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Australian Broadcasting Commission in Review - National Broadcasting in the 1980s - Australian Building Construction Employees' and Builders Labourers Federation - Report of Royal Commissioner, dated 27 May 1982


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The Parliament of the Commonwealth of Australia

REPORT OF THE COMMISSIONER APPOINTED TO INQUIRE INTO ACTIVITIES OF THE AUSTRALIAN BUILDING CONSTRUCTION EMPLOYEES AND BUILDERS LABOURERS FEDERATION

May 1982

Presented by Command and ordered to be printed 20 October 1982

Parliamentary Paper No. 296/1982

//

Report of the Commissioner appointed to inquire into activities of the Australian Building Construction Employees

and Builders Labourers Federation

The Government o f t h e Commo nwealth o f Australia

and

Th e Governme n t of t he St a t e o f Victo ria

REPORT OF THE COMMISSIONER APPOINTED TO INQUIRE INTO

ACTIVITIES OF THE AUSTRALIAN BUILDING CONSTRUCTION

EMPLOYEES AND BUILDERS LABOURERS FEDERATION

Commissioner: Mr J . S . Winneke, Q.C.

Austra lian Government Publishing Service

Canberra 1982

© Commonwealth of Australia 1 982

I SBN 0 644 02211 6

Publisher's note: Appendixes l, 2 and 5 of this report have been reproduced from photocopies of the origina l documents. Any l oss of definition in reproduction quality is regretted.

Printed by C.J. Thompson, Commonwealth Government Printer , Canberra

To : His Excellency the Right Honourable Sir Zelman Cowen, K.A., K.C.M.G., G.C.V.O., K.StJ, Q.C., Governor General of the Commonwealth of Australia.

May it please your Excellency:-I, JOHN SPENCE WINNEKE Q.C., having been constituted and appointed, by Letters Patent issued on the 20th day of August 1981 and entered on record in the Register of Patents on the same day,

as amended by Letters Patent issued on the 22nd day of February 1982 and e ntered on record in the Register of Patents on the day,

and further amended by Letters Patent dated the 22nd day of April 1982 and entered on record in the Register of Patents on

the same day, to be a Commissioner for the purposes of inquiring

into and reporting upon certain matters relating to the Australian Building Construction Employees' and Builders Labourers' Federation in accordance with the terms of reference recited in the said first mentioned Letters Patent,

HAVE THE HONOUR TO REPORT, that, pursuant to and in accordance with the said Letters Patent I have inquired into the matters to

which I have been directed and I herein report under my hand my

opi nion resulting from the said Inquiry. I humbly deliver up

with this, my said report, the aforesaid Letters Patent.

iii

JOHN SPENCE WINNEKE, 10 WYUNA AVENUE HAWTHORN. 2 7 th May 1 9 8 2 •

PART ONE

Chapter 1

Chapter 2

Chapter 3

Chapter 4

PART TWO

CONTENTS OF REPORT

VOLUME 1

INTRODUCTORY MATTERS

The Commissions

The Course followed by the Inquiry

Practices and procedures adopted at the Inquiry

The Federation and its attitude towards the Inquiry

BENEFITS RECEIVED BY THE FEDERATION AND ITS OFFICIALS

1-5

7-7B

8-13

14-30B

SECTION A Benefits in the form of materials and

Chapter 1

Chapter 2

Chapter 2 (a)

Chapter 2 (b)

Chapter 2 (c)

Chapter 2(d)

Chapter 2 (e)

Chapter 2 (f)

Chapter 3

Chapter 4

Chapter 5

officials in Victoria Synopsis of Conclusions 31-78

Benefits received by N.L.Gallagher 79-94

(and through him P.M.George and W. A. Gallagher)

The "Grey/Gallagher arrangement" 95-105

The "Grollo/Gallagher arrangement" 106-123

The "Hansen & Yuncken benefits" 124-131

The "Attempted Grey/Gallagher 132-141

Concealment"

The disposal of the "Norman 142-146

Gallagher beachouse" to Undertowers Pty. Ltd. The position adopted by N.L.Gallagher 147-153 in respect of benefits received by him

Benefits to Victorian Branch of B.L.F. 154-163

Benefits received by 164-169

Robert Harry Dalton

Benefits to other Victorian officials 170-178 of B.L.F. v

SECTION B

SECTION C

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

SECTION D

SECTION E

PART THREE

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

PART FOUR

Payments and Benefits made to and Received by P .J. O'Dea and the

A.C.T. Branch of the Federat1on

Interest Free Loans from Union Funds -a "perk" of B.L.F. Office

Introductory Remarks

Loans to Norman Leslie Gallagher and Patricia Mary George

Advances made to William Morgan

Interest Free Loan to K. Reynolds Loans to the Officials of the

South Australian Braach of B.L.F.

VOLUME 2

Receipt of Benefits- Criminal Implications

Recommendations ar1s1ng from investigation of Benefits

THE PERFORMANCE BY THE B.L.F. IN THE INDUSTRIAL ARENA

Introductory Remarks

The Drive by the B.L.F. for

Membership- "An Empire Building Campaign"

Industrial techniques adopted by B.L.F. - "Militant Unionism" or "Standover Unionism "

Attitude of other union officials to B.L.F. behaviour

General Observations and Suggested Guidelines

CONCLUDING MATTERS

vi

1 79-19fi

197-199

200-214

215

216-221

222-225

226-273

274-277

278-284

285-332

333-3 78

379-386

387-409

410

Appe ndix l

Appendix 2

Ap p e ndix 3

Appendix 4

Appendix 5

Appe ndix 6

*

Appendix 8

Appendix 9

APPENDICES

Te rms of Commissions

Te rms of Reference in daily newspapers

List of Persons to whom leave given to appear and their Counsel

Names of Witnesses

B.L.F. Advertisement

Schedule of Witnesses who have given evidence concerning benefits to B.L.F. and officials

B.L.F. Inquiry Exhibits

Table of Witnesses whose evidence reveals that they (and/or their employees) have been coerced into B.L.F. Membership against their wishes

* Appendix 7 not presented

vii

PART ONE INTRODUCTORY MATTERS

Ch apter 1 The Commi s si o ns

1.1. On the 20th day of August 1981 the Executive arms of the

Co mm onwealth and Victo rian State Governments issued Commissions

t o me wh ich, in their substance, directed me to inquire into and

r e p ort up o n activities o f the Australian Building Construction

Emp loyees and Builders' Labourers Federation (which Federation is

v a r i o usly described hereafter in this Report either as "the

B.L.F." or "the Federation"). The terms of those Commissions

are annexed to this Repo rt as Appendix 1.

The date initially set by each Commission for the

c ompletion of my task was the 28th February 1982. That date has

since been extended in each case - first to the 30th April 1982

and finally to the 31st May 1982.

1.2. In general terms the Commission issued by the Commonwealth

Government directs me to inquire whether the Federation, or any

o f its officers or members has been engaged in activities

contrary to a law of the Commonwealth. The Commission issued by

the Victorian State Government, in general terms, directs me to

inquire whether the Federation, or any of its officers or

members, has engaged in illegal, improper or corrupt activities.

In descending to the particular, each Commission directs me to

give attention to three matters:-

(a) Whether any executive, administrative or other body,

forming part of, or established by, or associated

2.

with, the Federati o n, has been us ed f o r t he pu r poses

of activiti e s c o ntr a r y t o a l a w of the Co mmon wealth

(in the case o f the Comm o nwealth Commissi on), or has

been used for the purpo ses o f illegal, imprope r or

corrupt activities (in the c ase of the St a te

Commissi on).

(b) Whether the Federati o n, or an y o f its officia l s or

members, have been engaged in d emanding o r r e ceiving

any payment, reward o r o ther benefit, o r in c ausing

any payment, reward o r o ther benefit, t o be r ece i ved

by any other perso n ( other than o r d inar y c ommercial

dealings), from emplo yers o r o ther persons a nd, i f so: ­

(i) the person by whom, and to whom, such pa yme nt,

reward or benefit has been made or giv en;

( i i) the reason for, or the purpose of, an y such

payment, reward or benefit;

(iii) the subsequent or proposed use o r disposal o f a n y

such payment, reward o r benefit.

(c) Whether the Federation, or any officials or members

thereof, have engaged in activities contrary to a law

of the Commonwealth (in the case of the Commonwealth

Commission), or in illegal, improper or corrupt

activities (in the case of the State Commission), in relation to the election or appointment of officers

of the Federation or the conduct, or purported

conduct, of the Federation's affairs.

3.

1.3. The similarity of the terms of each Commission has made

it desirable to conduct the Inquiries pursuant to those Commissions j o intly and, indeed, authority to do that was given by the terms

o f each Commissi o n. It has also made it practicable and, I think,

desirable to prepare the one Report for the purposes of servicing

t h e needs of each c o mmissioning authority. The substance of this

Report is relevant to, and meets the requisition of, each of the

commissioning authorities. However, as will be made clear from

their terms, some of the recommendations contained within this Report are solely directed towards the Commonwealth commissioning

authority and some directed towards the State.

1.4. The investigation conducted pursuant to each Commission is

now complete. The conclusions which I have arrived at, and the

opinions which I have formed, upon the material put before me,

are contained substantially in Parts Two and Three of this

Report. The information giving rise to the material

investigated came primarily from two sources; firstly, from

inquiries made by a joint Commonwealth/State Police Task Force which inquiries commenced well in advance of these Commissions

being issued, and continued during the course of the Inquiry

conducted pursuant to the Commissions. My own observations have

enabled me to conclude that these inquiries have been conducted

with the thoroughness and skill that one would expect of well

trained and highly professional police investigators. The

second source of information has been persons and organizations

within the public who have responded to advertisements and other

formal requests made by the Commission to provide information

4.

which may be thought to be relevant to its Terms of Reference.

By my direction all information so provided was initially

assessed by Counsel assisting the Inquiry for the purposes of

ascertaining its relevence to the Terms of Reference and,

accordingly, not all information provided has materialised in

evidence given before the Inquiry.

No evidentiary material has been put before me touching

and concerning those aspects of the Terms of Reference which

contemplate an investigation of the electoral practices leading

to the appointment of union office bearers. This is hardly

surprising having regard to the attitude of non-cooperation which

has been adopted by the Federation towards this Inquiry. It

necessarily follows that I have not been able to form any opinion

with regard to those aspects of the Terms of Reference.

1.5. Much of this Inquiry has concerned an investigation into

the conduct of certain officials of the Federation, pursuant

to which they have solicited and received, in the course of

administering the Federation's affairs, rewards and benefits.

The results of that investigation are dealt with in detail in

Part Two of this Report. As a consequence of that

investigation, I have formed and expressed the opinion that

certain of the officers concerned have acted in breach of the Criminal Law, and I have recommended that consideration be given,

by the appropriate authorities, to the initiation of criminal

proceedings. If those recommendations are acted upon, then

consideration will necessarily have to be given to the question

of how much, if any, of the contents of this Report can, or

5.

sho uld be released for public scrutiny pending the full

implementation of those recommendations. Furthermore, the Terms

of Reference of the Commissions issued to me have necessarily

involved an investigation of the conduct of the Federation and

the administration of its affairs in the industrial arena.

The nature of that conduct, and opinions formed in respect of

it, have been dealt with in some detail in Part Three of this

Report. Much of the material there discussed necessarily

touches and concerns the issues which have been raised in the

Deregistrati o n proceedings which are current in the Federal

Court. Consideration will, therefore, have to be given to the

question of whether it is appropriate or, indeed, desirable to

release for public consumption the opinions which I have formed

in respect of these matters during the pendency of that

litigation. Resolution of that question will, no doubt, in

part depend upon the Reasons given by the Judges of the High

Court for their Decision in December 1981, the consequence of

which was to permit this Commission to proceed thereafter in

public session. Those Reasons have only recently been published

and I have had no opportunity to study them.

7.

Chapter 2 The Co urse followed by the Inquiry

2 .1. The Commis s i o ns were issued on the 20th day of August

198 1. Public no tice of the appointment of the Commission and of

its Terms of Reference was advertised in daily newspapers c irc u l ating thro ugho ut Australia (the form of public notice is

conta ined in Appe ndix 2).

2 . 2 . The first public sitting of this Inquiry was held on the

l Oth day of September 1981 at the Collingwood Magistrates Court.

On that day Mr. Peter O'Callaghan Q.C. announced his appearance

with Mr. Crossley of Counsel to assist the Commission. No other

perso n o n that day sought leave to appear, although during the

course o f the Inquiry various persons and organizations, through

Co unsel , have sought leave to appear and that leave has been

granted. (Annexed hereto as Appendix 3 is a list of persons to

whom leave has been given to appear and their Counsel.)

2 .3. The investigations conducted pursuant to the Commissions

hav e taken place over approximately 80 sitting days. During

that time evidence has been taken from approximately 450 witnesses, the names of whom and the pages of transcript at which

their evidence appears, are contained in Appendix 4 to this Report. The evidence has been recorded by shorthand writers for

whose services I have been much indebted, and the evidence has

been reduced into transcript form, a copy of which transcript is

presented with this Report. Insofar as I am able to be so

7A .

satisfied, I am satisfied that the transcript contain s a n accurate recording of the evidence given at the Inquiry.

Additionally, a large number of documentary exhibits were

tendered at the Inquiry. A list of those exhibits ( inc luding

their exhibit number and the page of transcript at whic h the y were tendered) is Appendix 8 to this Repo rt.

2.4. The course taken by the Inquir y has been a somewhat

chequered one. Its commencement was initially delayed because

of the unavailability of suitable premises and staff during the

Commonwealth Heads of Government Meeting in Melbourne in

September and October 1981. Shortly after public sittings beg a n

the proceedings in Action No. V23 of 1981, (the "deregistratio n

proceedings") to which I have earlier referred in this Report,

commenced in the Federal Court of Australia. This led to an

application by the Federation to restrain the further hearing of

the Inquiry on the grounds that its continuation would amount to

a contempt of the aforesaid proceedings. At first instance that

application was refused and, accordingly, the Inquiry continued

in public between the 19th October and the 27th October 1981 at

the Collingwood Magistrates Court. On the 27th October 1981 the

Full Court of the Federal Court, upon an appeal by the

Federation, made an Order restraining me from continuing to

conduct the Inquiry in public session. Thereafter the Inquiry

proceeded in private session at premises in Wyuna Avenue,

Hawthorn, until the 16th December 1981 when the High Court of

Australia reversed the ruling of the Full Court of the Federal

Court. From that date until the completion of evidence the

7B.

Commission sat in public at its premises in Hawthorn save

except for the week commencing the 1st March when it sat in

Canberra , and the 24th, 25th and 26th days of March when it sat

in Perth.

8.

Chapter 3 Practices and procedures adopted at the Inquir y

3.1. It is a popular misconception to regard Royal Commissi o n s

and Boards of Inquiry as "Judicial Inquiries". Th ey are n o t.

This Commission, like other Comm i ssi o ns, is and has b een a n

inquisitorial process aided and abetted b y po wers inv este d in me by the Evidence Act o f the State of Vi c t o ria and the Roya l

Commissions Act of the Comm o nwealth. Those Statutes invest t he

Commissioner with the power t o administer an Oath and the po we r

to compel the attendance of witnesses and the pr oduction o f

d ocuments.

assisted. To that extent the inquisitorial process is greatl y

3.2. The procedure which I have adopted during the course o f

this Inquiry has been designed to follow as closely as is practicable the procedures ad o pted in a Co urt of Law. To that

end Counsel assisting the Commissi o n has led all the evidence

which has been put before me, altho ugh they have been entitled t o

cross-examine as well as e x amine witnesses. Other parties who

have been given leave t o appear at the Inquiry have had the right

to cross-examine witnesses upon matters which have touched and

concerned them. In every instance, Counsel assisting the

Commission has had the right of re-examination. At the

conclusion of evidence parties given leave to appear we re invited

to make submissions on matters affecting their interest. These

submissions were made orally in some cases and in writing in

other cases. The submissi o ns are to be found at Pages 2764 and

following of the transcript. At the conclusion of all the

9.

evidentiary material and submissions made by interested parties

Counsel assisting the Inquiry made final submissions. The

final submissions made by Counsel assisting are to be found

between Pages 2873 and 3177 of the transcript.

It has often been said that inquiries into activities of indiv iduals and organizations which may sound in criminal charges

ought to be held in priv ate lest the individuals or organizations

conce r ned suffer the prejudice of being "convicted" before they

are charged. These arguments are by no means ·lacking in

substance. They are, however, not novel nor have they been

directed solely at inquiries. Similar arguments have been raised

in respect of coronial and committal proceedings. The issue

raised by the argument is one of competing public inte rests;

on the one hand, the interes t of a thorough investigation, and

on the other, the interest of ensuring that individuals receive a

fair trial. From the point of view of a person commissioned

to inquire into a particular matter the balance necessarily

leans heavily in favour of thorough investigation. That is why

I have chosen to conduct this Inquiry, where practicable, in

public.

3.3. Thus, at the outset of this Inquiry I indicated that I would

be receiving evidence in public. However, I said that this policy

would be subject to the qualification that where I deemed it

desirable to receive evidence in private that would be done.

I took the view which I did because it was and is my opinion that

Commissions of Inquiry ought to be held in public if that is

10.

practicable. That is desirable, in my opinion, not only because of an instinctive repugnance to "Inquiries behind closed doors"

but because past experience has shown that investigations

conducted in public are more likely to "bear fruit". An Inquiry

is, after all, the pursuit of information and its progress is

likely to be facilitated if its subject matter is kept before the

public eye.

3.4. Notwithstanding the announcement which I initially made

and to which I have referred in the preceding paragraph, a

substantial amount of the evidentiary material which I received

during the course of the Inquiry, and which forms the basis of

this Report, has been received in private. Indeed all of the

evidence that appears between Pages 349 and 1450 of the

transcript was taken in private session. That course was rendered necessary because of the orders of the Full Court of the

Federal Court restraining public hearings of this Commission, which

Orders were consequential upon the initiation of the

Deregistration proceedings in the Federal Court. When the

constraints imposed upon me by the Order of the Full Court of the Federal Court had been removed in December 1981, as a

consequence of the decision of the High Court, a number of

enquiries were made, through the Secretary to the Commission,

as to whether or not I would be directing the release of the

transcript of proceedings which had hitherto been conducted in private. On the 18th December 1981, when the Inquiry resumed

in public session, I intimated that I did not propose to direct

11.

the release of such transcript for reasons which are set out at

Pages 1451 - 2 of the transcript. I repeat those reasons here:-

"Many representatives of the media have approached the

Secretary o f this Commission to inquire whether, in the

light o f Orders made by the High Court, I will be directing

that the transcript of proceedings which have been conducted in private be released for publication. I do

not propose to so direc t such release for the following

reasons:-First1y, the transcript covers 1100 pages and contains

the ev idence o f mo re than 100 witnesses. To release that

transcript in bulk and retrospectively so the persons to whom it is released could make such use of it as they

please would not, in my view, be fair, either to the

witnesses concerned nor to the persons or organizations

into whose activities I have been commissioned to

investigate. It could give rise to the distinct possibility that whatever use was made of such transcript could not be categorised as a fair and accurate

contemporaneous report of proceedings conducted before this

Commission. That is a possibility which I am not prepared

to countenance.

Secondly, some of the evidence which is contained in the

rel ev ant pages of the transcript is evidence which, if the

sittings had been conducted in public, may have been the subjec t of a n application to have it received in private,

and some of it may have been the subject of an order of my

1 2.

motion that it not be published. I do not propose, and

indeed it is not possible for me, to sift through the pages

o f transcript with a view to determ ining which of the

ma terial, if any, meets that description.

Thirdl y, and by no me ans l east importantl y , the evidence

concerned was taken in private, no t only because of the

restraining orde r which has now been se t aside, but also

beca use o f under takings which, thro ugh Counsel, I gave

both to the Fe deral Co urt and t o the High Court; and

whatever mig h t be said as t o the limits of those

undertakings, I do not now propose to take any action which

might be seen, o r thoug ht, to be inconsistent with them."

3.5. Even on those occasions where I have c o nducted my Inquiry

in public there have been circumstances in which I have directed

evidence be taken in private, or that publication of material

should be restrained. The occasions where evidence has been

received in private pursuant to my order have been motivated b y

two considerations:-

(a) A consideration of the personal security of the

person giving the evidence or some other person about

whom the evidence is being given;

(b) A consideration of the reputation of the person giving

the evidence or some other person about whom the

evidence is being given. This consideration has onl y

led to the evidence being received in private where

1 3.

t he ev id e n ce h as b e e n o f a "hea rsa y character" and has

not been s ubstanti a t e d b y furthe r e vidence or where

the evidence has no t had any imm ed i a te or apparent

relevance t o the Te r ms of the In q u i ry.

3.6 . On al l but one occas i o n where evid e n ce has been received

in pr i va t e I have t aken t hat evidence in the p r esence of Counsel

assisting , Counse l appea r i ng for the witness g iving evidence and

Counsel appearing for the pa rt y a ff ec t e d b y that evidence. On

one occas i o n, t o wh i c h I shall r efer h er e after, I have received

evidence onl y i n the presence o f Co unsel ass isting and Counsel

appea r ing fo r the par t y giv ing evid enc e. Th i s was done for

reasons wh ich I d ete rm ined t o be good and valid reasons relating

to the sa f e t y a nd s e curi t y of a witness t h r o ugh whom the evidence

was g i ven.

14 .

Chapter 4 Th e Federation and its attitude

towards the Inquiry

4.1. Th e B.L.F. is a registered o r ganization of employees-registered under the provisions of the Concil i at ion and

Arbi tration Act of the Commonwealth . It has a registered set

of Rules (Exhibit 115) and is subject to Awards setting minimum

sta nd ards of pay and cond itions for its members (Exhibit 158). Its "elig i bility c lause" i s a wide one and enables the

Federation to enlist as its members "an unlimited number of

persons employed or usually employed as builde r s labourers

throughout Australia on or about any build ing or a ssisting any

bricklayer, mason , plasterer , carpenter, plumber , or any

tradesman eng aged in build ing operations, or em ployed on any

making or contrac t ing job in wood, stone , br i ck , concrete,

iron or steel, or combination of these o r othe r materials

incidenta l to building construction, and any labourer engaged

in the construction, repair, demolition or removal of buildings ,

or as scaffolder, r igger, gearhand, gantry hand or crane hand,

or as dogman, or as drainer, on all building contrac ts , and any

labourer excavating ground for f oundations and basements of

buildings, or levelling ground o n a pro posed building site, or

doing concrete work, tar pa v ing or asphalt work, or mortar o r

concrete mixing in connection with, or inciden tal to , the

foregoing operations and employees (other than motor truck

drivers and clerks) engaged in the operation of concrete batching

plants (except in the State of New South Wales) where such

plants are principally used for the production of concrete for

supply to building construct i on operati o ns together with such

15.

other persons, whether employees in the industry or not, as have

been appointed officers of the Federation and admitted as members

thereof."

4.2. The Federation is comprised of a federal organization with

branches in each State and the Australian Capital Territory.

Notwithstanding that these branches have, by rule, capacity for

administration separate from the federal organization, they are

nonetheless inseverably and inextricably part of the fabric of

the Federation. The rules by which the branches are

administered form part of the registered rules of the Federation;

membership of a branch derives from the membership of the

Federation; branch membership is determined by the State or

place of residence of the member concerned (see Rules 6{d) and

Rule 20); federal management is derived from branch

administration, each branch returning delegates to the organs

of the federal administration; membership fees are paid twice

yearly to the branch and the branch remits a proportion of the

fees so collected to the Federation (see Rules 6 and 16).

In these circumstances, the branches seem to me to be integral

and inseverable parts of the federal organization, their members

being merely a section of the total membership of the Federation

but locally organized for the sake of convenience and in no

respect independent of the Federation but in all respects subject

to the control of the Federation (see Williams v. Hursey (1960)

103 C.L.R. 30; Moore v. Doyle (1969) 15 F.L.R. 59).

16.

4.3. Although the Rules of the Federation express the sentime n I

that "the supreme control" of the Federation is vested in its

members, in essence the rules provide for a three-tiered

structure of control. Those tiers are:-(a) The Federal Council which "shall be composed of the

General Secretary and Delegates from each Branch".

The number of Delegates from a Branch depends upon

the number of financial members of that Branch.

The Federal Council meets once a year in the month

of November, or such other times as the Federal

Management Committee of the Federation may decide.

The Federal Council has vested in it the power to

exercise "supreme control" of the Federation on

behalf of its members.

(b) The Federal Management Committee, which consists of

the Federal President, General Secretary, the Federal

Vice-President, the Federal Treasurer, and four

Trustees. This Committee is given by the rules wide

powers in dealing with the day-to-day activities of

the Federation, and its acts are deemed to be "of full

validity" until they have been "confirmed or otherwise

dealt with by the next meeting of the Federal Council". (c) Officers of the Federation, including the General

Secretary, who is expressed to be "a full time officer of the Federation". The General Secretary is, and at

all material times has been, Norman Leslie Gallagher, and he is expressed by the rules to be both an officer

of the Federal Council and a full member of the Federal

17.

Council and the Federal Management Committee.

He is given, by the rules, wide powers and duties

including:-( i) The preparation of all necessary documents for

the Federal Council, the Federal Management

Committee, the auditors and trustees;

(ii) The preparation and filing of annual returns to

the Industrial Registrar;

(iii) Summoning members of the Federal Council and Federal Management Committee to meetings;

(iv) Signing, with the Treasurer, all cheques;

(v) The power to sue, in the name of the Federation,

in any Court;

(vi) The power to exercise and perform, after

consultation with the President, all or any of

the powers and duties of the Federal Management

Committee between meetings (this power is

subject to limited exceptions);

(vii) The power to make, enter into and execute, and to

alter, vary, modify and cancel, on behalf of the Federation, all industrial agreements

(See Ru 1 e 19) •

The description of these powers of the General

Secretary serves to indicate the influence of the

person fulfilling that position. The evidence before this Commission, to which I shall refer in detail later

in this Report, satisfies me that Gallagher has

18.

exercised his substantial influence t o the full and,

in the course o f d o ing so, has managed t o i nspi r e a

degree of awe amongst members o f the development and

construction industry throughout Australia.

4.4. The administration of the branches o f the Federati o n i s

vested in Executive Committees but subject to the control of th e '

Federal Council and the Federal Management Committee. As will

appear from the material contained in this Report, each branch

has a Secretary. Gallagher is the Secretary of the Victo ria n

Branch, P. J. O'Dea is the Secretary of the Australian Capita l

Territory Branch, Ronald Owens is the Secretary o f the South

Australian Branch, Kevin Reynolds is the Secretary of the Wester nl

Australian Branch, and Stephen Black is the Secretary of the New

South Wales Branch. The branch rules gives the Secretary the

power of instructing all organizers in their daily duties. By

Rule 12 a branch may have as many organizers as the Branc h

Executive Committee may fix, and those organizers are elected to

their office by the branch. Among the organizers appointed for the Victorian Branch are included R.H. Dalton, P. Donnelly,

M. Greany and M. Lewis, to each of whom reference is made

hereafter in this Report.

4.5. Although Section 152 of the Conciliation and Arbitration

Act requires that an organization shall keep a Register of its

members and shall file with the Registrar a copy of that

Register and periodic amendments to it, the B.L.F., pursuant t o

application made on the 21st February 1978, has received a

19.

Certificate of Exemption from that requirement. That certificate has been granted pursuant to the provisions of Section 153 of the Act. The upshot of that certificate is that

since its grant the B.L.F. has not filed membership returns to

the Industrial Registrar. The evidence would nonetheless

indicate that the State of Victoria is the "power base" of the

Federation. The administrative offices of the Federation are t o

be found in that State, as are the bulk of the Federation's

members. The consequence of those facts is that most of the

finance generated by the Federation is generated in the State of

Victoria, and the material given before the Commission indicates

that the bulk of the Federation's property is located in that State (see Exhibit 74; total assets of Federation and branches

as at 9 /8 1 $2.9 million; total assets in Victoria= $1.6 million) .

4.6 On the 27th June 1974 the Industrial Registrar cancelled

the registration of the Federation as an organization under the

Commonwealth Conciliation and Arbitration Act, in accordance with

an Order made by the Industrial Court on the 21st June 1974.

The Order had been made upon the application of the Master

Builders' Association of New South Wales (see Master Builders'

Asssociation of New South Wales v. Australian Building

Construction Employees and Builders' Labourers Federation (1974)

23 F. L. R. 356). The Order for deregistration was made because

of a history of conduct inconsistent with and inimical to the

achievement of the policies and objectives of the Conciliation

and Arbitration Act. The conduct that led to the Order for

deregistration is eloquently described in the Judgment of Joske J. at Pages 357-363 of the abovementioned report.

20 .

4.7. The Fed erat i o n achieved reregistrati o n, pu r suant t o the

provisions of the Conci li a ti o n and Arbitration Act on t he

7th October , 1976. Fo r the purposes of achievi ng that

r eregistration, the Federal Council o f the Federation had

un an im ously resolved that Counsel , ac ting for the Fe de r ation in

the application for reregistration, should give an undertaking

to the Industrial Registrar . The content of that undertaking

included the following words:-"It is und erstood that the privileg es which attach t o the status of a registered org aniza ti o n carry with them

corresponding duties and responsibilities t o further the

achievement of the objects of the Act and , in particular,

to utilise the means provided by the Act f o r prevention

a nd settlement of industrial disputes, and fully to

observe the let t er and spirit of Awar d s and Agreements

made by or under the auspices of the Comm i ssion. Such

duties also require the officer s of an organizatio n t o

wo r k to minimise direc t industrial act i on . "

In written submissions directed to the Industrial Registrar,

Counsel for the Federation amplified the purpose and effect of

the aforesaid undertak ing in the following way:-"I am instructed expressly to affirm, o n behalf of the

B.L.F., that the undertaking to which I have just

referred is in no sense limited to disputes which might

arise between t he B.L.F. and employers. It was intended

to, and does in terms, comprehend disputes which might occur

between the B.L.F. and other organizations. The

21.

undertaking expressly conveys that the purpose of the

B.L.F. in seeking registration was to enable it to

participate fully in the prevention and settlement of industrial disputes by conciliation and, where necessary, by arbi·tration. That undertaking covers, without being

limited to, demarcation disputes."

The Federation achieved reregistration pursuant to the

Conciliation and Arbitration Act in October 1976.

4.8. "The Post-Reregistration" history of industrial conduct

and the administration of the affairs of the Federation has been

the subject of much of the evidence given in this Inquiry. The

evidence, and the conclusions which I have drawn from it, are

considered in detail in Parts Two and Three of this Report.

The evidence is a clear demonstration, in my view, that this

Union has remained uncontrite, notwithstanding its period of

dereg istration. It has, during the course of the last five to

six years, assiduously applied itself to the task of procuring

results by direct action and intimidation. Under the pretext of "militant unionism" this organization has conspicuously

"thumbed its nose" at the process of conciliation and

arbitration. It has consistently ignored the provisions of Awards applicable to it, and has used what it describes as

"guerilla tactics" to achieve its demands "on the job". Those tactics include sudden stoppages of work, banning of jobs or sections of jobs, banning of overtime, banning use of cranes and

other equipment, stopping of concrete pours, etc. Resort to

22.

violence in numbers against both person and property has by no

means been uncommon, and counter-resort by building proprietors

to the due processes of the law has been met vindictive

retaliation. In short, the leaders of this Union appear to

have embarked upon a policy of asserting dominance over employers

by "standing over" them and seeking to create an image of

irresistible power. The targets of this Union's practices and policies are not confined to employers. It is manifest that

the Federation has embarked upon a policy of "empire building"

in the industry in which it operates. It asserts its

entitlement to "recruit" every person who comes onto a building

site to perform any type of physical labouring work, whether such person is self-employed or not, and whether such person is a

financial member of another organization or not. This policy

is pursued indiscriminately and without recourse to reason or common-sense, and has resulted in bitter inter-union disputation

and recrimination - to such an extent in New South Wales that

the Federation has been recently expelled from the Trades and

Labour Council in that State.

It is appropriate, and I think desirable, to say that the

evioence given before the Inquiry indicates that the practices,

which I have broadly described, have predominantly been carried

on in the States .of Victoria, New South Wales and Western

Australia and in the Australian Capital Territory. But they

have occurred in those arenas with such vigour and regularity

that one is entitled to conclude that their pursuit is, indeed,

union pol icy.

23.

4.9. The attitude adopted by the Federation towards this Inquiry

has been consistent with its general standard of behaviour.

From the date when this Inquiry was announced, the attitude of

the Federation and its officials, has been one of consistent

antagonism and non-cooperation. In daily newspapers circulating

thro ughout Australia on the 28th August 1981, an advertisement

was circulated under the heading "B.L.F. Puts its Point of View".

This advertisement carried an authorisation by Norman Leslie

Gallager, as the General Secretary of the Federation, and

contained what was stated to be a Resolution of the Federal

Management Committee of the Federation said to have been carried

unanimously at a meeting on the 25th day of August 1981. It is

significant to note that both at the date of the carriage of the

Resolution and the insertion of the advertisement no proceedings

had been conducted pursuant to the Commissions at all. This

advertisement was admitted into the evidence before me and became

Exhibit 1. The contents of the Resolution contained in the

advertisement strongly attacked the appointment of the Commission

and condemned it as being "a spurious inquiry", a "fishing

expedition designed only to assist in attacking the conditions

and wages of all workers" and "a tool designed to serve

reactionary political purposes". The advertisement went on to

assert that there was no basis for the appointment of a

Corrunission and no basis for any allegation of "illegal, improper

and corrupt activities" against the Federation, its officials

or members. The advertisement went on to remind its readers

of "the correct procedure" where it is alleged that illegal

conduct has been corrunitted, and then it asserted that

24.

"if anything emerges at the Royal Commission t o warrant answer, the Federati o n will make its own answer".

The full text of this advertisement I have included as

Appendix 5 to this Repo rt.

4.10. Consistently with th e stated attitude of the Federati o n

towards the appointment of this Co mmissi o n no applicati o n was

made, on behalf of either the Federati o n or any of its officials,

for leave to appear or to be represented befo re t he Inquir y .

On the contrary, the officers of the Federation have wasted f ew

opportunities of proclaiming that the Federation wo uld not

co-operate with the Commission in any way and have d one so in

such an abusive manner that one is left with the strong

suspicion that they recognise that their activities and those of

the Federation which they represent will not withstand close

scrutiny and that, accordingly, the best defence is offense.

4.11. During the course of the Inquiry, 16 officials of the

Federation were summonsed to give evidence and produce documents.

These officials came from Victoria, New South Wales, South

Australia, Western Australia and the Australian Capital

Territory. They included the General Secretary of the

Federation and the Secretaries of the Branches of each State and

Territory referred to. In addition to those officials,

Wayne Alfred Gallagher, the son of the General Secretary, and

Patricia Mary George, the office manager and erstwhile compani on of the Ceneral Secretary, were summonsed to give evidence and

25.

produce documents . In respect of these latter two personalities,

it is perhaps significant to note that neither was a member of

the Federation but nonetheless each would appear to have been a

benef i c iar y of suppo rt by the Federation during the course of

lengthy litigatio n which f o llowed their refusal t o testify before

this Commiss ion .

4. 12. Each of the perso n s referred to in the preceding

pa ragraph a ttended before the Inquiry but, having done so, each

refused to comply with the dictates of the summons issued to him

or her - i. e . the y refused to a nswer questions and refused to

produce doc uments. The General Secretary of the Federation, and

each of the Branch Secretaries, used the occasion to read lengthy

and tedi o usly offensi ve sta tements replete with incontextual

slogans and tired cliches. Their refusal to co-operate, they

said , was consistent with the wishes of "their members". This

appeared to be an allusion t o the Resolution made by the Federal

Man agement Committee and referred to earlier in this Report - a

Committee which in the main comprised the men who were reading

the statements. Precisely what percentage of the membership of

the Federation was sympathetic with the attitude adopted by their

leader s can only be the subj ect of speculation. But it

certainly did not include the large number of members who gave evidence at the Inquiry, mo st of wh o m were openly critical of the

Federation to membership of which they had been conscripted

against their wishes.

26.

4.13. The refusal by the Federation's officials, and by

Wayne Gallagher and by Mrs. George, to answer questions put t o

them by the Inquiry led to action being taken against them

pursuant to the provisions of the Evidence Act of Victoria and

the Royal Commissions Act of the Commonwealth. In this regard,

it is perhaps pertinent to note that a Commissioner has no power to take direct action against a person who wilfully refuses t o

answer questions but, pursuant to the provisions of the said

Acts, must refer the matter to the appropriate law officer.

Following his conviction in the Supreme Court of Victoria

for refusing to answer questions, Gallagher was again required to

attend before the Inquiry and give evidence. On this occasion,

he challenged the validity of the requirement but at the same

time asserted that even if he was compelled to attend he would

refuse to co-operate. This attitude displays an arrogant

contempt for the processes of the law, an attitude which the

evidence given before the Inquiry reveals as being carried into

the administration of the affairs of the Federation.

4.14. The attitude of displayed by the

Federation and its officials towards this Commission has not made

the task of the Inquiry any easier. The refusal to provide

membership rolls and Minutes of Meeting has frustrated an

investigation of electoral and a proper review of the

manner in which the Union, and its branches, have administered

their affairs. The refusal to answer questions has denied to the Commission the opportunity of better exploring some of the

27.

p r actices in respect of which evidence has been given.

No netheless, on balance, the Federation has probably been the

lo s e r. The failure to co-operate has left the evidence in an

uncontested state and the failure, or deliberate design, not to

present "another side of the picture" can only tend to suggest

that the evidence is uncontestable. The Federation has been

given every opportunity to be represented before this Inquiry and

b e heard. Those opportunities have been steadfastly

But that is not to say that the Federation has been unaware of

wh at has been going on before the Inquiry. Despite its publicly

expressed disdain for the Inquiry, the Federation has taken a

v ery keen interest in its proceedings. A full copy of the

transcript of the proceedings before the Inquiry has been s upplied to the Federation's solicitors, Messrs. Holding, Redlich

& Co. That transcript has been readily and freely used by the

Federation in litigation which it has conducted with a view to

restraining further proceedings of the Inquiry.

It is, accordingly, futile for the Federation or its officials to proclaim that it has been denied "a fair go" or is

t he subject of victimisation, when it has wilfully and

c onsciously determined that it will not lend any a ssistance to an

Inquiry into its affairs, and has consciously determined not to

present "its side of the picture".

It is unfortunate, as I have pointed out more than once

during the course of this Inquiry , that representation has not

been soug_ht on behalf of the Federation before the Inquiry

28.

because the interests of the organization as an entity do not

necessarily seem to be consistent with the interests of the

officials of the Federation who play a significant part in the conduct of its affairs. One cannot help but be left with the

impression that this organization is run by a relatively small

number of autocratic personalities whose personal interests have

conflicted heavily in the context of this Inquiry with the wider

interests of the organization which they purport to represent. It is perhaps idle to speculate whether the existence of thi s

apparent conflict has denied to the organization, as an entity,

representation which may well have been beneficial to it.

4.15. The attitude which the B.L.F . and its officials have

displayed towards this Inquiry is, as I have said, merely

reflective of their unique and arrogant styl e of conduct. They

claim to have "all the rights but none of the obligations". To

that end, they exhaust the legal processes (and no doubt the

people who participate in them) in pursuit of what they assert to

be "their rights". When, at the end of the day, the processes

have been of no assistance, they help themselves by direct action

and in defiance of the very processes which they have been so

keen to employ.

For the past 8 months the B. L. F. has clearly expended man y

thousands of dollars - presumably members funds- in litigation.

It has been to the Federal Court and the High Court seeking to

restrain the further proceedings of this Commission. It has asked the Federal Court to punish the Herald and Weekly Times

Ltd, David Syme & Co. Ltd, and even the Prime Minister, for

29.

contempt of court. It claims to have taken these actions

because, so it asserts, its rights as a litigant in the

d e-registration proceedings have been prejudiced.

The B.L.F. has had no success in this litigation. But it

remains undaunted. Although it demands that other people respect

its rights as a litigant, it has shown no similar respect to the

rights of others. It has repeatedly claimed that it will take

direct action against master builders on their projects for the purpose of weakening their resolve to take part in litigation on

foot against the Federation. It has in fact taken such action

against one such builder and has been fined for doing so. Yet

it remains uncontrite. If the penal ties are executed, asserts Mr. Black, the New South Wales Secretary of the Federation, "We

will unleash the gorilla we have caged for so long" - an inane

statement but redolent of the attitude which the Federation

adopts towards obligations imposed upon it.

In similar terms, the Federation has argued in the High

Court that the Commissions establishing this Inquiry were

invalid; it has argued that the subpoenaes issued by this

Inquiry to its officials are invalid. Again it has met with no

success. Yet, when the officials came before the Inquiry, they

rudely refused to answer questions. When the inevitable action

was taken against them, they again resorted to lengthy and

expensive litigation designed to establish an excuse for their

conduct. When that failed and fines were imposed, they

arrogantly and publicly proclaimed that they would not pay the

fines. When, predictably, at the 11th hour, the fines were paid

they, with equal arrogance, asserted that it had nothing to do

30.

with them but was the act o f some person or group f earful of

massive reprisal.

This conduct only has to be stated to disclose the "anti-social" nature of the B.L.F. It is an organization which is

prepared to employ the legal processes only so long as it

believes that those processes can be of assistance to it. Once

it has been demonstrated that the processes are of no assistance, it will simply defy them. It becomes "a law unto itself". It is

this attitude which underscores much of the B.L.F.'s conduct to which I have adverted in Part 3 of this Report.

4.16. As a by-product of the attitude taken by the officials of

the Federation towards this Inquiry, I have been necessarily

constrained to consider the effectiveness of the coercive powers

invested in a Royal Commission. This Union has asserted that a

Commission of Inquiry is not a proper repository for an

investigation into its affairs. Having so asserted, it has

systematically set about "putting at nought" the coercive powers

which the Commonwealth and State legislation has provided to

facilitate the Inquiries which they have commissioned. This high-handed conduct has led me, and I suspect other law-abiding

citizens, to speculate whether the coercive powers given to Commissions of Inquiry are illusory, whether they have sufficient

"bite", whether they should not be strengthened to enable Commissioners to act "of their own motion" against witnesses who

wilfully refuse to co-operate. These questions, I suspect, have been raised before, and no doubt they will be raised again.

30A.

Fo r my own part, I am satisfied that, with certain limited

exceptions, the existing powers are sufficient. It may appear

cumbersome that a Commissioner cannot, in certain circumstances,

take immediate and direct action against wilfully obstinate and

abusive witnesses but must refer their conduct to an appropriate

law officer for action. Ho'wever, this Inquiry has been somewhat

unique in that respect and, accordingly, would make a poor basis

for changes in a law designed to operate universally.

Commissions are issued to a variety of people for the purpose of

investigating matters of a widely differing nature. Many, if not

most, are manned by non-judicial personnel into whose hands it

would generally be regarded as inappropriate to place powers

which are normally and desirably executed by persons holding

judicial office.

I have referred, in the preceding paragraph, to "limited

exceptions" which have been shown to exist by the experience in

this Inquiry. They are twofold:-(a) The maximum penalty provided by the Commonwealth Act

which can be imposed upon a witness who refuses to

answer questions is $1,000. Not only is this penalty

substantially less than that provided by the Victorian Evidence Act but is, in my view, inadequate to cater

for the type of contumacious behaviour which has been

experienced in this Inquiry. It is my recommendation

that consideration be given by the Commonwealth to amending the penalty provisions in Section 6 of the

Royal Commissions Act with a view to bringing those

30B.

provisions into line with (for example) the provisions

of Section 20 Victorian Evidence Act.

(b) The proper and effective functioning of an

investigative body depends to a large extent on it s

capacity to obtain documents which may be reasonabl y

thought to touch and concern its investigat ion . This

Inquiry has been unable to procure documents in th e

possession of the Federation which undeniably would

meet this description. In my view, it would be

appropriate for both the Commonwealth and the State of

Victoria to give consideration to making amendments to

their legislation for the purposes of investing Commissioners with the power of making application to

an appropriate officer for the issue of a warrant to

search premises and seize documents of a character

nominated in the warrant. It is of course contemplated

that such a power should only be exercisable upon

material clearly indicating a reasonable belief in the

Commissioner that the documents sought are in existence

at the premises nominated and are relevant to the matters under investigation.

31.

PART TWO BENEFITS RECEIVED BY THE FEDERATION AND ITS OFFICIALS

SECTION A Benefits in the form of materials and

Ch apter 1

services supplied to B.L.F. and 1ts o ff1c1als 1n VIctoria

S yno psis o f Conclusions

1 .1. The evidence di s clo ses that the f o llowing persons, all of

whom ar e o r have been o fficials of the Federation, have been

recipients of benefits provided "in Victoria" by persons engaged

i n the building and development industry in Victoria:-(a) Norman Leslie Gallagher of Charlton Street,

McL o ughlin's Beach via Yarram in the State of

Victoria. Gallagher has been at all material

times the General Secretary of the Federation,

a member of the Federal Council and Federal

Management Committee of the Federation and is

also the Secretary of the Victorian Branch of the

Federation.

(b) Robert Harry Dalton of Lot 3 Nero Avenue, Rye in

the State of Victoria, an organizer with the

Victorian Branch of the Federation.

(c) Norman Alexander Wallace of 27 Evans Street,

Mordialloc in the State of Victoria, a member of

the Federal Council of the Federation, the Treasurer

of the Federation, and an organizer of the Victorian

Branch of the Federation.

(d) Mortimer Greany of 6 Fraser Street, Dandenong in

the State of Victoria, an o rganizer of the Victorian

32 .

Branch o f the Federati on.

(e) Patrick Do nnelly of Unit 1, 2 Belmont Avenue , Glen

Iri s in the State o f Victo ria , an o rganiz e r of th e

Victo rian Branch o f the Fe d e rati o n.

(f) Michael J o seph Le wis o f 1 9 Rosebank Cr e s cent,

Br oadmead o ws in the State o f Vic t o ria, an o r ganize r

with the Victo rian Branch o f t he Fed erati on.

(g) J o hn J o seph Masterso n o f McLo ughlin's Beach via

Yarram in the State of Victo r ia, a f o rmer memb e r o f

the Federal Co uncil of the Federati o n and the Fe d eral

Management Committee th e reo f and a f o rmer Tre a s ur er

o f the Federat ion.

(h) John Cummins of 15 Alexand r a Street, Th o rnb ur y i n the

State oL -Victoria, who is a Vice Presid ent o f the

Victorian Branch of the Federati o n and an organizer

for that Branch. Cummins currently resides at a

remote part of Western Australia and he has no t been

served with a subpoena t o attend before the

Commissi o n. It appears that Cummins is no l onger

an o rganizer with the Victorian Branch of the

Federation but is currently an organizer attac hed t o

the Western Australian Branch of the Federati on.

1.2. In addition t o the persons menti oned in sub-paragraph 1

hereo f, the evide_nce disclo ses that Wayne Alfred Gallagher o f

McLoughlin's Beach via xarram in the State of Victo ria and

Patricia Mary George, otherwise known as Patricia Mary Mc Mahon ,

33.

f o rmerly of Unit 28, 177 Power Street, Hawthorn in the State of

Victoria, and who currently resides at Orr Street, Carlton,

have also been the recipients of benefits from persons engaged in

the building and development industry in Victoria. Neither Wayne

Alfred Gallagher nor Patricia Mary George is a member or office

bearer of the Federation. Wayne Alfred Gallagher is the son of

Norman Leslie Gallagher and Patricia Mary George is, or was, a

full time employee of the Federation and a close companion of

No rman Leslie Gallagher with whom she h'as lived for several

years. She was formerly the owner of the unit in Power Street,

Hawthorn to which I have referred, but that unit was sold by her

early in 1981.

1.3. I am satisfied that the benefits that have been received

by Wayne Alfred Gallagher and Patricia Mary George have been

received by them because of the influence of, and the

solicitations made by, Norman Leslie Gallagher. Those benefits therefore qualify for the description of benefits which Norman

Leslie has "caused to be made or given to other

persons" within the meaning of paragraph (b) of the Terms of

Reference of each Commission.

1.4. Wayne Alfred Gallagher and Patricia Mary George were both

summonsed to testify before this Commission. They refused to

answer any questions and in my view had no lawful excuse for that

refusal. Accordingly, I have certified to the appropriate law

officer that in my opinion they had committed an offence against

34 .

th e pr ovi s i o n s of t he Eviden ce Act of the State of Victo ri a and

t hey wer e bo th co nv i cted o f t ha t o f fence .

1 . 5 . Th e ev i dence s a ti sf i es me t ha t t he Federati on itself has

been t h e r ec ipi e n t of be nefits p r ov i ded by p e r sons engag ed i n

the b ui ld ing and devel o pment industr y in Vi c t o r i a . Mo st o f t hose

benefits h a ve been pr ovided as the result o f i nfl uence exerted

by No rm a n Leslie Ga l lagher.

1. 6 . The b e n e fit s whi c h h av e been received almos t e xc l usi vel y

t a ke the f o rm o f wo r k do n e fo r, and ma t erial p rovided t o , the

r e cipients. Th e s e ben e fi ts have been incorpo r at e d in homes

o wned by the rec ipients, t he ma j o rit y of t h em b e ing be a ch ho uses.

The evidence does not satisfy me, e x c e pt with o ne mino r

reservati o n, that any c a sh b enefits h a ve been received by an y o f the persons t o whom I have referred. Th e r e s ervati o n t o

which I have alluded c o nc e rns a c heque f o r t he sum of $ 2 , 050

drawn by Montva l e Devel o pm e nts a nd made payabl e t o Wayn e

Gallagher o n the 6 th December 1979. I am satisfied that th is

payment was made a s the result o f an arr a ngement mad e be t ween

Norman Gallagher o n the o n e hand and Mr. Mo rri e Le wis o f Montva l e

Developments on the other, pursuant t o whi c h Lewis agreed to

reimburse Gallagher for bricks which th e l a tter had purch ased for

use in the constructi o n o f his son's ho us e a t McLo ughlin' s Beach.

Tho se bricks were in fact purchased by Ga l lag h e r fr om Bri ck

a nd Pipe Industries in Decembe r 1979, and th e c o st o f t h em, namel y

$2,050, was subsequently reimbur s ed by a c h e que written b y

Montvale in favour o f Wayne Gallagher. Th a t cheque was pa i d

35.

against a "false invoice" raised by Montvale suggesting that the

c heque had been paid for work and labour done by Wayne Gallagher

t o the benefit of Montvale. The result of the transaction was

that Montvale Developments reimbursed either Norman or Wayne

Gallagher for the cost which they had expended in purchasing

bricks to be incorporated in Wayne Gallagher's house at

McLo ughlin's Beach. Although this was a payment of cash made

against the purchase of materials by Gallagher for one or other

o f the beachhouses at McLoughlin's Beach, it amply demonstrates

t wo features of the evidence given before this Inquiry; firstly

the lengths to which employers within the building industry have

been prepared to go for the purposes of accommodating Gallagher's

personal interests and, secondly, the clear determination by

Gallagher not to "put his hand into his own pocket" in respect

o f any expenditure incurred, or to be incurred, in the

construction of those houses.

1.7. Towards the end of this Inquiry an allegation was made that

one R.D. Silverstein, a Solicitor practising in Addeley Street,

West Melbourne, was "laundering black money" on behalf of the

B.L.F.. The allegation was made by one Maurice Lipov, a man

whom I find to be of dubious credibility, but with a strong

personal antagonism towards Silverstein. Lipov produced to this

Co mmission a tape recording of a telephone conversation which

he alleged took place between himself and Silverstein on the

26th March 1982. The substance of that conversation is found

between Pages 3193-3211 of the transcript. Silverstein, during

the course of giving evidence before this Inquiry, conceded that

36.

the recording was in fact an accurate reco rding of a conver s ati o n

between himself and Lipov . During the course o f t hat

conversati o n Silverstein t old Lipov that, i n t he cou r se o f his

practice, he was investing "black mone y " o n behalf of the Builders Lab ourers Federati o n. Lipov also gave evidence befo re

the Inquir y t o the effect that o n the 20 th April 1982, outside

Silverstein's premises in Addeley Street, Silverstein showed t o Lipov a large brown manila envelo pe which, he said, contained

a large sum o f mone y received by him on that day fr om the B.L.F.

for investment.

These allegations, because o f their obvious relevance t o

the Terms o f Reference of this Inquir y , were invest ig ated.

Insofar as the allegations suggested that the Builders Lab o ur ers

Federation, through Silverstein, was investing large sums o f

illicitly obtained cash, such allegation was not substantiated by the investigation. Rather, the investigati o n revealed simply

a propensity on the part of Silverstein to brag, a propensity

which appears to have been motivated by a perverted sense of

self-importance. Silverstein conceded that he had t o ld Lipov

that, during the course of his practice, he invested money obtained from the Builders Labourers Federation and he further

conceded that he had told Lipov, on the 20th April 1982 or

thereabouts, that he had received a large sum of money in cash

from the B.L.F. for investment purposes. He told this

Commission, however, that those statements were untrue and were

motivated by a desire on his part to encourage Lipov to place,

37.

t hr o ugh him, a sum of $3.5 million which he believed at that time

Lipov was able to "direct his way". A close examination of the

books of Silverstein and his bank accounts satisfies me that the

explanation which he gave t o this Commission was the accurate

on e and that, in making the statements which he did to Lipov,

he was "gilding the lily". The o nly justification for

Silverstein's statements, as revealed by the evidence, and the

o nl y matter which touched and concerned the Terms of Reference

o f this Inquiry was the fact that over a period of time one

Do nald MacGregor had placed with Silverstein for investment a

sum o f money between $30,000 and $40,000. Mr. MacGregor is,

and at all material times has been, the "Guardian" of the

Victorian Branch of the B.L.F. and, by reason of that position,

is a member of the Executive Committee of that Branch . An examination of Sil v erstein's books, however, made it clear

that the monies placed by MacGregor were his own monies and were not invested on behalf of the organization. Furthermore, an

investigation of the source of those monies revealed that

MacGregor had accumulated them over a substantial period of time

and had invested them in Building Societies within the State of

Victoria. There was no suggestion in the evidence put before

me that MacGregor had accumulated those monies through any

illicit activity arising out of, or in the course of , the conduct

of the affairs of the Federation. Having regard to the advanced

years of MacGregor, the fact that he apparently has no real

estate within the State of Victoria, and the fact that he had

accumulated the monies, which he invested with Silverstein, over

a considerable number of years, there seemed t o me to be no basis

38.

for drawing an inference that tho se monies had been obtained in

circumstances which made them relevant to the Terms of Re f ere nce

of this Inquiry.

Whatever may be said about the practices of Silverste in

and Lipov, each of whom I found to be less than fran k as

witnesses, there is nothing in their evidence which sub sta n tiates

the suggestion of improper, illegal or corrupt activities on the

part of the Federation, its officials or members.

1.8. I shall refer in more detail hereafter to the nature o f

the benefits received when I deal with the individual recipients.

It will become clear, however, that Norman Leslie Gallagher ha s been, by far, the major beneficiary, a fact which confirms what

the evidence reveals, namely that he has exercised considerable

influence over persons engaged in the building industry in the

State of Victoria and whose businesses depend very much upon the

maintenance of Mr. Gallagher's, and through him his Union' s ,

goodwill.

1.9. The benefactors have been persons and organizations within

the building and development industry. The major contributors

have been companies controlled by George Herscu, Morrie Alter,

and Paul Fayman. These gentlemen have been involved i n the

construction of major shopping centres throughout Victoria, and

those shopping centres include Forest Hills, Cranbourne Park,

Centrepoint Arcade, Flinders Fair, Deer Park,

Keysborough/Parkmore, Chirnside Park, Waverley Gardens and

39.

others . These gentlemen initially pooled their endeavours

through the instrumentality of a company called Hanov e r Holdings

Limited but in or about 1977 they "split" their activities and

went their own ways. At the time o f that "split" the projects,

which were then being carried on under the "flag" of Hanover

Ho ldings were divided up between them. Thus the Cranbourne Park

project became a "Herscu project" which was carried on under the

banner of a company called Murragong Nominees Pty. Ltd., which

was a company in which Herscu and one, Jack Stockdale, had an

approximately equal interest. The Forest Hills project became

"an Alter/Fayman project" which was carried on under the banner

of a company called "Forest Hills Heights Pty.Ltd.". Flinders

Fair became "a Herscu/Alter project" of which the proprietor was

a company known as 180 Flinders Street Pty.Ltd. Following the

"split" George Herscu continued to involv e himself in shopping cen tre developments and did so under the banner of Hersfield

Development Corporation Pty. Ltd . In that capacity, Mr. Herscu

was responsible for the development of more shopping centre

complexes including Deer Park, Keysborough/Parkmore and others.

Although Herscu, Fayman and Alter, or companies controlled

by them, were the proprietors of the projects to which I have

refer red, they carried out their developments through the agency

of "Project Managers" who, as their name implies, were

responsible for putting the projects t ogether, co-ordinating sub­

contractors and for the day-to-day and detailed management o f

the project from its inception to its conclusion. The principal

personalities who have acted in this capacity on behalf of the

40.

"Herscu/Alte r / Faym a n Group" are Morris Fairho lm Lewis and

George Edward Grey. The project management o f mo st, if not all ,

of the shopping centre complexes to which I have pr ev iously

refer red has been carried out by one or other o r both of thes e

personalities through their respective companies. Mr. Lewis'

company is kn own as Mo ntvale Developments Pty. Ltd. in which he

shares an interest with one, Brian Francis Daly, and

Fred er ick George Dodd. Mr. Grey has two companies o f which he

is the principal shareholder, namely Craigave Pty. Ltd. and

G.D.N.S. Constructions Pty. Ltd. Although Mr. Grey operates

through the agency of those companies as a self-employed building

consultant, he has, as he himself has conceded, at all material

times operated for, and o n behalf of, Mr. Herscu and the

companies in which Mr. Herscu has maintained an interest. The

evidence before me indicates with some clarity that Mr. Grey has,

for many years, enjoyed a reputation within the building industry

as being George Herscu's "right hand man".

1.10. Insofar as the evidence before me indicates that benefits

have been conferred on the Federation and its officials by the

companies controlled by the Herscu/Fayman/Alter triumvirate,

those benefits have been specifically organized by the Project

Managers. ,:There is no doubt that Mr. Lewis, Mr. Grey and

Mr. Daly played a principal part in the organization of the

benefits conferred upon Mr. Gallagher and the other officials

of the Federation and on the Federation itself. Those gentlemen

have with varying degrees of clarity, the parts which

they have played in the conferral of those benefits. Because

41.

o f the volume and value of the benefits which were organized by,

o r through those gentlemen, each has been a principal witness

in the Inquiry which I have conducted and each has been called

upo n t o give evidence on more than one occasion. Although

Mr . Le wis and Mr. Daly initially appeared to be reluctant

(pe rhaps understandably) to fully inform me of the parts which

they had played in organizing the benefits to which I have

re ferred, I am nonetheless satisfied that eventually they

p r ovided me with as full and as clear a picture of the benefits

wh ich the y participated in conferring as they could. In contra­

d i s tinction, I am far from satisfied that Mr. Grey gave me a full

a nd accurate acco unt of the part which he played. I found

Mr . Grey's evidence on many aspects of this Inquiry to be self­

c ontradictory and, I believe, deliberately evasive. In short,

I regard Mr. Grey as a person prepared to tell the truth only

when confronted with the "unassailable". It will be necessary

f o r me to refer to certain parts of his evidence in detail at

a later stage in this Report, and suffice it to say for present

purposes that I would not be prepared to accept his evidence on

matters of material significance unless clearly corroborated by

other testimony.

1.11. Although the companies controlled by Messrs. Herscu, Alter

a nd Fayman were the major contributors of the benefits provided

to the Federation and its officials, they were by no means the

only c ontributors. The "Grollo Group" of companies have been

substantial benefactors of Norman Leslie Gallagher and, to a

lesser extent, benefactors of other Union officials. In respect

42 .

of the benefits which that g r oup of companies has confer r ed upo n

Norman Leslie Gallagher, it is claimed that those benefits have

been confe rr ed pursuant to a " semi-commercial" a rr angement.

I sha l l have more to say about that hereafter . Dominion

Pr o perties Pty. Ltd., a company cont r o ll ed by Messrs.Ll oyd

Williams and Michael Prenti ce , has supplied goods and se r vices

to Norman Lesl ie Gallagher. In differi ng deg r ees of quality and

quantit y , Ha n sen and Yuncken Pty. Ltd ., the "Fl e t cher Watts

Group", Civil and Civic Limited, Costa ins Australia Limited,

Dillinghams Limited , A. J. Ga lvin Pty . Ltd ., Cyclone Scaffolding

Pty Ltd. and Jennings Industries have all done their bit in

con tributing to the welfa re o f the Federati on and its o ffi cials .

Th e extent to whi c h these compani es have participated in

con ferring benefits will become clearer when I refer in mo re

deta il t o the benefits recei ved later in this Report.

1.12. One o f the peculiar featu re s of the evidence is the

professed lack of knowledg e on t he part o f the major benefacto rs

o f the nature and extent of the benefits wh i c h have b ee n

conferred on the Federation and its o fficials by th e ir compani es .

If o ne were to accept at its face val ue, the evidence of Herscu,

Alter and Fayman, then one would be forced t o c onclude that none

o f these gentlemen had any idea that he, or his companies, were

contributing substantial benefits to the Federation and its

officials over a significant period of time .

1.13. Herscu, Alter and Fayman all claimed in evidence before

the Inquir y that they had little, if any, knowl edge of the nature

43.

and ex tent of the benefits which their companies were conferring

upon the Federation and its officials. This phenomenon seems,

at its face value, t o be somewhat surprising, both because of

the extent and val ue of the o utgoings and because of the

po sitions and perso nalitie s o f the recipients. The Herscu

c o ntroll ed companies have contributed over $60,000 worth of

benefit s to No rman Le sl ie Gallagher in the space of a little over

three years. Those benefits have included plumbing work,

electrical work, light fittings, bricks and bricklaying, provis i on of a cool room, provisi o n o f c urtains, painting work,

plaster, roo fi ng material, Besser bricks, steel purlins, doors and wi ndo ws, and sundry ca rpentry at beach houses owned by

Norman Gallagher and Wayne Gallagher at McLoughlin's Beach.

These works have been carried o ut through a variety of sub­

contracto rs and charged aga inst a numb e r of projects being

undertaken by the Herscu companies. Yet Mr. Herscu asserts that

he had little or no knowledge of the nature or extent of the

"favours" that he wa s providing to Mr. Gallagher. He claimed

that he was aware, through discussions which he had had with

Morrie Lewis and George Grey, that "some favours were being done"

b ut that he never knew what they were nor did he "want to know".

He said that it was not until this Inquiry commenced that he

became awa re of the extent t o which his companies had been

involved and of the details o f the benefits which they had

provided. His evidence as t o his state o f knowledge is best

summed up in the fo l l owing passages:-

44.

Page 708 . Q. "Wh e n did yo u first di scov er t ha t Gal l aghe r had had

wo rk d o ne for him at his McLo ughlin's beach ho use

by Hersfield?"

A. "Well, when this Inquir y s tarted a nd Ge o rge Gr ey

was called, I started t o find o ut the sum s , more

o r less the sums o f mo ney invo lv ed and who was

involved. But t o be specific, I knew tha t s ome

fav o urs had been do ne - let us no t f oo l o ur s el ves

about that - but I never asked beca use you have

t o understand I run a ver y substantial bus iness .

... Ge o rge Grey has been with me f o r abo ut nine

years and I consider him a trusted man."

Page 709. Q. "Do I take it that what you are saying is t h is:­

Mr. Grey had a general authority t o take whatev er

steps that were necessary to keep the projects

going including the doing of favours for such

union officials who, it might be thought,

warranted those favours?"

A. "Yes."

Q. "And was the same authority enjoyed by Mr. Lewis

on the projects for which he was the Project

Manager?"

A. "Yes •. n

In essence, Herscu is asserting that, although he had given

his Project Managers what he termed "general authority" to do

whatever was necessary to be done in the interests of his

45.

companies, he did not know, and did not want to know, what those

favo urs entailed. In this respect, he got support from his

"trusted employee" George Grey. Grey claimed that it was not

until this Inquiry started that he made a "clean breast" to

Herscu about the benefits he had organized to Mr. Gallagher.

As I have already indicated, I do not regard Mr. Grey as a

witness upo n whose evidence I can place much reliance. At all

times he appeared to me to be a person who was treading a

somewhat tortuous path between misguided loyalties to Herscu on

the one hand, and Gallagher on the other.

1.14. I find Herscu's evidence as to his state of knowledge of

the benefits being provided by him to be thoroughly unconvincing.

Qu ite apart from its inherent improbability it stands in stark

c ontrast with evidence from other witnesses whom I find to be

witnesses of truth. I will briefly refer to that evidence in

the following paragraphs:-(a) Mr. Lewis of Montvale (at pages 884 and following of

the transcript) described how he had led Mr. Herscu

into contact with Mr. Gallagher. This was in

early 1977. At the time one of Mr. Hercu's companies

was engaged in renovations of the project commonly

known as "Flinders Fair". The project was in

difficulty because, as Mr. Lewis put it, it had been

"closed down as tight as a drum" by the Builders

Labourers. The Federation was making a number of

demands upon the Herscu company for increased

amenities and a "site allowance" of $21 per week for

46.

the men. The project wa s at a standstill and Her sc u

had asked Lewis t o "go and see No rm Gallagher".

Lewis said that thereaft e r he had co nd ucted

negotiations with Gallagher seeking to achieve a

settlement. Lewis said that he c o uld no t get

Gallagher to c ome belo w a figure o f $15 in respec t of

the "site allowance " and Her s cu had indicated t o him

that he regarded Lewis as "a boy on a man 's errand"

and that he, Herscu, was going t o fix it up perso nall y

with Gallagher. Thereafter, according to Lewis,

Her scu went to see Gallagher and, having done s o ,

Herscu rang Lewis t o say " you've d o ne alright, the site

allowance is $15 plus afternoon smoke and we have to

do a l ittl e bit of plumbing work for Norm as well."

Lewis said that Herscu told him to go and see Gallagher

to find out what plumbing work he wanted done, that in

accordance with that instruction he went and saw

Gallagher and obtained details about the plumbing work

which Gallagher wanted done at h i s McLoughlin's Beach

premises, that thereafter he arranged for Moorabbin

Plumbing Pty. Ltd. to do the plumbing work required

and that he kept Herscu informed of the work being done

and the cost thereof.

(b) Herscu's intimate knowledge of what he was doing for

Gallagher is reflected in another piece of Lewis'

evidence. (See Pages 860 and following of the

transcript.) Towards the end of 1977 Lewis was

47.

seeking to negotiate his fee as the Project Manager

of the Cranbourne Park Shopping Centre Development.

These negotiations were being conducted between himself

and Herscu. He had submitted to Herscu a fee of

$165,000 and by November 1977 the two of them had

agreed upon a fee of $157,725. Shortly after the

latter fee had been agreed upon, Lewis said that he

was told by Herscu that he, Herscu, had recently been

in touch with Gallagher. Gallagher wanted some brick­

work and carpentry work done at his McLoughlin ' s Beach

house . Herscu asked Lewis t o attend to it. Lewis

said that he spoke to Gallagher and found out the

details of what was required, organized the purchase of bricks through Brick & Pipe Industries and organized

a br i cklayer, one J oe Tilli, to g o down to McLoughl i n ' s

Beach to attend to the bricklaying. The cos t of t h e

wo rk done in late 1977 and early 1978 amounted to some

$7 , 000 to $8,000. Lewis said that he spoke to

Herscu seeking reimbursement for the expenses

incurred by his company, Montvale Development, in

carrying out the works at McLoughlin ' s Beach. He

said that Herscu told him that he would reimburse

him that cost by readjusting his pro j ect management

fee on the Cranbourne Park project. It was agreed

between the two of them that the fee should be

renegotiated to the original figure of $165 , 000.

The substance of this transaction was incorporated

in a series of letters passing between Montvale

48.

Developments and the Hersfield organization

commencing in September 1977 and culminating in

May 1978. That series of letters was placed in

evidence before me as Exhibit 25D. The document s

do not disclose on their face that the reneg o tiati on

of the project management fee was on account o f

expense incurred by Montvale in causing work t o be

performed at the Gallagher beach house, but that i s

consistent with the veil of secrecy which the

evidence discloses surrounded the documentation o f al l

work done on behalf of Mr. Gallagher. The evidence

of Lewis in this respect is supported by the evidence

of his partner, Mr. Brian Daly. I found both

witnesses to be truthful men, and I see no reason t o

disbelieve their evidence which, in my mind, is

inherently probable. Their evidence is further

supported by the fact that Mr. Tilli indeed went t o

McLoughlin's Beach to perform this work in

November 1977 and December 1977.

(c) The episodes to which I referred in paragraphs (a)

and (b) above make it clear that Mr. Herscu knew a

lot more about the benefits being conferred upon Union officials than he was prepared to disclose t o

this Commission. Apart from those episodes there was other material before me which led me to the

conclusion that Mr. Herscu was not prepared to

reveal to this Commission the full extent of his

49.

knowledge. He initially asserted to me that

Mr. Norman Gallagher had never been in his office in

Collins Street. He later revised that and said that

ballagher may have been in the office one occasion

but he could not remember it. On this aspect of his

evidence he was predictably backed up by George Grey

who said, quite categorically, that Gallagher had never

been into the Herscu offices. In contra-distinction

t o this evidence, Mr. Doolan, the former financial

accountant with the Hersfield organization, and

Mr. Anderson, the former financial controller of

Hersfield, said that they had seen Mr. Gallagher at

the Hersfield offices on several occasions and were

aware of his presence there on several more occasions.

