively near future;

(b) the Federal Circuit Court is in a position to make a determination on the overlapping issues that will have a substantive legal effect and bind the parties and individuals in question; and

1490

(c) if the Federal Circuit Court proceeding does not proceed to final hearing in June 2015, the Commission can reconsider its position and deal with the matter further at that time.

D - CONCLUSION

6. The submissions of counsel assisting are correct, but for one

matter. There is too close a link between what the video shows

and the Circuit Court proceeding. Hence the outcome would be,

save in respect of the remaining three matters identified by

counsel assisting, that desired by the CFMEU.

7. The problem is that the CFMEU elected to put on no submissions

in answer to the substance of what counsel assisting alleged in

their submissions in chief on all matters, including the three

referred to above. It would have been preferable for the CFMEU

to have adopted one of the following courses: to adopt a fall-back position of dealing with all of counsel assisting’s

submissions in chief as a matter of substance; or to give notice

before 14 November 2014 of its precise position, so that

consideration could be given by all concerned to receiving its

submissions only on the three matters. But it indicated its stance

only on 14 November 2014, and there has been too little time for

the latter course to be worked through.

8. This is an unsatisfactory state of affairs. The CFMEU ran a risk

of being told that its failure to address matters of substance might

be met with the retort: ‘You gambled, and you lost’.

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9. However, since the Commission’s reporting date has been

extended to 31 December 2015, there will be time to return to the

Hindmarsh problem if the Federal Circuit Court proceeding is

adjourned or concluded within a reasonable time. Hence the

submissions in chief of counsel assisting on Hindmarsh will not

be dealt with now. If and when they are dealt with, they will be

dealt with in the light of any submissions the CFMEU desires to

make on the substantive merits.

1492

CHAPTER 8.9

CFMEU TREATMENT OF FAIR WORK BUILDING INSPECTORS

Subject Paragraph

A - SUMMARY 1

B - RELEVANT FACTS 5

FWB Inspectors 5

Events at the Ibis Hotel site in Adelaide 8

Events at the Barangaroo site in Sydney: Thursday 24 July 2014 27

Events at the Barangaroo site in Sydney: Friday 25 July 2014 42

Events at the Barangaroo site in Sydney: Monday 28 July 2014 62

C - CONCLUSIONS 75

Adelaide: Section 149 of the Criminal Code (Cth) 76

Adelaide: assault 83

Barangaroo 102

Adelaide: Section 500 of the Fair Work Act 2009 116

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A - SUMMARY

1. Section 59 of the Fair Work (Building Industry) Act 2012 (Cth)

provides for the appointment of inspectors (FWB Inspectors).

Their duty is to conduct investigations in building matters,

including breaches of that Act. This chapter concerns the

conduct of officers of the CFMEU towards FWB Inspectors.

2. Two case studies are considered. The first study concerns events

in early May 2014 at the Ibis Hotel construction site in Adelaide.

The second concerns events in late July 2014 at the Barangaroo

construction site in Sydney. On each occasion FWB Inspectors

were attending the site to investigate whether workers were

engaged in industrial action in contravention of the Fair Work

Act 2009 (Cth). The findings made are those which counsel

assisting submitted should be made.

3. On 1 May 2014 at the Ibis Hotel work site in Adelaide, Mr

Perkovic acted in a violent and threatening way towards an FWB

Inspector, Mr Flynn. He deliberately set out to frighten and

intimidate Mr Flynn while Mr Flynn was in the course of

carrying out his functions as an inspector. By so acting Mr

Perkovic may have committed criminal offences against s 149.1

of the Criminal Code 1995 (Cth), may have committed a criminal

offence against s 20(1) of the Criminal Law Consolidation Act

1935 (SA) and may have carried out a common law assault on

Mr Flynn.

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4. In late July 2014 a number of CFMEU officers, namely Mr Luke

Collier, Mr Michael Greenfield, Mr Rob Kera and Mr Brian

Parker, engaged in aggressive and intimidatory conduct against a

number of FWB Inspectors who were working at the Barangaroo

site in Sydney. By so acting they may have committed offences

under s 149.1 of the Criminal Code Act 1995 (Cth).

B - RELEVANT FACTS

FWB Inspectors

5. FWB Inspectors are appointed to their position by the Director of

the Fair Work Building Inspectorate pursuant to s 59 of the Fair

Work (Building Industry) Act 2012 (Cth).

6. Under s 59C of that Act, Inspectors are invested with the same

powers as an inspector appointed under the provisions of that Act

in respect of a matter relating to a building industry participant.

7. Those powers may therefore be exercised, for example, for the

purposes of determining whether that Act or any enterprise

agreement has been complied with in a matter relating to a

building industry participant: see s 706(1) of the Act.

Events at the Ibis Hotel site in Adelaide

8. Seamus Flynn is an FWB Inspector. At 7.43am on 1 May 2014

he received a call on his mobile from Rob Kamminga, the site

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manager for Watpac Limited on the Ibis Hotel construction site,

122 Grenfell Street, Adelaide.1

9. Mr Kamminga advised Mr Flynn that there were six CFMEU

officials on site, that they did not provide permits or right of entry

notices as required, and that they ignored his requests to leave.2

10. Soon afterwards Mr Flynn and Angeliek Peters, a fellow

inspector, attended the Ibis Hotel construction site to investigate.3

11. Both signed the visitors’ register.4 On doing so Mr Flynn noted

that the register recorded that at 7.15am that day the following

people had signed in: ‘Luke from the CFMEU, T. Jarrett, John P,

A. Sloane, Brendan Pitt and M. McDermott.’5

12. After signing in, Mr Flynn and Ms Peters were met by Mr

Kamminga. Mr Kamminga advised that there were two groups

of three CFMEU officials roaming the building site. He

confirmed that they had not provided permits or right of entry

notices and had refused to leave when asked to do so.6

1 Seamus Flynn, witness statement, para 8. 2 Seamus Flynn, witness statement, para 9. 3

Seamus Flynn, witness statement, para 11. 4 Seamus Flynn, witness statement, para 15. 5

Seamus Flynn, witness statement, para 16. 6 Seamus Flynn, witness statement, para 17.

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13. Mr Kamminga accompanied Mr Flynn and Ms Peters to level 13

of the building. There they encountered several CFMEU

officials.7

14. Mr Kamminga approached Anthony Sloane, one of the CFMEU

officials, and asked him to show his permit. When Mr Sloane did

not reply, Mr Kamminga stated: ‘You all need to leave site. You

don’t have notices.’8 Despite this request, the CFMEU officials

did not leave the site.9 They were trespassers.

15. Mr Kamminga, Mr Flynn and Ms Peters left down the fire escape

stairs to attempt to locate the other three CFMEU officials. After

checking levels 12, 11, 10, 9, 8 and 7, they reached level 6.10

16. Just as they entered the hallway, they noticed three CFMEU

officials coming out of room 616.11 The officials were Mick

McDermott, Brendan Pitt and John Perkovic.12 Mr Flynn took

photographs of them.13

7 Seamus Flynn, witness statement, para 27 and 37. 8 Seamus Flynn, witness statement, para 39. 9

Seamus Flynn, witness statement, para 40. 10 Seamus Flynn, witness statement, para 43. 11

Seamus Flynn, witness statement, para 45. 12 Seamus Flynn, witness statement, para 46; Seamus Flynn, 2/9/14, T:9.25-27. 13

Seamus Flynn, witness statement, para 46.

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17. Mr Kamminga said: ‘I want to see your right of entry notice and

your permits.’14

18. Mr Flynn states that he heard a response that he believed to be

from Mr McDermott: ‘Go fuck yourself.’15 Mr Flynn then heard

another response from Mr Perkovic: ‘Fuck off, grow some

balls.’16

19. The inspectors and Mr Kamminga followed the three CFMEU

officials down the hallway.17 Mr Flynn continued to take

photographs of the CFMEU officials.18

20. On noticing this, Mr Perkovic moved towards Mr Flynn and

stated: ‘You fucking maggot, what are you taking a photo of me

for, you piece of shit?’19

21. Mr Flynn describes Mr Perkovic being ‘directly in front of me,

face to face, and I could feel his body on my chest and stomach

region.’20

22. Among other insults in this exchange (as video recorded by Ms

Peters21), Mr Perkovic said to Mr Flynn: ‘…the piece of shit.

14 Seamus Flynn, witness statement, para 49. 15 Seamus Flynn, witness statement, para 50. 16

Seamus Flynn, witness statement, para 51. 17 Seamus Flynn, witness statement, para 54. 18

Seamus Flynn, witness statement, paras 56 and 57. 19 Seamus Flynn, witness statement, para 58. 20

Seamus Flynn, witness statement, para 59.

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You fucking coward. I’d fucking take you to school, you fucking

piece of shit.’22

23. During this exchange, Mr Flynn’s evidence is that Mr Perkovic

was pushing him backwards with his stomach23 and exerting his

bodyweight against him.24 Despite the fact that Mr Flynn said,

‘Don’t touch me’25 and ‘Get away from me, get away from

me,’26 Mr Perkovic continued to push against Mr Flynn so as to

cause Mr Flynn’s shoulder satchel to fall from his shoulder.27 Mr

Flynn’s evidence is that whilst this occurred, Mr Perkovic said:

‘You fucking piece of shit, you’re going to have a heart attack.

Look at you, you’re shitting yellow you piece of shit…’28

24. After the incident, Mr Flynn attempted to telephone the State

Director of Fair Work Building and Construction, Mark Temple,

to report the incident.29

25. Mr Flynn witnessed the six CFMEU officials leave the site

within the next five minutes.30

21 Seamus Flynn, witness statement, para 64. 22 Flynn MFI-1, video and transcript of Video Transcript, 1/5/14. 23

Seamus Flynn, witness statement, para 61. 24 Seamus Flynn, 2/09/14, T:9.45-47. 25

Seamus Flynn, witness statement, para 65. 26 Seamus Flynn, witness statement, para 68. 27

Seamus Flynn, witness statement, para 66. 28 Seamus Flynn, witness statement, para 67. 29

Seamus Flynn, witness statement, para 74. 30 Seamus Flynn, witness statement, para 79.

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26. Later that day, Mr Flynn and Mr Temple attended the Hindley

Street Police Station and reported the assault to Senior Constable

Nicola Buckle.31 Was this the legitimate use by the CFMEU of

its industrial muscle? Or was it, in its descent from intelligible

communication to the monotony of violent obscenity, the triumph

of barbarism?

Events at the Barangaroo site in Sydney: Thursday 24 July 2014

27. On 24 July 2014 Matthew Barr, an FWB Inspector, was informed

of industrial action at the Barangaroo South construction project.

He was told that the CFMEU had blockaded the entrance to the

project.32

28. The head contractor at the project is Lend Lease Building Pty

Ltd. The project is situated at Hickson Road, Barangaroo,

NSW.33

29. At about 8.20am Mr Barr asked Julie Siciliano and Jared

O’Connor, two other FWB Inspectors, to attend the site to

investigate.34

30. Mr Barr then telephoned Eric Hensley, Lend Lease’s Industrial

Relations Officer, to discuss what had occurred at the project.35

31 Seamus Flynn, witness statement, para 93. 32 Matthew Barr, witness statement, para 8. 33

Matthew Barr, witness statement, para 8. 34 Matthew Barr, witness statement, para 9.

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31. Mr Hensley stated to Mr Barr:

At 6.15am the CFMEU arrived at the project and started to block the gates. A mass meeting was held offsite and they voted to stop work until Monday. The union and the men have left.36

32. Ms Siciliano and Mr O’Connor arrived on site at about 9:00am.37

They observed CFMEU officers present on site. Those persons

included Brian Parker, the State Secretary of the CFMEU

Construction and General Division NSW, and a number of other

officials and organisers, including Richard Auimatagi, Darren

Greenfield, Michael Greenfield, Darren Taylor, Luke Collier,

Tony Sloane and Rob Kera.38

33. The song ‘Who let the dogs out’ was being played over a loud

hailer.39

34. Ms Siciliano and Mr O’Connor entered the site office. As they

were speaking to the receptionist, Mr O’Connor observed Mr

Collier come up to the window of the office and mouth the words

at him: ‘You’re a fucking grub’ and ‘fucking dog.’40

35. Several unidentified CFMEU officials then came up onto the

veranda outside the office and stood with their backs to the

35 Matthew Barr, witness statement, para 10. 36 Matthew Barr, witness statement, para 10. 37

Jared O’Connor, witness statement, para 7. 38 Jared O’Connor, witness statement, paras 8-17. 39

Jared O’Connor, witness statement, para 21. 40 Jared O’Connor, witness statement, para 23.

1501

window. Someone outside was shaking the door.41 A worker

inside the building was trying to leave, but the receptionist told

him ‘Don’t go out that door, the union are trying to get in.’42

36. Ms Siciliano and Mr O’Connor left the site office and started

walking across the road. As they were doing so, Mr Collier said

to Mr O’Connor: ‘You’re a fucking grub, why are you here, go

away. You’re lower than a paedophile you grub.’43

37. At about 9.30am Mr Barr asked Terry Morton and Veronica

Tadros, fellow FWB Inspectors, to accompany him to the project.

38. At about 9:45am, Mr Barr, Mr Morton and Ms Tadros were

walking toward the main entrance of the site and observed a

group of people standing on the path on Hickson Road in front of

the main entrance to the project.44 Mr Barr also observed Mr

O’Connor and Ms Siciliano standing opposite the entrance,

speaking to the police. While Mr Barr stood opposite to the site

entrance, he identified a number of CFMEU officials, namely

Michael Greenfield, Brian Parker and Luke Collier.45

41 Jared O’Connor, 2/09/14, T:28.11. 42 Jared O’Connor, witness statement, para 25. 43

Jared O’Connor, witness statement, para 26. 44 Matthew Barr, witness statement, para 13. 45

Matthew Barr, witness statement, para 14.

1502

39. That afternoon, Mr Barr signed a record of decision to investigate

whether the CFMEU officers and workers on the project had

breached the Fair Work Act 2009.46

40. The Fair Work Commission issued return to work orders under s

418 of the Fair Work Act 2009.47

41. Mr Barr briefed other inspectors about a plan to return on 25 July

2014 to observe a mass meeting that had been planned between

the CFMEU and workers and to obtain evidence should there be

allegations of organising or engaging in conduct in breach of the

orders.48

Events at the Barangaroo site in Sydney: Friday 25 July 2014

42. At about 6am on 25 July 2014 Mr Barr and Mr O’Connor

returned to the site. They saw 80 workers and a number of

CFMEU officials, including Mr Parker, Mr Darren Greenfield,

Mr Michael Greenfield and Mr Collier.49 Police officers were

also present. When Mr Parker saw Mr Barr arrive he said: ‘For

fuck’s sake.’50 Darren Greenfield was standing in front of the

turnstiles into the site with his arms folded.51 Michael Greenfield

46 Matthew Barr, witness statement, para 22. 47 Matthew Barr, witness statement, para 23. 48

Matthew Barr, witness statement, para 23. 49 Matthew Barr, witness statement, paras 25 and 26. 50

Matthew Barr, witness statement, para 30. 51 Matthew Barr, witness statement, para 32.

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was around with a hoodie jumper on over his head.52 Mr Collier

was handing out fliers to workers.53

43. Mr Barr heard Mr Parker tell the workers that they would hold a

meeting at 6.30am across the road.54

44. Chris Blanchard, the Construction Manager from Lend Lease,

told Mr O’Connor that on the previous day the union had shut the

sliding door in front of the turnstiles and had not allowed anyone

to pass.55

45. Mr Barr asked Ms Tadros to take photos of the CFMEU officials

standing at the site entrance.56

46. As Ms Tadros was about to take a photo with her phone, Mr

Parker said: ‘You can take a photo of me? I’ll fucking take a

photo of you.’57 Robert Kera stood in front of Ms Tadros,

putting his back approximately five centimetres away from her

and forcing her to move, as she felt his close proximity to her to

be intimidating.58 Mr Parker then took a photo of this.59

52 Matthew Barr, witness statement, para 32. 53 Matthew Barr, witness statement, para 33. 54

Matthew Barr, witness statement, para 31. 55 Matthew Barr, witness statement, para 35. 56

Matthew Barr, witness statement, para 36. 57 Veronica Tadros, witness statement, para 31. 58

Veronica Tadros, witness statement, para 31. 59 Veronica Tadros, witness statement, para 31; Matthew Barr, witness statement, para 37.

1504

47. Mr Collier used a megaphone to call workers into a meeting,

saying: ‘Everyone, there is a meeting across the road... that

doesn't include the FWBC grub in the fluoro.’ Mr Barr

understood Mr Collier to be referring to him as he was wearing a

fluoro orange jacket.60

48. Speaking through the megaphone, Mr Collier pointed to Mr

O’Connor and broadcasted his name and mobile telephone

number to the group and invited workers to call him and let him

know what they thought.61 By this time, there were 150 to 200

workers present.62

49. Mr O’Connor’s evidence is that:

I was in a bit of shock. My name was mentioned in front of several

hundred workers and also my phone number. So, yes, it was a little

bit - I thought it was just an intimidation tactic.63

50. Mr O’Connor heard Darren Greenfield yell out: ‘They are

nothing but dogs,’ while he pointed to Mr O’Connor and Mr

Barr.64

51. Mr Parker addressed the meeting. Mr Parker said that Fair Work

Building and Construction was present so the workers had to be

60 Matthew Barr, witness statement, para 41; Matthew Barr, 2/09/14, T:16.16-18. 61 Matthew Barr, witness statement, para 42; Matthew Barr, 2/09/14, T:17.1-3; Jared O’Connor, witness statement, para 55; Jared O’Connor, 2/9/14, T:29.2-5. 62

Matthew Barr, witness statement, para 42. 63 Jared O’Connor, 2/09/14, T:29.12-16. 64

Jared O’Connor, witness statement, para 58.

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careful and did not have to answer questions. He also said that

the workers should have legal representation and that the union

would provide it. Mr Collier yelled out: ‘They are dogs, don’t

talk to dogs!’65

52. Mr Parker subsequently addressed the workers on the

megaphone. He said that ‘Fair Work Commission’ had issued

orders the previous day and a fine of $11,000. He said that the

workers had been notified by their employers to return to work.