On most of those occasions, so they said, George Grey

was in the company of both Herscu and Gallagher.

I can see no reason why either of these gentlemen

should not have been telling the truth and once again

it underscores, in my mind, the unreliability of both Herscu and Grey as witnesses before me.

Furthermore, a Mr. Greg Pavlidis, a tenant at one of

the Herscu development centres at Deer Park, and who

traded under the name of "Deer Park Discounts" said

that in or about May 1980 Herscu had told him to put

aside one of the "best bases and mattresses" in the

shop so that it may be picked up by or on behalf of

Gallagher. Although there were certain aspects of

50.

the evidence of Pavlidis that I regarded as

unsatisfactory , it nonetheless seemed t o me that he was

telling the truth when he said (Page 1480) that Herscu

had told h im:-"I look after Mr. Gallagher and he makes sure

I don't have any strikes . "

and that:-"I feed the bastard plen t y for his backside to make

sure I don 't have any strikes ."

Predictably, Herscu denied the thrust of the evidence

given by Pavlidis .

1.15. Mr . Alter and Mr. Fayman took the same line as Mr. He r scu.

Mr. Alter said that he had i n itiall y been one of the

principals in the Han ov er Holding company, along with Herscu and

Fayman and that s ince the "split" in 1977 , he had retained an

interest in some of the shopping centre projects which had initially been commenced under the banner of Hanover Holdi ng s . Th ese included the Flinders Fair pr o ject and the Centrepoi nt

pro ject. He al s o said that he had maintained an i nter est in

Fo rest Hill Heights Pty. Ltd., which was the company responsible

for the construction o f the Forest Hi ll Sho pping Centre complex.

Like George Herscu, Alter maintained that he had no idea of th e

nature or extent o f the benefits which were conferred by his

company upon Mr.Gal l agher. Mr. Alter said that Morrie Lewis of

Montvale Develo pments had told him at one stage that he was

"helping Gall agher out, s omewhere in the bush" and that he,

51.

Alter , was happy to go a l o ng with that, although he did not

enquire from Lewis of the nature of the assistance which was

be i ng so ug h t ' or the value o f that assistance . Mr. Fayman went

one further. He asserted that he had no idea, until this Inquiry

commenced , tha t companies with which he was associated and over

which he had a degree of control had been providing goods and

services t o the benefit o f Mr. Gallagher.

1 .1 6 . Whateve r might be said about the state of knowledge of

Mr. Fayman, I have no doubt that Mr. Alter had a better knowledge

of the nature and extent of benefits being provided by his

compan ies than he was prepared to disclose. That knowledge came

through a transaction which took place in late 1979 to which

Mr.Alter and his company, Forest Hill Heights Pty. Ltd., was a

party, a transaction which cost Mr. Alter's company, Forest Hill

Heights Pt y . Ltd., the sum of $13,390 . This transaction also

involved the companies of Mr. Herscu and Mr. Grollo. I shall

describe this transaction, which clearly reveals the extent of

Mr. Alter's knowledge, in the next succeeding paragraph of this

Report.

1.17. In November 1979 the Forest Hill Shopping Centre complex

wa s under construction by Mr. Alter's company, Forest Hill

Heights Pty. Ltd.. Montvale Developments Pty. Ltd. was the

Project Manager of that construction project. At the same time,

the Keysborough/Parkmore Shopping Centre complex was under

construction by the Hersfield Development Corporation and

Mr. Grey was carrying out the project management of that complex

52.

on behalf o f Mr. Herscu. The Gr ollo group o f companies were a

maj or subco ntracto r on the latter constructi o n project.

Mr. Lewis of Montvale Devel o pments said that in November 1979

he was asked by Mr. Alter to see him . Alter t o ld him that he

had recei v ed a telephone call fr om Mr. Gallagher who wa nted s ome

further works carried ou t at his premises at McLoughlin's Beach.

In particular, Mr. Alter said that Mr. Gallagher had t o ld him

that he wanted some brickwork done, and Alter asked Lewis to

contact Gallagher t o find out specifically what work was

required. Lewis said that he went and spoke to Gallagher t o

"find out the detai l s" o f the work required and he was told by

Gallagher that it involved brickwork, both at his place and his

son's place. He also desired sundry carpentr y wo rk and the

building of an external staircase at No rman Gallagher's premises.

Mr. Lewis described the details o f this transacti o n in this way

(pages 864 and foll o wing o f the Transcript):-

"I received a call from Mr. Alter in response t o a call

that he had had from Mr. Gallagher to carry out some

brickwork, etc . , down a t McLoughlin's Beach. To the best

of my mem o ry I then went and saw Mr. Gallagher t o find ou t

the details because it was fairly vague. I went back t o

my o ffice and I did some rough calculations and we were

staring down the face o f some $24,000 odd worth of wo rk •...

When I saw Mr . Gallagher it expanded to Wayne's house t oo .

Quite frankly I did not know how to approach Mr. Alter

and tell him about this amount o f mo ney. He had already

said to go ahead. I do not think he realized what he was

53.

in for. I rang him back and said 'From what

Mr. Gallagher has told me you are going to be up for

$24,000 odd', and I think he took a couple of tablets

I think he said 'Let me think about that' at the time.

I rang Norm back and said 'Look do you realise all this

is about $24,000 worth'. He said 'It would not be that

much'. He didn't have any idea. A few days later

Mr. Alter had not come back to me ••• and I had a call from

George Grey to say that they were going to contribute.

Hersfield were going to contribute to that amount of money

to the tune of $11,000. So I was happy because I could

ring Mr. Alter back and say 'You don't have to fork out

$24,000 but $13,395'. As I was dealing with him, I went

down to see him and we worked out then the best way for

him to transfer the money to Montvale was to use Forest

Hill Heights and for Montvale to make out an invoice for

maintenance type work, etc."

Lewis went on to say that subsequently he attended a

meeting with Alter and Bill Fayman, the son of Paul Fayman.

They discussed the manner in which Montvale was to be reimbursed

by Forest Hill Heights Pty.Ltd. in respect of its share of the

expense to be incurred in carrying out the work at the Gallagher

premises. Ultimately it was agreed that Montvale would submit

an invoice to Forest Hill Heights Pty. Ltd. in the sum of

$13,395. That invoice was submitted into evidence before me as

Exhibit 258. It bears date the 26th November 1979 and was

expressed to be for the "cost incurred for urgent maintenance

54.

to roofs, parapets , downpipes and making good brickwork t o

Vi ll age Theatres tenancy and upgrading verandahs as necessary ,

as agreed in your office on the 16th September 1979 between

Messrs. M. Alter, W. Fa yman and M. Lewis." Mr. Lewis said that

this invoice was subsequently paid by Forest Hill Heights Pty.Ltd .. Mr. Lewis went on t o say that he was concerned to kn o w

how and when Mon tval e Developments would be receiving the $11 , 000

which Grey had told him would be contributed by the Hersf i eld

Corporation. He said that he had spoken t o Gr ey a nd told him

(page 867 of Transcript):-

"Knowing your boss, I would like to see t he colour of his

money first. That upset George, I am afraid. I did not

receive another call from him, I received a call from

Norm Gallagher then to say that Grollos were sending us

a cheque for $11,000."

Ultimately, Montvale Developments were sent a cheque for $11,000

by Grollos, for whom Montvale had done no work at all. The way

in which that came about was the subject of subsequent testimony

from both Bruno Grollo and George Grey. Bruno Grollo said (page

1176 and following of the Transcript) that in 1978 his company,

L. Grollo & Co. Pty. Ltd., had been carrying out concrete work

at the Keysbrough/ Parkmore. Shopping Centre under a contract with the Hersfield Development Corporation. He said that t)1e work

had been substantially completed by about the middle of 1979 and

tha t thereafter his company had been in negotiation with the

Hersfield company for the purposes of settling the final amount

55.

which was to be paid by Hersfield to the Grollos. He s aid that

the y had been having some difficulty in "coming to terms" with

Herscu and Grey about the final amount which was to be paid and

that early in December 1979 he, i.e. Bruno Grollo, had had a

meeting with Herscu and Grey. He went on to say this:-

"As expected, Herscu did not express willingness to pay the

amount of the claim and made an offer of some smaller

amount. Some heated discussion followed. I then left the

meeting without coming to any agreement about the amount

to be paid. I continued to telephone Grey over the

following week or so seeking payment of the amount due to

my company. A few days prior to the 13th December 1979,

in the course of one of these telephone conversations,

Grey offered me $130,000 in settlement of my company's

claim for $156,700 provided that I paid to Morris Lewis,

on behalf of Montvale Developments Pty. Ltd., a sum of

$11,000. I believe that Mr. Grey told me that he owed

$11,000 to Montvale. I was unhappy about paying this sum

of $11,000 but Grey telephoned me again when my messenger

was with him to pick up the cheque for the agreed amount,

and said that he wanted my word that I would pay the

$11,000 as it was for 'the big fella'. I understood this

to be a reference to Norman Gallagher and I agreed to

settle the claim my company had made upon this basis. The consequence was that my company was to receive a nett

figure of $119,000 in settlement of its claim. The amount

of $11,000 was paid to Montvale on the 13th December 1979,

the day the cheque was received from Hersfield."

56.

When Grey was recalled, to be asked about this transacti o n,

he said that he was aware of a sum of money which had been paid

by Grollos to Montvale. He said (page 1428 and following of t he

Transcript):-

"At the latter end of the last stage of Keysborough

I had a call from Morrie Lewis saying that he was out

of pocket in respect to some work that had been done

down at the beachhouse and, as I previously said, I was

aware of some brickwork being carried out down there

and painting work by Mazzetti other than the items I had

mentioned, and other bits and pieces that Lewis and I

had possibly been jointly involved in. He said he was

out of pocket by a sum of money, I could not swear

whether it was $6,000, $8,000 or $11,000. But it was a

sum of money. I had no reason to believe other than

$11,000 if they say it was $11,000, but if you ask me

exactly how much, I cannot recall. At that time there

had not been any business contact between Lewis and myself

for some time, we had gone our separate ways even though

we would on occasions meet in the street or round about

and pass the time of day on a friendly basis, which

I sincerely hope we still are today. He said he was out

of pocket; I said 'I will try and square it for you'

because I wanted to clean up any obligations that may be

outstanding between Hersfield and Montvale. So I spoke

57.

to Bruno Grollo and asked him if he would include it in

the final washup of his variations at Keysborough."

This evidence was a piece of "vintage Grey" evidence. He had

been previously asked (see page 650 of the Transcript) whether

Grollo had made any contributions towards the work that had been

organized by him and Montvale at McLoughlin's Beach, to which

he had responded "not that I can recall offhand". Yet, when

confronted with the specifics, he gave evidence in the terms to

which I have already adverted. When asked for an explanation,

he said (page 1431):-

"I did start thinking and wondering and going back through

things, then I suddenly realised that I had settled that

account with Montvale in that manner, but $11,000 I truth-fully cannot recall, then or any other time. But it was

a substantial sum of money."

Predictably, Mr. Herscu said that he knew nothing about the $11,000 which his company had asked Grollos to pay to Montvale on its account • 1.18. Not only does the evidence to which I have referred in the preceding paragraphs disclose the lengths to which the Herscu and Alter companies were prepared to go to accommodate the desires of Mr. Gallagher, but it also, in my view, makes a mockery of the testimony of Messrs. Herscu and Alter that they knew nothing of the nature and extent, or the value of the

58.

benefits which they were conferring upon the General Secretary

of the Federation. I entertain no doubt that those gentlemen

were well aware of the general nature of the contributions which

they were making to Mr. Gallagher's welfare. In my view it

would defy both reason and logic to arrive at a contrary

conclusion when, clearly, the underlying purpose of conferring

the benefits was to secure an advantage to the companies which

they controlled.

1.19. The method adopted by the persons and companies who

provided the benefits to the Federation and its officials

reflected a strong desire on their part to conceal the fact that

those benefits had been provided. It was not possible of course

to hide from public scrutiny the fact that the work, constituting

the benefit, was being done. Those persons who were contracted

to do the work or provide the materials had no reason to be coy

about it. But on the other hand, elaborate precautions were

taken to conceal the fact that those who received the benefits

had not paid for them. So effective have been the steps taken

by the providers to achieve this end, that it has not been easy

to unravel the extent of benefits given or their value. As

Mr. Lewis said, when seeking to provide details of the items of

work which justified the payment of $24,000 to Montvale at the

end of 1979:-"We have fallen short of justifying the $24,000 now because

we buried so much of those sort of things that we couldn't

find them ourselves."

59.

The typical pattern adopted by the providers of the

benefits was to engage a subcontractor employed on one of the

major city projects to deploy his men to do work on one or other

of the houses of the Union official concerned and then to invoice

the work against the city project upon which he was engaged.

The nett result of this ploy was to achieve a situation where

the work or materials supplied to the benefit of the Federation

or one or other of its officials became a charge against the

project concerned, and no documentary record exists identifying

the name of the beneficiary or the true nature and location of

the work done or materials provided. The following examples

indicate the pattern of procedure:-

(a) Moorabbin Plumbing Pty.Ltd. were engaged to provide

plumbing services at both the "Flinders Fair" and

"Centrepoint" projects in the city. Between 1978 and

1981 its employees were deployed, on instructions from

Montvale Developments Pty. Ltd., to do work on the

houses of both Norm Gallagher and his son, Wayne, at

McLoughlin's Beach. The work which they did included

the provision of taps and other plumbing fixtures,

wastes, vents, pumps, septic tank installation,

drainage and water connection, installation of pans,

cisterns, toilets, baths, showers, pressure systems, downpipes, etc. Mr. Lewis said that, on instructions

from Herscu, he told the Manager of Moorabbin Plumbing

60.

Services to build the costs o f those wo rks into

variations charged against either the Flinders Fair

or Centrepoint projects. The consequence is that one

can search in vain the records of Moorabbin Plumbing ,

Centrepoint Custodians Pt y . Ltd. o r 180 Flind e r s Street

Pty. Ltd. for a document identif y ing "work done at

McLoughlin's Beach for N. Gallagher". The best that

one can do is to go t o the worksheets, maintained in

the records of Moorabbin Plumbing (see Exhibit 13 . 4),

but even then one cannot get an accurate record of all

the work that was done at McLoughlin's Beach. Many

of those worksheets are headed either "Yarram" o r

"N. Gallagher". The workmen called to identify those

worksheets all testified that they related to work done

on the McLoughlin's Beach houses of the Gallaghers.

They cover a period from early 1978 to early 1981.

The former Manager of Moorabbin Plumbing, Mr. Geoffre y

Wood, testified (pages 107-8) that he could not

accurately estimate the total cost of the work done

by Moorabbin Plumbing at McLoughlin's Beach but

believed that a figure between $10,000 and $12,000

would be "pretty close". If one looks with some care

at the worksheets to which I have referred, it would

seem that that estimate is by no means an immodest one.

(b) The company, Electron Pty. Ltd., was an

electrical subcontractor employed by Dominion Properties Pty. Ltd. at a project at 224 Beaconsfield

61.

Parade, St. Kilda, between 1976 and 1977. Thereafter,

and into 1978, it was employed as a subcontractor on

the Centrepoint project in the city. Between July

1976 and November 1977 its employees were deployed from

time to time to work on the Norman Gallagher beachhouse

at McLoughlin's Beach by Gregson, the Project Manager

of Dominion Properties. Thereafter, until August 1978,

those employees were deployed to the same premises from

time to time by Lewis, the Project Manager for the

Centrepoint project. It became clear from the evidence

of Mr. Koob, the Managing Director of Electron, and

from the evidence of Mr. Gregson, that the reason why

the authorisation for this work changed in or about

November 1977 was because the Dominion group of

companies was taken over at or about that time.

Mr. Koob said that, when this occurred, he told

Gallagher, through one of his employees a Mr. Rauber,

that if he wanted further electrical work done by Electron on his house, he would have to provide some

other person who would "foot the bill". Thereafter,

according to Mr. Koob, he received his authorisation

from Mr. Lewis of Montvale Developments. Mr. Koob

said that during the earlier period when the

authorisation came from Gregson of Dominion Properties, he was directed to invoice his accounts to the project

at 224 Beaconsfield Parade. In the latter period, when he was carrying out work under the authorisation of

Montvale Developments, he was asked by Mr. Lewis to

62.

invoice the work to a company called Sapri Construc t i o n

Co. Pty. Ltd., a company which was doing structural

and concrete work o n the Centrepoint project. I n

respect of the earlier work d one under the

authorisation of Dominion Properties, the rec ord s ar e

deficient, not only because the y have been "bur i e d " in the paper work relating to the Beaconsfield Pa rade

project, but also because many of the reco rds of

Electron ha v e been destroyed by fire. Mr. Ko ob

maintained that his company had done approximatel y

$5,000 worth of work at the premises. The witnesses

from Dominion Properties, notably Mr. Williams and

Mr. Gregson, challenged that figure suggesting that

the total amount paid by their company to Mr. Koob's

company would not have exceeded $2,000. This provides

a rather typical example of the difficulties which

have been encountered during the course of this

Inquiry in pinpointing the nature and cost of work done

by subcontractors for Union officials. The difficulty

has been engendered by the practice of "false billing".

With respect to the latter work done by Electron, under

the authorisation of Montvale Developments, no such

difficulty arises. The cost of that work was

submitted in one invoice to Sapri Construction Co.Pty.

Ltd. and amounted to a little over $2,000. Sapri

included that amount in one of its variations charged

against the Centrepoint project. In the long run,

Centrepoint Custodians Pty. Ltd. absorbed this cost.

63.

(c) A.D. McCulloch Pty. Ltd. is a company which

carries on business as an electrical contractor. During 1978 it was subcontracted to perform work on

the Cranbourne Park Shopping Centre development

project. That project was being developed by Murragong Nominees Pty. Ltd., a "Herscu controlled

company". Mr. George Grey and Mr. Morrie Lewis of

Montvale Developments both had a hand in the project

management of the development. In or about October

1978, Grey gave to Lewis a list of light fittings

which Mr. Norman Gallagher required for his premises

at McLoughlin's Beach. Grey asked Lewis to arrange for the provision of those light fittings through

A.D. McCulloch Pty. Ltd •• Lewis handed on the list

to William McCulloch, the Director of A.D.McCulloch

Pty.Ltd •• A.D. McCulloch Pty. Ltd. purchased those

fittings "through the trade" at a wholesale price of $3,242. A.D . McCulloch Pty. Ltd. recovered its

expenditure by charging it as a variation in the

performance of work done by it at the Cranbourne Park

Shopping Centre.

1. 20. The three examples given in the preceding paragraph are

typical of the procedure used, particularly by the Herscu, Alter

and Fayman companies, to confer benefits on Union officials.

With regard to the "Gallagher beachhouses" the cost of providing

bricks and bricklaying, joinery, carpentry work, cool room,

curtains, painting, plaster, roof decking and o ther items was

64.

charged, accounted for and absorbed in similar fashion. The

work done and materials provided at the Power Street unit of

Mrs. George, the B.L.F. premises in Lygon Street, and at the

premises of Dalton, Lewis and other Union officials wa s accounted

for in much the same way.

These matters will be dealt with in more detail in later

sections of this Report.

1.21. There is no doubt that the "false billing technique" to

which I have referred in preceding paragraphs was adopted because

of a desire by those responsible for organizing the benefits to

conceal so far as practicable the fact that those benefits were

being conferred on Union officials. Grey made no secrets about

this. The following exchange (at page 479 of the Transcript)

discloses his point of view:-

"Q. And another reason why you would not discover it is

that it would be your intention, and Hersfield's

intention not to have any reference to Mr.Gallagher

in the official documentation of the company?

A. My intention, yes that is correct.

Q. Why would that be if this is being done as a

commercial transaction? Why do you seek to conceal

from view the fact that your organization on a

commercial basis is doing work for Mr.Gallagher?

65.

A. Rightly or wrongly, I don't know whether it is

right or wrong, I always intended to keep this

quiet as I possibly could, anything I was doing

for Mr. Gallagher. I did not want it common

knowledge within the trade or common knowledge

within the office.

Q. Can I ask you why?

A. No other reason except I wanted to keep it

confidential and quiet.

Q. There must be a reason for you wanting to keep it

quiet?

A. Yes I suppose the only reason I could give is that

the world at large might consider I was buying

favours from Mr. Gallagher."

Mr. Lewis, of Montvale Developments, put it this way (pages

899 and 900 of the Transcript):-

"Q. Fairly careful steps were taken by all parties

concerned in providing benefits to these Union men to

conceal the existence of them in the accounting

processes, is that right?

A. Yes.

66 .

Q. Indeed, the evidence so far has indicate d tha t even

those who have provided the benefits as you well know ,

have found it very difficult to trace them?

A. Yes .

Q. To use a phrase I used before, 'a fly on the wall ',

a fly on the wall would see work being done at

McLoughlin's Beach, contractors being ther e , the house

owned by Gallagher. Th e one thing the fly on the wall

woul d need special knowledge about was how that work

was paid for and arranged by way of accounts.

A. Yes.

Q. And the normal fly on the wall would readil y infer the

work was paid for by the person receiving the benefit

of it?

A. Yes.

Q. That I suggest to you was an impression which was

necessarily created by the procedures that were

followed?

A. Yes.

Q. And intended to be created?

67.

A. It follows.

Q. So far as you can speak about that, it was your

intent, no matter what other intent you might have had, to conceal from the world that your company had

participated in the provision of benefits to

Mr. Gallagher?

A. To the extent of our accounting in the books, yes.

Q. And the corollary of that is that it was also the

intent to conceal from public view the fact that

Mr. Gallagher had not paid for the work? That

necessarily follows I suppose?

A. It does follow."

It is implicit in the evidence of each of these two

gentlemen that one of the primary purposes, if not the sole

purpose, for which they followed the accounting procedures which

they did, was to conceal "from the world" that they, or the

organizations whom they represented, were conferring benefits

upon Union officials. It discloses, in my view, an apprehension

on their part of the consequences which would flow in the event

that these benefits became a matter of public disclosure. That was an apprehension which was obviously shared by Gallagher

himself, because I am satisfied that he too has taken steps to

hide from public view the fact that he has been a recipient of

68.

substantial gratuities from these persons and organizations.

I shall refer to the steps taken by him in greater detail when

I deal more specifically with the benefits which he has rec eived.

1.22. The terms of my references require me to inquire into

"the reasons for or the purpose of any benefit". As t o this

the evidence leaves me in little doubt. It can be summed up by

saying that those responsible for providing the benefits desired

to keep the Union and its officials "on side". It would seem

from the evidence that the Federation has achieved a position

of dominance within the building and construction industry and

has been prepared to achieve that position by militant conduct

and in defiance of the processes laid down in the Arbitrati o n

Acts in force in this country. Within this power structure, the

General Secretary, Mr. Norman Gallagher, appears to reign

supreme. He is disclosed as a man who is held in awe by senior

executives of major construction and development companies in

this State and has been variously described by witnesses before this Inquiry as "the boss", "the general" and "the big fella' Mr. Herscu described his perception of Gallagher in this way

(Page 709):-Q. "Did it appear to you from what you have observed that

Gallagher almost alone had the power to say yea or nay

to the continuation of work on your project site?"

A. "I would say yes."

Q. "He seemed to wield an enormous amount of power over

that union apparently?"

A. "Yes he is the boss."

69.

Q. "The reason why you sought him out was you believed he

had the power to make things smooth, if that is what

you required."

A. "Yes."

This situation is readily understandable. Construction projects,

and particularly, so it would seem, shopping centre complexes,

depend for their profitability upon adherence to strict

timetables. Time lost through industrial action is calculated

to cause heavy financial deficits. For this reason builders and

developers are keen to ensure that this prospect is kept to a

minimum. Accordingly, it would seem that a practice has

developed on the part of the project proprietors, or their

project managers, of conducting "pre-project negotiations" for

the purposes of establishing over-award payments, commonly

referred to as "site allowances", which are to be made to the

members of the Federation who are engaged in constructing the

project. Herscu gave evidence about these practices at Pages

703 and following of the Transcript. He gave evidence that in

early 1977 three of his projects, namely the Diamond Creek

Shopping Centre, the Flinders Fair project and the Cranbourne

Park project were all the subject of "closures" by B.L.F. bans.

He said that he went to see Gallagher and Gallagher said "Yes,

I want to discuss with you there is a site allowance which I want

and if we make an agreement about the site allowance, the jobs

can continue." He then said he negotiated the payment of such a

site allowance and he put it this way:-

70.

"And I said 'Well what is the site allowance'. I am not

sure if he asked $18 per man per week or $15 , and I'm no t

sure exactly what I finish up - e ither $12 or $15 a week."

Thereafter he said he developed the procedure of "going for lunch

from time to time" with Gallagher. He said "three, four times a

year we went for lunch and always when I had a new job starting,

you should take him for lunch. Tw o places, either Vlados in

Richmond or N ic kl eby' s in Carl ton and I used to say 'Well, Norm

we started these jobs and we want peace and quiet . The jobs have

got to be finished in time and that is all about it.' Thi s was

all my relations with Gallagher except yo u know Christmas I used to send him a card, a couple of bottles of whisky, 50 bucks worth

of drinks, a greeting card and that is all about it."

Mr. Williams of Dominion Properties said (at Page 102 2 and

following) that it was also his practice to have a meeting with

Mr. Gallagher prior to commencing any project to iron out any

problems that he might have with respect to Union participation

on his sites. When asked whether he regarded it as "beneficial

to your projects to have a pre-project conference", he responded

"I certainly do".

In the light of this background, the reasons expressed by

builders and developers before this Inquiry for conferring

benefits upon the Union officials becomes readily understandable.

Tho se reasons have been the subject of a variety of description,

but in short they come down to a desire on the part of those

71.

providing the benefits to maintain "the goodwill of the

Federation".

I shall refer hereunder very briefly to the reasons given

by some of the witnesses for conferring benefits upon Union

officials:-

(a) Grey said that he had played his part in granting

favours to Mr.Gallagher if he thought that it wo uld

serve the best interests of the companies which he

represented. He said (Page 423):-"I believe Mr. Herscu trusts me, I do the best

I can for him. We are not known for wasting mon ey

or throwing money away. Our projects are usually

carried out fairly quickly and fairly economically. I do not refer to him should I need to do a favour

for someone. I have mentioned to him from time

to time that I would need to do favours for certain

people, and this is business, and I have done that.

His comment is always the same comment 'That's okay

but watch the money, do not waste anything, and

be very careful in respect of costs because I do

not like throwing money out of the window'."

He was then asked:-Q. "So you have what you understand t o be a general

authority to do favours for people, which favours,

or the costs of which favours, would ultimately

be borne by Mr. Herscu or his company, you

72.

understand he generally a utho rises yo u to do that

if it is going t o advance th e interests of the

compani es ?"

A. "In principle that would be correct."

Q. "In pursuance of that authorit y and his d irection ,

yo u only pro v ided , if I might put it t his way ,

favours tha t yo u considered to be in t he best

interests o f the He rscu companies?" A. "Yes that is correct, very co rrect."

In seeking to define what he regarded as the "best

interests of the Herscu companies", Grey said (Page 475):-"The benefit has been and still is the fact that

I can ring him up on the phone if I've got

troubles. Say one of his organizers on one of

my sites, and I am having troubl e s, whether they

be correct or incorrect problems, I pick up the

phone and speak to him and I can simply say

'Can I come and see you.' He will say 'Well,

yes, if you come now or after lunch or whatever

the case may be'. I can sit down with him and I

can try and thrash the problem out and I think

that is the goodwill I have achieved by doing

these favours, if you want to call them favours."

Grey was also asked (Pages 511-12) about his reasons

for organizing benefits for Dalton.

following:-

He said the

73.

Q. "What reason did you have for doing favours for

Mr. Dalton?"

A. "No other reason than he was the organizer looking

after the project in that area. He was the area

organizer and they were pure, straight out

favours."

Q. "Di d you believe he might have some influence in

either speeding up or slowing down the projects of

which he was the area supervisor?"

A. "I certainly would feel it would put us on a better

standing with him."

Q. "So that by doing a favour for him you thought you

might obtain some, if not defined, at least

intangible benefit on behalf of your employer?"

A. "I suppose you could put it that way."

The significance of this evidence is that it points up

very clearly the fact that the Herscu companies were

only prepared to bestow benefits upon Gallagher, and to

a lesser extent the other B.L.F. officials, because

they believed it was in the best interests of their

companies to do so. The fact that that was the

principal reason only underscores the improbability

that Herscu was unaware of what was going on. If a

man such as Mr. Herscu is prepared to authorise Grey to

use his (i.e. Herscu' s) money to give benefits to the

officials of an organization which has business relations with him, it would seem to be highly

probable, if not certain, that Herscu would be

74 .

concerned to know fairly precisely what those f avo ur s

were. The last thing that Mr. Herscu would want is

for Gal l aghe r to be ignorant of the fact that the

Hersc u Group of companies was Gallaghe r' s benefacto r

pu r suant to the direction and author i sation of the

Group ' s boss.

(b) Mr . Ll oyd Williams (at 1019) has said that he

believed that the money spent by his c omp a ny, Dominion

Properties Pty. Ltd., had been v1ell spent for the

purposes of maintaining good r elations between the

Union and his companies. He sa i d "I think it has been

a n excellent public relations exercise".

(c) Mr. William Northover, a form er Associate Director o f

E.A. Watts Pty. Ltd., said (page 1 071) that he was

prepared to respond fa vo urably t o Gallagher's request

for buildi ng materials from time to time for the

purpose of ensuring the maintennnce of good

relationships between Gallagher and his company .

(d) Mr. Lawrence Darrell is the Managing Director of a

company called Adrianni Pty. Ltd., which was the

developer of the Melton Market project in 1980 .

During the couise of that project his company

authorised Mr. Lewis of M o ntvale Developments to

purchase for and deliver to the order of Mr.J. Cummins,

an organizer of the Federation, a quantity of bricks

75.

which cost some $800. Mr. Darrell (at page 1101) said

that he was prepared to bear this expense because Lewis had told him that "It was necessary to get the Union on

side". He said that he was prepared to spend the few

hundred dollars involved in order that he could "keep

sweet with the Union".

(e) Mr. Bruno Grollo said (at page 1169) that "We were

prepared to extend credit to him (i.e. Gallagher) and

to continue to provide favours which would not be out

of proportion to the advantages we saw as flowing from

ensuring Norman Gallagher's and his Union's goodwill

towards us continued". Later he said (at page

1178A) that "It would, in our view, have been foolish

for us not to have agreed to provide favours for Norman

Gallagher and other Union officials or our own

employees where the favour does not cost us much in

relation to the potential the detail of that favour has

for the destruction of goodwill we have sought to

foster.". When Grollo was later asked (at page

(1221) why it was "not in your interest to offend him",

he responded:-"It is not in our interest to offend him because

I could not afford to have a situation where he

or any of his Union organizers, or any of the

other Union organizers, would think that we were

wealthy and had plenty of money and could afford

to pay the men as much money as the Union could

76 .

screw out of us. We thought we had t o show t hat

we could not afford to pay exorbitant amounts of

site al l owances. "

(f) Allan George Pizzey, the General Manager (Operations)

for the Fl etcher Watts Group of companies said (a t

page 1295A.) that he had been prepared to authorise the

p r ovis i on o f favours in response t o Gallagher's request

no t on the basis of the expectation of " any favour in

return", but nonetheless "perhaps expecting

communications t o be maintained with the Union

movement". He said "I guess, of all the people

associated with the projec t, the Union movem ent can

make it very difficult if you cause them

displeasure.".

(g) Mr. Graham James Noble, the Victorian Construction

Manager for the Fletcher Watts Group of companies said

that he thought it was desirable to comply with the

requests for building materials made of his company b y

Gallagher because he felt "We still needed a

relationship with Norm Gallagher. We deal with him

through industry and at least that sort of thing keeps

the doors open for us to have direct contact with Norm

Gallagher."

77.

The expressions of sentiment to which I have referred are

typical of the attitude of all of those who participated in

conferring benefits upon the Federation and its officials.

Although these persons were not seeking to purchase any specific

favour from the person who was the object of their bequest, it is

nonetheless apparent that they were expecting, or at

hoping, that the provision of their bounty might in some way

enure to the benefit of their company's projects at some stage in

the future. It is perhaps both significant and descriptive of

the dominance which the B.L.F. and its officials have achieved

within the building industry that no other union, or official of

another union, has received the same degree of benefaction as

that afforded to the B.L.F. Mr. Grey was asked (Pages 435-6):-

Q. "Can you tell me any other union leader or union

official of which you have knowledge of similar favours being given?"

A. "Yes other union officials have received favours, minor

favours, nothing of any substance."

Q. "What do you classify as a minor favour?"

A. "A couple of loads of bricks or a bit of roofing iron

to put a roof on a garage or something of that nature."

Q. "Were these officials of the B.L.F. or another union?"

A . " The B. L . F • "

Q. "Have you any knowledge of major or minor favours being

provided to officials of any union other than the

B.L.F.?"

78.

A. "I have not. If I have it has been o f a very minor

nature, a bag of cement, a pound o f nails or something

1 ike that."

Further emphasis was given to the special position o f the

B.L.F., and Gallagher, in particular, in the following pass age of

evidence given by Bruno Grollo (Page 1211):-Q. "So far as other unions are concerned, have you

performed work for officials of other unions in the

same way as you have for Mr. Gallagher?"

A. "Not in the same - do I have, well not in the same way

as Mr. Gallagher, no."

Mr. Robert George Gussey, former Manager of Dillinghams

(Australia) Limited, put it in the following terms (Page 1471):­

Q. "What was the reason for giving it to the B.L.F. free?"

A. "I think that we had a reasonable relationship ••. with

the B.L.F. and I guess we didn't want to upset it ••• "

Q. "Preserving your relationship with the union?"

A. "Yes, that is it."

Q. "Do you regard that as a normal incident of your

business, or was it a peculiar one and referable

to the Builders Labourers Federation?"

A. "It was peculiar."

Q. "Peculiar to the B.L.F.?"

A. "Yes."

Chapter 2

79.

Benefits received by Norman Leslie Gallagher (and through him Patricia Mary George and Wayne Alfred Gallagher

2.1. Among the officials of the Federation whom the evidence

discloses as recipients of benefits Norman Gallagher, its

General Secretary and the Secretary of its Victorian Branch,

stands in a position of pre-eminence. At his request builders

and developers have provided many thousands of dollars worth of

goods and services to him, to his son, Wayne Alfred Gallagher,

and to his companion, Patricia Mary George, otherwise known as

McMahon. The evidence reveals that these benefits have been

provided between the years of 1975 and 1980 and the value of the

benefits ranges between $140,000 and $160,000.

The goods and services provided to Gallagher or at his

request are many and varied and are outlined in some detail in

the schedule which is contained in the next succeeding paragraph

of this Report. Some of the favours granted are significant in

their magnitude and some are trivial. Each one, however, has

resulted from the personal approach made by Gallagher to the

"giver" and reflects the apparent ease with which Gallagher has

been able to approach employers within the building industry

with requests for personal favours. The evidence paints a

fairly convincing picture of a man who has used his position of influence within the industry for personal advantage. The

evidence also makes it clear that those who have granted the

favours have done so because of an understandable desire not to

offend Mr. Gallagher. Mr. Lloyd Hancock, a former As soc ia te

Director of Costain Australia Limited, summed up what appears,

flO.

by the evidence, to be the general sentiments expressed by those

employers in the building industry upon whom the "bite" had been

put by Mr. Gallagher (Page 244):-Q. "When Mr. Gallagher indicated that he wanted building

material, you did not refuse him?"

A. "That is correct."

Q. "Did you give any thought to refusing him?"

A. "No - I would sa y no."

Q. "You did not think it would be prudent to say no?"

A. "Well that is right."

Q. "It was the sort of suggestion you couldn't refuse?"

A. "Well that is right."

2.2. I set out hereunder a schedule of the benefits that have

been conferred upon Gallagher and, through him, upon his son,

Wayne, and Patricia Mary George. For the sake of convenience

and ease of reference the schedule is divided into four parts:-A. Beachhouses at McLoughlin's Beach.

B. Premises at l 77 Power Street, Hawthorn.

C. Apartment at Lygon Street, Carlton.

D. Sundry benefits received by Norman Gallagher.

Schedule of Benefits Received by Norman Leslie Gallagher (and through him, by wayne Gallagher and Patricia Mary George)

A. Beach Houses at NcLoughlin's Beach

By whom \oX>rk done

Nature of Benefit I Date I orp_rovided By whom Authorized Person bearing cost

Plumbing (NLG) I 5/1976 I Conron Bros Plunbing Gregson of Dominion

Pro(:erties

Dominion Pro('erties

Pty. Ltd.

Plumbing (NLG & w::;) I 1978-1981 I Moorabbin Plumbing Lewis of Montvale 180 Flinders Street P/L

Centrepoint Custodians Pty. Ltd.

Electrical (NLG) I 7/76-fl/78 I Electron Electrics Gregson of Dominion

till 11/77;

Dominion Properties to 11/77;

"re" '""' ""' ' I 1978-1980

Light Fi ttings (NLG) I 9(78

Joinery (NLG) I 10/79

Structural Steel (NLG) I 4/1975 Plans and fabrication

B.C.Se)'ll'Our Pty. Ltd. (formerly Lane & lbux Pty. Ltd.)

A. D. McCUlloch Pty. Ltd.

Lewis of Montvale 11/77 to fl/78

Grey of Hersfield Developnents

Grey of Hersfield Developnents , Lewis of Montvale

Centrepoint Custodians 11/77 to 8/78

Hersfield Developnent Corporation

Murragong Nominees Pty. Ltd.

Ringwood Shop Fitters ! Lewis & Daly of Montvale I Centrepoint Custodians Pty.Ltd.

Neerod Engineering Pty.,The late C. Hansen I Hanse n & Yuncken Pty. Ltd. ( lo.holl y owned Ltd .

subsidiary of Hansen & Yuncken Pty. Ltd.)

Project cha r ged

224 Beaconsfield Parade

Flinders Fair Centrepoint

224 Beaconsfield Parade

Centrepoint

Chirnside Park, Deer Park and Footscray Market

Cranbourne Park

CentrefOint

Charged to account of "A.J. Day"

Value

$750

$10,000-$12,000

$2,000-$5 ,000

$2 , 021

$14 , 000

$3 . 250

$2,750

$7 , 500

(X) 1-'

Nature of Benefit I Date

Bricklaying (Nu:; & w:;) I No\/ & Dec 1977

Dec 79-Jan 80

Design Plans (Nu:;) I 1975

Carpentry (by Dominion I 1976 Prorerties ) {NLG)

Carpentry (Grandison I 2/79 & Neille) (NLG & WJ)

Carpentry (Montvale) (NLG & WJ) 7/78

Cool room (NLG) I 5/79

Repairs to cool room 1 1980

(Nu:;)

Curtains (NLG) I 4/79

Painting (NW) I 2/79

Plaster Sheets (w:;) I 7/80

Besser blocks, r oo f I 1976

dock, bricks arrl s teel purlins (Nu:; garage)

By v.hom '-ork done or provided

J . Tilli

J. Tilli

Picone of Civil & Civic Ltd.

Stevens & Redpath

Grandison & Neille Pty. Ltd.

J. cauchi

By whom Authorized

Lewis via Herscu

Lewis via Alte r

Civil & Civic Ltd .

Greatorex of Dominion

Lewis via Alter

Lewis of Montvale

Haden Engineering I G. Grey

pty. Ltd.

Simmons COnstructions I G. Grey

Sucol Di stributo r s I G. Grey

pty. Ltd.

J. Mazzett i I G. Grey and M. Lewis

Victorian plasterers IG . Grey

Unidentified I G. Grey

Person cost

Murragong Nominees pty . Ltd.

Forest Hill Heights pty. Ltd . and Hersfield Developnents

Project c ha.!:9._ed

Cranoourne Pa rk

Forest IIi ll and Keysboro ugh/Pa rkmore

Civil & Civic Ltd. I None

Dominion Properties pty. I 22 4 Beacons fi eld Pa rade Ud.

Forest Hill Heights I Forest Hill

pty.Ltd .

Montvale Developnent Uncertain

Hersfi e ld Developnents I Keysborough/Par kmore

Hersfield Developnents I Keysborough/Parkmo r e

Hersfield Developnents / 520 Collins Street; Riv e rside Av enue

Murragong Nominees pty. I Cranbourne Pa rk Ltd.

Hersfielcl Developnents I Deer Pa rk

Hersfield Developnents I \'laver l ey Gardens

Value

$5, 200

$14 ,400

No value giv e n

No value given

$1' 12<1

$3 , 30 0

$4 ' 200

$680

$5 ' 600

$4 ' 750

$3 , 800

Nq value g1ven

co I\.)

By ...Oom 1o.0rk done

Nature of Benefit Date or provided

Doors arrl windows (NLG) 11/1979 Nepean Soop Fitters via Cyclone !

17/76

Ltd.

Bricks (NLG) Brick & Pipe Industries

I

Pty. Ltd.

Br ic ks (NLG) 112/79 Brick & Pipe Irrlustries

1 12/79

Pty.Ltd .

Steel external Rocka Stee l Co .

staircase (NLG)

Design Plans (WG) 11/79 Austr alia n Basic

I

I Designs

Recoupment of costs 12/79 Bricks purchased by

expended on bricks Gallagher from Brick

(NLG) & Pipe Industries

Roo f Decking (WG) 6/78 Aldeck Roofing Co.

Steel beams (WG) 11/79 Rocka Steel Co .

Timber Frame (WG) 7/79 Canterbury Timbers

Pty. Ltd.

Erection of Timber 9/19 Termac Constructions

Frame (WG) Pty. Ltd.

Roof Deck i ng (WG) 10/79 Aldeck Roofing Co.

Concrete and concreting 12 /16- Pioneer Concr e t e (V i c) (NLG & WG) 4/81 Pty.Ltd.

By whom Authorized Person hearing cost

G. Grey He rsfield Developments

Lewis of M:>ntvale and Forest Hill Heights Pty.

C. Grey Ltd . and Erobin Nominees

Pty. Ltd.

Lewis of M:>ntvale M:>ntvale Developments

lewis & Daly of M:>ntvale Fores t Hill Heights Pty. Ltd.

Lewi s arrl Grey M:>ntvale Developments

Recoupment of cost Forest Hill Heights

authorized by Lewis Pty. Ltd.

I

I

Lewi s a nd Grey Murr agong Nominees

Pty. Ltd.

Lewi s o f M:>ntvale M:>ntv ale Dev elopments

Grollos Grollos

Grollos Grollos

Grollos Grollos

Grollos Grollos

Project c harged

Footscray Market

Forest Hill and 444 Nepean High..ay

Non e

Forest Hill

None

Forest Hill

Cr anbourne Park

No ne

None

None

None

None

Value

$2, 500-$4.700

$6G5

$754

$1, 730

$100

$2 , 050

$2 ,060

$306

$7 , 000

$5 , 000

$600

$1 5 , 850

ex:> w

By lhhom ..ork done

Nature of Benefit Date o r

Supply of Larour and 12/76- Elnployees o f Grollos

materials for 4/81

concreting(NLG & WG)

Co nstr uction Shed etc . 8/75 J ennings Industries

(Nl.G) Ltd.

Trees and Sh r ubs(NLG) 1976 & M. C. C.

1977

Steel comp:ments , 1971i & E. A. W3tts

re-inforc ing and 1977

bricks

--- --- - ---·----

By wh om Authorized Person bearing cost

Grollos Grollos

Jenning s Jenning s

M. c.c. M.C.C.

Northover of E.A. watts E. A. Watts

--- - -

Project charged

None

None

None

None

SJ , o,J0-$4,000

No value q iv e: n

No value g ive n

$2 , 000

CXl

"'"

Nature of Benefit Date

Plunbing, electrical None aod carpentry work given

Painting 1975 &

1976

Curtains 1979

Schedule of Benefits Received b Norman Leslie Galla her (and throu h him, y Wayne Ga ag er an Patnc1a Mary George)

B. Premises at 177 Power Street, Hawthorn

By whan work done or provided By whom Authorized Person bearing cost

Moorabbin Plunbing and Lewis of M::mtvale Montvale

J.Cauchi of Montvale

Monash Painting - finn The late C. Hansen Han sen & Yuncken

owned by Hansen & Yurcken

Sucol Distributors Grey Hersfield Developments

pty. Ltd .

Project charged

None

None

520 Col lins Street

--Value None given $1 , 000 $400

co U1

Schedule

c . Apa r tmen t at 11 Lygon Street , Ca rlton, occupi ed by No r ma n Ga llaghe r

By whcrn ""'rk do ne

Nature o f Be nefit Date o r provi ded By whom Autho r ized P e r son bearing cost

Curtains 10 /1980 Sucol Di strib utors Dodd o f M :mtva l e Mon tvale Developments

Pty.Ltd .

Per s pex , timber and ll/1980 & Fletcher Watts Fletcher wa t ts Fletcher Watts

l abour fo r greenhouses 2/1981

Re p3irs and al ter a tions 6/1979 Fletcher watts Schwe iger o f wa t ts Fl etcher watts

to s hower r ecess

Light Fitting s 10"/1 980 He l my' s Pty.Lt d. D:>dd of Montval e Mo ntval e Dev el o pments

---- -

P roject cha rged

Argyle Street M a ll , Go ul bur n , N. S.W.

Coll ins Place

None

Bowral Sho ppi ng Cen t r e

Va lue

$3, 762

$2, 60 0

No val ue

giv e n

$1 , 786

CXl 0'1

Schedule of Benefits Received by Norman Leslie Gallagher (and through him, by Wayne Gallagher and Patnc1a MMy George)

D. Sundry benefits received by Norman Gallagher

By whom work done ----

Nature of Benefit

Sundry building materials

Sundry building materials

Date

1975

1978

Br icklayirg at Woodsidell977 Surf Life Saving Club

or provided

Costains(Aust) Ltd.

Podgor Con s tructions

Dobie & Banks

Grollo Truck and Registration Fees 9/15 and I Grollos

registra-

D:>g kennel

Radial arm saw

SUndry building materials

Tomato Stakes and bait table

tion fees thereafter

1980

8/19

10/4/15-8/1/16

1979

I Fletcher watts

Power Tool Specialists pty. Ltd.

Dillingham Aus t.Lt:cl.

Fletcher watts

By whom Authorized Person bearing cost

Hancock of Costa ins Costa ins

Podgornik Podgornik

Lewis of Montvale Montvale

Grollos Grollos

I Fletcher watts I Fletcher watts

Wilkes of Fletcher Watts I Fle tcher Watts

Gussey of Dill inghams Dill inghams

Wilkes of Fletcher I Fletcher watts

watts

Project charged

None

None

None

None

I None

I North Wharf Project None

I North Wla r f

Value

None giv e n

Few hundred doll a r s

$2,937

$1,000

I No value given

I $528 $1,900

I None give n

co -.]

88.

I do not propose t o refer in detail to each benefit so

received. The schedule speaks for itself and the evidence , upon

which the findings are based, is set out in Appendix 6 t o this

Report. The schedule sets out the nature of the benefit, the

date upon which it was conferred, the persons doing the work or

providing the materials constituting the benefit, the person by

whom the benefit was authorised, the name o f the person o r

company bearing the cost of the benefit, the project which was

charged with the cost of the benefit and the value of that

benefit. Suffice it to say that the majority of those benefits

was conferred and accounted for in the manner in which I ha ve

related in Chapter 1 of this Section of the Report.

The schedule of course indicates that the benefits not only aided

the material welfare of Mr. Gallagher himself. By virtue of his

influence, his son, Wayne Alfred Gallagher, has been able to

become the owner of a substantial beachhouse at McLoughlin's

Beach, and Mrs. George was able to obtain improvements to her

premises at 177 Power Street, Hawthorn. Part C of the schedule

refers to work done and materials provided at a flat above the

Federation's offices in Lygon Street, Carlton, a flat which the

evidence discloses, is currently occupied by Gallagher.

Part D of the schedule contains what I have termed "sundry

benefits" which have been made available to Gallagher upon his

request. The evidence in relation to some of those items is

reflective of the extent to which the benefactors have been prepared to go for the purposes of "keeping Gallagher happy".

89.

The Fletcher Watts Group of companies were responsible for

providing the radial arm saw referred to in Part D of the

schedule. This was provided in August 1979 whilst Watts were

constructing the World Trade Centre in Flinders Street.

Mr.Wilkes was the Construction Manager of that project. He said

that for some time prior to August 1979 Gallagher had been in the

habit of borrowing a bench-top saw, owned by Fletcher Watts, for

his own purposes. Wilkes said that for some time Gallagher had

been "whingeing" that the saw was "no good". In August 1979

that saw had been "tied up" in a dispute at Loy Yang involving

the Builders Labourers Federation. According to Wilkes,

Fletcher Watts decided that they would buy Gallagher a new saw.

Gallagher accompanied Wilkes to a display centre of a company

called Power Tools Specialists Pty. Ltd. in August 1979 and there

chose a radial arm saw which, he said, suited his needs. That

saw was subsequently picked up from Power Tools Specialists

Pty.Ltd. by Gallagher or on his behalf and the supplier, at the

request of the Fletcher Watts Group, invoiced the cost of the saw

to Fletcher Watts but marked it as being "the cost of repairs to

a Favco crane".

The Grollo brothers said that in 1975 they had sold one of

their trucks to Gallagher for a sum of $700. They had not pressed

him for the payment of that truck but they had transferred the

registration into his name in or about August 1975. Notwithstanding the transfer, they had continued to pay the

annual registration and insurance costs of that truck up until

90.

the present time.

Mr . Gallagher".

The y said that they did this "as a favour t o

The Woodside Surf Lifesaving Club , which exists at a beach

not far from McLoughlin ' s Bach, commenced the erection of a new

clubhouse in late 1977 . Gallagher approached the Club and t o ld

its executives that he would give it "wh a tev er assistance he could on a voluntary basis" . Ultimate ly Gallagher arranged for

a bricklayer (Mr . Banks of Dobie & Banks) t o do the bricklaying

in the erection of a clubhouse and an agreement was mad e that the

Club would bear one-half of the cost of the brick- laying and t he

other half would be accepted as a donation to the expenses of the

Club . In fact the other half of the cost was borne by Mr. Lewis

of Montvale Developments Pty.Ltd . Montvale bore the cost at the

request of Gallagher. Cyclone Scaffolding Pty.Ltd. prov ided th e

scaffo l d work used in the erection of a clubhouse. It did that

at the request of Gallagher.

Th e cost to Montvale Developments of assisting with the

br ic kla ying for the Surf Lifesaving Club was of the order of

$3 , 000 , and the co nsequence of this assistance has been ,

according to the Club' s President , that the Club regards

Gallagher as one of its substantial "benefactors". The charity,

however, has not been his.

2.3. The schedule in the preced i ng paragraph shows that most of

th e benefits received by Mr. Gallagher were directed towards the

91.

construction of two beachhouses at McLoughlin's Beach; one in

which he himself resides and the other one which is owned by his

son. So much of the construction of these houses has been

contributed by builders and developers within this State that on e

is tempted to conclude that very little of the finished produc ts

has been the consequence of a commercial transaction between

building owner and contractor. The house occupied by

Norman Gallagher has been built on land which was formerly owned

jointly by himself and Mrs. George. The relevant land is part of

the subdivision entitled "McLoughlin's Beach Township" which is

contained in a registered plan of subdivision No.51853

(Exhibit 28). The house is constructed on Lots 1, 3, 4 and 5 of

that registered plan and is on the corner of two streets now

known as McLoughlin's Road and Charleton Street. Lots 1, 3 and 4

were progressively purchased between June 1975 and July 1976 and

were formerly jointly registered in the names of Gallagher and

George. It was on these three allotments that the house was

bu i lt. Lot 5, which adjo i ns Lot 4, was purchased by Gallagher

on the 7th August 1979. In October 1980 the land and premises

were transferred to a company called Undertowers Pty.Ltd., which

is currently the registered proprietor of the land. That company was incorporated in June 1980 and is the trustee of the

"Gallagher Family Home Trust". The Directors of the company are

Peter Joseph Redlich and Ro ss Frederick Betts, each of whom is a

partner in the legal firm of Holding Redlich and Co., the

Solicitors for Mr. Gallagher. As a result of this transaction, Mrs. George has relinquished her interest in the land and

92.

premises at McLoughlin's Beach and in return has sec ur ed from

Mr. Gallagher a release from a debt of a little over $3,000 which

she owed to him, and which had been secured by a mo rtgage over her

interest in the premises at 177 Power Street, Ha wthorn. I shall

refer in more detail to this transaction hereafter when I deal

with the "disposal of the beachhouse to Underto wers Pty .Ltd .".

2.4. At first blush it would seem that the amount o f expenditure

incurred upon the two beachhouses at McLoughlin's Beach is not

warranted either by the nature of the finished products o r their

l oca tion. This proposition tends to be corroborated by the

"qualified" valuation placed upon those beachhouses by the

valuer-General. Without having the opportunity of looking

inside either of the houses, the combined value placed upon the

two beachhouses by the Valuer-General amounted to approximately

$95,000 (See Exhibits 48.1 and 48.2). At various times during

the course of this Inquiry, an explanation was sought to be given

for this discrepancy by the "providers of the benefits" by

suggesting that the sub-contractors who had done the work on the

beachhouses had sought to "load their accounts" safe in the

knowledge that those accounts were unlikely to be challenged.

Whilst it is no part of my function to inquire into the

propriety of the accounts rendered by the sub-contractors, it

does not seem to me that the explanation so advanced is either

logical or correct. Indeed the evidence established to my

satisfaction that many of the materials which have been provided

for these beachhouses have been provided at trade discount prices

and much of the labour provided has been provided free of cost or

93.

at reduced cost. It seems to me to be much more logical to

conclude that these beachhouses have been expensive to construct,

firstly because most of the labour has been provided from Melbourne, and secondly because little expense has been spared in

the fitting out of the houses. For example, those responsible

for delivering and pouring the concrete express significant

surprise at the lavishness with which the concrete was poured. According to them it was poured in accordance with measurements

and dimensions more suited to a wartime bunker than a beachhouse

outside of Yarram. In the result, the cost of concrete, at

prices vastly reduced from trade price, amounted to nearly

$16,000. Likewise, both Mr. Silva and McCulloch, who provided

the curtains and light fittings respectively, were constrained to

say that the quality of the fittings supplied by them was more

lavish than one would normally expect in a beachhouse of the type

described.

2.5. Various aspects of the provision of benefits to

Norman Leslie Gallagher were the subject of protracted

explanation and qualification. For the sake of clarity, it

seems appropriate that I should deal with those aspects in more

detail in this Report. I shall hereafter deal with them

seriatim in the following chapters:-2 (a). The "Grey/Gallagher Arrangement".

2 (b). The "Grollo/Gallagher Arrangement".

2 (c). The "Hansen & Yuncken Benefits".

2(d). The Attempted "Grey/Gallagher Concealment".

94.

2 (e). The Disposal of the Beachhouse to Undertowers

Pty. Ltd.

2 (f). The Position Adopted by Gallagher in relation to the

Receipt of Benefits.

95.

Chapter 2 (a) The •Grey/ Gallagher Arrangement"

2(a).l. Mr. George Grey, the Project Manager for many of the

projects undertaken by the Hersfield Development Corporation,

maintained during the course of this Inquiry that the month of

November 1979 provided a "watershed" in the history of benefits

o rganize d by him for Gallagher. He maintained that whereas

prior to that date he had been responsible for conjointly

organizing benefits free of charge for Ga llagher, he nonetheless

made an arrangement with Gallagher in or about the month of

November 1979 pursuant to which any future benefits requested by,

and organized for, Gallagher were to be the subject of payment.

This claim becomes of relevance because the Terms of Reference

constituting the parameters of my Inquiry do not envisage any finding in respect of benefits which have been provided and

received "in the ordinary course of commercial dealing or

pursuant to a contract of employment in respect of work actually

performed or to be performed". As I unders t and the ev i dence of

Mr. Grey, he claims that the wo r k and l abour which he organize d

for Mr. Gallagher subsequent t o November 1979 wa s wo r k and la bo ur

to be done upon a commerc ial b as i s . It, the r e fore, b ecomes

necessary to analyse this cl aim t o s ee whethe r o r no t it is

acceptable.

2(a) .2. When Grey was first call ed t o giv e ev i dence b efo re the

commissi o n on the lOth Novemb er 1981, he gave evide nce o f an

arrangement that he had made wi t h Ga ll aghe r i n late 1979 pur suant

to which h e said he h a d o r ganized som e $14 , 000 wo rth o f wo r k f o r

Gallaghe r for which Gallag he r had ag re ed t o pay . He sa i d tha t

96.

in fact he had received $6,400 in cash from Gallagher over the

period of time between the making of the arrangement and the

present date and that that amount of money had been received by

cash payments in "dribs and drabs" (see Pages 429 and

following). Grey said that this arrangement was made during the

course of a conversation with Gallagher at the John Curtin Hotel

in which Gallagher had asked him to arrange for certain further

work to be done for him. Grey said that he told Gallagher that,

in his view, Gallagher had "received enough for free" and that

for any works to be organized thereafter he would "need payment

for these items".

Grey was then asked to nominate the items of work which he

had thereafter organized for Gallagher, the value of which

totalled $14,000. In response to that question he said that

that sum was made up of the following items:-(a) $5,000 paid to B.C. Seymour for electrical work

done at Gallagher's house at McLoughlin's Beach;

(b) The installation of a coolroom at McLoughlin's

Beach for $4,200;

(c) The installation of windows and doors by Nepean

Shopfitters at McLoughlin's Beach to a total of

$2,500;

(d) Curtains installed at McLoughlin's Beach for the

s urn o f $ 2 , 0 0 0 ;

(e) Miscellaneous "bits and pieces" making up the total

of $14,000.

97.

Grey said that Gallagher had agreed to make him payments in

respect of the work so organized as and when he had the money

available. He said that over the years Gallagher had made him a

series of small payments in cash and he further said that he,

Grey, had kept "pencil records of the amounts that I get". When

he was asked where those records were, he replied "I just keep

them on a scrap of paper back in the office" (Page 436). Grey

said that when he received these amounts of cash from Gallagher

he had "recycled" those amounts into the Hersfield organization

without keeping a detailed record of them. Grey said that he had

received about five cash payments from Gallagher and that those

amounts had been paid between 1979 and 1981, the highest payment

being $2,400 made in 1979. Grey was asked (Page 440) "Would

there be a record of that $2,400?", to which he replied "There

would be no record as far as I know. I simply took the cash and

held it to use on behalf of the company which I have done".

Q. "Are there no records at all of this agreement or

ar rang em en t?"

A. "I purposely did not want to keep a record of it."

Q. "Why?"

A. "I did not want to appear to be doing favours."

Q. "But you were not. You were charging him for it."

A. "I was doing him a favour by getting him materials at the

right price. I suppose I was doing a favour. But I did not

want it to be public knowledge."

Q. "Is that the reason why you did not keep a public record or

any record of it?"

A. "That is right. I purposely did not keep records."

98.

The effec t o f this evidenc e of Grey was that since t he

making of the arrangement t o wards the end o f 1979 he had

organized approximately $14,000 worth of work at Gallagher's

r e quest, for which wo rk Gallagher had agreed to pa y . He sai d

that from time to time Gallagher had made him cash pa yments t o

the tune o f appr ox imately $6 ,400 and that Gallagher still o wed

him in excess of $7,000. He said tha t no records of this

transaction or payments made had been kept a part from "ro ugh

pencilled notes" that he kept in his office.

2 (a) .3. I do not accept the evidence of Grey about this s o-call ed

"arrangement". As I have alread y indicated I found Gre y a

thoroughly unsatisfactory witness but, quite apart from that, his

evidence about the "arrangement" suffered from internal

inconsistencies as well as inconsistencies with other evidence

which I do accept. I shall point out those inconsistencies in

the following sub-paragraphs:-( a) It seems t o me to be inherently improbable that a

man who had organized "free benefits" for Gallagher

over a lengthy period of time should suddenly c ome

to a "point of repentance" in November 1979. It

seems to me to be far more l i kely that Grey gave

this evidence in support of a "cover up arrangement" which he had made with Gallagher at or shortly prior

to the time when this Inquiry was announced and to

which I shall refer in Chapter 2(d) hereunder.

(b) Grey was never able and in fact did not produce the

"pencilled notes" which he maintained initially that

99.

he kept as a running record of his transactions with

Gallagher. At a later date in the Inquiry, namely

the 15th December 1981, Grey did produce what he

claimed to be a receipt dated the 24th December 1979

for a sum of $2,300. He claimed that this was a

receipt which he had given to Mr.Gallagher for the

first sum of money which he claimed that Mr. Gallagher had paid him pursuant to the

"arrangement". He said that he had obtained a copy

of that receipt from Mr. Gallagher at Mr.Gallagher's

office. The receipt (which is Exhibit 78) reads: "Received from N. Gallagher the sum of $2,300

cash for the purchase of a coolroom and

associated equipment, the above equipment to be

purchased through the trade at best possible

discount."

The difficulty about this document, as I see it, is

that it contemplates that the sum of $2,300 is to be

used for the purchase of a coolroom to the order of

Mr. Gallagher at some stage in the future. The

evidence before me indicated however that the

coolroom had in fact been ordered and installed in

Mr.Gallagher's premises well before the

24th December, 1979 at a cost price of $4,200.

In my view this document probably was brought into

existence at some stage in 1981 as part of an

arrangement hatched between Grey and Gallagher for

the purposes of making it appear that Gallagher had

100.

paid for items of work which had previously been

done on his beachhouse at McLoughlin's Beach.

I shall be referring to that arrangement in greater

detail in Chapter 2(d) of this Report. There is another difficulty in the way of accepting

Grey's suggestion that Gallagher had paid a sum in

the order of $2,300 towards the end of 1979. There

is no suggestion in the Bank records tendered to

this Commission that Gallagher withdrew from his Bank accounts any sum approximating that amount at

the time suggested (see Exhibits 79H, 790 and 79P).

(c) The "arrangement" as testified to by Grey suffers

from other defects. Grey claims that part of the

$14,000 worth of work which he "arranged" to

organize for Gallagher in return for payment was

the supply of curtains to the McLoughlin's beach-house for $2,000. If his evidence of this

arrangement was credible then one would expect to

find that the curtains had in fact been installed

for the sum of $2,000 subsequent to November 1979.

In fact the evidence satisfies me that a firm called

Sucol Distributors Pty.Ltd. installed the curtains

at Gallagher's house at McLoughlin's Beach for a total of $5,634. Not only was this sum the amount

charged for the curtains, but those curtains had

been installed by the end of April 1979 and had been

paid for by Hersfield cheque by the end of

101.

June 1979. Similar inconsistencies arise in respect

of the provision of doors and windows by Nepean

Aluminium Shopfitters who, according to Grey,

supplied their products at a cost of $2,500 to the

Gallagher beachhouse. The evidence satisfies me

that Nepean Shopfitters purchased those windows from

Boral Windows Pty. Ltd. for a sum of $4,720.

Although there is some doubt, on the material, as to

the amount charged by Nepean Shopfi tters to the

Hersfield organization, it seems to me to be

difficult to believe that they charged a price consistent with the amount of $2,500 which Grey

claims was the subject of his "arrangement" with

Gallagher.

(d) Nor do I believe that Gallagher agreed to pay

Hersfield any amount for work done by B.C.Seymour

Pty.Ltd. at his beachhouse at McLoughlin's Beach.

The evidence shows that B.C.Seymour had been

engaged in performing electrical work at the

Gallagher beachhouses from as early as 1977, for

which no charge had been made to Gallagher.

I am quite satisfied that Grey never intended to

raise any charge against Gallagher for work done at

his beachhouses by B.C. Seymour. On the contrary,

I am satisfied that Grey sought to make a collusive

arrangement with the proprietors of B.C. Seymour

shortly before this Inquiry "broke" for the purposes

1 02 .

o f co nc ealing t he fa c t tha t no c ha r g e had been made

ag a in s t Gallagher f o r wo rk d o ne by Se ym our s a t

M c Lo ughlin's Beach . I s hall dea l with thi s a spect

o f t he ev id e nce i n mo r e d etail i n Chapt e r 2(d) o f

thi s Re po rt.

( e ) There are o t her parts o f the ev i dence befo re me

wh i c h satisf y me that Gre y was privy t o t he

c o nfe rral of "free ben e fits" to Gallagher subse que n t

t o Nov ember 197 9 which he maintains was th e

appr ox imate date o f the arrangement after which

Gallagher was t o pay for all benefits organized b y

him. I have alread y referred in Chapter 1 o f t h is

Section of the Report t o the part wh ic h was pla yed by

Grey in raising a sum of $11,000 to be contributed

t o wards a cost of $24,000 expended o n works at

M c Lo ughlin's Beach which were carried out in the

early part of 1980. Furthermore, in July 1980, Grey

was instrumental in organizing the suppl y of plaster

sheeting to be delivered to the McLoughlin's Beach

beachhouses of the Gallaghers through the agency of

Victorian Plaster Industries Pty.Ltd .• The c o st of

this plaster sheeting was approximately $3,300 and there is no suggestion in the evidence other than

that this was to constitute a benefit free of charge

to Gallagher. The transaction, therefore, lies

uneasily alongside Grey's evidence that all work and

material organized for Gallagher, and at his

request, subsequent to November 1979, was to be paid

103.

for by Gallagher. It was obvious that when the

supply of the plaster was proved to the point of

demonstration, Grey had extreme difficulty in seeking

to reconcile that transaction with his earlier

evidence that Gallagher had agreed to pay for all

work done and materials provided at his request,

and for his benefit, subsequent to November 1979.

He sought to maintain that the plaster had in fact

been delivered during the early part, or the middle

part, of 1979, a fact which was clearly disproved by the documentary evidence. The difficulty with which

he was confronted was reflected in the passage of

his evidence which appears at Page 1712:

Q. "Am I not right in believing that what you have

told me before is this: that at the end of 1979

or towards the end of 1979 you and Mr.Gallagher

made an arrangement and, put shortly, that

arrangement was that for any benefits you

organized for him thereafter he would pay'?"

A. "That is correct."

Q. "You then indicated to me the nature of the

benefits you said you had organized for him

thereafter?"

A. "Yes."

Q. "And in respect of those benefits you said he

had made an arrangement to pay you and, in fact,

had made some payments to you by cash remittances

over a period of time?"

104.

A. "That is correct."

Q. "The fact is this, is it not, that if indeed the

plaster was delivered free of charge to

Mr. Gallagher late in 1980 then there was never

any doubt that that was not going to be paid for,

is that the situation?"

A. "Never any intention it would be paid for."

Q. "If indeed it was delivered after the end of 1979,

that would be inconsistent with this arrangement

that you said you had made?"

A. "I understand what you say."

Q. "What Mr. O'Callaghan is saying to you is this:

is this why you're saying it was delivered before the end of 1979?"

A. "I understand exactly what Mr.O'Callaghan is

saying and exactly what you are saying, I'm not

trying to hide anything."

Q. "How do you explain it?"

A. "It is difficult to explain but my firm belief

is that it was in 1979."

Q. "If indeed it was delivered in August 1980, how

do you explain the transactibn consistently with

the arrangement that you have indicated to me

that you made with Mr.Gallagher?"

A. "It is difficult to do so."

2 (a) • 4.

105.

In my view this passage of evidence is just one of

several occasions where Mr. Grey is seeking to

explain the inexplicable.

For the reasons which I have given in the preceding

paragraph, I have no hesitation in rejecting the evidence of

Mr. Grey that he came to an arrangement with Mr.Gallagher in late

1979, pursuant to which Gallagher agreed to pay for work done

thereafter at his request as part of a commercial transaction. I have little doubt that Grey was seeking to shield Gallagher

and, at the same time, to minimise the part which he, and the

Hersfield organization, had played in making benefits available

to Union officials. Even if one was to accept Grey's evidence

about this "1979 arrangement" at its face value, it is still

manifest that he was conferring a benefit upon Gallagher and was

not engaging in commercial dealing with him. According to Grey,

$14,000 worth of work was organized for Gallagher in 1979 and

early 1980 in respect of which Gallagher was entitled to pay "as and when he could". So far some $6,400 has been paid and the

balance has been the subject of neither a demand nor a promise to

pay. No interest is chargeable or expected on the unpaid

amounts. As Mr. Grey was prepared to concede Gallagher had

received "pretty good terms".

106.

Chapter 2 (b) The "G rolla/Ga llagher Arrangement"

2 (b) .1. For some years there has been seen to exist in the

building industry a fairly close relationship between the Grollo

Group of Companies and Norman Gallagher. The manifestation of

this relationship has no doubt been fostered by the fact that Norman Gallagher has been seen to be drivini a Grollo truck, and

by the fact that subcontractors who have been asked to deliver

goods to the use of Mr. Gallagher have delivered those goods t o

the Grollo yards in Chifley Drive, Preston. For whatever reason,

rumours have spread in this community that the Grollo family and

the Gallagher family are tied by marriage. The ev id enc e

satisfies me, however, that there is no substance in these rumours.

2(b).2. The Grollo brothers, Bruno and Rino, both gave evidence

before this Inquiry. They testified that between the years of

1977 and 1981 they supplied, at the request of Gallagher, work

and materials at the Gallagher beachhouses at McLoughlin's Beach,

to a total value of some $32,000 to $33,000. The work and

materials which they supplied are to be found in Part A of the

Schedule contained in Chapter 2 of this Section of the Report.

In addition, they said they had transferred to Gallagher a

"Grollo truck" in September 1975 and had thereafter paid the

registration fees in respect of that truck. That benefit is

referred to in Part D of the aforesaid Schedule and has already

been referred to in more detail in Chapter 2 of this Section.