He further said ‘FWBC and employers are intimidating you. I

can’t force you to go back to work… It is up to you what you do

from here.’66

53. Mr Kera pointed at Mr O’Connor and Mr Barr and said: ‘That’s

the FWBC. They are here to prosecute workers. We have the

right to go to work and not to be prosecuted like dogs. This is

Australia!’67

54. Mr Parker subsequently said: ‘If you do return to work…I have

to be very careful as this is being recorded. It’s intimidation. I

have to wrap up the meeting. I have no problem going to jail for

it.’68

65 Matthew Barr, witness statement, para 47. 66 Matthew Barr, witness statement, para 50. 67

Matthew Barr, witness statement, para 56; Matthew Barr, 2/09/14, T:22:25-33; Matthew Barr, 2/09/14, T:17.42 to T:18.8. 68

Matthew Barr, witness statement, para 62.

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55. Michael Greenfield was standing close to Mr Barr and staring at

him. Mr Barr then observed Michael Greenfield say to Mr

Blanchard: ‘Are you the Lend lease intimidation squad?’69

56. Mr Collier stood about five metres away from Mr Barr and Mr

O’Connor and said: ‘We’re starting a dog wash over here.’ Mr

Barr understood this to mean that Mr Collier was referring to him

and Mr O’Connor as dogs.70

57. Darren Greenfield said to Michael Greenfield: ‘Don’t stand too

close Mick, they have fleas. They’re dogs.’71

58. Michael Greenfield said to Mr Barr: ‘I hope your kids work in

the construction industry then they will come running to us.’ Mr

Barr’s evidence is that he took this comment as a personal threat

that Michael Greenfield would harm his children if they worked

in the construction industry and that this threat was meant to

intimidate him.72

59. Darren Greenfield then walked past Mr Barr and Mr O’Connor

and said: ‘I have a can of PAL in the boot of the car, they can eat

it for breakfast.’73 PAL is a well-known brand of dog food.

69 Matthew Barr, witness statement, para 74. 70 Matthew Barr, witness statement, para 77. 71

Matthew Barr, witness statement, para 78. 72 Matthew Barr, witness statement, para 79. 73

Matthew Barr, witness statement, para 81.

1507

60. Mr O’Connor, Mr Blanchard and Mr Barr subsequently

proceeded to cross the road to the site office next to the site

entrance. As they were crossing, Mr Collier said through the

megaphone: ‘There goes the fuckin grubs… They’re leaving cos

the police are gone. Don’t let a car hit ya!’74 Mr Barr’s evidence

is that there was still a significant number of workers present at

this time.75

61. Mr Barr stated:76

I felt that the abuse that O’Connor and I received from the Union Officials, especially COLLIER and M GREENFIELD, whilst at the meeting and at the Site Entrance was targeted at us to intimidate us as representatives of [Fair Work Building and Construction] and to stop us from doing our job effectively. I did not appreciate having personal threats made to me and have been concerned about this since this day. I believe that a Commonwealth Official such as myself should be able to carry out their role without being subject of [sic] constant and aggressive abuse.

Events at the Barangaroo site in Sydney: Monday 28 July 2014

62. On 28 July 2014, at about 5:45am, the following FWB Inspectors

attended the construction site: Mr Barr, Mr O’Connor, Ms

Tadros, Mr Pascoe, Mr Trent Roll and Mr David Shao. When

they arrived, Mr Collier, Michael Greenfield and Mr Auimatagi

were standing at the site entrance. There were also about 50

workers in the vicinity.77

74 Matthew Barr, witness statement, para 85. 75 Matthew Barr, 2/9/14, T:18.46-47. 76

Matthew Barr, witness statement, para 88. 77 Matthew Barr, witness statement, paras 92 and 93.

1508

63. As Mr Pascoe walked towards Mr Barr, Mr Collier took a swig of

water from a bottle and spat it in the direction of Mr Pascoe’s

feet.78

64. As Ms Tadros walked past the site entrance, Mr Collier said

‘fucking slut.’79 Michael Greenfield called Ms Tadros and Mr

Pascoe ‘fucking dogs’ and asked Mr Pascoe if he had brought his

wife to protect him.80

65. Ms Tadros’s evidence is that: ‘I felt quite intimidated by the

verbal abuse that I had received at that point.’81

66. Mr Barr gave evidence that Michael Greenfield said to Mr

Blanchard: ‘I hope you brought your knee pads, you’re going to

be sucking off those dogs all day.’82

67. Mr Barr noticed that Mr Parker, Darren Greenfield, Mr

Auimatagi and Mr Kera were also at the site entrance.83

68. Mr Collier then walked past Mr O’Connor, Mr Blanchard and Mr

Barr to a car and took out a megaphone. He used this to blast a

78 Matthew Barr, witness statement, para 94. 79 Veronica Tadros, witness statement, para 54. 80

Adam Pascoe, witness statement, para 26. 81 Veronica Tadros, 2/9/14, T:34.31. 82

Matthew Barr, witness statement, para 96. 83 Matthew Barr, witness statement, para 98.

1509

wailer sound centimetres away from Mr O’Connor’s and Mr

Barr’s ears. Mr Collier walked away laughing.84

69. By about 6.30am, around 150 workers had gathered across the

road where the meeting was held the previous Friday. Mr Parker

addressed them.85

70. Mr Collier said to Mr O’Connor: ‘You think all I got is your

phone number?’ Mr O’Connor turned around to look at Mr

Collier who was standing about three metres away. Mr Collier

said: ‘What the fuck are you looking at?’ Mr Collier then spat at

Mr Barr’s feet and said in a menacing voice: ‘Lick it up you

fuckin’ dog.’86

71. Mr Barr stated:

When Collier said this it was said with an aggressive tone. I felt like COLLIER was making personal threats against O’Connor and I and that this behaviour was assault. I sensed hatred in Collier’s voice and actions of [sic] O’Connor and me. I immediately became concerned about the safety of O’Connor and myself and looked around to see who was standing nearby.87

72. Michael Greenfield came within five metres of Mr Barr and Mr

O’Connor and said: ‘Why don’t you go up the front you fuckin’

84 Matthew Barr, witness statement, para 101. 85 Matthew Barr, witness statement, paras 105 and 106. 86

Matthew Barr, witness statement, para 113 and 115. 87 Matthew Barr, witness statement, para 116.

1510

dog.’88 Mr Barr observed there to be about 300 workers present

at this time.89

73. Mr Parker asked the workers to vote with their hands if they

wanted the union to come on site for a stop work meeting. Mr

Barr observed about fifty hands rise, including that of Michael

Greenfield.90

74. Soon after, the meeting ended and the police arrived.91

C - CONCLUSIONS

75. The relevant legislative provisions are set out below. In applying

them to the facts, as submitted by Mr Parker, it is necessary to

bear in mind the seriousness of the allegations and the possible

consequences of any findings.92

Adelaide: Section 149 of the Criminal Code (Cth)

76. Section 149.1(1) of the Criminal Code (Cth) provides:

(1) A person is guilty of an offence if:

(a) the person knows that another person is a public official; and

88 Matthew Barr, witness statement, para 118. 89 Matthew Barr, witness statement, para 120. 90

Matthew Barr, witness statement, paras 121 and 122. 91 Matthew Barr, witness statement, paras 123 and 124. 92

Submissions on behalf of Brian Parker, 21/11/14, para 6: see Briginshaw v Briginshaw (1938) 60 CLR 336.

1511

(a) the first-mentioned person obstructs, hinders, intimidates or resists the official in the performance of the official’s functions; and

(b) the official is a Commonwealth public official; and

(c) the functions are functions as a Commonwealth public official.

Penalty: Imprisonment for 2 years.

77. As to the first of those elements:

(a) a person is considered to have knowledge of a circumstance if

that person is aware that it exists or will exist in the ordinary

course of events;93

(b) it is not necessary to prove that the person knew that the other

person was a Commonwealth public official, or that the

functions were Commonwealth public functions;94 and

(c) it is immaterial whether the person was aware that the official

was performing the official’s functions.95

78. Mr Flynn is a Commonwealth public official, and was performing his

function as such during the course of his attendance at the Ibis Hotel

site on 1 May 2014.

79. Mr Perkovic knew this to be so. Mr Flynn and Ms Peters both had

their identification cards visible.96 Mr Flynn already knew

93 Criminal Code (Cth), s5.3 94 Criminal Code (Cth), s149.1(2) 95

Criminal Code (Cth), s149.1(3) 96 Seamus Flynn, witness statement, para 24.

1512

Mr McDermott and Mr Pitt.97 It is obvious from Mr Perkovic’s

behaviour that he knew what role Mr Flynn was performing on

that day and that Mr Flynn was an FWB Inspector.

80. When Mr Flynn attempted to document the incidents he was

investigating by taking photographs, Mr Perkovic acted towards

Mr Flynn in the manner detailed above. He was seeking to

intimidate and bully Mr Flynn, in a particularly aggressive

manner, in order to frighten him away from the task at hand.

81. Mr Perkovic therefore may have committed an offence under s

149.1 of the Criminal Code Act 1995 (Cth).

82. It is recommended that this Interim Report be referred to the

Commonwealth Director of Public Prosecutions in order that

consideration may be given to the prosecution of Mr Perkovic in

respect of an offence against s 149.1 of the Criminal Code (Cth).

Adelaide: assault

83. Intentionally or recklessly threatening force so as to cause

another person to fear imminent and unlawful physical violence

constitutes an assault. It is an offence punishable under the laws

of South Australia in four ways.

84. First, under s 20(1)(a) of the Criminal Law Consolidation Act

1935 (SA), an assault will be occasioned when a person

97 Seamus Flynn, witness statement, para 46.

1513

intentionally applies force (directly or indirectly) to another

person (the victim) without the consent of the victim.

85. Secondly, s 20(1)(b) of the same Act makes it unlawful for a

person intentionally to make physical contact (directly or

indirectly) with the victim without the victim’s consent, knowing

that the victim might reasonably object to the contact in the

circumstances (whether or not the victim was at the time aware of

the contact).

86. It is well established at common law that any touching of another

person, however slight, may amount to a battery.98

87. Mr Flynn gave evidence that during the altercation in the

hallway, he could feel Mr Perkovic exerting his body weight

against his chest and stomach and that Mr Perkovic used his

stomach to push Mr Flynn backwards approximately six inches.

He gave evidence that Mr Perkovic later pushed him with his

stomach again so as to cause his satchel to fall from his shoulder.

This conduct is sufficient to establish the requisite direct

application of physical force for the purposes of an offence under

s 20(1).

88. It is clear from the nature of Mr Perkovic’s words and actions, as

captured on video, that he intended to apply physical force to Mr

Flynn. Not only was he deliberately moving towards Mr Flynn in

98 Collins v Wilcock [1984] 3 All ER 374; Boughey v The Queen (1986) 161 CLR 10, 25.

1514

an intimidating fashion, but he was hurling verbal abuse at him

and threatening to take Mr Flynn ‘to school.’

89. Obviously Mr Flynn was not consenting to Mr Perkovic’s

conduct. Mr Flynn said ‘Don’t touch me’ and ‘Get away from

me, get away from me’.

90. Mr Perkovic may have committed an offence under s 20(1) of the

Criminal Law Consolidation Act 1935 (SA).

91. It is recommended that this Interim Report be referred to the

South Australian Director of Public Prosecutions in order that

consideration may be given to the prosecution of Mr Perkovic in

respect of an offence against s 20(1) of the Criminal Law

Consolidation Act 1935 (SA).

92. Thirdly, s 20(1)(e) of the Criminal Law Consolidation Act 1935

(SA) makes it unlawful for a person to accost or impede another

in a threatening manner without consent.

93. It is plain from the description of Mr Perkovic’s conduct set out

in an earlier part of these submissions that he may have

committed this offence.

94. It is recommended that this Interim Report be referred to the

South Australian Director of Public Prosecutions in order that

consideration may be given to the prosecution of Mr Perkovic in

respect of an offence against s 20(1)(e) of the Criminal Law

Consolidation Act 1935 (SA).

1515

95. Fourthly, assault will be established at common law where the

following elements are satisfied beyond a reasonable doubt:

(a) the accused commits an act that causes another person to

apprehend immediate and unlawful personal violence;99

(b) he or she does so without the other person’s consent; 100

and

(c) his or her conduct was either intentional or reckless.101

96. The offence of assault does not require actual violence. It is

sufficient that the victim reasonably believes that they he or she

is at risk of immediate unlawful violence.102 The victim’s fear

must be of immediate violence, rather than violence that may be

committed at some time in the future.103

97. The requisite apprehension may exist even if the accused does

not intend to carry out the threat.104 It is also not necessary that

99 Fagan v Commissioner of Metropolitan Police [1969] 1 QB 439, 444; Macpherson v Beath (1975) 12 SASR 174, 177; McIntyre v R [2009] NSWCCA 305, [40]. 100

Fagan v Commissioner of Metropolitan Police [1969] 1 QB 439, 444. 101 Vallance v R (1961) 108 CLR 56; Macpherson v Brown (1975) 12 SASR 184; R v Venna [1976] QB 421. 102

Zanker v Vartzokas (1988) 35 A Crim R 314. 103 R v Knight (1988) 35 A Crim R 314. 104

Rixon v Star City Pty Ltd (2001) 53 NSWLR 98, 114; R v Mostyn (2004) 145 A Crim R 304, 316.

1516

the fear of violence into which the accused deliberately puts the

victim should be a fear of violence from the accused.105

98. Again, the description of Mr Perkovic set out earlier indicated

that his conduct was both intentional, and undertaken without Mr

Flynn’s consent. It was behaviour of a kind that led Mr Flynn to

reasonably believe that he was at risk of immediate violence.

99. It is recommended that this Interim Report be referred to the

South Australian Director of Public Prosecutions in order that

consideration may be given to the prosecution of Mr Perkovic in

respect of the common law offence of assault.

100. The CFMEU submitted in relation to Mr Perkovic that it was

outside the function of the Commission to determine whether Mr

Perkovic had committed any offence, to determine whether he

should be prosecuted and to make findings concerning any

alleged breach of the law.106 The summary of the evidence and

conclusions from it does not do any of these things. Nor do the

recommendations that the Interim Report be referred to the South

Australian Director of Public Prosecutions in order that

consideration may be given to the prosecution of Mr Perkovic for

various offences.

101. The CFMEU also submitted that the matter has been reported by

an inspector to the South Australian police and that Mr Perkovic

105 Macpherson v Beath (1975) 12 SASR 174, 177. 106 Submissions on behalf of the CFMEU, 14/11/14, Pt 8.9, para 4.

1517

has not been advised of the outcome of any police investigation.

For the sake of considering the submission, let it be assumed that

these propositions, which are not in evidence, are correct. The

CFMEU submitted that in the light of what it called ‘an apparent

police investigation’ it would not be right for the Interim Report

to ‘make any findings or express any opinion about this

matter’.107 Since legal proceedings alleging breaches of s 149 of

the Criminal Code or s 20 of the Criminal Law Consolidation Act

have not been instituted, there is no risk of a contempt of court in

these respects. Again, what appears above makes no findings of

criminal guilt. It does no more than summarise what can be seen

on the video and what is stated in other evidence, and

recommend that the responsible authorities consider whether a

prosecution should be brought.

Barangaroo

102. The events described by the FWB Inspectors on the Barangaroo

site indicate that the CFMEU officials on site at the time knew

that they were inspectors, and were attending the site in the order

to perform their official function in the investigation of alleged

industrial action.

103. The following conduct by CFMEU officials during the course of

the Barangaroo incidents described above is properly

characterised as conduct which obstructed, hindered, intimidated

107 Submissions on behalf of the CFMEU, 14/11/14, Pt 8.9, para 7.

1518

or resisted the performance by the FWB Inspectors in the

performance of their functions:

(a) Mr Collier directed offensive language and abusive

comments towards Mr O’Connor and Ms Siciliano on 24

July 2014. Mr O’Connor perceived Mr Collier’s conduct

as ‘an attempt to intimidate or scare us due to the level of

aggression he was showing.’108

(b) Mr Collier subjected the FWB Inspectors to verbal abuse

on 25 July 2014. Mr O’Connor perceived Mr Collier‘s

broadcast of his name and mobile telephone number to a

group of approximately 150 to 200 striking workers as an

‘intimidation tactic.’109

(c) Mr Kera stood very close to Ms Tadros, putting his back

approximately five centimetres away from her so as to

obstruct her when attempting to take photographs on 25

July 2014.110

(d) Mr Parker told workers that the FWB Inspectors were

trying to intimidate them by showing up on the site on 25

July 2014, and in the process misleading the workers about

the important official function the FWB Inspectors were

108 Jared O’Connor, witness statement, para 28. 109 Jared O’Connor, 2/09/14, T:29.13-16. 110

Veronica Tadros, witness statement, para 31.

1519

actually performing at the time. A specific submission by

Mr Parker to the contrary is examined and rejected below.

(e) Mr Collier and Mr Michael Greenfield launched a barrage

of abusive and derogatory comments to the FWB

Inspectors after their arrival on site on 28 July 2014. Ms

Tadros felt intimidated by this verbal abuse.111 Mr Collier

spat water in the direction of Mr Barr’s feet and stated:

‘Lick it up you fuckin dog’.112 He also spat in the direction

of Mr Pascoe’s feet.113 Mr Collier directed comments such

as ‘fucking slut’114 and ‘fucking dogs’115 towards Ms

Tadros and Mr Pascoe. Michael Greenfield stated to Mr

Blanchard, in the presence of Mr Barr and Mr Pascoe, ‘I

hope you brought your knee pads, you’re going to be

sucking off those dogs all day’.116 Mr Collier blasted a

wailer sound through a megaphone only centimetres away

from Mr O’Connor’s and Mr Barr’s ears.117 Mr Collier

stated to Mr O’Connor: ‘What are you looking at, you

111 Veronica Tadros, 2/9/14, T:34.30. 112 Matthew Barr, witness statement, para 115. 113

Adam Pascoe, witness statement, para 23. 114 Veronica Tadros, witness statement, para 54. 115

Adam Pascoe, witness statement, para 23. 116 Matthew Barr, witness statement, para 96. 117

Matthew Barr, witness statement, para 101; Jared O’Connor, witness statement, para 87.

1520

fucking dog, do you think your phone number is all I got’.

Mr O’Connor perceived this as a threat.118

104. All of this behaviour was intimidatory. It was calculated to

belittle and scare the FWB Inspectors in the most public of ways,

with a view to encouraging them to leave and not return. The

CFMEU officials did not want FWB Inspectors witnessing

workers engaging in industrial action, or the CFMEU seeking to

encourage or support the workers in taking that action.

105. The CFMEU officials named above may have committed

offences under s 149.1 of the Criminal Code, the terms of which

were set out above.

106. It is recommended that this Interim Report be referred to the

Commonwealth Director of Public Prosecutions in order that

consideration may be given to the prosecution of each of Mr

Collier, Mr Kera, Mr Parker and Mr Michael Greenfield in

respect of offences under s 149.1 of the Criminal Code.

107. Counsel for Mr Parker put two submissions against the

conclusion about him stated above.

108. The first concerned the construction of s 149.1(b). Counsel for

Mr Parker submitted that the words ‘obstructs, hinders,

intimidates or resists’ are words which ‘require an integer of

physical interference: as a matter of law, ‘misleading’ an

118 Jared O’Connor, witness statement, para 96.

1521

audience about the nature of an official’s functions is not

enough’.119 The submission continued:120

Indeed, if merely “telling workers” something - even something “misleading” about FWB Inspectors could amount to a breach of s 149.1, very real issues would arise about the constitutional validity of that provision, having regard to the implied freedom of communication on government and political matters, including the performance of official functions by Commonwealth officials. In the absence of submissions by Counsel Assisting as to the proper construction of s 149.1, enabling issue to be joined, the Royal Commission should not make the finding.

109. The last point is untenable. The position of counsel assisting in

chief on the point of construction was clear. And in reply

counsel assisting denied Mr Parker’s contention. They were

correct to do so. To say misleading things to people in relation to

whom government officials are seeking to carry out their

functions about those functions can obstruct or hinder the

performance of the functions.

110. What of the implied freedom of communication on government

and political matters? Here, as so often, the appeal to that

freedom is the last refuge of the desperate. The appeal is so often

made. But it so rarely succeeds. The implied freedom would not

protect misleading conduct.

111. The second submission of Mr Parker was that the allegation was

not put to him in cross-examination. Hence it was said to be

unfair to make the finding against Mr Parker. The submission

119 Submissions on behalf of Brian Parker, 21/11/14, para 44. 120 Submissions on behalf of Brian Parker, 21/11/14, para 45.

1522

appealed to the rule in Browne v Dunn.121 That rule applies in

litigation, but applies outside that field as well. It is a rule of

fairness. In litigation, for example, it requires a party who

proposes to advance an allegation adverse to another party or a

witness, to put the latter party or witness on notice of the

submission in cross-examination. But this need not be done if

the latter party or witness is on notice of the allegation in some

other way. Here Mr Parker was served with the inspectors’

statements. He had the opportunity to prepare a statement in

response with a view to counsel assisting tendering it. He did not

take advantage of that opportunity, despite being represented by

senior and junior counsel and several solicitors. He also had the

opportunity to deal with the matter when he entered the witness

box, but his counsel did not take it. In short, he knew the matters

of fact alleged against him. The rule in Browne v Dunn does not

call for the possible legal characterisations of conduct to be put to

witnesses for their comment.

112. The CFMEU made two submissions about Barangaroo.

113. The first was put thus:122

It should be noted that despite police presence on the site on the first day not one of the inspectors made any complaint to police about any assault or otherwise. The inspectors did not seek police assistance to carry out their duty.

121 (1893) 6 R. 67. 122 Submissions on behalf of the CFMEU, 14/11/14, Pt 8.9, paras 9-10.

1523

The inspectors also made no arrangements for the police to attend on the second day. Again no complaints to police have apparently been made in relation to alleged conduct on that day.

114. Even if it is assumed that these propositions are correct, they do

not bear on the question: ‘What actually happened?’ Nor do

they bear on the question: ‘Should a recommendation be made

that the relevant authorities consider whether or not to initiate a

prosecution?’

115. The CFMEU’s second submission was: ‘The course submitted

by Counsel Assisting is beyond the power of the Commission.’123

The submission did not say why it was not. If the complaint is

that no findings or opinions about criminal guilt should be

expressed, they have not been. There is only a summary of the

evidence and a recommendation to the relevant authorities to

consider whether or not to prosecute.

Adelaide: Section 500 of the Fair Work Act 2009

116. The evidence outlined also raises questions regarding whether

breaches of s 500 of the Fair Work Act 2009 (Cth) arise. Section

500 is a civil penalty provision.

117. Section 500 of the Fair Work Act 2009 (Cth) provides:

A permit holder exercising, or seeking to exercise, rights in accordance with this Part must not intentionally hinder or obstruct any person, or otherwise act in an improper manner.

123 Submissions on behalf of the CFMEU, 14/11/14, Pt 8.9, para 11.

1524

118. The CFMEU submitted that there were proceedings against the

CFMEU, Mr Perkovic and others in the Federal Court in relation

to the events at the Ibis Hotel site. The proceedings are under s

500. They are non-criminal proceedings for a penalty. They

have been brought by the Director of the Fair Work Building

Industry Inspectorate.124 The issue is whether s 500 has been

breached. The CFMEU submitted that the Interim Report should

not contain any findings or any opinion on the matter.125 It is

understood that mediation has been ordered. What next?

Mediating murder charges? However, the CFMEU was correct

to submit that it is undesirable to address the question whether s

500 has been breached. At the same time, the summary of the

evidence above does not create a substantial risk of injustice in

the Federal Court proceedings, because it simply reflects what

appears incontrovertibly on the video.

124 J Agius SC, 2/9/14, T:29.43-30.5. 125 Submissions on behalf of the CFMEU, 14/11/14, Pt 8.9, para 7.

1525

1526

CHAPTER 8.10

THE PENTRIDGE VILLAGE SITE

Subject Paragraph

A - SUMMARY 1

B - NATURAL JUSTICE 3

C - OUTLINE OF FINDINGS 6

D - RELEVANT FACTS 7

West Homes and Pentridge Village 7

Initial dealings with the CFMEU 14

A fatal accident on site 24

Meetings with the CFMEU 31

Meeting Mr Hardy and the employment of Mr Sucic 46

Mr Sucic 49

Pressures applied by the CFMEU to transition to commercial 51

Pressure from Mr Sucic on workers and subcontractors 57

Pressure from Mr Dadic on workers and subcontractors 66

Mr Setka’s awareness and endorsement of the actions on 79

1527

Subject Paragraph

site

Mr Benstead flexes his muscle on site 86

Mr Setka flexes his muscle on site 89

Mr Setka’s call about Mr Onal 93

Disposing of Mr Bonnici’s evidence 95

E - CONCLUSIONS 99

A - SUMMARY

1. This chapter concerns the conduct of certain officers of the Victorian

Branch of the Construction & General Division of the Construction

Forestry Mining and Energy Union (CFMEU) and those associated

with the CFMEU towards West Homes Pty Ltd (West Homes) and

Pentridge Village Pty Ltd (Pentridge Village) on the Pentridge Village

building site (the Pentridge site).

2. The officers in question are Mr John Setka (Victorian State Secretary)

and Mr Gerard Benstead (organiser). The actions under consideration

are those of Mr Setka and Mr Benstead both directly, and also through

Mr Sucic and Mr Dadic, two CFMEU delegates appointed by them to

work on the Pentridge site.

1528

B - NATURAL JUSTICE

3. The ‘primary submission’ of the CFMEU can be treated as a

preliminary point.1 The submission was summarised by the CFMEU

as follows:2

The Royal Commission should find that a denial of natural justice has occurred in circumstances where:

(a) Mr Leigh Chiavaroli produced a significant amount of material to the Royal Commission which was not made available to the CFMEU;

(b) the material produced by Mr Leigh Chiavaroli appears to have been directly relevant to a number of key factual matters the subject of the case study;

(c) there was no reason proffered by Counsel Assisting as to why the material was not provided to the CFMEU;

(d) as to (c) it was not suggested by Counsel Assisting that the material was confidential, was sensitive in nature, or that it was necessary to withhold the information to protect any person;

(e) a small selection of the material produced by Mr Leigh Chiavaroli was provided to the CFMEU some two business hours before the resumed hearing;

(f) the small selection of material that was provided to the CFMEU was probative but was limited mainly to the financial position of the Pentridge Village, joint venture (a matter which is addressed below);

(g) the CFMEU’s counsel was required to cross-examine Mr Leigh Chiavaroli “in the dark”;

(h) the difficulty in (g) was exacerbated by the fact that Mr Leigh Chiavaroli adopted a pattern of answering questions by referring to “the evidence” which he had provided to the Royal Commission, when it was clear that no such material was actually the subject of any evidence before the Royal Commission;

1 Submissions on behalf of the CFMEU, 14/11/14, Pt 8.10, para 77. 2 Submissions on behalf of the CFMEU, 14/11/14, Pt 8.10, para 4.

1529

(i) as a result of (g) and (h), Mr Chiavaroli’s evidence could not be fully and properly tested;

(j) as a result of (a) - (i), the CFMEU was at a serious disadvantage which impeded it and the relevant individuals from receiving a fair hearing.

4. The response of counsel assisting was follows:3

6. The CFMEU asked the Commission to issue notices to produce, and the Commission did so. Documents were produced to the Commission and were reviewed by staff assisting the Commission for the purpose of determining whether they were material to a proper assessment of the evidence under consideration, including the evidence of the Chiavarolis. The documents so identified were gathered together, regardless of whether they helped or harmed the CFMEU. The CFMEU was given the documents.

7. Some of those documents were helpful to the CFMEU’s cause on issues which had been raised, and were used first by Counsel Assisting to form a view that no submission should be made as to the financial effect of the CFMEU’s conduct on Pentridge Village (a fact which the CFMEU conveniently ignores when deciding if and to what extent persons assisting the Commission are partisan), and later by the CFMEU (to support submissions about that topic even though the point in question had not been made against it).

10. The “small selection of materials” produced to the CFMEU in Melbourne in response to its request for documentation ran to two full lever arch volumes. A third bundle was provided on the same day in relation to Mr Zaf.

11. The submission that no reason has been given as to why other material was not provided to the CFMEU is incorrect. The CFMEU’s lawyers were told by persons assisting the Commission about the processes described in paragraph 6 above. The CFMEU has also overlooked the portion of the transcript which records the statement that the documents identified for disclosure to the CFMEU by staff assisting the Commission were

3 Submissions in Reply of Counsel Assisting, 25/11/14, Chapter 8.10: paras 6-8, 10-12.

1530

those which had been determined to be relevant to the terms of reference.[4]

12. If there was a different version of the facts for this Commission to consider, Mr Setka could have come and given evidence about it. Mr Reardon could have come and given evidence about it. Mr Benstead could have come and given evidence about it. None of them did. Each of them - having remained mute - nevertheless took up the opportunity to undertake a lengthy cross-examination of Mr Chiavaroli through senior counsel, and received from the Commission volumes of documents which they now seek to use to their advantage. The submission by them and the CFMEU that they have been denied natural justice should be rejected.

5. The CFMEU is correct in suggesting that Mr Chiavaroli’s technique of

answering questions, on occasion, by reference to materials he had

provided to the Commission whether or not they were actually in

evidence was not helpful. However, taken as a whole, the CFMEU

submission is not compelling. The submission does not suggest that

documents relevant to the Terms of Reference which might have been

favourable to it were deliberately withheld. Some discretion must

reside in those assisting the Commission to determine what documents

are outside the Terms of Reference, and then to decline to disclose

those documents. Counsel assisting is also entitled to decline to pursue

issues which may be within the Terms of Reference, but are

excessively prone to waste time or which it may otherwise be

undesirable to pursue. As the CFMEU pointed out in another context,

at one stage it seemed that the causal relationship between the

CFMEU’s conduct and any loss suffered by the Chiavaroli companies

was in play. It is not now in play. The CFMEU is not denied natural

justice by not having material going to that question. The CFMEU

complaints of time constraints have to be understood in the light of the

4 Mr Stoljar SC, 17/9/14, T:12.37.

1531

need to do a great deal of work against what was until quite recently a

31 December 2014 deadline. That imposed pressures on all involved,

not just the CFMEU. There has been no showing that on any particular

issue the CFMEU was unfairly hampered by what has happened.

Hence the CFMEU’s submission is rejected. It made other

submissions which are dealt with at appropriate points below.

C - OUTLINE OF FINDINGS

6. The substance of counsel assisting’s submissions are to be accepted.

They lead to the following findings.

(a) There was a sad death on the Pentridge site during the life of the

project. The circumstances surrounding and the causes of that

fatality are not within the Terms of Reference.

(b) The CFMEU’s response to the death was strong and swift. In

many respects its reaction was both understandable and to be

expected. It wanted to introduce a higher level of safety

standards on site, for the benefit of workers on the site.

(c) However the CFMEU went too far, in that it used threats and

coercion in order to ensure that its own preferred candidate, Mr

Sucic, was retained to oversee matters of safety.

(d) In addition, and regrettably, the CFMEU took an advantage of

the opportunity afforded to it to have some presence on site. It

sought, through persons strategically placed on the site (Mr

Sucic and then Mr Dadic), to take control of the project and all

1532

of the workers on the site. It did so through the use of

illegitimate pressure exerted by these individuals on builders and

subcontractors to enter into the CFMEU form of enterprise

bargaining agreement (EBA), and by seeking to exclude from

the site workers who were not CFMEU members.

(e) This conduct may have contravened ss 346 and 355 of the Fair

Work Act 2009 (Cth).

(f) An investigation into the Pentridge site has also revealed a

number of discrete instances where Mr Setka engaged in grossly

offensive and aggressive conduct. It indicates a type of

behaviour that one would not expect to see from any trade union

leader. The behaviour, and the underlying attitudes it reveals,

fall well short of the professional standards expected of a State

Secretary of the CFMEU.

D - RELEVANT FACTS

West Homes and Pentridge Village

7. West Homes, a family owned building and construction company, was

incorporated in 1972 by Mr Peter Chiavaroli.5 West Homes holds a

full building licence. Mr Leigh Chiavaroli, Peter Chiavaroli’s son, was

a director of West Home for various periods from 1994 to 2011.6

5 Leigh Chiavaroli, witness statement, 8/7/14, para 3, annexure 1, pp 55-62. 6 Leigh Chiavaroli, witness statement, 8/7/14, annexure 1, pp 55-62.

1533

8. Pentridge Village was incorporated by Leigh and Peter Chiavaroli and

their then joint venture parties in 1999.7 Pentridge Village was

incorporated as a joint venture vehicle to purchase and develop the

Pentridge site.8 The Pentridge site was originally an 88 acre site

located at Urquhart Street in Coburg, Victoria.9 The site was

purchased by Pentridge Village on 5 June 1999.10

9. The development proposed on the Pentridge Village site was an $800

million multi-staged development11 that was to be developed under the

Pentridge Village master plan.12

10. Pentridge Village engaged West Homes to complete all building and

construction on the Pentridge Village site.13 Construction and building

commenced on the Pentridge site in November 2000.14

11. Prior to October 2010, West Homes did not have an enterprise

bargaining agreement with its employees. West Homes predominantly

engaged subcontractors and employees on individual contracts.15

7 Leigh Chiavaroli, witness statement, 8/7/14, para 8. 8 Leigh Chiavaroli, witness statement, 8/7/14, para 10. 9

Leigh Chiavaroli, witness statement, 8/7/14, para 10. 10 Leigh Chiavaroli, witness statement, 8/7/14, para 12. 11

Leigh Chiavaroli, witness statement, 8/7/14, para 14. 12 Leigh Chiavaroli, witness statement, 8/7/14, annexure 3, pp 77-81. 13

Leigh Chiavaroli, witness statement, 8/7/14, para 16. 14 Leigh Chiavaroli, witness statement, 8/7/14, para 18. 15

Leigh Chiavaroli, 17/9/14, T:61.4-7; Leigh Chiavaroli, witness statement, 8/7/14, para 47.

1534

Pentridge Village was also not party to any enterprise bargaining

agreement.16

12. At the peak of the development, there were up to 500 subcontractors

engaged by West Homes to complete stages of the development.17

13. Mr Des Caple of Des Caple & Associates had been engaged in October

2000 as an occupational health and safety consultant for the Pentridge

site.18 The frequency of Mr Caple’s audits varied depending on the

stage of the development. In addition to Mr Caple, Mr Martin

Zerowsky was employed as a full time occupational health and safety

officer at the Pentridge site.19

Initial dealings with the CFMEU

14. For the first nine years of the development and prior to 2009, the

CFMEU was largely unconcerned with the Pentridge site.

15. In January 2009, Mr Gerard Benstead, an organiser with the

Construction and General Division of the Victorian Branch of the

CFMEU arrived at the Pentridge site and asked to enter the site. Leigh

Chiavaroli met Mr Benstead in his site office.20

16 Leigh Chiavaroli, witness statement, 8/7/14, para 47. 17 Leigh Chiavaroli, witness statement, 8/7/14, para 21; Leigh Chiavaroli, 8/7/14, T:7:24-25. 18

Leigh Chiavaroli, witness statement, 8/7/14, Annexure 9, p 180. 19 Leigh Chiavaroli, witness statement, 8/7/14, para 51. 20

Leigh Chiavaroli, witness statement, 8/7/14, paras 27-29.

1535

16. Mr Benstead requested that he be allowed to enter the Pentridge site to

‘have a look around’.21 Mr Benstead also asked for a copy of the

project plan. He wanted to ascertain the commercial stages of the site

so that the CFMEU could ‘move onto the site as the project entered the

commercial stage of construction’.22

17. Mr Benstead also discussed with Leigh Chiavaroli his belief that a

‘shop steward, occupational health and safety representative’, was

required on site.23 Leigh Chiavaroli told Mr Benstead that he had

engaged Mr Caple for site audits and Mr Zerowsky as an occupational

health and safety officer. Mr Benstead replied: ‘I think you need help

from the CFMEU to look after the blokes on site’.24

18. By March 2009, Mr Benstead had attended the Pentridge Village site

on at least two further occasions seeking to inspect the Pentridge

Village site.25 On each occasion Leigh Chiavaroli maintained that the

development was a residential development and not a commercial

development. Traditionally, the CFMEU does not have coverage in

relation to residential or domestic housing sector.