With regard to the assistance which they gave Gallagher in

107.

respect of the beach-houses at McLoughlin's Beach the Grollos

said that they had arranged for the supply of concrete to those

beachhouses between January 1977 and April 1981; they had

arranged for the supply of a timber frame for Wayne Gallagher's

beachhouse in July 1979 from Canterbury Timbers Pty.Ltd.; for

the erection of that frame by Termac Constructions Pty.Ltd. in

September 1979; and for the supply of some roofing for the Wayne

Gallagher beachhouse from the Aldeck Roofing Co. in October 1979.

In addition to these benefits, the Grollos said that they had

provided labour to assist in the pouring and laying of concrete

from time to time from their own work force between January 1977

and April 1981. In connection with this they had made available

various items of equipment, including a backhoe.

The Grollos said that they arranged for the supply of

concrete "at trade prices" to the beachhouses through a related

company, Pioneer Concrete Pty.Ltd., from its plant at Sale. The

Grollos said that the total cost to their companies of this

concrete amounted to some $15,850 and that this value fell far

short of what Gallagher would have had to have paid for it if he

had purchased it as a private customer. The Grollos conceded

that the amount of concrete ordered and used by Gallagher in

these beachhouses appeared to them to be a lavish amount.

Nonetheless it appears that a large amount of concrete was in

fact poured at these beachhouses including paths, driveways, slabs, floors and concrete tanks. The evidence indicated that on many occasions when concrete pours were made there were

substantial amounts of concrete left over which, at Gallagher's

108.

direction, were taken to various other sites around McLoughlin' s

Beach Township. The Grollo brothers said that in respect of

the timber purchased for the frame of Wayne Gallagher's house,

they had paid Canterbury Timbers Pty.Ltd. $7,000 and a further

$5,000 had been paid to Termac Constructions Pty.Ltd. for the

erection of that timber frame.

2(b) .3. The Grollos said that prior to the provision of the wo rk

and materials requested by Gallagher, they had come to an

undocumented arrangement with him pursuant to which he was to

repay the Grollos in respect of these items for which they bore

the expense. This arrangement bore many of the aspects of the

one testified to by George Grey and to which I have referred in

the preceding chapter of this Report. The agreement as alleged

was undocumented and had many of the same "laissez-faire"

attributes about it. Gallagher was to pay them as and when he

was able to and without having to pay interest on the outstanding

balance at any time. For those reasons the arrangement could

hardly be described as a "commercial dealing" between the parties

and, as the Grollos readily conceded, constituted a significant

benefit to Gallagher. As Bruno Grollo put it (Page 1178A)-"It would, in our view, have been foolish for us not to have

agreed to provide favours for Norman Gallagher ••• where the

favour does not cost us much in relation to the potential the

detail of that favour has for destruction of the goodwill we have sought to foster".

109.

2(b).4. Even if one accepts the Grollo account of this

arrangement, the significance of the benefit which they were

bestowing upon Gallagher becomes more apparent when one looks at

the arrangements which the parties have made for payment. This

arrangement was the subject of the following evidence by

Bruno Grollo (Page 1174 and following):-

"In late March or early April 1981 Norman Gallagher again

telephoned me and said he wanted to come to see us. He

arrived a day or two later when both my brother and I were

present. He said he wanted to square up the account.

Rino asked him to wait for a moment whilst he got out the

Norman Gallagher file. Rino examined the folder which

contained most (but not all) of the accounts we had

received from Pioneer, the invoices from Termac, the

documents relating to the truck sold to Gallagher, the

invoice relating to the steel roofing and the crane hire

documents. Rino said (mistakenly as it now appears) that

the Pioneer accounts amounted to $12,000, the Termac

account was $5,000, the amount owing on the truck was

$1,000, being the price of $700 plus an extra $300 to

cover transfer and registration costs, and the amount of

$1,000 would cover the roof decking, crane hire and other

materials supplied. On the basis that labour for

approximately 25 to 30 man days had been supplied, and a

truck with driver had been supplied for 10 to 15 days,

Rino indicated the charge for these items of $3,000 to

$4,000. This estimate of the cost of the labour would

110.

be less than the amount which we would charge at our then

current charge out rates. We did not wish to find

ourselves in dispute with Norman Gallagher about the

amount payable by him, or give the appearance of attempting

to make a profit out of our dealings with him, or to be

exploiting him, or attempting to do so.

Although there was, at the time, no invoice in the

folder in respect of the timber, Rino recalled the timber

had been supplied. Our recollection was that the timber

had been worth about $2,000 and this sum was included in

Rino's reckoning of the amount owed by Norman Gallagher.

At the time of our meeting with Norman Gallagher

my brother and I thus believed that the amount owing to us

by him was in the order of $24,000 to $25,000. We were

thus happy to agree with Norman Gallagher that he should

pay us $20,000 in settlement of his account with us.

Norman Gallagher expressed his surprise that his account

had grown to as high a figure as $24,000 to $25,000.

Neither my brother nor I wished to press too

strongly for payment of an amount higher than $20,000

which was offered to us believing, as we then did, that

the actual amount owing was not much greater and

believing, as we still do, that neither his assets nor

his income was high. As indicated above, we did not want

to be in a position where it appeared to Norman Gallagher

that we were making a profi't out of our relationship with

him or exploiting him. Nor did we want to offend him.

111.

Equally, it was my belief that if we accepted the amount

suggested by Norman Gallagher, there was a greater

probability of being paid in fact. In all the

circumstances my brother and I were content to accept

the sum of $20,000 offered by Norman Gallagher in

settlement of his account."

If this account is true, it was a most extraordinary

arrangement and one which was very much to the benefit of

Gallagher. The facts were that over the years between the

beginning of 1977 and the time when this arrangement was made,

the Grollos had supplied, to the order and benefit of Gallagher,

goods and services to a value of about $35,000, a price which did

not reflect the true value of those goods and services on the

market-place. Yet four and a half years after they had

commenced to supply those goods and services they made an

arrangement with Gallagher to accept $20,000 in full settlement

of his account with them. The looseness of the arrangement, and

the magnitude of their undoubted desire not to offend their

"customer", is reflected by the fact that when they finally sat

down to estimate their customer's account, they underestimated it

by some $12,000 to $15,000. So that what, in essence, they

finally agreed to do was to accept a payment of $20,000 in

satisfaction of goods and services supplied by them to the value of $35,000 over a period of some four and a half years. It would

indeed be hard to deny the proposition that, even on their own

account, they had bestowed a considerable benefit upon

Norman Gallagher.

112.

2(b) .5. According to the Grollos, Gallagher has paid them the

$20,000 which was the subject of their arrangement in cash. They

said it was paid in the following sums:-

(a) By a payment of $4,000 in cash in June 1980;

(b) By a payment of $12,000 in cash on 15th April 1981;

(c) By a payment of $4,000 in cash on or about the

27th July 1981.

In respect of each of these payments the Grollos said that

they issued a receipt to Norman Gallagher and they produced three

documents which they said were copies of those receipts (those

documents form part of Exhibit 26.4). The three documents were

dated the 6th June 1980, the 15th April 1981, and the

27th July 1981 respectively. They each took the form of a letter

addressed to "Mr. N. Gallagher, C/- Lygon Street, Carlton,

Victoria", and were each signed by Rino J. Grollo as "Director of

L.Grollo & Co. Pty.Ltd.". The document of 6th June 1980 read:-"Dear Sir,

re: Me Loughlin's Beach

As agreed we acknowledge receipt of $4, ·000 from you

on account for concrete and sundry materials supplied to

the above project."

The document dated 15th April 1981 read:­

"Dear Sir,

re: McLoughlin's Beach

We acknowledge receipt of $12,000 on account for

concrete and sundry materials supplied for the above

project.

113.

We confirm that a balance of $4,000 as settlement is

due and payable by you in July 1981."

The document of 27th July 1981 reads:­

"Dear Sir,

re: McLoughlin's Beach

Received with thanks $4,000 being balance of

monies due for work done on the above project."

It will be noted that the first of these payments "on

account", as testified to by the Grollos, was made in June 1980,

some nine months before their alleged arrangement with

Mr. Gallagher was entered into. This payment, therefore, takes

on an aspect of isolation and Bruno Grollo gave evidence about it

in the following form (at Pages 1173-4):-" In about late May or early June 1980 Norman Gallagher

telephoned either my brother or myself and said that he

would like to see us. He did come to our Preston office

shortly thereafter (it may have been the same day) and I

believe that he saw both my brother and myself, although

I'm not certain that he did so. Norman Gallagher said

that as he had promised he wanted to square up his

account. He offered to pay $4,000 immediately on account

and repeated that he would be looking for a loan upon the

security of his house when it was finished. He said he

would also be looking for a loan against his long service

leave entitlement. Thus, he. said, he would be able to

make a further payment in the future. Some few days after

this meeting, on the 6th June 1980, Norman Gallagher again

114.

called at our office and handed over the sum of $4,000

in cash. I believe that both I and my brother saw

Norman Gallagher on this occasion. I recall having been

surprised that the payment was made in cash and commented

on it. Norman Gallagher told me that he did not have a

cheque account. At the time we received payment of the

$4,000 I expected that the balance would be paid in the

short term."

Neither of the Grollo brothers could explain why it was

that there had been no discussion on that occasion with Gallagher

as to the amount which was owing to them, or as to the terms upo n

which Gallagher was to settle his account with them. It

subsequently transpired in the evidence that no contemporaneous

receipt had been given on the date when this $4,000 was alleged to have been paid, and the Grollos conceded that the document

dated the 6th June 1980 had in fact been drawn up in April 1981

and "backdated" at the time when they had finally come to terms

with Gallagher about the amount which he owed. When asked why

they did not give Gallagher a receipt for the $4,000 on the

6th June 1980, Bruno Grollo responded (Page 1183):-"No I cannot explain it."

Grollo sought to confirm the fact that Gallagher had paid $4,000

on the 6th June 1980 by reference to the entries on a bank pay-in

slip of the same date, which identified the fact that on that day

$12,000 in cash had been paid into the Grollo bank account.

There was a notation in red ink on the back of that slip that

$4,000 _of that amount was attributable to cash received from

115.

"N. Gallagher". However, Rino Grollo conceded that such

notation had been placed onto that slip at his direction during

the year of 1981. No contemporaneous note appeared on that pay­

in slip to attach Gallagher to any part of the $12,000 in cash

which was on that day paid into the Grollo bank account.

2(b) .6. Whilst I am satisfied that some cash changed hands

between Gallagher and the Grollos during the early part of 1981,

I nonetheless entertain a substantial doubt about the substance

of their account that at all material times Norman Gallagher had

agreed to, and was expected to, pay for the work and labour

provided for his benefit by the Grollo Group of companies.

Having regard to all the evidence before me in this Inquiry, it

seems to me to be probable that in or about March or April 1981

Gallagher made an arrangement with the Grollos to pay them some

money on account of work done for him and on his behalf but that

this arrangement was triggered by the realisation that the police were making enquiries into the manner in which the McLoughlin's

Beach house had come to be built. In my view, this more probably

represents the truth of the matter for the following reasons:-(a) Apart from the bank pay-in slip to which I have

already referred, there is no material to support

the proposition that Gallagher had paid to the

Grollos $4,000 in June 1980. To say the least that

pay-in slip is quite equivocal. If in fact

Gallagher had come to the Grollos in June 1980 to

"square his account" as the Grollos maintained, one

finds it hard to understand why no receipt was given

116.

to him contemporaneously with the payment and why

the parties had not, at that stage, sat down to wo rk

out the terms of their settlement as they did in

March 1981.

(b) The conduct of Gallagher up until March 1981 is far

more consistent with a man who did not intend to pa y

the Grollos for anything. In the first place, he

had been receiving benefits at the expense of the

Grollos since the end of 1976, and for several years

thereafter had made no payments in respect of them.

In the second place, the manner in which he went

about receiving those benefits was barely consistent

with the conduct of a man who is fully intending to

pay for them. Several of the employees of Pioneer

Concrete, who were responsible for delivering the

successive loads of premixed concrete to the

Gallagher premises between 1976 and 1981, testified

to the somewhat cavalier and incautious attitude

adopted by Gallagher with regard to the quantity of

concrete supplied to his premises, and the manner in

which it was utilised. Not only was the concrete

poured in lavish quantities at the Gallagher house,

but almost on every occasion when a delivery was

ordered there was an over-abundance of concrete

carried to the site, sometimes as much as a full

truck load. The excess was carried by the drivers

to other sites around McLoughlin's Beach, at the

direction of Gallagher, including the sites of his

117.

son and other officials of the Builders Labourers

Fed e r a t ion • Almost without exception, the truck

drivers testified as to the rather cavalier fashion

in which Gallagher dealt with the expense of

"waiting time" which is an expense normally incurred

and paid for by the person receiving the concrete

between the time when the concrete is delivered to

the site and the time when it is commenced to be

poured. As one driver, Mr. McPharlane, put it

(at Page 1250) he was always "looked after" when he

arrived at the site. He said that he was usually

handed a "stubby" as soon as he pulled up and was

"allowed to drink as long as I liked". He was asked

"Was there any mention in the course of the waiting,

of 'waiting time'." He responded "Yes, the first

time I was there, after 25 minutes, I said to Norm

'There will be waiting time put on this', and he

said 'There is no problem, son. You will be paid.'

He always signed the waiting time with no queries

and occasionally even said 'We ought to put another

hour on it' or something. This is a bit hard to do

because when you get back to the plant and our boss

takes a record of what time you arrive back you can't

do this so this way you cannot cheat the customers

at all."

This brand of generosity is barely consistent with

the picture which is painted of Gallagher by the

whole of the evidence. It is more consistent with

118.

his knowledge of the fact that someone else is

going to pay for the product.

(c) The period of March/April 1981 was a period when,

to my satisfaction, other steps were being taken

to conceal from public view the fact that Gallagher

had had his beachhouse erected at the expense of

others. It was at this time that George Grey was

approaching Messrs. Denham and Seymour of

B.C. Seymour Pty. Ltd., electrical contractors, to

enlist their aid for the purposes of fabricating documents designed to conceal the fact that

B.C. Seymour Pty. Ltd. had engaged in the

performance of electrical work at the beachhouses

at McLoughlin's Beach at no cost to Gallagher.

I will be dealing in more detail with this

transaction in Chapter 2(d) of this Report. It is

obvious, from the evidence, that by March 1981 it

was common knowledge within the building industry

that pol ice investigations were being conducted into the "Gallagher beachhouses". Grey said that

Gallagher himself was well aware of these

investigations (Pages 641-2). It seems to me to be

more than likely that an attempt was made at this

time to "cover the tracks of the Grollo benefits"

in much the same way, as the evidence satisfies me,

an attempt was made to "cover the tracks of the

Herscu benefits". This, in my view, was probably

the triggering factor which gave rise to the

119.

arrangement made during the course of that month

between the Grollos and Gallagher. There seems to

be little doubt that following the "arrangement"

made between the Grollos and Gallagher in April 1981

Gallagher did, in fact, transfer to the Grollos the

sum of $12,000 in cash and that this money did come

from "money invested in Government Bonds" as

Bruno Grollo testified (1175). The evidence

satisfies me that in December 1980 Gallagher had lodged on Term Deposit with the Commonwealth Bank

a sum of approximately $12,000, the source of which

monies were a loan which Gallagher had obtained from

the Federation in November 1977 (see Page 1672).

On the 13th April 1981 $12,000 was withdrawn in

cash, being the proceeds of that Term Deposit (see

Page 1673), and, according to the Grollos, it was

two days later that Gallagher gave them the sum of

$12,000 in cash pursuant to their alleged

arrangement. This payment of $12,000, as testified

to by the Grollos, therefore receives some support

from independent evidence. The final payment of

$4,000 was, so the Grollos claimed, paid by or on

behalf of Gallagher in July 1981. The Grollos said

that this sum came into their possession on the 27th July 1981 when it was brought in cash into their

offices on Gallagher's behalf by Robert Dalton, a B.L.F. organizer. This payment of $4,000, like the

preceding payment of $12,000, received the support of

120.

some independent testimony. Apart from a Bank pay-in slip, forming part of the Bank's records of the

Grollo Group of Companies, and showing that on that

date a sum of $4,000 in cash was paid into the bank

account of the Grollos, there is also some

independent evidence from Gallagher's bank records

produced by the Victoria Street Branch of the

Commonwealth Savings Bank to show that on the

24th July 1981 Gallagher had withdrawn a sum of

$3,500 in cash from his account No.5001066 at that

Bank (See Exhibit 79.0).

I am accordingly satisfied, on the evidence, that

some cash changed hands between Gallagher and the

Grollos during the early 1981, but it seems to me to

be highly likely that that exchange of money was not

precipitated by any desire on the part of Gallagher

to settle any outstanding account which he had with

the Grollos but rather was an exchange brought about

by a realisation that it might be necessary to have

some confirmation of the proposition that Gallagher

had paid for the work and materials provided by the

Grollos for the beachhouses at McLoughlin's Beach.

(d) There is nothing in the books of account of the

Grollo companies to suggest that the work done by

those companies for Gallagher was being done on a

121.

commercial basis, or indeed to suggest that

Gallagher was ever a debtor of the companies.

Mr. B. Dowding, a partner of Touche Ross & Co.,

who were the accountants and auditors of the Grollo

Group of companies, gave evidence on these matters

(at Page 1370) in the following manner:-

"Q. Could I pursue some questions I previously

asked you with respect to the list of debtors

being exhausted for the year ended the

30th June 1980 and where the name of Mr.Gallagher

does not appear? Let us assume for present

purposes that the debt outstanding by

Mr. Gallagher, if one viewed it on a commercial

basis, at that time was say $20,000? That ought

to be information made available to you to

include in the position of the company so as to

strike the correct profit? A. That is correct.

Q. So to the extent that that is not done, and in

fact the work was on a commercial basis, that

would mean there was an error?

A. It would mean that there was an omission."

This "omission" was explained by Mr. Rino Grollo in

the following way (Pages 13 71-2):-"Q. Well, Mr. Grollo, I put it to you that had it

been the company's intention to include Norman

Gallagher as a debtor of the company, then you

122.

would have informed Mr. Dowding of that fact in,

for instance, the striking of accounts for the

year ended the 30th June 1980.

A. This was not an ordinary debt and therefore it

was not

Q. Are you saying it was not an ordinary debt in the

sense of the other debts which you would have

referred to Mr. Dowding?

A. Yes.

Q. What was different about it?

A. I think we explained that in our statement, that

this was not ordinary debt and in fact it was

done over a period of time, and we were promised

that we would get paid, but payment was very slow

in coming and we were not sure how much we were

going to get, how long it would take to get it.

That is why it was not an ordinary account.

Q. Have you provided Mr. Dowding with the lists of

outstanding debtors in previous years to 1980?

A. I have gone through prepared lists of debtors,

yes.

Q. Why did you not include Gallagher in one of those

earlier years when in fact his promise that he

was going to pay was presumably one upon which

you relied?

A. It was not an ordinary debt. I always kept it in

a separate file."

123.

2(b).7. The sum total of the evidence in relation to these

matters leads me to the view that whatever arrangement was made

between the Grollos and Gallagher in April 1981 was very much a

"sham" arrangement. There can be no doubt that Gallagher did

not, and was never asked to, pay the full value of the work and

materials supplied to him or his benefit by the Grollo Group of

companies. I believe that whatever amount he did pay was paid as

a matter of convenience, namely the convenience of having an

explanation as to the manner in which the beachhouses at

McLoughlin's Beach came to be built. I find it improbable that

any intention to pay existed before March or April 1981 and,

accordingly, I find it improbable that Gallagher paid the sum of

$4,000 to the Grollos in June 1980. That improbability is

supported by the fact that no receipt for such sum came into

existence until April 1981, and by the lack of any independent

supporting material to confirm the payment of that sum of money

at the date when it was alleged to be paid.

124.

Chapter 2 (c) The "Hansen & Yuncken Benefits"

2 (c) .1. Part A of the Schedule contained in Chapter 2 of this

Report indicates that in or about April 1975 a steel frame was

constructed for incorporation into the beachhouse of Gallagher at

McLoughlin's Beach. That steel frame was constructed by Neerod

Engineering Pty. Ltd., a wholly owned subsidiary of Hansen &

Yuncken (Vic.) Pty. Ltd. in accordance with structural steel

drawings produced by W.L. Meinhardt & Partners, upon the

instructions of Civil & Civic. The cost of producing that steel frame amounted to $7,500. The circumstances in which that steel

frame came to be manufactured and accounted for in the books of

Hansen & Yuncken was the subject of some intrigue and deserves,

in my opinion, to be specifically dealt with in this Report.

Whatever one makes of the evidence relating to the production of

this steel frame, the evidence satisfies me that in the long run

it was not paid for out of the pocket of Gallagher.

2(c).2. Mr. Chivers, the Manager of Neerod Engineering, said that in March 1975 his company had received a set of

architectural drawings for the steel frame of a house in the name of a person stipulated to be "A. J. Day". He said that these

plans were given to him by a Mr. Ridgeway, the then Secretary of

Hansen & Yuncken. Mr. Chivers said that he had told Mr .Ridgeway

that the cost of fabricating the steel frame, in accordance with those plans, would be $7,500, and that thereafter he had caused

the fabrication of the steel to be carried out in accordance with

those plans. Although he no longer had, in the company's

125.

possession, the copy of the plans that had been handed to him, he

was nonetheless able to identify those plans as the ones which

had already been tendered to the Commission from the offices of

W.L. Meinhardt & Partners (Exhibit 18.1). Mr. Chivers said,

however, that when these plans had been passed to him by

Mr.Ridgeway, the column on the right-hand side, which contained

the identifying details of client and the project manager (namely

Mr. Gallagher and Civil & Civic), had been removed. Mr. Chivers

said that when he received the plans the only identification of

the client for whom the work was being done was the description

of "A. J. Day" •

Mr. Ridgeway, when called to give evidence before me, said

that he was given the "untitled" set of plans by

Mr. Clarence Hansen, the then Chairman of Directors of Hansen &

Yuncken. He was instructed to hand those plans on to Neerod

Engineering. He said that his only knowledge as to the identity

of the client for whom the work was being done, came from the

description on the copy plans handed to him by

Mr. Clarence Hansen. That description was "A.J. Day" (see

Pages 160 and following).

2(c) .3. There seems little doubt that the subterfuge of "A.J.Day

was the creation of the late Mr. Clarence Hansen. It would

appear that he invented the alias for the purposes of seeking to

conceal in the records of his company that assistance was being

given to Gallagher in the construction of his beachhouse.

126.

Any doubt that might have existed that such assistance was in

fact given and intended to be given by the late Mr. Hansen wa s

dispelled when his son, Mr. Max Hansen, gave evidence (Page 1 81)

that on more than one occasion before he died his father had told

him that he had assisted Gallagher in providing the steel fr ame

for his house.

2(c) .4. The subterfuge created by Mr . Clarrie Hansen was c arried

on into the records of both Neerod Engineering and Hansen &

Yuncken. Those records show (see Exhibits 19.1 to 19.6) that on

the 7th March 1975 "A.J. Day" had paid to Neerod Engineering a

sum of $5,000 as an advance payment against the construction of

this steel frame. The records show that that $5,000 came in the

form of a bank cheque issued by the National Bank of Australia,

Stock Exchange Branch, and numbered 3-077/777. When the steel

frame was completed Neerod invoiced the cost of it (namely

$7,500) to "A.J. Day C/ - Hansen & Yuncken". The records

indicate that the $5,000 to which I have referred was then

appropriated to the part payment of that invoice and the

of $2, 500 remains unpaid.

2 (c) • 5. The story as it unfolds from the "camp" of Hansen &

Yuncken would make it appear that a steel frame, valued at

$7,500, was constructed by the subsidiary company of Hansen &

Yuncken for Norman Gallagher under the alias of "A.J. Day".

It would also make it appear that the sum of $5,000 by wa y of

bank cheque No.777, drawn on the National Bank of Australia,

Stock Exchange Branch, was used to partly pay for that steel

127.

frame. The other half of the story, which only adds to the

intrigue, attaches to the manner in which that bank cheque came

to be issued and passed on to Hansen & Yuncken. It appears that

during 1974 the New South Wales Branch of the Builders Labourers

Federation, led by one. Jack Munday, was the centre of industrial

strife, generated through what were commonly known as the "green bans". Many large builders throughout Australia were

apparently keen for Norman Gallagher and his National Federation

to "take over" the New South Wales Branch. Accordingly, they

chose to "fund" the B.L.F. for the purposes of taking the

necessary action. This action was to include the setting up of

an alternative branch in alternative offices in Sydney. In

November 1974 a number of builders in various parts of Australia

donated money towards the fight. It would seem that

Mr. Clarence Hansen was a keen supporter of the "Gallagher

faction". The money which was collected was forwarded to a firm

of accountants in Melbourne called Yarwood Vane & Co., who were

the accountants and auditors to Hansen & Yuncken (Vic.)

Pty. Ltd .• Mr. Jack Kennedy, a then member of the firm of

Yarwood Vane & Co, said that in November 1974 he had received for

the purposes stated a sum of $10,000 comprising four cheques for

$2,500 each from four building companies in South Australia, one

of which was Hansen & Yuncken (S.A.) Pty.Ltd •• He said that in

accordance with his instructions he simply channelled that money

through to his counterparts in Sydney, Messrs. Perry Johnson

Beardsmore & Wilton. Mr. Frank Crowle, the Chairman of Directors

of Hansen & Yuncken (S.A.) Pty.Ltd. gave confirming the

source of the $10,000 and also confirmed that the amount was

128.

collected for the purposes of assisting the "Gallagher faction"

to take over from the "Munday faction" in Sydney. He said that

he had brought the four cheques to Melbourne and had given them

to Mr. Clarence Hansen. He confirmed that the idea was that this

money was to be disbursed to Mr. Gallagher's faction for the

purposes of establishing a new branch office of the B.L.F. in

Sydney under the Secretaryship of a Mr. Robinson, who was then

the Secretary of the South Australian Branch of the Federation.

Mr. Wilton of the Sydney firm of Perry Johnson Beardsmore &

Wilton confirmed that his firm had been the recipient of

substantial amounts of money in late 1974 and 1975. These sums

of money had come from Yarwood Vane & Co. in Melbourne with

instructions to pass them on to Mr. Gallagher and Mrs. George. He gave evidence that he had carried out these instructions and

had passed on substantial amounts of cash, including the $10,000

to which I have already referred, to Gallagher and George.

2(c).6. Kennedy of Yarwood Vane & Co. said that on the

19th February 1975 he had received a further cheque of $5,000

which he recalled was to be used "for further assistance to

Mr.Gallagher in this fight against Mr. Munday" (see Page 1771),

He said that this cheque came to him in the form of a bank cheque

issued by the A.N.Z. Bank and that on the 20th February 1975 he

had used this bank cheque to purchase a further bank cheque for

$5,000 drawn on his own bank, namely the National Bank, in

favour of Mr. Gallagher. The records produced by the National

Bank of Australia, Stock Exchange Branch, (see Exhibit 100) ,

disclose that the cheque which was purchased by Yarwood Vane & Co

129.

on the 19th February 1975 in favour of Mr. Gallagher was cheque

No. 601. Mr. Kennedy said that shortly after he had purchased

bank cheque 601 he had given that bank cheque to Mr .Gallagher, or

someone on his behalf.

The records of the Stock Exchange Branch of the National

Bank (Exhibit 100) disclose that bank cheque 601 was in fact paid

on the 7th March 1975. On the self-same day a further bank

cheque, No.777, for the sum of $5,000 was issued by the National

Bank, Stock Exchange Branch, in favour of Hansen & Yuncken(Vic.)

Pty.Ltd.. It was this cheque which was used to partly defray

the account of "A.J. Day" in whose name the steel frame for

Gallagher's house had been constructed. The coincidence of

dates, amounts and circumstances makes irresistible to me the

inference that Gallagher had used bank cheque 601 drawn in his

favour to purchase bank cheque 777 made payable in favour of

Hansen & Yuncken.

2(c) .7. The upshot of the rather convoluted series of

transactions to which I have referred in this section of my

Report would appear to be as follows:-(a) In or about April 1975 Neerod Engineering, a wholly

owned subsidiary of Hansen & Yuncken, manufactured a

steel frame which was ultimately incorporated into the Gallagher beachhouse at McLoughlin's Beach.

(b) The plans and structural drawings for that frame were

drawn by W.L. Meinhardt & Partners on the instructions

of Civil & Civic. They were passed on to

130.

Mr. Clarence Hansen of Hansen & Yuncken for the

purposes of fabrication.

(c) Mr. Clarence Hansen adopted the alias of "A.J. Da y "

and caused his companies to fabricate this steel frame

for that "alias".

(d) On the 19th February 1975 Mr. Jack Kennedy of Yarwood

Vane & Co. received a sum of $5,000 which he was

instructed to pass onto Mr. Gallagher. With that

money he purchased a bank cheque, No.60l, from the

Stock Exchange Branch of the National Bank. This

bank cheque was made out in favour of N.L.Gallagher

and passed onto Gallagher or someone on his behalf.

(e) With bank cheque 601 it would appear that Gallagher,

or some person acting under his instructions,

purchased from the same branch of the National Bank,

bank cheque No. 777, made payable in favour of

Hansen & Yuncken.

(f) Bank cheque 777 was passed onto Hansen & Yuncken

upon the same date on which it was issued by the

National Bank, namely the 7th March 1975, and used

by Hansen & Yuncken to partly defray the cost of

constructing the steel frame for Gallagher.

2 (c) • 8. No doubt because of the passage of time and the

"attempted cunning" with which the various parties went about

this transaction, it is difficult to fit all the pieces together. If Mr. Kennedy is right when he says that the $5,000 which he

131.

received on the 19th February 1975 was received by him with an

instruction to make that amount of money over to Mr. Gallagher so

that it could be used for Union purposes, then the subsequent use o f that money by Mr. Gallagher for his own purposes would amount

to a misappropriation of that sum. The difficulty in drawing

that conclusion conclusively lies in the uncertainty which surrounds the source from which Mr. Kennedy derived that $5,000

and the instructions which came from that source. In the absence

o f further material, and notwithstanding the existence of grounds

f o r the gravest of suspicion, I would be reluctant to draw the

conclusion that Gallagher used the money for purposes other than

those for which it came into his possession.

132.

Chapter 2 (d) The "Attempted Grey/Gallagher Concealment"

2 (d) .1. The evidence satisfies me that in or about April and

May 1981 George Grey of the Hersfield Corporation, on behalf of

and with the knowledge of Norman Gallagher, took steps which were

designed to conceal from investigating pol ice officers the fact

that work and labour provided for Gallagher at McLoughlin's Beach had been provided free of charge to Gallagher. Specifically,

Grey sought to enlist the aid of Messrs. Denham and Seymour of

the electrical firm of contractors B.C. Seymour Pty. Ltd. to

fabricate a backdated invoice, purporting to indicate that work

of a stated quantity and amount had been done at McLoughlin's

Beach in September 1979 by a company called Lane & Roux (Vic.)

Pty. Ltd., which was the name of a company under which

B.C. Seymour had formerly traded. I am satisfied, on the

evidence, that such a fabricated invoice was brought into

existence by B.C. Seymour Pty. Ltd., upon the instructions of

Grey, and was carried by Denham to the office of Norman

Gallagher. At that office, Denham had receipted the invoice in

the presence of Gallagher as "paid in full" and had left the

original with Gallagher on or about the 8th day of May 1981.

The evidence satisfies me that Gallagher was a knowing and

willing party to this fabrication.

2(d).2. The evidence in which this "scheme" was revealed was

contained in the material put before me by Don Denham, the

Contracts Manager of B.C. Seymour Pty. Ltd. and Brian Seymour,

133.

the principal of that company. Their evidence in respect of

this arrangement I accept, both because of its inherent probability and because it is confirmed by the material which

I ha ve appended to this Report in Appendix 7. I received the

material contained in Appendix 7 in private for the reasons which

I give in that Appendix, and it seems to me to be desirable that

its confidentiality should be preserved unless and until it becomes necessary to treat it otherwise.

Grey also gave evidence to me about this arrangement. His

e v idence concerning it conflicted with that of Denham and

Seymour. I found his evidence in respect of this arrangement

thoroughly unsatisfactory and I totally reject it.

2(d).3. In the course of giving his evidence Denham produced a

document which was exhibited as Exhibit 9.12 (d), which document

was on the letterhead of the company "Lane & Roux (Vic.) Pty.

Ltd", that being the name of a company under which B.C. Seymour

had formerly carried on its business as electrical contractors.

The evidence indicated that that company had gone into

liquidation during the year of 1979. The document was in the

form of an invoice dated the 12th September 1979 and was

purported to be addressed to Mr. N. Gallagher, C/o the Australian

Building Construction Employees and Builders Labourers Federation

of Victoria Street, Carlton. The body of the document reads as

follows:-

134.

"Dear Sir,

re: Domestic I nsta11ation Yarram S .E .C .V. Area McLoughlin's Beach

Please find enclosed detailed acc o unt for work inv o l ved in the house and also the gar age.

Instal additional power outlets and alter lighting circuiting in the house $1793-00

Instal new power outlets, subcircuit wiring to electric stove, switchboard etc. as agreed $982-00

To ta 1 $ 2 7 7 5-0 0

Yours faithfully,

LANE & ROUX (VIC)PTY.LTD. D. Denham, Manager."

Mr. Denham said that he caused this document to be brought

into existence upon the instructions of George Grey (see Pages

520 and following of the transcript). He said that in late

April 1981 Grey had approached him expressing concern at t h e

fact that official enquiries were being made into the "Gallagher

beachouses" at Yarram and the manner in which the construction

had been financed. He said that a meeting had taken place

between himself, Mr. Seymour and Grey in the offices of

B.C. Seymour, during the course of which Grey had sought their

assistance in the development of a scheme to make it appear that

Gallagher had paid for work which had hitherto been done on the

beac hho uses. Consequent upon that request, the document to

which I have referred was brought into existence, was backdated

to the 12th September 1979, and was carried by Denham to the

offices of Gallagher where, in Gallagher's presence, Denham receipted it as "being paid in full".

135.

Mr. Seymour, when called to give evidence, referred to this

meeting in the following way (see Pages 947 and following of the

transcript):-Q. "What was said with respect to the fact that

investigations had been taking place in respect of

Mr. Gallagher?"

A. "There was a conversation regarding the fact that

there were investigations being made and most of the

information I previously had to this had been via

Don Denham who said that someone, I do not know

whether it was George Grey or Norm Gallagher,

required a letter or a receipt in fact for work done

at that job."

Q. "What was said in relation to the investigations, did

they talk about government organizations or what?"

A. "Only that they, being the police I would think -

probably the police was mentioned and I do not know

if it was Federal Pol ice, but that the pol ice had

been making enquiries. We had been asked if there

had been enquiries made of us and I answered 'Yes

there had been enquiries made of us'. The police had

been in looking for information and required some of

our paperwork and so on. We were asked to get this

receipt out for Norm Gallagher. I do not know if the

amount of money was discussed, but it would be within

the ballpark of $3,000. Don Denham was asked if he

would deliver that to Norm Gallagher and, as you are

shown this letter now, I must say that I have never

136.

seen it myself because Don Denham organized it,

delivered it and I have not even seen a copy of it."

Q. "Was there any discussion as to what letterhead the

letter should be written on?" A. "Going back, Don Denham came to me and said that this

was required and asked if we could give this receipt.

At that time I did not see how we could because since

we had been on the computerised accounting system

every transaction goes through our computer and

I could not see how we could put something in and

backdate it and spit it out in our debtor's ledger.

I did not know how this could be achieved. That was

an earlier meeting."

Q. "An earlier meeting with whom?"

A. "With Don Denham after he had spoken to George Grey.

Subsequent to that, Don Denham had further talks with

George Grey and told him that I did not see any way

that we could do that and I was not happy about

doing it. He said he wanted a meeting at my office

and came and suggested that maybe we could use the

old company."

Q. "When you say 'He suggested', who suggested that?"

A. "George Grey suggested we could use the old company,

being Lane & Roux."

Q. "Did you discuss with Grey at that time the fact that

you were on the computer system now?"

A. "Yes I certainly did, that we were in a situation

whereby we could not just take out an account and

137.

backdate it, not without repeating the whole of our

computer printout, which I was not prepared to do.

He asked us if we could have it on an old company

receipt, but we had no longer any old company receipt books or any other stationery other than a letterhead

and it was possibly Don Denham who suggested maybe

we could use an old letterhead and it was left to

Don to arrange it."

Q. "Was there any conversation with Mr. Grey as to what

the work was to be described as?"

A. "Not really. I cannot remember the conversation that

well but it would only be in generality and mainly

left up to Don, the wording, something like the usual

manner of coming up with some sort of a figure

related to work that was done down there."

Q. "Did Grey make it clear to you for what purpose this

letter was to be used?"

A. "Only in as much as there had been investigations made

and Gallagher required some form of receipt to show

that he had paid for part of this work."

2(d).4. Grey was confronted with this document before either

Denham or Seymour had given evidence. At that time (see Page

496 of the transcript) he said that he had never seen the

document, nor did he have any knowledge of how it came into

existence. He was later confronted with the evidence of Denham

and he conceded that there had been a conversation in the offices

of B.C. Seymour, during the course of which the cost of

138.

electrical services at the Gallagher . beachhouses had been discussed (see Pages 597-600). Grey conceded that he had

requested Denham and Seymour to bring into existence a statement

relating to the "early work" which had been done by the

electrical firm at the Gallagher beachhouses at Yarram, but he said that he had made that request for purposes materially

different from those attested to by Denham and Seymour. He said that at the time in question he was somewhat confused as to the

nature and extent of work which had been done by B.C. Seymour

Pty. Ltd., or its predecessor Lane & Roux, at the Gallagher

beachhouses at Yarram, and that he was concerned to have a clear

and concise statement of that work so that he could identify the

liability of the "Herscu companies" in respect of that work. Grey's explanation of the purpose for which he had asked Denham

and Seymour to bring the document into existence was encapsulated

in the following piece of his evidence (see Pages 644-5):-"Well if I can explain. I have had some anxieties in

relation to Seymour's in the last couple of years in

respect to payments. Just briefly as I said yesterday

there were some works carried on down there in the very

beginning, which I do not deny and I believe I settled up

at Chirnside Park or asked Mr. Denham to clean up anything he had with respect to Chirnside in the early days, and

I assume that when we finished Chirnside, it was then

finished up.

We then went on to where I provided a cool room and

other electrical works associated with that and house

139.

wiring and Wayne Gallagher's free wiring. That was for

the sum of about $5,000.

I believed then at the time I got through Footsc ray

Market I was cleaned up with Seymour's and again they have

come out and said when letting the Deer Park contract

'You still owe me further money'. It seemed to be

something which was growing, growing and growing, and my

intention was - and I have been extremely busy over the

last few months and I will be busier over the next month -

my intention was to get that statement and go back to the

very beginning and then work up the value of the work in

the old days and the work and value of the coolroom then

and come up with a figure so I could settle with Seymour's

for once and for good, because it appears it is still an

ongoing thing.

I think they were saying yesterday I still owe them

$4,000 and, for the life of me, I do not see how you could

spend that amount of money because, in principle,

I generally know what electrical work has gone on down

there.

That is the reason I wanted this statement and

Gallagher, going right back at the beginning, had

something, electrical works done on his house prior to

my being involved. When I was first involved in the

house, as I said previously, it was to sort of lock-up

stage. There was some electrical installation done at

that time. I was going to try and sort it out with

him. I was going to try to sort out what had been done,

140.

what had been done up to this stage ' when we first

commenced. I was going to sit down and try and work out

the values from thereon out."

This explanation given by Grey sounds like "drivel" and, in

my opinion, that is exactly what it is. It does not explain why

the document was addressed to Mr. Gallagher, why it was

backdated, and why it was on the letterhead of a company which

was no longer in existence. Nor does it explain why the document

was carried by Mr. Denham to Mr. Gallagher and receipted in

Mr. Gallagher's presence as "paid in full". I am left in no

doubt that in respect of this letter and its purposes, Grey was

prevaricating.

2 (d) .5. The material to which I have referred in this section of

the Report leads me to the conclusion that in April and May 1981

Grey and Gallagher were both concerned by the fact that official

investigations were being carried out into the manner in which

the "Gallagher beachhouses" had come to be constructed at Yarram.

Such was their concern that they were prepared to engage in a

course of conduct which was calculated to conceal from the

investigators the true facts. The fact that Grey was prepared

to participate in this "cover up" and then to prevaricate when

questioned about it during the course of this Inquiry, provides

strong grounds, in my view, for doubting his testimony in respect

of other matters raised during the course of this investigati on -particularly his allegation that he made "an arrangement" with Mr. Gallagher in late 1979 pursuant to which Gallagher had agreed

141.

to make payment for benefits provided to him after that date by

the "Herscu based companies". The fact that Gallagher was

prepared to participate in this "cover up" in the month of

April 1981 only serves to confirm the doubt which I have already

expressed as to the legitimacy of his suggested arrangement with

the Grollos alleged to have been made at or about the same time.

142.

Chapter 2 (e) The Disposal of the "Norman Gallagher

Beachhouse" to Undertowers Pty. Ltd.

2(e) .1. Amongst other things, my Terms of Reference require me

to inquire into the manner in which any "benefit" received by an

official of the Federation has been disposed of. I have,

accordingly, investigated the proprietorial history of the house

occupied by Gallagher at McLoughlin's Beach into which, as

I have found, have been incorporated many benefits secured by

Gallagher.

2(e) .2. As Part A of the Schedule contained in Chapter 2 of this

Section indicates, the Norman Gallagher Beachhouse was

progressively constructed between 1975 and 1980. The land on

which that house was constructed is located at the corner of

Charleton Street and McLoughlin's Road, McLoughlin's Beach in

the Shire of Yarram. More specifically, the house was

constructed on Lots 1, 3 and 4 on Plan of Subdivision 51853.

Those allotments of land were acquired by, or registered in the

name of, Norman Leslie Gallagher and Patricia Mary George. The

file from the Office of the Registrar of Titles shows that two

of those allotments (namely Lots 3 and 4) were registered in the

joint names of Gallagher and George (see Exhibits 23.3 and 23. 6) • The Instruments of Transfer pursuant to which those

allotments were conveyed to Gallagher and George show that the

consideration paid for each was $1,000 (Exhibits 23.4 and 23.5).

Lot 1 was initially purchased by, and registered in the name of,

Norman Leslie Gallagher alone, the purchase price again being

$1,000 (Exhibits 23.1 and 23. 2). However, on the

17th June 1977 Norman Leslie Gallagher transferred this allotment

into the joint names of himself and George (Exhibit 23.5).

143.

On the 15th February 1980 Gallagher and George, as joint

registered proprietors of Lots 1, 3 and 4, applied to the

Registrar to have these three allotments consolidated into one

title and the consolidated title which issued is Certificate of Title Volume 9367 Folio 574 (see Exhibit 23.8). On the 7th August 1979 Gallagher purchased Lot 5 on the

same Plan of Subdivision - namely Plan of Subdivision 51853,

which allotment was adjacent to Lot 4. For this allotment he

paid $2,000 (see Exhibits 23.10 and 23.11).

2 (e). 3. It therefore appears that at all material times until

September 1980 Gallagher and George were the joint proprietors of

the land (namely Lots 1, 3 and 4) upon which the house was

constructed and, accordingly, they were the joint beneficiaries

of the improvements to that land which comprised the labour and

materials incorporated into the house's construction.

2(e).4. On the 6th October 1980 the land contained in Certificate of Title Volume 9367 Folio 574 was transferred to a company

called Undertowers Pty. Ltd., which company had been incorporated

on the 11th day of June 1980 through the offices of

Messrs. Holding Redlich & Co., who were the solicitors both for

Norman Gallagher and Undertowers Pty. Ltd. (see Exhibits 23.9 and

23.10). The company Undertowers Pty. Ltd. was and is the

trustee of the "Gallagher Family Home Trust" and it holds the land and premises at McLoughlin's Beach on the terms of the Deed

144.

of Trust which it administers. When first subpoenaed to produce

the Trust Deed in respect of this Trust , Mr. Redlich of the

aforesaid solicitor's firm declined to do so contending that its

contents were the subject of legal professional privilege and

that his client, Mr. Gallagher, did not waive that privilege (see

Page 1488). On the 21st January 1982 I entertained argument from

Mr. A.R. Castan, Q.C., and Mr. R. Hi--nkley of Counsel (who

appeared on behalf of Messrs. Redlich and Betts, the latter being

another member of the firm of Holding Redlich & Co.) in support

of the claim for legal professional privilege. On the

26th January 1982 I rejected that claim and gave my reasons for

doing so. Subsequently on the 3rd February 1982 the Trust Deed

was produced (Exhibit 98). When produced, the Deed showed that

Mrs. George no longer had any interest in the property at

McLoughlin's Beach. The Trust constituted by the Deed is a

typical discretionary trust which requires the trust property to

be dealt with in favour of Gallagher and his family.

2(e).5. Miss Jeanne Gorman, Solicitor for Mrs. George, was called before me to give evidence. With her client's consent she

produced her files indicating the manner in which Mrs. George had

come to release her interest in the land and premises at

McLoughlin's Beach. In short, it appears that Mrs. George

agreed to release that interest in return for Gallagher releasing

her from a mortgage obligation which she had incurred to him in

December 1977. In that month Gallagher had loaned to her the

sum of $6,500 at 9%, repayment of which was secured by a mortgage

145.

over premises owned by Mrs. George and known as Flat 28,

177 Power Street, Hawthorn. At the time when Mrs. George came

to release her interest in the McLoughlin's Beach premises the

amount outstanding on that mortgage was a little over $3,000.

2 (e). 6. The transaction, pursuant to which the property at

McLoughlin's Beach was transferred to Undertowers Pty. Ltd., took

place on the 26th September 1980. This transaction has the

appearance of a "window dressing" operation designed to

accomplish the relinquishment by Mrs. George of her interest in

the property and the passage of the legal title in the property

from Gallagher George to a "bare trustee" operating in the

interests of Mr. Gallagher. A purchase price of $25,000 was elected, a figure which, upon the evidence which I have received,

bore no resemblance to the true value of the land and buildings

being sold. Indeed Mr. Redlich said (Page 1606) that the figure

was "a figure that the company was advised of by the company's

solicitors, which, of course, was our firm". The device of a "round robin of cheques" was used to give

the transaction the appearance of "an arm's length one". The

"round robin" was commenced by Gallagher writing out a cheque for

$25,000 in favour of Undertowers Pty. Ltd. to put that company in

funds to enable it to pay the purchase price of the property.

That payment is recorded in the company's Minutes as "an interest

free loan" (see Exhibit 80). The cheque for $25,000 was drawn

on Gallagher's account, No.l0933, at the Victoria Street Branch

of the Commonwealth Trading Bank, and was paid into an account

opened in the name of Undertowers Pty. Ltd. at the same branch

146.

of the same bank on the same day. On that day Undertowers Pt y.

Ltd. drew two cheques for $12,500 each in favour of Gallagher and

George respectively in payment of the "purchase price" for t he

land and premises. On the same day Mrs. George wrote out two

cheques in favour of Gallagher on her account at the same bank -

one for $9,325 and the other for $3,175 (i.e. a total of

$12,500). This was designed to be a repayment by her of two

amounts alleged to be owed by her to Gallagher; $3,175 as the

outstanding balance on the mortgage loan advanced to her by

Gallagher in December 1977, and the balance of $9,325 expressed

to be an amount owing by her to Gallagher for work and materials

provided by him on her account at McLoughlin's Beach.

2(e).7. The effect of these transactions (which are evidenced in

Exhibits 79, 79.1, 79.2, 79.3 and Pages 1462-4 of the transcript)

is that, notwithstanding that none of the three parties to them was "out of pocket" at the end of 26th September 1980, the propert

at McLoughlin's Beach was transferred from Gallagher and George to Undertowers Pty. Ltd., George released her interest in that

property in favour of the beneficiaries of the "Gallagher Family

Home Trust" and Gallagher released George from her obligation to

him under the mortgage loan. In the circumstances it is not

surprising that Mrs. George required Gallagher to give to her an

indemnity against "all costs, fees, penalties and liabilities of

whatsoever nature arising out of any assessment either to gift or

stamp duty in respect of the transfer (of the property)" (see

Exhibit 99).

147.

Chapter 2 (f) The Position Adopted by Norman Gallagher in respect of Benefits Received by him.

2 (f) .1. Although Norman Gallagher refused to answer questions put

to him during the course of the Inquiry he has made statements

outside the Inquiry concerning the receipt of benefits by him.

These statements have been made to the public, via the press,

and to the members of the Federation in its quarterly

"Bulletin". In these statements Gallagher has denied any

impropriety on his own behalf, in his capacity as an official

of the Federation, and has made assertions which are calculated

to induce a belief in those to whom they are directed that his

beachhouse at McLoughlin's Beach was constructed as a

consequence of the application of his own efforts and financial

resources. In the light of the material which has been put

before me during the course of the Inquiry, the statements are

demonstrably misleading and are a distortion of the truth.

2 (f). 2. In his "Report to the Members" of September 1981,

Gallagher made certain assertions concerning the development of

his beachhouse at McLoughlin's Beach (see Exhibit 90). These

assertions were made in response to opening remarks which

Mr. O'Callaghan Q.C., Senior Counsel Assisting the Inquiry, had

made on the lOth September 1981 during the course of which he

particularised some of the evidence which he proposed to lead

before the Inquiry. He did this, properly in my view, because

the Federation had publicly attacked the Inquiry as "spurious"

and because it had chosen not to be represented before the

Inquiry. Having particularised the nature of the evidence

which he proposed to· lead about benefits received by Gallagher,

148.

he made the comment that "This evidence will found the

submission ... that Norman Gallagher has improperly exploited his

position as a union official for his own benefit. We shall be

submitting that the benefits are no mere perks of office but that

the value of the unpaid works, which Norman Gallagher has

attracted .•. to better his house and that of his son's house

appear to us to be of the order of $100,000."

In his report to the members of September 1981, Gallagher

made the following assertions:-"For the benefit of our members I reprint a statement that

was read to the Builders Labourers at the General Branch

Meeting way back in May 1978. The 'Truth' newspaper had

intended to run an article at the instigation of the

builders to discredit myself at the time of the elections

for General Secretary.

Truth were to allege that I owned a Melbourne family

house worth $55,000 and a house at McLoughlin's Beach

worth $60,000 in a 'good sale'.

The Branch Meeting was told:-'The facts are, I and my wife bought the land for the

Melbourne (Reservoir) house for $540 through

Melbourne agents Wilmour and Randell in 1950.

I built the house myself by a loan from the

Commercial Bank at Reservoir. I am now separated

from my wife, the house is used by her exclusively.

I have a half share in the land at McLoughlin's

Beach bought for $3,000. I built the house myself

149.

by raising a loan of $18,000. The Shire of Yarram

valuation of the property is $19,000.'

To avoid a Libel action that 'Truth' article never

appeared. However it showed the willingness of the

employers to get at me, and thus the union. The same

determination exists now, but what they are trying to

sell to the members as sensational revealation is not new. The membership were informed of my position three and

a half years ago."

In this Report, Gallagher was clearly stating to his

members his response to the allegations raised against him. He

was claiming that the position was, as he had stated it to the

members in May 1978, and he was asserting to the members that, so

far as the beachhouse at McLoughlin's Beach was concerned, the

following were the true facts:-( a) That he had a half share in the land at McLoughlin's

Beach;

(b) That he built the house himself;

(c) That he had built the house by raising a loan of

$18,000;

(d) (by implication) The house was worth about $19,000

and was not worth $60,000.

The material put before me during the course of the Inquiry

demonstrated these assertions to be false. In September 1981

the whole of the land and premises at McLoughlin's Beach were

held on the trusts of the "Gallagher Family Home Trust".

150.

By that time the half interest which Mrs. George had formerly had

in the land and premises had been extinguished. It is clear

beyond question that Gallagher did not "build the house

himself". The bulk of the labour and materials which went into

the construction of that house, and also his son's house, was

done by contractors who were paid by builders and developers

within the State of Victoria. It is also demonstrably false to

suggest, as Gallagher did, that he financed the construction of

this house out of a loan of $18,000. I will be referring to the

existence of this loan in a later section of this Report.

Suffice it to say for the present purposes that Gallagher did

obtain a loan of $18,000 from his Union in November 1977. That

loan was granted to Gallagher on "an interest free basis". The

proceeds of that loan were immediately invested by Gallagher on

an interest bearing basis. Insofar as any portion of those loan

monies were used to finance the construction of the house at

McLoughlin's Beach they were used only in payment of the Grollos

in April 1981 at a time when Gallagher was aware that inquiries

were being made by police officers into the manner of the

construction of the house at McLoughlin's Beach. I have already

referred to this transaction in Chapter 2 (b) of this Report.

Insofar as Gallagher was seeking to infer in his "Report to

Members" that his house at McLoughlin's Beach was only wo rth

$19,000, then that statement also was, to his knowledge,

misleading. Quite apart from the fact that Gallagher well knew

that the value of labour and materials which had g o ne into the

construction of that house well exceeded the sum of $19,000

151.

(that sum would have barely covered the cost of the concrete alone) , the fact is that in June 1981 he had insured the premises

for $60,000 and the contents for $16,000 (see Exhibit 123.1).

2(f) .3. It would seem that Gallagher has made statements, similar

to those contained in the preceding paragraph, to the public via

the . press. The June 1982 edition of "Australian Penthouse" is

the unlikely repository of what is claimed to be an exclusive and

verbatim interview between Gallagher and one Adrian Tame

(a copy of that interview was tendered to the Inquiry as Exhibit

180). During the course of that alleged interview (at Page 131

thereof) it is reported that the following question was asked

of, and the following answer given by, Gallagher:-Q. "What about the building materials and plumbing and so

on that you were supposed to have received for you.r

house?"

A. "For a start the building materials were given to l)le by

mates in many cases. It's a bad job if your mates

can't give you something." Q. "What about the plumbing?"

A. "When I got a bill for the plumbing there was some

other work mixed up with it. There was a bill for

someone else's work. But there were a lot of lies

told about all this at the Royal Commission. I paid

for the materials apart from what was given to me."

If this exchange truly records what was said between Gallagher and the interviewer, then it is an additional

indication of the lengths to which Gallagher has gone to

152.

suppress the true facts, not only from his members, but from the

public at large. It is little wonder that he chose not to answe r

questions before the Commission.

2{f).4. The clear inference from the material put before me i s

that Gallagher has concealed from union members th e

true position with regard to the construction of his house at

McLoughlin's Beach. When called before the Inquiry, he refused

to answer any questions put to him concerning the manner in which

that house was constructed, or concerning the $18,000 loan whi c h

he has asserted was used to finance the construction of the

house. Instead he elected to read a statement making a

generalised attack upon the Inquiry and its purposes, and alleged

that the Inquiry had "allowed and encouraged a complete

misrepresentation of allegations against the union and its

officers". He again asserted that he "repudiated on behalf of the union, its officers including myself, and on behalf of union

members any allegations of wrongdoing of any kind".

This was of course an ineffective way of dealing with the

detailed evidence given before the Inquiry, which evidence leads

to the inescapable conclusion that Gallagher's beachhouse was

constructed for him by, and at the expense of, persons with whom

he had dealings in the course of his day-to-day activities as the

General Secretary of the Federation. That evidence amply

justifies the opening remarks which had been made by Senior Counsel Assisting the Inquiry on the lOth September 1981 and

153.

makes a mockery of the assertions made by Gallagher to his

members in the same month. I infer that Gallagher has adopted

the stance which he has in order that he might avoid an

embarrassing confrontation with the truth.

154.

Chapter 3 Receipt of Benefits by the Builders

Labourers Federation (Victorian Branch)

3.1. The evidence indicates that the following benefits have

been received by the Victorian Branch of the Builders Labourers

Federation.

Nature of Benefit Date

Timber 6/75 -

10/75

Plumbing Suppl ies 10/80

Insulation material 8/l9

Paint and materials 8/79

Sea ffold ing 1976-80

I\:lstage stamps 3/1978

Schedul e of Benefits Received by B. L . F.

By whcm work done or provided By whom Authorized Person bearing cost

Ma r ibyrnong Timber 1\. J . Ga lvin pty. Ltd . 1\.J. Galvin pty. Ltd.

Supplies

O.P. Plumbing Services G. Grey B. P. Plumbing

I\. G. Coombes pty. Ltd . Watts Watts

Manfax pty. Ltd . Watts Watts

Cycl one Scaffolding Cyclone Scaffolding Cyclone Scaffoldi1 -q pty. Ltd . pty. Ltd . pty. Ltd .

Montvale Devel opments Lewis of Montvale Jl'

-

Project charged

None

None

North Wlarf

North Wharf

None

None

Value

$6 , 000-$10,000

$350

$400

None given

None given

$200

f-'

lJl

lJl

156.

3. 2 • . The state of the evidence does not enable me to determine

with certainty whether these benefits accrued to the Victorian

Branch of the Federation or one or other of its officials. What

can be stated with certainty is that the materials constituting

each such benefit were given or delivered either to the offices

of the Victorian Branch of the Federation in Lygon Street,

Carlton, or to one or other of its officials. In particular,

the evidence makes it clear that Norman Gallagher personally

played a leading role in securing most of those benefits and,

in some instances, some of the materials comprised in those

benefits were delivered to premises in which he personally had

an interest.

3.3. By far the largest benefit referred to in the

abovementioned schedule was the timber supplied at the expense

of A.J. Galvin Pty. Ltd., a building company operating within

the State of Victoria. In the main, this timber was ordered from

and supplied through Maribyrnong Building & Timber Supplies Pty.

Ltd. during the year of 1975. The principals of A.J. Galvin

Pty. Ltd. also testified to the fact that their company had also

directly delivered quantities of timber to the B.L.F. offices in Lygon Street, Carlton, direct from building sites controlled by

that company.

In the year 1975 A.J. Galvin Pty. Ltd. was constructing the

"Highpoint West Shopping Centre" under contract to Development

Underwriting Limited. During that year the Master Builders

157.

Association of Victoria had sought to deal with industrial

disputation within the building industry by requiring its members

to "lock out" labour from their sites. A.J. Galvin Pty. Ltd.

was a member of the M.B.A.V. and the effect of the "lock out"

was to halt its project at Highpoint West. A.J. Galvin Pty.

Ltd. was put in a difficult position because Development

Underwrit i ng Li mited was "holding it to its contract". The

Project Manager of A.J. Galvin Pty. Ltd., Mr. Robinson, had had a

me eting with Norman Gallagher for the purpose of getting what

he described as "some assurance that if we did return to work

••• we would be able to fulfil our contract and complete the job

on time" (Page 191). Robinson testified that, following that

meeting, the project was resumed and was in fact completed on

time. Thereafter, he said, timber was delivered, in a series

of orders , to the B.L.F. offices, either from the building site

or, in the main, from the premises of Maribyrnong Timber & Building Supplies. This timber was supplied on the account

of A.J. Galvin Pty. Ltd. and paid for by it. Robinson said that

th.e supplies of timber had commenced initially as "the result

of a request in the way of an offer" (Page 191). He said that

there was a discussion about "a building fund or something; they

(meaning the B. L. F.) were going to build onto their offices"

(Page 191). Robinson said that periodic requests were made by

various shop stewards on the site who would supply to him a list

of the materials required by the B.L.F.. Mr. Robinson and

Mr. Galvin (a Director of A.J. Galvin Pty. Ltd.) thought that

the total value of timber supplied in this way amounted to

158.

"about $6,000" (see Pages 187, 192A), but Robinson said that he

• "could not dispute" a figure of $10,000 (Page 192A).

Both Galvin and Robinson were very vague as to the

in' which this arrangement came to be made and the reasons for

it. Galvin was asked (at Page 187) whether he was expecting

to get some benefit out of the supply of $10,000 worth of timber

to the Union. He replied:-

"No we were not expecting to get any benefit and we further

more have never had any benefit out of the union."

He was then asked:-

"Why would you give $10,000 worth of timber to the uriion

if you were not going to get any benefit out of it?".,

to . which he replied:-"Well I suppose just for harmonious relations."

He then said that he thought the value of the timber was not

$10,000 but $6,000 and he was again asked:-"Why would you give a gift of $6,000 to a union or to

any person?"

To this question he responded:-"Well I think you see when that was given, we would have to

concede we had a reasonable run on the job and possibly

I dare say that, let us say any union officer turns up on

the job and asks us for a bit of timber, we would not

necessar·ily refuse."

Mr. Robinson was asked (Page 193) why the company had

de,livered the timber to the B.L.F. or its officials. He said:-

159.

"I guess the general reason could be said that you tend to

want to maintain relationships with the particular person

you g i v e it to • "

It was then put to him:-

"You believed it was worthwhile because you thought you

might be purchasing future industrial harmony, I take it?"

To which he responded:-"Possibly that is what I had in the back of my mind."

Darryl Mathews, the Managing Director of Mar ibyrnong Timber

& Building Supplies Pty. Ltd., gave evidence that he became aware

that materials ordered by Galvin's were being delivered by his company to the B.L.F. offices in the latter part of 1975. He

said that this timber was ordered by, and paid for by, Galvin's.

He produced a number of copy invoices in respect of the timber

so supplied and they reveal that eight loads of timber were

supplied to the B.L.F. offices in Carlton between July 1975 and

December 1975, and two loads of timber were supplied to

14 Glasgow Street, Reservoir, in September 1975 (see Exhibit

21.9). The premises at 14 Glasgow Street, Reserv-oir, are

premises jointly owned by Gallagher and his former wife, Jean

Iris Gallagher (see Exhibit 23.13). The total value of the

timber supplied to the B.L.F. offices amounted to $3,469 and the

value of the timber supplied to Glasgow Street amounted to

$2,276. Eric Doidge, a salesman with Maribyrnong Timber &

Building Supplies, said (Page 203) that he took various orders

over the phone from Galvin's for the "B.L.F. job". He said that

on one occasion Gallagher had personally rung him to inquire in

160.

respect of one order (Page 205). He said that Gallagher had

wanted to know where the timber was and that he was ringing t o

find out when it was coming.

This evidence satisfies me that in the last half of the 1 975

year timber to a value of some $6,000 was delivered on the

account of A.J. Galvin Pty. Ltd., either to the B.L.F. offices

in Carlton or to the home in Reservoir jointly owned by Gallaghe r

and his former wife. The evidence does not enable me to say

for what purpose or purposes this timber was used, although

I would infer that at least in respect of the timber delivered

to Reservoir, it was used for the purposes of Gallagher, or some

person associated with him. With regard to the timber supplied

to the B.L.F. offices, there is no evidence before me which would

indicate that works of the type described by the witnesses were

being carried out at those offices at that time. It is, perhaps,

of significance to note that Mr. Harold John Redpath, a carpenter

formerly employed by the Dominion Properties Group, said that

he had done carpentry work at the McLoughlin's Beach premises

of Gallagher in 1975 or 1976 and that he had picked up the timber

for a "flight of stairs" which he had installed at those premises

from the -B.L.F. offices in Lygon Street (see Page 335). Redpath

said that the timber which he picked up was similar in character

to the timber referred to in the invoice, dated 15th August 1975,

being one load of timber supplied to the B.L.F. offices by

Maribyrning Timber & Building Supplies Pty. Ltd. on account of

A.J. Galvin Pty. Ltd. (Page 338).

161.

3.4. The other materials, which the evidence satisfies me were

delivered to the B.L.F. offices in Lygon Street, Carlton, were

of minor order. Mr. Manson, the Manager of B. P. Plumbing

Services, gave evidence that in October and November 1980 he had

been requested by George Grey of the Hersfield Development

Corporation to deliver plumbing fittings, including spouting

material and toilet fittings, to the B.L.F. offices in Lygon

Street, Carl ton. He indicated that the total cost of these

materials was approximately $350 and that these items were to

be invoiced to Hersfield (see Pages 1142-4).

Mr. Harold Wilkes, formerly the Project Manager on behalf

of the Fletcher Watts Group of the World Trade Centre Project,

said that in August 1975 he had caused some 4,700 square feet

of insulation material to be delivered to the B.L.F. offices in

Lygon Street. He said that he had done that after he had

received a phone call from Gallagher who had asked him "to get

some insulation for him" (Page 1455). He said that he requested

one of the contractors on the World Trade Centre Project, namely

A.G. Coombes Pty. Ltd., to deliver the insulation material to

the B.L.F. offices. He said (Page 1455) that "Over the years,

the company had been giving Norm Gallagher surety or benefits -whatever you like to call it - and in that particular case

I happened to be the tool - he went by me - but the precedent

had been set". Mr. Wilkes went on to say that in August 1979

Gallagher had also asked him to get some paint for him, and that

he had organized the delivery of the paint from a firm called

Manfax Pty. Ltd •• Wilkes said that both the insulation material

162.

and the paint was charged against the World Trade Centre Projec t.

Wilkes said that these benefits formed part of a pattern of

benefits which had been supplied by Fletcher Watts over the

years. When he was asked (at Page 1456) what were the nature

of the benefits and gratuities that had been previously gi v en

to Gallagher, he responded:-" I remember one instance where he rang Ernie Watts and asked

Ernie for some pickets to build a fence. Later on he rang

Frank Watts and asked him for things. He has also asked

Oscar Meyer for things. He has asked everybody for

things."

The scaffolding supplied to the B.L.F. was supplied by a

company called Cyclone Scaffolding Pty. Ltd.. The Victorian

Manager of that company, Mr. Graeme Allen, said that the

scaffolding had been supplied free of charge from time to time

since 1974 upon the order of various officials of the Victorian

Branch of the B.L.F.. He said that the company had made an

arrangement with Mr. Gallagher that it would provide material

which was "in store" but he denied that the service provided was

in exchange for any promise or undertaking by Mr. Gallagher.

When asked about the motive for supplying the material, Mr. Allen

said (Page 1535):-"I think possibly it was because we had a reasonably good

association with the Builders Labourers over many years.

That was number one and, number two we did not feel that

we wished to strain our friendship, shall we say, to any

marked degree if we could possibly see our way clear to

163.

provide this service without inhibiting our general normal

trading operations so, therefore, we would do so."

The final item listed in the schedule in paragraph 3.1

hereof, namely the postage stamps, were supplied by Montvale

Developments in March 1978. According to the evidence of both

Mr. Dodd and Mr. Lewis of Montvale Developments, their company

had supplied postage stamps to the Victorian Branch of the B. L. F.

to a value of approximately $200 because they had been told at

the time that the B.L.F. was "short of stamps".

3.5. When the evidence relating to the delivery of materials

to the Victorian Branch of the B.L.F. is analysed it does not

become clear how much of that material was enjoyed by the

Federation itself and how much was enjoyed by Mr. Gallagher.

As I have already indicated, it seems to me to be open to

inference that at least the timber supplied on the account of

A.J. Galvin to the premises in Glasgow Street, Reservoir, was

material to the use and enjoyment of Gallagher or some person

connected with him. Although it seems clear that much of the

other material supplied to the offices of the B.L.F. was

"ordered" by Gallagher, the evidence does not enable me to

determine whether the ultimate enjoyment of those materials was

that . of Gallagher or of the Union.

164.

Chapter 4 Receipt of Benefits by Robert Harry Dalton

4.1. Mr. Robert Harry Dalton is a member of the Federation and

an official of the Victorian Branch of the Federation.

Specifically, he is an organizer for that Branch. As such, he

is a fully paid employee of the Federation.

4.2. I deal with Dalton specifically in this section of the

Report because the evidence discloses him to be second only to

Gallagher in receipt of benefits for his personal enjoyment.

All of those benefits were incorporated into a house being

constructed by Dalton at Lot 30, Nero Avenue, Rye in the State

of Victoria. It would seem from the evidence that that house

was being constructed by Dalton between 1976 and 1979, and from

time to time during that period he made requests of various

builders and developers, within the State of Victoria, for the

supply of labour and materials to be incorporated in the

construction of his home. The evidence leaves me in no doubt

that Dalton was able to induce the persons so requested to supply

those benefits because of the position which he held within the

Federation. Accordingly, I am satisfied that Dalton exploited

his position as an organizer for the Federation for the purposes

of obtaining benefits for himself. There certainly seems little

doubt that those who gave the benefits to Dalton believed that

by doing so they could secure for themselves or the organizations

which they represented an advantage. That view was put fairly

clearly by Grey (at Page 511 of the transcript):-

165.

Q. "What reason did you have for doing favours for

M r • Da 1 to n? "

A. "No other reason than that he was the organizer looking

after the project in that area. He was the area

organizer and they were pure straight out favours."

Q. "Did you believe that he might have some influence in

either speeding up or slowing down the projects of which he was the area supervisor?"

A. "I certainly would feel it would put us on a better

standing with him."

4.3. I set out hereunder a schedule of the benefits so received

by Dalton:-

Nature of Benefit Date

Bricks f or Dalton's house 9/76, 1/77,

and garage at Rye 5/77 and

10/77

Bricklaying at Rye 8/78

Glazing 7/77

. Electrical 8/79

Supply of crane and 1979

re-inforcing mesh

Steel dec king 6/78

Ceranic Tiles 1/79

Design Plans 7/76

Engineering Computations 9/76

Concrete an:l labour ll/76 an:l

5i79

Schedule of Benefits Received by Robert Harry Dalton

By whcrn work done or provided lly_ whom Authorized Pers on c ost

Brick & Pipe In:lustries Montvale Developments Monlv al e

Dobie & Banks Daly of M:>n tvale an:l 1'\Jrragong Nomin ee s

Grey Pty. Ltd.

Oliver Davey Glass Lewis an:l Daly of l'tlntvale

Montvale

B.C. Seymour Gr ey Hers field

Hersfield Grey Hersfield

I

Aldeck Roofing eo. Lewi s o f Montvale Nominee s

Pty. Ltd.

A.A. Ceranic Tiles Daly an:l Grey Murragong Ncrninees

Pty. Ltd. Pty. Ltd .

Balwyn Drafting Servic e Lewis o f Montval e Montvale

Samuel Engineering Unknown Samuel Enginee ring

Grollos Grollos Grollos

----

Project charged

Not krown

Cranbourne Pa rk

None

01irns id e Pa rk

Ke ys boro ugh/ Parkmo r e

Cranbourne Pa rk

Cranl::ourne Pa rk

Nil

Nil

No ne

Value

$ 1, 700

$1 , 450

$200

$1 , 000

None g iven

$1, 084

$812 I

i $75 I I sso $3 , 000

.....

0'\

0'\

167.

4.4. The schedule of benefits given to Dalton spe aks for itse lf.

The manner of supplying, charging and paying for those benefits

is i dentical in character to the manner of supplying, charging and paying for the benefits which accrued to Norman Gallagher .

The evidence which supports the receipt of the benefits by

Dalton, as referred to in the schedule, is identified in

Appendix 6 attached to this Report. That evidence reveals that

all but one of the benefits accruing to Mr. Dalton were organi z ed for him either by Mr. Grey of the Hersfield organization or

Mr. Lewis of the Montvale organization.

4.5. The only benefit received by Dalton which, in my view ,

warrants special consideration in the content of this Report, is

the item of "concrete and labour" which was supplied by the

Grollo organization, the value of which was some $3,000.

Mr. B. Grollo said (at Page 1178) that on five occasions between

November 1976 and May 1979 concrete to a total value of about

$2,800 and labour to a value of about $200 was supplied to

Dalton. Grollo went on to say that Dalton paid $2,000 in

June 1980 for this concrete and labour. Grollo said "We were

prepared to accept a reduced price to provide him with a favour

of reasonable proportions and not to appear to be exploiting

him". Grollo sought to support his allegation that Dalton had

paid the $2,000 by reference to the bank "pay-in book" of Grofam

Pty. Ltd. which simply referred to a cash deposit of $2,000 into

the account of that company on the 20th June 1980. There is no

reference on that document to identify that pay-in with

Mr. Dalton. Bruno Grollo said that his knowledge of payment by

168.

Dalton came from a conversation with his brother, Rino Groll o .

Rino Grollo (at Page 1274) said that Dalton had come into h is

office one morning and had given him $2,000 in cash. He s a i d

that Dalton did not ask him for a receipt and that he, Grollo ,

had not offered him one.

I entertain, in the light of the evidence to which I have

referred, a real doubt as to whether Dalton ever paid the Gro l l os

for the concrete and labour supplied to him. It seems an odd

circumstance that Dalton would be offering to pay $2,000 in

June 1980 for concrete which had been delivered to him as earl y

as 1976. It also seems an odd circumstance that he should pa y

$2,000 in cash and neither be offered or request a receipt for

that payment. Whether or not Dalton paid the amount of money,

alleged by the Grollos to have been paid, the receipt of the

concrete and the labour attending it still amounts to a benefit

to Mr. Dalton. The benefit, in those circumstances, would flow

from the $1,000 discount given by the Grollos in respect of the

concrete and the generous terms provided by the Grollos to Da l ton

in respect of payment.

4.6. The material put before me in respect of benefits received

by Dalton indicates that over a period of some three years Dalton

received the use of labour and materials to a total value of

approximately $10,000. No payment was made by Dalton for these

benefits save with the possible exception of the $2,000 referred

to by the Grollos. The evidence leave s me in little doubt that

Dalton was able to secure these benefits fo r his own enjoyment

169.

by the exploitation of his position as an official of the B.L.F.

Dalton was given the opportunity of explaining the receipt of

these benefits to the Inquiry but, like other officials of the

union, declined to take advantage of that opportunity.

Specifically, he declined to answer questions put to ,him

concerning his receipt of material and services in respect of the

construction of his house at Nero Avenue, Rye. Those parts of

the evidence relating to the supply of services and materials for

his use were put to him. He declined to answer in respect 'of

all of those matters. His attitude and conduct before the Commission only serves to confirm the view which I have earlier

stated- namely that Dalton took advantage of his positiori an

organizer of the union to benefit himself.

170.

Chapter 5 Benefits Received by Officials of the Victorian Branch of the B.L.F. other than Gallagher and Dalton

5.1. The evidence given at the Inquiry reveals that at

different times between December 1977 and November 1980 various other of the Builders Labourers Federation received

benefits for their own use and enjoyment from builders and

developers within the construction industry. Those benefits,

however, were of a far less significant order than the ones

received by Gallagher and Dalton. The persons concerned are

Michael Joseph Lewis, Norman Alexander Wallace, John Joseph

Masterson, Patrick Donnelly, John Cummins, and Mortimer Greany.

Lewis, Donnelly, Cummins and Greany were, at the time when they

received their benefits, organizers of the Victorian Branch of

the Federation. Masterson is currently a retired pensioner

but did, at various times, hold almost every official position

within the Federation, including the positions of Federal

Treasurer and Federal General Secretary. Wallace is a member

of the Victorian Executive of the Federation and is also the

Treasurer of the Federation.

5.2. I set out hereunder a Schedule of the benefits disclosed

by the evidence to have been received by each of the persons

referred to in sub-paragraph 1 hereof:-

Schedule of benefits received by M.J . Lewis, N.A. Wallace, M. Greany, J . Masterson, P. Donnelly and J. CWMiins

Person rece1v1ng Person by whan

Benefit Nature of Benefit done or provided By whom AuthoriZed Person bearing cost Project charqed Value

1. M.J. Lewis Br leks Brick & Pipe Lewis of Montvale Lt>known Unknown $200

Industries

Concrete Grollos Grollos Grollos N:>ne $300

2 . N.l\ . Wallace Bricks and materials Montvale and Brick Daly of Montvale Montvale None $1,200

& Pipe Industries

I

Concrete Grollos Grollos Grollos N:>ne I $9oo

3. J. Masterson Design Plans Picone of Civil & Requested by Picone None None given

Civic N. Gallagher

4. P. Donnelly Heater Flu B. P. Plllnbing G. Grey B. P. Pllllibing None None given

Concrete Grollos Grollos Grollos N:>ne $200

5. ,J. Cummins De&i9n Plans R. Barnard-Brown Le wis of Montvale Montvale None I None given

·Bricks Brick & Pipe Lewis of Montvale 1 Mrianni Pty. Ud . Mel ton Market $GOO

Industries , and L. Darrell

' 6. M. Greany suwly of wall Presswell Panels Pty. Lewis of Montvale I $1,261 1 Montvale N:>ne Panelling and latour Ltd. and Cauchi of I Montwlie Concrete Grollos Grollos Grollos N:>ne $150 --' .

, .( '

Date

Unknown

1978

ll/79

2;81

1975

ll/ 80 ll/80

8/80

8/80

1 12/77 I

I

l

i 1/78 I

-

f--'

--.]

f--'

172.

5.3. Reference to the schedule contained in the preceding

sub-paragraph indicates that the benefits received by each of th e

persons concerned were of minor significance when compared with

the benefits which I am satisfied were received by Gallagher and

Dalton. For example, the only benefit which the evidence

discloses was received by Masterson came in the form of a design

which was drawn for his beachhouse at McLoughlin's Beach by an

employee of Civil & Civic. The evidence also discloses that

this benefit was provided, not through any approach of Masterson, but an approach by Gallagher to the employee of Ci v il &

Civic concerned.

The benefits supplied to Wallace came in the form of work

done his garage through the Montvale organization in

November 1979 and concrete to his carport through the Grollo

·organization in 1981. Mr. Daly of the Montvale organization

said that Wallace had agreed to pay for the work done by Montvale

on · his garage and that indeed a bill had been submitted to

Walla6e, at his request, during the course of the Inquiry.

Altho.ugh Mr. Wallace has obviously been slow in putting his hands

into his pocket for the labour and materials supplied to him by

Montvale, I cannot be satisfied that Wallace does not have a

genuine intention to pay for those works. Likewise,

Mr. Bruno Grollo said that his organization had done a "small

concreting job" for Wallace early in 1981. Grollo said that

had indicated that he intended to pay for the work but

·e ha't he, Groilo, had not pursued him for payment. Although it

173.

appears that generous terms have been extended to Wallace with

regard to payment for services rendered to him, it would, in the

light of the evidence, be difficult to establish that these goods and services had been carried out for Wallace otherwise than on a

proper commercial basis.

The benefits, disclosed by the evidence, to have been given

to Donnelly were, likewise, of a fairly insignificant nature.

It appears that during the construction of the "Footscr.ay Market Centre" by the Hersfield organization, Donnelly had approached

Grey to give him some assistance with regard to a "plumbipg

problem" which he had at his flat in Glen Iris. Grey had

requested Mr. Bruce Manson of the firm of "B.P. Plumbing

Services" to help Donnelly with his problem. Mr. Manson said

that Donnelly had told him that a heater had been installed at

his premises and he needed a flue and a gas connection to. be .

made. Manson said that he had got a list of materials together

and arranged for a plumber to go there on the following day.

He said that this work had been done in November 1980 but that

the work had neither been "costed" nor "billed" (see

1139-40). Mr. Bruno Grollo said, in relation to the cone; rete

supplied to Donnelly (Page 11 78); that in November 1980 Grollos

had supplied Donnelly with $204 worth of concrete "as a favour".

Grollo said that there was "no expectation by us that the

concrete would be paid for".

The evidence also indicates that the materials and services

supplied to the order of Greany were likewise supplied on a basis

which could be described as "semi commercial". Mortimer Greany

is, and was at the material time, an area organizer for the

174.

Victorian Branch of the B.L.F. Montvale Developments organized

installation of some wall panelling at Greany's place at

6 Fraser Street, Dandenong, in December 1977. The panelling was

supplied by a company called Presswell Panels Pty.Ltd. and

Mr. Cauchi, a carpenter employed by Montvale, provided the

labour. The total cost ·was some $1,260. Daly, of Montvale

Developments, gave evidence about the work and materials which

had been provided by Montvale to order of Greany at Pages

788-789 of the transcript. He said that this work had been

carried out after Greany had approached Mr. Morrie Lewis, the

principal of Montvale. Daly was then asked (Page 789):-Q. "Did you und,erstand whether this was to be a transaction

that was performed free of charge, or whethe·r Mr. Greany was to pay?"

A. "No. Mr. Greany was to pay for this and everytime I see

him he still tells us that he is going to pay for it but

as yet he has not."

Q. "Was your understanding at any time in the transaction that

it was to be a benefit to him or that it was a commercial

transaction?"

A. "No, it was a commercial transaction. That is how it

started off ••• "

Q. "It has not ended up that way apparently?"

A. "No."

The effect of that evidence is that the Montvale organization

supplied work and materials to the order of Greany pursuant to

terms that called for payment by Greany. It appears that Greany

has so far failed to pay for the cost of the work and that

175.

generous terms have been extended to him by the Montvale

organization. Whether, despite his protestations to the

contrary, Greany ever intends to pay for that work is a .matter

for speculation. The situation remains however that the work

was carried out and the materials provided pursuant to what the

evidence discloses was a commercial agreement.

Additionally to the wall panelling provided by Montvale, it

appears that in January 1978 Greany received a small. amoun .t of

concrete from the Grollo organization. Bruno Grollo said . that

his company had supplied $133 worth of concrete to Greany' s place

at Dandenong during that month. Grollo said that "this _was

provided as a favour without expectation of payment" (see Page

1178) •

The benefits secured by Lewis and Cummins, albeit small in

value, stand on a somewhat different footing from the

given to Masterson, Donnelly, Wallace and Greany. The difference

lies in the fact that Lewis and Cummins manifestly secured their benefits by "pulling their rank" without any intention of paying

for them. The benefits provided to Lewis comprised 2,000 bricks

for his garage at his place of residence in Broadmeadows, and the

supply of concrete for a similar purpose by the Grollos. The

bricks were obtained by Lewis when he approached Mr. Daly of the

Montvale Development Corporation whilst Lewis was on site as an

Area Organizer. According to Daly (Pages 295-6) Lewis not.iced

some bricks on site and indicated that they would be a "good

colour" for a job that he wanted to do and he asked Daly to

arrange for the supply of some 2,000. Daly told him to approach

Mr. Morrie Lewis, the principal of Montvale. Mr. Morrie Lewis.

176.

told me (at Page 268) that he had subsequently arr a nged for the

supply of those bricks. Mr. Bruno Grollo said that a t or abo ut

the same date that the bricks were supplied, Lewis had approached

him f o r some concreting work and that this had been provided at a

cost of some $200-$300. Grollo said that it was "supplied as a

favour by us and without any expectation of payment". It would

seem that Lewis was the beneficiary of some concrete delivered

to, and at the order of, Norman Gallagher at McLoughlin' s Beach.

Some of the drivers employed by Pioneer Concrete, who had been

asked to make deliveries to Norman Gallagher, indicated that, at

Gallagher's direction, they had taken some of the "left-over

concrete" to a block of land owned by Lewis at McLoughlin's

Beach. They expressed the view that they had poured a slab on

that block of land (Pages 1247, 1252). They said, however, that

when they returned to the site recently, before giving evidence

at the Inquiry, they noticed that efforts had been made t o

conceal the existence of that slab by covering it with soil

(Page 1249).

I have no doubt that Lewis was able to secure these benefits

.fin himself as a consequence of exploiting his position as an

organizer for the B.L.F.. He tried it on other occasions but

did not succeed. For example, Mr. Wilkes, the Project Manager

for the Fletcher Watts Group, gave evidence that Lewis had

· approached him in 1978 and had asked for some roof trusses for

the purpose of building a roof on his garage. Wilkes said that

he denied the request because "It's one thing to give it to the

177.

boss, but if you start giving it to all the underlings, the next

thing you would be feeding the lot of them." (Page 1460).

Cummins extracted from the Montvale organization and

Adrianni Pty. Ltd. design plans for extensions to his house and

bricks by exploiting his position as a union organizer. In

August 1980 Cummins was the Area Organizer for the B.L.F. in the

Mel ton area. At that time the Melton Market was being

constructed by a company called Adrianni Pty. Ltd., of which

Mr. Lawrence Darrell was the principal. Montvale Development

Corporation was the Project Manager. Cummins approached

Mr. Lewis and said that he was doing some extensions to his home

and that he needed a design plan drawn to get a building permit.

Mr. Morrie Lewis of Montvale said that the initial approach

in respect of Cummins had been engineered by Gallagher, who had

asked Lewis whether he could get some bricks for Cummins.

Gallagher introduced Cummins to Lewis and Cummins said that he

wanted 5,000 bricks. Lewis (said Pages 881-2) that he had

organized the drawing of the design plans for Cummins through an

architect, Mr. Barnard-Brown. With regard to the bricks, Lewis said that he approached Mr. Darrell and said to him "Look this

union organizer fellow wants some bricks and I think we should

give them to him." (Page 881). Lewis said that Darrell agreed

and that Darrell had borne the cost of those bricks. Mr. Darrell

said (Page 1101) that he was prepared to bear the cost of the

bricks for Cummins because he believed it would purchase for him

178.

"co-operation from the union". He said that as far as he was

concerned this was "an extra payment to keep the union happy"

(Page 1102).

5. 4. Each of the persons referred to in the preceding

paragraph, with the exception of Cummins, was subpoenaed to

attend before the Inquiry and give evidence. Each one answered

his subpoena but refused to give evidence for similar reasons.

I was consequently denied by these men their explanation for the

benefits which they had received.

SECTION B

179.

Payments and Benefits made to and received Ex P.J. O'DEA and the A.C.T. Branch of the Federation

l. Peter John O'Dea of 2 Walker Crescent, Griffith, A.C.T. is, and for some time has been, the Secretary of the A. C.T .

Branch of the B.L.F •• He is also a member of the Federal

Council of the Federation and of its Federal Management

Committee.

Although O'Dea, when called to give evidence before the

Inquiry, "took the party line" and refused to testify, it would

nevertheless seem that his position within the Federation is

under some form of siege. As recently as the 8th February 1982

a letter over the hand of Norman Gallagher was directed to the

Master Builders Association of the A.C.T., Construction House,

217 Northbourne Avenue, Turner. That letter, omitting formal

parts, reads:-"I wish to inform you that Mr. Peter O'Dea is no longer

acting on behalf of the Federation. Any applications, notifications, and any matters concerning the Federation should now be sent directly to our Federal Office in Melbourne."

In response to that epistle from the General Secretary,

O'Dea issued a statement to his members on the 16th February 1982

in the following form:-"Members of the Master Builders Association are displaying copies of a letter received by them last Thursday from the General Secretary, N. L. Gallagher, which purports

to relieve me of my duties in the Branch. Neither myself

nor the Branch has received the same letter from the

General Secretary. My only knowledge of the letter is the copy given to the Branch by the builders.

I am elected by the members of the A.C.T. Branch as

officials in other States are elected by the members in those States. Under the Rules of the Federation, copies

of which are available from the Branch Office upon

180.

request, a Branch Official can only be removed from office by Federal Council which involves a majority decision by delegates from every State in Australia.

At the present time no meeting of the Federal Council has been called nor do I have any reason to believe

that one is going to be called."

Although these documents would appear to indicate some form

of faction dispute within the Federation, O'Dea declined to

comment on them when called to give evidence (see Page 2327).

I therefore assume for the purposes of this Report that O'Dea is

still an officer of the Federation and certainly he was such an officer at the time when the events, to which I propose to refer

in this Section of the Report, occurred.

2. The evidence justifies a finding that, in similar fashion

to some of his Victorian counterparts, O'Dea has exploited his

position for the purpose of obtaining benefits for himself. The

personal benefits which I find him to have received are,

however, of minor order when compared with the activities of the

General Secretary of the Federation. I tabulate these personal

benefits hereunder:-

181.

Nat ur e o f Project Pages of

Benefit Date Person Providing Charged Value TranscriEt

Land s e a pe 1979 s. Sta nkov itch None $400- 1947-1948,

Ga rdening $500 2232-3

Tiles 4 / 1980 P.D.C.Constructions, National $340 2226-7,

through Lehman Tiles Gallery 2296-7

Lay ing o f 6/1980 P.D.C.Constructions, None $320 2302-3,

T i les t h rough Tiles and Ex.l33.1,

P.C.'s Pty. Ltd. Ex.l33.2,

Ex.l33.3

Survey 1979 K.B. Hutchinson None $30 2303-44

work in Pty. Ltd.

"fixing lev els"

I K. B. Cage Wire 1979 Hutchinson School $30 2232

Pty. Ltd. Project

at

Griffith

Provision 1978- K.B . Hutchinson None None 2304

of Sundry 1980 Pty.Ltd. given

Tools

3. All the benefits referred to in the schedule have been

furnished to O'Dea's residence at 2 Walker Crescent, Griffith.

It seems desirable to make some brief comments upon the evidence giv en concern i ng those benefits. The landscape gardening was done by a gentleman called Stavrous Stankovitch who is a

landsc ape gardener carrying on his business in the A.C.T ••

He gave evidence that in or about 1979 O'Dea had asked him to

come and give him some advice about his garden. O'Dea told him

that he desired to construct "a sunken garden" and Stankovitch had agre e d to hire some e quipment for the purposes of doing the

"most difficult work". He said that the value of the work that

h e had carried out amounted t o s o me $400 or $500. He said that

O'Dea had requested him to "se nd a bill" for the work which he

had done but that he, Stankovitch, had never sent that bill.

182.

With regard to the laying of tiles and the fixing of those

tiles the former Construction Manager o f P.D.C. Constructions, Mr. Carlin, gave evidence that in April 1980 O'Dea had approached

him to ask him whether he (Carl in) knew of any place where he

could get tiles "at the right price". Carlin said that he had

introduced O'Dea to a firm called Lehman Bros. and had a rranged

an introduction between O'Dea and Mr. Douglas Murray, the

principal of that firm. It then appears that O'Dea and his wife

had gone to see Mr. Murray and had made a selection of tiles

from the stocks maintained by Lehman Bros. At some stage after

their selection had been made, O'Dea had rung Carlin to find out

when the tiles were coming. Carlin had then "pressed Murray" to

expedite the delivery of those tiles. Murray said that he had

been requested by Carlin to send the bill for the tiles

(approximately $340) to P.D.C. Constructions which he had done.

With regard to the laying of those tiles, one Eva Raiser, the

Manageress of Tiles and P.C.'s Pty. Ltd., said that she had been

asked by Carlin to provide labour for the fixing of the tiles at

O'Dea's residence. She said that Carlin had asked her to charge

the work to P.D.C. Constructions and that she had subsequentl y

rendered an invoice for the sum of approximately $320.

It appears that O'Dea did not reimburse P.D.C. for any of these monies expended. Carlin said that he had subsequently

been approached by O'Dea who said that he "wanted to set the

record straight" with regard to the tiles . According to Carlin,

O'Dea said that he would pay for the work done but that he wanted

a receipt. Carlin said that he sent him a receipt but that he

183.

never got a cheque from O'Dea in return. Carlin said that he

assumed that when O'Dea had said that he "wanted to keep the

record straight" he really meant that he wanted a receipt without

having to pay.

The other items in the schedule are of small consequence and

were provided by a construction firm called K.B. Hutchinson

Pty.Ltd., a Director of which was Mr. Ronald Chesterman.

Mr. Chesterman said that he had provided these benefits to O'Dea

because he desired to maintain "a cordial relationship" with

him.

4. Although O'Dea got an obvious benefit from the landscape

gardening services provided to him by Stan kov itch, it would be

difficult, in the light of the evidence, to taint that benefit with turpitude in view of the fact that Stankovitch insists that

O'Dea had always intended to pay. The same comment, in my view,

c annot be made about the tiles and the laying thereof at the

expense of P.D.C. Constructions. If one accepts at its face

value the evidence of Mr. Carlin, it would seem to reveal a

deliberate endeavour on the part of O'Dea to secure for himself a

benefit at the expense of another and to conceal its existence

by requesting the issue of a receipt when no money had been paid

and, presumably, no money was intended to be paid.

5. The evidence established the existence of a pattern of

conduct on the part of O'Dea pursuant to which he procured the

payment of substantial sums of cash from builders in the A.C.T.

184.

upon the representation that the money was to be paid to

nominated work'men upon whose behalf he had made claims. Ha v ing

received the money he would then apply it, or part of it, f o r th e

purposes of the Branch without the consent of either the payer

or the intended beneficiary.

that pattern of conduct i -The following examples exemplif y

(a) Mr. Dockery is a land 'scape contractor and the principal

of a company known as C.S.P. Landscaping Pty. Ltd.

operating in the 'A.C.T •• In 1981 he employed, as

casual labourers, three brothers called Reginald,

Paul and John Plunkett. He employed them on an

hourly basis. It appears that the Plunketts were a

close-knit family, because their . elder brother, David,

(who was a member of the B.L.F.) took the view that

his brothers were not being fairly treated by Dockery .

Accordingly, he went to the un'ion and saw O'Dea

(Page 2291). O'Dea subsequently confronted Dockery,

threatening to "black" his projects unless he made

proper recompense to the Plunkett brothers. He

alleged that Dockery owed the brothers $20,000 in

"back pay" but, when Dockery said that the payment of

such a sum would "send him broke", the figure of

$6,000 was settled upon (see Pages 2313-5). Dockery

wrote out a cheque for $6,000 which he handed to 0 'Dea

on the lOth February 1981 (see Exhibit 118.1, Page

2315) • Dockery made it clear that he understood that

this sum of money was to be divided equally between the Plunkett brothers.

185.

O'Dea then contacted the Plunkett brothers and

told them that he had recovered an amount of $2,000

for each of them from Dockery but that he was

proposing to retain $500 out of each such sum of

$2,000 "for the effort that he had put into it".

He said that this was to be regarded as "a donation

to the union (see Pages 2291-2). In addition, he

told the Plunkett brothers that they should "join

the B.L.F." and he deducted from the amount recovered

a further $78 each to pay for their union membership.

The Plunkett brothers all gave evidence in which

they testified to this conduct on O'Dea's part.

John Plunkett said (Page 2298/9) that O'Dea had given

him $1,500 but had required him to sign a receipt for

$2,000. None of them was given the opportunity of

consenting to the withholding of $500 from the monies

collected on their behalf. Rather they had been

presented with a "fait accompli" by O'Dea. Each one

said that they had allowed their union membership to

expire.

(b) L.W. Contracting Pty. Ltd., a New South Wales based

company, was a contractor working on the National

Gallery site engaged in "bush hammering".

Mr. John White, the Manager of that company, gave

evidence before the Commission (see Pages 2343 and

following). He said that he had hired a number of

men on a sub-contract basis and that, during the

course of the work, O'Dea had visited those men on

186.

site and had t o ld them that no t o nl y should the y b e

members of the B.L.F. but that t he y s ho uld b e paid i n

accordanc e with the B.L.F. Award . The men

themselves , s ome o f whom gave ev idence, express ed

dissatisfaction with the appr o a c h b y O'De a b e ca use , so the y s a id, they were d o ing bette r o n "s u bco n tract

rates" than the y were e n titled t o expect und er t he

Award. No nethel e ss, O'Dea had t o l d them that he

would b e able to secure for them a lump sum b y wa y o f

holiday pay upon the determination of their

employment. John White said that O'Dea had c ome t o

see him and had threatened to "black ban" the wo r k

being d o ne b y L.W. Contr acting unless he agreed t o pa y

the men in accordance with the B.L.F. Award, including

the payment of a lump sum at the determination of

their employment on account of holiday pay. Whi t e said that, in order to avoid the conse quences

threatened by O'Dea, he had come to an agreement in

June 1980 . That agreement had been reduced t o wr i ting

(see Exhibit 135) in a letter written by White t o

O'Dea on the 11th June 1981. In that letter White

had acknowledged to O'Dea his responsibility t o pay

annual leave entitlements to the men a nd he agreed t o

pay $15,000 to the B.L.F. by instalments. The

agreement was to pay $2,000 on the 12th June 1981,

$4,000 within 14 days of that date and $1,500 per

fortnight thereafter until the balance had been pa i d . The terms of that agreement, as reflected in the

187.

l e tte r, stipulated that O'Dea, on behalf of the

union, was " to hold that money in trust until the

completion of the work on the Australian National

Gallery site in approximately eight weeks time".

O'Dea had agreed to these proposals. In fact,

as White said, L.W. Contracting had met its part of

the bargain b y paying the $15,000 in the instalments

stipulated and indeed had paid a further $219-52

which was claimed by O'Dea at a later date (see

Page 2345). White said that the figure of $15,000

was a "settl ement figure", O'Dea having initially

demanded a figure of $45,000. White said that he

did not agree with O'Dea that L.W. Contracting had

been "underpaying" t he men but he took the view that

he had no option but to settle for the lump sum figure

(Page 2346). He said that he had later given O'Dea

a list of the men involved and the dates upon which

they had commenced their work so that O'Dea could

work out how he should apportion the $15,000 between

the men. All monies which had been paid pursuant to

this agreement were paid in cash and O'Dea had assured him that that money would go to the men (see Page

2347).

There were nine men involved in respect of whom

the $15,219-52 had been paid. Four of those men were

called to give evidence and the cheques which had been

paid by the B.L.F. to the other five were exhibited

(see Exhibit 142). The evidence disclosed that out of

188.

the $15,219.52 paid b y L.W. Contracting to the uni on

only $10,902-48 had been paid b y the union to t he men.

One of the men, Warr en Selway, sai d that when he had

received his cheque he challenged 0 'Dea saying that it

was not consistent with the amount which had been paid

to the union on his behalf by his employer. He said

that O'Dea had told him "That ' s right, we keep 20% "

(see Page 2351) •

The retention by O'Dea on behalf of the union of

a substantial proportion of the money paid by

L.W. Contracting, was manifestly in breach of the

terms upon which L.W. Contracting had entrusted this

money to O'Dea.

(c) P.D.C. Constructions were commissioned by the National

Development Commission to carry out work on both the

National Gallery site and the High Court site.

Brian Carlin was the Construction Manager for the

company in respect of these works. In January 1979

disruption was caused to both of these works due to

"a walk off" by the B.L.F. men. The stoppage had been

called initially because of "a minor issue" involving

a contention that the labourers were being required to

work in an area which was "too hot". Allegations had

been made that the Site Foreman had misrepresented the

true position and the strike had "escalated". The

eventuality was that both projects had stopped for the

best part of seven weeks (see Page 2219). During the

course of this time Carlin said that he had been

189.

seeking to negotiate terms with O'Dea upon which the

men would be willing to return to work.

that P.D.C. pay the men for "lost time"

O'Dea required

before they

would go back, but P.D.C. had taken the stand that

they would not pay. Carlin says that, as the time

dragged on, O'Dea was becoming embarrassed and said

that he required a "face saver" in the form of a lump

sum payment in order to get the men to return to

work (Page 2219). Carlin said that ultimately O'Dea

had agreed that the men would return to work if P.D.C.

agreed to pay the men a "$12 a week productivity

allowance" together with some recompense for the men

in respect of some time lost (Page 2220). If these

terms were agreed to, according to Carlin, O'Dea was

prepared to accede to a "disputes settlement

procedure" for the purposes of obviating further

stoppages on the works.

The dispute was still continuing by the

19th March 1979. By that time the matter had come

before the Conciliation and Arbitration Commission in

the form of Mr. Justice Coldham and proposals for

settlement of the dispute necessarily had to be put

before him. Mr. Bruce Healey, the former General

Manager of P.D.C. Constructions, said that on the

19th March 1979 a round-table conference had taken

place at a Sydney hotel for the purposes of "ironing

out the dispute". He said that O'Dea and one Owens

(the Secretary of the South Australian Branch of the

190.

B.L.F.) were present at that conference.

At that conference terms of settlement of the

dispute were agreed upon. They included a term

that P . D.C. Constructions would pay to the men

thereafter a $12 per week "productivity allowance".

Healey said (Page 2323) that at the conference

0 'Dea had indica ted that he wanted "some money for

his own men - the leaders in the struggle". Healey

said that he had agreed, on behalf of P.D.C.

Constructions, to pay to the B.L.F. a sum of $12,000

but that the payment of that figure was not to be

publicly known. He said that on the 20th March,

i.e. the day after the conference, all the parties

went to Melbourne to put the settlement proposals

before Mr. Justice Coldham. That was done but the

fact of the payment of $12,000 was withheld. Healey

said that O'Dea had indicated to him that the money

was to go to the persons whom he described as the

"leaders of the struggle" and he specifically

mentioned Jack Grey as one of the proposed recipients.

Grey was, at the time, the representative of the

B.L.F. on the National Gallery site.

Healey made arrangements for Carlin to withdraw

a cash payment from P.D.C.'s bank of $12,000 for the

purposes of having that transmitted to O'Dea. Carlin

said that he had withdrawn that money in cash and that

he had handed the money in a calico bag in a Canberra

street to O'Dea. According to Carlin, O'Dea had

191.

claimed that he wanted the money in cash because

it would be easier for him to distribute it to the men

who had been off work. Carlin said that he had only

paid the money over on the understanding that it was

to go to the men (see Page 2221A).

It would seem tolerably clear from the evidence that O'Dea did not use this money for the purposes of

paying the men. Les Evans, a former organizer with

the B.L.F., gave evidence during the course of the

Inquiry. He said (Page 2216) that he had seen O'Dea

at the union office with the bag of union money which

had been given to him by Carlin. O'Dea had told him

"I have $10,000 here to do with what I want". Evans

said (Page 2228) that so far as he was aware the men

knew nothing about the $12,000 and that they had gone

back to work solely on the strength of the $12 per

week productivity allowance. He said that it was his

belief, based on what he had been told by O'Dea, that

the $12,000 had gone into union funds.

Jack Grey also gave evidence. At the time when

he gave evidence he was no longer a member of the

union. He said, however, (Page 2286) that he had

formerly been a member of the B.L.F. and was the job

representative on the High Court site. He further

said that he had later become Vice President of the

A.C.T. Branch of the union. He said that at the time

he knew nothing of the $12,000 lump sum payment (some

of which had been apparently destined for him) and

192.

that the first he had heard about it was during t h e

course of this Inquiry (see Page 2289). Grey

confirmed what Evans had said - namely that the me n

had gone back to work on the strength of the payme n t

of a "$12 per week productivity allowance".

(d) In 1979 the Rice Marketing Board, a semi-statutor y

authority set up under the Marketing of Primary

Products Act in New South Wales, was inv.olved in t he

construction of two facilities at a place called

Burraboi near Deniliquin. This is in an area which

is apparently controlled by the officers of the A.C. T. Branch of the B. L. F •. These facilities were being

constructed in anticipation of the 1980 harvest whi ch

was due to commence in approximately 1980.

The employees of a Melbourne based firm called Skill ed

Engineering were engaged in the construction

of one of the facilities and the employees of a firm

R.C. & J.A. Lucas of Deniliquin was engaged in the

construction of the other facility. In November 1979

a dispute broke out on the site, apparently because

the employees of Lucas were not members of the B.L.F ••

Demands were made by Evans, the then organizer of the

A.C.T. Branch of the B.L.F., first upon Lucas and then

upon the Rice Marketing Board, that the employees of

Lucas join the B.L.F., that joining fees amounting to

approximately $640 be paid and that a certain amount

by way of "back wages" also be paid. These demands

led to a cessation of work over a substantial period

193.

of time. On the 29th November 1979 0 'Dea came to the

site and included in the demands a claim for a $40 a

week "site allowance". The dispute was not resolved

and when it became apparent that the facilities could

not be finished in time for the 1980 harvest, the

projects were "closed down" and the employees were

put off (see Pages 2184-2191). In June 1980 Mr. Bate,

the Chief Engineer of the Rice Marketing Board, went

to see O'Dea to ask him what could be done to get the

"Burraboi job back on the rails". O'Dea said he

required $2 , 000 for each man who had lost his job at

Burraboi because of the dispute. It was ultimately

agreed between Bate and O'Dea that $1,000 per man

would be paid and that, as there were 14 men involved,

it would involve payment of a lump sum of $14,000 (see

Pages 2194-6). Bate said that he then made

arrangements to pay this sum of money to the union via

Lucas, because Lucas had been the employer of the men.

Arrangements were then made for the Rice Marketing

Board to draw a cheque for $14,000 and transmit it to

the solicitors for Lucas. The solicitors for Lucas,

Messrs. Schneider & Temple of Deniliquin, then drew a

trust account cheque for the sum of $14,000 and that

cheque was transmitted to O'Dea by Mr. Bate (see

Page 2197). This was done in July 1980.

Evans, the former organizer for the B.L.F. in

Canberra, said that O'Dea had told him that he would

pay $500 each to the men involved "in case there were

194.

more than 14 men" (Page 2209). In Novembe r 1 980

Evans laid charges against O'Dea before the Exec ut ive

of the Branch alleging (inter alia) that O'D e a had

misappropriated the monies which he had collecte d on

behalf of the men at Burraboi (see Page 221 2) . O' Dea

apparently told the Executiv e that he had paid t he

money to the men in accordance with the te r ms upon

which he had received them and the Execut i ve di sm i ssed

the charges. Two of the men invol v ed, namel y G. Byr ne

and c. Holden, were called to giv e evidence. Each said

that he had received two cheques from t h e union, one

in November 1980 for $500 and one in March 1 9 81 fo r

$375 (see Pages 2251-5). It is to be noted that t he

first of these cheques was paid at or about the time

when Evans laid his charges against O'Dea before t h e

Union Executive. Mr. Turner, an Accountant with the

firm of Rugen Dyke Turner & Associates, the Auditors

for the A.C.T. Branch of the B.L.F., said that the

accounts of the union indicated that there was s t il l

remaining in the funds of the union a sum of $2,62 5

which was part of the $14,000 which had been collected

as a consequence of the Burraboi dispute.

6. The matters to which I have refe r red in the preceding

paragraph clearly demonstrate a pattern of conduct on the par t

of O'Dea pursuant to which he collected lump sums from emplo yers

for the express purpose of distributing those monies amongst

nominated men. It also shows that he failed to apply those

195.

monies, or portion of them, in accordance with the terms upon

which he had collected them, and instead had applied them to the

purposes of the union. This conduct, in my view, was imprudent,

improper and probably unlawful. It was clearly imprudent

because, by collecting large sums of money in cash without giving

a receipt therefor and without providing detailed accounts

sho wing the manner in which he had applied those monies, he left

himself wide open to the allegations which have in fact been made

against him, namely that he had misapplied those funds. It was

improper because , in my view, appropriate standards of conduct

required him, as a union official, when collecting "back funds"

for specified persons, to ensure that those sums were paid

d irectly by the employer to the men on whose behalf they had been

negotiated. It was quite improper, in my view, for O'Dea to

unilaterally determine to withhold a portion of those funds as a "collection fee" applied to the purposes of the union.

Several union officials, who gave evidence before me, not

surprisingly "frowned upon" the type of conduct in which O'Dea indulged. Although each of these persons said that it was part

of the usual duties of a union official to recover arrears of pay

that employers have not, but should have, paid to their members, they nonetheless said that the normal and appropriate practice

is to ask the employers to direct cheques to the individual employees on whose behalf those sums have been negotiated. Each

one regarded the practice of deducting "a commission" as most

unsatisfactory (see P.J . Unsworth Pages 2738-9; K. Stone Pages

2402-3; J.D. McLaughlin Pages 2421-2; I.R. Cutler Page 2431).

Mr. L. Short, the National Secretary of the Federated Ironworkers

196.

Association, put the matter, I believe, in its proper

perspective when he said (Page 2053):-"We do not do business like that in our union. We would

get the employer to post cheques to the employees.

We would not want to handle that one because it is open

to abuse. If we were given a large sum of money by

an employer and told 'go out and pay the employees',

we would say, 'No, thank you, we do not want to handle

money like that'.

I am not saying that every official who has been

given money to disburse like that would necessarily abuse

the trust imposed upon him, it is a practice which, I

think, is most unsatisfactory."

In my view, the conduct of O'Dea, as exemplified in the

examples given in the preceding paragraph, is probably unlawful

because he has applied monies which he received for purposes

other than those upon which the monies were entrusted to him.

197.

SECTION C Interest Free Loans from Union Funds -=c..::....:=-=--::..:..:.---=----=a..:..:...;";..,Po-e::....::.r;:.k.;:;"-o f B • L • F • 0 f f i c e

Chapter 1 Introductory Remarks

1. 1. In November 1977 there was advanced to Norman Leslie

Gallagher a sum of $18,000 from the Federal Fund, stipulated

to be a loan of monies from the Federation upon the security of

his "entitlement to long service leave". The loan was made

pursuant to a resolution of the Federal Management Committee of

August 1977, which resolved that it should be "interest free"

and repayable on demand provided that 30 days written notice was

given.

1.2. Three of the members of the Federal Management Committee

at the time when the loan to Gallagher was approved, were

William Leslie Morgan (the Secretary of the Tasmanian Branch of

the Federation), Kevin Noel Reynolds (the Secretary of the

Western Australian Branch) and Ronald George Owens (the

Secretary of the South Australian Branch). These three men

were elected to the Federal Management Committee as "trustees"

of the organization. Clause 14 of the Rules of the

organization imposed upon them (inter alia) the duty to "ensure

that the property comprised in the Federal Fund is properly administered". It appears that not only did they regard the

application of the Federal Fund for the purposes of making an

interest free loan to Gallagher as a proper administration of that fund, but they used it as a springboard to advance their

own financial interests in the application of the funds of their

respective branches. What appeared to be a very unusual

198.

transaction became "par for the course". In December 1 9 77 Mr. Morgan secured for himself $5,000 from th e funds of t he

Tasmanian Branch which was apparently expressed to be

"a payment of long service leav e". In October 1978 the

Executive Committee of the Western Australian Branch res o l ved

to make a loan of $ 3,500 t o Reynolds "on the same basis as the

loan which had been ma de to the General Secretary" ; and i n

November a nd December 1980 two loans totalling $5,00 0 were made

by the South Australian Branch to Owens against his "entitl emen t

to long service leave". In addit i on to these loans , a loan o f

$3,000 was made, in accordance with the resolution of the Fed er a l

Management Committee, between September 197 9 and March 1980 to

Patricia Mary George on idential terms to the loan which had been made to Gallagher, and in the years of 1980 and 1981 two loan s

were made to two other officials of the South Austral i an Bra nch

of the Federation, namely Messrs . Hughes and Porter , on the sam e

terms as the loan which had been made to Owens .

1.3 . Whatever may be said as to the legality of these ad vanc es ,

they were, in my view, an improper application of funds by t he

Federation on the one hand, and the respective branches on the

other. Correspondingly, in my view, they amounted to th e

receipt of an improper benefit by the individual offic ers or

employees in whose favour they were made. Neither the Ru les o f

the Federation nor of the respective branc hes, which opera t ed at

the time when the loans were made, empowered those loans to be

made; the security accepted by the respective bodies for the

making of the advance was, in my opinion, inadequate; the

199.

notification to the members of the terms , upon which a nd the

purposes for which the loans were given, was insufficient;

a nd, in the cases where it is asserted that the loans have been

repaid, the methods adopted for repayment are , in my view, highly

questionable .

1.4. In the succeeding chapters of this Report I will deal

individually with the loan transactions. The history of these

transactions reveals their irregularity.

200.

Chapter 2 Loans to Norman Leslie Gallagher and

Patricia Mary George

2.1. It appears that in August 1977 the Federal Management

Committee resolved to make a loan of $18,000 to Norman Leslie

Gallagher, such loan to be interest free and to be repayable on

demand provided that 30 days notice was given. The precise terms

of this resolution are unknown to me because, presumably, a copy

of the resolution is in the possession of the Federation, and

the Federation has steadfastly refused to produce to me any of

its books. However, the books and papers produced by the

auditors of the Federation, Pratt Peterson & Associates, sheds

light on the manner in which the loan was made.

In a letter dated 27th October 1977 and written by Peterson

to Gallagher, care of Mrs. George, Peterson notified Mrs. George

that he had calculated Gallagher's entitlement to long service

leave at that stage at a sum of $18,576. The letter (which

forms part of Exhibit 81) proceeded in the following manner:-"At this stage we consider that if an amount of say

$15,000 was drawn or some lesser amount as needed, then the payment should be made from the Superannuation Fund as a loan to Mr. Gallagher rather than an advance

payment of his entitlement. Such a payment, of course, would require ratification of the Committee of Management as it would surely constitute an abnormal payment by the Federal Office. When we discussed this matter with Mr. Gallagher, he was rather concerned at the possibility of the amount being shown as a loan in the balance sheet

of the or at least in the balance sheet of the

Superannuation Fund, however if the amount is taken as an advance payment from the Superannuation Fund to him it constitutes assessable taxable income in his hands, and of course he would be fully taxable on this amount in the

year of its receipt. Upon his ultimate retirement, and assuming that this amount has not been withdrawn by him prior to that date, he would receive it as a 1 ump sum

payment on termination and be taxable on only 5% of it."

201.

Pe t e rso n said (at Pages 1542-3) that when he referred in this

l et t e r t o the "Superannuation Fund" he was referring to what he

desc ribed as "an official's retiring fund which is based on long

se r vice leave calculations". He said that "it was a matter of

termino logy" but that the fund to which he was referring was

syno nymous with "long service leave entitlements". Peterson was

ask ed ( Page 1510) whether he recalled the circumstances of the

loan. He re s ponded in the following way:-

"As I recall Mr. Gallagher requested a loan of $18,000 and

i t wa s approved by the Committee of Management. He discussed

it with me and my comment at that point in time was that

there would need to be some form of documentation

suff ic ient, firstly, to satisfy us as auditors and secondly, to protect the Union in the event of his death

or some other problem in relation to retirement, or

another form of leaving the union. My suggest i on to him

was that they consult their legal representatives and get

something done in that regard ••.• It was of some concern

t o me bec ause it is a very unusual - certainly it has been

in the past, but has not more recently , been a most

unusual transaction. The reason I say that is that the

security behind the loan, as mentioned in that letter, beihg his entitlement to long service leave is in fact

fairly weak security because a person's guaranteed long service leave is only supported by his continuity of

employment and his ultimate retirement from that position

under normal circumstances."

202.

The "sufficient documentation" which Pete rson required

resulted in the coming into existence of two letters which ar e

best described as "Gallagher to Gallagher letters". These f o rm

part of Exhibit 8 1. 1 . The fir st o f these was a l e tter d a t ed

29th November 1977 and was add r essed by N. L. Ga llagher the

General Secretary, to Mr. N. L. Gallagher the General Secre t ar y .

Omitting formal parts, that letter reads:-"Dear Comrade ,

re: Long Service Leave Entitlement

We hereby notify you that an amount of $18,000 has been withdrawn in your fa v our , as per Federal Management Committee Resolution of the 31st August 1977.

The terms of this negotiation is as under:-1. That this be a loan of $18,000, security against

which loan is long service leav e entitlement granted to you as per Federal Council Resolution of the 24th November 1959 .

2. That this loan be repayable by you upon demand by the

Federal Council , provided that notice is given to yo u within 30 days of making such demand .

Your written acknowledgement will b e anticipated."

The second letter was a response dated 30th November 1977

and again addressed by Gallagher to himself. Omitting form a 1

parts it reads:-"Dear Comrade,

re: Long Service Leave Entitlement

I acknowledge your letter of the 29th November notifying me of an amount of $18,000 having been withdrawn in my favour, as per F.M.C. Resolution of 31st August 197 7 .

I advise herein that I agree to the terms of the loa n

against my long service leave entitlement, as tabled in that letter."

203.

It is to be noted t ha t no wh e r e in those documents is

reference made to the fact that the loan was granted on "interest

free terms". No doubt the "concern" which .Peterson said had been expressed by Gallagher at the fact that the existence of

this loan would necessarily h ave to be disclosed in the books of account of the organization was somewha t alleviated by the

omission of this relevant detail.

2. 2. There can be no doubt, as Peterson conceded, that this

loan transaction was a "very abnormal transaction". There

appears to be no power in the Rules of the Feder a tion for the

Federal Management Committee to apply the funds of the Federation

in making interest-free loans to t he officials of the Federation.

True it is that the Federal Management Committee has the control

of those funds but it has that control for the purposes of

ensuring that the funds are applied in fu rthe rance of the obiects

of the Federation. A review of the objects of the Federation

reveals that the funds of the Federation may be applied towards

the alleviation of stressful circumstance s of the members, but

none of such circumstances as are therein r eferred to had any

application to the position of Gallagher in November 1977 . Al though Peterson conceded that the Rules of the Federation did

not appear to empower the making of such a loan, he nonetheless

contended that he was satisfied, as the auditor of the

Federation, that the ma king of the loan was appropriate because

it had been ratified by t he Federal Management Committee (see Page 2730). Peterson conceded that , because of the very abnormal

nature of the transac tio n, he owed a duty, as the auditor, to

204.

"highlight" the transaction in his Report (see Page 1544).

2 . 3. In my view, the loan to Gallagher was irregular in its

making, in its application and in its purported repayment.

2. 4 . It was irregular in its "making" because there was no

power in the Federation to make it, because its very generous

terms constituted the application of the funds of the Federation

for the purposes of conferring a substantial benefit upon one

of its officials and because its security was unsatisfactory.

In essence, Gallagher was being given use of the members' fund

for an indeterminate period of time and at no expense. In view

of that fact one would have th:>ught that the members would have

been interested to know, and were entitled to know, all of the

aspects concerning the transaction, including the terms upon

which the loan was made and the purpose for which it was made.

The fact is the members were not given these details. No

mention was made , in the auditor's report, of the fact that the

loan had been advanced on "an interest free basis" nor was any

mention made of the purpose for which the loan was granted.

Peterson conceded (Page 2727) that, looking at the matter in

retrospect, perhaps he should have highlighted the fact that the

loan was interest free. In my view, it was proper that he should

have done so. I agree with the views of Mr . Milner, an

independent accountant called before me, who said (Page 2718-9)

that in his view the auditor had not properly "highlighted " in

his report what was conceded to be an abnormal transaction .

I also agree with the views of Mr. Milner (Page 2718) that a

205.

"provision for long service leave" is not an appropriate security

against which a loan should be advanced. Such a provision is

maintained by an organization for the purposes of fulfilling

contingent liabilities. The purpose of the provision is to

enable the organization, in accordance with its rules, to meet

its liabilities at such time as an entitlement to long service leave accrues in respect of any person in respect of whom the

provision is made. If, in the course of recovering a debt, the

o rganization was to have recourse against that provision, the

probability is that the purposes of the provision will be

defeated. Peterson's evidence about the strength of the

security vacillated somewhat. When he first gave evidence about these matters he said that he regarded the transaction as an

unusual one because "the security behind the loan ••• being his

entitlement to long service leave, is in fact fairly weak

security because a person's guaranteed long service leave is only supported by his continuity of employment and his ultimate

retirement from that position under normal circumstances." (see

Page 1510). When he was called to give evidence on a later

occasion he sought to suggest that the security was much stronger

than he had formerly represented because, at the time of making

the loan to Gallagher, Gallagher had an undeniable right to his

long service leave (Page 2725). This circumstance, however,

does not overcome the difficulties to which Mr. Milner adverted.

2.5. The evidence reveals that the loan to Gallagher was also

irregular because of the purpose to which it was applied. In

fact its application only underlines the extent of the benefit

206.

which was conferred upon him. According to Peterson (Page 1511 )

when Gallagher had first raised the question of the loan with

him, Gallagher had told him that he proposed to use the loan for

the construction of a house "because he had recently parted

company with his former wife and had little or no assets". If

indeed this was the purpose stipulated by Gallagher upon which

the Federal Management Committee had approved the advance to him ,

then his subsequent application of the monies would suggest that

he had misrepresented the true situation. The true situation

was that the $18,000 was drawn by the union in favour of

Gallagher on or about the 29th November 1977. It would appear

that he immediatel y invested those monies in interest bearing

securities. The bank records, produced to this Commission by the Victoria Street Branch of the Commonwealth Bank, reveal that on

the 29th November 1977 Gallagher deposited the sum of $11,279-75

in an Interest Bearing Deposit at that bank at 9% for two years

(see Page 1672, Exhibit 79K). At or about the same time it

would appear that he advanced the sum of $6,500 to Mrs. George,

upon the security of a mortgage over her premises at Unit 28,

177 Power Street, Hawthorn. The mortgage deed (Exhibit 23A)

discloses the existence of a loan in the amount of $6,500 from

Gallagher to George, commencing as at the lst December 1977.

Interest at the rate of 9% was payable on that loan by Mrs.George

to Mr. Gallagher.

From the coincidence of dates, and the amounts, a nd the fact

that prior to the 29th November 1977 Gallagher had little money

in his known bank accounts, it seems to me to be clearly open

to the inference that Gallagher used the $18,000 which he

207.

received interest free from the Union for the purposes, firstly

of making an interest bearing loan to Mrs. George upon the

security of her premises, and secondly for the purposes of making

an Interest Bearing Deposit at the Commonwealth Bank. In other

words, he engaged in the process of making a profit for himself

at the expense of the Union. Despite the fact that he told his

members in May 1978 that he had used the loan of $18,000 for the

purposes of constructing his beachhouse at McLoughlin's Beach

(as to which see Chapter 2 (f) of Section A of this part of the

Report) it appears fairly conclusive that the money was not

used for that purpose. Indeed it is interesting to trace the

application by Gallagher of the $18,000 which he received from

the Union. On the 7th July 1980 he withdrew the amount of

$11,312-65 from the Interest Bearing Deposit referred to

aforesaid (that being the principal sum of $11,279-75 plus $32-90

unpaid interest which was accruing at that date) and paid that

amount to the credit of his Savings Account No.21323 at the same

Branch of the same Bank. At that date there was slightly more

than $800 standing to the credit of that account. This was

obviously done for the purpose of reinvesting the monies in a

further Interest Bearing Deposit at a greater rate of interest,

because on the 9th July 1980 he withdrew the sum of $12,000 from

the aforesaid savings account and reinvested it in another

Interest Bearing Deposit at 10% with the same Bank (see Exhibit 79L). That sum remained invested in that Deposit until the 13th

April 1981 when he withdrew the $12,000 from that Deposit in

cash. I have already indicated earlier in this Report (see

Chapter 2(b) of Section A of this part of the Report) that on or

208.

about the 15th April 1981 Grollo ma intained tha t he r eceived

a payment of $1 2 ,000 in cash from Gall aghe r.

Insofar as the $6,500 advanced to Mrs. Geo rg e i s concerned ,

that amount remained on advance t o her at 9 % until appr oxima t e l y

September 1980 when the amount o utstand i ng unde r the mo r tgag e

was a little over $3,000. At that date , Gal l aghe r r el eased her

from her 1 iabil ity to repay to h im tha t outstandi ng amo un t in

consideration of her relinquishing the inte r e st which, a t tha t

stage, she had in the McLoughlin's Beach home ( s e e Cha pt er 2(e)

of Section A of this part of the Report).

Insofar, therefore, as it can be s a id that a ny part of the

$18,000 loan was used for the purposes of constructing t he

beachhouse, it came in the form of a "belated payment" t o Gr ollos

in April 1981 of the $12,000. And, as I have already indicated ,

that payment was only made at a stage when it was well kno wn to

Gallagher that inquiries were being made as to the manner in

which he had paid for the construction of that house.

2. 6. The manner in which the $18,000 loan is asserted to have

been repaid by Gallagher to the Union is also questionable.

At all times up until August 1981 that loan is disclosed in th e

books of account of the Union as being due and owing by Ga l lagher

to the Union . At that stage steps were taken to cause it to

be "repaid". Prior to August 1981 steps had been t a ken b y the

Federation to establish with the National Mutual Life Associat i on

in Queensland a Superannuation Fund for th e bene fi t of o ffi c i als

209.

and other employees of the Union. For the purposes of

establishing this fund, it had been decided by the Federation

to transfer to the National Mutual a proportion (namely two­

thirds) of the provisions then being held by the Federation and

its Branches on account of long service leave entitlements. These arrangements meant that a sum of slightly in excess of

$29,000 was to be transferred from the provision which the

Federation had made in respect of long service leave entitlements

to the Superannuation Fund to be administered by the National

Mutual. The difficulty about doing this, however, was that it

involved the removal of a substantial part of the security upon

which the Union had advanced $18,000 to Gallagher and $3 , 000 to

George. (In fact, the Union had advanced $3,000 to George on

precisely the same terms as the advance to Gallagher in early

1980.) Peterson, as the auditor for the Federation, was

naturally concerned with the reduction in the amount of the security and, accordingly, he was concerned to create a situation

where Gallagher's loan and George's loan were repaid (see Page

2 738) • He, therefore, devised a scheme which was carried into

effect on the 5th August 1981. The scheme was, in my view, a

"colourable transaction" to be carried into effect by a "round

robin" of cheques passing between Gallagher and George of the

one part, the Union of the other part, and the National Mutual

of the third part. It would seem that the primary purpose of

this scheme was to bring about a situation in which it could be

seen that the loans then outstanding by Gallagher and George to

the Union were repaid. Neither Gallagher nor George had

sufficient funds standing to their credit at the Commonwealth

210.

Bank to repay those loans and, accordingly, overdraft

accommodation was arranged on their behalf to enable them to dr aw

cheques o n th e ir account at that Bank for $18,000 and $ 3, 0 00

respectively. It is obvious that this overdraft accommodati o n was only capable of being arranged because of an assurance give n

t o the Bank tha t the accounts would be put in funds by

corresponding cheques of the same amount being deposited on the

same day into the respecti v e accounts.

The overdraft accommodation having been arranged, both

Gallagher and George drew cheques on their respective ac c ounts

at the Commonwealth Bank in favour of the Federation for the sums of $18,000 and $3,000 respectively. Both these cheques were

dated 5th August 1981. The receipt of these amounts put the

Federation in sufficient funds to enable it to transfer to the

National Mutual the sum of $29,267-66, which was the amount which

had been previously determined by the Federation that should be

transferred for the purposes of initiating the Superannuation

Scheme. However, upon receipt of that sum of money, the National

Mutual immediately transmitted back to the Victoria Street Branch

of the Commonwealth Bank the sum of $25,000 - $18,000 of which

was credited to the account of Gallagher at that Bank, and the

remaining $7,000 of which was credited to the account of George.

The actions of the National Mutual in transmitting the monies

in this way were taken in accordance with instructions which that

company had previously received from the Federation on the

3rd August 1981, as amplified in a further letter of the

5th August 1981. On the 3rd August 1981 the Federation had

211.

written a letter, signed by Gallagher (as General Secretary)

and Wallace (as Authorising Officer) to Mr. Giesen, the Broker

for National Mutual. In that letter the writers had said the

following:-

"Dear Sir,

re: Superannuation Scheme •••

As verbally agreed, we confirm that we will be telegraphically transferring to the National Bank of Australia, 308 Queen Street, Brisbane, an amount of $29,267-66, which consists of lump sums to be paid into

the above scheme on behalf of the members itemised here:-J. Capog reco $1,375-53

N. Gallagher $18,884-72

D. Hellier $1, 621-0 3

P. McMahon $7,075-78

H. Nowicki $310-60

Total $29,267-66

Also, as agreed, we request that an amount of $25,000, constituted as under, be telegraphically transferred to the Commonwealth Bank, Victoria Street Branch, Cnr. Russell and Victoria Streets, Melbourne, to be deposited in the bank

accounts, as itemised:-1.

2.

Norman Leslie Gallagher Cheque Account No.l21871

Patricia Mary McMahon Cheque Account No.380435

Total

$18,000

$71000

Your receipt for the balance, namely $4,267-66 will be anticipated.

We have incorporated the signatures of the authorising officers in this letter."

212.

On the 5th August 1981 the Federation, in a letter signed

by the same two gentlemen, wrote to Mr . Giesen as follows:-

"Dear Sir ,

re: Superannuation Scheme

Further to our letter of the 3rd August, we advise

that the first paragraph reads incorrectly. The amounts to be paid into the above scheme are

itemised here:-J. Capog reco $1 , 375-53

N. Gallagher $884-72

D. Hellier $1,621 - 03

P. McMahon $75-78

H. Nowicki $310-60

Total $4,267-66

The total amounts transferable for N. Gallagher and P. McMahon are as under:-N. Gallagher

P. McMahon

$18 , 884-72

$7,075-78

of which t he amounts of $18,000 (N. Gallagher) and $ 7, 000 (P. M. McMahon) are bei ng returned to them as

advances against their entitlements under this scheme.

Thi s is to the satisfaction of the Union."

(These le t ters form part of Exhibit 88 . )

The difference between the two sets of instructions

t h e refore lay in the fact that whereas in the first i nstruction

the whole of the entitlements of Gallagher and George (namely

$ 1 8 , 884 -7 2 and $7,075-78 respectively) were to be paid "into the

scheme" , the instr uctions given to the National Mutual in the

213.

second lett,er were to pay only $884-72 into the scheme on behalf

of Gallagher and $75-78 into the scheme on behalf of George.

The remainder of their entitlements (namely $18,000 and $7,000

respectively) was to be immediately transmitted by the National

Mutual to their respective bank accounts in Melbourne. The

change in instructions came about because on the 4th August 1981

Mr. Arnold, the Superannuation Manager of the Queensland Branch

of the National Mutual, had told George, per medium of a

telephone conversation, that if the money went "into the Fund"

it could only be administered in accordance with the Trust Deed. According to Arnold, George told him that the monies were to go

back to herself and Gallagher and she instructed him to pay

$4,267-66 into the scheme and remit the balance of $25,000

immediately back to the accounts of Gallagher and George at the

Commonwealth Bank in Melbourne (see Pages 1648-9). Although

the letter of the 5th August 1981 referred to the $25,000 being

remitted by the National Mutual to Gallagher and George as

"advances against their entitlements under the scheme" it is

nonetheless clear that these monies never became part of the

scheme and that the National Mutual was simply being used by the

Union as a "conduit pipe" for the purposes of transmitting

$25,000 from itself to Gallagher and George.

The simple effect of these transactions on the

5th August 1981 was that Gallagher paid $18,000 to the

Federation, which was accepted in repayment of the debt which

he then owed to the Federation, and the Federation paid the same

amount back to Gallagher via the National Mutual. The legal

214.

effect of the transaction would seem to me to be that Gallagher

was able to repay his debt to the Union by receiving from the

Union a lump sum payment of his long service leave entitlements.

One is entitled to suspect that the money was transmitted from

the Union to Gallagher "circuitously" irt order that it might be

said that the money was not assessable to tax in the hands of

Gallagher.

2.7. The benefits which have flowed to Gallagher as a

consequence of this "loan transaction" are self-evident. He

has had the use of $18,000 worth of Union funds "interest free"

for a period of approximately four years, and he has been able

to repay that amount to the Federation only because the

Federation has been prepared to release in his favour a

substantial proportion of his accumulated long service leave

entitlements, and has done so in a way which has enabled

Gallagher to avoid the taxation implications of that release.

Similar comments can be made in relation to the loan secured by

George, although the amount and duration of that loan were of

lesser import.

215.

Chapter 3 Advances made to William Morgan

3 .1. Mr. William Morgan was the former Secretary of the

Tasmanian Branch of the B.L.F. He died in August 1980.

3 . 2 . In December 1977 the Tasmanian Branch of the B.L.F.

adva nced a sum of $5,000 to Morgan, no t in the form of a loan

but "as long service leave payments". A similar sum had been

advanced to Morgan in the preceding year. In 1978 it came to

t he attention of the auditors of the Tasmanian Branch of the

B.L.F., A. R. Hewer & Co., that these advances had been made.

Mr. Whitehouse of that firm gave evidence before me (see Pages

2509 and following) . In the course of performing his audit

during 1978, he f o rmed the professional opinion that Morgan was

not entitled to the money because he had not retired.

Mr. Whitehouse said:-"We pointed out to him (i.e. Morgan) the tax ramifactions

of receiving a lump sum at that time and, generally, to get

the account back in order we persuaded him to refund the

money to the Union."

Mr. Whitehouse said that, in accordance with the advice given

to Morgan, Morgan refunded the money to the Union and no further

claim was made upon it until his death. Accordingly, the only

benefit received by Morgan from those monies was their use from

the time of their receipt until the time when he refunded them.

2lfi .

Chapter 4 Interest Free Lo an to K. Reynolds,

Branch Secretary in Western Austr a li a

4.1. Kev in Noel Reynolds is , and at all material times has

been , the Secretary of the Western Australian Branch of the

B. L. F •• He is also a me mber of the Federal Council and the

Federal Management Committee of the Federation .

4. 2 . On the 24th da y o f October 1978 the Executive Committee

of the Western Australian Branch resolved t o gra nt a loan to

Reynolds on similar terms to the loan which had been granted by

the Federation to Gallagher. The Minute of the Execut iv e

containing such Resolution is to be found in the working files

of the Auditors to the Western Australian Branch-Messrs. K. F. Holmes & Associates (Exhibit 171). The Minute

reads as follows:-"K. Reynolds drew on his long service leave entitlement on a similar basis to the General Secretary and will give the

same assurance. Loan to be $3,000 for an undetermined period and is repayable on 30 days demand." (See Page 2701).

4.3. Mr. Geoffrey Watt, an employee of the above firm of

accountants, gave evidence to the Inquiry. He said that he was

responsible for preparing the audit repo rt in respect of the

Branch's accounts under the supervision of his principals.

He said that he had noted the Minute of the Executive Committee

resolving to make this loan and that he had regarded it as an

"unusual transaction" (see Page 2711). Accordingly he said

that he had approached Reynolds for the purposes of making a

query and he was told that the amount of the advance was in fact

$3,500 and not $3,000 as had been stated in the Minute. Reynolds

217.

t o l d him that the Minute contained "a typing error" in this

r es p ec t ( Pa ge 2701).

4 .4. In line with the comments which I have already made in

res p ect o f the loan to Gallagher, I regard the loan to Reynolds

no t o nl y a s a n unusual transaction but indeed an improper one.

It a ppe a rs that the loan wa s granted to Reynolds in order that

he c ould "buy a boat" (see Page 2705). The loan was made on

a n interest free basis; it was made in my view otherwise than

i n a cco rdance with the Rules of the organization; it was granted

f o r a n indeterminate period of time; and it was charged with

the s e curity of Reynolds' long service leave entitlements which,

f o r v iews that I have already stated, I regard as inadequate.

In sho rt, it seems t o me that Reynolds was simply using the Union

fu nds, at the Union's expense, to satisfy his personal

p leasures.

4.5. There is nothing in the Rules which govern the

activities of the Western Australian Branch of the B.L.F. that would justify the making of this loan. Mr. Watt asserted that

he had satisfied himself that the advance was made in accordance

with t h e Rules of the organization and that this was so because

it was in the power of the Executive Committee of the Branch to

"vote the appl ication of union funds" for any purposes which it

desired (see Page 2704). When given the opportunity at the

Inquiry to identify the Rule or Rules which would justify the

making of this loan, Mr. Watt said that he was unable to do so

but accepted the invitation which I extended to him to write a

218.

letter to th e Commission at h is l e isur e id e ntifying t h e s o urc e

of power. He subsequently accepted that invitation a nd

a dd re ssed a l e tter dated 5th April 1982 to the Secreta ry t o t he

Co mmission (that letter appears a s Exhibit 171A befor e the

Commission) In this letter Mr. Watt cited Rule 3 (d) of the

Rules o f the Branch as j ustification for the granting o f t he

loan. That Rule states:-

"In all matters between meetings of the Branch, and subject to the control of the meetings of the Branch, the

Br a nch Ex ecutive Committee sha ll have contr o l and cond uct of the business of the Branch and shall act on its behalf

in all matters. It shall have the daily management o f

the business of the Branch. It shall be bound t o observe

the decisions of the meetings of the Branch."

In my view, this Rule does not justify the granting of the

loan to Reynolds by the Executive Committee and, indeed, the

Rules of the organization, read in their proper context, would

seem to me to clearly preclude the making of the type of loan

which was made to Reynolds. Rule 17 of the Federation's Rules

deals with the application of "Branch Funds". Sub-paragraph (b)

of that Rule provides that:-"Branch funds may be applied for the following purposes:-(i) Paying the necessary expenses of management of the Branch;

(ii) Paying subscriptions or affiliation fees to any organization or association with which the Branch, with the consent of the Federal Council, has or may become affiliated;

(iii) Rendering assistance to members who may suffer loss through lawfully taking an active part in the affairs of the Federation."

Rule 3(f) of the Rules of the Western Australian Branc h

provides that:-

219.

"In regard to the disposal of money other than for

administrative expenses and current wages, a two-thirds

majority of financial members voting at a Branch meeting

is necessary."

Having regard to the evidence, it seems to me to be most

unlikely that, at the time when the Executive Committee resolved

to grant the loan to Reynolds, it was concerned to ascertain its

source of power for doing so. The tenor of the Resolution

itself would appear to indicate that it was simply prepared to act on the basis that a loan had been made in similar

circumstances at an earlier point of time to the General

Secretary.

4. 6. The security, which has been taken by the Union for the

loan which it made to Reynolds, is, in my view, unsatisfactory.

Indeed, it is difficult to ascertain from the documentation just

what the security is. The Minute of the Executive Committee

resolving to grant the loan refers to the fact that the loan was

to be advanced against Reynolds' entitlement to long service

leave "on a similar basis to the General Secretary and would give

the same assurance". It would seem that no written assurance

has been given by Reynolds. Initially when Watt gave evidence

he said that at the time when the loan was made Reynolds'

entitlement to long service leave amounted only to $2,452-i.e. less than the amount of the advance (Page 2702). When

confronted with this fact Watts sought to justify the advance

on the basis that an additional security was taken in the form

220.

of unpaid holiday pay which had accrued to Reynolds. He was

unable to specify exactly what amount of unpaid holiday pay had

so accrued. In the letter which he wrote to the Commission dated

the 5th April 1982, Watt revised his view of the amount of

Reynolds' entitlement to long service leave. In the letter

he stated that at the time when the advance was made to Reynolds

he had "an accrued benefit of $3,876-60" by way of long service

leave. It does not seem to me, however, that it matters very

much how much had accrued to Reynolds by way of long service

leave. For reasons which I have stipulated earlier in this

Report, I do not regard a provision for long service leave as

an adequate security against which an employer should be

advancing money to its employee.

4. 7. The transaction, pursuant to which Reynolds received

an advance from his employer in the sum of $3,500 on an interest

free basis for an indeterminate period of time, was, on any view,

an abnormal transaction. Mr. Watt did not contend to the

contrary . It was, in my view, a transaction which an auditor

should clearly have highlighted in the books of account of the

organization. In fact, the only reference to the transaction

in the books of account of the organization is the bald statement

in the balance sheet showing the sum of $3,500 as "advance on

long service leave". In my view , this was not an appropriate

way for the auditor to deal with the transaction. Mr. Milner

took that view (Page 2719) and, indeed, so did Mr . Peterson (Page

2740).

221.

4.8 . The loan to Reynolds still remains outstanding. Not only

d o es that loan remain outstanding but the alleged security for

it has been substantially depleted as a result of the conduct o f the Branch in the latter part o f 1981. In company with the

Federation and the other Branches , the Western Australian Branch,

in the latter part of 1981, transmitted to the National Mutual

in Queensland for incorporation in the Superannuation Fund, two­

thirds of the provision which it was then holding on account of

long service leave entitlements. This action means that the

long service leave entitlements of Reynolds have been

corresponding l y reduced, notwithstanding the fact that the loan

of $3 , 500 still remains unpaid. What amounts, in my view, to

an improper benefit , stil l continues to accrue to Reynolds.

222 .

Chapter 5 Loans to the Officials of the South Australian

Branch of the B.L.F.