19. On 3 March 2009 Mr Benstead attended the Pentridge Village site

again. Mr Benstead gave a copy of the CFMEU’s pattern enterprise

21 Leigh Chiavaroli, witness statement, 8/7/14, para 30(a). 22 Leigh Chiavaroli, witness statement, 8/7/14, para 30(b). 23

Leigh Chiavaroli, witness statement, 8/7/14, para 31. 24 Leigh Chiavaroli, witness statement, 8/7/14, para 31. 25

Leigh Chiavaroli, witness statement, 8/7/14, para 32.

1536

bargaining agreement to Leigh Chiavaroli. He told him to read it and

ask Mr Benstead any questions he might have.26

20. On 16 March 2009, Leigh Chiavaroli met Mr Benstead at a café near

the development. During this meeting Mr Benstead asked Leigh

Chiavaroli if he intended to sign the CFMEU enterprise bargaining

agreement.27 Mr Benstead again said to Leigh Chiavaroli ‘I think you

need help from the CFMEU to look after the blokes on the site’.28

21. At the meeting on 16 March 2009, Leigh Chiavaroli agreed to allow

Mr Benstead to conduct a visual occupational health and safety

inspection of the site.29

22. This site inspection occurred that same day, during which Mr Benstead

said to Leigh Chiavaroli ‘everything is okay. It’s a pretty clean site.’30

23. Leigh Chiavaroli did not receive any phone calls or visits from the

CFMEU for six months after this meeting with Mr Benstead.

A fatal accident on site

24. On 15 October 2009 an accident on the Pentridge site resulted in the

death of Thomas Kelly, a concreter working on the site.31

26 Leigh Chiavaroli, witness statement, 8/7/14, paras 44-45. 27 Leigh Chiavaroli, witness statement, 8/7/14, para 60. 28

Leigh Chiavaroli, witness statement, 8/7/14, para 60. 29 Leigh Chiavaroli, witness statement, 8/7/14, para 61. 30

Leigh Chiavaroli, witness statement, 8/7/14, para 63. 31 Leigh Chiavaroli, witness statement, 8/7/14, para 65.

1537

25. Mr Benstead and Mr Gerry Ayers, the CFMEU’s Safety Unit Manager,

attended the site on the day of the accident.32 In response to demands

from Mr Benstead, Leigh Chiavaroli met Mr Benstead and Mr Ayers

that afternoon.

26. During this meeting Mr Benstead criticised the occupational health and

safety staff that West Homes had engaged on the Pentridge site. Mr

Benstead also said ‘It is a prerequisite that because of the accident

from here on in, a union representative will have to be put in place at

the site’.33 Mr Benstead told Leigh Chiavaroli that he would be

contacting him by phone in the next 24 hours.34

27. The Pentridge Village site was shut down immediately after the

accident and remained shut until around January 2010.35 Various site

improvement and prohibition notices regarding the Pentridge site were

issued by WorkSafe Victoria in the days after the 15 October

accident.36

28. Following the accident and on 12 October 2011 the Victorian

WorkCover Authority charged West Homes with one count of failing

as far as reasonably practicable to provide a safe working environment

and one count of failing as far as reasonably practicable to ensure that

32 Leigh Chiavaroli, witness statement, 8/7/14, para 66(b). 33 Leigh Chiavaroli, witness statement, 8/7/14, para 75. 34

Leigh Chiavaroli, witness statement, 8/7/14, para 75. 35 Leigh Chiavaroli, witness statement, 8/7/14, para 70. 36

Leigh Chiavaroli, witness statement, 8/7/14, para 81.

1538

employees are not exposed to risks to their health and safety under the

Occupational Health and Safety Act 2004 (Vic).37

29. On 2 August 2012 the Victorian WorkCover Authority withdrew the

charges against West Homes.38

30. A coronial inquiry in relation to the facts and circumstances

surrounding Mr Kelly’s death is on foot. It is not appropriate to deal

further with the cause of and circumstances surrounding Mr Kelly’s

death.

Meetings with the CFMEU

31. In the week immediately following the accident, Mr Benstead

proceeded to call Leigh Chiavaroli two or three times a day.39 Mr

Benstead demanded that Leigh Chiavaroli meet officials of the

CFMEU, including Mr John Setka (the State Secretary of the CFMEU

Construction and General Division - Victoria) and Mr Bill Oliver (the

former President).40

32. During these conversations Mr Benstead repeatedly threatened that the

site would be ‘black banned and picketed’ if Leigh Chiavaroli did not

37 Leigh Chiavaroli, witness statement, 8/7/14, para 79. 38 Leigh Chiavaroli, witness statement, 8/7/14, annexure 16, pp 193-195. 39

Leigh Chiavaroli, witness statement, 8/7/14, para 82. 40 Leigh Chiavaroli, witness statement, 8/7/14, para 82.

1539

meet with and co-operate with the CFMEU and if West Homes did not

engage a CFMEU shop steward on the site.41

33. In the weeks following the accident Mr Shaun Reardon (the Assistant

State Secretary of the CFMEU) attended the site. He shook the fence.

He yelled obscenities and threatening comments.42 He also regularly

called Leigh Chiavaroli and demanded he come and talk to him.43

34. The pressure placed on Mr Leigh Chiavaroli to co-operate with the

CFMEU caused him to agree to attend a meeting with Mr Setka and

Mr Oliver on 22 October 2009. Leigh Chiavaroli’s diary records show

that the meeting took place at Don Camillo’s in West Melbourne.44

35. Mr Chiavaroli’s account of the meeting is that Mr Setka threatened to

put a ‘picket line across the front of your job’ unless the Chiavarolis

agreed to put the CFMEU nominated health and safety representative

on the site.45

36. Mr Bonnici’s evidence is that the meeting was ‘not threatening’ and

that there was ‘nothing said’ about establishing a picket line.46 Mr

Bonnici describes the tone taken by Mr Oliver at the meeting as

‘authoritative’ and ‘like a parent dressing down a child’.47

41 Leigh Chiavaroli, witness statement, 8/7/14, paras 83-84. 42 Leigh Chiavaroli, 17/9/14, T:27.1-4. 43

Leigh Chiavaroli, witness statement, 8/7/14, para 97(d). 44 Leigh Chiavaroli, witness statement, 8/7/14, annexure 17, p 196. 45

Leigh Chiavaroli, witness statement, 8/7/14, para 88. 46 Michael Bonnici, witness statement, 18/9/14, para 65. 47

Michael Bonnici, witness statement, 18/9/14, para 63.

1540

37. Leigh Chiavaroli’s version of events should be preferred to that of Mr

Bonnici.

38. A further meeting took place at the Pentridge Village site on 26

October 2009.48 Mr Setka, Peter Chiavaroli and Leigh Chiavaroli

attended. Mr Mario Amenta was also in attendance. He was a director

of XL Concrete and someone who had been introduced to the

Chiavarolis as a ‘facilitator’ for discussions with the CFMEU.49

39. During this meeting there was a discussion about the employment of an

additional occupational health and safety representative on site. The

Chiavarolis said that they were in the process of employing an

additional occupational health and safety representative, Mr Anthony

Rowe.50

40. Mr Setka told the Chiavarolis that employing Mr Rowe was not an

option. He said that West Homes had to employ Mr Anton Sucic.51

Mr Setka said that this was ‘non-negotiable’.52 Mr Sucic was a close

personal friend of Mr Setka. Mr Setka was best man at his wedding,

Mr Sucic is the godfather to Mr Setka’s son. They each share a one

eighth financial interest in a fishing boat.53

48 Leigh Chiavaroli, witness statement, 8/7/14, para 91. 49 Leigh Chiavaroli, witness statement, 8/7/14, paras 38-39. 50

Leigh Chiavaroli, 8/7/14, T:13.34-43. 51 Leigh Chiavaroli, witness statement, 8/7/14, para 94; Peter Chiavaroli, witness statement, 8/7/14, para 32. 52

Leigh Chiavaroli, witness statement, 8/7/14, para 94; Peter Chiavaroli, witness statement, 8/7/14, para 32. 53 Anton Sucic, witness statement, 18/9/14, para 9.

1541

41. Mr Bonnici gave a different account of the conversation. According to

him, it was Mr Amenta who suggested Mr Sucic as a suitable

occupational health and safety representative and Mr Setka agreed that

Mr Sucic ‘would be a good fit’.54 Mr Bonnici gave evidence that the

only requirement Mr Setka described as ‘not negotiable’ was the

engagement of a qualified health and safety officer on the site,55 and

that the ‘conclusion of the discussion was that Mr Sucic was the best

person for the job’.56

42. Leigh Chiavaroli’s account of this meeting, too, should be preferred.

43. The CFMEU submitted that Mr Leigh Chiavaroli’s accounts of the

conversations of 22 and 26 October 2009 were prone to error. He

admitted in oral evidence that his statement was wrong in claiming that

Mr Sucic attended the 26 October 2009 meeting. The CFMEU pointed

to the fact that Mr Peter Chiavaroli’s account omitted any threat of

industrial action. It pointed to the fact that Mr Amenta was not called

and that no notes or other documentary record of the meetings were in

evidence. Finally it pointed to the fact that Mr Bonnici’s account of

the conversations was different.57

44. For reasons given below, Mr Bonnici’s credit is bad. The other points

are reasonable points to make about conversations five years ago, but

the crucial contest is between the uncreditworthy Mr Bonnici and Mr

Leigh Chiavaroli. On the probabilities, the latter is to be preferred.

54 Michael Bonnici, witness statement, 18/9/14, para 75. 55 Michael Bonnici, witness statement, 18/9/14, para 74. 56

Michael Bonnici, witness statement, 18/9/14, para 77. 57 Submissions on behalf of CFMEU, 14/11/14, Pt 8.10, paras 81-91.

1542

45. As a result of this meeting Leigh Chiavaroli felt there was ‘no option

but to employ’ Mr Sucic.58 Mr Setka had given the Chiavarolis an

ultimatum. They decided to capitulate rather than face problems with

the CFMEU.

Meeting Mr Hardy and the employment of Mr Sucic

46. Around the same time, the Chiavarolis were introduced to Mr Ken

Hardy of Construction Safety and Training Services Pty Ltd. They

understood that Mr Hardy could ‘fix’ the problems that West Homes

was having with the CFMEU, and that he had close ties with the

CFMEU and its officials. This was to become evident during the

course of their dealings with Mr Hardy on the site.59

47. On 27 October 2009 the Chiavarolis met Mr Hardy. They discussed

the possibility of Mr Hardy providing occupational health and safety

services together with advice in relation to industrial relations.60

48. On 17 December 2009 Pentridge Village engaged Mr Hardy’s

company to provide occupational health and safety services for the

Pentridge Village site.61 Mr Sucic was then employed by Mr Hardy’s

company from December 2009. Thereafter he began attending the

Pentridge Village site.62

58 Leigh Chiavaroli, witness statement, 8/7/14, para 99; Peter Chiavaroli, witness statement, 8/7/14, para 36. 59

Leigh Chiavaroli, witness statement, 8/7/14, para 113. 60 Leigh Chiavaroli, witness statement, 8/7/14, paras 104-106. 61

Leigh Chiavaroli, witness statement, 8/7/14, annexure 24, pp 204-205. 62 Leigh Chiavaroli, witness statement, 8/7/14, para 108.

1543

Mr Sucic

49. Other than an ‘occupational health and safety course at Trades Hall in

Melbourne 20 years ago’, Mr Sucic does not have any occupational

health and safety qualifications.63 His only occupational health and

safety expertise is that which he has gained ‘on the job’.

50. As Mr Sucic accepted, he was, in substance, ‘CFMEU’s man on site’,

and he had been placed on site by Mr Setka and Mr Benstead.64

Pressures applied by the CFMEU to transition to commercial

51. Each of counsel assisting and counsel for the CFMEU provided

submissions in relation to an email dated 18 August 2010 sent by Mr

Sucic, and the relevance of that email to the question of whether one

particular part of the site, called S8, was ‘domestic’ or ‘commercial’.65

It is not necessary to set out those submissions in this Interim Report.

Resolution of that discrete sub-issue has become difficult. That is

because matters that are now being advanced on the sub-issue travel

beyond what was put to various witnesses by both counsel for the

CFMEU and counsel assisting. Further, the sub-issue is not

determinative of the critical events under consideration, as much of the

conduct complained of by Mr Chiavaroli concerned the CFMEU’s

coercion of West Homes generally, and the treatment of sub-contractors and their employees who were not CFMEU members. For

these reasons no findings based on Mr Sucic’s email will be made

63 Anton Sucic, witness statement, 18/9/14, para 3. 64 Anton Sucic, 18/9/14, T:183.43-184.3.

1544

which are adverse to the CFMEU or its officers, or adverse to Mr

Sucic’s credit.

52. When the Chiavarolis first met Mr Hardy in October 2009, Mr Hardy

took steps to have West Homes sign an enterprise bargaining

agreement with the CFMEU.66 He told Leigh Chiavaroli that the site

needed to be transitioned in order to ‘keep the site going and to

administer good relationships with the CFMEU’, that if the CFMEU

enterprise agreement was not signed, the CFMEU would ‘shut you

down’,67 and that there would be a ‘full stoppage of work on site’ if

West Homes did not sign the enterprise bargaining agreement.68

53. Mr Hardy’s behaviour suggests that he was, at this time, doing the

CFMEU’s bidding. He had been introduced to the Chiavarolis as

someone with links to union officials, and once he was on site, Mr

Hardy was regularly meeting with union officials in his office. Indeed

at one point he said to Mr Oliver that he did not need to worry because

Mr Hardy was ‘here now’.69

65 Submissions on behalf of CFMEU, 14/11/14, Pt 8.10, paras 59-76; Submissions in Reply of Counsel Assisting, 25/11/14, Chapter 8.10: paras 15-20. 66

Leigh Chiavaroli, witness statement, 8/7/14, para 118. 67 Leigh Chiavaroli, witness statement, 8/7/14, para 119(b). 68

Leigh Chiavaroli, witness statement, 8/7/14, para 124. 69 Leigh Chiavaroli, witness statement, 8/7/14, para 113; Peter Chiavaroli, witness statement, 8/7/14, para 49.

1545

54. Faced with this pressure from the CFMEU, communicated through Mr

Hardy, Leigh Chiavaroli felt he had to agree. He did not want to take

the risk that the CFMEU would launch an attack if he did not agree.70

55. The Chiavarolis were under significant pressure to complete parts of

the development in time for settlements. The settlements were for an

anticipated amount of $69 million. In these circumstances Leigh

Chiavaroli felt that he had no option but to comply with the CFMEU’s

demands.71 He did not want to upset the CFMEU and risk attacks on

his site that would result in delays to the settlements.

56. After the Chiavarolis had buckled to this pressure and signed the

CFMEU form of EBA, they dispensed with the services of Mr Hardy.

At this point Mr Sucic ceased to be employed by Mr Hardy’s company,

and started working directly for Pentridge Village.72

Pressure from Mr Sucic on workers and subcontractors

57. In and after mid 2010 subcontractors working on the Pentridge site

were pressured by Mr Sucic to sign the CFMEU’s form of EBA and, in

the process, re-price their jobs based on the commercial rates in the

enterprise bargaining agreements.73

58. In tandem with this, Mr Sucic also sought to exclude workers who had

been retained to work on the site if they were not CFMEU members,

70 Leigh Chiavaroli, 17/9/14, T:35.33. 71 Leigh Chiavaroli, witness statement, 8/7/14, paras 129-130. 72

Leigh Chiavaroli, witness statement, 8/7/14, para 141. 73 Leigh Chiavaroli, witness statement, 8/7/14, paras 120,133.

1546

and through this and other means, applied significant pressure to

workers to join the CFMEU.

59. Leigh Chiavaroli’s evidence was that if subcontractors and their

workers did not comply with requirements of this kind, they were

prevented from accessing the Pentridge Village site. As a consequence

they were prevented from completing outstanding works on the

Pentridge Village site.74 Complaints were made to him by a range of

subcontractors, including Peter Brown, Rahimi Mobarak and

Albert Moshi.75

60. Contemporaneous emails from site staff reveal complaints being made

about Mr Sucic behaving in this way. This supports Leigh

Chiavaroli’s evidence on the subject. The complaints concerned Mr

Sucic:

(a) not allowing non-union workers on the S8 site;76

(b) putting ‘a lot of pressure’ on a subcontractor for not having an

enterprise agreement with the CFMEU;77

(c) putting pressure on a subcontractors whose employees were not

members of the CFMEU;78 and

74 Leigh Chiavaroli, witness statement, 8/7/14, para 120. 75 Leigh Chiavaroli, 17/9/14, T:27.25-28.17. 76

Sucic MFI-4. 77 Sucic MFI-5. 78

Sucic MFI-5.

1547

(d) handing out forms for joining the union, telling workers they had

to sign those forms, and demanding the forms be signed.79

61. Mr Sucic gave unsatisfactory evidence on these subjects. When it was

suggested to him that he had put pressure on workers to join the union

and would not allow non-union members to enter the site, he said he

did not need to recruit members because every contractor had a

CFMEU enterprise bargaining agreement and their employees were

union members.80

62. This was inconsistent with what he had said in his statement, to the

effect that he was positively encouraging workers to join the union.81

When this contradiction was put to Mr Sucic, his evidence became

nonsensical. He said he encouraged people to become union members

even though they were already union members.82 At this point in the

examination, Mr Sucic was dissembling.

63. At a later point in the examination, Mr Sucic accepted that he was

making demands about union membership because he was trying to

achieve direct negotiating strength as a union representative looking

after union members, and that this was ‘common practice’. He said he

wanted a workforce that would ‘take instruction’, and that is what he

was seeking to achieve at the Pentridge site. He admitted that was

79 Sucic MFI-5. 80 Anton Sucic, 18/9/14, T:177.6-9. 81

Anton Sucic, witness statement, 18/9/14, para 25. 82 Anton Sucic, 18/9/14, T:177.11-35.