5.1. The South Australian Branch of the Federation has made

advances by way of loan to three of its officials . Each of these

advances has been expressed as an advance against the long

service leave entitlement of the official concerned. The

advances have been made to R. G. Owens, the Secretary of the

South Australian Branch, who is also a member of the Federal

Co uncil and the Federal Management Committee of the Federation;

to L. J. Hughes, a Trustee and Organizer of the South Australian

Branch; and to R. H. Porter, a Delegate and Organizer of the

South Australian Branch. Each of these gentlemen is a member

of the Executive Committee of the South Australian Branch.

5.2. On the 22nd September 1980 the Executive Committee of

the South Australian Branch resolved to advance the sum of $2,500

to Hughes; on the lOth September 1980 and the 3 rd December 1980

the Committee resolved to advance to Owens the respective sums

of $3,100 and $1,900 making in all a total of $5,000; on the

27th July 1981 the Executive Committee resolved to advance to

Porter the sum of $2,000. Each of these advances was made upon

the security of long service leave entitlements which were then

accruing to the personnel involved, and each advance was

" interest free".

5. 3. The advances made to the officials of the South

Australian Branch of the Federation are open, in my view , to the

same criticism as the advances made to Gallagher and Reynolds.

The Rules of the Branch (which are the same as the Rules of the

Western Australian Branch) do not justify the making of the

223.

advances ; the security taken by the organization for the

advances (namely the provision for long service leave

enti tlements) is inadequate; and insufficient notice has been g i ven in the books of the organization of the existence of the

advances . Once again I regard these advances as impro per

benefits secured by the persons to whom they were made and

constituted by the interest free use of Union funds.

5 . 4. The books of account of the South Australian Branch of

the B.L.F. now show that the loans referred to in the preceding

paragra ph have been repaid to the Union. Mr. Richard Dean, a

member of the firm of Fo rge & Partners (the auditors to the South

Aus tr alia n Branch) told the Inquiry, when first called, that to

the best of his knowledge the loans had been repaid at the time

when the Superannuation Fund had been established by the

Fed e ration with the National Mutual in Queensland (see Page

2753A). Certainly, the balance sheet for the relevant period,

would appear to demonstrate that such was the case. For the

period ending t he 30th September 1981 the balance sheet discloses

that during the preceding six months the organization had

transferred to the Superannuation Fund a total amoun t of $10,993,

inc luding a sum of $9,500, which was attributed to what is

described as "officials loans". Mr. Dean sa id (at Page 2754)

that his understanding of the situation was tha t the three

recipients of the loans had personally made payments of the

a mo unts of their loans to the Superannuation Fund. These

payments, he said, totalled $9,500, and the balance of $1,493

224 .

was paid by the South Australian Branch itself to the National

Mutual. Mr. Dean's explanation on the first occasion was that

this had been done as a matter o f co nven i ence r ather t han have

the off icials repay their lo a ns t o the Union a nd then have the

Unio n transmit that s um on to the Na tio na l Mutual. As Mr . Dean

rather inelegantly put it, the offici als concerned had done this

"rather than pa y it into the B.L.F. books and then back to the

Fund".

5.5. Mr. Dean was later recalled to give evidence be f o re the

Inquiry. On this occasion it appeared that his prior explanation

as to the manner in which the loans had been dealt with was

inco rrect. This time he said that, during the interval

which had elapsed since he had last given ev idenc e , he had

ascertained from Owens, the Secretary of the South Australian

Branch, that none of the officials concerned had, in fact, paid

the amount of the loans which they had received from the Union

direct to the National Mutual, nor had they paid those amounts to the Union or anybody else (Page 2848). Mr. Dean nonetheless ,

however, sought to justify the entries which had been made in

the books of the account of the Union, by saying that he had

acted on the statement by Mr . Owens, verified by Minutes which

he had sighted, that the officials concerned were going to pay

the relevant amounts direct to the National Mutual.

The consequence of the facts as they currentl y stand is that

the three officials concerned have recei v ed interest-free l oans

from the South Australian Branch of the Fed e ration totalling

225.

$9,500. None of those sums has been repaid to the lender.

Nonetheless the books of account of the lender show that those

loans have been repaid, but there has been a corresponding

reduction in the provision maintained by the Union for long

service leave entitlements to the three officials concerned.

In other words, it would appear that, by the book entries

referred to, the organization has accepted the fact that the

indebtedness of these officials to it no longer exists. The

organization appears to have accepted, in lieu of repayment, a

reduction in the outstanding liability to pay long service leave

entitlements. If this is, indeed, the effect of the action

taken by the organization, then it would seem that the officials

have received their long service leave, or at least part of it,

in advance.

226.

SECTION D Receipt of Benefits - Criminal Implications

1. The Terms of Reference issued to me require me to

direct my mind t o the question of whether or not the Federation ,

or any officer or member thereof, has engaged in conduct amounting

t o a criminal offence. Any view which I form about these matters

i s to be formed only on evidence which is admissible in a Court

of Law and "sufficient to place the Federation officer or member

on trial for that offence". I have treated these words as

imposing upon me a requirement similar in nature t o that imposed

upon a committing Magistrate. In other words, my consideration

has been directed towards the question of whether the evidence

in respect of any particular person or organization, against whom

it is directed, is of such a strength and quality that it raise s

a s trong or probable presumption that the person or organization

concerned has engaged in conduct of a criminal character. It

necessarily follows that a recommendation by me that

consideration be given to the prosecution of a particular person

is not a determination of the guilt or innocence of that person. It is trite to say that it is no part of the function of an

inquisitor to determine the guilt or innocence of any person.

The recommendation merely means that, in my opinion, the evidence

bears a sufficiently strong character and quality to warrant t hat

the person, who is the subject of the recommendation, should

stand his trial before a duly constituted Court of Law.

2. It is to be noted that I am only required to concern

myself with a consideration of whether the "receivers of

227.

benefits" have been implicated in criminal conduct. This is

because I have been directed only to consider the position of

the Federation, its officers or members, and in each case the

evidence discloses those persons to be the receivers of benefits.

I have not been asked to consider the position of the "givers

of benefits" which position, in certain circumstances, might

raise different questions from those which are apposite to a

consideration of the position of "receivers". In this regard,

I would point out that most of the persons and organizations whom

the evidence discloses to be the major contributors of benefits

to the Federation and its officials in Victoria, have asked me,

through their respective counsel, to make a certification in the

terms of Section 30 of the Evidence Act of the State of Victoria.

I have declined to adopt that course because it does not seem

to me that the type of certification sought (namely a "blanket

certification" in anticipation of certain events occurring) is an appropriate exercise of the power invested in me under Section

30 of the aforesaid Act. In any event, it seems to me that the

certificate contemplated by Section 30 is of evidential value only, the substantive protection being provided in the opening

paragraph of the Section. I have annexed to this Report the

full transcript of the proceedings which took place before me,

and so far as I am aware that transcript accurately records the

questions asked and the answers given by the witnesses who gave

evidence before me. It seems to me that in the circumstances

the existence of that transcript will provide such protection

as is necessary for the purposes contemplated by Section 30 of

the aforesaid Act.

228.

3. Receipt of Benefits in the form of goods and services

EY_Gallagher, Dalton, Wallace, Lewis, Greany, Masterson, Donnelly and Cummins

(a) In Chapter 2 and the following chapters of Section A

of this part of the Report, I have dealt with the

receipt of benefits in the form of goods and services

by the abovementioned persons. Each of these persons

is, or was at the relevant time, an official of the

Federation or its Victorian Branch and each is, or was ,

a member of the Federation.

(b) The central question which is raised by the evidence

is whether the receipt of the materials and services

by these people amounted in the circumstances t o the

receipt of a "secret commission" ir. contravention of

the provisions of Section 176 of the Victorian Crimes

Act. Insofar as that section appears to bear on the

material before me, it provides as follows:-"Whosoever being an agent corruptly receives or

solicits from any person for himself or for any

other person any valuable consideration:-(a) as an inducement or reward for or otherwise

on account of doing or forbearing to do

any act in relation to his principal's

affairs or business; or (b) the receipt or any expectation of which would

in any way tend to influence him to show or

to forbear to show favour or disfavour to

any person in relation to his principal's

229.

affairs or business .•. shall be guilty of

a misdemeanour

(c) The section is obviously designed to establish a code

of "business propriety" to be followed by agents in

the conduct of the affairs of persons or organizations

on whose behalf they are acting. The category of

persons who fulfil the description of an "agent" is

cast wide (see Section 175). In my view, each of the

persons to whom I have referred, in carrying out his

duties of negotiating, organizing, establishing and maintaining industrial conditions and agreements for

the members of the organization on building sites is

"an agent" within the meaning of the section (see

Morgan v. Director of Public Prosecutions (1970)

2 All. E. R. 1053). Gallagher, as the General

Secretary of the Federation, is given, by the Rules

of the Federation, a wide variety of powers which the

evidence reveals he exercises to the full. Those

powers include the power to negotiate industrial

agreements on behalf of the Federation, one or more

of its branches, and its members (see Rule 19). The

evidence indicated that Gallagher commonly exercised

this power and witnesses, including Herscu, Grey, Williams and Lewis, testified that not infrequently

they conducted negotiations with Gallagher for the

purposes of establishing agreements as to conditions

which would appertain to members of the Federation on

particular building sites. It would seem to me that

230 .

in conducting these negotiations Gallagher was acting

not only as an agent for the Federation but also for

the particular members of the Federation affected by

the agreement. Likewise the evidence revealed that

the organizers , from time to time and in pursuit of

their duty , negotiated " on site agreements" with particular employers with a view to furthering the

interests of the members of the Federation working on those particular sites . In carrying out those duties

it would seem to me that the organizer is not only an

agent for the Federation but also for the men on whose

behalf t he negotiations were being conducted .

In general , it seems to me that the relevant

" business" of the Federation can be loosely described

as "achieving and maintaining satisfactory working

cond i tions and wages for its members , inter alia ,

through the negotiation of agreements with builders,

developers and their representatives" . In a sense ,

the members of the Union are the shareholders of the

organization , dependent upon the activities of the

organization to better secure their wages and

conditions . One of the ways in which better wages and

conditions are won is by resolution of disputes with

employers . The " agents" of the organization who

negotiate with employers, or their representatives ,

in seeking to achieve these better wages and

conditions , are people such as Gallagher and the

organi zers . If , therefore , these persons are placed

231.

in a position where the receipt of a favour, or any

expectation of a favour, would "in any way tend to

influence them to show or to forbear to show favour

or disfavour to any person in relation to their

principal's affairs or business" then quite clearly a serious situation arises. Immediately he receives

the favour conflict of interest exists. On the one

hand, he remains under his primary obligation to carry

out the affairs of his principal (i.e. the Federation)

by negotiating the best terms and conditions which he

is able to negotiate with the builder concerned. On the other hand, however, his capacity to engage in

that primary obligation is "diluted" by the extent to

which he is induced by the favour to show "gratitude"

to the builder. In other words, he no longer has one

"master" but two. It is not to the point to consider

whether in fact such a situation actually occurs; the

vice of the situation is that the receipt of the gift

will have the tendency to make this situation occur.

(d) The evidence given before me in this Inquiry makes it

abundanti y clear that Gallagher, and the other officials

to whom I have referred, have received, from persons

and organizations with whom they came into "industrial

contact" in the course of pursuing their official

duties, substantial benefits in the form of materials and services. There can be no doubt that these

materials and services constituted "valuable

considerations" within the meaning of Section 176 of

232.

the Crimes Act . Th e evidence leaves me with a firm

conviction that the se considerations were given with

a view to influencing the recipients to show favour

to the "giver s " in relation to the manner in which the

Federation and its members would conduct themselves

towards building projects which were o r were to be

ca rried out by those "givers". It does not seem to

me to matter very much whether the considerations are

labelled as "instruments of maintaining goodwill" or

"the means by which industrial harmony might be

bought". These epithets seem to me to cover the

field of reasons provided by the donors during the

course of the Inquiry, for bestowing the benefits on

the union officials. In any case, it seemed to me

that the design was to secure an advantage to the

giver. Looked at in this light, one can well

understand why the donors took such careful pains t o

conceal the benefits which they were bestowing.

(e) Whether the receipt by the union officials concerned

amounted to a criminal offence depends on whether the

benefits undoubtedly received were solicited or

received "corruptly". The word "corruptly" is the

key to the criminality of the conduct:-"The word 'corruptly' in the section sounds the

key note to the conduct at which the section is

aimed. The evil is the giving of a gift o r

consideration not bona fide but mala fide and

designedly wholly or partially for the purpose

23 3.

of bringing about the effect forbidden by the

section. It need not necessarily amount to a

bribe to do some specific act or a reward for

having done it."

(R. v. Gross (1946) Ontario Reports, Page 1,

per Roach, J.A. at Page 9.)

Although it is colloquial to refer to considerations

received in contravention of the provisions of

Section 176 of the Crimes Act as "secret commi$sions",

those words are nowhere to be found in the section.

Nonetheless the notion of corrupt conduct is probably

best evidenced where an agent abuses the position of

influence and trust into which he has been placed by

his principal by receiving a consideration for

himself "behind his principal's back" . Indeed,

Section 186 (2) of the Crimes Act provides that

"where it is proved that any valuable consideration

has been received or solicited by an agent from

any person having business relations with the

principal without the assent of the principal, the

burden of proving that such valuable consideration

was not received or solicited • . . in contravention of

any of the provisions of this subdivision shall be on

the accused". Thus, although it does not seem to me

to be necessary in order for a receipt to be "corrupt"

within the meaning of Section 176 for it to have been

taken by the agent without the assent of the principal,

nonetheless such lack of assent gives rise to a

234 .

presumption that the receipt was taken cor r uptly

(seeR . v . Scott (1907) V. L. R. 471 at 474) . Thus ,

whi l st the presence of secrecy may be a s ignificant

as pec t o f proof , it is no t an essential component , in

my v iew , of the facts which would constitute an offence

against the section . The major conside r ation is

whe ther th e valuable consideration has been recei ved

in bad fa i th .

When applied t o a receiver , it seems t o me t hat

the word " corrupt " means little more than that the

conside ration was taken wit h some wr o ngful intention .

The wrongful intention which is contemplated is ,

I believe , t he intention of the agent t o take

advantage of his position and of his relationship with

his principal for the purpose of secu r ing some benefit

to himself o r some othe r person , and he is presumed

to have acted corruptly if he indulges in that sort

of conduct without h i s principal ' s assent (see

R. v . Stevenson (1907) V. L. R. 475 at 47 6 ;

C . v . Johnson (1967) S . A. s . R. 259 at 300-301) .

(f) Most of the benefits secur ed by Gallagher for

himsel f , and fo r his son , and for Mrs . George ,

satisfy , in my view , the c r iteria of co rr upt receipts

to which I have refe r red i n the preceding paragraphs .

In the main , t hose benef i ts we re given by perso ns o r

organizations for the purpose o f securing an advantage

to themselves . They saw Ga ll agher as a man of

infl uence wi thin his own organization - a man who had

235 .

the power and the capacity , in the conduct of the

affa ir s of his organization , to make things "rough or

smooth" on the building sites administered by the

donors of the benefits. By "greasing his palm" they

hoped to secure the benefit to themselves of harmonious

industrial relations on those sites . It is not to

the point, as some submissions made to me would have

it, that Gallagher did not give these people all that

they wanted. The law does not require that the

person receiving the benefit in fact shows the favour

which the giver of the benefit seeks . It is the

giving and receiving of the benefit, in corrupt

circumstances , loJhich is struck at by the section

(seeR . v . Carr (1956) 3 A.E.R. 979;

R. v. Dickinson 33 C.A.R. 5).

Lo oked at from Gallagher's point of view , the

evidence demonstrates that he exploited to the full

the position of influence which he had for the

purposes of securing these benefits to himself, his

son and Mrs. George. In most instances the evidence

shows that he actively solicited benefits from

builders or developers at times when those builders

or developers had projects underway which involved

the substantial use of union labour. In many

instances the persons to whom these requests were made

said , during the course of their evidence , that they

could not afford to refuse them. Even if that

concession was not made expressly, it seemed to me to

236.

be the obvious implication from the evidence that all

persons of whom such requests were made "saw the

wisdom" of granting them.

The fact that these benefits were given and

received "with wrongful intent" seems to me to be

borne out by the steps which the parties took to

conceal what they were doing. The givers painstakingly

took steps to "bury" the cost of their benefits by

submerging them in the accounts of other building

projects. So successfully have they achieved their object that in some cases it is no longer possible to

ascertain precisely how much money was expended in

providing labour and materials for the benefit of

Gallagher . There is no doubt that these steps were

taken to conceal the fact that favours were being done

for Gallagher. Lewis said so, and so did Grey.

It does not seem to me to be to the point to claim

that "everyone knew that a beachhouse was being erected by Gallagher" . The real point is whether

peopl e knew how it was being paid for . That is where

the benefit lay and the intent was to conceal that

benefit from public view. For his part , Gallagher

has demonstrated his " wrongful intent" by doing his

best to conceal from his union, its members , and the

world at l arge, the nature and the extent of the

benefits conferred upon him . In May 1978 , at a

time when elections for the office of General

Secretary were pending, Gallagher told his members at

23 7.

a General Branch Meeting that he had built his house

at McLoughlin's Beach by raising a loan of $18,000.

In his report to the membership of the Federation of

September 1981 (after this Commission had commenced

its investigation) Gallagher repeated this statement. There can be little doubt that this conduct on the

part of Gallagher amounted to a wilful attempt to conceal the true facts from the members of his

organization . As I have already pointed out in an

earlier section of this Report, Gallagher connived with Grey (when he knew that enquiries were being

made as to how he had paid for his beachhouse) to

fabricate false documents for the purposes of falsely

representing that he had paid for work and materials

when clearly that was not the case. This conduct on

the part o f Gallagher demonstrates, in my view, a

clear design to keep hidden from the membership of the

union, and from the world at large, the fact that

these benefits had been received. Implicit in the

conduct is a recognition of the fact that he had

improperly exploited his position for his own

benefit. It was submitted to me that because other

officials of the organization had themselves received benefits there fore they all must have been aware of what each other was doing and recei ving and that,

because their knowledge was "the knowledge of the

union" the benefits could not be said to have been

received "secretly". That submission seems to me

238.

to be tantamount to saying that if a number of persons

act corruptly , then none of them is corrupt if each

knows what the other is doing. The proposition, in

my view, is unsound and contrary to authority (see

Leary v . Cohen (1940) 14 L.G.R. 142).

(g) The application of the principles to which I have

referred in the preceding sub-paragraphs would suggest

that if an agent negotiated for the supply of goods

and services on a commercia l basis then,

notwithstanding that the supplier was a person "in

business relationship with the agent's principal", it

could not be said that the agent has acted corruptly.

It seems to me that the essential element of

corruption to be found in Section 176 of the Crimes

Act 1958 must necessarily be negatived if the agent

enters into a commercial agreement to pay a market

price for the considerations which he receives.

Accordingly , it could not be proven, in my view ,

that the goods and services which the evidence establishes were provided by developers to

Messrs. Wallace and Greaney were "corrupt receipts"

because the "substanti al giver" in each case has said

that the provision of the goods and services concerned

was attended by a "promise to pay" which, although yet

unfulfilled, could not be said t o be ungenuine. In

the case o f Greaney it is true that there was the

supply of a small amount of concrete by the Grollos,

said to be "a favour" in respect of which payment was

239.

not expected. This item, however, is in my view so

small as not to warrant attention. Likewise, in the

case of Donnelly, the evidence does not enable me to

conclude one way or the other whether there was a

promise or expectation of payment; but once again the

se rvices provided were so inconsequential as to be

unworthy of action.

The principles to which I have adverted in this

sub-paragraph squarely raise the question as to

whether the receipt by Gallagher of goods and services

from Grollos were corrupt in the sense in which it is

used in Section 176 of the Crimes Act. The Grollos have

asserted before this Commission that they always

intended that Gallagher should pay for the goods and

services which they provided to, or organized for, him,

and they also asserted that there was a corresponding

intention in Gallagher to pay. For the reasons which

I have already expressed in Chapter 2 (b) of

Section A of this part of the Report, I do not accept

the evidence of the Grollos in this regard. It is

far more probable that ther e never was an intention

on the part of the Grollos that Gallagher should pay,

or an intention on the part of Gallagher that he would

pay. Such payments as were, or might have been, made

in my v iew were the result of a "wall-papering

exercise" taken at a time when Gallagher knew that his

activities were the subject of investigation.

240 .

I f , as I bel i eve , t he goods and se r v i ces prov i ded

by t he Gr o l los to Ga l lagh e r were "g i fts p ur e and

s impl e ", the n I wo ul d have no d o ub t that the y am o un ted

to c orrupt r ec ei p t s withi n th e meani ng o f Sect i on 1 76

of t he Crim e s Ac t. I n o th e r wo r d s, they were g i ven

with a vi e w t o securing an a dvantage and r ece i v ed in

bad faith, and in the expl o itatio n of the positio n of

influenc e which Gallag her h ad a s a n ag e nt o f t he

Federation. That much seems cl ear from t he e v idence .

Bruno Grollo said (Page 1169):-"We were prepared t o extend credit t o him

(i.e. Gallagher) and to continue t o prov ide favours which wo uld not be out of proportion t o

the advantages we saw as fl o wing fr om ensuring

Norman Gallag he r's, and his union's, g ood will

towards us continued."

When he was asked t o explain what "advantages" his

company saw, he replied (Page 1221-2):-"I suppose that we were on a more personal and

friendly basis than some o f the people who wo uld

not talk to the unions and would rather 'blue'.

I think if myself and Norman Gallagher, or

myself and any other union organizer, were on a

reasonably friendl y footing, it is a bit harder

for him to be more difficult with me than if he

had never seen my face before."

The fact that it was the "special position" whi c h

Gallagher held in the building industry which prompted

241.

the Grollos to single him out for special treatment

was made clear in this passage of evidence given by

Bruno Grollo at Pages 1185-r-. He was asked why he kept

on giving materials to Gallagher when he was not

getting paid for them. Grollo responded:-A. "\\Thy did I keep on giving it to him."

Q. "Yes?"

A. "Because he was Norm Gallagher, I suppose,"

Q. "What does that mean. You can't afford to

offend him?"

A. "That's right."

Q. "That is, when he said 'I want something'

it is a suggestion which is not appropriate for you or perhaps other builders to refuse?"

A. "To a point, to a point, yes."

If, as I would find to be the case, Gallagher

received these goods and services from the Grollos

without any intention to pay for them, the fact that

in April 1981 he had developed a "locus poenitentiae"

which resulted in a payment of monies by him to the

Grollos, would not change the corrupt character of

those receipts. More so, if his change of heart was

precipitated by a desire to "cover up".

Notwithstanding the views which I have formed

about the "Grollo transactions", to contemplate

charging Gallagher with offences of receiving these

goods and services corruptly would necessarily involve

the laying of charges in respect of which the

242 .

principal Crown witnesses would be asserting that

there had been an intention to pay . This realisati o n

squarely raises the issue as to whether that evidence

is sufficient to place Gallagher on his trial in

respect of those receipts.

In this regard I would obse r ve that it is a

peculiar feature of the offence of "corruptly

receiving valuable considerations as an agent " that

the evidence upon which one must primarily rely for

its substantiation is that of the " giver". It is also

a feature of such offences that this evidence has a

potential of unrealiability because , in most instances,

the "giver" himself is an offender. This much is

recognised by the provisions of Section 1 84 of the

Crimes Act 1958 which denies to a person giving

evidence in a charge laid under Section the right

to refuse to answer questions on the grounds that they

might incriminate him.

In my view , there is suffic ient evidence to place

Gallagher on h i s trial in respect of the "Grollo

receipts" - i.e. the supply of concrete , the supply

of labour and materials in r es pect of concreting , the

supply of timber for the frame of Wayne Gallagher's

house , the supply o f a carpenter for the erection of

that timber frame, the supply of a roof deck for

Wayne Gallagher's house, and the supply of a truck and

the payment of registration fees in r espect of that

truck. Th e assertion by the Grollos that there was

243.

an intention to pay for these goods and services is

but one aspect of the evidence which would have to be

taken into account by the tribunal of fact in seeking

to determine whether those receipts were corrupt.

For the reasons to which I have already adverted

earlier in this Report, there is an ample basis, when

the whole of the material surrounding these receipts

is looked at, for the tribunal of fact to reject the

assertion of the Grollos that there was an intention to pay.

But that, however, is not the end of the matter.

A "valuable consideration" within the meaning of the

Crimes Act is not limited to the subject matter of the

receipt. It includes "any benefit or advantage

whatsoever and any rebate, deduction or discount or

any forbearance to demand any money". Whatever else

might be said about the materials and services received

by Gallagher at the instance of the Grollos, Gallagher

received those goods and services at a reduced price

and, in the long run (even accepting the Grollos'

evidence in its entirety), only paid $20,000 for goods

and services which, even at trade prices, were worth

somewhere in the vicinity of $35,000. Furthermore,

he received the "advantage" of a forbearance on the

part of the Grollos to demand payment in respect of

those goods and services over a substantial period of

time. The fact that this latter advantage was

afforded to Gallagher because of his particular

244 .

situation in the building industry was made clear by Bruno Grollo (Page 1221) when he said:-"I suppose it i s not in our interest t o go and

chase him very hard for the money."

When he was asked why , he said :-

"It is not in our interest t o offend him because

I couldn't affo rd t o have a situation where he ,

o r any of his union o rganizer s , or any of the

othe r union o rg anizers , would think that we were

weal thy and had plenty of money and could afford

to pay the men as much money as the unions could

screw out of us . We thought we had to show th a t

we could not afford to pay exo rbitant amounts of

site allowances ." This evidence clearly means that the only reason

why Gallagher was able to get these benefits, and the

only reason why the Grollos were prepared to give them

to him was because of the special position of influence

which Gallagher had within the building industry, and

his capacity to turn that influence t o the disadvantage

of the major builders .

Thus it seems to me that the evidence relating

to the receipt of goods and services by Gallagher at

the instance of the Grollos would justify charges where

the "valuable consideration" alleged to have been

corruptly received was expressed in the alternative.

Whether the advantage was the receipt of the goods and

services themselves, the receipt of those goods and

245.

services at reduced prices, or the receipt of those

g o ods and services on generous terms , they are

no netheless "valuable considerations " which , on any

v iew , the evidence given i n this Inquiry would suggest

we re received corruptly by Gallagher. The precise

form of the charges which , in my view, ought to be

l a id in respect of these receipts is a matter which

o ught , desirably, be left to the appropriate law

o fficer .

Similar considerations to those which I have

expressed in rel ation to the benefits which Gall agher

recei v ed from the Grollos also apply to certain of the

benefits which the evidence establishes that he r e cei v ed from the Herscu companies , through the medium

of George Grey . I have referred to Gr ey ' s evidence

in respect of t h ese benef i ts in Chapter 2 (a) of

Section A of this part of the Report . Grey sa i d that

the coolroom, the curtains, the doors and windows from

Nepean Aluminium, and certain of the electrical work

done by B. C. Seymour, were the subject of an agreement ,

or understanding , which he had with Gallagher that

Gallagher woul d pay. For the reaso n s I have earlier

given , I would have no hesitat i on in rejecting t hat

evidence of Grey . In my view , there is sufficient

evidence to warrant placing Gallagher on his trial for

corruptl y receiving each of those items. Howe v er , even

if one was to accept Grey's evidence in its entirety ,

there is no doubt that in respect of each of those

24 6 .

items, Ga llaghe r received a " v aluabl e c onside r a t ion "

within the me aning of th a t term in Section 176 of the

Crimes Act, b o th in respe ct o f the d isco unted price

which he was c alled upon to pay, and the f o r bea r a nce

o f t he g i ve r t o demand pa yment f o r th e full am ount o f

the consid e rati o n agreed t o b e giv en.

( h) I ha v e fo rmed the conclusi o n th a t th e e v idence

establishe s that the foll o wing officials o f t he Federation, residing in Victoria, have receiv e d the

following v aluable consideratio ns in circumstanc es

which br e a c h the provisi o ns o f Section 17 6 of the

Crimes Act o f the State of Victo ria:-

A. Norman Gallagher

(i) Plumbing work performed at McLoughlin's

Beach by Moorabbin Plumbing, organized b y

Montv ale Developments and paid for by the

Herscu companies.

(ii) Electrical work performed at McLoughlin's

Beach by B.C. Seymour Pty.Ltd., organized

(iii) by Grey and paid for by the Herscu companies. Bricklaying in 1977 at McLoughlin's Beach

performed by J. Tilli, organized by Montvale

Developments and paid for by Murragong

Nominees Pty. Ltd.

(iv) Bricklaying in 1979 and 1980 at McLoughlin's

Beach performed by J. Tilli, organized by

Montvale Developments and paid for by

247.

Forest Hill Heights Pty. Ltd. and the

Hersfield Development Corporation.

(v) Light fittings supplied by A.D. McCulloch to

the house of Norman Gallagher at McLoughlin's

Beach, organized by Grey and Lewis and paid for

by Murragong Nominees Pty. Ltd.

(vi) Timber and joinery supplied by Ringwood

Shopfitters to the house of Norman Gallagher

at McLoughlin's Beach, organized by Lewis of Montvale Developments and paid for by

Centrepoint Custodians Pty. Ltd.

(vii) A coolroom supplied to the house of Norman

Gallagher at McLoughlin's Beach by Haden

Engineering Pty. Ltd., organized by Grey and

paid for by Hersfield Development Corporation.

(viii) Curtains supplied to the house of Norman Gallagher at McLoughlin's Beach and to the flat

at 177 Power Street, Hawthorn, by Sucol

Distributors Pty. Ltd., organized by G. Grey

and paid for by Hersfield Development

Corporation.

( ix) Painting of Gallagher's house at McLoughlin's

Beach by J. Mazetti, organized by Grey and

Lewis and paid for by Murragong Nominees

Pty. Ltd.

(x} Plaster sheeting prov ided t o the house of

Gallagher's son at McLoughlin's Beach by

Victorian Plasterers, organized by G. Grey

248.

and paid for by the Hersfield Development

Corporation.

(xi) Bricks and the cost thereof supplied to the

houses of Norman Gallagher and Wayne Gallagher

in December 1979, organized by Lewis of

Montvale Developments and paid for by

Montvale Developments.

(xii) A steel external staircase supplied to the

house of Norman Gallagher at McLoughlin's

Beach by Rocka Steel Co., organized by Lewis

of Montvale Developments and paid for by

Forest Hill Heights Pty.Ltd.

(xiii) The supply of carpentry work at the house

of Norman Gallagher by Grandison & Neille Pty.

Ltd., organized by Lewis and paid for by

Forest Hill Heights Pty.Ltd.

(xiv) Plumbing work done at the house of Norman

Gallagher at McLoughlin's Beach by Conron

Bros. Plumbing Pty. Ltd., organized by

Gregson of Dominion Properties and paid for

by Dominion Properties.

(xv) Electrical work done at the house of Norman

Gallagher by Electron Electrics Pty. Ltd.,

organized by Gregson of Dominion Properties

and paid for by Dominion Properties.

(xvi) Electrical work done at the house of Norman

Gallagher by Electron Electrics Pty. Ltd.,

249.

organized by Lewis of Montvale Developments

and paid for by Centrepoint Custodians Pty.Ltd.

(xvii) Curtains provided by Sucol Distributors Pty.

(xviii)

Ltd. to Gallagher's apartment at Lygon Street,

Carlton, authorized by Dodd of Montvale

Developments and paid for by Montvale

Developments.

Light fittings provided by Helmys Pty. Ltd.

to Gallagher's apartment at Lygon Street,

Carlton, organized by Dodd of Montvale

Developments and paid for by Montvale

Developments.

( xix) A radial arm saw provided to Gallagher by

Power Tools Specialists Pty. Ltd., organized

by Wilkes of Fletcher Watts and paid for by

Fletcher Watts.

(xx) Labour and materials supplied to Gallagher

for two greenhouses provided by Fletcher

Watts and paid for by Fletcher Watts.

(xxi) Sundry carpentry work carried out for Norman

Gallagher and Wayne Gallagher at McLoughlin's

Beach by J. Cauchi, on the authorisation of

Lewis of Montvale and paid for by Montvale

Developments.

(xxii) Steel beams provided to the house of Wayne

Gallagher in November 1979, authorised by Lewis

of Montvale Developments and paid for by

Montvale Developments.

250 .

(xxiii) S undr y building materials provided to Gallagher

by E.A. Wa tts on the instruc t ions of Northover.

(xxiv) S undr y building materials provided by Costains

(Australia) Limited to Gallagher, on th e

instructions of Hancock of Costains .

(xxv) Sundry building mate rials provided t o Gallagher

by Dillingham (Australia) Limited on the

authorisation of Gussey.

(xxvi) A timber frame suppli ed by Canterbury Timber s

Pty. Ltd. on the authorisation of Gr ollos for

the house of Wayne Gallagher.

(xxvii) The provision of carpentry work by Termac

Constructions Pty.Ltd. on the authorisation of

Grollos f o r the erection of a timber fram e at

Wayne Gallagher's ho use.

(xxviii) The supply of roof decking for Wayne Gallagher's

house by the Aldeck Roofing Co. on the

authorisation of Grollos.

(xxix) The supply of concrete to the houses of

Norman and Wayne Gallagher by Pioneer Concrete

(Vic.) Pty.Ltd. on the authorisation of Grollos.

(xxx) The supply of labour and materials in respect

of concreting at the houses of Norman and

Wayne Gallagher by employees of Grollos on the

authorisation of Grollos.

(xxxi) The supply of a truck to No rman Gallagher by

the Grollos in September 197 5.

251.

(xxxii) The payment of registration fees in respect of

that truck by the Grollos for all years between

1975 and 1981.

(xxxiii) Doors and windows supplied by Nepean Shopfitters

on the authorisation of George Grey and at the

expense of Hersfield Developments to the

premises of Norman Gallagher at McLoughlin's

Beach.

In the light of the comments which I have made

in the immediate preceding sub-paragraph of this

Report, the nature of the "valuable consideration"

expressed in sub-paragraphs (vii), (viii) and (xxvi)

to (xxxiii) inclusive may have to be the subject of

an alternative count.

The evidence discloses that each of the above

33 items was expressly solicited by Gallagher from

a person who had the authority to organize their

provision. The evidence establishes that most of

these items were provided for the construction of

the beachhouses of Gallagher and his son at

McLoughlin's Beach. Some of the items, however,

were incorporated in the flat owned by Mrs. George

at Power Street, Hawthorn, and in the flat occupied by Gallagher at the Federation's offices in Lygon

Street. The evidence also indicates that the cost

of each item referred to was borne by the person

252.

providing it and that, with the possible exception

of the items to which I have referred in

sub-paragraph (g), no part of the cost was borne

by Gallagher who solicited it. The evidence

appropriate to the receipt of each of these items

is to be found in Appendix 6 to this Report.

The evidence disclosed the receipt of benefits

by Gallagher other than those to which I have

referred above. I have not included these items

in the list of "secret commissions" received by

Gallagher for a variety of reasons. Some of them,

in my view, are too insignificant to warrant

attention, such as the dog kennel provided by Fletcher Watts, the tomato stakes and the bait

table provided by Fletcher Watts, the repairs

and alterations to the shower recess at the

Lygon Street premises provided by Fletcher Watts,

the plumbing, electrical and carpentry work done

by Moorabbin Plumbing and Montvale at the Power

Street flat, the trees and shrubs provided by the

Melbourne City Council, and the contractor's shed

and toilet provided by Jennings Industries.

In respect of other items, it seems to me that the

evidence is vague and uncertain, mainly because of

lapse of time and death of principal witnesses.

An example is the structural steel frame which

appears to have been manufactured for the house of

Norman Gallagher at the instance of the late

253.

Mr. Hansen of Hansen & Yuncken Pty. Ltd. I have

referred in detail to the intrigue which surrounded

the supply of this item in April 1975, and the

manner in which it appears that a bank cheque of

$5,000 was used to pay for a proportion of the cost

of constructing that item. It seems to me that

without the evidence of Mr. Hansen, the proof of the

receipt of that item, and the circumstances in which

it was received, would be difficult to furnish. Other items, in respect of which it seems to me the

evidence is insufficiently strong, include the

Besser blocks, bricks and steel purlins, organized

for Gallagher by Grey, and roof decking, alleged to

be supplied by Aldeck Roofing Co. on the instructions

of Lewis and Grey in June 1978.

There is one other item which ought to be

mentioned. That is the timber supplied by

A. J. Galvin Pty. Ltd., which the principals of

A. J. Galvin testified was supplied by that

company to the Victorian Branch of the B.L.F. for

i t s pur po se s • When one looks at the places to

which that timber was delivered, however, it is

seen that a substantial quantity of it went to

premises at Glasgow Avenue, Reservoir, which

premises are jointly owned by Gallagher and his

former wife. This would seem to suggest that some

of the timber at least was used for the purposes of

Gallagher as distinct from the Organization . There

254.

is no evidence, however, that Gallagher was concerned in soliciting this material, although

there is evidence which shows that the material

commenced to be delivered following negotiations

between Robinson of Galvins on the one hand, and

Gallagher, on the part of the Union, on the other

hand, at which it was agreed that work would

recommence on the Highpoint West Project then being

constructed by Galvins. If this timber, or

portion of it, was in fact received to the use of

Gallagher, then it would, in my view, constitute a

corrupt receipt within the meaning of Section 176

of the Crimes Act, but there may be some difficulty,

in the state of the evidence as it was left before

me, in proving that the timber was in fact received

to the use of Gallagher.

B. Robert Harry Dalton

(i) Bricks supplied by Brick & Pipe Industries,

authorized by Montvale Developments and paid

for by Montvale.

(ii) Bricklaying at Dalton's house at Rye by

Mr. Banks, organized by Daly of Montvale and

Grey and paid for by Murragong Nominees

Pty. Ltd.

(iii) Glazing at Dalton's premises at Rye done by Oliver Davey, organized by Lewis and Daly

255.

of Montvale Developments and paid for by

Montvale.

(iv) Electrical work done by B. C. Seymour at

Dalton's premises at Rye, organized by Grey

and paid for by Hersfield Development

Corporation.

( v) Supply of crane and reinforcing mesh to

Dalton's premises at Rye, organized by Grey

and paid for by Hersfield Development

Corporation.

(vi) Supply of steel decking by Aldeck Roofing Co.,

organized by Lewis of Montvale Developments

and paid for by Murragong Nominees Pty.Ltd.

(vii) Supply of ceramic tiles by A. A. Ceramic

Tiles Pty. Ltd., organized by Daly and Grey

and paid for by Murragong Nominees Pty. Ltd.

(viii) Concrete and labour supplied by Grollos.

The evidence revealed other benefits provided

to Dalton which may not satisfy the requisites of

"secret commissions". Design plans and engineering computations were solicited by Dalton for his own

purposes, but they are of minor consequence.

The benefit to which I have referred in

sub-paragraph (viii) above, refers to $3,000 worth

of concrete and labour supplied by the Grollos to

Dalton. Bruno Grollo said (Page 1178) that between

November 1976 and May 1979 they caused concrete,

256.

to a total value of about $2,800, to be supplied

to Dalton. In addition, they said, they gave him

labour which they valued at about $200. However,

they maintained that Dalton had paid $2,000 for

this concrete and labour in June 1980. They said

that they were "prepared to accept a reduced price to provide him with a favour of reasonable

proportions and not to appear to be exploiting him."

As with the case of Gallagher, I have some

difficulty in accepting the Grollos' evidence that Dalton paid them for the concrete provided.

Apparently the concrete was provided over a period

of some three years, no invoice was ever directed

by the Grollos to Dalton, no demand appears to have

been made upon him for payment, and there was no

substantiation of the fact that Dalton paid, apart from a reference to a "cash pay-in" in the Grollo

books dated June 1980, which has no specific

reference in it to the fact that the monies were

paid by Dalton (see Page 1222). No receipt was

issued by the Grollos to Dalton in respect of the

payment (Page 1238). It seems to me to be highly

improbable that Dalton, who had been the recipient

of a number of free benefits from other employers

within the building industry, and who had received

this concrete from the Grollos over a period of some three years, would suddenly come into the Grollos'

office some year or more after the completion of

257.

the supply of these goods and services by the

Grollos and pay over $2,000 in cash in respect of

which no receipt was apparently asked for, or

given. But, as in the case of Gallagher, even if

one was to accept, in its entirety, this improbable

story of the Grollos, it is still clear that Dalton

received a "valuable consideration" in the form

of a discounted price, and generous terms for

payment. The evidence satisfies me that no matter

how one identifies the benefit - be it the whole

of the goods and materials supplied, the discounted

price for the materials supplied, or the generous

terms of payment extended in respect of the

materials supplied - it still amounted to a corrupt

receipt by Dalton.

C. M.J.Lewis

(i) Bricks supplied from Brick & Pipe Industries

to Lewis' premises at Broadmeadows,

organized by Lewis of Montvale Developments

and paid for by Montvale.

(ii) Concrete supplied by Grollos and paid for

by Grollos.

D. J • Cummins

Design plans and bricks, organized by Lewis of

Montvale Developments and paid for by Adrianni

Pty. Ltd.

258.

4. Receipt of Benefits by O'Dea for his own use

and the use of the A.C.T. Branch of the B.L.F.

(a) In Section B of this Part of the Report I have dealt

with the practices of Peter John O'D ea , the Branch

Secretary of the A.C.T. Branch of the B.L.F •. I ther e

review the evidence which disclosed that O'Dea had

solicited from various persons in the building and

construction industry, the provision of materials and

services in the renovations of his house at

2 Walker Crescent, Griffith, A.C.T .• The significant

items which O'Dea secured for his own benefit were some

landscape gardening done by one s. Stankovitch during

1979, and supply and fixing of tiles through the firm

P.D.C. Constructions in April and June 1980.

It would appear that by securing for himself the services and materials referred to, O'Dea received

a benefit totalling in all some $1,100 to $1,200.

According to Stankovitch, the landscape gardening which

he provided for O'Dea cost him in the order of $400

to $500, and Mr. Carlin, the former Construction

Manager of P.D.C. Constructions, indicated that the

tiles and the laying of them cost somewhere between $600 and $700. O'Dea has, in fact, paid for none

of these materials and services.

(b) As I have already indicated in Section B of this part

of the Report, it would be difficult to characterise

the receipt by O'Dea of the landscape gardening

services as "corrupt". The evidence of Stankovitch

259.

was that O'Dea had, at the material time, requested

Stankovitch to send him a bill and that it was apparent

from O'Dea's conduct that he intended to pay for the

work provided. Stankovitch said that he had never in

fact sent O'Dea a bill for reasons which he,

Stankovitch, regarded as appropriate. For reasons

which I have earlier indicated in this section, it

would be difficult to stigmatise the receipt of the

benefit by way of landscape gardening as corrupt, when

the receipt of the services was accompanied by a

promise to pay and an apparent intention to pay.

The receipt of the tiling and the laying thereof

stands, according to the evidence, on a somewhat

different footing. If Carlin's evidence is to be

accepted, O'Dea engaged in a device which was

designed to show, falsely, that he had paid for this

work when he had no intention of doing so. According

to Carlin, O'Dea had requested, and had been given, a

receipt indicating payment for this work, but had

never sent any cheque in return. If this evidence is

accepted, then it seems to me to raise a strong prima

facie case against O'Dea that his receipt of these

materials and services was a corrupt one. At the

material time, O'Dea was an official of the

Federation and had been engaged in conducting

negotiations with P.D.C. Constructions for the

purposes of securing appropriate conditions of work

for his members at the National Gallery site and the

260.

Hi g h Co u r t s i t e • There would be little doubt, in my

view, that in s oliciting the tiles and the serv i ces

for the laying thereof, O'Dea wa s exploiting, and

intending t o exploit, his positi o n o f i n fluenc e as an

official of the union which had shown itse lf, in the

preceding year o f 1979, to be capable of causing

substantial industrial unrest on each of the

aforementioned sites. The fact that O'Dea had the

requisite wrongful intent, and the fact that he

intended to conceal the receipt of the benefit i s

reflected in the steps which he took to make it

appear that he had paid for the g o ods and serv ices.

(c) The Secret Commissions Act of the Commonwealth (1905)

is made applicable to the Australian Capital Territor y by virtue of the provisions of Section 7 of the Seat

of Government (Administration) Act 1910-1973. The

latter Act provides that : -"The Secret Commissions Act(l905) shall

apply in the Territory to trade and

commerce in ... the Territory as if the words

'with other countries and among the States' were

omitted fr om Sec tion 2 of that Act".

Applying that qualification to Section 2 of the Secret

Commissions Act (1905) that section, insofar as is

relevant, provides that:-"This Act applies to trade and c ommerce

in the Territory

261.

Section 4 of the Secret Commissions Act (1905)

creates an offence, substantially similar to the one

created by Section 176 of the Victorian Crimes Act.

Insofar as is relevant, it provides that:-"Any person who, without the full knowledge and

consent of the principal, directly or indirectly­

(a) being an agent of the principal accepts or

obtains ••• from any person for himself

any gift or consideration as an inducement

or reward -· ( i) for any act done or to be done or any

forbearance observed or to be observed

or any favour or disfavour shown or to

be shown in relation to the principal's

affairs or business •.• shall be guilty of an indictable offence." Sub-section (ii) of the same section provides that:-"A gift or consideration shall be deemed to be

given as an inducement or reward if the receipt

••• thereof would be in any way likely to

influence the agent to do or leave undone

something contrary to his duty."

(d) It will be seen that the significant difference

between this section and Section 176 of the Crimes

Act of the State of Victoria is the omission from

Section 4 of the word "corruptly" and the substitution

therein of the words "without the full knowledge and

consent of the principal". "Full knowledge" within

26 2.

the meaning of Section 4 is defined as meaning

"knowledge of all the material facts and

circumstances". The section undoubtedly equates with

"corrupt conduct" the fact of the receipt by an agent

of a gift in the course of his duty and behind the

back of his principal. In my view, the evidence put

before me, during the course of this Inquiry, raises

a prima facie case against O'Dea of a breach of

Section 4 in respect of the receipt of the tiles and

the services in laying them. There can be little

doubt that at the material time O'Dea was

"an agent" within the meaning of the Act. There is

also no doubt that he received from P.D.C.

Constructions "a gift or consideration" in the form

of goods and services. The evidence makes the

inference irresistible that in obtaining that gift

O'Dea was exploiting, and intending to exploit, his

position as an influential official of the Federation.

It would seem to me that the gift was accepted

"without the full knowledge and consent of the

principal" by virtue of the fact that O'Dea went to

considerable lengths to make it appear that he had

paid for the goods and services supplied to him.

Furthermore, it would seem to me that it would be

difficult to contend otherwise than that this gift or consideration was given or received as an

inducement for favour to be shown by O'Dea to

263.

P.D.C. Constructions in the handling of the Union's

affairs.

(e) In pilragraphs 5 and 6 of Section B of this part of the

Report, I have referred in some detail to a pattern

of conduct engaged in by O'Dea, pursuant to which he

would negotiate with employers for the payment by the

employers of large lump sums of cash, on the basis

that the money was being collected for, and on behalf

of, nominated persons who were members of the Federation. In particular, I instanced four

occasions in which O'Dea had engaged in this type of

conduct between 1979 and 1981. On each occasion,

O'Dea had failed to apply the monies in accordance

with the terms upon which he had received them, and

it further appears that he applied the monies, or at

least part of those monies, for the purposes of the

organization.

(f) In paragraph 6 of Section B of this part of the Report

I ventured the suggestion that the conduct of 0 'Dea,

referred to in the preceding sub-paragraph, was

"probably unlawful". I had in mind the offences of

fraudulent misappropriation of money, or obtaining

money by deception, offences which are contained in

Section 178A and Section 178BA of the New South Wales

Crimes Act, which Act is in force in the Australian

Capital Territory. The evidence reveals that on

each of the four occasions to which I have referred,

O'Dea negotiated for, and was given, the money on the

264.

basis that it was to be distributed to certain

per sons. On each occasion, the persons pay ing th e

money- namely C.S.P. Landscaping, L. W. Contrac ting ,

P.D.C. Constructions and the Rice Marketing Boar d -handed over the money on the basis that it was t o be

disbursed to the men on whose behalf the sum had be e n

negotiated. It appears, howe v er, that o n each

occasion, with the possible e xception of the mo nie s

collected from the Rice Marketing Bo ard, O'Dea did no t

disburse the monies, or the whole of them, for the

purpo ses for which they had been given or collected.

Thus he collected $6,000 from C.S.P. Landscaping on

the basis that it was to be distributed am ongst three

employees. He did not disburse the whole of thos e

monies in accordance with the terms upon which the

monies were given and collected but retained $1,500

which he claimed to be "the Union's entitlement".

In the case of the $15,000 collected from

L.W. Contracting on the basis that it was to be

held in trust for 10 named persons, he appears to

have applied only a little more than $10,000 for the

purposes in respect of which the money was paid.

In respect of the $12,000 collected from P.D.C.

Constructions on the basis that it was to go to the

"leaders of the struggle" at the National Galler y

and High Court sites, it would appear that none of

these monies were disbursed in accordance with the

terms upon which they were paid. These facts, in

265.

my view, strongly suggest that O'Dea has fraudulently

misappropriated or failed to account for monies which

he has collected upon terms requiring him to pay such

monies to certain persons.

Section 178A of the New South Wales Crimes Act

provides, insofar as it is relevant, that "whosoever

having collected or received any money ..• upon terms

requiring him to deliver or account for or pay to any

person the whole or any part of -

{a) such money •.• fraudulently misappropriates to his

own use or to the use of any other person or

fraudulently omits to account for ..• any part of

such money •.• in violation of the terms on which

he collected or received such money .•. "

shall be guilty of an offence. In respect of the $6,000 collected from C.S.P.

Landscaping, and the $15,000 collected from L.W.

Contracting, there can be little doubt, on the evidence

put before this Inquiry, that O'Dea collected and

received them on terms which required him to deliver

the whole of such monies to nominated members of the

organization. The evidence also makes it tolerably

clear that O'Dea received the $12,000 from P.D.C. on

terms which required him to pay those monies, not to

any nominated person, but to certain persons, all being

members of the B.L.F., who had lost work at either the

High Court site or the National Gallery site. The

evidence also makes it clear that O'Dea did not apply

266.

the whole of such monies in acco rdance with the t erms

upon which he had received them. In the case o f t he

monies which he received from C.S.P. Landscaping, he

withheld $1,500 or 25% of the money so collected, and

apparently applied it to the purpo ses of the A.C.T.

Branch of the B.L.F .. Likewise, in respect o f th e

$15,000 which he received from L.W. Contracting, it

appears that O'Dea did not apply the whole of thos e

monies in compliance with the terms upon which he ha d

it but retained approximately $5,000 thereof, or approximately 33 1/3%, and again applied it for the

purposes of the organization.

In each of those cases it is clear from the

evidence that the person paying the money to O'Dea

required that the whole of the monies so paid be

applied by distributing them to nominated persons.

In each case the giver of the monies was ignorant of

the intention, ultimately manifested by O'Dea, to

withhold portion of those monies in favour of the

organization. In neither case did O'Dea enlighten the

giver of the monies that such was his intention. In

neither case were the intended beneficiaries of the

money aware of O'Dea's intention to withhold from them

portion of those monies, so received, until such time

as O' Dea paid the money over to them. In those case s,

however, O'Dea did not present them with "a choice";

on the contrary, he simply told the beneficiaries that

he was not proposing to distribute to them the entire

267.

proceeds which he had co llected on their behalf, but

was proposing to subtract a proportion "for the union".

In those circumstances, it seems to me to be

strongly arguable that O'Dea, in failing to apply the

whole of the monies in accordance with the terms upon

which he had received them, was acting "in fraud" of

the person from whom he had collected the money. In

addition he may well have been acting "in fraud" of the

persons on whose behalf he had collected the money.

In each instance he represented to the payer of the

money that the monies were to go to specified

employees of that payer. On the face of this

representation, the payer was induced t o mak e over to

O'Dea a stipulated sum. I nd e ed , i n the c a s e o f L • W •

Contracting, the basis and the terms upon which the

money was paid were reduced to writing. One of those

terms stipulated quite clearly that O'Dea was to hold

the money "in trust" f o r the intended beneficiaries.

It seems to me that, in failing to tell the payer of

the money of the manner in which he was intending to

apply it, O'Dea acted dishonestly.

In the case of the $12,000 collected from P.D.C.

Constructions, the situation is not quite as c lear as

it is in the two cases to which I have referred above.

True it is that both Mr. Carlin and Mr. Healey of

P.D.C. Constructions believed, at the time when they

paid over the $12,000, because of the representations

which had been made to them by O'Dea, that the monies

268.

were to be used in reimbursement of certain members of

the B.L.F. who had been out of work because of the

strike. But, in this case, no specific persons appear

to have been mentioned, although Healey did say that he

was told by O'Dea that it was to be used to reimburse

"the leaders of the struggle", and that O'Dea had

mentioned specific names, including one Grey. One gets

the impression that P.D.C. Constructions was prepared

to pay this money for the simple purpose of "breaking

the strike" and did not care very much how the money

was applied by O'Dea. Although it seems reasonably

clear from the evidence that O'Dea did not apply any

portion of that $12,000 in payment of his members, it

may be difficult, in the light of the uncertain state

of the evidence, t6 stigmatise that failure to account

as "fraudulent" within the meaning of Section 178A of

the New South Wales Ciimes Act.

Although O'Dea did not take the opportunity of

explaining his conduct to this Commission, he has, more

recently, sought to defend himself, in respect of the

conduct to which ' I have above referred, in a circular

bulletin, which he distributed to his members in the A.C.T. on the 4th May 1982 (Exhibit 181). In the

course of this "Statement to Members" O'Dea referred to

submissions which had been made by Counsel assisting

the Inquiry to the effect that I should recommend that

charge's of "misappropriation" . be laid against Mr.O'Dea

269.

in respect of the monies which he collected from C. S.P .

Landscaping and L.W. Contracting . Having referred to

these submissions the statement went on:-"The so-called offences of misappropriation are

not allegations that I have stolen any money!

What is being said is that I have committed a

crime as Secretary of the Union because the Union

charges a 20% collection fee from wage settlements

on behalf of members who have been working 'cash

in hand'. It has been the Union's publicly

stated policy since 1977 to charge a collection

fee for recovering monies for those people who

have been getting the money in the hand each week

and who later come to the Union and want backpay

and annual leave, public holidays, etc ."

The thrust of this statement would appear to be

that O'Dea is disclaiming dishonesty or fraud on the basis that he has been applying a long standing policy

of deducting a "20% commission " for the Union. The

difficulty about that "disclaimer", as I see it, is that the monies provided to O'Dea by C. s. P. Landscaping

and L.W. Contracting were provided on stipulated terms

which did not include a term that a significant

proportion of them was to be retained as a commission

by the Union. Whether or not such a practice was

"long standing policy" or not, it was a practice that

was not known nor, as I see it, intended to be known,

by the per sons who are asked to pay the money.

270.

According to the evidence put before this Inquiry, the

payers of the money were deliberately "kept in the

dark" about any such intention. It is also clear, on

the evidence that was put before the Inquiry, that the

intended beneficiaries of these monies knew nothing

about the "long standing policy" referred to by O'Dea

in his circular. Furthermore, it would seem that the

monies retained by O'Dea, in each of the two cases

referred to, went well beyond the "long standing

policy" to which he has referred in this circular.

The monies retained from those provided by C.S.P.

Landscaping on the one hand, and L.W. Contracting on

the other, were well in excess of 20%. In the case of

the monies collected from P.D.C. Constructions, it

would appear, on the evidence before this Inquiry, that

the .whole of those monies were retained by the Union.

5. Loans to Officials

In Section C of this part of the Report I have dealt in some

length with the practice, which has become fairly widespread in

the Federation, of using the funds of the Federation or its

respective Branches for the purposes of making interest free

loans to the officials of the Federation against the security of

long service leave entitlements. I have characterised these

transactions as an improper use of Union funds but, whatever

might be said about their propriety, or lack of it, it does not

seem to me that the transactions involved any breaches of the

criminal law.

271.

Although the members of the Federal Committee of

Management of the Federation, i n resolving to make the loans to

Gallagher and George, and the members of the Branch Executive

Committees, in resolving to make the loans to the respective

Branch Secretaries and other Union officials, to whom I have

referred in this Report, may not have been acting in breach of

any criminal law, they have, nonetheless, acted beyond the powers

given to them by the Rules of the organization and also in breach

of a fiduciary obligation which, in my opinion, they clearly

owed.

In giving the majority decision in the case of Allen v .

Townsend (1978) 16 A.L.R. 301, the majority of the Industrial

Court (Evatt and Northrop J.J.) made it clear that persons

exercising executive control of organizations registered under

the Conciliation and Arbitration Act have a position of trust

similar to that occupied by directors of companies. Their

Honours said (at Pages 349 and following):-"The Courts have developed principles of law of general

application regulating the manner in which directors of

companies are required to exercise powers conferred upon

them. Subject to necessary adaptations, similar principles

of law should apply to regulate the exercise of powers

conferred upon members of a committee of management of an

organization, or of a branch of an organization, or of a

sub-branch of a branch of an organization.

There are many similarities between organizations and

legal persons incorporated under the Companies Acts ••••

Each must act at the direction of individuals who manage

272.

its activities. The powers of these individuals depend upon the rules which regulate the affairs of the

incorporated body

The relevant principle is stated in Mills v. Mills

(1938) 60 C.L.R. 150. In that case the resolution passed

by the directors of a company to increase the voting power

of one of the directors but which was believed by the

directors to be in the best interests of the company was

challenged, unsuccessfully, on the basis that one of the

directors thereby derived some benefit. Dixon J., at Pages 185-6, said:-'Directors of a company are fiduciary agents and a

power conferred upon them cannot be exercised in

order to obtain some private advantage or for any

purpose foreign to the power. It is only one

application of the general doctrine expressed by

Lord Northington in Aleyn v. Belchier(l758) 1 Eden

132 at 138:-"No point is better established than that, a

person having a power, must execute it bona fide

for the end designed, otherwise it is corrupt

and void."'"

In seeking to apply the Federation's fund for the purposes

of affording interest free loans to themselves, or one of their

number, it seems to me that the respective Committees of

Management have not acted bona fide, and for the purpose of

exercising the powers governing their functions. Applying the

principles to which I have adverted in this paragraph, it seems

273.

to me that they have clearly acted in breach of the fiduciary

obligation which they owed to the Federation. In each case it

would seem to me that the members of the Executives, which

resolved to grant these loans, have laid themselves open to an

application which could be made by any member of the Federation

under Section 141 of the Conciliation and Arbitration Act for

an Order that the respective officers comply with the rules of

the organization. Furthermore, it would seem to me that any

such Order would, and should, contain a direction that any of

the officials who have made for themselves a profit out of the

misapplication of union funds, should disgorge that profit to

the Federation (see F. Gordon v. Carrol 6 A.L.R. 579).

274.

SECTION E Recommendations arising out of the Investigation into Benefits

1. It is recommended that the institution of criminal

proceedings be considered by the appropriate authority in the

State of Victoria in respect of the following persons and

offences:-(a) Norman Leslie Gallagher- corruptly receiving, as

an agent, valuable considerations of the description

referred to in Section 176 (1) (b) of the Crimes Act

1958 contrary to that section in respect of the

various counts to which I have referred in the

preceding section of this Report.

(b) Robert Harry Dalton - corruptly receiving, as an

agent, valuable considerations of the description

referred to in Section 176(l){b) of the Crimes Act

1958 contrary to that section in respect of the

various counts to which I have referred in the

preceding section of this Report.

(c) Michael Joseph Lewis - corruptly receiving, as an

agent, valuable considerations of the description

referred to in Section 176 (1) (b) of the Crimes Act

1958 contrary to that section in respect of the

various counts to which I have referred in the

preceding section of this Report.

(d) John Cummins- corruptly receiving, as an agent,

a valuable consideration of the description referred

to in Section 176(l)(b) of the Crimes Act 1958

contrary to that section in respect of the count to

275.

which I have referred in the preceding section of

this Report.

2. In respect of the recommendations which I have made in

the preceding paragraph, I draw attention to Section 186,

sub-section (4) of the Crimes Act of the State of Victoria which

provides:-"No prosecution for an offence under this subdivision

shall be commenced without the consent of the Attorney­ General."

3. That the institution of criminal proceedings be

considered by the appropriate authorities of the Commonwealth of

Australia against Peter John O'Dea in respect of the following

offences:-(a) Receiving a consideration of the description

referred to in Section 4 (l) (a) of the Secret

Commissions Act (1905) contrary to that section

in respect of the provision of tiles and the laying

thereof in or about April and June 1980 (as referred

to in the preceding section of this Report).

(b) In respect of the $6,000 received from C.S.P.

Landscaping Pty. Ltd. on the lOth February 1981,

the $15,000 received from L.W. Contracting Pty.Ltd.

in June 1980, and the $12,000 received from P.D.C.

Constructions Ltd in March 1979 - for fraudulently

misappropriating or failing to account for those

monies or portion of them in violation of the terms

276.

upon which he collected or received such monies

contrary to the provisions of Section 178A of th e

Crimes Act of New South Wales.

4. It is recommended that consideration be given by the

appropriate authorities to amending the provisions of the

Conciliation and Arbitration Act of the Commonwealth o f Australia

in the following respects:-(a) For the purpose of providing that an officer of an

organization who is convicted of an indictable offence

involving an abuse of that office be disqualified from

holding that office, or any other office, within the

organization, and remain ineligible for such office

or offices for a period of five years. This

recommendation is predicated upon the proposition that

such person is unfit to hold the office in much the

same way as a company director is regarded by the

various pieces of companies' legislation operating

throughout Australia as unfit to hold his office in

the event that he has been convicted of offences

involving an abuse of his directorship.

(b) For providing that the funds of any registered

organization, or of any branch thereof, should not be

applied in the granting of loans to any officer or

member of the organization or branch unless the terms

and conditions upon which such loan is to be granted

277 .

have been fully disclosed to the membership of the

organization or branch in General Meeting and have

been approved by such membership .

5 . It is further suggested that consideration be given by the

Industrial Registrar to the question of whether the financial

returns of the Federation and its Western Australian and South

Australian Branches for the periods ending 31st March 1981 a nd

30th September 1981 reveal any deficiency or shortcoming with

regard to the manner in which they deal with loans made to the

officials of the Federation or such branches and, if so , whether such deficiencies or shortcomings should , or can , be referred to

the Industrial Relations Bureau for investigation pursuant to the

provisions of Section 158AH of the Conciliation and Arbitration

Act .

Chapter 1

PART THREE

278.

THE PERFORMANCE BY THE B.L.F. IN THE INDUSTRIAL ARENA

Introductory Matters

1.1. During the course of the Inquiry a substantial amount o f

evidence was led relating to the performance of the Feder a ti on ,

its officials and members within the industrial arena. Thi s material was relevant to the terms of the Commissions issued

to me. The Commonwealth Commission requires me to inquire

into (inter alia):-(a) Whether the Federation, its officials or members,

had acted contrary to a law of the Commonwealth in

the course of, or in relation to, the affairs o f the

Federation; and

(b) Whether the Federation, its officials or members,

have engaged in activities contrary to a law of the

Commonwealth in relation to the conduct, or

purported conduct, of the Federation's affairs.

These terms appear to invite an examination of the conduct

of the Federation's affairs against the background of the

obligations imposed upon it (inter alia) by the Commonwealth

Conciliation and Arbitration Act.

I have afforded to the words "contrary to the law of the

Commonwealth" a liberal interpretation. Activities contrary to

a law of the Commonwealth do not necessarily involve the

commissior1 of a criminal offence. In the context of this

Inquiry I have taken the view that such activities at least

include conduct which is contrary to the policies and objectives

of the Commonwealth's industrial legislation.

279.

The terms of the Commission issued by the Governor in Council

o f the State of Victoria require a consideration (inter alia)

0 f:-

(a) Whether the Federation, its officers or members, have

engaged in illegal or improper activities in the

course of, or in relation to, the affairs of the

Federation; and

(b) Whether the Federation, its officials or members,

have engaged in improper or illegal activities in

relation to the purported conduct of the Federation's affairs. Although the Victorian Commission requires me to exclude

from my consideration activities which involve only breaches of

Commonwealth or State Law relating to trade unions, the

requirements, nonetheless, appear to contemplate a consideration

of the performance of the Federation in the industrial arena.

1 . 2. It is apparent that the terms of my references do not

require me to engage in a consideration of "industrial relations"

generally, nor do they require a general consideration of

industrial relations in the building industry. Rather they

require me to focus my attention upon the conduct of the

Federation, its officials and members, and to do so for the

limited purpose only of considering whether or not those persons

or that organization have acted in an improper or illegal manner

in the conduct of the Federation's affairs.

280.

1. 3. The material to which I refer in this part of the Repo rt

relates to the performance of the Federation, its officials and members within the industrial arena during the last six years -i.e. since the Federation was reregistered as an organization pursuant to the provisions of the Conciliation and Arbitration

Act. In general terms that material makes it clear that during

the years referred to the Federation, both in its relationship

with employers and with other unions in the building industry,

has acted in a lawless way. Not only has it ridden roughshod

over the obligations imposed upon it by the Conciliation and

Arbitration Act but it has paid scant respect to the duties

imposed upon it by the general law of the land, civil and

criminal alike. Under the pretext of "promoting the interests

of its members" this organization has, with frequency, resorted

to tactics of violence, intimidation and victimisation. Resort

by the victims of these tactics to the ordinary processes of the

law has been met with recrimination and the arrogant assertion

that law enforcement agencies have no part to play in the settlement of the Federation's affairs in the industrial arena.

There has been no restraint by the organization or its branches

in publicly declaring what its aims are, or the methods by which

it is prepared to achieve those aims. Thus, in the official

publication of the New South Wales Branch of the Federation of

September 1979 (Exhibit 122), the Secretary of that Branch,

Steven Black, stated that "builders labourers in Sydney have won

some big victories recently through the use of 'guerilla tactics'

on the job to win overaward payments and better conditions.

These victories have also been won through B.L's actions for

281.

tradesmen on the site. The policy of using guerilla tactics

allows the labourers on the job to rely on their own strength.

It has been developed and extended by B.L.s all over Australia . It follows the line of 'the most harm to the boss, the least harm

to ours e 1 v e s' . "

Having referred to an episode in New South Wales where

wilful damage had been occasioned by builders labourers to an

employer's property which resulted in the summoning of police,

the document goes on to assert in bold type "The union does not

tolerate any police interference in industrial matters." These assertions and the arrogant manner in which they are

made serves to emphasise the belief which the organization

apparently has that it is, and is entitled to be, a "law unto

itself". The tactics of the Federation in the industrial arena do not

stop with repeated breaches of the criminal law. It treats the

obligations imposed upon it by the civil law, and the

corresponding rights which that law confers upon others, with

contempt. It ignores the rights which others have to work, to

perform contractual obligations and to enlist the processes of

conciliation and arbitration. When it suits its purposes, it has combined to injure others financially, intimidate those who

are seeking to perform contractual obligations and, at will,

procure breaches by others of their contractual requirements.

1. 4. The tactics to which I have referred in the preceding

paragraph are pursued with such repetition and similarity that

one is entitled to conclude that they are not isolated instances

282.

but form part of the policy of the organization. Although the

publication to which I have referred asserts that these polici es

are pursued "throughout Australia", the evidence has indicated

that these policies have been largely to the south­

eastern States of Victoria and New South Wales and the Australian

Capital Territory. In recent times, however, it would appear

that they are being pursued in Western Australia. It would be

unfair to suggest that these policies are embraced by all members

of the Federation. A large number of people gave evidence

before the Inquiry to the effect that they had been coerced into

membership of the organization against their will. Nearly all

of these people have no interest in the affairs of the Federation

and clearly wished to dissociate themselves from it.

1. 5. One is left with the clear impression from the evidence

that the policies to which I have referred have been formulated

and orchestrated by the officials of the organization whose task

it is to administer its affairs. The scant respect which these

officials have for the due processes of the law was typified by the contemptuous manner in which they treated their obligations

towards this Inquiry. They have persistently claimed that what

they have done in the industrial arena was justified by the

promotion of the interests of "our members". What they fail, or

wilfully refuse, to recognise is that the pursuit of the interests of their members does not justify unlawful conduct. In this respect the words used by Fullagar J. in Williams v.

Hursey (1959) 103 C. L. R. 30 at 68 are apposite. His Honour

· said:-

283.

"But it has been accepted ever since 1908 that the

Commonwealth may create these corporations (i.e. industrial

organizations) and if it can create them, it must be able

to define their powers. They must be associations of

employees or of employers formed for the purpose of

protecting and advancing the interests of their members,

and no reason exists for saying that they cannot be

empowered to do anything 'not contrary to law' which is

calculated to protect or advance those interests

"

It must be necessarily trite to say that a union official

cannot justify unlawful conduct by claiming that the conduct was

engaged in as a means of promoting the affairs of the union and

its members (see Allen. v. Townsend (1978) 16 A.L.R. 301 at 307-8 ). Yet the officials of this Federation appear to show no

embarrassment in so asserting.

1. 6. The conduct of the affairs of the Federation has brought it

into sharp conflict not only with employers in the building

industry but also with other unions. This is hardly surprising.

The vast majority of unions and unionists are decent people.

Many of them have given evidence before this Inquiry. It is

obvious that those people are not prepared to tolerate the sort

of conduct which has been engaged in by this Federation which, in

the long run, can only bring the entire union movement into

disrepute. A number of union leaders gave evidence before the

Inquiry and expressed these sentiments, some more explicitly than

o thers. The Secretary of the Federated Ironworkers

284.