1548

indicative of the CFMEU’s general position.83 This was all about

control - control by the CFMEU of all the workers, and thus the site.

64. On the question of applying pressure to subcontractors to sign CFMEU

enterprise bargaining agreement, Mr Sucic did ultimately accept that

he was insisting on subcontractors signing a commercial enterprise

bargaining agreement.84 He had no right to do so. The terms of

employment between subcontractors and their employees was a matter

for those parties. Mr Sucic was not entitled to force himself on their

relationship and dictate the terms on which an employer would

employee its employees.

65. Mr Sucic prevaricated as to whether his insistence that subcontractors

had ‘commercial EBAs’ meant, in substance, an insistence that they

sign the CFMEU’s form of EBA. He started his answer with the words

‘If that was the case’, but then changed course and suggested that

something else might have sufficed so long as it was of a commercial

nature.85 Given that he was CFMEU’s man on site, and was positively

requiring subcontractors to sign commercial enterprise bargaining

agreements, a suggestion by Mr Sucic that he was not pressing for the

CFMEU’s form of enterprise bargaining agreement is not credible.

Pressure from Mr Dadic on workers and subcontractors

66. In October 2010, Mr Sucic told Leigh and Peter Chiavaroli that he was

going to be replaced on site by Mr Ivan Dadic.86 Mr Dadic is Mr

83 Anton Sucic, 18/9/14, T:183.1-23. 84 Anton Sucic, 18/9/14, T:179.38. 85

Anton Sucic, 18/9/14, T:179.41-45.

1549

Setka’s brother-in-law.87 He is also a long-term and close personal

friend of Mr Sucic.88 Mr Benstead told Leigh Chiavaroli that he had

no choice and that Mr Dadic was coming onto the site.89

67. Below there is a finding that Mr Setka may have breached s 355 of the

Fair Work Act 2009 (Cth) by threatening industrial action unless Mr

Dadic was employed. The CFMEU submitted that there is no evidence

that Mr Setka had any role in the employment of Mr Dadic.90 But Mr

Dadic was Mr Setka’s brother-in-law. It is unlikely that Mr Benstead

would threaten Mr Chiavaroli without Mr Setka’s knowledge and

approval. A probable inference arises that Mr Benstead’s statement to

Mr Chiavaroli was made with Mr Setka’s knowledge and approval.

68. As a result, Mr Dadic did replace Mr Sucic on site. He behaved in the

same manner as his predecessor.

69. In this regard, Mr Dadic refused entry to the Pentridge site to

subcontractors that had not signed an enterprise bargaining agreement

with the CFMEU, and workers who were not union members.91 He

told subcontractors during their inductions that they were required to

be members of the CFMEU and were required to join the CFMEU

86 Leigh Chiavaroli, witness statement, 8/7/14, para 143; Peter Chiavaroli witness statement, 8/7/14, para 54. 87

Peter Chiavaroli, witness statement, 8/7/14, para 54. 88 Anton Sucic, witness statement, 18/9/14, para 37. 89

Leigh Chiavaroli, witness statement, 8/7/14, para 143. 90 Submissions on behalf of CFMEU, 14/11/14, Pt 8.10, para 80. 91

Leigh Chiavaroli, witness statement, 8/7/14, para 149.

1550

preferred income protection and superannuation schemes, Incolink and

Cbus.92

70. Subcontractors who reported Mr Dadic’s conduct to Leigh Chiavaroli

included:

(a) Mr Peter Brown, director of Premium Shower Screens Pty Ltd,

who complained that, in March 2011, one of his employees was

refused access to the site by Mr Dadic on the grounds that the

employee was not a CFMEU member;93

(b) Mr Talip Onal from Onal Painting Contractors Pty Ltd, who

complained that, between 4 and 8 April 2011, he and his

subcontractors was refused entry to the Pentridge Village site by

Mr Dadic as he did not have a CFMEU enterprise bargaining

agreement and Cbus and Incolink membership;94

(c) Mr Rahimi Mobarak of Golden Towers Construction Pty Ltd

who complained that he was refused access to the Pentridge

Village site by Mr Dadic as he was not a CFMEU member;95

(d) Mr Rahimi Hamidullah, a renderer, who reported that he was

refused access by Mr Dadic to the site because he did not have

CFMEU, Cbus or Incolink membership.96

92 Leigh Chiavaroli, witness statement 8/7/14, para 150. 93 Leigh Chiavaroli, witness statement 8/7/14, para 152(a). 94

Leigh Chiavaroli, witness statement, 8/7/14, para 152(b). 95 Leigh Chiavaroli, witness statement, 8/7/14, para 152(c).

1551

71. Leigh Chiavaroli was told by Mr Mastramico that other subcontractors,

including Carpet Call, Austral Kitchens, Super Kitchens and CSR

Bradford were refused entry to the site by Mr Dadic because they had

not signed an enterprise bargaining agreement with the CFMEU.97

Ryden Braggins, a contracting carpet layer, was told that he would

have to join the CFMEU, Cbus and Incolink before he could get access

to the Pentridge Village site.98

72. Mr Benstead was Mr Dadic’s CFMEU supervisor. When Leigh

Chiavaroli approached Mr Dadic about his conduct, Mr Dadic made

clear to him that subcontractors were not allowed to work on the

Pentridge Village site without an enterprise agreement. Mr Dadic also

made clear that he was acting on instructions from the CFMEU,

saying: 99

I get my instructions from my masters at the CFMEU. If you have a dispute or a problem with that, you need to speak to the area manager, Gerard. It’s the policy of the CFMEU.

73. When Leigh Chiavaroli specifically asked Mr Dadic about CSR

Bradford not being permitted access to the site as their employees were

not members of the CFMEU and because they did not have a CFMEU

enterprise bargaining agreement, Mr Dadic responded: ‘You know, if

these guys come to the site I won’t allow them past the gate, I’ll just

refuse them entry and turn them around’.100

96 Leigh Chiavaroli, witness statement, 8/7/14, para 152(d). 97 Leigh Chiavaroli, witness statement, 8/7/14, para 158. 98

Ryden Lee Braggins, witness statement, 8/7/14, paras 18-22. 99 Leigh Chiavaroli, witness statement, 8/7/14, para 166. 100

Leigh Chiavaroli, witness statement, 8/7/14, para 169.

1552

74. Mr Dadic also threatened subcontractors on the Pentridge site

saying: 101

you have to join the CFMEU and if you don’t I will be watching you. If your shoelace is undone and you are going up a ladder, then that’s it.

75. Peter Chiavaroli interpreted this to mean that Mr Dadic was

threatening work stoppages on false workplace safety grounds if

people did not sign up to the CFMEU.102

76. Several of the subcontractors engaged by West Homes, some of whom

had worked with West Homes for many years, ceased work on the

Pentridge Village site due to the pressure to join the CFMEU and sign

an enterprise bargaining agreement with the CFMEU.

77. Mr Dadic’s employment with Pentridge ceased on 22 November 2011

and his position became redundant. Since that time there has been no

CFMEU presence on the Pentridge Village site.103

78. The CFMEU made some general submissions about the preceding

paragraphs and others. It complained about particular subcontractors

not being called. It complained about double hearsay. It complained

about inability to test Mr Leigh Chiavaroli because of his references to

material not in evidence. The last two complaints are exaggerated. So

far as double hearsay was involved, it tended to take the form of

statements by sub-contractors to their head contractors at the time of

101 Peter Chiavaroli, witness statement, 8/7/14, para 63. 102 Peter Chiavaroli, witness statement, 8/7/14, para 63. 103

Leigh Chiavaroli, witness statement, 8/7/14, para 177.

1553

particular CFMEU conduct: that is, it was part of the res gestae, as

distinct from being a testimonial narration long after the relevant event.

So far as particular subcontractors were not called, it is necessary to

bear in mind the difficulties of obtaining assistance from witnesses of

that character in view of the strong industrial position of the CFMEU.

Mr Setka’s awareness and endorsement of the actions on site

79. Peter Chiavaroli’s evidence is that he attended a meeting with Mr

Setka and two other CFMEU representatives at the CFMEU’s offices

in Swanston Street. During that meeting Mr Setka made clear to Peter

Chiavaroli that employees and subcontractors working on the

Pentridge Village site had to become CFMEU members. Mr Setka

also made clear that those who did not wish to join would need to be

replaced.104

80. When Peter Chiavaroli pushed back, Mr Setka retorted ‘there’s more

than one fucking way to skin a cat’.105 Peter Chiavaroli interpreted this

as a threat of industrial action if he did not comply with Mr Setka’s

demands to use a ‘unionised’ workforce on the site.

81. Mr Setka also told Peter Chiavaroli that he was to engage Mr Amenta

and XL Concrete to provide concrete to the Pentridge Village site.106

82. Peter Chiavaroli’s protested that West Homes already had a concrete

supplier, Holcim, with whom they had had a long-running commercial

104 Peter Chiavaroli, witness statement, 8/7/14, para 65. 105 Peter Chiavaroli, witness statement, 8/7/14, para 66. 106

Peter Chiavaroli, witness statement, 8/7/14, para 67.

1554

relationship and a better commercial price, Mr Setka retorted ‘It is not

a fucking option. Do you want to finish the job?’107 Peter Chiavaroli

took this as a threat by Mr Setka to shut the Pentridge Village site and

prevent them from finishing construction of the units if he did not

comply with Mr Setka’s demands.

83. The CFMEU provided no evidence to contradict Peter Chiavaroli’s

version of these events, even though Mr Setka and others were given

the opportunity to do so.

84. Out of fear that the site would be shut down, Mr Amenta and XL

Concrete were engaged to perform multiple concrete pours over

multiple days.108

85. The CFMEU submitted that Mr Leigh Chiavaroli’s evidence did not

implicate Mr Setka or refer to XL Concrete, Mr Peter Chiavaroli was

not tested because he was too ill to attend for cross-examination, there

was no written or other complaint about the retainer of XL Concrete,

and Mr Amenta did not give evidence.109 The lack of complaint is not

significant. A person who submits to coercive behaviour in the form of

threats out of fear that a union may cause that person harm is well

advised not to submit complaints less the union be irritated into

carrying out the conduct threatened. Mr Peter Chiavaroli’s evidence

may be untested, but it is also uncontradicted by Mr Setka. The fact

that it is uncontradicted suggests that it could not have been tested

successfully. There is no reason not to accept it.

107 Peter Chiavaroli, witness statement, 8/7/14, para 66. 108 Leigh Chiavaroli, 17/9/14, T:70.25-30. 109

Submissions on behalf of CFMEU, 14/11/14, Pt 8.10, paras 92-99.

1555

Mr Benstead flexes his muscle on site

86. In June 2011 Mr Onal told Leigh Chiavaroli that he had lodged a

complaint with the then Australian Building and Construction

Commission in relation to Mr Dadic refusing to allow Mr Onal access

to the Pentridge Village site.110

87. Mr Benstead was not pleased when he found out that Mr Onal had

made the complaint and that the Australian Building and Construction

Commission was investigating the complaint.

88. On 30 June 2011 Mr Benstead telephoned Leigh Chiavaroli. He told

him not to talk to the Australian Building and Construction

Commission unless he was forced to do so. Mr Benstead made clear to

Leigh Chiavaroli the CFMEU’s view that getting the Australian

Building and Construction Commission involved would only hold the

job up. He said that the CFMEU would take unnecessary industrial

action if a contractor complained to the Australian Building and

Construction Commission. A recording of the call was played to the

Commission. Mr Benstead said, in a very aggressive, tense, energetic,

passionate and intimidating way:

And he goes talking to the ABCC … if Johnny Setka ever hear him about that that would be a friggin - that’ll be the end of it, right, if they hear about the fact that you’re talking to them and you’re running to them all the time, right.111

110 Leigh Chiavaroli, witness statement, 8/7/14, para 179. 111 Leigh Chiavaroli MFI-1, 8/7/14, T:3.29-4.2.

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Forget about the law. I can do it another way. Do you want me to do it by the law, what I’ll do is I’ll push - serve paperwork to the company that gives me the entitlement to put bans on the job in pursuit of an enterprise agreement.112

Everything works on a bit for youse and a bit for us. Forget about the law,

right.113

Mr Setka flexes his muscle on site

89. On 21 September 2011, Leigh Chiavaroli received a call from Mr

Setka in relation to Mr Paul Costa of Costa Constructions Pty Ltd. He

was a subcontractor engaged to provide concreting services on the

Pentridge Village site.

90. Mr Setka said during the call:

I know that you have a concreter on site by the name of Paul Costa. I hate the cunt. I’m going to come down there, rip his head off, shit down his throat, and bury his head next to Ned Kelly’s.114

91. Mr Setka then demanded that Leigh Chiavaroli remove Mr Costa from

the site. Leigh Chiavaroli was told to ‘get rid of him’.115 When

pressed for a reason Mr Setka said:

Because ten years ago I had a blue with him and he used to work for Daniel Grollo and I hate Grollo, I can’t stand the cunt.116

112 Leigh Chiavaroli MFI-1, 8/7/14, T:4.12-16. 113 Leigh Chiavaroli MFI-1, 8/7/14, T:5.13-14. 114

Leigh Chiavaroli, witness statement, 8/7/14, para 182. 115 Leigh Chiavaroli, witness statement, 8/7/14, para 182. 116

Leigh Chiavaroli, witness statement, 8/7/14, para 182.

1557

92. Mr Setka also threatened to ‘throw’ Mr Costa off site if Leigh

Chiavaroli did not comply with Mr Setka’s demands to have Mr Costa

removed from the site.

Mr Setka’s call about Mr Onal

93. On 27 September 2011 Mr Setka left a voicemail message on Leigh

Chiavaroli’s mobile telephone in relation to Mr Onal saying:117

Leigh, its John Setka, can you please give me a ring about this fucking dog Turkish fucking painting piece of shit on your job on …

94. The recording of this voice message was stored on Leigh Chiavaroli’s

phone. It was played to the Commission.118 Mr Setka was shouting

almost uncontrollably.

Disposing of Mr Bonnici’s evidence

95. Mr Bonnici was not a truthful witness, and his evidence cannot be

preferred to that of the Chiavarolis.

96. In his statement Mr Bonnici made a number of very serious allegations

against the Chiavarolis. They were false allegations that should never

have been made. Many of them had nothing to do with the issues

under consideration by the Commission. It was yet another example of

the CFMEU’s tendency to engage in slur campaigns against witnesses

who were willing to give evidence against them.

117 Leigh Chiavaroli, witness statement, 8/7/14, para 220; Leigh Chiavaroli, MFI-2, 8/7/14. 118 Leigh Chiavaroli, 8/7/14, T:29.35.

1558

97. In this regard, Mr Bonnici gave evidence that he was sacked by the

Chiavarolis and escorted off the site. Security camera footage of the

parting meeting between these parties was played before the

Commission and the witness. It demonstrated that Mr Bonnici’s

evidence was a lie.119

98. Other examples of the deficiencies in Mr Bonnici’s evidence may be

given. He alleged the Chiavarolis had mistreated contaminated soil.120

Documents showed that statement to be false.121 He alleged that Leigh

Chiavaroli requested Mr Bonnici to bribe an employee of a power

company to have certification completed as quickly as possible to

obtain certificates of occupancy.122 Documents revealed that this could

not have been so.123

E - CONCLUSIONS

99. This case study illustrates the way in which officers of the CFMEU,

and persons appointed by them to act on the CFMEU’s behalf, misuse

their powers and position in order to force builders, subcontractors and

workers to enter into agreements and join a union against their will.

100. Mr Setka is the most senior official in the Construction and General

Division in Victoria. He has behaved towards the Chiavarolis and their

companies, both directly and through his delegates Mr Sucic and Mr

119 Bonnici MFI-1. 120 Michael Bonnici, witness statement, 18/9/14, para 22. 121

Bonnici MFI-2, tabs 10, 14. 122 Michael Bonnici, witness statement, 18/9/14, para 24. 123

Bonnici MFI-2, tab 16.

1559

Dadic, in an intimidating and unsavoury way. He misused his position

and power.

101. It is not lawful to attempt to force people to join a trade union, and to

exclude them from a work site if they refuse.124 It is not lawful to

attempt to force contractors to sign an enterprise bargaining agreement,

and to exclude them from a site if they refuse.125 It is not permissible

to seek to interfere in the contractual relationship between a developer

and a subcontractor by applying pressure to the subcontractor to

increase price. It is not lawful to make threats in order to encourage a

developer to use or not use a particular subcontractor.126

102. Yet this is how the CFMEU officials and delegates under consideration

- Mr Setka, Mr Benstead, Mr Sucic and Mr Dadic - may have behaved.

103. Even if Mr Setka and others initially held strong and genuine concerns

about safety on the site, that does not excuse the behaviour that is now

under consideration. That behaviour was not motivated by a concern

for safety. It was motivated by a desire to control the work site and the

workers on it, increase the membership base of the union, and increase

the number of subcontractors bound to the CFMEU’s form of

enterprise bargaining agreement (the terms of which require

subcontractors to make payments to Incolink and Cbus, two companies

in which the CFMEU has a substantial financial interest).

124 Fair Work Act 2009 (Cth), s 346. 125 Fair Work Act 2009 (Cth), s 343. 126

Fair Work Act 2009 (Cth), s 355.

1560

104. The demands and threats made in relation to Paul Costa, the Turkish

painter, Mr Oral and the Australian Building and Construction

Commission had nothing to do with safety. The pressure applied to

workers to join the union had nothing to do with safety. It was Mr

Sucic’s and Mr Dadic’s job to ensure that the safety systems on site

were adequate. The workers did not need to be union members in

order for Mr Sucic and Mr Dadic to do their job.

105. The facts set out above indicate that Mr Setka and Mr Benstead may

have breached s 355 of the Fair Work Act 2009 (Cth). That prohibits a

person from organising or taking action against another person with

intent to coerce the other person to employ or not employ a person or

engage or not engage a particular independent contractor (or

threatening to do so). The evidence indicates one or other of them

threatened to take industrial action against the Chiavarolis and the

companies associated with them unless they employed Mr Dadic,

unless Construction Safety and Training Services Pty Ltd employed by

Mr Sucic, and unless XL Concrete was retained.