Association, Mr. Laurence Short, was perhaps the most explic it.

At Pages 2494-5 of the transcript he described the B.L.F. thus:-"Builders labourers have used violence and intimidation

against workers, including women employed in union offices,

and this type of behaviour cannot, and is not, supported by

democratically minded Australians. Under its present

leadership and policies, the B.L.F. has brought the union

movement into disrepute."

Although it might be said that Mr. Short, because of his

position and the long standing antipathy between his union and

the B.L.F., may have cause to be vindictive towards the

Federation, it seems to me that he was doing nothing more, no r

less, than describing a situation which the evidence before this Inquiry eloquently reveals. Mr. Short is not only a long­

standing leader in the union movement, but he is a community

leader as well. He is a Fellow of the Senate of the University

of Sydney, the National Chairman of the Metal Trades Federation,

a life member of his own organization and the Vice-Chairman of

the Australian Broadcasting Commission.

The fact that the union movement, as a whole, shares the

sentiments expressed by Mr. Short has recently been reflected by

the Trades and Labour Council in New South Wales when it

resolved, by a subtantial majority, to expel the Federation from

the "New South Wales Family of Unions".

1.7. In the succeeding chapters of this part of the Report

I propose to deal specifically with certain aspects of the

conduct of the Federation and its officials in the industrial arena.

Chapter 2

285.

The Drive by the B.L.F. for Membership­ "An Empire Building Campaign"

2. 1. The evidence indicates that most of the major building

construction sites throughout Australia (certainly in Victoria,

New South Wales, the Australian Capital Territory and Western

Australia) are regarded as "union sites"; that means that

everybody coming onto those sites to per form labour must belong

to "an appropriate union". In other words, the sites become

"a closed shop" and no work can commence unless a union "clear

card" is possessed and can be produced by each worker on the

site.

The "no ticket, no start" rule is rigidly enforced. Each

union represented on the site makes regular inspections to

ensure that persons doing work of the kind claimed to be covered

by that union possesses a ticket. It matters not whether the

person doing the work is an employee of another, a self-employed

sub-contractor, or an employer of men. The rule is that if he

does physical work on the site, he must be a financial member of

the appropriate union. If he is not, then the traditional

consequence is that the entire project "stops" for 24 hours.

This practice appears to be acquiesced in by both builders

and unions alike. In the south-eastern States of Australia, it

has become enshrined in what are called "no ticket, no start

agreements" made between the relevant Master Builder Associations

and the Union Movement. Pursuant to these agreements, the

major contractors, who are usually members of the M.B.A.,

undertake to ensure that all persons coming onto their sites are

286.

members of the "appropriate union". They seek to carry out this

undertaking by including in their sub-contract documents a clause

which requires sub-contractors to engage only union labour.

A breach of this clause can carry draconian consequences for sub­

contractors who are in breach of it, because they are expected t o

make up the financial loss which is occasioned by a work stoppage.

Mr. Ian Mudge, the Manager of Concrete Testing Pty.Ltd., gave a

vivid example of these consequences to the Commission (Pages 2033

and following). He said that employees of his company were

mainly involved in attending at building sites to sample concrete

and to test its quality. At Pages 2034-5, he gave the following

evidence:-Q. "We have heard in this Commission that to get onto a

'B.L.F. site' you must be a ticketted B.L.F. member,

that is so is it?"

A. "Yes."

Q. "What happens if someone on one of these sites does

not have a ticket?"

A. "It has only happened once to us, so I can only state

the case that happened."

Q. "Where and when was that and what happened?"

A. "It was in 1979, August I believe, and one of our

operators went onto a site, performed his testing and

was in fact in his vehicle leaving the site when he

was stopped and asked to produce his ticket."

Q. "Which site was it?"

A. "I believe it was G.M.H. Plant 10. He was not a

financial member by, I believe, 21 days at which stage

2. 2.

287.

the B.L.F. organizer closed the site, all trades, and

we subsequently were given a bill for all wages lost

for all persons on site plus loss of production."

Q. "Who gave you that bill?"

A. "The contractor, Watts Constructions."

Q. "Did you pay it?"

A. "Yes."

Q. "How much was it?"

A. "It was $7,682-92."

Q. "Did you accept responsibility for that?"

A. 11

Yes.11

Q. "Was your driver given any time to make amends, to go

and renew his membership to bring it up to date?"

A. "No, not by the B.L.F •• The site was blacked."

The Master Builder organizations in Victoria and New South

Wales, on the one hand, and the unions, on the other hand, each

seek to justify the "no ticket, no start agreements" although

each side seems to have a different perspective of what those

agreements are designed to achieve. In Western Australia the

Master Builders Association formally opposes the existence of

these agreements, on the basis that they are an instrument

towards the achievement of compulsory unionism on building sites,

a concept which is outlawed by the provisions o f Section 100 of

the Industrial Arbitration Act of Western Australia.

Mr. J. F. Gregor, the Manager "Construction Services" of the

Confederation of Western Australian Industry stated his

Confederation's attitude towards "no ticket, no start agreements"

288.

in this way (Page 2650):-"In regard to the employer association's policy first, the

pol icy of the Confederation of Industry and the Master

Builders Association, and in fact other organizations, is

that they support responsible union membership and support

the inclusion in Awards of preference to unionists, but

they, under no circumstances, support compulsory membership

of unions. That has been their consistent policy, and it

is based on Article 22 of the United Nations Charter of

Human Rights, and on the International Labour Organization

Convention 105. We have not changed from that policy.

The unions have consistently asked us over a number of

years to introduce 'no ticket no start' agreements and we

have consistently refused as employer organizations,

therefore the unions have given their attention to

individual contractors to seek to achieve that."

The substantial "individual contractor", to whom Mr. Gregor

was alluding, was Multiplex Construction Pty.Ltd., a major

building contractor in Western Australia. The principal Director

and shareholder of Multiplex is Mr. John Charles Roberts.

He indicated that the official attitude of the employer

organizations in Western Australia to "no ticket, no start

agreements" was outdated, and he further indicated that, in

practice, most major building contractors in Western Australia

accepted "compulsory unionism" on building sites as a "fact of

life". Having conceded that most of the Multiplex sites carried signs entitled "no ticket, no start", he justified the practice

289.

in this way (Page 2673):-"In the Builders Labourers Federation Federal Award there is

a preference for unionist clause, and over the years it has

stood the test of time of jolly well being enforced. We

might have some signs up but I do not think there is one

major site that I know of in Western Australia that would

not be adopting a 'no ticket, no start' attitude or, in

other words, preference to unionists."

2. 3. The Master Builder organizations (at least the National

Federation and the Associations in Victoria and New South Wales),

and the Union Movement, each take the view that the "no ticket,

no start agreements" promote a semblance of harmony on building

sites, which was not apparent when non-unionists were permitted to work at those sites alongside unionists. Mr. David Murden,

the Executive Director of the Master Builders Association of

Victoria, and Mr. David Andrew, the Executive Director of the Master Builders Federation of Australia, each supported the

concept of "no ticket, no start agreements" on the basis that

they provided the best recipe for industrial harmony on building

sites (see Murden Pages 2155-7, Andrew Pages 2170 and following) The effect of the evidence of these gentlemen was that the

development of the agreements leading to "closed shop unionism"

within the building industry, had been the result of empirical

measures taken by employer organizations and unions over the

years, for the purpose of finding a solution to the industrial

disharmony which had riddled the industry. They said that the

"no ticket, no start agreements" had at least produced an

290.

alliance which, though uneasy, had nonetheless produced a degree of harmony which had hitherto been lacking. They acknowledged

that the agreements had, in their operation, demonstrated some

undesirable side effects, including the development of the

practice of "banning work" for 24 hours in the event of a non-

unionist being found on the site. However, they contended that

the scope and operational effect of these agreements was still at

the stage of refinement and negotiation, and they expressed the

firm conviction that, as a matter of policy, these agreements

provided the best avenue towards industrial harmony within the

building industry. These views were adopted by union leaders.

Mr. Ken Stone, the Secretary of the Victorian Trades Hall

Council, put it this way (Page 2398):-"That was a policy (the policy of no ticket, no start) that

was developed by the unions and then taken up with the

Master Builders Associations who consented to it. They

knew it would have difficulties and they knew it would have

losses, but it was put that everyone had to get 'fair

dinkum' about it if we were to avert the disasters that

were occurring. Where we talk about a day in this

situation (talking about the '24 hour ban practice') I assure you that some of the others had a duration much

longer than a day. In other words, the 'no ticket, no

start' policy- if one could call it that- and the

implementation of that has, notwithstanding the fact that

you might be able to highlight some individual disasters,

brought about a much better regulated system."

291.

These sentiments were adopted by other union leaders in the

building industry (see Mr. James Sheather of the B.W.I.U. Page

2 543; Mr. L. Short of the F.I.A. Page 2500; Mr. B.J. Unsworth,

Secretary of the Labour Council of New South Wales Page 2370;

Mr. J.D. McLaughlin, Secretary of the A.S.C.J. Page 2418).

2.4. Although the union movement, on the one hand, and the

employer organizations, on the other, agree that the introduction

of "closed shop unionism" on building sites has promoted

industrial harmony on those sites, they nonetheless have a different perception of the extent to which the practice ought to he permitted to go. On the one hand, the unions contend that the

practice entitles them to require that any person who comes onto a building site to perform physical labour be a member of an

appropriate trade union. They take the view that it does not

matter that a person who meets that description is a self­

employed person or, indeed, an employer of labour. They seek to

justify that attitude by contending that any person performing physical work on the building shares the improved site

amenities and conditions of safety that have been "won" by the

unions and, therefore, they say that it is a matter of equity

that people who share those improved conditions should contribute

to the organizations which have established them and are

maintaining them.

The Master Builders, however, contend that they never

intended the "no ticket, no start agreements" to act as an

instrument for the purposes of coercing self-employed contractors

to join a union (see Murden Pages 2153, 2166-7; Andrew 2173).

292.

Indeed it seems inconsistent with the concept of "trade uni o ni s m"

that a self-employed person, or an employer of men, sho ul d be

forced to join an organization of employees. Indeed, Se c tion

132A of the Conciliation and Arbitration Act of the Co mm on we al t h

of Australia makes it an offence for an organiza tio n t o "ta ke or

threaten to take industrial action against an eligible per so n

being an employer, with the intent to coerc e him t o join t he

o rganization". For the purposes o f this secti o n an "eligibl e

person" means a person who is engaged in activities in an

industry, otherwise than as an employee, and by reason o f be ing

so eng aged is, or would, if he were an employee, be eligibl e t o

join an organization.

The building industry unions, howe v er, argue that it is

perfectly proper to coerce self-employed persons, and even

employers of labour, to join a union, if that person is

performing physical labour on a building site. They claim that

in recent years there has been a "revolution" in the manner in

which labour has tended to organize itself within the building

industry. They say that the industry has, in recent years, see n

the proliferation of sub-contractors and the emergence of t he

"labour only sub-contractor" who, to all intents and purpose s, i s

an employee of those persons to whom he has been sub-contracted.

They, therefore, argue that the provisions of Section 132A are

quite inadequate to cater for the peculiar circumstances whi c h

have developed within the building industry. Mr.Barry Unswo rth ,

the Secretary of the La bour Council o f New South Wales, put it i n

t h is way (Page 2366):-

293.

"Not only do I subscribe to that proposal (i.e. the 'no

ticket, no start policy') but our Labour Councillors negotiated a number of 'no ticket, no start agreements'

The question of persons being self-employed, particularly

in the building industry, is the result of a development

that has taken place in that industry with multiple self­

contracting and even new phrases have developed , such as

' body h i r e' • It is very difficult to establish the true

relationship between employer and employee, and we recently

had an inquiry in New South Wales that the whole industry

was to try and establish the development that has taken

place in terms of the relationship between employer and

employee . So the fact that a person is self-employed

today does not necessarily mean that he suddenly becomes

an entrepreneur and has no need for union membership.

In fact there has been a great number of cases coming back

from the Commonwealth Industrial Court, ••. which deal with

the questions of unions eligibility to enrol and retain

amongst their membership persons who fall within that

category. As a member of the New South Wales Parliament,

I have been involved in legislation which has made

provision for uni ons to enrol into their membership self­

employed persons so that their general we lfare and interest

can be catered for .•• If they go on to a project where

everybody else belongs to a union, we take the view that

they should also be in the union."

294.

Mr. McLaughlin, the National Secretary of the Association of

Carpenters and Joiners, had this to say about the same problem

(Page 2143):-" It is not only yourself but the Minister for Industrial

Relations has also been informed about the matter of

independent contractors, in particular where the building

industry is concerned. We are a unique industry and at no

given point of time can a union say that its members are on

day labour or working as independent contractors. They are

fluctuating backwards and forwards from the day labour area

into the independent sub-contracting area."

2. 5. Whatever may be the merits or demerits of the opposing

arguments, it is a clear "fact of life" within the building

industry, at least on the major construction sites, that a

"closed shop" exists, and both unions and employer organizations

contend that it is in their respective interests that it should

be so. However, whatever legitimacy may be ascribed to these

no ticket, no start agreements" they appear to have provided a

very fertile arena for the B.L.F •• The Federation asserts that

it is the "appropriate union" to cover all persons coming onto a

building site to perform work which cannot be clearly categorised

as a "building tradesman's work". It has pushed this policy to

lengths which cannot be regarded by any appropriate standards as

reasonable and, in doing so, has created resentment not only

amongst · the working community, but also within the union movement

itself. It matters not to the B.L.F. that persons coming onto a

building site may happen to be financial members of other unions,

295.

nor does it matter that those persons happen to be coming onto

the building site to perform work which is appropriately covered

by the union of which they are a financial member. It is the

policy of the B.L.F. that if those persons are not clearly

r ecognisable as tradesmen belonging to a building trade union,

they should join the B.L.F •. Whenever they set foot on a

building site which is being "controlled" by the B.L.F., they are

met with a demand to purchase a B.L.F. ticket, involving a

joining fee and six months subscription. This demand is made,

and enforced, even though the work which those persons have to

perform is of a very limited duration, and is work which is

clearly covered by the eligibility clause of the union of which t hey are already a member. The evidence in this Inquiry has

indicated that the B.L.F. makes these demands quite

indiscriminately. The demands have been made on members of the

A.W.U., the Storemen and Packers Union, the Shop Distributors

union, the A.M.W.S.U., the Liquor and Allied Trad es Union, the

F.E.D. & F.A., the Boilermakers Union, the Miscellaneous Workers

Union, the Transport Workers Union, the Stonemasons Union, and

many others. Indeed, so zealous has the B.L.F. been in pursuing

this policy, that one is compelled to come to the conclusion that

the B.L.F. has been engaged in a "empire building" campaign. The

following examples suffice to make the point:-(a) Mr. R.L. Gibson is the Managing Director of the company

which operates the Canberra International Motor Inn.

That motel was completed in March 1981 and some t wo

weeks before it opened the company had employed three

housemaids for the purposes of cleaning up the rooms,

296.

making beds, etc. These girls were financial members

of the Catering and Allied Trades Union. When they

commenced their work, O'Dea, the Secretary of the

B.L.F. in the A.C.T., told Gibson that those girls

would have to join the B.L.F. at a cost of $78 per

person, otherwise the site would be "declared black".

Gibson said he paid the fee demanded, very willingly

"seeing the interest bill was about $7,000 a week and

I had bookings already in, so we just paid it" (Page

2319) • Gibson said that he saw no benefit in these

girls becoming members of the B.L.F. for a period of three or four days, and their membership has now been

discontinued. He regarded the activity as a fund

raising exercise (Page 2320).

(b) Mr. Colin Spinks was a former employee of T.V.Whittle

Pty. Ltd., a building contractor in Canberra. Some

years ago he was the Project Manager for that company

during the construction of the "Cameron Offices" at

Belconnen. When the project was almost completed,

his company had approximately 15 employees working on

the site. Each of those employees was a member of the

Buildin·g Workers .Industrial Union. TheB.L.F.

representative in Canberra asserted that these men were

performing "builders labourers work" and demanded an

amount in excess of $1,000 for their membership fees.

It was indicated that if this amount was not

forthcoming the entire project would be banned. As

Mr. Spinks said (Page 2316):-

297.

"It was considered best by myself that the fees that were asked for should be paid by the company

to the B.L.F. in order to keep the project

rolling to its completion." Mr. Spinks said that his company had paid the required

amount because the men involved had refused to join the

B.L.F. because they were financial members of another

union.

(c) Mr. Philip Hart is the Store Manager for Red Rooster

Foods which has a shop at the Caulfield Plaza. His

employer is a tenant of that building which was being

constructed by Myers in 1981. The shop was due to

open in December 1981, and his company had received

possession of its premises early in December. On the

day preceding the opening, Mr. Hart had six employees

"setting up the store". These men were members of the

Liquor and Allied Trades Union. Specifically they were

engaged in removing the plastic sheeting off the

stainless steel fittings and preparing the kitchen for cooking. A B.L.F. shop steward from some other part

of the Plaza site came to him and told him that unless

these men joined the B.L.F. the entire project would be

banned. Mr. Hart was asked to pay a sum of $504,

being the membership fee for the B. L.F. in respect of

himself and the six employees. Mr. Hart said that his

employer decided to pay rather than risk the entire

project being closed down and, accordingly, the seven

298.

men became members of the B.L.F. effectively for one

day (Pages 2029 and following).

(d) Mr. Brian Henry Frost, the State Manager for Target

Supermarkets Pty. Ltd., said that his client was the

developer of the Caulfield Plaza project in December

1981. He said that that project opened on the

15th December of that year. He said that a few weeks

prior to the opening the company had deployed some

staff to go to the store to commence stocking and

laying out the shelves preparatory to the opening.

These men were members of the Shop Distributors

Association. He said that when these men commenced

their work, the shop steward of the Builders Labourers Federation approached him and told him that these men

were not permitted to stock the shelves unless they

joined the Federation. The shop steward asserted that

the stocking of shelves was "builders labourers work",

and he stated that "if we did not comply with their

wishes they would black ban the site and we would not

be able to open the store" (see Page 2020). Mr. Frost

said that a cheque for $720 was demanded, being

membership fees for 10 people, and rather than risk a

black ban and a delay to the opening to the store, this

money was paid by the company. Mr. Frost said that the

argument of the B.L.F. was that whilst the building was

under construction, the work done by these employees in

cleaning the shelves preparatory to stocking amounted

to the "cleaning of industrial dust" which was the work

299.

of a builders labourer. He said that the joinder of

the staff as members of the B.L.F. involved the company

in paying B.L.F. Award rates to those people for the

limited time, prior to the opening of the store. Once

the store had opened, the B.L.F. took no further

interest in the affairs of those people, and the

company reverted to paying them the rates laid down by

the Award of their appropriate union.

(e) Mr. Leon Harrick is the Assistant Manager of the

Victorian Hospitals Association which, in 1981, had let

a contract for the renovation of its premises at

Mulgrave. Those premises were reaching conclusion in

April 1981 and the sub-contract had been let to Dexion

to install racking on the site. The people employed

by Dexion to install the racking were members of the

A.M.W.S.U •• · A demand was made by Kent, an organizer

of the B.L.F., that these men join the B.L.F •• Dexion

contended that their employees were already financial

members of a union which covered the type of work that

these men were doing and refused to pay membership fees

demanded by Kent. Kent said that if the membership

fees were not paid the project would be banned and,

ultimately, the Victorian Hospitals Association agreed

to pay the sum involved (see Page 1994).

(f) Mr. Barry Brown is the Managing Director of B.M. Brown

and Associates, which organization provided cleaning

services in 1981 to the "Home Show" at the Exhibition

Buildings. The cleaners who were provided to clean

300.

the building preparatory to the opening ' of the Show

were members of the Miscellaneous Workers Union.

Two days before the Show was due to open, Brown was

approached by Dalton, an organizer of the B.L.F., who

told him that unless the cleaners joined the B.L.F.

the Show would not open (Page 1939). Brown said that

he asked Dalton why the men had to join another union

and Dalton told him "this is a building construction

site". Brown said that in order to enable the project

to open on time he paid a cheque of $612 to Dalton in

respect of the six cleaners involved. Mr. Brown said

that he wrote out the cheque on the 20th August 1981

and he was told that this was the six months

subscription for membership of the B.L.F. ending at the

30th September 1981. He said, however, that the amount

was paid in respect of only two days work because the

Home Show was due to open on or about the

22nd August 1981, after the B.L.F. took no

interest in the men in respect of whom the membership fees were paid.

(g) Mr. Robin Hutchison is a Director of a company called

Hutchison Brunheubr Rozario Display Industries

Pty. Ltd., a company which designs, manufactures,

installs and dismantles exhibition stands. His company had been commissioned to put up exhibition stands for

the Commonwealth Heads of Government Meeting in

Melbourne. The men, whom they employ to engage in

this work, are all members either of the Building

301.

Workers Industrial Union or the Society of Carpenters

and Joiners. He said that two days prior to the

opening of CHOGM four of his employee carpenters had

been doing some work and were in the process of

sweeping up "a little bit of a mess on the carpet"

(Page 1855). Mr. Hutchison said that "At that precise

moment two B.L.F. organizers happened to walk around

the edge of the building and ••• asked a question

whether those four men were in the B.L.F •• They were

informed that they were in the B.W.I.U. and thereupon

they (i.e. the B.L.F. organizers) pointed out that

sweeping the floor was not a carpenter's function but a

function of the B.L.F." Mr. Hutchison said that the

B.L.F. organizers indicated that unless the men were

joined up in the B.L.F. then "CHOGM would not open"

(Page 1856). He said that the men involved refused to

become members of the B.L.F. but, because of the

urgency of the matter, he personally wrote out a cheque

for $288 and gave it to the organizers. He said that

he devised four names which were purely the fiction of

his imagination, and in return received four B.L.F.

membership tickets in the bogus names.

2. 6. The examples which are referred to in the preceding

paragraph should not be regarded as isolated episodes of the

B.L.F.'s in recruiting members. They are but a small

number of cases referred to in the evidence which reflect the

manner in which the B.L.F. has used its "muscle" on building

302.

sites to coerce workers to join the B.L.F. against their will. The evidence reveals a widespread practice on the part of the

Federation of coercing people to take up membership of the

Federation. In most instances, the membership fees have been

paid, not by the men themselves, but by their employers or,

in cases where the employers have resisted, by head

contractors. It is clear that these sums of money have been

paid as a "line of least resistance", the fear being that if

monies were not paid the entire project would be "blacked" with

consequent loss and expense, disproportionate to the amount of

fees involved. I attach to this Report as Appendix 9 a table of

those persons who have given evidence before the Inquiry

indicating that they, or their employees, have been forced to

join the B.L.F. against their wishes. The table sets out the

transcript page at which the evidence of the witness commences and a brief description of the nature of the evidence given by

the witness.

2. 7. The Federation has followed its "recruiting policy" in a

manner which has paid no heed to the rights of individuals or

other unions. It appears to be concerned only with an increase

in its own numbers and assets. Its pursuit of these policies

has led to some undesirable consequences within the building

industry:-(a) The Federation's conduct has brought it into conflict

with other organizations who seek to cover workmen in

the building industry. Other organizations have

accused the Federation of "poaching" their members and

303.

of doing so by coercive tactics. These conflicts,

loosely described as "demarcation disputes", have led

to many stoppages and costly loss of productivity.

The evidence indicates that members of a large number

of unions operate on the "fringe" of the building

industry. For example, members of the Transport

Workers Union carry goods onto a site; Boilermakers

perform welding activities; Stonemasons perform

stone work; Storemen and Packers deliver and stock

containers; Steel Workers erect shelving and Shop

Distributors stock that shelving; Landscape Gardeners

exercise their skills outside the building but within

the perimeter of the building site; Asphalters lay

carparks. Indeed, the construction of a building

brings together onto the building site a confluence of

skills. The men who are responsible for exercising those skills are the legitimate members of a large

variety of labour organizations. Yet all of them are

the subject of a demand by the Federation that they

purchase a B.L.F. ticket as an entree card onto the

building site. The claim is that they are performing

labouring work "incidental to the construction of a

building". The Federation claims to have a monopoly

entitlement to enrol all such persons as members of its

organization. Perhaps its sharpest and longest

conflict has been with the Australian Workers Union, which has traditionally "covered" those persons who

have engaged in the laying of asphalt and the

304.

activities of landscape gardening. This conflict has been brought into sharp focus during the last six

years. Many building and development projects have

involved not only the construction of the edifice but

the creation of substantial carparking spaces around

it. Planning requirements have imposed an obligation on many developers to landscape their sites. The

employees of most of the major contractors who carry

out these works have traditionally been members of the

Australian Workers Union, but the B.L.F. has insisted

that where those persons are exercising their skills

within the perimeters of a building site they should be

members of the Federation. The following examples

serve to illustrate the point:-( i) Mr. Peter Malcolm is the General Manager of

Boral Asphalt (Victoria) Pty. Ltd .• That

company, as its name implies, engages in the

provision and the placing of asphalt. It

employs many men and those men are members of

the A.w.u •• It has received contracts from

builders to lay asphalt in carparks

surrounding d ev elo pmen ts. Two of those

contracts involve the laying of a carpark at

the Waverley Gardens Shopping Centre and the

Telecom site at Clayton. When the company

had completed two-thirds of its contract work

at the Clayton site, the B.L.F. demanded that its employees become members of the

305.

Federation. They refused and the entire

project was black banned and their employees

have not been permitted onto the site for

some four months (see Pages 1896-1989).

( ii) Ronald Ekberg is the Victorian Manager of

Pioneer Asphalt Pty. Ltd. which engages in

bituminous surfacing work pertaining to

roads, carparks, shopping centres, industrial

developments, and any form of bituminous

work. The company employs a pprox imatel y

100 employees, each of whom is a member of

the A.W. U •• Mr. Ekberg said (Pages 2001 and

following) that in recent years the B.L.F.

has stepped up its campaign to enrol his men

as members of the Federationj where those men

are engaged in laying bitumen adjacent to the

construction of a building. He posed the

problem in this way (Page 2001):-"Certain sites require asphalt surfacing,

such as industrial areas, where there is

a roadway leading to or from the loading

dock, shopping centres, off-street car-parks. The roadworks are generally

sub-contracted. The contract for the

development of the site is let to a

major contractor, and he in turn would

probably let roadworks to a specialised

road contractor, and the road contractor

306.

in turn would sub-contract t he asphalt

work at the end of the contract to a

company such as o ur s . Our men would

come in f or a relatively f ew days in the

t o tal life of the project to do th e job

that they have d o ne all their lives,

laying the asphalt. There is no

difference between laying asphalt o n a

carpark o r street, but once they arrive

on the building site there is no t

infrequently a claim made by somebody on

the site that the men should belong to

the B.L.F. and that this is known as a

"B.L.F. site" even whether or not there

are fences around the site."

Mr. Ekberg said that his company had so f a r

resisted all demands by the B.L.F., although

in respect of certain projects the head

contractor had paid B.L.F. fees on behalf of

his men. He cited an example of Grollos

doing this in respect of the A.P.O. site at

Clayton (Page 2002) •

The above two examples are only two of a large number

of examples put before this Commission of the attitude

of the Federation towards the enrolment into its

organization of men who are already members of the

A.W.U. where those men come onto a building site to la y

asphalt. In most instances the employers of thos e men

307.

or the head contractors have succumbed to the B.L.F.

demands for the purposes of maintaining industrial

peace on the site. However, in 1976, the A.W.U.

approached the Industrial Registrar for the purposes of

establishing its claim that it was entitled to cover

men engaged in that form of work. It claimed before

the Industrial Registrar that it had traditionally

covered men engaged in that type of work, and it

claimed that its "eligibility clause" clearly entitled

it to do so. But it sought amendments to its

"eligibility clause" to put the matter beyond doubt. In a decision handed down on the 17th October 1977, the

Industrial Registrar, Mr. K. D. Marshall, acceded to the claim of the A.W.U. against the objection of the

B. L. F •• In the course of giving his Reasons, the

Industrial Registrar, having referred to the competing

arguments of the A.W.U. and the B.L.F., and in

rejecting the contentions of the B.L.F., said this

(Page 6 of his Reasons):-"But to say that the surfacing of a carpark of many

acres with asphalt, even when it completely

surrounds a building under construction, is in

connection with building operations, seems to me

to go too far. I do not accept that such

asphalting work has a sufficiently direct

relationship with building operations to come

within the Constitutional Rules of the B.L.F.,

even when building operations and asphalting work

308.

are initially contracted to the one head

contractor."

At page 7 of his Reasons for Decision the Industrial

Registrar said this:-"In my opinion, it is logical and reasonable t o

conclude that the A.W.U. has properly enrolled

employees engaged in the laying of asphalt in

carparks and like areas as members under its

current Constitutional Rules. But to put the

matter beyond doubt, I have decided to consent to

its applications in part." Notwithstanding this decision of the Industrial

Registrar in 1977, the B.L.F. has remained uncontrite.

It has refused to abide by the decision of the

Industrial Registrar and continues to ban projects or

parts of projects where asphalting is being carried out

by A.W.U. members. Mr. Malcolm described the attitude

of the B.L.F. in this way (Page 1897):-

Q. "Why has the company taken that stand (i.e.

refusing to join its men with the B.L.F.)?"

A. "We believe that through the hearings between

the A.W.U. and the B.L.F. both the Registrar

and a Commissioner of the Arbitration

Commission handed down judgment that the work

was the wor k of the A. W. U.. It has been

traditionally so and we have held to that

decision. Had the decision been different

perhaps then our attitude would be different."

309.

Q. "In other words, without going into the

details you see your position as abiding by the umpire's decision, is that so?"

A. "I do."

Q. "Your suggestion is by making demands contrary

to that decision the B.L.F. are ignoring the

umpire's decision?"

A. "Yes."

Q. "What effect has that had on the jobs that

you have been contracted to do? Have you

been black banned?"

A. "Yes. There have been times when in my short

stay in this position we have been unable

to complete the work."

Q. "What consequences have flowed from that?"

A. "The job has not been completed. We have had

hassles getting money from the client we are

working for because he has not been paid in

full for the work he has done."

These circumstances are typical of the conduct of the

Federation as outlined in the evidence before this

Inquiry. If it suits its purposes to ignore the

decisions of the Conciliation and Arbitration

Commission, or the Industrial Registrar, it will do

so with impunity. The sad fact is that it has been

able to get away with that type of conduct. Because

of the peculiar power which it holds within the

building industry, it has been able to put the pressure

310.

on employers and contractors. Those persons would

prefer to "pay up and say nothing" rather than run the

risk of lengthy and expensive stoppages. It is little

wonder that the B. L.F. has incurred the wrath of other

unions operating within the building industry.

(b) The "empire building" activities of the Federation has

added a new dimension to unionism- artificial

unionism. The membership of the B.L.F. has become

"schizophrenic". On the one hand, it has as its

members persons whom it can claim to legitimately

"cover". Those persons are the legitimate builders

labourers, people who exist at almost every corner of

a building project. They include people engaged in

labouring activities assisting building tradesmen on

the site and other persons who are engaging in

labouring activities of other types around the

building site. But, on the other hand, there are a

large number of members of this union who are

unwilling, people who have been coerced into membership

against their will, and people who would much prefer

to be represented by the union of which they have been

long term members. Quite apart from this "unwilling

membership", the evidence before this Inquiry reveals

that the ranks of B.L.F. membership have been swollen by fictitious, or bogus, members. In its quest to

exercise domination of building sites, the Federation

has been prepared to "sell" tickets to manifestly

non-existing people, notwithstanding the contemplation

311.

by its Rules that the enrolment into membership of the

organization involves a mature consideration by people

making application to become members, and the

attachment to those people of rights and privileges

of membership. Rule 6 of the Rules of the

organization deal with "membership". That rule

provides that candidates for membership of the

Federation should forward to the Secretary of the

branch of the State or Territory in which he resides,

an application, on the form prescribed by the

Federation for that purpose, signed by such candidate

and stating his address, and such application form

shall be witnessed and accompanied by the entrance fee. There is attached to the Rules of the

Federation a prototype form of "Application for

Membership". It provides:-"!, the undersigned, hereby apply for admission as a member of the above Federation and, if

admitted, pledge myself to comply with the

rules and decisions of the organization."

Once a person has been admitted to membership of the

organization, he is then given, by the Rules, certain

privileges and is subjected to certain obligations. Those privileges include the capacity to vote in the

course of any election conducted by the Federation for

the positions of office bearers of the Federation.

The attitude of the Federation towards the

enrolment of members make a mockery of these Rules.

312.

It cannot be described otherwise when it is clear that the Federation has been engaged in swelling the ranks

of its organization with non-existent persons.

I provide the following examples:-( i) Mr. Edward Kilmartin is the proprietor of a

business called Les Harrison Contracting,

which is engaged in excavation, earth moving

and civil engineering construction. Most of

the employees of that company are covered by

the A.W.U., but Mr. Kilmartin indicated

(Pages 1926 and following) that his company

had come to recognise the desirability of

"purchasing B.L.F. tickets" to enable certain

contracts to be completed. He gave the

following evidence (Page 1928):-Q. "Do you have any knowledge of any such

incident where a deal was effected

between the B.L.F. and the number of

tickets that were purchased?" A. "I know where asphalting was done on a

site, it was necessary to buy some

tickets so that the job would be

proceeded with."

Q. "And that the number of tickets was less

than the actual number of men on site?"

A. "Yes, the tickets were bought the day

before to ensure the job went ahead."

313.

Q. "This was, if not a common practice, a

known practice that happened on some

occasions?"

A. "Yes."

Q. "What names would be on the tickets?"

A. "Since we did not know the names of the

crew likely to appear the next day,

suitable names were put on them."

(ii) Mr. Terence Grey is a Director of Alto

Constructions Pty. Ltd., which engages in

construction of roads, freeways, drainage and

earth works. He said (Pages 1952 and

following) that in 1981 his company was

contracted to do work at the Bundoora

Geriatric complex. He said that the job was

stopped by the B.L.F. because his employees

were not members of the B.L . F •• He described

the resolution of the dispute in this way

(Page 1953):-"The concrete truck was told that he would

be blacked if he poured the concrete.

He (i.e. the driver) said he took his

orders from us. We poured the concrete.

As a result we were invited down to the

Builders Labourers offices the next

morning to try and resolve the matter.

We went down there the next morning.

We showed them that there was none of

( iii)

314.

their work on the site, and they

argued and argued. We said for

peace - they offered us to buy four

tickets and my partner and I said we

would buy four tickets. We made an

agreement then and there that fouj men

could go onto any building site in

Melbourne and use the tickets. That

meant that if we continued to pay we

could always send four men to any site

to wo r k i f we wanted to • "

Mr. Grey was asked with whom this agreement

had been reached and he said "Norm Wallace.

I think that's his name." He then said that

he purchased four B.L.F. tickets in the names

of A., B., C. and D. Alto. He said that thes e

tickets were given to him in these names at

the B.L.F. offices and that thereafter they

have been carried and used by such of the

employees of the company who have gone onto

sites controlled by the B.L.F •. Mr. Grey said

that the tickets were purchased as, and have

been maintained as, convenient passports to

bu.ilding sites.

Mr. Barry Iles is a Real Estate Agent and

Developer. He said that in 1976 he was

engaged in the development of the Regent

Theatre site in Toorak Road, South Yarra.

315.

He said the site was "banned" by the B.L.F.

because A.W.U. labour was engaged in paving

work on the site. He said the closure of

the job was costing him a lot of money and

he sought an introduction to Norman Gallagher,

through his friend Ron Walker, who was then

the Lord Mayor of Melbourne. Walker made the

required introduction. Mr. Iles described

his contact with Gallagher in this way

(Page 2109):-Q. "Where did you see him?"

A. "I'm sorry that is incorrect. I phoned

him that afternoon, i.e. Mr.Gallagher,

and he said 'Well there wouldn't be a

great number of workers involved,

I would think about three, so if you

take on three union memberships that

would settle the matter.'."

Q. "What did you do having received that

information?"

A. "I made an appointment to go into the

B.L.F. offices the following day and

I did that and that was 11 o'clock on

the 15th October 1976."

Q. "You went there at that time and who did

you see at the B.L.F. offices?"

A. "Mr. Gallagher was not there and I cannot

say with whom I spoke, because I had

316.

no knowledge."

Q. "Does the name Patrick Donnelly ring a

bell?"

A. "I think someone came to the offices at

that time and was speaking generally

and I think 'Pat' was mentioned, but

I do not think that the man I was

dealing with at the counter, it was

just whoever was at the counter." Q. "What did you do at the counter?"

A. "I said that I spoke to Mr. Gallagher

and this was the arrangement that had

been made and I said 'I'm to take out

three union memberships but I don't

really understand whose names they should be taken out in, should they be

in my name.' The man said 'We don't

stand on ceremony here, it doesn't

matter whose name it's in."

Q. "But whose name was it put in?"

A. "Well inspiration came to me and I made

it in the name of Fred Brown, Fred White

and Fred Black."

Mr. Iles went on to say that on payment of

the appropriate fees in respect of these three

fictitious persons, the ban was lifted and the work was permitted to be completed.

317.

(iv) Mr. Richard Eckersley is the proprietor of

Ecko Landscaping Design, a firm that engages

in landscaping of commercial projects.

He said that in 1981 he had been engaged by

James O'Connor of Land Securities (Australia)

Pty. Ltd. to do some landscaping work at a

project known as the International Freight

Centre at Tullamarine. Eckersley was

engaged in the landscaping of that project

and a Mr. Murray Borman, who conducted his

business under the name of Australian Brush

Fences, was engaged in building a brush

fence at the Tullamarine site. In or about

October 1981 both Borman and Eckersley were

approached by the B.L.F. shop steward at the

site and told that neither they nor their men

could come onto the site and commence work

until they had joined the B.L.F .• Borman had

four men and they all refused to join the

B.L.F .• Eckersley had three men and they,

too, were unwilling to join the B.L.F ••

Eckersley said that he approached Mr. O'Connor

and O'Connor told him to join both his men

and the men of Borman with the B.L.F. and that

he, O'Connor, would reimburse Eckersley.

As Eckersley said (Page 1931A) he paid the

fees to the union representative on the site

and gave to the representative seven

318.

fictitious names. In return, he received seven B.L.F. tickets, four of which he gav e

to Borman. Eckersley said that his name wa s

made out as "Steve Martin" (Page 1930), tha t

the job which he had t o do at the Tullamarine

site took about 10 days, that he has had no

interest in, or benefit from, his membership of the union, and that he regarded the

exercise as nothing more than a "business

expense to Mr. O'Connor". O'Connor, who was

called to give evidence, accepted this

description of the expense. He said (Page

1985):-"For the purpose of completion I add t hat

at times early in the construction some workers, who were not B.L.F. members,

joined that union. This was to avoid

disputes. The fees were met by Ecko

Landscaping, a firm employed by the

company to attend to the landscaping wo rk

on the site. For the purposes of

registration they used false names. This

was done to create harmony on the site.

It was known both to Ecko Landscaping and to the shop steward, representing

the B.L.F. on the site."

319.

( v) Geoffrey Petherbr idge is the Managing Director

of Petherbridge Constructions Pty . Ltd., a

building contractor.

follows (Page 2120):-He gave evidence as

Q. "Have you ever had to resort to purchasing

tickets for the employees of your sub-contracting companies?"

A. "Yes, on several occasions."

Q. "Could you give us examples of occasions

when that occurred?"

A. "I believe at Knox City Shopping Centre

we purchased a ticket in a fictitious

name and held it while the men were on

site. The basis is that we have had to

work on several sites and that the B.L.F .

and the A.W.U. with their demarcation

disputes will sometimes have a site crew

and what happens is that the men will

hold both B.L.F. and A.W.U. tickets . "

He went on to recite that his company had

purchased some B.L.F. tickets for a sub­

contractor called "Emoleum". He said that

the tickets so purchased would have been in

fictitious names. He went on (Page 2121) : ­

Q. "It would have been in a false name? "

A. "Yes."

Q. "Is that frequently done?"

320.

A. "Yes, all my employees hold fictitious

tickets."

Q. "How do you do that? Do you go along

and give a fictitious name and receive

a ticket?"

A. "They have never asked me. I just pay the

fees and they give me a ticket. My men

do not want to be union members the

fact that they might be in the A.W.U.

does not matter, they have to be in the

B. L.F. II

Q. "You get a ticket with a fictitious name?"

A. "The same tickets have been held for

years. We renew them from time to time."

Q. "You hand them out to your men so that

they can gain entry to a B.L.F. site?"

A. "They hold that ticket for years so that

they can get onto sites."

Q. "This is because your men do not want to

become members of the B.L.F.?"

A. "That is correct."

The above examples are only some of the instances given

in the evidence where contractors have been coerced into

purchasing B.L.F. tickets in fictitious names. They

are nonetheless sufficient to indicate what appears to

be a standard practice. It is a practice which cannot

be defended by any legitimate argument and indeed was

roundly condemned by several of the trade union leaders

321.

who gave evidence before the Inquiry.

regarded as a "money making exercise".

It can only be

(c) It is apparent that the policies adopted by the

Federation towards the enrolment of members has led to

widespread "dual ticketting". Financial membership

of another union, which has the capacity to cater for

the interests of the worker involved, is of no

significance to the Federation once it determines, quite

unilaterally, that that worker is engaging in work which it, the Federation, is entitled to cover. Nor do the

wishes of the worker play any part in the consideration

of the Federation. Its demand is made upon the

employer of the worker, and the demand is frequently

attended by the threat of stoppage. Because employers

have realised that these threats are not idle, they

have, on most occasions, taken the line of least

resistance and purchased B.L.F. tickets on behalf of

their men, notwithstanding that the men are financial members of other unions. The administrative officers

of the other unions appear to have been powerless to

do anything about it, although it appears clear that

the conduct of the Federation in this regard, has been

responsible for developing a healthy antipathy on the

part of other unions towards the B.L.F .• But,

notwithstanding this "union hostility" employers have

been prepared to buy "a batch of B.L.F. tickets", not

because they believe that their men desire to join the

B.L.F., or because they believe the B.L.F. will be the

322.

best representative of their men on the site, but

rather because they know that the purchase of the

tickets will obviate disharmony. In this sense , the

B.L.F. tickets have come to be regarded within the

i nd ustr y more as "an entree card" to building sites,

rather than as a security against the imposition of

improper working conditions. Mr. James Long, a

Director of William Loud (Aust.) Pty. Ltd., put the

matter in what appears to be its typical perspective.

He said (Page 2016):-

"This has been a fact of life over the years that,

you know, if you go onto a B.L.F. site with

A.W.U. tickets you either leave the site or they

declare it black."

He then gave the following evidence (Pages 2016-7):­

Q. "How many tickets does the company hold at

the moment?"

A. "Eight."

Q. "Have they names on them?"

A. 11

Yes.11

Q. "Are each of those eight names that are on the

tickets present employees of your company?" A. "With one exception, he resigned a couple of

months ago."

Q. "But that ticket has been kept on as a matter

of convenience to be used by someone else if

and when necessary?"

323.

A. "Yes, a particular employee, I understand, has

a resignation form."

Q. "Mr. Roberts says that those tickets are

normally held in the company's offices, is

that right?"

A. "That is right."

Q. "And as and when they might be required they

are issued out to employees who are working

on what you have termed 'B.L.F. sites'?"

A. "Yes."

Q. "It may be that in some instances the tickets

go to people whose names are not borne by the

ticket?"

A. "That is possible."

Q. "They become, as it were, a passport for entry

onto the site?"

A. "That is right."

It is, therefore, apparent that in the building industry the practice of the worker holding more than one union's

"clear card" has become a very common practice indeed.

Union leaders regard this as undesirable, but

pragmatically take the stance that it is difficult to

do anything about it, so long as the B.L.F. maintains

its current intransigent attitude, and has the power to "whip employers into submission". The powerlessness

of other unions in this field was summed up by two union

leaders who gave evidence before the Inquiry.

Mr. Sheather, the Assistant Secretary of the B.W.I.U.

324.

said this about it (Pages 2543-4):-Q. "If a person comes on to a site and is a

member of a union which he bona fide

believes and, indeed, objectively would

appear to cover the class of work in which

he is involved, do you consider it desirable

that he should be required to join another

union?"

A. "I do not think it is a happy situation.

It is a reflection of the multitude of unions

that we have in our society and the problems

that there are with amalgamation which is maintaining that position. However, certainly

on occasions, that is the only alternative

because whilst his employer might have been

dealing with another union, perhaps in the

manufacturing area, he may then extend his

work to go on to on site construction work

and he cuts across traditional demarcation

lines, and that then brings about the question of union membership, and it is generally

resolved in a practical way on the basis of

the demarcation pattern on the site, rather

than in the manufacturing area.

always as easy as that."

It is not

Q. "Do I take it that in agreement with some other

union officials who have given evidence here,

you would see nothing particularly undesirable

325.

about a person being required to be a member

of two unions in order to resolve what would

otherwise be a demarcation dispute?"

A. "I do not agree that it is desirable, but in

many instances it is the only practical way

o f res o 1 v i ng it . "

Q. "It is the expedient which is used to overcome

a difficult situation?"

A. "I would not even term it 'the expedient'

Wherever possible we endeavour to reach

agreement with other unions involved to avoid

that situation, but we do not resolve it

completely."

Q. "It depends very much on co- operation and

goodwill between parties to that sort of

agreement?"

A. "Yes it does and demarcation disputes are not

renowned for their area of goodwill."

Mr. Laurenc e Short of the Federated Ironworkers

Association was even more explicit. He said (Page

2501):-Q. "How do you resolve this area of d i spute on

the building site if one union is saying ' Our

clause entitles us to enrol this man' and the

man clearly has his work covered by the clause

of another union, how is that problem solved?"

A. "I have no quick answer to that. I would hope

the presence of commonsense in the union and

326 .

that some reasonableness is left in the B. L.F. to give people a fair go if they are prepared

to be un ion i s t s . If there is some doubt about

the work coverage on a particular job, wh y

not take that to a court and some court

interpretation of a dispute." Q. "The trouble is, when he gets into that arena

A.

he comes into conflict with another

organization that says 'Every person coming

onto the site to do non-tradesman work has

to join our union'?"

"We try to overcome that. Where there is some

borderline work that could be B.L.F. work or

could be F.I.A. work there is sometimes a

system of dual tickets. Some of our members

are members of the F.I.A. and also have B.L.F.

tickets, and some even have tickets in the

A. W. U •• I know of ironworkers who have three

union cards."

Q. "Is that desirable?"

A. "I do not think it is desirable but I do not

know the answer to it at present."

Q. "It seems to be a very complex problem?"

A. "It is complex, but what I am opposed to is

that the B.L.F. tries to exert its will in

cases even if they are doubtful, let alone

if they are not doubtful, by intimidation. That is what I am opposed to."

2 . 8.

327.

Q. "How is it that the B.L.F. is able to exert

its will in that arena - is it because it

has the strength in that arena, the industrial

strength on the building site?"

A. "I do not think everybody is prepared to stand

up to intimidation, unfortunately, in the

community."

The B.L.F. has been able to carry out its process of

"empir e building" because it occupies a position of strength

within the building industry. Although a building site brings

t o gether a vast array of skills, represented by a multitude of

differing labour organizations, the fact is that the "legitimate membership" of the B.L.F. penetrates into almost every corner

o f the building site. In this regard, it stands in stark

c o ntrast with the large number of unions upon whose membership

it is seeking to impose itself. The B.L.F., therefore, has a

capacity to paralyse a building project in a way which, say, the

A.W.U. does not. It accordingly has the power to "squeeze"

building contractors, most of whom are seeking to meet tight

schedules. People who commit themselves to building projects

cannot afford to have those projects delayed and, thus,

they become vulnerable to the demands of a labour organization

which has the capacity to delay the project, even though those

demands may be rapacious in character. The peculiar position

into which building contractors are thus placed, forces them to

forego principle for financial viability. This is clearly what

Mr. Andrew, the National President of the Master Builders

328.

Federation, had in mind when he said (Pages 2713-4) that the

master bui l d ers were not prepared to "lock horns" with the uni o ns

over the rec ruitment into membership by the uni ons of self­

empl oyed peo ple • He said : -

"I ha v e not seen any of the Master Builders Associations

wanting t o be the first cab off the rank and take an y

e ffecti ve action in this area, I am afraid ..•• I think

until there is a change in attitude by the trades unions

themselv es, or by whatever means there is some redressing

of the balance of industrial power in our industry, I am

afraid I have to admit that I cannot see any likelihood of

change in the near future."

The evidence in this Inquiry has identified a widespread

recognition by major building contractors of the vulnerability

of their financial situation. They have very clearly adopted

a line of "least resistance", a stance which has made it very

easy for the B.L.F. to establish its position of dominance in

the building industry. Very clearly, the major building

contractors have not been prepared to "put their projects on the

line" to enable other unions to test where the line of

demarcation exists between work, which their members are entitled

to carry out, and work, which the B.L.F. is legitimately entitled

to "cover". These contractors have only been too ready to

accept the assertions made by the B.L.F. that it is entitled to

"cover" all persons coming onto a building site to perform

physical work of a non-tradesman's type and, for that reason,

they have become, willingly or unwillingly, recruiting agencies

for the B.L.F.. Some very clear examples of the practices were

329.

given during the course of the Inquiry:-(a) Mr. Philip Zagni, a Director of Zagni Industries Pty.

Ltd., said that his company had been given a contract

by Lewis Constructions to carry out work at the Art

Centre. Part of that contract was sublet to a company

called Associated Asphalters Pty.Ltd.. The employees

of the latter company were members of the A.W.U .•

Mr. Zagni said (Page 1795) that he told Mr. Baker, the

principal of Associated Asphalters that all his men

would have to join the B.L.F.. He said that the

Supervisor of Lewis Constructions had told him "If you

want to get in there those men will have to be in the

B.L.F.".

(b) Mr. Bruno Carraro is the proprietor of Carraro

Engineering Pty. Ltd., Structural Engineers. That

company was contracted by Dill inghams to do some work

on the Underground Railway. His men were tradesmen

and were members of the Boilermakers Union. He said

that at the time when the contract was let Dillinghams

told him that all his men must be members of the B.L.F.

otherwise they could not go on the site (Page 1797A).

Mr. Carraro said:-"When I originally came into sign an agreement with

Dillinghams I objected to our employees being

members of the Builders Labourers Federation

because we are tradesmen and t o me it is a

humiliation for a man to have to join another

union. I firmly did not believe in it. Once you

330.

are a member of a union and you pay your dues you

are right and should be covered; you should no t

have to join another union."

Despite the expression of these sentiments, which appear

to have the backing of commonsense, Mr. Carrara said

that they "cut no ice" with Dillinghams. He said that

he was told that the only way in which Dillinghams would

give his company the contract was for the employees to

join the B.L.F.. Reluctantly, according to

Mr. Carrara, he agreed to comply.

(c) Mr. Allan Harris carries on business as a Monumental

Mason under the business name of S. Harris & Sons .

He was sub-contracted by Dillinghams to do some work

on the Underground Rail Loop- namely bringing the

fence around Parliament House (Page 1808A). Although

his men had been members of the Stonemasons Union for

some years the y were required, by Dillinghams, to join

the B.L.F. as the price of obtaining the contract.

He said that he was told by Mr. Manie of Dillinghams

that if they did not join the B.L.F., and loss was

involved, Dillinghams would be looking to him to recoup

the loss (Page 1809) .

(d) Mr. Robert McKie is the Manager of Brownbuilt

(Victoria), a manufacturer of steel shelving and other

industrial products. He said (Page 1815) that his

company had received a sub-contract from Target Stores

to deliver materials to their Ringwood site and their

Broadmeadows site. The work which Brownbuilt was

331.

required to do was simply to deliver shelving and

bracketing which was to be installed by other people

in the premises being constructed. Mr. McKie said

that his employees were members of the Storemen and

Packers Union. He said that he was advised by letter

from the Target organization that these men would have

to be members of the "appropriate union" and, having

made further investigation, he was told by the site

foreman that such instruction meant that the men who

carried the goods from the truck into the store would

have to be joined up with the B.L.F.. He further said

that he was told that if these men were not joined up,

and war k stopped as a consequence of it, Brownbui l t

would be made liable for the cost and expense of the

stoppage (Page 1852).

These are specific examples of the part which is being played

by the major building contractors within Australia in recruiting

members for the B.L.F.. They clearly do it at the point of

letting sub-contracts in order to minimise the amount of industrial disharmony upon their projects. As Mr. R. J. Grollo

said (Page 2102):-"I think anything that gives peace on the job is desirable.

I think the important thing is to keep peace on the job."

Representatives of other major building contractors who gave

evidence before the Inquiry were, likewise, quite frank in

conceding that, for the purposes of industrial peace, they

332.

have imposed obligations upon their sub-contractors to

ensure that men whom they bring onto the site are financial

members of the B.L.F. This has been the policy of such major

construction companies as Hollands (see pp.2007 ff), Dillinghams

(see pp.2010 ff), Fletcher Watts (see pp.2048 ff), Costains

(see pp. 2071 ff), Civil & Civic (see p.2090), and Lewis

Constructions (see p.2091). In this way these companies have

become powerful, albeit reluctant, allies of the B.L.F. in its

"empire building campaign".

333.

Chapter 3 Industrial Techniques Adopted "In the Field" by the Federation

3. l. The evidence discloses a pattern of conduct adopted by the

Federation for the purposes of achieving "over award conditions"

for its members. To describe that conduct as "militant" (as

the B.L.F. officials have described it) is to afford to it a

degree of propriety which it does not deserve. It is more apt

to describe the conduct as "standover behaviour" which, in the

long run, reflects a determination by the Federation to gets its

own way, notwithstanding the processes of law, or the dictates

of ethical union behaviour. The conduct, which can be

conveniently described as "direct action against the employers

on the job", was eloquently summed up by Mr. Steve Black, the

New South Wales Branch Secretary, in his Bulletin to members of

September 1979 (Exhibit 122). Under the heading of "Guerrilla

Tactics", Black wrote:-"The tactics used to get the overaward payments and better

conditions are 'guerrilla tactics' - the use of bans and

lightning stoppages to disrupt the boss on the job.

These tactics include:- lightning strikes, work to

rule, banning of parts or sections of jobs, one day and one

week bans on concrete, stopping of concrete before a pour

begins, breaking of concrete pours, bans on mobile cranes,

bans on the lifting of certain materials by cranes or hoist,

bans on truck deliveries, bans on unloading trucks, sending

trucks away, overtime bans, safety bans, bans on the removal

of scaffolding.

These tactics and others are designed to hit the boss

in the poe ket. Rather than costing B.L.'s wages in lengthy

334.

strikes, the boss loses the money when the bans are used.

This is a policy of 'the most harm to the boss the least harm

to ourselves'."

The evidence in this Inquiry reveals that these tactics hav e

been regularly put into practice. In the succeeding paragraphs

of this Chapter it is proposed to outline that evidence; It

exposes the B.L.F. as a body which refuses to negotiate its

demands. Instead it resorts to immediate and direct action

against the employer to "win" its demand. It will not brook an y

opposition and it displays a distressing recognition of what

appears to be the fact - namely that it has the capacity to

render the employer impotent.

is preferable to right". Its motto appears to be "might

I have "grouped" the evidence of the Federation's conduct

under the following headings:-(a) Vindictive conduct shown towards employers;

{b) Violence to person and property and intimidatory

conduct;

(c) Intolerance of the processes of Conciliation and

Arbitration and other processes of law;

(d) Demands upon employers for dismissal of employees

who have opposed union demands and demands that

employers conduct their business in a manner desired

by the Federation;

(e) Spreading of bans against particular employers for

vindictive reasons;

335.

( f ) D em a nd s f o r l urn p s urn pa ym en t s a s a co nd i t i on o f

returning to work.

3 .2. Vindictive Conduct towards Employers

Th e evidence reveals an alarming tendency on the part of

B.L.F. officials to "punish" employers, or self-employed persons,

for failing to meet the requirements imposed upon them by the

Federation, or because those persons have sought to oppose those

requirements. I refer to the following episodes:-(a) Kevin Joseph Fitzpatrick is a self-employed steel

worker carrying on business in Western Australia under

the name of K.J. Constructions. In February 1979 he

was contracted to do work at the "Gosnells Church site"

in Perth. He was not a member of a union, firstly

because he was self-employed and, secondly, because, at

a time when he had been employed for wages, he had

received a Certificate of Union Exemption based on

conscientious beliefs. At the Gosnells Church site

he had employed on sub-contract two other steel workers

called Carter and Selpack.

Fitzpatrick said that he had been a regular subject of victimisation by the B.L.F. because he refused to

join the union. He said that a union organizer, one

Olsen, frequently told him that the union would "put

him out of business". Fitzpatrick said that Olsen

came to the Gosnells Church site and stopped the job

because Fitzpatrick was working there. Watts, the

principal contractor, then terminated Fitzpatrick's

336.

contract. Shortly after that, a large poster was

displayed on that site and on other building sites

around Perth. It was, in dimension, some three feet

by two feet, and has been exhibited before the Inquiry

as Exhibit 168. The poster was headed "Don't Work with

Scabs" and had a photograph of Fitzpatrick, Carter and

Selpack. The content of the poster was highly

derogatory of the three persons involved. Fitzpatrick

said that Olsen had been responsible for distributing

and displaying the posters. This evidence is to be

found at Pages 2687-2692.

(b) Mr. Walter Van der Grable carries on business in the

Australian Capital Territory as a paver under the name

of "Award Pavings". In October 1981 he was under

contract to the Griffiths Group to do some paving work

at the Gregory Motors Site in Canberra. In October 1981

Ken Miller, a B.L.F. organizer, came to the site and

demanded that certain men, who were sub-contracted to

Award Pavings, should join the B.L.F •. The job was

almost finished and Van der Grable agreed to pay the

fees on the part of these men, who were not willing to

join. He wrote out a cheque for $234 and gave it to

Miller. He arranged to complete the work on the

following day but when he arrived at the site he found

that the job had been "black banned" again. It

remained so for a week without any reason being given.

At the end of the week he arranged a meeting to see

O'Dea, who was the A.C.T. Branch Secretary of the B.L.F ..

337.

At the meeting O'Dea had another B.L.F. organizer with

him and Van der Grable wanted to know how it was that

he had been put out of work for a week immediately

following the joinder of his men with the B.L.F. and

the payment of the requisite fee. He was then told

that he had been subjected to this discipline because,

at the time when the men had been "joined up", one of

them had said to the B.L.F. official on the site

"Congratulations we have just joined the Communist

Party". This indiscretion apparently cost

Van der Grable seven days income (see Pages 2281-2284).

(c) Wilhelmus Schraven is the Managing Director of Hany

Group Pty. Ltd., a company which engages in concrete

cutting, excavation and other operations. In or about

1979 Schraven had had an argument with Mick Lewis, a

B.L.F. organizer in Victoria, over the refusal of

Schraven to join his youngest son into the membership

of the B.L.F.. Schraven had declined to do so because

his son was a qualified apprentice and it appears that,

during the course of the argument, Schraven, who was

sitting in his car and frightened that Lewis was about

to punch him through the window, drove off and ran over

the toe of Lewis. Two years later, in April 1981,

Schraven's company was working at the Gas and Fuel

Corporation site in Fitzroy, under contract to

O.J. Nilsen who, in turn, was a sub-contractor to

Graham Evans & Co., the builder. On the

14th April 1981, the Site Foreman of Graham Evans

338.

issued a written site instruction ordering Schraven

and his equipment from the site.

(Exhibit 102) read as follows:-The site instruc ti o n

"Please proceed to remove all your plant from the

site as instructed by Mr. Lewis, owing to a uni on

dispute which ocGurred approximately two year s

ago."

Schraven was kept off the site for approximately a

month; it cost him more than $5,000. During the

course of his period off site, and at O.J. Nilsen's

request, he made contact with Lewis, at the office of

the B.L.F., and Lewis demanded a written apology in

respect of the incident which had occurred two years

before. Schraven did this on the 8th May 1981.

He said he did it, not because he believed he was in

the wrong, but because he wanted to get back on site.

The apology, which was addressed to Lewis, read as

follows:-"Dear Sir,

In regards to an incident approximately two

years ago, it was all an unfortunate

misunderstanding.

our side."

It will not happen again from

(This evidence of Schraven appears at Pages 1745-1751

of the transcript.)

It appears that this episode occurred because Lewis had come onto the Fitzroy site from the B.L.F.

offices and had noticed the Hany Group equipment on

339.

site. Mr. G. Thomas, the Site Foreman of Graham

Evans, said that Lewis had ordered Evans' Project

Manager to direct Schraven to leave the site and take

his equipment. Lewis said that he had had a "hassle"

with Schraven a couple of years before and "did not

want them on any B.L.F. site". Lewis said that if

they were not evicted, then the site would be declared

black. Thomas said that although he regarded the site

instruction as "unfair" his company had, nonetheless,

issued it because they were fearful that the job would

be shut down.

Thomas' evidence appears at Pages 1995-1997 of the

transcript. (d) In December 1980 Land Securities Pty. Ltd. was

developing a project for the Commonwealth Superannuation

Fund at Tullamarine. It engaged a company called Reid

Wood (Vic.) Pty. Ltd. as the builder. Reid Wood had

entered into a contract with E.P.M. Concrete Pty. Ltd.

of New South Wales to fabricate and supply the concrete

slabs for the project. Unknown to Reid Wood, E.P.M.

had employed A.W.U. labour in the fabrication of those

slabs. That fact was ascertained by the B.L.F.

representative on the site and the job was immediately

ublacked", and the ban remained for nearly two months.

The B.L.F. organizer directed that the work would not

proceed until the slabs had all been removed from site

and others recast in situ with B.L.F. labour. Reid Wood

had no alternative but to comply with this direction,

340.

and the cost thrown away was something in the vicinit y

of $70,000 (see Pages 1970 and following of the

transcript)

(e) Towards the end of the contract referred to in the

preceding sub-paragraph Reid Wood had stood down

certain "B.L.F. labour" because it was redundant . Despite threats by the B.L.F . that the job would be

"blacked", Reid Wood stood firm and their stand was

vindicated by the Victorian Building Disputes Tribunal

which held that, in the circumstances, the builder was

perfectly entitled to take the action that it did.

The B.L.F . refused to accept that decision and

James O'Connor, the principal of the developer ,

directed that the men involved be re-employed. One

of the men was an Eddie Williamson, who had been , and

remained, a B.L.F. representative on the site. Some

short time before the completion of the project, Reid

Wood had engaged on sub-contract two brick cleaners t o

work on a Sunday in order to finish the job. For their

services they were paid $300. Williamson later learned

of this fact and told Mr. Wood, a principal of Reid

Wood, that the job was a "B.L.F. job" and that the

project would be "blacked" unless Reid Wood paid to the

Children's Hospital the sum equivalent to the amount

which they had paid to the sub-contract brick cleaners .

He claimed this was in the nature of a "fine". Reid

Wood had no alternative but to pay the sum .

341.

3.3. The examples given in the preceding paragraph demonstrate a

naked abuse of power by the B.L.F. for non-industrial purposes.

They were actions taken out of sheer spite and display the

capacity of the Federation to inflict wilful financial damage

in circumstances which amount to deliberate interference with

contractual obligations. The unfortunate aspect is that the

B.L.F. "gets away with it" because the people upon whom the

demands are made believe that they have no alternative but to

comply.

3.4. Violence to Person and Property and Intimidatory Conduct

There have been many instances put before this Inquiry of

threatening and violent conduct engaged in by officials and

members of the Builders Labourers Federation in pursuit of

demands made upon employers. These instances appear to

demonstrate the existence of a philosophy in the Federation that

resort to mob violence is a justifiable weapon in the process

of "softening up" an employer. I cite the following examples:-(a) Raymond Isaac is a builder carrying on his business in

New South Wales. In August 1980 he was engaged in

building a factory at a building site in Prospect, New

South Wales. He had let a sub-contract to a

Mr. Richard Wehbe to do concreting at the site. Wehbe

was self-employed. In August 1980, Wehbe was engaged

in doing some concreting at the site and he had with

him his son, who was on holidays. He was approached

by a B.L.F. organizer who demanded that Wehbe join the

Federation. Wehbe refused and there was a scuffle

34 2.

between Wehbe and the organizer . Wehbe is a large man

and it appears that the organizer was no match for him.

The organizer left the site but threatened that "he

would be back". On the following day the organizer

came back to the site with 18 men, some of them armed

with weapons of various descriptions. Wehbe was

brutally assaulted, two of his ribs were broken and his

face was badly bruised. Wehbe's resistance was broken

and he immediately joined the B.L.F •• Upon leaving

the site, the Federation members systematically smashed

every window on the project with bricks. This action

resulted in damage to Isaac of in excess of $1,000.

In addition, the Federation's organizer required Isaac

to dismiss Wehbe from the site and to pay $210 for

damage which was asserted to have been occasioned to

the clothing of the B.L.F. representative during the

scuffle. Isaac said that he had no alternative but

to meet these demands (see Pages 2547-2555 of the

transcript). (b) In 1981 a company known as Regency Constructions Pty.

Ltd. was engaged in building the Balcatta Rollerdrome

in Western Australia. Wexyl Constructions had been

engaged to perform steel erection work at the site.

During the course of the project Mr. Jim Reid, a B.L.F.

organizer of the Western Australian Branch, came to the

site and demanded that the employees of Wexyl join the B.L.F.. They refused to do so because they were

already members of the Metal Workers Union. Reid told

343.

a Mr. Michael Palumbo, a Director of Wexyl, to pack up

his equipment and get off the site. A scuffle broke

out between Reid and one of the crane drivers emplo ye d

by Wexyl. During the course of the scuffle it appear s

that Reid had his shirt torn and his spectacles broken.

Reid left the site but shortly after returned with

Olsen, another union organizer, and three car loads of

B.L.F. members. Olsen told the principal of Regency

Constructions that "the men had come from major

contracts throughout the city and, if anybody assaulted

any of their organizers, they were going to look after

him". A large number of the Federation members then

started to assault the crane driver and commenced to

push over his crane. Mr. Ferguson, the Supervisor of

Regency Constructions intervened and agreed that he

would direct Wexyl's men to leave the site. Regency

agreed to pay B.L.F. fees in respect of Wexyl' s men and

also agreed to pay a sum in excess o!: $200 to Reid t o

damage which had been done to his clothing and to his

spectacles. Ferguson said that his reason for doing

so was "to get things sorted out on the site and to

just have a bit of peace, to make sure that we got our

steel up and our job underway". Although B.L.F.

membership fees were paid by Regency on behalf of

Wexyl's men, those men never received B.L.F. tickets.

Palumbo said that Reynolds, the Western Australian

Branch Secretary of the B.L.F., subsequently told him

that the money paid was "Not money for joining. That

344.

is a fine for Regency Construction." (This episode is described at Pages 2602-2611 of the transcript.)

(c) Penrith Estates Pty. Ltd. is currently engaged in

developing a project at the Southern Cross site in

Sydney, New South Wales. In November 1981 it had let

sub-contracts to a Mr. William Summers of West End

Constructions Pty. Ltd. for the purposes of carrying

out general concreting work on the site, and also to

Mr. Thomas Andrew O'Connell for the purposes of doing

bricklaying work. Summers, his employees and O'Connell

were all members of the Builders Labourers Federation.

In November 1981 industrial unrest broke out at the

site because B.L.F. members were being stood down in view of the fact that there wa s no work left for them.

The B.L.F. placed a ban on the job and the project

ground to a halt. Demands were made by the B.L.F. for

suitable redundancy payments to be paid to the men who

had been stood down, one of whom was the B.L.F .' s

delegate on the site a Mr. Gil Green. There was a

further demand by the B.L.F . for his reinstatement.

Mr. Paul Van Gulich was the Project Manager for Penrith

Estates. Because the site was paralysed after the

withdrawal by the B.L.F. of their labour, he conducted

negotiations, for the purposes of seeking to resolve

the dispute . On the 21st December 1981 Penrith

Estates took the matter to Commissioner Shorthall of

the Conciliation and Arbitration Commission. On that

day Commissioner Shorthall handed down a recommendation

345.

that all members of the B.L.F. return to work. The

B.L.F. rejected that recommendation and, on the

7th January 1982, Commissioner Shorthall handed down

a further decision in which he ordered, rather than

recommended, a return to work. Once again the B.L.F.

rejected that decision and remained on strike. By that

time the B.L.F. had dropped its claim in respect of the

reinstatement of Green, it having been ascertained that

Green had misappropriated a "punter's fund" which he

administered on behalf of B.L.F. members on the site.

By the time Commissioner Shorthall had made his Order

that the men return to work on the 7th January 1982,

Mr. Summers and hi s men and Mr. O'Connell desired to

go back to work. They took the view that they had

been out of work for nearly six weeks and the

Arbitration Commission had ordered a return to work.

At this time, however, the B.L.F. had o rganized pickets

around the job, and Summers and O'Connell were harrassed

and physically assaulted. Summe rs said "It got to the

stage when abo ut 200 or 300 police were cal led to the

site with riot battens to let us onto the site to start

work.". He said that his wife received threatening

phone calls and the tyres on his vehicle were let down .

He said that he was spat at and had missiles thrown at

him . He said that his vehicle was damaged with scratch

marks, nails were put in front of the tyres, the exhaust

pipe was broken off and the tailgate had been kicked in

and the rear parking lights were broken . He said that

346.

ultimately his contract was terminated by Penrith

Estates, that he was told by Harris, a B.L.F.

organizer, that he would not get any further work in

Sydney. Mr. Mark Alcroft, an employee of Summers,

said that on one occasion the picketers had broken

into the building site and that he was manhandled from

the first floor of the site all the way down the stair s

and into the road. He said that he was hit, kicked,

punched and dragged. His jaw was broken and two of

his teeth were knocked out. Mr. O'Connell said that

he was kicked by a union delegate and threatened b y

another. He said the delegate by whom he was kicked

was a man called Willie Denver, that the co-delegate

was Alan Whitehouse who had said to him "I'm going to

get you, I'm going to split your head open."