106. The CFMEU appeared to submit that s 355 did not apply to coercion

by Mr Setka of Pentridge Village to procure Construction Safety and

Training Services Pty Ltd to employ Mr Sucic to employ services

which Pentridge Village requested Construction Safety and Training

Services Pty Ltd to perform. That submission is rejected. Section 355

is not limited to coercion by Mr Setka of Pentridge Village to employ

Mr Sucic.

107. Further, Mr Sucic and Mr Dadic may have breached s 346 of the Fair

Work Act 2009 (Cth). That prohibits a person from taking adverse

1561

action against another person because the person is not a member of an

industrial association.

108. Sections 346 and 355 are civil penalty provisions.

109. It is recommended that this Interim Report and any other relevant

materials be referred, pursuant to s 6P of the Royal Commissions Act

1902 (Cth) and every other enabling power, to the Fair Work Building

Inspectorate in order that consideration may be given to whether

proceedings should be commenced and carried on against:

(a) each of Anton Sucic and Ivan Dadic for taking adverse action

against a person because they were not a member of an industrial

association contrary to s 346 of the Fair Work Act 2009 (Cth);

and

(b) each of John Setka and Gerard Benstead for coercion by

allocating duties to a particular person contrary to s 355 of the

Fair Work Act 2009 (Cth).

1562

CHAPTER 8.11

ANDREW ZAF

1. This chapter relates to the conduct of officers of the Victorian Branch

of the Construction & General Division of the Construction, Forestry,

Mining and Energy Union towards Mr Andrew Zaf.

2. Shortly before this Interim Report was completed, material came to the

Commission’s attention which requires investigation before any

concluded findings can be made. There has been insufficient time to

carry out that investigation.

3. For those reasons nothing further should be said at this stage.

1563

1564

CHAPTER 8.12

LIS-CON’S QUEENSLAND LOCKOUT

1. This chapter concerns the alleged conduct of officers of the

Queensland Branch of the Construction & General Division of

the Construction, Forestry, Mining and Energy Union (the

CFMEU) towards Lis-Con Concrete Constructions Pty Ltd and

Lis-Con Services Pty Ltd. These companies are referred to either

as the Lis-Con companies or Lis-Con.

2. The officers in question are Mr Michael Ravbar (Branch

Secretary), Mr Peter Close (Branch Assistant Secretary), Mr

Greg McLaren (organiser) and Mr Bud Neiland (organiser).

3. Lis-Con alleges, and the CFMEU denies, that the CFMEU

engaged in an ‘industrial campaign’ against Lis-Con so as to

have it removed from work sites in Queensland as a result of Lis-Con failing to accede to the CFMEU’s demands.

4. Counsel assisting submitted that there was insufficient evidence

to support the making of adverse findings against the CFMEU or

the officers referred to above.1

1 Submissions of Counsel Assisting, 31/10/14, para 4.

1565

5. Not surprisingly, the CFMEU in this instance agreed with

counsel assisting.2

6. However, counsel for Mr O’Neill and the Lis-Con companies

took issue with this unwonted consensus - very strongly.3

7. For various reasons there is some force in her submissions. The

main reason concerns the Cbus scandal. Although Mr Fitzpatrick

was the witness who first gave direct evidence about it, counsel

for Mr O’Neill and the Lis-Con companies pursued the Cbus

scandal strongly. That is because her clients were the victims of

the Cbus-CFMEU misbehaviour. The fact that the CFMEU was

prepared to go to those lengths is a sign of a strong motivation.

That motivation could well spring out of a ‘war’.

8. The position should be reviewed when the examination of the

Cbus scandal - in which there are frequently new developments -

is complete. The origins of the Cbus scandal may cast light on

the important question whether there was such a thing as ‘Lis-Con’s Queensland lockout’. But no findings will be made at this

stage.

2 Submissions on behalf of the CFMEU, 14/11/14, Pt 8.12, para 3. 3 O’Neill/Lis-Con submissions, Chapters 8.3, 8.12, 14/11/14, paras 53-63.

1566

PART 9: HEALTH SERVICES UNION

CHAPTER 9

RIGHT OF ENTRY PERMIT TESTS

Subject Paragraph

A - INTRODUCTION 1

B - RIGHT OF ENTRY TESTING 5

C - CRITICAL FACTUAL DISPUTES 9

Did Ms Lee sit online tests for Mr Rowe and Mr Eden? 11

Did Ms Lee sit online tests for Mr Rowe and Mr Eden? - evidence of Pik Ki (Peggy) Lee 12

Did Ms Lee sit online tests for Mr Rowe and Mr Eden? - evidence of David Eden 30

Did Ms Lee sit online tests for Mr Rowe and Mr Eden? - evidence of Darryn Rowe 45

Did Ms Kitching sit online tests for Ms Asmar and others? 53

Did Ms Kitching sit online tests for Ms Asmar and others? - evidence of Robert McCubbin 57

1567

Subject Paragraph

Did Ms Lee sit online tests for Ms Asmar and others? - evidence of Sandra Porter 62

Did Ms Lee sit online tests for Ms Asmar and others? - evidence of Jayne Govan 64

Did Ms Lee sit online tests for Ms Asmar and others? - evidence of Lee Atkinson 68

Did Ms Lee sit online tests for Ms Asmar and others? - evidence of Nick Katsis 70

Did Ms Lee sit online tests for Ms Asmar and others? - evidence of Saso (Sasha) Trajcevski-Uzunov 78

Did Ms Lee sit online tests for Ms Asmar and others? - evidence of Alexander Leszcynski 86

Did Ms Lee sit online tests for Ms Asmar and others? - evidence of Robert Morrey 87

Did Ms Lee sit online tests for Ms Asmar and others? - evidence of Kimberley Kitching 89

Did Ms Lee sit online tests for Ms Asmar and others? - evidence of Diana Asmar 98

Did Ms Lee sit online tests for Ms Asmar and others? - assessment of the various witnesses 102

Did the conduct of Ms Kitching and Ms Lee occur at the direction of Ms Asmar? 111

D - CONSEQUENCES OF FACTUAL FINDINGS 114

Mr McCubbin’s application 115

Applications of Mr Eden and Mr Rowe 122

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Subject Paragraph

Ms Asmar’s application 124

The other organisers’ applications 125

Recommendations 128

E - A PRELIMINARY POINT 129

A - INTRODUCTION

1. This chapter of the Interim Report deals with events in and concerning

the HSU Victorian No 1 Branch, now known as the Health Workers’

Union, in 2013 (No 1 Branch).

2. Ms Diana Asmar has since 21 December 2012 been the Secretary of

the No 1 Branch. The Commission has heard evidence raising a

number of concerns relating to Ms Asmar’s discharge of her duties as

Secretary. It includes allegations of autocratic hiring and firing of

staff, the appointment to paid positions of Ms Asmar’s friends and

acquaintances, bullying, attempting to undermine the outcome of the

democratic elections, and serious lack of proper practices. These

allegations will not be analysed in this Interim Report.

3. The Interim Report will, however, deal with a discrete but most serious

issue. It relates to whether Ms Asmar directed and acquiesced in the

General Manager of the No 1 Branch, Ms Kimberley Kitching, and a

then industrial officer, Ms Pik ki (Peggy) Lee, sitting online right of

entry tests purportedly carried out by other organisers, thereby falsely

1569

and deceitfully obtaining right of entry permits for a number of

organisers.

4. Ms Kitching sat an online right of entry test for Ms Asmar on 25

January 2013 and for a number of other organisers on 15 February

2013. Ms Lee sat the online test for Mr Darryn Rowe on 20 March

2013 and for Mr David Eden on 26 March 2013. All this occurred

with the knowledge and at the direction of Ms Asmar. The reasons for

these findings are stated below. They are based on the submissions of

counsel assisting, subject to challenges from counsel for Ms Asmar,

Ms Kitching and other officials.

B - RIGHT OF ENTRY TESTING

5. In order to enter workplaces, union officials must have a right of entry

permit issued by the Fair Work Commission.1

6. Each application for a right of entry permit contains a declaration

which provides, among other things, that the proposed permit holder

has received the appropriate training.2 The declaration must be signed

by a member of the Branch Committee of Management. The

declaration specifically states that the proposed permit holder has:3

(a) … received appropriate training about the rights and responsibilities of a permit holder, namely: The ACTU Federal Right of entry online training course completed on [insert date].

1 Fair Work Act 2009 (Cth), ss 498 and 512. 2 Fair Work Commission Rules 2013 (Cth), r 51(1). 3

McCubbin MFI-1, 25/8/14, pp 1782-1784.

1570

7. The usual practice was that Ms Asmar signed these forms and indeed,

she signed all of the forms for the applicants set out in paragraph 54

below and for Mr Rowe and Mr Eden.4

8. In order to show that the online training has been completed, proposed

permit holders must complete an online test. If they pass this test, a

certificate of completion is generated.

C - CRITICAL FACTUAL DISPUTES

9. There are three hotly contested factual disputes. Did Ms Kitching sit

the test for Ms Asmar on 25 January 2013 and for a number of other

organisers on 15 February 2013? Did Ms Lee sit the online test for Mr

Rowe on 20 March 2013 and Mr Eden on 26 March 2013? If this

conduct occurred, did it occur with the knowledge and at the direction

of Ms Asmar, and in the case of Ms Lee, at the direction of Ms

Kitching also?

10. It is convenient to deal with the second question first, because an

assessment of that matter bears upon the answer to the first question.

Did Ms Lee sit online tests for Mr Rowe and Mr Eden?

11. The relevant witnesses in relation to this issue were Ms Lee, Mr Rowe

and Mr Eden. Ms Lee’s evidence was that she sat the test for Mr Rowe

on 20 March 2013 and for Mr Eden on 26 March 2013 at the direction

of Ms Asmar and Ms Kitching. Mr Rowe and Mr Eden denied this and

said they sat their own test.

4 McCubbin MFI-1, 25/8/14, pp 34, 123, 634, 1149, 1411, 1599, 2083.

1571

Did Ms Lee sit online tests for Mr Rowe and Mr Eden? - evidence of Pik Ki

(Peggy) Lee

12. From January 2013 Ms Lee continued in her role as Industrial

Assistant.5 On 13 February 2013 Ms Lee went on holiday to Hong

Kong.6 Ms Lee returned to Australia on 6 March 2013 and appears to

have returned to work shortly thereafter.

13. Ms Lee testified that after returning from leave she was handed a

bundle of permits and asked to deal with them. She said that she took

the bundle of applications, certificates and test results into Ms

Kitching’s office and discussed the issue with Ms Kitching.7

14. Ms Lee testified that Ms Kitching told her that she had completed the

right of entry tests for various organisers. Ms Lee recounted that Ms

Kitching became excited about the fact that she had achieved a perfect

score (100%) in some of the tests.8

15. It was clear to Ms Lee that Ms Kitching was talking about having

completed the right of entry tests for the organisers whose forms were

in the bundle of documents that had been handed to Ms Lee and which

5 Peggy Lee, witness statement, 25/8/14, para 14. A copy of Ms Lee’s statement of evidence is contained within McCubbin MFI-1, p 100. For ease of reference references to the six volume McCubbin MFI-1 will be given by reference to the number of the folder followed by the relevant page. Thus the statement of Peggy Lee is at 1/100. 6

Peggy Lee, witness statement, 25/8/14, para 38; 1/106. 7 Peggy Lee, witness statement, McCubbin MFI-1, 25/8/14, para 44; 1/107. 8

Peggy Lee, witness statement, 25/8/14, para 45.

1572

she had taken into Ms Kitching’s office. These included Mr Sherriff,

Mr Katsis, Mr McCubbin, Ms Govan and Mr Trajcevksi-Uzunov.9

16. On 15 March 2013 Ms Lee sent an email to Ms Govan, Mr Trajcevski,

Mr Sherriff, Mr Atkinson and Mr Mitchell. She copied in Ms Kitching

and Ms Asmar. The email advised them that their right of entry permit

applications had been lodged with the Fair Work Commission.10

17. Ms Lee gave evidence that around this time, Ms Asmar told the

organisers to forward the emails they had received from the ACTU

containing their course access passwords to Ms Kitching.11 Ms Lee

said that as far as she knew, one could only access an organiser’s

online test and coursework if one had that organiser’s password.12

18. Ms Lee realised that Mr David Eden and Mr Darryn Rowe had not

completed their right of entry tests. This was in part because they were

country organisers and were not always in the city office. Ms Lee

raised the issue with Ms Kitching. At some stage while Mr Eden and

Mr Rowe were in the branch office Ms Kitching asked them to sign a

F42 Application for Permit forms although they were not dated at that

time. Ms Lee said that she asked them to sign these forms before they

had done the test so that she could have signed forms ready to process

once their tests had been done.13

9 Peggy Lee, witness statement, McCubbin MFI-1, 25/8/14, paras 44-46, 50; 1/107-108. 10 Peggy Lee, witness statement, McCubbin MFI-1, 25/8/14, 1/118. 11

Peggy Lee, witness statement, 25/8/14, para 29. 12 Peggy Lee, witness statement, 25/8/14, para 30. 13

Peggy Lee, witness statement, 25/8/14, paras 52-54; 1/109.

1573

19. Ms Lee’s evidence was that at about this time Ms Asmar and Ms

Kitching asked her to sit the tests for Mr Eden and Mr Rowe.14 Ms

Lee resisted at first because she regarded it as wrong for her to do tests

for other people. On 18 or 19 March 2013 Ms Lee seems to have

accessed Mr Rowe’s course details to check whether he had done his

test and confirmed that he had not. Ms Lee testified:15

This was a time of significant stress for me because Diana had been angry that the tests had not been done and Kimberly had been constantly asking me about them.

20. Ms Lee further testified that she was working at the HSU on a

sponsored visa and felt under immense pressure to keep her job. Ms

Lee testified:16

Because of how angry Diana had been and the pressure I felt from Kimberly, I felt that if I did not complete the ROE tests for Darryn Rowe and David Eden that I might be fired and my visa would immediately be at risk.

21. Ms Lee testified that although she knew it was wrong and although she

found it stressful and distressing she decided that she would complete

the right of entry tests for both Mr Rowe and Mr Eden.17

22. On 18 March 2013 at 2.14pm, Mr Rowe forwarded his Australian

Council of Trade Unions (ACTU) enrolment letter which included his

login and password to Ms Lee.18

14 Peggy Lee, 25/8/14, T:478.30-34; Peggy Lee, 16/9/14, T:995.22-26, 997.7-.21 15 Peggy Lee, witness statement, 25/8/14, para 60; 1/110. 16

Peggy Lee, witness statement, 25/8/14, para 62; 1/111. 17 Peggy Lee, witness statement, 25/8/14, para 63; 1/111. 18

McCubbin MFI-1, 25/8/14, 1/137; 1/22.

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23. On 20 March 2013, according to records created by the ACTU, Mr

Rowe’s online test was commenced at 9.07pm (AEST). Ms Lee’s

evidence is that the IP address recorded on the ACTU record was that

of her home computer. Ms Lee said that she completed the test from

her home address on the evening of 20 March 2013.19 On 20 March

2013 at 10.34pm a ‘Certificate of ‘Completion’ for Mr Rowe was sent

via email from the ACTU.20

24. As noted above Ms Lee had already caused Mr Rowe to sign a Form

F42 - Application for an Entry Permit in relation to Mr Rowe.

25. On the morning of 21 March 2013 Ms Lee collated the necessary

forms and documents and asked Ms Asmar to sign the Form F42

application. Ms Asmar did so, dating it 21 March 2013.21

26. On 21 March 2013 at 9.21am Ms Lee sent this Form F42 by email to

the Fair Work Commission.22 On the same day the Fair Work

Commission received Mr Rowe’s signed and completed Form F42

application.23

27. On 26 March 2013 Ms Lee deposes that she sat the online test for Mr

Eden, commencing at 8.51am (AEST).24 On 26 March 2013 at

19 Peggy Lee, witness statement, 25/8/14, para 65-66; 1/111. 20 McCubbin MFI-1, 25/8/14, 1/154. 21

Peggy Lee, witness statement, 25/8/14, 1/34. 22 Peggy Lee, witness statement, 25/8/14, para 69; 1/129. 23

McCubbin MFI-1, 25/8/14, 3/1001. 24 Peggy Lee, witness statement, 25/8/14, para 76; McCubbin MFI-1, 25/8/14, 1/113.

1575

10.16am (AEDT) a ‘Certificate of ‘Completion’ for Mr Eden was sent

via email from ACTU.25

28. Again, Mr Eden had previously signed the form F42. Ms Lee printed

out Mr Eden’s certificate of completion and wrote in the date

‘26/3/2013’ above his signature.26 On 26 March 2013 Ms Lee also

arranged for Ms Asmar to sign and date her part of Mr Eden’s

application.27

29. Later that morning, at 10.39am (AEDT) on 26 March 2013, Ms Lee

sent an email to the Fair Work Commission attaching the form F42 and

the signed declaration by both Ms Asmar and Mr Eden.28 On the same

day the Fair Work Commission received Mr Eden’s signed and

completed Form F42 application.29

Did Ms Lee sit online tests for Mr Rowe and Mr Eden? - evidence of David

Eden

30. As noted above, Ms Lee deposed that she sat the online test for Mr

Eden on 26 March 2013, in the No 1 Branch office in Melbourne. Mr

25 McCubbin MFI-1, 25/8/14, 1/419; Peggy Lee, 25/8/14, T:483.39-4. 26 Peggy Lee, witness statement, 25/8/14, para 79. 27

Peggy Lee, witness statement, 25/8/14, para 79; 1/113; 25/8/14 T:484.45-46;484.1-5. 28 Peggy Lee, witness statement, 25/8/14, McCubbin MFI-1, 25/8/14, 1/132; McCubbin, MFI-1, 25/8/14, 1/416-417. 29

McCubbin MFI-1, 25/8/14, 3/1001.

1576

Eden gave evidence that this was not true.30 He clearly remembered

sitting the test himself.31

31. The first difficulty in accepting Mr Eden’s evidence is that he has

propounded numerous versions of events at different times. On 12

September 2013 Mr Eden made a statutory declaration which stated,

among other things, that he completed the ACTU Fair Work Right of

Entry Online Training Course on 26 March 2013.32

32. In his oral evidence, Mr Eden retreated from this statement:

Q. You knew that this stat dec was false when you signed it, that’s right isn’t it?

A. No, that’s not correct. I thought it was correct at the time. My recollection wasn’t correct.

Q. What do you mean by that, Mr Eden? You thought it was correct?

A. That’s right. I thought it was correct when I signed it but I don’t believe that - it may well have been 26 March, it may not have been. It was a long time ago.33

33. As appears from this evidence Mr Eden was apparently sure on 12

September 2013 that he had sat the test on 26 March 2013, but had

ceased to be sure of that fact at some later point.

34. However he was still sure on 26 November 2013. On that date the

solicitors for the No 1 Branch, Holding Redlich, sent a detailed letter to

30 David Eden, 19/9/14, T:1011.19-20. 31 David Eden, witness statement, 19/9/14, para 20. 32

McCubbin MFI-1, 25/8/14, 2/585. 33 David Eden, 19/9/14, T:1005.21-30.

1577

the Fair Work Commission addressing various allegations that had

been raised concerning the obtaining of right of entry permits.34 This

letter included the following concerning the completion of the test by

Mr Eden:

In relation to Mr Eden, the ACTU record shows that Mr Eden undertook his ROE test on 26 March 2013 at 8.51am and the time taken was 21 minutes and 49 seconds. Mr Eden has provided a Statutory Declaration as requested by you and further instructs that he came down to Melbourne on the afternoon of 26 March 2013 to do his test - he did not do the test at 9.14am that day. To the best of his recollection, it took longer than the 21 minutes and 49 seconds set out in the ACTU record. Mr Eden also recalls that Ms Kitching opened up the computer for him and that Mr Rowe also came down from Bendigo that afternoon to do his test.35 (emphasis added)

35. Mr Eden accepted that he gave instructions to someone at Holding

Redlich for the purposes of him or her drafting and sending this

letter.36 It follows that as at 26 November 2013 Mr Eden gave

instructions to Holding Redlich to the effect that he did the test on 26

March 2013, and indeed was able to recall not only that he did the test

in the afternoon, but also incidental details to the effect that Ms

Kitching opened the computer for him and that Mr Rowe sat the test on

the same afternoon.

36. On 19 December 2013 Mr Eden was interviewed by representatives of

the Fair Work Commission. A transcript of that interview is in

evidence.37 Mr Eden was accompanied by Mr David Shaw from

Holding Redlich. The representatives of the Fair Work Commission

34 McCubbin MFI-1, 25/8/14, 1/407. 35 McCubbin MFI-1, 25/8/14, 1/409-410. 36

David Eden, 19/9/14, T:1006.8-13. 37 McCubbin MFI-1, 25/8/14, 1/421.

1578

conducting the interview were Mr Enright and Ms Fraser. In that

interview Mr Eden said that he recalled doing his test in the evening of

26 March 2013 not in the morning.38 He said that he remembered Mr

Rowe being present when he did his test and that Mr Rowe had done

the test after Mr Eden did his.39

37. By the time Mr Eden gave evidence in the Commission his position

had changed again. When asked about what he said to the Fair Work

Commission concerning his alleged recollection of Ms Kitching

opening up the computer for him and Mr Rowe coming down from

Bendigo in the afternoon to do the test as set out in paragraph 34 above

he said, ‘I was confused’.40 He also retreated from the proposition that

he had observed Mr Rowe doing his right of entry test on the afternoon

of 26 March 2013. He said again that he was confused and added ‘I

did not witness him do his right of entry test that afternoon’.41

38. Mr Eden’s evidence in his witness statement was to the following

effect:42

Because so much time had passed, I do not know what time of day or what date I did the ROE test. I remember that I came especially to Melbourne to do the test. I also clearly remember that I did the test myself.

39. Written submissions filed on behalf of a number of individuals

including Mr Eden argued that Mr Eden should be believed because he

is the President of the Health Workers’ Union (HWU), has been a

38 McCubbin MFI-1, 25/8/14, 2/465. 39 McCubbin MFI-1, 25/8/14, 2/467. 40

David Eden, 19/9/14, T:1007.46. 41 David Eden, 19/9/14, T:1008.22. 42

David Eden, witness statement, 19/9/14, para 20.

1579

nurse for 26 years, and it is ‘possible’ that both he and Ms Lee sat the

test and the relevant documentary records were incomplete.43

40. In the circumstances the fact of Mr Eden’s position carries no weight.

As to the possibility that multiple tests were completed, Mr Eden does

not point to any records which indicate that the test was carried out by

him or on his behalf on any day other than 26 March 2013. At

10.16am (AEDT) on that day, he was sent a ‘Certificate of

Completion’ via email. If he had already completed the test, he would

have already received such a certificate. Would he not have

questioned why he was receiving a second certificate? If he completed

the test after 26 March 2013, he would have received a later certificate.

There is no evidence of such a certificate. The contention that it was

‘possible’ that Mr Eden completed the test on a day other than 26

March 2013 must be rejected. One test was completed on the morning

of 26 March 2013.

41. Yet Mr Eden was in Bendigo, on the morning of 26 March 2013, as

appears from his phone records. When asked about those telephone

records the examination proceeded as follows:44

Q. One point we draw from that is that you are certainly at Bendigo when the test was done on the morning of 26 March; that’s right?

A. If this is my phone record, it would indicate that.

Q. You know it’s your phone record, Mr Eden. You’ve just said you had produced it to the Fair Work Commission that’s correct?

43 Submissions on behalf of named No 1 Branch officials, 14/11/14, paras 24-25. 44 David Eden, 19/9/14, T:1009.5-17.

1580

A. That’s right, we volunteered that information to the Fair Work Commission.

Q. So you know it is your phone record?

A. I believe it to be my phone record, yes.

42. Ms Lee’s evidence should be accepted. Ms Lee have her evidence in a

careful and thoughtful way. It carries significant weight because it is

against interest. It is consistent with the documentary records. It has

remained unchanged. Whilst the submissions filed on behalf of the No

1 Branch officials alleged that other persons who gave evidence

against interest had a motive to inculpate Ms Asmar, no such

submission was advanced in respect of Ms Lee. In contrast, Mr Eden

repeatedly changed his evidence. His only explanation for the many

competing versions was to say that he was ‘confused’.

43. On the evidence before the Commission, Ms Lee sat Mr Eden’s online

test on the morning of 26 March 2013.

44. A further submission was made that there is no evidence that Mr Eden

asked Ms Lee to complete his test, or that he knew Ms Lee had done

his test, or that he knew of any request for Ms Lee to complete the test

on his behalf.45 It is true there is no evidence before the Commission,

but that is irrelevant. Mr Eden allowed a declaration to be submitted to

the Fair Work Commission which was false or misleading in that he

stated that he had received the required training when he had not. Mr

Eden had a duty to correct the misleading declaration.

45 Submissions on behalf of named No 1 Branch officials, 14/11/14, para 26.

1581

Did Ms Lee sit online tests for Mr Rowe and Mr Eden? - evidence of

Darryn Rowe

45. The evidence of Mr Darryn Rowe was similarly problematic. The

letter of 26 November 2013 from Holding Redlich to the Fair Work

Commission included the following:

As to Darryn Rowe, he does not agree that he did the test on 20 March 2013 starting at 9.08pm. Mr Rowe instructs that he, like Mr Eden, did his test on 26 March 2013. He recalls that both he and Mr Eden attended a meeting at 2.00pm in Bendigo and, following the conclusion of that meeting, they both drove to Melbourne to undertake the test.

46. Mr Rowe’s story then changed: he told the Commission that he

completed the test on 20 March 2013 as per the ACTU record.46

47. In his oral evidence Mr Rowe accepted that someone from Holding

Redlich asked him for an account of what had happened regarding his

online test and that he knew that this was for the purposes of

responding to the investigation that the Fair Work Commission was

conducting.47 It was put to Mr Rowe that he had been careful to give a

truthful account to Holding Redlich and Mr Rowe accepted this and

agreed he gave those instructions to Holding Redlich in November

2013.48

48. In his oral evidence Mr Rowe attempted to explain the discrepancy in

his evidence by saying that when he was interviewed by Holding

Redlich he could not remember when he had sat the test so he

46 Darryn Rowe, 19/9/14, para 8. 47 Darryn Rowe, 19/9/14, T: 1022.5-12. 48

Darryn Rowe, 19/9/14, T:1022.14-39; 1026.25-32.

1582

discussed it with Mr Eden who suggested to him that they had travelled

to Melbourne from Bendigo to do the test on 26 March 2013.49 Mr

Rowe said:

Q: But you discussed it with Mr Eden, hadn’t you?

A: I had - at that stage I was -

Q: You discussed it with Mr Eden hadn’t you?

A: At that stage, if you’d let me finish, I was having trouble as far as I couldn’t remember the exact time or date that I’d done the - completed the test, and I did speak to Mr Eden to see if he could recollect when we had completed. He said, “I believe it was here”, and because we had travelled to Melbourne, there was a recollection, yes, that’s right, I had to go down to the office on that day I do remember travelling down.

49. When asked again to explain why his evidence had changed from what

he told the Fair Work Commission in November 2013, Mr Rowe

said:50

A: The evidence that was initially put forward, and as I said to you prior, I had trouble recalling, I'd started a new job which I was trying to learn, and because of the amount of travel that we were doing at the time, it was very hard to recall exactly where I was at any given time. I remember doing the right of entry, but I could not recall exactly when I did it. Because of that I spoke to David [Eden] and said, ”Look, do you remember?” He said, “Yes, I believe it was here”. I remember travelling down to Melbourne from Bendigo with him and I thought, yep, that sounds fine, that's right, more than happy. So, as things progressed I looked at, and this is as we went down, we looked at the record, ironed that, okay, yes, I remember where I was clearly.

Q. So your memory gets better and better over time, does it, Mr

Rowe?

49 Darryn Rowe, 19/9/14, T:1027.28. 50 Darryn Rowe, 19/9/14, T:1027.18-38.

1583

A. Yeah.

50. Submissions filed on behalf of Mr Rowe did not appeal to Mr Rowe’s

position in the union, or the fact that he is nurse, as a reason for

accepting his account. But they advanced the same argument as was

made on behalf of Mr Eden: it was ‘possible’ that both he and Ms Lee

sat the online test on 20 March 2013 and the ACTU records were

incomplete.51 For reasons similar to those articulated in respect of Mr

Eden, that possibility should be rejected as fanciful.

51. Mr Rowe was an unconvincing witness. His story has changed

repeatedly over time. His first attempt to defeat the allegations, when

raised by the Fair Work Commission, was, in effect, to deny the

accuracy of the computer records as to the time and date his test was

done. After being confronted with evidence that the computer records

were correct, Mr Rowe’s evidence also changed and he told the

Commission that he completed the test on 20 March 2013 (not 26

March 2013 as previously claimed), a new story which attempted to fit

with what was shown on the ACTU record as to the timing and date

the test was done.

52. Ms Lee’s evidence that she sat Mr Rowe’s online test on the evening of

20 March 2013 should be accepted. As with Mr Eden, a submission

was made that there is no evidence that Mr Rowe asked Ms Lee to

complete the test on his behalf and there is no evidence that he knew of

any request for Ms Lee to complete the test on his behalf.52 The

51 Submissions on behalf of named No 1 Branch officials, 14/11/14, para 29. 52 Submissions on behalf of named No 1 Branch officials, 14/11/14, para 29.

1584

answer to that submission is the same as the answer in relation to Mr

Eden.

Did Ms Kitching sit online tests for Ms Asmar and others?

53. The next issue is whether Ms Kitching sat the online right of entry test

for Ms Asmar on 25 January 2013 and for a number of other organisers

on 15 February 2013.

54. The ACTU’s records demonstrate that on 15 February 2013, a series of

right of entry online tests were conducted as follows:53

(a) Mr Lee Atkinson’s right of entry online test was opened at

9.02am (10.02am AEDT) and concluded at 9.14am (10.14am

AEDT),;

(b) Ms Jayne Govan’s right of entry online test was commenced

1 minute later, at 9.25am (10.25am AEDT) and concluded at

9.34am (10.34am AEDT), in 9 minutes and 9 seconds;

(c) Mr McCubbin’s right of entry online test was undertaken at

1.56pm (2.56pm AEDT) and concluded at 1.59pm (2.59pm

AEDT), in 2 minutes and 49 seconds;

(d) Mr Dean Sherriff’s right of entry online test was undertaken

at 2.10pm (3.10pm AEDT) and concluded at 2.12pm (3.12pm

AEDT), in 2 minutes and 31 seconds;

53 McCubbin MFI-1, 25/8/14, pp 1396, 1501, 1512, 1698.

1585

(e) Mr Saso (Sasha) Trajcevski-Uzunov’s right of entry online

test was undertaken at 2.54pm (3.54pm AEDT) and

concluded at 2.56pm (3.56pm AEDT), in 1 minute and 57

seconds; and

(f) Mr Nick Katsis’s right of entry online test was undertaken at

3.00pm (4.pm AEDT) and concluded at 3.02pm (4.02pm

AEDT), in 2 minutes.

55. In summary, Ms Govan and Mr McCubbin gave sworn evidence that

they did not sit their respective tests. This was not challenged. Who

sat them? Their evidence was that it was Ms Kitching. The evidence

of Ms Lee, which has already been recounted, was to the same effect.

Ms Kitching denied this. She also denied that she sat the test for Ms

Asmar and for Messrs Atkinson, Trajcevski-Uzunov and Katsis. This

latter denial of Ms Kitching was supported by the evidence of Ms

Asmar and Messrs Atkinson, Trajcevski-Uzunov and Katsis.

56. It is necessary first to recount the evidence of the relevant witnesses.

Given the overlapping and conflicting accounts it is difficult to assess

the evidence of a number of the witnesses in isolation. In those cases,

an assessment of the evidence is deferred to paragraph 102 and

following. However, where it is possible to assess a witness’s

evidence in isolation that has been done in the section concerning that

witness’s evidence.

1586

Did Ms Kitching sit online tests for Ms Asmar and others? - evidence of

Robert McCubbin

57. On 18 March 2013, an application for a right of entry permit was

lodged with the Fair Work Commission by the No 1 Branch on behalf

of Mr McCubbin. The application was dated 12 March 2013 and

included a declaration from Ms Asmar, as the Committee of

Management member making the application.

58. On the application a box had been ticked stating that the proposed

permit holder, Mr McCubbin, was an employee of the No 1 Branch

holding the position of occupational health and safety officer.54

59. Mr McCubbin gave evidence that he commenced full time employment

with the No 1 Branch as an occupational health and safety officer on

22 April 2013.55 For approximately three months prior to commencing

this role, Mr McCubbin said he had been assisting Ms Asmar on a

voluntary basis until the No 1 Branch had the funds to start paying him

wages.56 Ms Asmar gave evidence that when she signed the

declaration she knew that Mr McCubbin was not an employee of the

No 1 Branch.57

60. Mr McCubbin said that he did not receive the training referred to in his

right of entry permit application and that he knew he had not received

54 McCubbin MFI-1, 25/8/14, 4/1782. 55 Robert McCubbin, witness statement, 25/8/14, para 14; Robert McCubbin, 25/8/14, T:469.5-20. 56

Robert McCubbin, witness statement, 25/8/14, para 14. 57 Diana Asmar, 26/8/14, T:559.23-29.

1587

this training at the time he signed the application.58 Mr McCubbin said

that he signed the application at the direction of Ms Asmar.59 Mr

McCubbin said that Ms Kitching did the online test for him as well as a

number of other people including Ms Asmar, Mr Eden, Mr Katsis and

a person named ‘Sasha’.60

61. Mr McCubbin also gave evidence that he recalled attending a meeting

in April 2013 at the No 1 Branch office with his partner Ms Porter

where Ms Asmar told them that Ms Kitching had completed her right

of entry test for her and that at the upcoming industrial day she was

going to tell the No 1 Branch staff that Ms Kitching would do their

right of entry tests for them.61

Did Ms Lee sit online tests for Ms Asmar and others? - evidence of Sandra

Porter

62. Ms Porter has been Mr McCubbin’s partner since 2006. Ms Porter

gave evidence that around January to March 2013, she and Mr

McCubbin attended a barbecue at Ms Asmar’s house. Ms Porter

deposed that she recalled Ms Asmar saying that she was getting Ms

Kitching to do her right of entry test, and that Mr McCubbin would do

the same.62

58 Robert McCubbin, 25/8/14, T:469.22-46. 59 Robert McCubbin, 25/8/14, T:470.1-3. 60

Robert McCubbin, witness statement,25/8/14, para 19. 61 Robert McCubbin, witness statement, 25/8/14, para 15. 62

Sandra Porter, witness statement, 16/9/14, paras 11-12.

1588

63. Ms Porter also deposed that around the same time in early 2013, she

and Mr McCubbin attended Ms Asmar’s office at the No 1 Branch to

discuss the commencement of Mr McCubbin’s employment and other

issues. Ms Porter said that Mr McCubbin asked Ms Asmar what was

happening with the right of entry permits and testing to which she

responded that Ms Kitching had already done her test and that she had

asked her to do Mr McCubbin’s test as well.63

Did Ms Lee sit online for Ms Asmar and others? - evidence of Jayne

Govan

64. Ms Govan was an HSU Organiser in 2013. Ms Govan gave evidence

that around February or March 2013, she attended an industrial day at

the No 1 Branch offices on Park Street, Melbourne where the

following occurred:64

I recall that a number of organisers raised the issue of Right of Entry

Permits because of the difficulties we had been experiencing. Most if not

all the employees of the union would have been present at the meeting,

including most if not all of the organisers. … Diana Asmar told all of us

present that we would not be required to complete our own Right of Entry

tests and that Kimberly Kitching would be completing the tests for us.

65. Ms Govan said she understood that Ms Asmar arranged for Ms

Kitching to complete the right of entry tests for the organisers because

63 Sandra Porter, witness statement, 16/9/14, para 16. 64 Jayne Govan, witness statement dated 16 September 2013, 25/8/14, paras 13-14.