Van Gulich said that he had ultimately settled the

dispute with the B.L.F. by agreeing to redundancy

payments and reinstatement, if their members wanted it.

Furthermore, he agreed to the demand of the B.L.F. that

Summers and O'Connell be put off the site. (These

matters are referred to between Pages 2455-2475 and

2514-2529 of the transcript.)

(d) In 1979 K.G.K. Simpson Pty. Ltd. was engaged as the

builder on the "Western Press" site in Western

Australia. They were about to commence a concrete pour

when a threat was made by the B.L.F. to stop that pour

because the principal of the building company was a

member of the Master Builders Association which had

34 7.

refused to negotiate wage agreements with the B.L.F ..

Reynolds, the Western Australian Branch Secretary of

the B.L.F., had told the concrete sub-contractor that

he was going to "stop the pour- right in the middle".

Nonetheless, the builder took precautionary measures

and engaged the assistance of police officers, and the

pour was commenced in secret early one morning. During

the course of the pour the B.L.F. organizer, one

Neil McDonald, arrived at the site and he was stopped

at the perimeter. McDonald told Simpson that "he was a

marked man" (see Pages 2441-9 of the transcript).

(e) In June 1979 Stocks and Holdings Ltd. were developing

a site at Baulkhan Hills in New South Wales. They had

let a sub-contract for the pouring of concrete to N.S.W. Concrete Pty. Ltd.. The B.L.F. alleged that the sub-

contractor was not paying its men the correct amount

of "tea allowance" and, accordingly, the B.L.F. placed a

ban on overtime. John Oates, the Construction Manager

for Stocks and Holdings, had ordered the B.L.F.

organizer, Nick Harris, from the site, alleging that

Harris had come on site in defiance of the Award

provisions. Harris had refused to go and Oates had

called in police assistance. The pol ice arrived and

ordered Harris and two other B.L.F. officials to leave

the site. This was on the 31st May 1979. On the

following day, namely the lst June 1979, seven B.L.F.

officials, including the New South Wales Branch Secretary, Steven Black, together with 40 other men,

348.

came to the site and created a disturbance. During

the course of this disturbance, the Federation members

jack-hammered out the concrete which had been laid by

N.S.W. Concrete Pty. Ltd., under the pretext that that

concrete had been laid by "scab labour". This action

caused substantial damage and needed to be rectified

at substantial expense. During the course of the

disturbance, Oates again called police and requested

them to move the crowd from the site. The police

arrested 23 men and charges of malicious injury,

trespass and resisting arrest were laid. These were

subsequently withdrawn or not proceeded with as a

consequence of the B.L.F. putting pressure on Stocks

and Holdings and, in addition, Oates was dismissed by

Stocks and Holdings from his job. In his quarterly

circular of September 1979, Black, the New South Wales Branch Secretary, gloated about this episode as "a big

victory for the B.L.F.". (This episode is referred to

at Pages 2180-2183 and 2431-2440 of the transcript.)

(f) In July 1981 the B.L.F. picketted the Monier Factory

at Fyshwick in Canberra. No reason was given to the

Monier administration for the picketting. The purpose

of the picket was apparently to prevent any vehicles

entering or leaving the factory. The Sales Manager for

Monier directed Steven Samson, a Despatch Clerk with

Monier, to go up the street and try and intercept a

number of trucks which were on their way to the factory.

Samson managed to contact some of the trucks but one

349.

had arrived at the factory and had been redirected by

the pickets on the gate. Samson was then requested to

go to the truck driver for the purposes of redirecting

the truck. Samson said he walked up to the gate of

the "Masonry Factory" and was about to go in when he

was confronted by the B.L.F. organizer, Ken Miller.

Miller then grabbed him by the throat and threatened

him bodily harm if he went anywhere near the gate.

Samson subsequently reported the assault to the police

but no action was ever taken. The Factory Manager of

Monier, Mr. Eddie Bobotillof, was subsequently told that

the B.L.F. organizers had come to the site for the

purposes of seeking to "recruit" the employees in the

factory into the B. L.F.. All Monier employees were

members of the A.W. U.. At no stage was any demand put

to, or made upon, Mr. Bobotillof and all he was told

by Miller was "We want your blokes to be B.L.F.

members". Notwithstanding the fact that no demands

were made, and that the entire episode appeared to be

nothing more than a "recruiting campaign", the factory

was picketed by B.L.F. members for nearly four weeks,

and Mr. Bobotillof said that the ultimate expense

involved to the company was in the vicinity of $80,000.

(The evidence concerning this episode is to be found

at Pages 2337-2342 of the transcript.)

(g) Mr. Peter Morrison is Director of a landscaping company

called Able Landscaping Pty. Ltd. which carries on its

business in the Australian Capital Territory. In 1979

350.

and 1980 Able Landscaping had been doing landscaping

work at the High Court building project in Canberra,

pursuant to a contract which it had received from the

National Capital Development Commission. The work

involved the erection of walls, the laying of concrete

paths, drainage works, and the laying of turf. The

employees of Able Landscaping were predominantly members

of the Australian Workers Union. In January 1980 the

B.L.F. organizer in the A.C.T., Mr. Evans, approached

the employees of Able Landscaping on the High Court

site and demanded that they join the B.L.F.. He told

them that unless they did so the job would be banned.

Mr. Morrison got in touch with the Branch Secretary of

the A.W.U. in the A.C.T. and he came to the site. At

the time the employees of Able Landscaping were laying

turf, and it was urgent that the work be proceeded with

because the turf, unless laid quickly, is likely to be

damaged. The A.W. U. representative spoke to the men

on the site, told them that they were entitled, as

A.W.U. members to continue with the work and that they

should proceed. Accordingly, the laying of turf

proceeded. Whilst the employees of Able Landscaping

were laying the turf, there was a meeting of all other

Builders Labourers working at the High Court site some

200 yards away. The meeting broke up and some 200 men

moved towards the turf layers en masse. Evans, their

spokesman, came to Mr. Morrison and told him to remove

all his "scab labour" off the site and to move all the

351.

plant and equipment with them. Mr. Morrison said that

it was "an ugly scene" and that he endeavoured to comply

as quickly as he could. However, whilst he was

endeavouring to get his equipment off the site, Evans,

the B.L.F. organizer, made a number of demands upon him.

Morrison said that Evans told him "You have to pay the

men who were on strike yesterday for yesterday's pay".

Morrison said he agreed to do this. Evans then said

that before any of the employees could come back on site they all had to be joined up with the B.L.F., that Able

Landscaping had to abide by all B.L.F. awards and

conditions, and that the men had to be paid "height

money and productivity allowance". Morrison said that

he told Evans that he could not meet any of those

demands without seeking legal advice, to which Evans

had responded "If you do not meet those demands

immediately we will show you what we can do". Morrison

again told Evans that he could not meet those demands

immediately and Evans then said "We will show you what

we are going to do with you". Morrison said that Evans

then left him, in company with some other members of

the B.L.F., and they walked on top of the newly laid

turf and began to pull it up. Morrison said they

"picked it up and threw it around the place. It was

being thrown everywhere and turf was laid all over the

place." Morrison said that they kept off the site for

some 10 weeks and, in addition, certain of their other

contracts were "black banned". He said "It was going

352.

on far too long and costing us a lot of money and we

couldn't afford to do it any longer." His company,

therefore, finally came to an agreement with the B.L.F.

which was reduced to writing in a document dated the

26th day of March 1980 (see Exhibit 129.1). Morrison

said that the cost to his company of this dispute was

in the order of $30,000. (This episode is recited at

Pages 2256-2268 of the transcript.)

(h) In 1980 John Holland Constructions Pty. Ltd. were

engaged in developing a project known as the Sydney

Entertainment Centre. In July 1980 they were pouring

a concrete slab at "Level 4". That aspect of the work

had been let on sub-contract to a firm called DeMartin

and Gaster in i • Shortly after the concrete pour had

begun, the B.L.F. organizer (one Neeson) came onto the

site and made a demand of the Construction Manager for Hollands (namely one Anderson) that Hollands grant to

the B.L.F. members on site a 4.2% increase in wages as a

"flow on" from the National Wage Increase. Anderson

had no authority to grant that demand but said that he

would consult with his superiors. He ultimately told

Neeson, after making enquiries, that Hollands, as a

member of the M.B.A., would be following the M.B.A.

policy, which was that, because of industrial unrest

which had been previously occasioned by the B.L.F., the

"flow on" would not be granted at that time. Neeson

then called a "stop work meeting" of the B.L.F. members

on site, and the concrete pour was stopped. A meeting

353.

of B.L.F. members was held on site and Anderson was

told that there would be no return to work unless

Hollands immediately, and in writing, guaranteed the

"flow on". The employees of DeMartin and Gasterini

desired to finish the pour but they were told that if

they continued to pour the concrete measures would be

taken against them. Mr. Anderson said (Pages 2137-8):-"It had been the general practice in the industry that concrete pours once started are finished.

When I saw that the concrete pour had stopped,

I spoke to Arthur Neeson and reminded him of that

fact. I also reminded him of the fact that only

some months previously the B.L.F. had stopped in

the middle of a very important pour at the Sydney

Cricket Ground which had resulted in serious

damage being done to the concrete, resulting in

virtually the whole of the pour being jack picked out and had to be redone. I said the company would

certainly not look kindly on that sort of action happening again."

Notwithstanding, the concrete pour was not continued

and "for good measure" the B.L.F. Safety Officer on the

site, one Willie Denver, deliberately walked through a section of the wet concrete leaving his foot marks

in it. At this stage, some 90% of the pour had been

completed. The consequence of the stoppage, and the

deliberate damage done by walking through the wet

concrete, was that the pour had to be rectified by means

354.

of jack hammering the rough edges out and cleaning up

the mess. This involved three labourers working f o r

two full days. Once the rectification to the "ro ug h

edge" had been completed, Hollands were ready then t o

complete the last 10% of the pour. On the

25th July 1980 Neeson informed Anderson that the B.L.F.

members on site were going to hold a further stop work

meeting and, following that, the site delegate of th e

B.L.F. informed Anderson that the men would be

withdrawing their labour for the rest of the day in

protest "over the 4.2% issue". The remainder of t h e

concrete was not poured until approximately the

30th July 1980, when the men of DeMartin and Gasterini

poured the final 10%. Almost immediately after the

completion of that pour about 20 members of the B.L.F.

deliberately tramped through the wet concrete, which the employees of DeMartin and Gasterini were in the

process of screening. Just to make sure that the

damage was complete, they also threw scaffolding clips

into the wet concrete. After this damage had been

occasioned, the site delegate of the B.L.F. told

Anderson that they had taken that action because of the

refusal by Hollands to agree to give to the B.L.F.

members the 4.2% "flow-on". This action again put

Hollands to further loss and expense. (This incident

is described between Pages 2130-2147 of the transcript.)

355.

3.5. Intolerance of the Processes of Conciliation and Arbitration and Other Due Processes of Law The evidence given in this Inquiry leaves me in no doubt

that the Federation displays an arrogant disregard of the due processes of law and order. In the preceding chapter of this

Report I have recounted that in 1977 the Industrial Registrar,

upon the application of the Australian Workers Union, made

amendments to that Union's "eligibility clause" for the purposes

of seeking to put it beyond doubt that that Union had the right

to cover men who came onto a building site for the purposes of

engaging in the laying of asphalt in carparks surrounding

building sites. That Decision has been consistently ignored

by the Federation and it continues to "ban" jobs where members

of the A.W.U. seek to perform that type of work.

Mr. Peter Malcolm, the General Manager of Boral Asphalt

(Victoria) Pty. Ltd., said (at Page 1897) that the B.L.F. has

ignored "the umpire's decision" and continues to make demands

contrary to that decision. Mr. Ekberg , the Victorian Manager

of Pioneer Asphalt Pty. Ltd. gave evidence to the same effect

(Page 2004). In the course of the dispute at the "Southern

Cross Development" in New South Wales (referred to in the

preceding paragraph of this Report), the B.L . F. refused to

accept the Determination by Commissioner Shawcross that the men

return to work on that site on the 7th January 1982.

Mr. Van Gulich, the Project Manager for Penrith Estates Pty . Ltd.,

said (at Page 2528) that his company was, of course, willing to

abide by the Commissioner's decision. But he said:-"I do not think the B.L . F. takes very much notice at all of

the Conciliation and Arbitration Commission •.. I think

356.

generally the B.L.F. regards the Arbitration Commission as

a 'bosses court' much the same as they probably regard

this Commission, and they go along and they listen but they take no notice of the recommendations handed down."

He said that, in effect, the B.L.F. was only prepared to agree

with the Arbitration Commission so long as the Commission agreed

with it.

These episodes are reflective of the multitude of instances

where the Federation has shown its preparedness to flout the

Decisions of the Conciliation and Arbitration Commission. But

its intolerances of the processes of the law does not stop with the Conciliation and Arbitration Commission. It goes much

further than that. The Federation regards itself as "above the

law" and openly and publicly states that it will not tolerate

the interference by law enforcement agencies in its affairs.

During the course of the "Baulkham Hills dispute" in New South

Wales in 1979, the police were called to the site when the

members of the B.L.F. threatened riotous behaviour, and some 23

members of the B.L.F. were arrested on charges including wilful

damage, resisting arrest and trespassing. In the course of

seeking to settle that dispute, the B.L.F. made demands upon

Stocks and Holdings that those charges be dropped, and Stocks

and Holdings showed a ready willingness to comply with those

demands. On the 7th June 1979, the Managing Director of Stocks

and Holdings wrote to Mr. Black, the Secretary of the New South

Wales Branch of the B.L.F., during the course of which he said:-"I have pleasure in confirming, that to resolve the dispute,

and on the condition that the men return to work on the site

357.

after their meeting proposed to be held at 7 a.m. tomorrow,

lifting all bans and limitations, we are prepared to take the following steps as agreed:-1. The company will withdraw charges laid against

members of the Federation who were arrested by

the police on the lst instant.

2. We will do our best to ensure that the separate

charges laid by the police in relation to these

events will also be withdrawn

On the same day, the same gentleman wrote to the Officer-in­

Charge of the New South Wales Police Department, during the

course of which he stated:-"This is to confirm the writer's earlier discussions of

today with Inspector Woolnough regarding the incident which

occurred at Baulkham Hills Shopping Centre site last Friday

the lst June 1979 when some 24 men, members of the Builders

Labourers Federation, were charged with various offences as

a result. Since that time negotiations with a view to

settling the dispute have been taking place. One of the

conditions of settlement on which a compromise cannot be

achieved is that of the various charges referred to above.

After due consideration of both the principles involved and

the damages and losses (particularly loss of employment)

which would be suffered by many innocent and uninvolved

workers, we have indicated that, subject to settlement on

all the other matters we would be prepared to withdraw those charges laid by Stocks and Holdings. On this basis

••• we confirm our request that those charges laid by the

358.

Police Department also be withdrawn. Whilst we do

acknowledge that the course of action requested is perhaps

unpalatable, we do believe that it is the right one in the

circumstances .

In the long run, the charges laid by the police against these

men were, in fact, not proceeded with, and this was done, despite

the fact that the police prosecuting officers had plenty of

evidence to support those charges and desired that they proceed.

Constable Barry Elliott, who was stationed at the Castle Hill

Police Station at the time, said that the charges were not

proceeded with "as a result of a direction from above". He said

that he "felt there was plenty of evidence but that it was a

direction that it was to be sto pped" (see Pages 2179-2180).

This episode is typical of the power which is wielded by the

Federation. Its members had engaged in conduct wh ich was

clearly violent and damaging to both person and property. Notwithstanding that the ordinary processes of the law were

summoned, they were unable to take effect, no doubt because of

the ultimate power which the Federation is able to command over

organizations who desire, for fear of financial consequences,

to get their project finished on time. This type of episode

has only served to confirm the belief, which is undoubtedly held

by the Federation, that it is "above the law" and has

strengthened its resolve to embark upon anti-social behaviour

without fear of recrimination. The attitude of the Federation

in this regard was made very clear in the report which was

published by the New South Wales Branch Secretary of the

Federation, Steve Black, to his members in September 1979.

359.

In a "gloating" fashion he dealt with the settlement of the

Baulkham Hills dispute in this way:-"After another week of strike action, the company 'caved in'

and all the above demands were met, including the full one

and a half week's lost time for each man whether employed

by the main sub-contractor or sub-contractors. The company

sacked their Project Manager and also got the police to drop

all charges. We can all learn from this struggle. The men

on the job stood firm, fought hard, and with the assistance

of workers from other sites and of the union officials led

by Steve Black, won all their demands."

In the same publication he wrote:-"The union does not tolerate any police interference in

industrial matters."

It is difficult to resist the conclusion that, so far as the

B.L.F. is concerned, a blatant denial of the existence in other

persons and organizations of a right to enlist the due processes

of the law does pay, and pay very handsomely indeed.

3.6. Demands upon Employers for Dismissal of Employees who have opposed B.L.F. Demands and Demands that Employers conduct their business in the manner desired by the B.L.F.

The B.L.F.'s policy of "direct action" against employers does

not stop with the satisfaction of having its demands met. It

does not brook any opposition in the course of having those

demands met. If any member of the employer's staff, during the

course of "an industrial disputation" is sufficiently strong-willed to "take the B.L.F. on", he is met with swift reprisal.

360.

The employer is then "pressurised" to break its contractual

obligation to that member of the staff. Thus it was that

Mr . Isaac, the Developer of the premises at Prospect in New South

Wales, met the Federation's demands that Mr. Wehbe have his

contract terminated. Likewise Penrith Estates Pty. Ltd. met the B.L.F. demand that Messrs. Summers and O'Connell have their

contracts terminated. So, too, did Stocks and Holdings succumb

to the demand of the B.L.F. that Mr. Oates, the Stocks and

Holdings Project Manager at Baulkham Hills, be dismissed. But

the list does not stop with Wehbe, Summers, O'Connell and Oates.

There were numerous examples given during the course of this

Inquiry of the Federation blithely disregarding the right which

an employer has to "run his own business". The following

examples suffice to provide the pattern of conduct:-(a) John William Belcher is the Manager of Botany Crane

Hire Pty. Ltd., which carries on the business of hiring

out cranes and forklifts in the Australian Capital

Territory. In the early part of 1980, it negotiated

the purchase of plant and equipment, which had formerly

been owned by a company called Fairway Engineering Pty.

Ltd . , which company had ceased to trade. Botany did

not buy the business of Fairway Engineering, it simply

bought its redundant plant and equipment. As a gesture

of goodwill, it offered employment to five former

employees of Fairway, including one Barry Winchelo.

Each of those five employees took up the offer. Shortly

after Winchelo had taken up employment with Botany, Peter John O'Dea, the Secretary of the A.C.T. Branch

361.

of the B.L.F., contacted Belcher and demanded that

Botany recognise that Winchelo was entitled to long

service leave. Winchelo had completed 8 years

continuous employment with his former employer,

Fairway, and had not even qualified for long service

leave with that employer, let alone with Botany.

Winchelo was not even a member of the B.L.F., but was

in fact a ticketed member of the F.E.D.F.A ••

Nonetheless, O'Dea asserted that Winchelo was entitled

to pro rate long service leave. Belcher refused

O'Dea's demands and suggested to O'Dea that it was none

of his business. O'Dea responded by saying "Okay, you

are blacked on every building site which will cut off

75% of your hiring work." Belcher said that O'Dea

also told him that "I've got people who will look after

you". Belcher said that O'Dea told him that the

company would remain "blacked" until it had granted

long service leave entitlements to Winchelo and

recognised the seniority of each of the other former

employees o f Fairway, and until it employed a crane

chaser for every crane operator which Botany employed.

It was not the practice of Botany to employ a crane

chaser for every crane operator which it employed,

because there was insufficient work to warrant it.

It was perfectly within the legal rights and entitlements of Botany to adopt the practice of

employment which it did. Nonetheless, O'Dea having

made his demands, Botany found itself "blacked" in

362.

respect of every building site of which the B.L.F. had

control. This had the effect of reducing Botany's work

by the best part of 75%. After this had gone on for

more than two weeks, the General Manager of Botany

succumbed to the demands of O'Dea. Botany then

recognised the seniority of the former employees of

Fairway and, in addition, recognised the asserted long

service leave entitlements of Winchelo. In addition,

they agreed to employ crane chasers, which the extent

of Botany's business at that time did not warrant.

The fact is that crane chasers are, by virtue of the

nature of their work, members of the B.L.F .•

Mr. Brian McLeod, a former Crane Inspector for the

Department of Capital Territory, said that he had no

doubt that the reason for O'Dea's demands was "to

increase his membership in the Capital Territory - it

was common knowledge in the industry and it was part of

a recruiting drive."

Even though Botany had finally acceded to all of

the demands which had been placed upon them by O'Dea

(demands which could not be justified either by reason

or by law) Botany was nonetheless thereafter subjected

to a campaign of victimisation by the B.L.F •• During

the period of the last 12 months, Botany has been

subjected to a number of "work bans" in support of

frivolous demands, such as "putting laminex on a kitchen

room table" and "shifting an electrical switch in the

shower room because it is in an unsuitable

363.

Belcher said that he had no doubt that these bans were

imposed, not for any legitimate purpose but as "nuisance

demands" (see Pages 2273 and following of the

transcript}. (b) During 1981 a company called Land Securities Pty. Ltd.

was developing a project at Tullamarine for the

Commonwealth Superannuation Fund. The principal of

Land Securities was James O'Connor. The builder engaged

on the project by Land Securities was Reid Wood

(Victoria) Pty. Ltd., of which one of the principals was

Mr. Linton Reid. During the course of that project,

Mr. Mick Young, an area organizer for the Victorian

Branch of the B.L.F., had approached Mr. Reid and told

him that he had a friend, one Eddie Williamson, who was

a good worker and needed a job. Mr. Reid told Young

that he had no work for Williamson, to which Young

responded "You had better find work for him", and said

that if he did not do so then Reid Wood would have

problems with the project. Reid said that he "got the

message" and it was necessary for him to shift another

worker to make room for Williamson (see Page 1975).

Williamson then became a shop steward for the B.L.F. on

the site.

Towards the end of 1981, when the project was

almost completed, Land Securities engaged Ecko

Landscaping to do the landscaping of the site.

Mr. Richard Eckersley was the proprietor of Ecko

Landscaping and he had with him five employees who were

364

members of the A.W . U • • As the consequence of threats

of black bans , these men were forced to join the B.L . F .

in the circumstances which I have described in paragraph

2.7(b)(iv) of the preceding chapter of this part of the

Report. In October 1981 , Reid Wood had commenced t o

put off labour as the project was "winding down" . Two

of the men who were rendered redundant were members of

the B. L.F., and one of them was Williamson . This action

on the part of Reid Wood , led to further industrial

unrest at the site, and the members of the Builders

Labourers Federation withdrew their labour. The issue

was referred to the Disputes Board of the Victorian

Building Industry, which ultimately resolved that Reid

Wood were perfectly justified in taking the action which

they did . This decision was , of course, ignored by the

B. L . F., which continued to withdraw their labo u r . The

matter was of concern to Mr. O' Connor , who had a meeting

on the 14th October with Mr. Mick Young. He demanded

of O'Connor that O'Connor r e-employ Williamson and the

other builders labourers who had been stood down by Reid

Wood , and further demanded that certain of his members

be engaged on the landscaping work instead of t he five

employees who had been bro ught onto the site by Ecko

Landscaping. It was alleged by Young that the five

employees of Ecko Landscaping (who by this time had

joined the B.L . F . ) were " hassling" because they were

working through luncheon breaks and rain periods.

O'Connor agreed, after consultation with Eckersley ,

365.

that five builders labourers would be employed on

landscaping duties and that the employees of Ecko

Landscaping would be shifted from the site. O'Connor

agreed that his company, Land Securities, would carry

the cost of employing these five men. Williamson was

one of them. When Mr. Linton Reid received notice of

the actions taken by Mr. O'Connor, he objected that

O'Connor should be taking these industrial matters "into

his own hands" and terminated Reid Wood's contract with

Land Securities. O'Connor said that he had acceded to

the B. L. F.'s demands because he "wanted to keep complete

harmony on the whole situation" (Page 1987).

These examples provide vivid illustrations of the extreme

lengths to which employers within the building industry are

prepared to go to accommodate the demands of the Federation.

If the Federation says "terminate that contract" then the means are found of complying with that request even though the request

involves dispensing with the services of a valued sub-contractor

or employee. If the Federation says "employ this man" then, no

matter what the inconvenience, that request is also met. It

presents the picture of an omnipotent organization, whose power

is apparently irresistible.

3.7. The Spreading of Work Bans against Particular Employees for Vindictive Reasons

It appears to be standard practice for the B.L.F. to place

bans on projects for non-industrial reasons. According to the

publicly recorded statements of the General Secretary of the

Federation, this amounts to its own special brand of "tit for tat

366.

unionism". In reality, it is the use, or more accurately abuse,

of organized power for the purposes of inflicting financial harm

on persons who have had the "audacity" to do something which the

Federation does not like. There have been instances of this

practice since these Commissions were issued. Bans were placed on Costains projects because that company was reported to have

provided information in support of the application for the

deregistration of the Federation. More recently, bans have been

placed on the projects of H.M. Keast & Sons Pty.Ltd. If the

reported statements of Gallagher are to be accepted, this action

was taken because the principal of that company was alleged to

have given assistance to this Commission, as well as to the

applicants for deregistration of the Federation. Not only is

the action unsupportable on industrial grounds, but its basis is

false in any event. Mr. Keast has not, nor has he been

required, to provide any information to this Inquiry. It

appears to have been his singular misfortune to have been an

executive member of the Master Builders Association when that

organization determined to support the application for

deregistration of the Federation. One is left with the clear

impression that the B.L.F. is prepared to use its collective

might against people who have done nothing more than exercise

their legal rights. In other words, it has acted "out of

spite", with a desire to punish and injure, and for reasons which

have no legitimate industrial basis. There have been other

examples provided in the evidence put before this Inquiry of

similar conduct:-

367.

(a) In August 1981 the Melbourne City Council had publicly

proclaimed that it was proposing to remove from the City

Square the Robertson Swann sculpture, colloquially known

as " the Yellow Peril" . The B.L.F., which had set

itself up as the self-styled guardian of works of artistic merit, responded to the City Council's proclamation by stating that if the sculpture was

removed it would ban work on all projects being then

carried out by the Melbourne City Council.

Mr. Neil Bonneface , the Project Manager for Dillingham

(Australia) Limited in respect of the City Square

project , was told, before the sculpture was removed,

that bans would be placed on the City Square project if

the sculpture was dismantled. He said that he was told

this by Cummins, an organ izer of the B. L.F. (see Page

2492) •

The B.L.F. was as good as its word. The Melbourne

City Council arranged for the dismantling of the

sculpture and repairs to the damage done to the bluestone

by its removal have been the subject of a ban. But the

B.L.F. has not stopped there. It has spread those bans

to other projects currently being conducted by the City

Council. Bans were immediately placed on the Council's

project being carried out at Batman Park. In August

1981, Fleming Constructions Pty.Ltd. were working,

pursuant to a contract with the City Council, on the

Batman Park project. Their contract involved the

drainage and the paving of the park. B r i an Bo yd , a

368.

B.L.F. organizer, told Mr. Fleming that the project was

"blacked" because the City Council had arranged for the

removal of the structure from the City Square against

the wishes of the B.L.F.. The financial loss to

Fleming Constructions as a consequence of this ban was

in the order of $3,000.

At or about the same time the City Council had let

contracts to builders for the redevelopment of the Queen

Victoria Market. The major contract had been let to

L.U. Simon Pty. Ltd., of which company

Malcolm John Stewart was the Project Manager. The

value of that project was approximately $3.5 million,

and involved the reconstruction of the Meat Market,

including extensions to that market, and the renovation

of the existing Dairy Produce Section, with sundry works

to be done in the existing Fruit and Vegetable Section.

Shortly before the sculpture was removed from the City

Square, Brian Boyd, the B.L.F. organizer, came to the

Queen Victoria Market site and told Stewart that if the

"Yellow Peril" was touched, the Queen Victoria site

would suffer a ban by the B.L .F .. After the structure

was in fact dismantled, the B.L.F. placed a ban on the

Queen Victoria project on the 17th August 1981. Th e

ban paralysed the project. The effect of that ban

was to cost the project 106 working days, and

approximately $60,000, and to delay the completion

of the project until August 1983, when its due

date was initially January 1983 (see Page 2487).

369.

(b) Ronald Desmond Clapton is the Manager of the Police

Credit Co-operative. That co-operative i s a non-profit organization registered under the Co-operative Act of the State of Victoria. It is an accredited

credit union with no formal connection with the Victoria Police Force but designed to provide services and

facilities to employees of the Police Force, public servants and the families of those persons. It has

some 14,870 shareholders, the majority of whom are

non-police force members. Indeed, some of the members

of the co-operative are also members of the B.L.F .•

The services which the co-operative provides to its

members includes financial guidance, and banking,

travel and loan facilities.

The co-operative is engaged in erecting its

headquarters at the corner of LaTrobe and William

Streets, Melbourne. The construction contract was let to Graham Evans & Co. on the 8th December 1980 and at

that time its projected completion date was the

19th January 1982, and the budgeted cost $3.57 million.

The project, however, has suffered considerably because

of bans imposed by the B.L.F. for reasons unconnected

with industrial relations on the site. These bans have

been imposed because the B.L.F. has been "unhappy" with

the performance of the Victoria Police Force in other

and remote areas of the State of Victoria. The

attitude of the B.L.F. was clearly stated by B.L.F. organizer Brian Boyd to Commissioner Merriman of the

370.

Conciliation and Arbitration Commission on the

13th February 1981 in Matter C248 of 1981 (see Exhibit

153). This matter comprised an application brought by

Graham Evans & Co. after the B.L.F. had placed a ban on

the Police Credit Co-operative's project "in retaliati on"

for the activities of the Victoria Police in breaking

B.L.F. picket lines at the Omega Navigation site. It

is instructive of the Federation's attitude to note what

Boyd, on behalf of the Federation, had to say on that

occasion to Commissioner Merriman. He said (Page 4 of

the transcript of proceedings before the Commissioner):-"I would like to say from the start that our

Federation is not in dispute with Graham Evans,

we are in dispute, if you like, with the clients

of Graham Evans who are behind the Police Credit

Co-operative that is being built on that site.

It is well known that the trade union movement here

in Australia opposes very strongly the use of

police against legitimate pickets, and that is why

that ban is placed on the building site."

Mr. Boyd was asked by the Commissioner:-"What did the Credit Co-op do in relation to

anything at Omega?"

To which Boyd responded:-"The Co-op as such did nothing, the Co-op has

been set up to help members of the Victoria Police

Force and it is members of the Victoria Police

371.

Force who broke our picket line . At this

stage the ban has been put on to make a point

against the Victoria Police because they were used against our picket."

Boyd said that the B.L.F. could not be concerned abo ut

the fact that the Police Co- operative was not controlled

by the Victoria Police Force, or that many of its

members had nothing to do with the Police Force. In

other words, Boyd was saying that the Federation was

prepared to inflict financial injury upon an

organization which had no capacity to influence the

policy or decisions of the Victoria Police Force, whose

conduct was apparently the target of the B.L.F.

complaint. As Mr. Clapton said, in evidence before

this Inquiry (Page 2534), his Co - operative knew nothing of the circumstances, or the reasons, for the imposition

of those black bans, but they had clearly suffered as

a consequence of them. He went on to say that since

February 1981 the Co-operative had been the victim of

other "secondary bans" imposed by the B.L.F .•

Mr. Clapton indicated that the increase in the cost of

this project, occasioned by the industrial disruption, would be of the order of $146 , 000 (see Page 2538).

The injury suffered by the Police Credit Co-operative,

as a consequence of the arbitrary action taken by the

B.L.F., is manifest. In September 1981 insult was

added to that injury when the B.L.F . demanded the

payment of a lump sum as a condition of its members

372.

returning to work. The lump sum was nearly $11,000 and

represented the amount of wages which had been lost by

those members during the imposition of one of the bans.

The fact that the Credit Co-operative was prepared to

meet this demand is reflective of the utter dominance

which the Federation is able to assert in the building

industry. In a letter to the Co-operative dated the

18th September 1981, Rider Hunt & Partners, the Project

Managers, wrote as follows:-"We therefore recommend payment of the above

monies amounting to $10,878-74 to Graham Evans

in settlement of the above claims. This

recommendation is in complete contradiction to

that which we would consider to be fair and

reasonable in resolving such industrial

disruption. However, there would appear to be no alternative to paying the wages if the project

is to go ahead hopefully with some form of

industrial harmony." Once again it would seem that the price which has to be

paid for industrial harmony in the building industry is

not only money but the concession by building

contractors and developers of the absolute dominance of

the B.L.F. in that industry.

373.

3.8. Demands for Lump Sum Payments as a Condition of Returning to Work

The evidence before this Inquiry is replete with examples

of demands made by the Federation upon employers for the payment

o f lump sums of money as a condition of its members returning to

work. One such example was the case of the Victorian Police

Credit Co-operative to which I have referred in the preceding

paragraph. Other examples have already been referred to

earlier in this Report when considering the conduct of Peter John O 'Dea, the Secretary of the A.C.T. Branch of the

Federation (see Section B of Part Two). Similar practices have

been followed in Western Australia. In 1980 and 1981 a Western

Australian company called Sabemo Pty. Ltd. were carrying out

construction work at the Wagerup Refinery site for Alcoa.

A demarcation dispute erupted between the B.L.F. and the A.W.U.

which ended in a virtual shutdown of the project. This resulted

in a large number of B.L.F. members and members of other unions

being out of work for some four weeks. One of the demands made

by the B.L.F., through its Western Australian Branch Secretary

Reynolds, was the payment of a lump sum to the employees who had

been out of work as a consequence of their demarcation dispute.

Ultimately, Sabemo agreed to pay a sum of $295,000 as the price

of inducing the men back to work. Mr. John Franco Pieri, the

Construction Manager for Sabemo on the site, said that his

company was very keen to suppress publicity of the fact that it

had made these payments. In conjunction with Reynolds, he

contrived a devious scheme for the purposes of transmsitting

those payments. They used the vehicle of a defunct company

called Construction Plant Hire Pty. Ltd. for the purposes of

374.

channelling large amounts of cash from Sabemo Pty. Ltd. through

to the union members. Mr. Pieri was asked (Page 2594):-

Q. "What was the point in using this rather devious method

for paying money from Sabemo to the union members?"

A. "The reason was the thing I was trying to avoid now -

publicity, which is always very much in our interests."

Q. "Why did you fear the publicity of the fact that you

were paying money to workers who had been on strike

would be damaging to you?'

A. "My own personal feelings."

The Fletcher Watts Group who was also a contractor at the Wagerup

Refinery site was also induced to pay a lump sum of money to the

B.L.F. for the purposes of getting its members to return to work.

The fact that major contractors are prepared to pay to the B.L.F.

lump sums of money as a price for the breaking of strikes or work

bans only serves to emphasise the dominance which the Federation

has within the building industry.

3. 9. The chronicle of events to which I have adverted in this

Chapter exposes the Builders Labourers Federation as an

organization whose conduct recognises neither the bounds of

propriety nor legality. Its policy seems to be one of direct

action in support of demands, and it brooks no opposition from

any quarter. Conciliation and Arbitration are words which find

no place in its vocabulary. Its tactics are aptly described by

the Federation itself (Exhibit 122):-"The tactics used to get overaward payments and better

conditions are 'guerilla' tactics- the use of bans and

375.

lightning stoppages to disrupt the boss on the job •..

These tactics and others are designed to hit the boss in

the pocket."

Its conduct makes a mockery of the undertaking which it gave to the Industrial Registrar in 1976 when it was seeking

registration under the Conciliation and Arbitration Act. I have referred to the terms of that undertaking in Chapter 1 of this

Report.

In the light of the Federation's history of conduct since it

regained registration in 1976, it is instructive to recall some

of the remarks made by the Industrial Court about its pre-1974

conduct in the case of Master Builders Association of New South

Wales v. Australian Building Construction Employees and

Builders Labourers Federation (1974) 23 F.L.R. 356. Joske J.

summarised that conduct in the following passages:-

"Many of the stoppages and strikes it (i.e. the Federation)

has brought about have lasted for months and a number have

continued indefinitely and are still current. Large

industrial jobs have been held up for lengthy periods causing

losses amounting in all to millions of dollars, which hardly

brings about industrial goodwill. Jobs have been left in

an unsafe state so that they are likely to collapse which

likewise does not promote goodwill in industry. When

management has attempted to protect a building or work on it

376.

from being destroyed, the behaviour of the representatives

of the respondent organization, in addition to being

highhanded has been grossly offensive, and has exhibited no

features of a conciliation which the legislation seeks to

bring about. There has been wilful interference with the

manner in which employers carry on their work, directions

have been given as to the work to be done or not done, and

as to the way in which, and by whom, it is to be done.

Attempts have been made to make employers dismiss men whom

they do not wish to dismiss, but who are not satisfactory to

the organization, to make them accept labour provided by the

organization, and on the organization's terms, instead of

choosing their employees, and when they have chosen them,

continuing to employ them. The organization has insisted

on the reinstatement of men dismissed for good cause,

including disobedience and irresponsibility, and pay has been

demanded for men on strike and for work which has not been

carried out. All these have been conditions of return to

work and bans being called off, or of stoppages and bans not

being placed on the job or part of a job."

Page l.§_.Q_

"Demands for wages, allowances and conditions not prescribed

by the Award accompanied by the threat, often carried out,

of a ban are a normal condition of the industry. In order

to get jobs done or going again management has been compelled

to accede to the demands of the organization or some of them,

but on many occasions the workers themselves have got nothing

377.

o r next to nothing out of the strikes and stoppages but have

lost their pay and often their employment . Management has, however , inevitably suffered substantial losses in the

processes of softening it up, as the respondent regards it,

and so the respondent considers that direct action has been a

success and is encouraged to bring about more industrial

turmoil and to turn away from endeavouring to secure

industrial goodwill ."

"They (i.e. the officials of the Federation) have called

meetings, stoppages and strikes at critical times, e.g., at

the beginning or in the middle of a concrete pour occasioning

considerable damage. It is union policy that a good time

to go on a site is during a concrete pour, and the threat to

stop a pour has been used as a means of extortion to get

claims granted which the Award does not grant. Meetings

have been called on jobs disrupting a daily work of the job ,

upsetting workmen employed in other trades on the job, often

preventing them from working and even causing them to walk

off the job. Members of the organization have often been

working peacefully on a job for months until the union

representative arrives on the job and proceeds to cause

disruption . When his demand has been met by giving what he

wants, new demands are put forward by him which are made a

ground for a stoppage of work . Many of the claims made can

hardly be regarded as genuine as often they were dropped and

the men returned to work without achieving anything for

378.

themselves. · There has been intimidation by the respondent

on job sites on a wholesale basis . The organization has

been guilty of sabotage on these sites and has taken part

in mob violence causing destruction on industrial sites and

the disruption of industrial projects. When it has suited

them, union leaders have led their members in numbers upon

invasions of industrial sites, doing considerable damage

there and preventing work taking place and occasioning great

hostility and bitterness in the industry. On occasions police have been called upon to deal with the situation which

has arisen. The respondent has reacted to this by demanding

that management is not entitled to the assistance of the

police in relation to industrial strife."

In the light of the material given before this Inquiry, and

to which I have referred in this Chapter, the same words could

apply with equal force to the post-1976 conduct of the

Federation.

379.

Chapter 4 Attitude of Other Union Officials to

B.L.F. Behaviour

4.1. The conduct of the Federation, to which I have referred in

the preceding Chapter, condemns it as a lawless organization.

It is conduct which runs counter to the objects and aims of

industrial legislation in this country; it is conduct which ignores and traverses the right which other people have to

lawfully carry out their contractual obligations; it is conduct

which transgresses the boundaries of the criminal law. Because

the B.L.F., by exerting its dominance in a limited field, has

been able to "get away with it", its conduct is erosive of the

rule of law. It is difficult to imagine that the methods of

operation , identified in the preceding Chapter, could meet the

standards of propriety adopted by any right thinking members of

this community but, nonetheless, the Federation and its officials seek to justify that conduct as legitimate industrial action of a

militant kind. Because my Commissions have required me (inter alia) to consider the conduct of the Federation and its officials

within the context of "industrial propriety", I have sought the

views of union officials outside the B.L.F •• Some of those

persons have been officers of "peak union organizations" (e.g.

the Victorian Trades Hall Council and the New South Wales Trades

and Labour Council), and others have been officials of other

unions in the building industry. To that end, the following

persons were summoned to give evidence:-Mr. J. W. Sheather, the Assistant National Secretary of the

Building Workers Industrial Union;

Mr. L. E. Short, the National Secretary of the Federated

Ironworkers Association;

380.

Mr. I. R. Cutler, the Secretary of the Australian Workers

Union (Victorian Branch);

Mr. J.D. McLaughlin, the Federal Secretary of the Society

of Carpenters and Joiners;

Mr. G. Crawford, the General Secretary of the Plumbers and

Gasfitters Union;

Mr . K. Stone, the Secretary of the Victorian Trades Hall

Council;

Mr. B. J . Unsworth, the Secretary of the Labour Council of

New South Wales .

All of these persons gave evidence , with a greater or lesser

degree of reluctance, save and except Crawford who took a stance

similar to that taken by the Federation ' s officials who had been

summoned to give evidence before this Inquiry. In other words,

he declined to assist the Commission on the basis that he

considered it to be a "political ploy" (Pages 2404 - 5) .

Whilst the evidence of most of the other union officials was

somewhat restrained, they nevertheless freely answered the

questions which were put to them . Most of them expressed the

view that an Inquiry of this type was an inappropriate forum for

the investigation of the affairs of a trade union. That , they

seemed to infer, was , or ought to be , the domain of the Trade

Union Movement itself. Those reservations havi ng been

expressed, however , they set about giving me the assistance which

I sought .

381.

4. 2. Mr. Laurence Short, the National Secretary of the Federated

Ironworkers Association, was not restrained in proffering his

views on the conduct of the Builders Labourers Federation.

Mr. Short is a unionist of long standing in this community and

is a life member of his own Association. Quite apart from his

union affiliation, he is a man of substance in the community as

I have indicated in an earlier part of this Report. As might

be expected, he presented as a man of common decency and high

pr inc i pl es. Because his Association has been locked in conflict

with the B.L.F. for a substantial period of time, it might, and

indeed was , suggested that his opinions were "tainted" on that

account. However, although his evidence was less restrained

than that of the other union officials to whom I have referred

in the preceding paragraph, it seemed to me that, on analysis,

it did not differ in substance from the evidence of those other

off icials.

In the end, it seemed that the unanimous view of all of

them was that the B.L.F.'s conduct fell far short of appropriate

standards.

4. 3. Mr. Short strongly condemned the conduct of the Builders

Labourers Federation. He said that his Association had been

instrumental in moving for the expulsion of the B.L.F. from the

"family of unions" in New South Wales. He said that it had

taken its stance "because our union is outraged, as I think most

unions in Australia are, at the conduct of the B.L.F. on picket

lines and the harassing of workers going about their lawful work

382.

and their implicit and explicit violence against fellow

unionists. That is why we took the step that we did." (Page

2494) He went on to say that "the B.L.F. has had picket lines

in New South Wales, Victoria and South Australia. These picket

lines were designed, and unfortunately in some cases succeeded,

in preventing members of the Ironworkers Union from going about

their lawful work with a clear threat that if Ironworkers tried to go through those picket lines there could be at least

intimidation, abuse and perhaps even violence. The B.L.F.

has engaged upon a campaign of empire building and it was not

fussy about its methods and it did not stop at intimidation and

explicit or implicit violence." (Page 2494).

When asked about the standards of conduct which should govern

the actions of trade union officials in this country, he said

(Page 2498):-"I do not believe that in a democratic society such as we have

in Australia any group of citizens, or any one or two

citizens, should be allowed to behave other than the way that other citizens have to behave. They should be bound by the

law of a democratic society. If I were in Poland within the

Solidarity I would have different answers to your question.

In this country laws are made by democratic governments and

should be observed by citizens and those who break the law

should take the consequences, whether they are union

officials or anyone else. .. • In some circumstances I would

regard it as corrupt if gifts of a big dimension, either in

cash or materials, are accepted by a union official in secret

383.

without obtaining his union's approval. Even then, I would

have to see the circumstances of the donation or the gift.

In certain circumstances I would say that it would be an act

of corruption for a union official to accept large gifts of

sums of money or material worth large sums of money."

Mr. Short described the B.L.F.'s practices of enrolling

persons into its membership as "empire building". He was asked

(Page 2502) whether it was those practices that had brought the

B.L.F. into conflict with other unions in the building industry

and had led to its expulsion from the Labour Council in New South

Wales. He responded:-"Of course, and the methods used in the empire building

process, not so much the empire building concept but the

methods used in pursuance of that empire building. That is

what outraged the Labour Council of New South Wales, the

F.I.A. and a number of unions, unionists and members of the

general public. The B.L.F., under its present leadership,

and in the light of its present activities, is bringing the

union movement into disrepute, and it behaves sometimes in

a most disgraceful manner."

In particular, Mr. Short roundly condemned the taking of

loans by officials of a union from union funds (Page 2499),

damaging property of employers during the course of industrial

disputes (Page 2500), interruption of concrete pours (Page 2500),

the issuing of membership tickets in false names (Page 2502), and

the banning of jobs for non-industrial purposes (Page 2504).

384.

4.4. In my view, the statements made by Mr. Short during the

course of his evidence about the conduct of the B.L.F., were by

no means extravagant. They seem to me to be the views which one

would expect to be expressed by any decent citizen who had an

insight into the type of practices which I have set out at some

length in the preceding Chapters of this Report. In substance,

the views which he expressed did not differ very much from those

expressed by the other union officials who were called to give

evidence. It is true to say that those other officials were

more guarded in the evidence which they gave and it seemed to be

a consensus of their views that an Inquiry of this nature was not

an appropriate forum in which an official of one union or

organization should express his views, or the views of his union,

about the affairs of another organization. They took the view

that it was appropriate for the Trade Union Movement as a whole

to deal with its own members. However, when their views are

analysed, it is not difficult to draw the conclusion that these

gentlemen were saying implicitly what Mr. Short was prepared to

say explicitly. It is not difficult to distill from the evidence

which they gave the following points:-(a) That it is inappropriate for union officials to borrow

from union funds (see Sheather Page 2540).

(b) That it is improper for a union official, who stands in

a position of trust towards his members, to exploit his

position to materially benefit himself (see Sheather

Page 2541; Cutler Page 2426; McLaughlin Page 2408).

(c) That it is not only wrong, but discrediting to the

Trade Union Movement as a whole, to engage in acts of

385.

wilful damage, violence and intimidation in support of

industrial demands (see Sheather Page 2541; Cutler Page 2427; McLaughlin Page 2420; Unsworth Page 2378).

(d) That it is improper practice for an organization to make

a demand for an overaward payment and seek to support

it by stopping a concrete pour and damaging wet concrete (Stone Page 2396).

(e) That it is unacceptable practice for one organization

to seek to enrol financial members of another

organization by the use of intimidatory tactics, and it

is quite improper to enrol members in fictitious names

(Sheather Page 2544A; McLaughlin Page 2414; Stone Page

23 92; Unsworth Page 2374) •

(f) That except in exceptional circumstances it is quite

wrong for a trade union to withdraw labour or impose

bans except as a matter of last resort (McLaughlin Page

2420; Stone Page 2395; Unsworth Page 2374).

(g) That it is improper for an organization to collect

monies from employers purportedly on behalf of the

members of the organization and then to retain part of

those monies for the organization itself (Cutler Page

2431; McLaughlin Page 2422; Stone Page 2403; Unsworth

Page 2379).

If one accepts these principles as a yardstick of appropriate and ethical union behaviour, then the standard of conduct which

the evidence reveals has been adopted by the B.L.F. falls

386.

lamentably short of that yardstick. It is therefore not

surprising that the union movement reacted in an unprecedented

manner in New South Wales by expelling the B.L.F. from its ranks.

387.

Chapte r 5 General Observations and Suggested Guidelines

5.1. Th e investigation which I have been commissioned to

undertake has a limited scope. It is, by definition, an

investig a tion into one trade union, its officials and its

members. Because that union is a prominent one in the building

industry, the evidence has traversed certain aspects of that

industry. However, the investigation has not been an

investigation into industrial relations per se, a subject which

forms the basis of most industrial legislation in this country.

I am not unmindful of the fact that those charged with the

responsibility of creating and refining legislative codes, which

are designed to operate in the field of industrial relations, are

constantly seeking to improve those codes. Even during the course of this Inquiry announcements have been made of proposed

changes to industrial legislation, both at Commonwealth and State

level.

In view of the limited scope of this Inquiry, it seems to

me that I am ill-equipped, nor would it be appropriate, to make

recommendations, to those whose task it is to f o rm general

policies in the complex area of industrial relations generally.

I have, however, had the opportunity of liste ning to a

substantial amount of evidence which bears upon the question of

industrial relations in the building industry. This ev idence has been given by reputable persons on bo th sides o f the

388.

"industrial relations fence" in that indus try. Its quality has been such as to lead me to certain conclusions which I propose

to express in this part of the Report, in the hope that they may

lend some guidance in the formulation of policies designed to

operate in what appears to be a delicate and, in some respects,

unique a rena.

5. 2. For several years now the building industry has been beset

by industrial unrest. This unrest has been evident, not only

in the relationships between employers and unions, but in the

relationships between unions themselves. Although they are not

exclusive, the evidence suggests that there are three problem

areas which have provoked a significant amount of the industrial

unrest to which I have referred:-(a) The problem of non-unionists working alongside

unionists.

(b) The problem of unions competing against unions for the

right to "cover" workers on building sites.

(c) The problem of aggressive t actics in support of union

demands .

5.3. The Problem of Unionists Working Alongside Non-Unionists

(a) The building industry is a "cloistered industry" in the

sense that it accumulates, in the confined area of a

construction site, a large number of workmen employing

a variety of skills and represented by a variety of

organizations . This type of arena magnifies problems

which, traditionally, exist where unionists work

389.

alongside non-unionists, because all people share the

benefits of working conditions which apply universally

on the site . Improvements in these conditions -

including site amenities and safety conditions - have

been gained, to a significant extent, by labour

orga nizations. Feelings of resentment against those who

have not, and will not, contribute to the cost of

maintaining those conditions, accordingly, runs high.

In the early 1970s this resentment was, apparently,

manifested by s ubstantial industrial unrest which

occasioned much lost productivity.

(b) Throughout the 1970s the industry - both employer and

employee organizations alike - has sought, by empirical

processes, to minimise the disharmony which has hitherto

existed by establishing a "closed shop" policy. In its

operation , this policy has meant that persons working

on major construction sites must belong to "an

appropriate union". The policy has only ope rat ed on

"major" construction sites , because unions have lacked

the organizational strength to ensure that it applies

universally. Although it amounts to a form of

"compulsory unionism" (which is anathema to the

instincts of many people), it is seen by both sides of

the building industry as a major step towards industrial

harmony on building sites. The policy has now been

enshrined, at least in the south-eastern States and the

A.C.T., in the "no ticket no start agreements" to which

I have referred in Chapter 2 of this part of the Report.

390.

The policy is embraced by both employer and empl o yee

organizations alike.

Mr. David Murden, the Executive Director of the

Master Builders Association of Victoria, said that over

a substantial period of time in the building industry

there has been a "general agreement on ... major

construction sites that they were union sites ... It

has always been traditionally known as a union site.

That acceptance of the philosophy has manifested itself

on occasions in written agreements in the past;

sometimes it sort of carried over without being

expressed in writing ." (Pages 2152-3). He said that

the major construction contractors in Victoria had

embraced these agreements for the purpose of ensuring

industrial peace on the sites (Pages 2160, 2165). Mr. David Andrew, the Executive Director of the

Master Builders Federation of Australia, supported this

view (Page 2171), as did the Executive Officers of many

of the large construction companies operating in

Australia (see Pizzey of the Fletcher Watts Group Pages

2046-7; Hude of Costains Page 2070; Corrigan of

Consulare Pty. Ltd. Page 2079; Grollo Page 2094;

Roberts of Multiplex Page 2674).

On the "union side" Mr. Unsworth, the Secretary of

the Labour Council of New South Wales put it this way

(Page 2370) :-"I do not necessarily espouse it (i.e. closed shop

unionism). I believe in voluntary unionism but if

391,

you are going to reach a situat i on where some

people do not want to join, you are going to have

problems on the job and you are better off to have

an arrangement where it is a closed shop."

His views were generally endorsed by the other union

officials who gave evidence before this Inquiry. Mr. Laurie Short said, when questioned about the

"no ticket, no start" concept (Page 2500): -"This is a difficult question, because we have

compulsory unionism in Australia. One can enter

into a l ong philosophical debate about that, but

I think, on balance, people who are going to enjoy

the benefits offered by unions should be prepared

to join unions and pay union fees. I endorse

(the pol icy) and I think it is in the interests of

good industrial relations."

Mr. Sheather said (Page 2543):-"I am not saying that the "no ticket, no start" has

resolved all disputes, but I believe that its

intent was to remove an area of disputation and,

generally, it has achieved that Many workers

would see someone that was trying to work on the

site without paying his dues as being in the role

of a bludger and they are not popular."

(c) Although the "closed shop" policy has significantly

reduced industrial unrest on construction sites, it has

not been without its problems. On the un ion side , i t

has been interpreted as requiring all persons coming

392.

onto a site to engage in physical labour to join the

"appropriate union", whether those persons are self­

employed contractors or not. The Master Builders

Association says that it has never intended its

acceptance of the policy to go that far. Mr. Murden

said (Page 2153):-"The agreement (i.e. the no ticket, no start

agreement) applies to people employed on building

sites and therefore brings in, from our point of

view, the connotations of the master/servant

relationship that they are employees covered by the

relevant awards. Obviously over those years there

has been a number of disputes arising where people

who are not technically employees have worked on

building sites as self-employed sub-contractors,

and whilst we may take the view that the agreement,

the understanding, relates to people who are

lawfully and properly employed, the unions, for

their part, see coverage and the possibility of

increased membership, and there have been over the

years many disputes in this area of union

membership for self-employed persons."

Mr. Andrew agreed with this interpretation of the

policy and said (Page 2173):-"We take the view that the independent self-employed

contractor is not eligible for membership of unions

and should not be forced to become a member of the

union."

393.

He nonetheless said that it had become "a fact of life"

that such persons were being compelled to enrol as union members, and he "saw continuing union activity in that

area as being inevitable".

It not only seems inconsistent with the concept of a "trade union" that independent contractors should be

compelled to join a trade union, but the practice

appears to be in direct conflict with the express

provisions of Section l32A of the Conciliation and

Arbitration Act.

Notwithstanding, the union movement justifies its

stand in this regard by pointing to the development of

"multiple sub-contracting" in the building industry

which they claim is unique to that industry. No longer,

they say, is building construction carried out by a head

contractor employing a large number of tradesmen and

non-tradesmen. Building construction these days, they

say, is effected by the letting of a myriad of sub­

contracts, including "body hire" or "labour only sub-contracts". In practice, they say, these sub-contractors fill the role of the traditional employee

and, as such, need the benefits which a labour

organization can give them. They say that Section 132A

of the Conciliation and Arbitration Act is too wide in

its application and takes no account of this "special development" in the building industry. In support of

their argument, they point to legislation in some States which they say enables unions to enrol as members

394.

persons who are "labour only sub-contractors".

Mr. Unsworth referred to this development in the

following way (Page 2366):-"The question of persons being self-employed,

particularly in the building industry, is the result of a development that has taken place in that industry with multiple self-contracting and

even new phrases have developed, such as 'body

hire'. It is very difficult to establish the true

relationship between employer and employee, and we recently had an Inquiry in New South Wales that the

whole industry was to try and establish the

development that has taken place in terms of the

relationship between employer and employee. So the

fact that a person is self- employed today, does not

necessarily mean that he suddenly becomes an

entrepreneur and has no need for union membership.

In fact, there have been a great number of cases

coming back from the Commonwealth Industrial Court,

•.. which deal with the questions of unions

eligibility to enrol and retain amongst their membership persons who fall within that category.

As a member of the New South Wales Parliament,

I have been involved in the legislation which has

made provision for unions to enrol into their

membership self-employed persons, so that their

general welfare and interest can be catered for."

395.

Mr. McLaughlin, of the Carpenters and Joiners

Union, said (Page 2413):-"We are a unique industry and at no given point of

time can a union say that its members are on day

labour or working as independent contractors.

They are fluctuating backwards and forwards from

the day labour area into the independence of

contract area."

(d) In the light of the evidence given in this Inquiry, it

seems to me that there exists strong grounds for a

community acceptance of the "closed shop" policy in the

building indus try. That policy has apparently been

formulated, over a substantial period of time, by

employers and unions alike, in a common search for

industrial harmony. The tenor of the evidence leads to the conclusion that the policy has, to a significant

degree, achieved its aim. If, however, the policy is

to remain, it seems desirable that its application

should be limited only to persons who are truly

employees or "labour only sub-contractors". The

extension of the policy by unions, who seek to enrol

into their membership, persons who employ capital in the

course of earning their income, is not warranted. These

people are truly independent contractors who seek to

employ their assets to earn profits. They obtain no

real benefit from union membership, and many expressed

resentment before this Inquiry about being coerced into

union membership.

396.

5.4 The Problems of Unions Competing with Other Unions for the Right to Enrol Workers

(a) These problems are, to some extent, linked with the

development of "closed shop" unionism on building

sites. "No ticket, no start" policy requires

membership of "an appropriate union". That, of course,

raises the question of "what is the appropriate union".

The solution to the problem requires a degree of

tolerance and commonsense by the competing unions. In

the building industry, however, the manifest intention

of the B.L.F. to exert its will and to "ride roughshod"

over the competing interests of other unions, has led

to many demarcation disputes, which have been very

costly to the industry as a whole. The B.L.F. has made

it clear that it will not recognise a union "ticket"

other than its own if a person enters a site to perform

non-tradesmen work. It has been remorseless in its

attitude towards the enrolment of members and its complete lack of regard to other unions. It has

repeatedly placed bans on jobs, or sections of jobs,

until a demand that workmen, already financial members

of one union, join its union, has been met. It has met

with derision, appeals for restraint and commonsense.

Its campaign has succeeded because its power to paralyse a site forces compliance, not as a rule by the person

who is in fact enrolled, but by his employer or, in many

instances, by the head contractor of that employer.

In this arena, it is little wonder that Mr. Short said

that there is no real prospect of achieving harmony

397.

"so long as the leadership of the B.L.F. persists in

its present unscrupulous , ruthless policy towards other unionists " (Page 2505) .

(b) The B.L.F.'s attitude towards enrolment of members is

not , however, the underlying cause of demarcation

disputes in the building industry. The underlying

cause is that there are too many unions operating

within the industry with overlapping "eligibility

clauses" . Given the nature and location of the work

which a workman is called upon to perform, he may be the

subject of a demand by a union (other than the one of

which he is already a financial member) to the effect

that it has the right to enrol him into membership .

Where that workman trespasses on to the periphery of the

domain in which the B.L.F . claims to be dominant (namely

the building site), he will almost certainly be met with

that demand. I have already adverted to the problems

faced by the industry in the areas of carpark asphalting

and landscape gardening, where the B.L.F. resolutely

demands that A. W.U. members join its ranks.

(c) The Union Movement, as a whole, is very sensitive to

this problem of demarcation dispute . And rightly so . It recognises that repeated episodes of time lost through one union fighting with another ultimately

brings discredit on the Trade Union Movement as a whole.

The evidence reflects an acute knowledge on the part of

responsible unionists of the fact that there are too

many unions in the industry, and the desirability of

398.

striving towards an ultimate goal of "industry

unionism"- i.e. one union for the industry where "work

coverage" disputes would be reduced to a minimum. But

they are sufficiently hard-headed to realise that this

goal, because of entrenched rights, is but a distant

light at the end of a distant tunnel. They have no

ready answer to the immediate problems. They contend

that one has to rely upon the commonsense and goodwill

of the disputing unions and, whilst they recognise the

undesirability of "dual ticketting", they take the view

that perhaps this is the most practical and appropriate

expedient of resolving bona fide disputes between two

unions.

(d) The sentiments expressed in the preceding sub-paragraphs

are readily identified in the evidence given by union

officials and employer representatives. (e) (i) Mr. Murden, the Executive Director of the M.B.A.V.,

discussed these problems at Pages 2161-2162 of the

transcript. He said that there was "a traditional

running battle" between the A.W.U. and the B.L.F.

for membership and for coverage. He said that this

battle existed "because there are certain similarities in the scope clauses in both registrations, but it goes to that as much as

anything else there. That is certainly an area

where there have been a lot of union membership

problems." He said that in these areas

contractors had striven for industrial peace by

399.

resorting to the practice of purchasing "dual

tickets". He said that "it all goes to the

problem of demarcation disputes in this area which,

unfortunately, industrial tribunals in this country

have very little ability to settle, as do the union

organizations or employer organizations , and it

goes right to that difficulty." He said that the

M.B.A. was endeavouring to bring about some form

of agreement with the Union Movement that these

matters would be referred to some form of Disputes

Board, but he recognised that "agreements are only

as good as the intentions of the parties, and that

is why we have had difficulties in the past".

( ii) Mr. Unsworth gave evidence about these problems at

Pages 2371 and following of the transcript. He

said:-"! think there is a topical debate that ranges

in Australia and that is we have too many

unions. As I said, we have 125 and I think

the A.C.T.U. has about 140 affiliates. I

often sympathise with individuals who, after

all, really just want to do a job, and if they

work in this place they are in one union and

if they go to work in another place and are

doing the same work they have to be in another

union. That is, of course, because of the

uni on structure. Where people do tend to work

on the fringes of two union operations , they

400.

frequentl y find it convenient to be members

o f more than one union."

He we nt on to say (Page 2373):-

"What should occur is that there ought to be

some liaison and c ommon sense between the

uni o ns invo lved .•.• I do no t think that

unionism is really about maximising uni on

contributions per se, I think they are ther e

to advance the interests of the people whom

they represent."

Mr. Unsworth made it clear that these problems were

not solely the province of the B.L.F. but,

nonetheless, he said that the Labour Council o f New

South Wales had "a code of behaviour which says

that these matters should be discussed, wherever

possible, and resolved by discussion and agreement.

As long as I have been in unions, unions have been

going on strike against other unions. I think it

is a dreadful f o rm of behaviour, and we have all

endeavoured to resolve it. Maybe in the

building industry if there was one union perhaps

we wouldn't have those problems drawn to our

attention." Although Mr. Unsworth was not prepared to lay

these problems solely at the door o f the B.L.F.,

he said (Page 2367-8):-"I can say that their attitude (i.e. the

B.L.F.) as to who they should enrol and

( iii)

401.

retain as members, brings them into conflict with the views of quite a number of other

unions, and perhaps that situation caused the

events of last year in New South Wales ."

Mr. Stone said (Page 2387 and following) that

these demarcation problems had arisen because

of the number of unions in the one industry

with overlapping eligibility clauses. He said

that unions, quite deliberately, in formulating their own constitutions, "spread

their net as wide as they possibly can". This,

he said, caused problems of "overlapping" and

he said that the Union Movement, both at the

level of the Victorian Trades Hall Council and the A.C.T.U., had endeavoured to minimise this

area of disruption. He said that the union

organizations had sought to lay down a formula

comprising "industry panels" for the purposes

of resolving disputes between two competing

unions, but he said that the unions had been

reluctant to use that machinery. Mr . Stone

said that in his view the only solution is for

people to "submit to an arbitration of some

sort" (Page 2388) .

(iv) Mr. Laurie Short said , when talking about the

problem of demarcation disputes, that he had

"no quick answer" to that problem. He went

on to say that he would "hope the presence of

402.

commonsense in the union and that some

reasonableness is left in the B.L.F. to giv e

people a fairgo if they are prepared to be

unionists. If there is some doubt about the wo r k

coverage on a particular job to union coverage wh y

not take that to a Court to have some Court

interpretation of the dispute." (Page 2501).

He said that his organization, when confronted with

the problem of "overlapping work coverage" tried

to overcome the problem by the system of dual

ticketting. He said that he did not think that

that system was desirable, but he did not know the

answer to it at the present time. He took the view

that where there were areas of doubt as to which

union a person should be in, that doubt should be

resolved by the Court and it should be done

peacefully. He said that "the criteria which

I would apply to union membership in the cases that

you have quoted would be "does that person belong

to the union that properly covers the work that he

is doing, or is he performing work that properly

belongs to (another union)" (see Page 2505) .

He maintained, however, that there was no easy

answer to the problem so long as there was a lack

of goodwill on the part of all the disputants (Page

2507) •

(v) Mr. Sheather (Pages 2543 and following) agreed that

the problem of demarcation disputes arising over

40 3.

work allocation was a real concern to the Union

Movement. He said that he did not regard the

practice of "dual ticketting" as a desirable

practice but that "it is a reflection of multitude

of unions that we have in our society and the

problems that there are with amalgamation which is

maintaining that position". He said that in his

view disputes between unions over work allocation

should be resolved by agreement, but that such

disputes were not "renowned for their area of

goodwill". He said that the question of time lost

through unions fighting one another was a matter

of concern to the Union Movement as a whole, and

that it was the view of his union (namely the

B.W. I. U.) that there should be encouragement

towards industry unionism. He said (Page 2546)

that " we believe it is in the interests of the

industry and the workers i n the industry for a

reduction in the number of unions in the industry.

We have had a policy in our organization of

amalgamating on a principle basis wherever that is

possible by agreement after a process of

consultation and negot i ation with other unions."

He said that this was a policy of the A.C .T. U. and

that he believed it to be "a worthwhile ideal and

objective" (Page 2546).

(f) The concept of "industry unionism" is by no means a

novel one in the field of industrial relations in

404.

Australia. The evidence in this Inquiry lends support to the proposition that it is a desirable goal in the

building industry and, no doubt, encouragement ought t o

be given, where possible, to that aim. A diminution in

the number of unions in the building industry is not

something, however, which can be achieved overnight.

In the interim, it seems likely that disputes between

unions over "work coverage" and rights to enrol workers

doing particular categories of work, will continue to

occur . Given this probability, it seems desirable that

consideration be given to the establishment of some form

of machinery for the settlement of such disputes. The

consensus of view to be distilled from the evidence in

this Inquiry would appear to be that such machinery is

warranted, although there appears to be a divergence of

attitudes as to the form which such machinery should take. It seems tolerably clear that the existing

Arbitration machinery has not been adequate to cope with

the problem.

One possibility to which consideration might, with

profit, be given is the establishment of a "Building Industry Disputes Settlement Tribunal", specially

designed to arbitrate between organizations in dispute

over issues of work allocation and right to enrol

persons performing certain categories of work. Such a

Tribunal, if created, would need to be readily

accessible to disputant organizations, persons upon whom

demands were made for membership enrolment, and the

405.

employers of those persons. In the light of evidence

given in this Inquiry, it would, in my view, be futile

to establish such machinery unless it was attended by

sanctions. It is apparent that these "demarcation disputes" are not renowned for goodwill and co-operation

between the competing organizations. In particular, the

B.L.F. has displayed a marked disinclination to carry

its disputes in this arena to arbitration, and even less inclination to abide by arbitration decisions which have been imposed upon it. Any arbitration system "without

teeth" would, therefore, be of no consequence.

Legislation establishing a "Disputes Tribunal" of the type which I have contemplated would need to incorporate

provisions designed to secure:-( i) Continuation of work pending resolution of

the references made to it. Work bans,

stoppages, or withdrawal of labour by a

person or organization pending determination

would need to be characterised as offences,

breach of which would carry economic

sanctions equivalent to the amount of loss

occasioned by such conduct;

( ii) Adherence to the findings of such Tribunal

by the parties to the dispute. Failure to

accept this decision would also need to be

characterised as an offence carrying monetary

sanctions equivalent to the losses occasioned

by the failure.

406.

Because the building industry itself (unions and

employer organizations alike) have, over the years, been

at pains to find an answer to the problem of

"demarcation disputes", it would seem to me to be

desirable for consultation to be held with the

interested parties before the establishment of any

Tribunal of the type which I have suggested.

5 . 5. Tactics employed in Support of Industrial Demands

The evidence to which I have referred at some length in

Chapter 2 of this part of the Report, discloses the widespread

use of "standover tactics" by the B.L.F. in support of industrial

demands. These tactics, frankly and publicly described by the

B.L.F. as "guerilla tactics", are the B.L.F.'s own special brand

of unionism. Mr. Murden, the Executive Director of the M.B.A.V.,

described these tactics as a "comparatively recent phenomenon"

(Pages 2158-9). He said that "in recent years this type of

approach has been adopted. The strike, as was discussed

earlier, has less and less an industrial weapon in the

building and construction fndustry. The rationale for this is,

I guess, to use two courses; the pressure put upon an employer

by the interruption of his construction processes and the cost

attendant to that, and secondly the pressure which comes on the

contractor from the client end of his contract. The client has

spent a lot of money and is into a construction process but

cannot complete it, and it was a tactic that has been developed

in the past 5 years and which has been widespread in its

application through the industry. That description

407.

(i.e. guerilla tactics), whilst I do not agree with it, is an apt

o ne of what is happening."