1589

the organisers did not really have time to do the tests due to their

workloads.65

66. Ms Govan gave evidence that the following people did not complete

their own right of entry tests:66

(a) Nick Katsis;

(b) Dean Sherriff;

(c) Diana Asmar;

(d) Sasha (whose surname Ms Govan could not recall);

(e) David Eden; and

(f) Rob McCubbin.

67. Ms Govan said that she, Mr Katsis, Mr Sherriff and ‘Sasha’ all

commenced their employment as organisers at the same time and they

spoke about the right of entry tests amongst themselves. Ms Govan

also said she recalled Ms Asmar boasting that Ms Kitching got around

99% or 100% when she completed Ms Asmar’s right of entry test.67

65 Jayne Govan, witness statement dated 16 September 2013, 25/8/14, para 15. 66 Jayne Govan, witness statement dated 16 September 2013, 25/8/14, para 17. 67

Jayne Govan, witness statement dated 16 September 2013, 25/8/14, paras 18-19.

1590

Did Ms Lee sit online tests for Ms Asmar and others? - evidence of Lee

Atkinson

68. Mr Atkinson is an Organiser at the HSU. Mr Atkinson gave evidence

that he did not sit his right of entry test but obtained a right of entry

permit.68 Mr Atkinson said that Ms Lee told him that she completed

his right of entry test and he got 100%.69 Mr Atkinson said that Ms

Lee did not mention Ms Kitching.70

69. On Ms Lee’s unchallenged evidence, Mr Atkinson must have been

mistaken in his recollection. Ms Lee’s evidence was that she was on

annual leave in Hong Kong from 13 February 2013 to 6 March 2013,

and during this time she did not access the online ACTU training

course or have anything to do with right of entry permits.71 Mr

Atkinson’s test was undertaken on 15 February 2013.

Did Ms Lee sit online tests for Ms Asmar and others? - evidence of Nick

Katsis

70. Mr Katsis was an Organiser with the No 1 Branch from January to

May 2013 and an Industrial Officer with the No 1 Branch from May to

June or July 2013. Mr Katsis is currently a Lead Organiser with the

No 1 Branch.

68 Lee Atkinson, 19/9/14, T:1038.7-.11;1039.10-11. 69 Lee Atkinson, 19/9/14, T:1037.42-45. 70

Lee Atkinson, 19/9/14, T:1038.3-5. 71 Peggy Lee, witness statement, 25/8/14, paras 38-39.

1591

71. Mr Katsis gave evidence that he completed his own right of entry test

during the early stages of his employment as an Organiser. Mr Katsis

denied that Ms Kitching or anyone else completed his right of entry

test for him.72 Mr Katsis told the Fair Work Commission that he

recalled taking the test on 15 February 2013 in the No 1 Branch office,

and that the test took him more than 30 minutes to complete.73

72. It is apparent from the evidence recounted above that Mr Katsis’s

evidence was contradicted by Mr McCubbin, Ms Govan and Ms Lee,

all of whom gave evidence that Ms Kitching sat Mr Katsis’s test. Ms

Govan also gave evidence that Mr Katsis had told her that Ms Kitching

sat his right of entry test.74

73. Apart from the evidence of those three witnesses, there is other

evidence that contradicts Mr Katsis’s evidence. The records of the

ACTU show that Mr Katsis’s right of entry test was commenced on 15

February 2013 at 2.59pm (AEST) or 3.59pm (AEDT) and completed

on 3.02pm (AEST) or 4.02pm (AEDT).75 At 4.03pm on that day a

generic email was sent from the ACTU to Mr Katsis attaching a

certificate of compliance for the right of entry course.76

74. The submissions filed on behalf of Mr Katsis made the submission that

the timing in relation to the ACTU computer records cannot safely be

relied upon because of the revelations in a report prepared by KPMG

72 Nick Katsis, 19/9/14, T:1059.17-37. 73 McCubbin MFI-1, 25/8/14, 4/1672. 74

Jayne Govan, 16/9/14, T:965.6-25. 75 McCubbin MFI-1, 25/8/14, p 1698. 76

McCubbin MFI-1, 25/8/14, p 1697.

1592

that Mr Katsis’s user account has been deleted on 9 July 2013 and that

there were some discrepancies in time zones in the ACTU records.77

That report was dated 11 November 2014, was attached to the back of

the submissions and was not tendered in evidence until 28 November

2014.78

75. The KPMG report does not assist Mr Katsis in relation to the

submission made on his behalf. The KPMG report specifically

accepted that on the basis of a snapshot of information as at 17

February 2013, Mr Katsis’s test on 15 February 2013 commenced at

3.00pm (AEST) and was completed at 3.01pm (AEST).79 The report

obtained by the Fair Work Commission from an independent expert,

Mr Scott Mann of Invest-e-gate Pty Ltd explained that any time

extracted from the ACTU records during the period in which daylight

savings operated, should be accounted for by adding one hour to that

time.80 Thus all of the evidence points to the conclusion that Mr

Katsis’s test was commenced at approximately 4.00pm (AEDT) on 15

February 2013 and completed 2 minutes later. The subsequent deletion

of Mr Katsis’s account on 9 July 2013 is thus irrelevant.

76. But Mr Katsis’s telephone records show that he was making a

telephone call from Malvern at 3.48pm (AEDT) on 15 February

2013.81 His diary entry for that day records that he had a meeting from

2-3 pm with delegates and members followed by a meeting with

77 Submissions on behalf of named No 1 Branch officials, 14/11/14, para 22. 78 HSU Additional Tender Bundle, 28/11/2014, Tab 1. 79

HSU Additional Tender Bundle, 28/11/2014, p 18. 80 McCubbin MFI-1, 25/8/14, p 1701. 81

McCubbin MFI-1, 25/8/14, p 1681.

1593

human resources at Cabrini Hospital.82 There is a Cabrini Hospital on

Wattletree Road, Malvern. It is approximately 8 km by road between

Cabrini Hospital and the No 1 Branch at Park Street, South Melbourne.

15 February 2013 was a Friday. It is unlikely that Mr Katsis could

have made a phone call at 3.48pm (AEST) near Malvern and then be

sitting at a computer in the No 1 Branch at Park Street to commence

his test 11 or 12 minutes later.

77. Mr Katsis’s evidence is thus inherently unlikely and contradicted by

the evidence of three other witnesses. It is not accepted.

Did Ms Lee sit online tests for Ms Asmar and others? - evidence of Saso

(Sasha) Trajcevski-Uzunov

78. Mr Trajcevski-Uzunov was an Organiser with the No 1 Branch from

late January to early April 2013.

79. Mr Trajcevski-Uzunov’s evidence was that on or about 15 February

2013 he completed an online right of entry test.83 He could not

remember the exact time or date.84 He denied that Ms Kitching

completed the test for him.85 He said that it took him a couple of

minutes to take the test and that it was the first time he sat it.86

82 McCubbin MFI-1, 25/8/14, p 1688. 83 Saso Trajcevski-Uzunov, witness statement, 19/9/14, paras 9-10. 84

Saso Trajcevski-Uzunov, witness statement, 19/9/14, para 9. 85 Saso Trajcevski-Uzunov, 19/9/14, T:1101.8-.10, 1102.11-17. 86

Saso Trajcevski-Uzunov, 19/9/14, T:1101.12-31.

1594

80. Mr McCubbin, Ms Govan and Ms Lee all gave evidence to the effect

that Ms Kitching sat Mr Trajcevski-Uzunov’s test. ‘Sasha’ was Mr

Trajcevksi-Uzunov.87

81. Ms Govan gave the most detailed evidence on this point. She deposed

that Mr Trajcevksi-Uzunov told her that he had not done his own test.

Ms Govan thought this conversation occurred when she and Mr

Trajcevski-Uzunov were travelling together in a car to a meeting at the

Kingston Centre which is part of Monash Health, Cheltenham. Ms

Govan recalled that Mr Trajcevski-Uzunov said words to the effect that

he had not done his right of entry test either and that Ms Kitching was

doing all of the organisers’ exams.88

82. Ms Govan provided information to the Fair Work Commission that Mr

Trajcevski-Uzunov accompanied her in attending a meeting at Monash

Health in the afternoon of 15 February 2013. Ms Govan said that by at

least 12.56pm on 15 February 2013, she was travelling to Monash

Health with Mr Trajcevski-Uzunov in her HSU vehicle. Ms Govan

said that she and Mr Trajcevski-Uzunov arrived at the meeting location

at approximately 2.30pm, they participated in a meeting which took

place between 3pm - 4pm and then Ms Govan drove Mr Trajcevski-Uzunov back to the No.1 Branch office in South Melbourne.89 Ms

Govan produced telephone records which showed that she was near

‘MCL Tunnels’ being the Melbourne CityLink tunnel at 12.56pm on

15 February 2013.90 This evidence supported Ms Govan’s account that

87 See, eg, McCubbin MFI-1, 25/8/14, p 1380. 88 Jayne Govan, 16/9/14, T:966.35-46; 967.1-9. 89

McCubbin MFI-1, 25/8/14, p 2067. 90 McCubbin MFI-1, 25/8/14, p 2155.

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she was travelling from South Melbourne to Monash Health on 15

February 2013. Ms Govan also produced copies of print-outs from her

electronic diary indicating the fact and timing of the meeting at

Monash Health.91 No challenge was made to that evidence.

83. The relevance of this evidence was that it demonstrated that Mr

Trajcevski-Uzunov could not have been completing his test at the time

the records show the test was completed. The ACTU records showed

that Mr Trajcevski-Uzunov’s test was commenced at 2.54pm (AEST)

or 3.54pm (AEDT) and concluded at 2.56pm (AEST) or 3.56pm

(AEDT) taking 1 minute and 57 seconds to complete.92 Mr Trajcevski-Uzunov answered all of the questions correctly.93 At 3.57pm (AEDT)

a generic email from the ACTU was sent to Mr Trajcevski-Uzunov

attaching a Certificate of Compliance for the right of entry training

course.94 Those records support the conclusion that the test was

completed at 3.56pm (AEDT).

84. When it was put to Mr Trajcevski-Uzunov that Ms Govan had said that

he was on site at Monash Health on 15 February 2013 at the time that

his right of entry test was undertaken, he said that he could not recall

where he was on that date and he could not recall being with Ms

Govan at Monash Health.95 Mr Trajcevski-Uzunov’s phone records

showed that on 15 February 2013 he made a telephone call at 2.54pm,

91 McCubbin MFI-1, 25/8/14, p 2156. 92 McCubbin MFI-1, 25/8/14, p 2164. 93

McCubbin MFI-1, 25/8/14, p 2166. 94 McCubbin MFI-1, 25/8/14, p 2167. 95

Saso Trajcevksi-Uzunov, 19/9/14, T:1101.47, 1102.1-.5.

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lasting for 0.16 minutes, which used the Moorabbin tower.96 The

timing and location of the call using the Moorabbin tower is consistent

with Ms Govan’s evidence that Mr Trajcevski-Uzunov accompanied

her to Kingston Centre, Monash Health in Cheltenham (which is an

adjoining suburb to Moorabbin) on the afternoon of 15 February 2013.

85. Mr Trajcevski-Uzunov’s evidence that he sat his own test cannot be

accepted.

Did Ms Lee sit online tests for Ms Asmar and others? - evidence of

Alexander Leszcynski

86. Mr Leszcynski was a Senior Industrial Officer at the No 1 Branch from

late 2012 to March 2013. Mr Leszcynski’s evidence that Ms Kitching

told him that Ms Asmar was too busy to complete her right of entry

training and test so Ms Kitching was going to do it for her.97

Did Ms Lee sit online tests for Ms Asmar and others? - evidence of Robert

Morrey

87. Mr Morrey was a member of the Branch Committee of Management

from late 2012 until March-April 2013.

88. Mr Morrey gave evidence that Mr Leszcynski told him that employees

of the No 1 Branch were not permitted to do their own right of entry

96 McCubbin MFI-1, 25/8/14, p 2153. 97 Alexander Leszcynski, witness statement dated 6 January 2014, 19/9/14, para 47.

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permit applications and Ms Kitching completed the right of entry tests

and applications on their behalf. 98

Did Ms Lee sit online tests for Ms Asmar and others? - evidence of

Kimberley Kitching

89. Ms Kitching said she was at the No 1 Branch office for part of the

morning and part of the afternoon on 15 February 2013 but denied that

she completed right of entry tests for other people that day.99 Ms

Kitching denied that she was in the No 1 Branch office at the times that

the right of entry tests referred to in paragraph 54 above were

completed.100

90. Ms Kitching produced some documentary evidence to the Commission

which establishes that she was away from the No 1 Branch office at

times during the day on 15 February 2013.101 However, taken at its

highest, all this documentary evidence shows is that Ms Kitching left

the No 1 Branch office for short periods of time during that day but

does not exclude the possibility of Ms Kitching returning to the

Branch, to sit the tests at the times recorded in the ACTU records.

91. Ms Kitching said that she attended two industrial days at the No 1

Branch office in February and March 2013. Ms Kitching said that Ms

Asmar addressed staff on various topics at both meetings but did not

98 Robert Morrey, witness statement dated 18 July 2014, 25/8/14, paras 34-35. 99 Kimberley Kitching, witness statement dated 16 September 2014, 19/9/14, paras 8-9. 100

Kimberley Kitching, witness statement dated 16 September 2014, 19/9/14, paras 8-9. 101 Kimberley Kitching, third witness statement, dated 17 September 2014, 19/9/14, paras 2,4-5; annexures A, C, D.

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say that Ms Kitching was going to complete the organisers’ right of

entry tests for them.102

92. Ms Kitching gave evidence that she never told Ms Lee, or anyone else,

that she had completed right of entry tests for organisers.103 In relation

to Ms Lee’s statement that Ms Asmar and Ms Kitching told her that

she would be sitting the right of entry tests for Mr Rowe and Mr Eden,

Ms Kitching denied this and said the conversation never took place.104

93. When asked why numerous witnesses would say that Ms Asmar told

them that Ms Kitching would sit their right of entry tests, Ms Kitching

said the following:105

Q. You heard yesterday, when you were listening to the evidence, a number of witnesses say that there was a meeting of organisers in the office in early 2013 at which Ms Asmar directed all the organisers present that you would sit the test for them?

A. What I can tell you, Mr Stoljar, is that did not happen. That conversation did not happen. I can also tell you that perhaps some of these witnesses are politically motivated. They're running on other tickets. We have elections coming up and they may be motivated by malicious purposes.

94. When asked whether Ms Lee was running for any office, Ms Kitching

said she was not, but that she helped in the previous campaign on the

ticket that ran against Ms Asmar.106

102 Kimberley Kitching, witness statement dated 16 September 2014, 19/9/14, para 33. 103 Kimberley Kitching, witness statement dated 16 September 2014, 19/9/14, para 34. 104

Kimberley Kitching, 26/8/14, T:530.14-18. 105 Kimberley Kitching, 26/8/14, T:529.18-28. 106

Kimberley Kitching, 26/8/14, T:529.38-46.

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95. Ms Kitching also proffered a reason why organisers may have given

evidence that Ms Kitching did their right of entry tests for them. The

reason was that they were ‘disgruntled former employees’.107

96. Ms Kitching gave evidence that she does not hold a right of entry

permit and has never sat the test for a right of entry permit. Ms

Kitching said she had never been instructed or asked to do a right of

entry test.108

97. Ms Kitching gave evidence that she never discussed right of entry tests

with the Senior Industrial Officer at the No 1 Branch at the time, Mr

Leszcynski.

Did Ms Lee sit online tests for Ms Asmar and others? - evidence of Ms

Diana Asmar

98. In her evidence Ms Asmar said she sat her own right of entry test and

that each organiser was required to undertake his or her right of entry

test.109

99. The ACTU records show that Ms Asmar’s right of entry test was

completed on 25 January 2013 and she scored 99%.110 Ms Asmar

107 Kimberley Kitching, 26/8/14, T:529.36. 108 Kimberley Kitching, 26/8/14, T:529:13-16. 109

Diana Asmar, witness statement, 26/8/14, para 83. 110 McCubbin MFI-1, 25/8/14, p 936.

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signed her declaration on 29 January 2013.111 On 31 January 2013, Ms

Asmar was issued with her right of entry permit.112

100. Ms Asmar gave evidence that she did not tell a meeting of organisers

in early 2013 that Ms Kitching would be sitting their right of entry

tests.113 Ms Asmar’s evidence on 28 August 2014 was that no meeting

or industrial day took place in April 2013 or on an earlier date.114

However, Ms Asmar’s evidence changed on 19 September 2014 during

the following exchange:115

Q: You attended the industrial day in February-March 2013?

A: I would have, yes.

101. Ms Asmar squarely denied instructing Ms Lee to sit the right of entry

tests for Mr Rowe and Mr Eden.116 Ms Asmar said that when she hired

Ms Lee she said she was politically neutral. However, Ms Asmar later

discovered that Ms Lee had assisted on the opposing campaign for Mr

Marco Bolano. Ms Asmar said that Ms Lee ‘appeared to want to

destabilise the current Branch leadership with a view to reinstating the

previous team’.117

111 McCubbin MFI-1, 25/8/14, 2/845. 112 McCubbin MFI-1, 25/8/14, p 1372. 113

Diana Asmar, 26/8/14, T:557.18-21. 114 Diana Asmar, 26/8/14, T:557.23-29. 115

Diana Asmar, 19/9/14, T:1094.10-12. 116 Diana Asmar, 26/8/14, T:562.39-41. 117

Diana Asmar, witness statement, 26/8/14, paras 86-87.

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Did Ms Lee sit online tests Ms Asmar and others? - assessment of the

various witnesses

102. The contemporaneous written record from the ACTU shows that six

right of entry tests were undertaken on 15 February 2013. The time

taken to complete the tests gets progressively quicker throughout the

day. Three of the organisers whose tests were taken that day, Mr

McCubbin, Ms Govan and Mr Atkinson gave evidence that they did

not complete their tests. Mr Kastis and Mr Trajcevski-Uzunov did not

complete their tests. Who completed them? Ms Lee did not.

103. The evidence of Ms Lee, Ms Govan, Mr McCubbin, Ms Po