Mr. Andrew, the Executive Director of the Master Builders

Federation of Australia, said (Page 2176) that in his experience

the B.L.F. had invented the types of "guerilla tactics" discussed

in Chapter 2 of this part of the Report, and he said that "from

their po int of view they have been applying them very successfully for a number of years". He said he knew of other

construction unions that had applied similar tactics from time

to time, but he said that "the B.L.F. had developed them to an

extent and standard far greater than any other single union in

the industry." (Pages 2177-8).

These tactics find no support or condonation in any

industrial legislation in this country. The conduct not only exceeds the bounds of industrial propriety but, in many

instances, plainly transgresses the Criminal Law. In many, if not most, instances, demands are made accompanied by threats.

Those threats are frequently implemented and the implementation

has gone far beyond financial loss and has involved damage to

property and person. It is a sorry reflection on the nature of

the building industry that in no instance of which I have been

made aware has the Federation, or any of its officials, been

"brought to book" for this conduct. The victims of the conduct

seem to take the view that they cannot afford to complain to law

enforcement agencies or to avail themselves of the existing

processes. Such is the position of dominance of the B.L.F.

408.

within the building industry that complaints which have been made

are quickly withdrawn. The result has been to place the B.L.F.

in a unique position - a position of being above the law. The

B.L.F. is clearly cognisant of the position which it has

attained. If recent assertions by Gallagher are correct -namely that employers in the building industry have paid fines

imposed upon B.L.F. officials for refusing to answer questions

to this Commission and have done so because of fear of massive

reprisal - it aptly demonstrates the sorry plight of the industry. Even if the assertion is not correct, the existence

of that plight is nonetheless evident.

The situation calls for a greater degree of resolve upon

the part of employers and existing law enforcement agencies

alike. Employers in the industry see the B.L.F. as an

"irresistible force". Mr. Andrew summed it up when he said

(Pages 2174-5):-"I have not seen any of the Master Builders Associations

wanting to be first cab off the rank and take any effective

action in this area, I am afraid."

The evidence to which I have referred in Chapters 2 and 3

of this part of the Report supports these sentiments. Even gross

abuses have gone unchecked. A prime example is that of the

"Baulkham Hills dispute" to which I have referred in paragraph

3.4(e) of Chapter 3. Within a week of that dispute occurring,

Stocks & Holdings were writing to the Police "confirming our

request that those charges laid by the Police Department be

409.

withdrawn". The writer acknowledged that "the course of action

is perhaps unpalatable" but that he believed that "it is the

right one in the circumstances" (Exhibit 144).

The request of Stocks & Holdings was granted. It may be

that the employer believed the course of action to be correct but it was immediately seen by the B.L.F. as capitulation. The New South Wales Secretary of the Federation boasted that the employer

had "caved in" (Exhibit 122). Small wonder that the Federation

has come to regard itself as omnipotent. But no matter what

perception the B.L.F. might have of itself, it is not, to use the

words of Mr. Short (Page 2501) "an invincible juggernaut rolling

over everybody". It, too, is subject to the rule of law and so

are its officials and members. The industrial abuses which are

central to the B.L.F. philosophy will continue to exist only so long as employers continue to adopt the "soft option". It would

be idle to suggest that the adoption of a more resolute attitude

on the part of employers and employer organizations would be

unnecessarily "confrontational", to use a currently popular term.

The industrial policy of the B.L.F. is based on confrontation;

conciliation and negotiation are its "playthings"; to be used if they suit, to be derided if they do not. It seems tolerably

clear that unless positive steps are taken towards checking the

industrial excesses of the B.L.F., the community can look forward to a continued suffering of damage and indignity and the Trade

Union Movement itself to a loss of repute and credibility.

410.

PART 4 CONCLUDING MATTERS

1. This investigation, in some respects complicated, and in

many respects in relation to matters calculated to be

concealed, could not have been possible without the untiring

industry and pertinacity exhibited by Counsel assisting the

Inquiry, Peter O'Callaghan, Q.C., and Mr. Graeme Crossley.

Nor could it have been possible without the industry of the

police officers who have acted under their direction.

I desire to record my indebtedness to Counsel for their great

assistance, whilst at the same time making it clear that they are in no way responsible for opinions expressed or value judgements

made in the course of this Report.

2. I desire also to record my appreciation of the very capable

handling of the administrative affairs of the Inquiry by

Mr. Jack O'Shaughnessy, who acted as the Secretary to these

Commissions and of the efficient staff who have worked under him.

I have also appreciated and am thankful for the efforts of the

shorthand and typing staff who have been responsible for the

production of the transcript in this Inquiry.

3. Finally, I desire to record my to my own

secretary, Miss Joan Simmons, for the capable, efficient and

generous manner in which she has assisted me throughout the

course of this Inquiry and, in particular, in the production of

this Report.

11 K/AC Royal

APPENDI X 1

"CO fiiMONW EALTH CF' AUSTRJ..L IJ.

ELI ZABETH THE SECOND, by t he Gr Etce 0f G;id , Queen of Austr Ellin nnd Hr.: r othe r Realms nne" Te r ritori es , Hec. d Df Commr; nwenl th:

TO J ohn Sp ence Winnekc o.c.

GREETING:

WE DO by the se Our Lett ers Pa t ent i s su c:; d i r. Ou r name by

Our Governor-Gener al of the Comm onw ealth of Australi <1 on the advice of t he Feder al Ex ecutive Council and in pursua nce of the Constitution of the Commonw eal th of Australia , the Royal Commissions Act 1902 and ot her enabling powers, appoint you t o bo , on and from 20 Au gust 1981,

a Commis s i oner t o inquire, f or the purpos e of the exer cise and perfor mance of the powers and functi ons of the Parliament a nd Government of the Commo nwealth, whethe r t h e Australian Building Construction Employee s' and Builders Labourers' Federation (he r einafter referred t o as

"the Fe deration " ) or any offi cer or mer:1be r of the

Federation, in the course of or in t o the a f f ai r s

of the Federation, has be en or i s engaged in activities

contra ry t o a l aw of the Co r.uno nw eal th. ·

A f'..TD, without r estricti ng the s cope of you r i nquiry , \·le direct you, f or t he purposes of you r inquiry, t o gi ve

particula r attention t o t he f ollowi nt; questi ons : (a ) wh e the r any execut ive , ve or other

body f or ming part of , or est ablished by, or

a ssoc i a ted with, the Feder ati0n has been us ed , or

i s being u s ed, f a r the purpos es of acti vi t i es

c ontrar y t o a l mv nf the Com mo nweal th;

(b) wh e the r t h e Feder ::1t i on or any o f its c ffi c i als or

membe rs h ave been or ar e engGg ed in demanding or r e c e iving di r e c tly or indirectly any payment, r ewa r d or other bene fit or in causing any

payme nt , r ew a r rt or ot her bene f it t o be r eceived

by nny ot her p e:: rs,?n_ tha n in the or di nary

course of deal1ng or pursuant t o a

c ontract ') f in r espect of wor k act ually

p erfor med or t o be perfor med ) from empl nye r s or other per s on s nnd , if ::my payr. ent, r ew:1 r d or benefit h a s be en or given -

( i ) t he per s ons by whom and t o wh om any

such !Kt ynwnt , r ewa r d . ::J r bencfi t been

r:1ad e: ') r g i ven ;

l

i:t1 z t-3 i:tJ ::u H M ::r CJ ..... 0 (11 ,, ,_, [g Q :::1 0 r+ 0 t-'· 6 (') r+ ::r CJ' '< p. i3 !'J (!) '< 0 t--· H, :::1 !I> g c ro C1 c ;:o {/) ro t+ Otl ..... CJl .... t+ \!) II> CD '1 .... 0 H) - cl' en ri' ..... II> !. rA - . en .... 0'\ ., .. CD cl' ()q II> t+ VI 0 ...;) Et II> ., II> 0. II> .., Ill .... II> () c t+ .... < I'D ("') 0 § 0 .... .... 11 K/AC Royal

(ii) th e I' <..'c1 :.: •n :-. i' 'J r •) r t h o purpo ::<

;; u ch pn y:- .cnt, r cwc-c r r] ::J r b cnc f i t ;

(iii) th<-' s u b sc: ,]u cnt .! r US •:' ·)r

disy:; c s nl ,· f such P''Y"c.nt, rcw<::rd

·' r b enefi t ;

(c) whethe r the Fede r :1ticm o r any -. f f i ccr s o r :nc:r:Jbers

the Federntion hove enga ged in uctiviti c s c ontra ry to a law of the Conm onwenlth in rclati J n t o the

election or appointment of o f the Federati :n

or the conduct or purported conduct o f the affairs. AND We direct you t o make such recor:Jmcniations arisin G out of your inquiry as you think appropria te, inc luding regarding the legislative or administrative

changes, if any, that a rc necessary or desirable:

AND We further direct that any finding th2t the Fed crr:ti Jn or any officer or mer,1ber of the Federati on has engaged i 21 conduct amounting to a criminetl offence be made only evidence, admissible in a Court of Law, sufficient to place the Federation, officer or member on trial for that

offence.

AND \'le declare that you nre authorised to c onduct your inquiry into any matters under these Our Letters Patent in combination with any inquiry into the same or related matters that you are directed or authorised to make by any Commission issued, or in pursuance of any order or appointment made,by any of Our Governors of the States:

AND We require you as expeditiously as possible to f:1nke your inquiry and not lnter than 28 February 1982 or such later date as We may be pleased to fix, t o furnish

to Our Governor-Gener<:l of the Commonwealth 0f Australic. a report of the results of your inquiry and your

recomrnendc.tions.

By His Excellency's Comman c' (Signed) P. Dura ck The f or and beha lf of the

Prime Minister. 2

WITNESS His Excellency Sir Zelman CowGn,(Knight of The Order of Australia, KniGht Grand Cross of The flost Distinguished Order

of Saint Michael and Saint Ge orge, Knisht Grand Cross of The Royel Vict,)rian Order, Knight of The Hos t Venerable Order of the Hospital of Saint J ohn o f Jerusalem, one of He r Majesty's Counsel learned the l nw), Governor-General of the Commomve o. l th of !.u.stralia (nnd Commander-in-Chief of the De fenci? Force). Da t ed this Twentieth day o f Au s ust 1 981

(Signed) Zel ma n Cowen G:;v ernor-Generol "

APPENDIX

"ELIZABET;{ THE SECmm, BY THE GRACE OF GOD QUEEN OF AUSTHALI/. A:m HEFI. OTHER REALl1S AND TERRITORIES, ' lEAD OF THE C:Oli!I"!ONV.'EALTH .

To our Trusty and V/ell-bel rwed

J OHN SPENC E VIH JfJEK..G , ES QUI RE , Q. C.

GREETINGS:

WHEREAS the Governor of the St ate o f Victori2, in the of Australia , by a nd with t he advice of t he

Executive Council of the s a i d Sta te, has deef7led it exp edient that a Commission shall f orthwith issue t o inquire into and report up on the f ollowing matters, namely: To inquire whether The Australian J uild i ng Construction Employees' a nd Builders Labourers' Feder ation (hereinafter

referred t o ns "the Feder ati on") or any offi cer or

member of the Federation in the course o f or in r elation t o

the affairs o f the Federation, has eng2.ged in any illegal, improper or corrupt activities (other than e.cti vi ties involving only breaches of the law wh ether o f the Commonwe alth or a State relating t o tra de unions ).

AND, without restricting the scope of your inquiry , we direct you, for the purposes of your inquiry, t o give

particular attention to the f ollowing questions: (a) whether a ny executive, administra tive or 0ther body forming p2 · t of, or established by or associated with the ha s been used, or i s being used,

for the purposes of illegal, improper or corrupt activities, ( other than activities involving only breaches o f laws, whether of the Commo nwealth or a State, r el a ting t 0 trade unions): (b) whether the Federation or a ny o f its officials or

members have been or a r e engaged in demanding or receiving directly or indirectly any payment , rewa rd or other b enefit or in co.using any rewar d or

other benefit t o be r eceived by a ny oth2r person ( other tha n in the or dinary cour se (.' f comme r cial deD.ling or pursuant t o a contract of in r e spect

of work actually perfor med or t o be perfor med from employers or other persons) and , if nny pGyment, reward or b en efit ha s been made or given -

(i) the persons by wh om and t o wh om a ny such payment,

reward or benefit has been made or given;

(ii) the r easons f or, or the purpose o f , any such

payment , r eward or benef it;

(iii) the subsequent or proposed use or disposal o f any

such payoent, r ewa rd or benefit .

11 K/AC

3 Royal

)'> crJ cz ()q >-3 eM ctt:J 0 ;:l 0 ro ::s ct'i ;:rro 0 () c o (0 'i OJP, ;:l a' p,'< ::l ro ro f-'• ;:r::s c ;:let ro p,;:o I'D (I) ()':I ;:l f-'• P,Ul ct roro 1-"'1 I)Q ::r o I"CC 00> :Set roro I tj ....... ct Cll I:J) .... 1 g' 0 ::r;' ...... :z: 0 I I tD \.)J I ....;] "CC 01 Ol n OQ ,... ro • > N .1:- 0 ::l g; I Ill "' Sf r+ .... -< rtl I r+ ::r Q. Ol '< 0 ..... 11 K/AC Royal

( c ) wh ether the cr a ny off i cers membe r s of

the Fede r ::1tion h2.vc enz,nt:; ... 'd i n i ll e::;:1l, i mp r oper or c·.; rrupt D.cti vi ti t::s in t o tile election

or appointment o f . :c fficers C' f th0 Fcder .:ltion or the purported conduc t tile affairs.

AND \'JE DO by these presents gi ve and e; r ant you full power

and authority t o cull before you such person or persons D.S you shall judge likely to a ffor d you any i nform ntion upon the subject of thi s Our Cor:JJ;Jiss i on, snd t o i nquirG of and concerning the premises by a l_ other l awful ways and means whatsoever.

AND WE further direct t hat any findi ng tha t the

Federation or any of f i cer or member of the Feder2tion h2s engaged in conduct mounting t o a criminnl offence b e marte only on evidence, admissible in o Court of Law, suff icient t o place the Federation, officer or membe r on trinl f or that offenc e , Al'!D \\'E will and c ommand thct this Our Commission shall continue in full forc e and virtue and that you shall and may from time t o time and at a ny pl a ce or places proceed

in the execution thereof, and of every matter and thing therein contained although the same be not continued from time to time by adj ournment.

f .. ND WE declnre that you are authorised t o conduct your inquiry into the matt ers mentioned a foresaid under these our Letters Patent in coinbinati on with any inquiry into the matters that you a re directed or authorised to make by sny Commission or Commissi ons issued, or in pursuance of any Order or appointment mad e , by the Governor-Genera l of t he Comm onwealth of Austrnlia or the Governor of any StClt e of the Colllf:1onweal th of Austre,lin •

AND WE direct that you do with as little delay a s possible

and not l ater than 28th day of Februo.ry 1982 report t o Us

under your ha nd and seal the result of the said inquiry.

IN TESTIMONY WHEREOf We have caused these Our Letters t o be made Pa tent a nd the Seal of our State t o be

hereunto affixed .

WIT NESS, Hi s Excellency the Hon our2cbl e Sir Henry Winneke , Governor of t he Stnt e of Victoria at Melbourne this twentieth day of August

(Signed) Hen ry Winne ke

One t housand nine hundr vd and eighty-one in the t hirtieth year of Our Rei:;n.

By His Excellency's Comma nd •

(Signed) Robe r t Maclellan ACTING ATTORNEY - GENERAL ''

ROYAL COMMISSION into the activities of the

AUSTRALIAN BUILDING CONSTRUCTION EMPLOYEES' AND BUILDERS LABOURERS' FEDERATION

APPENDI X 2

The Commonwealth and Victor ian Governments have established a Commission, on and from 20 August 1981, into the activities of the Australian Build ing Construction Employees ' and Builders Labourera' Federation. The Commiss ioner is Mr J . WiMeke, QC. The full terms of reference of the commission are aet out belo•. PeraoM, organisa tions or bodies . wishing to make a written submission before tile commission are invited to do so by lodging subml!sioOJ with the comm imon's 5f{:retary, Post Ottlce Box .SO, Hawthorn, Vic. 3122. Such submilsions art to IMt

lodged by 31 October 1981. TERMS OF REFERENCE issued by the Commonwealtl! A . \1.1let her any executive. administrative or other body forming part of, or established by, or associated with, the Federati012 hu bee!! used, or It bein&

used, for the purposes of activities contrary to a law ot the Comm012we<.b. B. Whether the · Federatloa· or any of Its offlclau or members b.ave w are . engaged ill demandin& or receiving directly or indirectly any payment, reward of other benefit or in causlna any payment, reward or other benefit to be

received by any other person (other thaD in the ordinary course of commercial dealing or pursuant to a contract of employment ill respect or work actually performed or to be performed) from employers or other pu10111 lllll, I! any payment. reward or Oe:lellt bu been made or given -

[) The persons by whom and to wl!Dm any such payment, reward or be:!e!it hu been made or given. II) The reasons !or or the purpose of any · 1uch payment , re1r11d or ller.cflt. III The sub!equent or prol)Oied or disposal ot any sue!! paymet, reward or

benefit.

C ·hether the Federation or any ar r:nemben of tilt Fec!eratl011 1\.tvt In activities contrary to a law of the Commonwea.lth In relation to Ole

election or appointment of officers of the Fec!eratloa or !U conduct or purported conduct of the Federation's a/fairs. The termt of reference wued by the VIctorian Government are ldntlcal acept for Parlil'allba A. and C. wbJch read:

A. Whether any executive, ldminlstradve or other body forming !)art af, er established by, or U50Ciated with, the Federation bu been usee!, or Ia bei11J · used. lor the purposes of illep.l, Improper or corrupt activities (other than activities involvina ocly. breac:bel of laws, whether of thJ: oc 1

State. relating to trade un!Oil! ). C Whether the Fec!eratlon or any otflceTl or memben ot the Federat1011 have engaged In Illegal , Improper ar corrupt activities in re lation to the election or appointment of otncers of the Federation or the purponed conduct of tile

Federation 's affairs. wishing to appear before the commission may apply to the commlnl012 It

10.30 am on Thursday 10 September llltl qr at such ltU!ber beL1np u tile commissioner allows. The heanna of the commluloa on 10 September "Ill lie at the Colllnpood Court House. Stanton Street, Colllnpood. Fllrthel' Information II available 011 request fMnll tilt 5eer..., te m. C•lftllttelt,

P01t Otflce B" 451, HaiJ!bons, Vlcttri& 3122. N' tal..,_ 112 JaZ. Eit. Ul (temporary ... tnber).

APPENDIX 3

COUNSEL AND PARTIES APPEARING

Mr. P. O'Callaghan Q.C. and Mr. G. Crossley (instructed by Crown Solicitor)

Mr. G. Hampel Q.C. and

Mr. P. Guest

(instructed by Rigby and Fielding)

Mr. G. Hampel Q.C. and

Mr. J. Larkins

(instructed by Mallesons)

Mr. C. Macleod and

Mr. R. Meldrum

(instructed by Phillips Fox & Masel)

Mr. K. Milte (instructed by Andrew T. Fraser & Co.)

Mr. M.J. Black, Q.C. and

Mr. R. Gillard

(instructed by Hedderwick Foo kes & Alston)

Mr. H. Jolson (instructed by Strongman & Crouch)

Mr. M. Gurvich, Mr. H.A.Cottee and Mr. Francis Galbally (instructed by Galbally & 0 'Bryan)

Mr. R.K. Meldrum (instructed by Phillips Fox & Masel)

Mr. w. J. Martin

To assist the Commissions

For Dominion Properties Ltd, Watson James Pty.Ltd. Mr. Lloyd Williams and Mr. T. Gregson

For the "Grollo Group" of companies

For Montvale Developments Pty.Ltd. and Denatos December Nominees Pty.Ltd.

For A.J. Galvin Pty.Ltd.

For Civil & Civic Pty.Ltd.

For Hersfield Developments Corporation Pty.Ltd., Mr. George Herscu and Mr. George Grey

For Mr. M. Alter and

Centrepoint Custodians Pty.Ltd.

For the Fletcher Watts Group

For Mr. S.M. Rosenberg

2.

Mr. A.R. Castan Q.C. with

Mr. R. Hinkley (instructed by Holding Redlich & Co.)

Mr. P. Guest (instructed by Corr & Corr)

Mr. S. Resch (instructed by Darvall & Hambleton)

Mr. R.W. Hinckley (instructed by Pamela Coward & Associates)

Mr. H. Berkeley Q.C. with Mr. R. Merkel (instructed by Holding Redlich & Co.)

Mr. R. Gillard (instructed by Marshall & Marshall)

APPENDIX 3 ----------

For Mr. P.J. Redlich and

Mr. R.F. Betts

For Land Securities Developments and James Francis O'Connor

For Building Industry Lo ng Service Leave Bo ard

For Mrs. Pamela Burton

For N.L. Gallagher and P.M. McMahon (limited onl y to an application to set

aside a subpoena)

For Ronald David Silverstein

(A. C. T.)

(W.A.)

APPENDIX 4

WITNESSES APPEARING UP TO AND INCLUDING THE 11TH MAY I 1982

NAME TRANSCRIPT PAGES

ABBOTT , M. J. 1753-55

ADSHEAD, G.C. 2037-38

ALABACOS I R.J. 1783-86

ALCROFT, M. 2464-67

ALLEN I G. J. 1530-6

ALLEN I M. R. 1540

ALLEN I S.J. 1539-40

ALTER, M. 971-86, 1083-99

AMALAAN , J . W. 795-6

ANDERSON, J.D.M. 2130-47, 2150-51

ANDERSON I M.McD. 1339-43, 1497-1507

ANDREW, D. 2170-78

ANTHONY, L.B. 2199A-2202

ARNOLD, D. 1647-50

ASSETTA, M.R. 2084-86

ATKINSON I R.W . 2083-84

BAKER, G.J. 1788-91

BALL , s. w. 2570-77

BARIC, M. 125A-127

BARNES, K.J. 342-5A

BARRETT , D.R. 1954 - 55

BARTON , G.C . 682-94

2. APPENDIX 4 ------

(A. C. T.) BATE, H. G. 2184-97 , 2199-2199A

BECKETT I J . L . 678 - 86

BEGGS , S . L . 1 730-33A

(A. C. T.) BELCHER, J.W. 2272 - 78

BENNETT!, J.A. 1883-86

BETTS, R.F. 1606-7

BIANCON, J . 1948-50

BIESOTTO , M. 2148-50

BLACK , J.J . 366-71

(A. C. T.) BLACK, s. 2330 - 31

(A. C. T.) BOBOTILLOF I E. 2340 -42

BONNEFACE I N.M. 2491-93

BORMAN I M.H. 1928-31

BRAND, R.J. 1262-3

BRITCHFORD, R.W. 1892 - 94

BROOKS, R.E. 303 - 6

BROWN, B.M. 1938-41

BROWN, N.G. 1811-12

BROWN, R.G. 399 - 41

BRUNNEN I G. J. 1378-87

BUENEMANN I W. F. 1224 - 28

BUNTING, R.M. 2180-83

BURGESS, A. C. 127-34

BURGESS I L.J. 1539-9

(A . C. T.) BURN, G.G . 2251 -53

(A. C. T.) BURTON I P. H. 350-53

BURTON I P.M. 2234-42

BURUBU , R. L . 1773-75

3. APPENDIX 4 -------

CAELLI , B.J. 1846-48

(A . C. T.) CAMPBELL, R.R. 2269-71

CARACELLA, F.V. 1962-64

(A. C. T.) CARLIN I B.F. 2218-28

CARRARO, B.B. 1797-98

CATTARINOZZ I, s. 2088-90

CAUCHI I J.J . 790-94, 2062-64

(A. C. T.) CHESTERMAN, R.T. 2303-05

CHIVERS, K. J. 155-60

(W .A.) CHURCHWARD, K.B. 2582 -5

CLAPTON , R.D. 2530-38

(A. C. T.) cLARKE I P.C. 2321

COCK, G . M. 1887-89

coc KB URN I P . M. 179 8-1800

COLLUSSA, A. 1752-53

(W.A.) COLLINS I T.R. 2612-6

c ONBOY I W.T. 1791-5

CONRON I K.W. 220-26, 237-41

COOEN I R.E. 148-9

CORRIGAN I J. E. 2078-83

COYLE, E.T. 1923-24

CRAWFORD, G. R. 2403-06/2407

(W.A.) CREWE I A . D. 2661-4

CROWE, T.W. 1659-65

CROWLE, F. E. 1823-3 3

CUTCLIFF I J . W. 1997-2000

CUTLER, I. R. 2423-31

4. APPENDIX 4

DALE, K.P . 795

DALTON, R.H . 1598-1600

DALY, B.F . 290-303 , 763-90,

BOO- 3 2, 848-48A, 1449 - 50, 2064-65

DARRELL, L. 1100- 3

DAVIS, A. D. 1956- 57

(W .A.) DAY , R . A. 2641 - 5

DEAN, R.F. 274 7-60

DELAFINO, P. 1812-15

DENHAM , D . G. 513 - 97

DENNY , M. J. 1867-8

DEVEREAUX, R . J . 2167- 69

DISANTE, F . 1802A-1 804

DOBIE, W.R . 1359-62

(A .C.T.) DOCKERY, D.R. 2313 -1 5

DODD, F.G. 747- 61 , 833 - 48

2058-62, 2069-70

DOIDGE, E . W. 203-6

DOOLAN , p .G. 1332-9

DONNELLY , p . 1573-80

DORDEVIC, D . 1778-80

DOUGHERTY, S.M. 2046

DOUGLAS, I.D.A. 1145

(W .A.) DOUST, J.L . 2657- 61

DURBIN, B . B. 697- 8

DOWDING, B. I. 1364- 70, 2744-6

DOWLING, T.J. 1760- 2

DOWNES, J . W. 2090 - 92

DOWSETT, I.R. 135 7-9

5. APPENDIX 4

DOWTY, D . G. 1902-05

(W.A . ) DYER, E.J. 2694-6

(A. C. T.) EASTMEAD , A. P. 2295 - 96

EDWARDS, R.J. 922

ECCLESTON, A. R. 353-9

ECKERSLEY, R . H. 1931 - 34

EKBERG, R.c.w. 2000-05

ELLIOTT, B.C. 2178-80

EMBURY, A.W. 164-74

EVANS, G.A. 1911-13

(A. C. T.) EVANS, L.C. 2207-18, 2228-33

EVERARD, P.M. 2147-48

EVINS, J • H. 1835-7

FAVERO, B. 1864-5

FAYMAN, P. 1150-61

FELLOWS, C.R. 1527-9 , 1676-80,

1693-1705

(W.A.) FERGUSON, K.J. 2602-7

(W.A.) FILMER, J.R. 2679-80

(W.A.) FISHLEY, K. R. 2627-34

(W . A.)

(A. C . T. )

FITZPATRICK , P.J .

FITZPATRICK, K. J.

FLEMING, B.S.

FRICKER, B. A .

FR OS T, B.H .

FULTON, K.J .

GALLAGHER, A. R.

GALLAGHER, N. L .

GALLAGHER I W.A.

GALVIN I A.J.

GASOWSKI I A.

GATES , A. J .

GATFORD, A . B.

GARDHAM, M.G .

GEARSON , E. H. P.

GEORGE, P.M.

GIBBS , R.A .

GIBSON , R. L.

GLENK, H.

GORDON , c.

GORMAN, J . C. A.

GOVAN, J.R .

GRANDISON , B.

GRAY, T .M .

GREANY , M.

6.

2042 - 44

2687 - 92

2488-91

183 7

2017 - 27

1905-06

1524-7

1654 - 9

1587- 9

182 - 90

2066 - 69

1316-1 7A

1842 - 6

1261 - 2

1652 - 4

1715-18

1117-8

2318-20

2110 - 18

1228- 31

1714 - 5

1 97 - 8

1233 - 5

1952 - 54

1 514 - 9

APPENDIX 4

(W . A . ) GREGOR , J . F .

GREGSON , T. A.

GREGSON , C . E .

GRESTY, R.

GREY , G . E.

( A. C. T • ) GREY , J .

GRIFF , B . L.

GROLLO , B.G .

GROLLO , R. J .

GUILLIERI, T. J .

GUSCOTT , R. T .

GUSSEY , R . J .

HADDEN , J . R .

HAGAR , R . A.

HAGEN , H.

HANCOCK , L .

HANSEN , M.R .

HANSEN , P. A.

HARKIN, M.J.

HARPER , N . D.

HARRICK , L. J .

HARRIS , A. E.

7 . APPENDIX 4

2648-57

1034-4 9

1061

1820-22

417-61, 469-513, 597 - 602, 614 - 661 , 1417-48, 1623-7, 1637-47 , 1705-13

2286-90 , 2294 - 95

856-7

1161-1223 , 1238-46

1263-90, 1370-77 , 2094-2104

231-2

1880 - 90

1470 - 2

1726-30

141-43

924

242-5

174-81

1259 - 61

1775-8

2431 - 34 , 2439 - 40

1993 - 95

1808-10

8. APPENDIX 4

HARRIS, L.B . 1149-50

HARRISON I P . C. 1567-8

HART, W. J. 2029-32

HAYNES I J . A. 1585-7

(A . C. T.) HEALEY I B. G. 2321-24

(W . A.) HEALEY I G.J. 2638-41

HEALY, R. R. 1061-4

HERRINGTON I P.J. 1786-88

HERSCU , G. 694-74 71 1398-1416,

1680-6

(W.A . ) HIGSON, A. 2620-22

HIRT , J . W. 1120-81 1343-7

HOATH, G.C. 344-6

HOGAN, K.J. 1806-8

(A. C. T.) HOLDEN, C. D. 2254-56

HOOD, G.C .P . 1757-60

HOPKINS, D. G.P. 2032-33

HOSE I R.M. 9251

HOUGH, J. c. 920-1

HUDE, N.F. 2070-76 / 77

HUNT, F.A.J. 359-64

HUNT, J. R. 364-66

HUTCHINSON 1854-56

HUXHAM, A. 371-77

ISAACS , M.

ISAACS, R.

ISLES , B. J.

JACKSON, J .

JAMES , I. R.

JOLLY , D. A.

KEENAN , F .

KEETON , N. A.

KE LL Y, T. L.

KENNEDY , J.

(W . A.) KILCULLEN, R.J.

KILMART I N, E.M.

KING , L.K.

KING , P.W .

KLASTER , B.

KLAJINB LAT, M.

KNIGHT , c.

KOOB , G. H.

KOOB, G. H. (Snr)

KOZMA, J.

KURZMAN, G. F.

9 . APPENDIX 4

34 2A - 44

2547-52

2108-2110

1950 - 1952, 2479 - 2483

1326-9

2762-3

1562-7

1 349- 54

1330 - 1

1768-73

2664 - 66

1926 - 28

198 - 200

1129- 30A

1 739 - 43

1762-64

395-8

152-3

990-1006

1734 - 36

377 - 38 7

LATROSS , M.L .

(W . A.) LEE , M. R.

LEWIS, M. F .

LEWIS, M.F .

LIPOV, M.

LODGE, J.V .

LOI Z OU , L .

LONG , J.E .

LONGHI , D.

LOWE, R. J .

(A . C. T. ) LUCAS, R. C.

(W.A . ) McBEAN , A. G.

McBETH , L . I.

McCARTNEY, e.G.

(W . A.) McCULLOC H , J .

McCULLOCH, W.H.

(A.C . T.) McDONA LD, C. H.

McDONA LD, T . R.

McEVOY , A.W .

McFARLANE , D.J . E.

McGRAT H, T.G .

McGREGOR, B. D.

MciNERNEY, B. P .

McKELSON, D. J.

10. APPENDIX 4

602-7

2600-2

64-90, 249-89, 849-54, 857 - 919, 926-45 , 2104-07, 2118-19

1592-7 (BLF)

3240-3245A

2036-37

246 - 8

2015-17

1755-56

1569-70

2242-51

2578 - 82

1332

245-6

2616 - 8

145-4 7A

2334 - 3 6

1146 - 9

2787- 8

1 246 - 52

388-92

2483 - 84

1335-9

1907 - 09

McKENZIE, D.

McKENZIE, G.A.

(A. C. T.) McKENZIE-SMITH ,

McKIE, R. R.

Me LAUGHLIN, J.D.

Me LAUGHLIN , J.F.

( A. C. T.) Me LENNAN, T.

(A . C.T.) McLEOD, B.R.

McMAHON, B. R.

McNEILL, G.F.

MACHIN, H.J .

MAIZEY, W.G .

MALCOLM, P.G .

MANIE, G.P.

MANSON, B.J.

MARSH, M.F.

MASON, P.E.

MASTERSON, J.J.

MASTERTON , A.

MATERIA, P.

MATTHEWS, D.C .

MAY, A. D.

MAY, R. G.

MAZETTI, J.

MELLINS, A.V.

11.

T . M.

APPENDIX 4

90-95

1131-2

2296

1849-54

2406/7-2422

306-7

2332-33

2278-79

206-9

147A-8

1865-67

2761-2

1895-98

2010-11

1139-44

1252-54

143-144A

1600-1

1816-18

1964-65

210-19

1915-18

1873-82, 1918-19

1118-20

796

12. APPENDIX 4

MIDDLETON, A.J. 1363-4

MILES, T. E. 1628-37

(A.C. T.) MILLER, K.C. 2333-34

(W.A.) MILLMAN, B. E. 2673-6

MILNE, R. L. 1322-4

MILNER, L.A. 2517-24A

MILTON, R. 2086-87

MINETT, T.W. 1309-11

MOAR, M. 1103-9

MOODY, R.G. 2475-79

MORRIS, T.J. 1848-49

(A. C. T.) MORRISON, P.K. 2256-68

MOTTON, B. 2005-06

MUDGE, I. H. 2033-36

MURDEN, D. H. 1838-42, 2152-67

MURRAY, B.F. 1591-2, 1650-2,

1672-6

MURRAY, B.F. 95-99

(A.C.T.) MURRAY, D.W. 2296-97

MUTIMER, B. D. 1536-8

(W.A.) NATHAN, J • H. 2645-7, 2668-70

NEGRI, P.J. 1397-8

(A. C. T.) NELSON, M. 2300-02

NICOTRA, J .A. 1133/1135-6

NICHOLAS, C.R. 1724-6

NOBLE, G.J. 1311-16

NORD I 0, D. D.

NORMAN, D.C.

NORTHOVER, W. J.

NOTARFRANCESCO, B.

0 'CONNELL, T.A.

O'CONNOR, J.F.

(A. C. T.) O 'CONNOR, T.H.

(A. C. T.) O'DEA , P.J.

O 'MAHONEY, J.M.

(W.A.) OLSEN, H.R.

ORSINO, E.

PAIN, B.L.

(W.A.) PALUMBO, M.

PANETTA, A.J.

PARKER, J • W.

PARKINSON, A. G.

PARKINSON, R. C.

PARNELL, G.L.

PARRY, B. L.

PAVLIDIS, G.

PAZERECKAS, V.

PEARSON, W.J.

13. APPENDIX 4

121-5

99-104

1067-77

1780-82

2468-71

1983-93

2310 -13

2324-2 9

1461-65

2685-7

1961-62

149-51

2607-11

3227-3232

1960

1347-9

1957-60

1890-91

132 9-3 0

963-70, 1388-93, 1478-85, 1578-85

1231-33

1868-72

PERRY, R. D.

PETERSON, P.M.

PETERS, R.W.

PETHERBRIDGE, G.E.

PETTI NELLA, F.

(W.A.) PIERI, J.F.

PICCONE, A. P.

PIZZEY, A.G .

(A.C.T.) PLUNKETT, D . M.

(A.C.T.) PLUNKETT, J.T.

(A.C.T.) PLUNKETT, P.G.

(A.C.T.) PLUNKETT, R.J.P .

PODGORNIK, C.F.

(W.A.) POGORELIC, A.

POL!, E.J .

POPE, K.L.

PORTIUS, K.A.

PRENTICE, M.G.

PUNT, F.A.J.

(A. C. T.) RADOVANOVI C, M.

(A. C. T.) RAISER, E.

RAUBER, G.

RAYMOND, V.R . A.

READ , P. L.

14. APPENDIX 4

134-41

1507-13, 1540-62, 1686-89, 2725-40

2087-88

2119-23

1909-11

2585-94

307-14 , 323-4

1291-1308, 2046-58

2290-92

2297-2300

22 93-94

2292-93

1077-82

2596-99

1894-95

1766-68

1764-66

1053-8

1800-2A

2348-50

2302-0 3

958-62

411-17, 465-69

1059

15. APPENDIX 4 ------

(W.A.) REID, J . F. 2684-5

REDLICH, P.J 1486-90, 1602 - 6

REDPATH, J.H.J. 334-8A

REID, L.J. 1967 - 81

(W.A . ) REYNOLDS, K.N. 2680-4

REYNOLDS, T.J. 2044-45

RHODES, K.A. 1819-20

RICHES, R.J. 1736-39

RIDDELL, P.G. 1934-38

RIDGEWAY, R. L. 160-164

RICHER, I. R. 105-6

(W . A.) ROBERTS, J.C. 2671-8

ROBERTS, N.G . 2012-15

ROBINSON, R. C. 190

ROCKET, C. E. 2123-29

ROSENBERG, S . M. 1490-7

RUG LESS, R. 2007 - 10

RUSSELL, K.J. 1049-50

(W.A . ) RUTHVEN, D.K. 2623-6

RYAN, P. L. 2746-7

SAB LOTNY, W. 1743 - 5

SADLER, A. E. 1891-92

SAMPSON, S.J. 2337 - 40

SAMUEL, M. 1109-13

SANDERS, T.J. 1899 - 190 2

SANDERSON , H.J. 1235-7

SARAH , M. 1833-4

SCHRAVEN, W.L.A. 1745-52

SCOTT, N.

(A.C.T.) SELWAY, B.R.

(A. C. T . ) SELWAY, W. A.

(A . C.T.) SEMPLE, J.A.

SEYMOUR, B . C.

SHALOUB, E .

SHARP, B . E .

SHEATHER, J.W.

SHEFFIELD, F.J.

SHORT, L.E.

SILK, M.S .

SILVER, G . C.

SILVERSTEIN, R.D.

(A.C.T.) SIMPSON, S.J.

SIMPSON, R. J.

(A.C.T.) SPINELLI, G.

(A.C.T . ) SPINKS, C.L.

SPROULE, M.C.

STANKOVICH, S .

(A.C . T . ) STEVANO VIC, D.

STEVENS, R.

STEWART , M.J.

STEWART, P.A.

STONE, K.C.

SUMMERS, W.

SUMMONS, J.J.

SUTHERLAND, J.S .

16. APPENDIX 4

393-5

2351-52

2350-51

2197-99

946-957A

1356-7

2496

2358-47

201-3

2493-2507

1064-7

662-77

3178-3214, 3216-27, 3233-40

2440-50

1255-9

2279-81

2315-18

1982-83

1944-48

235 2-53

326-334

2485-88

2744-6

2381-2403

2455-64, 24 71-75

1113-16

1862-64

17. APPENDIX 4 ------

TALBOT , T . G. 1355

TATSALL, J . G. 1324-5

TEAL , G. L. R. 2027-29

THOMAS, G. R. 1995-97

THOMAS, L. R. 314-23

THOMPSON , I. G. 1857-9

THOMPSON , W. J . 1815

TILL! , J . 399-411

TINDAL 1859-61

TO LSON , W. A. 1395 - 98

TURNER , G. W. 2202 - 07

TWIGG , I.M. 1485 - 6

UNSWOR TH, B. J . 2356 - 81

VAN ANDELL, H. 924

(A.C.T . ) VAN DER GRABLE , W. 2281-85

VAN DYK , J . A. 207 6/7 7-78

VAN GU LICH, P . F. 2513-29

WALKER, R.J . 1582 - 5

WA LES , P .F. 2789-90

WALL , D. E. 1818- 19

WALL , G. J . 2576- 8

18. APPENDIX 4

WALLACE, I. H. 226-31

WALLACE, N.A. 1519-23

WALSH, N. W. 2039-42, 2045

WARREN, w.c. 1804-6

WATT, G.A. 2700-15, 2740-1

WATSON, A . D. 2634-8, 2693

WEATHER LEY , A . C. 1393-5

WEATHERLEY , D.C. 922-3

(A. C. T.) WEBSTER, R.W. 2268-69

WEHBE, M. 2553-56

(A. C . T.) WHITE, G.J. 2347-48

(A. C. T . ) WHITE, J.M. 234 3 - 4 7

WHITEHEAD, J. 2450-53

WHITEHOUSE, R.P. 2509-13

WILKES, H.J. 1467-9, 1454-61

WILKINSON, J.A. 2090

WILLERS , H. 987-9

WILLIAMS, D. E. 1318- 22

WILLIAMS, L.J . 1006-34, 1050-53

WILTON , H.C.E . 1920-23 , 1924-26

WOLLBRANDT, L. H. H. 232-7

WOOD, G . J . 106-20, 1966-67,

1981-82

WOOD, R.W. 797

WOOLNOUGH, J. L. 2434-3 9

19. APPENDIX 4

YATES, J.R. 1913-14

YAU, D.P. 1568-9

ZAG HI, P.M. 1795-7

ZAVROU, H.A. 1942-44

B.L.f".

PUTS ITS POINT OF VIEW

Roaolutlon of Federal Management Committee of the

Australian Building Construction Employees & Builders' Labourers' Federation

The F ederaticil its o:l iCtJ!s and hal'e been and are con cerned only wilh potect:ng and win nln£ good cond1t1ons an:l wa ges tor me mbers. and 1n o!h er iilember s of th e pro tecti on of

Aust :2:i 1's enw o.1:i1Cn l an d herit2ge . Ali th is hJs and sti:t fu ll

l1 ::1e oC\1v1ty F ede rJt:o n. co r its members. w1:1 be cr·â€¢eil ed fr om thai 'Jy a so uri ou s ·: nq u:ry·. ·

Nor i:s offiCials or m mbers e P

' '" er fh> Q 1lJU. Sugges1 10n s o ' 1i:egal. 1 r.1proper and co rru pt ac t;vrties implic1l in the terr.1s ol reference for the Royal Commi ss ion. are wholly :als!:_ The Royal Commission is • fishing expedition on ly to m1st1n the son:..

diti ons and wages of all worke rs. to divert the F ec erat 10n s ener&:es an d to serve reac!l onJry political purpose s. Th iS is demonstrated by extr eme gene:ali ty and vaguen ess of the terms of reference. Where charges of illega!1ty, Impropriety and are made. it is a card 1 nal rule that they be sped ic. Because th ere is no basis fer th em they are no t. and cann ot be: specific. The Federat ion notes in the statement by the Prime Min ister. rel eased on 20 th AugusL re fere nc e

was mad e to a 'joi nt police re port into activities of officials of the Bui lders· Labourers' Federat ion' The most bas ic re qu:r em ent of nat ural justice demonds the immediate pu bl icati on ol !hat repor t. so tnat tHe concerned and lhe pull'l: c. ca n see ihe su bs ta nce oil he mat!ers into wh ich the Royal Com mission is to inqu ire. !I any offiml or member is alleged to be guilty of 'il legal, Improper or corrupr activities. th e C

willin g to lace such a trial becau se tbey know th ere is no illegality. im propriety or corruption. The gov er nme nt and buil ders are invited to proceed in that way .which has lon g been the right ol all citizens under th e com mon law system. The present Royal Commission specifies no char2es, rmrses the onus of proof,

has no jury, no rules of evidence, no presumption of innocence and no commiltal proceedinas, If anything em er es at the Royal Commission to warra nt answer. the Federation w1 rn a s own answer. The Roya[ Commiss ion is to cG- inc1de wilh d re istrat1on roceedin ·nst

the Federat1on in the e ourl In ot her wor ds. two s1mu taneous prG­ ceedlngs Jf a penal. character agai nst the Federation and its officials and

members are to occur - th e one feed ing the other: Thi s is unprecede nted in history. There is also a strong leg al principle against double jeop ardy. In the present circumst;nces, a ntw alte111pl is being made to invoke penal powers •1ainst all unions and workers ;nd bruk all established principle.

Irrespective of the Royal Comm ission and the deregistration proc eed in gs. the Federation and its officials wilt go about the bus1ness of fi ghtin g for the and liberties and the conditions of union members and for protection of the enwonmenl and her 1 tage. It regards thi s as the only honourable cour:e and in keep ing with tradition of

the Eureka dizgers who swore by the Southern Cross to stand truly by each other and li ght to defen d th eir rights and li bert ies. ·

It o lts upon ;lt lovers of civil liberty, democratic ri1hls, defenders of the environment ;nd ;lt workers to support if in its struule. Carr ied by a unan imous reso lution. 25th August 1981.

AuntORtSEO BY N. L GALLAGHER, GEHEJUL S£CR£TARY, ·. AND BLF, C/· TRAO£S HAU. CARt.TOH SOliTH,

VtCTORtA .lOSl.

APPENDIX 5

APPENDIX 6

SCHEDULE OF WITNESSES WHO HAVE GIVEN EVIDENCE CONCERNING BENEFITS TO B.L.F. AND OFFICIALS

Benefit

Plumbing by Conron Bros.

Plumbing by Moorabbin Plumbing

Electrical Work by Electron Electrics

Witness

Keith Wallace Con ron

Ian Wallace Tim Guil ieri

T. Gregson

Lloyd Williams

D. McKenzie

B.J. Murray

G.J. Wood

R. D. Perry

A.C. Burgess G. F. Me Kne i l

R.E. Cooen B. L. Pain

M.F. Lewis

G. Her scu

G. H. Koob

G. Rauber

Status

Managing Director of Conron Bros Pty.Ltd.

)Employees of Conron ) Bros.

Former Project Manager of Dominion Properties

Former Managing Director of Dominion

Former "building estimater" with Moorabbin Plumbing

Former Accountant with Moorabbin Plumbing

Former Manager of Moorabbin Plumbing

Manager Moorabbin Plumbing

) Plumbers employed )by Moorabbin ) Plumbing )

Director of Montvale Dev elo pmen ts

Director Hersfield Developments Corporation

Director of Electron

Former Manager of Electron

Page Reference

220-226 237-241

226-231 231-232

1034 ff.

1006 ff.

90-95

95-99

106-120

134-141

127-134 147A-148 148-149 149-151

70, 73,

llO, 884 ff.

1400 ff.

990-1006

958-962

Benefit

Electrical Wo rk by Electron Electrics

(Contd)

Electrical Work by B.C.Seymour Pty.Ltd.

Light Fittings

Joinery by Ringwood Shopfi tters

Witness

M. Baric R. Hagar

P. Mason G.H.Koob

T. Gregson

L. Williams

M.F. Lewis

D. Nord is

D.J.Denham

B.C. Seymour

R. G. Brown K.J. Barnes M. Isaacs G.C. Hoath G.F. Kurzman

G. Grey

W. H.McCulloch

M.F. Lewis

D. Norman

G. Grey

R. E. Brooks

2.

Status

)Electricians ) employed by )Electron

Do minion Properties

Dominion Properties

Montvale Developments

Director, Sapr i Constructions

APPENDI X 6

Page Reference

126-127 141-143 143-144 152-153

1034 ff.

1006 ff.

84-5

121-125

Contract Manager of 513 ff.

B.C. Seymour

Director of B.C.Seymour Pty.Ltd.

(Electricians (employed by (B.C.Seymour (

(

Projects Manager for Hersfield Developments

Director of A.D.McCulloch Pty. Ltd

Director, Montvale Developments

Chief Estimator of Montvale Developments

Projects Manager for Hersfield Developments

Secretary of Ringwood Shopfitters

339-342 342-34 2A 34 2A-344 344-346 377-387

428, 444-5 , 494-8, 516-9, 653

145-7

82-4

10 3

651

303-4

Benefit

Joinery by Ringwood Shopfitters ( Contd)

Structural Steel Frame, Plans and Fabrication

thereof

Bricklaying

Design Plans for N. Gallagher house

3.

Witness

J. McLaughlin

M.F. Lewis

B. Daly

K.J. Chivers

R.L.Ridgway

A.W. Embury

M. R. Hansen

J. Kennedy

C.R.Nicholas

J. Till i

M.F. Lewis

B. Daly

A. Picone

L. R. Thomas

Status

Employee of Ringwood Shopfitters

Director of Montvale Developments

Director of Montvale Developments

Manager of Neerod Engineering Pty.Ltd.

Former Secretary, Hansen & Yuncken

Secretary, Hansen & Yuncken

Director, Hansen & Yuncken

Accountant and Member of Yarwood Vane & Co.

Bank Officer with National Bank

Contract Bricklayer

Director of Montvale Developments

Director of Montvale Developments

Draftsman employed w i th c i v i l & c i v i c

General Manager, Civil & Civic

APPENDIX 6

Page Reference

306-7

86

291, 295, 768-9

155-9

161-2

164-173

176-181

1768-1772

1724-26

400-410

250, 252, 253,257-8, 862-4

290, 300, 768

307-313

315-321

Benefit

Carpentry by Dominion P rope rt ies

Carpentry by Grandison & Neille

Carpentry by Montvale Developments

Cool room and repairs thereto

4.

Witness

R. Stevens

H. Redpath

L. Williams

T. Greg son

M. Prentis

B. Grandison

J. Summons

M.F. Lewis

B. Daly

J. Cauchi

M. F. Lewis

B. Daly

P. Burton

A. Eccleston

F. Hunt

Status

Carpenter employed by Dominion

Carpenter employed by Dominion

Former Managing Director of Dominion Properties

Former Project Manager of Dominion

Former Director of Dominion

Proprietor of Grandison & Neille

Director of Surrey Engineering Pty.Ltd.

Director, Montvale Developments

Director, Montvale Developments

Carpenter employed by Montvale Developments

Director, Montvale Developments

Director, Montvale Developments

Manager of Burton­ Turner Coolrooms Pty. Ltd.

Sales Manager of Haden Engineering Pty.Ltd.

Former Managing Director of Hunt Refrigeration Pty. Ltd.

APPENDIX 6

Page Reference

326-334

334-337

1009

1035

1054

1233-35

1113-16

857, 859

776-7

791-2

262

291, 778-9' 786-7

350-352

353-356

359-363

Benefit

Cool room and repairs thereto (Contd)

Curtains to N. Gallagher beachhouse

Painting of N. Gallagher beachhouse

Plaster Sheets

5.

Witness

J. Hunt

I. McGrath

N. Scott

G. Grey

V. Raymond

C. Silva

B.Durbin

G. Grey

J. Mazzetti B. Daly

G. Grey

M. Lewis

C. Fellows

T. Miles

Status

Employee of Hunt Refrigeration Pty. Ltd.

Sales Manager, Haden Engineering Pty.Ltd.

Former employee of Burton-Turner

Project Manager., Hersfield Developments

Manager of Custom Furnishings Pty. Ltd.

Proprietor of Sucol Distributors Pty.Ltd.

Proprietor of B.&.R. Curtain Tracks Pty. Ltd.

Project Manager, Hersfield Developments

Contract Painter

Directo r, Montvale Developments

Project Manager, Hersfield Developments

Director, Montvale Developments

Director, Victoria Fibrous Plaster Manufacturers Pty. Ltd.

Director, T.S.&.J. Constructions Pty. Ltd.

APPENDIX 6

Page Reference

364

388-390

393-4

430, 442-3, 489, 1423

411-5

662-675

677-8

430,442, 445,479, 485,633, 1447

1118-1120

77 3

4911657

85 3

1527A-1529 1 1676-9, 1693-1703

1628-1632

Benefit Witness

Plaster G. Grey

Sheets (Contd)

Besser Blocks, G. Grey Bricks, Roof Deck and Steel Purlins

Doors and M.Latross

Windows by Nepean J.L. Beckett

Shopfitters

Bricks for N. Gallagher

Steel External Staircase for N. Gallagher

Design Plans for Wayne

Gallagher house

G. Barton

G. Grey

B. Daly

G. Grey

B. Daly

F. Dodd

M. Lewis

P. Reid

J.W.Amalaan

M. F. Lewis

6.

Status

Project Manager, Hersfield Developments

Project Manager, Hersfield Developments

Cartage Contractor

Victorian Manager, Boral Windows Pty. Ltd.

Director, Nepean Aluminium Industries Pty. Ltd.

Project Manager, Hersfield Developments

Director, Montvale Developments

Project Manager, Hersfield Developments

Director, Montvale Developments

Director, Montvale Developments

APPENDIX 6

Page Reference

473-4, 1434-5, 1626-7, 1639-45, 1705-13

488

602-6

678-682

682-694

430,433, 503,613, 614-5

764-6, 818-9

461, 1432

770-771

760

Director, Montvale 849-850

Developments

Secretary, Rocka Steel 1059/60

Secretary, Grenex Pty. Ltd.

Director, Montvale Developments

795-6

902

Benefit

Design Plans for Wayne Gallagher house

(Contd)

Witness

B. Daly

G. Grey

Recoupment of M.F. Lewis cost expended on bricks for

W. Gallagher house

Roof decking B. Daly

for Wayne Gallagher house

Steel beams B. Daly

for Wayne Gallagher house P. Reid

7.

Timber frame D.C.Weatherley for Wayne Gallagher house

B. Grollo

T .McDonald

Roof Decking, B. Grollo via Grol1o's for Wayne Gallagher W. Buenemann

Concrete and R. Wood

Labour for Concreting

B. Grollo

Status

Director, Montvale Developments

Project Manager, Hersfield Developments

Director, Montvale Developments

Director, Montvale Developments

Director, Montvale Developments

Secretary, Rocka Steel

Accountant, Canterbury Timbers Pty.Ltd.

Director, Grollo Group of Companies

Proprietor of Termac Constructions Pty.Ltd

Grollo Group of Companies

Director of Aldeck Roofing Co.

Secretary, Pioneer Concrete (Vic) Pty. Ltd.

Director, Grollo Group of Companies

APPENDIX 6

Page Reference

780

1446

276, 871-2

783-4

785

1059/60

922-3

ll69-1170, 1209

1146-7

1170-1

1224-8

797

1168, 1173-4, 1190

Benefit

Concrete and Labour fur Concreting (Contd)

Contract of Shed and Toilet

Trees and Shrubs

Witness

R. McFarlane

I. Marsh

R. Simpson

P. Hansen

M. Gardam

G. Brand

P.L.Griff

F.Keenan

D. Yau

D. Lowe

R. Walker

Steel J.Northover

Components, Reinforcing Material and Bricks

Plumbing, J. Cauchi

Elec.trical and Carpentry Work at Power St Flat B. Daly

M. Lewis

8.

Status

Driver for Pioneer Concrete

Driver for Pioneer Concrete

Driver for Pioneer Concrete

Driver for Pioneer Concrete

Driver for Pioneer Concrete

Driver for Pioneer Concrete

Deputy General Manager, Jennings Industries

Former Director of Parks and Gardens, M.c.c.

Employee of M.C.C.

Employee of M.C.C.

Former Lord Mayor of Melbourne

Former Associate Director of E. A. Watts

Carpenter employed by Montvale Developments

Director, Montvale Developments

Director, Montvale Developments

APPENDIX 6

Page Referenc e

1246-51

1252-53

1255-59

1260

1261-2

1262-2A

856-7

1562-7

1568-9

1570

1583-4

1068,1069 1075-6

792

296,809

267

Benefit Witness

Plumbing, G. Grey

Electrical and Carpentry Work at

Power St Flat

( Co ntd)

Painting at M. Hansen

Power St Flat

A. Huxham

Curtains for C. Silva

Power St Flat

Curtains at ll Lygon St, Carl ton

Perspex, Timber and Labour for BLF Green­

house

Repairs and Alterations to Shower Recess at

BLF Flat

G. Grey

c. Silva

F. Dodd

G. Pizzey

A. Noble

I.Tapsall

I. Dowsett

9.

Status

Project Manager, Hersfield Developments

Director, Hansen & Yuncken

Manager "Monash Painting"

Director, Sucol Distributors Pty. Ltd.

Project Manager, Hersfield Developments

Director, Sucol Distributors Pty. Ltd.

Director, Montvale Developments

Director, E.A.Watts Pty.Ltd.

Employee of Fletcher Watts Group

Employee of Fletcher Watts Group

Construction Super­ visor with Watts Construction Division Pty.Ltd.

APPENDIX 6

Page Reference

459

l 79

372-6

662 ff.

430, 442,

446, 480, 485, 633, 1423,1426, 1447

668, 670, 671

749-754

1292-99

1311-14

1324

1357-8

Benefit Witness

Sundry L. Hancock

Building Ma t e r i a l s to

N. Gallagher from Costains C.McCartney

L. Lo i za u

Building G.Podgornik

Materials for N.Gallagher from Podgor Constructions

Light Fittings F. Dodd at Lygon St

Apartment

B. Daly

J. Cauchi

A. Gosowski

Bricklaying at W. Dobie the Woods ide Surf Life- J. Hirt

Saving Club

Provision of Truck and Payment of Registration

Fees by Grollo to N.Gallagher

B. Daly

M. Lewis

B. Grollo

E. Shalhouv

A.Middleton

R. Grollo

10.

Stat us

Former Director of Costain Australia Limited

Yard Manager of Costains

Yardman of Costains

Managing Director of Cvetko Nominees Pty. Ltd.

Director, Montvale Developments

Director, Montvale Developments

Employee, Montvale Developments

Director, Salon of Distinction Pty.Ltd.

Contract Bricklayer

Contract Bricklayer

Director, Montvale Developments

Director, Montvale Developments

Director, Grollo Group of Companies

Officer of Motor Registration Branch

Manager, ANZ Bank, 524 Swanston St, Carl ton

Director, Grollo Group of Companies

APPENDI X 6

Page Reference

242-5

245-6

246-8

1078-80

2059-63

2065

2062-3

2064-5

1359-62

1120-28 1344

293,820

272,275, 900

1171,1214, 1242,1243

1356-7

1363-4

1283,1371

Benefit

Radial Arm Saw for N.Gallagher

Witness

T. Minett

D. Williams

H.J. Wilks

Sundry N. Keeton

Building Materials from

11.

Dillinghams to A. Weatherley N. Gallagher

R. Gussey

Various A. Pizzey

Benefits including Dog Kennel, Tomato Stakes H. Wi 1 kes

and Bait Table Fletcher Watts to N. Gallagher

Timber for A.J.Galvin

B.L.F.

R.Robinson

J. Govan

L. King

R. Sheffield

E. Doidge

P. McMahon

Status

Managing Director, Power Tools Specialist Pty.Ltd. Plant Manager for

Fletcher Watts

Former Associate Director of Fletcher Watts

Secretary, Dillingham Australia

Director, Dillingham Australia

Former General Manager, Dillingham Australia

General Manager (Operations) Fletcher Watts Group

Former Associate Director of Fletcher Watts Group

Director, A.J.Galvin Pty.Ltd.

Director, A.J.Galvin Pty.Ltd.

Driver, Maribyrnong Timber and Building Supplies

Sales Representative, Mar ibyrnong Timber

Site Co-ord ina tor A.J.Galvin Pty. Ltd.

Sa 1 esman, Maribyrnong Timber

Cartage Con tractor

APPENDIX 6

Page Reference

1309-ll

1318-22

1454-60

1349-54

1393-5

1470-72

1306

1460

183-8

190-6

197-8

198-200

201-3

203-6

206-9

Benefit

Timber for B.L.F. (Contd)

Plumbing Supp:iies to B.L.F.

Insulation Material for B.L.F.

Paint and Painting Materials to BLF off ices

Provision of Scaffolding to B. L. F.

Postage Stamps to B.L.F.

12.

Witness

D •• Matthews

P.B.Mcinerney

B. Manson

A. Pi zzey

H. Wilkes

A. Pi zzey

H.J.Wilkes

G. Allen

B. Mutimer

L. Burgess

S.J.Allen

M.R.Allen

F. Dodd

Status

Managing Director, Maribyrnong Timber and Supplies

Director, Jones B.P. Plumbing Services

Manager, Jones B.P. Plumbing Services

General Manager, Fletcher Watts Group

Former Associate Director, Fletcher Watts Group

Director, Fletcher Watts Group

Former Associate Director, Fletcher Watts Group

Victorian Manager, Cyclone Scaffolding Pty.Ltd.

APPENDIX 6

Page Reference

210-219

1135-39

1139-44

1301

1455-6

1301-2

1456

1530-36

Sales Manager, 1536-38

Cyclone Scaffolding Pty. Ltd.

Sales Representative, 1538-39 Cyclone Scaffolding Pty.Ltd.

Former employee of 1539-40

Cyclone Scaffolding Pty. Ltd.

Sales Representative, 1540 Cyclone Scaffolding Pty.Ltd.

Director, Montvale Developments 757,833

Benefit

Bricks and Bricklaying f o r Da::.. ton

Glazing for Dalton

Witness

W. Dobie

M. Lewis

B. Daly

J .C. Hough

M. Lewis

B. Daly

M. Silk

Electrical Work G.Kurzman for R.Dalton

G. Grey

D. Denham

Supply of Crane G. Grey

and reinforcing mesh to Dalton

Steel Roof M. Lewis

Decking for Dalton

Ceramic Tiles for Dalton

B. Daly

B. Daly

H. Willers

13.

Status

Contract Bricklayer

Director, Montvale Developments

Director, Montvale Developments

Secretary, Erobin Nominees Pty.Ltd.

Director, Montvale Developments

APPENDIX 6

Page Reference

1362

269,284

294,298 , 787,802, 816,848

920,921

262,271, 90 3

Director, Montvale 802

Developments

General Manager, 1064-67

Oliver Davey Glass Co.

Former employed by B.C.Seymour Pty.Ltd.

Project Manager, Hersfield Developments

Secretary, B.C.Seymour Pty.Ltd.

Project Manager, Hersfield Developments

Director, Montvale Developments

Director, Montvale Developments

Director, Montvale Developments

General Manager, A.A.Ceramic Tiles Pty. Ltd.

383-4, 386

494

515, 543-4, 568

459, 501-511, 658

873

803 -4

804-6

987-9

14. APPENDIX 6

Page

Benefit Witness Status Reference

Design Plans M. Lewis Director, Montvale 81

for Dalton's Developments

House

R. Gibbs Proprietor, Balwyn 1117-18

Drafting Services

Engineering M. Samuel Director, Samuel 1109-12

Computations Engineering(Vic)

for Dalton's Pty. Ltd.

House

Concrete and B. Grollo Director, Grollo 11 78

Labour for Group of Companies

Dalton

R. Grollo Director, Grollo 1274

Group of Companies

Bricks for M. Lewis Director, Montvale 268,1665,

M.J. Lewis Developments

B. Daly Director, Montvale 295

Developments

G. Grey Project Manager, 459

Hersfield Developments

Concrete for B. Grollo Director, Grollo 1178

M.J.Lewis Group of Companies

Bricks, B. Daly Director, Montvale 806-7

Material and Developments

Labour for N. Wallace J. Cauchi Employee, Montvale 794

Developments

Concrete for B. Grollo Director, Grollo 1178

N. Wallace Group of Companies

Design Plans A. Picone Draftsman employed 310 - 3

for House of with Civil & Civic

J. Masterson

Benefit

Pl umbing S uppli e s t o

P. Do nnelly

Co ncrete for P. Do nnelly

Design Plans f o r J.Cummins

Bricks f o r J. Cummins

Supply o f Wall Panel! i ng and Labour to

M. Greany

Co ncrete for M. Greany

15.

Witness

B.Mcinerney

P.Manson

G. Grey

B. Grollo

M. Lewis

B. Daly

M. Lewis

L. Darrell

B. Daly

B. Parry

J. Cauchi

B. Grollo

Status

Proprietor, Jones B.P.Plumbing Services

Manager, Jones! B.P.Plumbing Services

Pr o ject Manager, Hersfield Developments

Director, Grollo Group of Companies

Director, Montvale Developments

Director, Montvale Developments

Director, Montvale Developments

Director, Adrianni Pty. Ltd.

Director, Montvale Developments

Credit Manager, Presswell Panels

Carpenter, Montvale Developments

Director, Grollo Group of Companies

APPENDIX 6

Page Reference

1135-8

1139-40

512,628

1178

811-2

811

881

1100-3

788-9

1329

793

1178

APPENDIX 8

B.L.F. INQUIRY EXHIBITS

Exhibit No . Exhibit

l . Newspaper advertisement inserted in the

Melbourne Sun , 28th August 1981, under the title "B.L.F. puts its point of

view 11

2.

3.

4.

5.

5.2

6.

Commission's advertisement as to the commencing of sittings

Copy letter dated 9th September 1981, from the Acting Crown Solicitor to Mr N. L. Gallagher, with its enclosure

Document relating to procedures of the Commission

Bundle of documents produced by the Shire Secretary, Shire of Alberton. (The original rate and valuation cards were released to the Shire of Alberton, but copies are included in the Exhibit.)

Manilla folder including structural drawings of N.L. Gallagher house

Financial records and correspondence maintained by the City of Footscray relating to the matters set out in the

Summons

5

5

5

14

18

309

20

2. APPENDIX 8

Exhibit No. Exhibit Page

6.1. City of Footscray File No.280 relating

to Footscray Market Shopping Centre 369

6.2 Plan 1194/2, City of Footscray, showing

conduits and pit requested of Seymours by C i t y o f Fo o t s c r a y 3 6 8

7. Documents of the City of Footscray

relating to electrical installations 20

8(a) Box of documents produced by Chirnside

Park Shopping Centre Pty.Ltd. and Hersfield Developments Corporation Pty. Ltd. relating to electrical work done at Chirnside Park 21

8 (b) Box of documents produced by 180 Flinders

Street Pty.Ltd. relating to plumbing work done at Flinders Fair 21

8C.l Hersfield File "B.C. Seymour, Footscray

Market" 462

8C.l(a) Summary of variations on Footscray Market ProJect submitted by Seymours to Hersfield 573

8C. 2

8C. 3

Hersfield File "International Contamination"

Hersfield File "Nepean Aluminium Footscray Market"

8C.4 Hersfield File "Haden Engineering,

Par kmore"

8C. 5

8C.5(a)

Hersfield File "Sucol Distributors"

Sucol's invoice No.808 to Hersfield, 10/4/1979

8C.6 Photostat cheque butt No.433934 of

Simmons Constructions for $680 and 2 files of Hersfield re Simmons Constructions

8D.

8E.

21 Lever arch files re Hersfield Development Waverley Gardens Stage 1

Further Hersfield material produced on 17/11/1981 being Hersfield Development's Chief Estimation file re B.C.Seymour work at Footscray Market

462

462

462

462

666A

462

462

566

Exhibit No.

8F.

9.

9.2

9.12 (a)

9. 12 (b)

9.12(c)

9.12(d}

9A.

9B.

9B.l

10.

10. 2.

10.3.

11.

11. 2.

3. APPENDIX 8

Exhibit

Bundle of documents, including Murragong Nominees cheque requisition, 12/12/1979, requisitioning a cheque to L. Grollo & Co.

Documents of B.C. Seymour Pty.Ltd. relating to electrical work done since 1979 when B.C. Seymour Pty.Ltd.was opened

Job envelope containing documents relating to work done by B.C. Seymour at Yarram List of variations from B.C. Seymour or

Lane & Roux charged against Chirnside Park

Invoice No.4365 dated 26/2/1981, B.C. Seymour to Hersfield

Letter, 2/3/1981, B.C. Seymour to Hersfield

Letter dated 12/9/1979 from Lane & Roux to Gallagher

Four manilla folders of B.C. Seymour Pty.Ltd. re Deer Park

Bundle of job files of Lane & Roux(Vic.) Pty.Ltd. (now known as Merlec Pty.Ltd.) re Chirnside Park

Draft summary of variations submitted by B.C. Seymour on Chirnside Park project

Financial and accounting records of A.D. McCulloch Pty.Ltd.

Invoice of C.E.W. Pty. Ltd. to

A.D. McCulloch for light fittings ultimately installed in N.L. Gallagher's house

A.D. McCulloch's list of variations on Cranbourne Park including amounts spent on light fittings for N.L. Gallagher

Records produced by Electron Electrics

Time sheets of Electron Electrics Pty. Ltd. rework done on N.L. Gallagher's house

1410

23

341

496, 515

520

520

524

567

567

571

24

146

147A

25

142

4. APPENDIX 8

Exhibit No. Exhibit

11.3. Preliminary invoice from Electron

Electrics setting out work done at Yarram, dated 17/8/1978

12. Records produced by Conron Bros.Pty.Ltd.

12.1A. Time sheets recording work done by

Conron Bros. employees on Gallagher's house on 29th and 30th June 1976

l2.1B. Quantity sheets and labour sheets kept

by Conron Bros re work done on

N.L. Gallagher's house

12.2A. Ledger sheets of Conron Bros. showing

that Watson James paid for work done by Conron on N.L. Gallagher's house

12.2B. 2 Conron ledger cards for 7/75-6/76 in

name of Watson James and Dominion Properties

12.2D. Extract from Conran's cash receipt book for 8/76

13. Bundle of records produced by Moorabbin

Plumbing Services Pty.Ltd.

13.2. Ledger sheets of Moorabbin Plumbing

relating to Flinders Fair and Centrepoint Projects

13.3. 3 pieces of note pad in possession of

Moorabbin Plumbing

13.4. Bundle of work sheets kept by B. Pain

relating to plumbing work done on N.L.Gallagher's house at Yarram

13.5. Order dated 16/10/1978 from Lewis

(Montvale) to McKenzie (Moorabbin Plumbing) setting out detail of work required at McLoughlin's Beach plus Order 24/10/1978, from detailing work to be done 13.6. Bundle of records kept by Burgess of work

done and expenses incurred at Yarram December 1979/January 1980

13.7. Document "Yarram Report" compiled by

Burgess 7/80

996

26

229

234

234

235

235

27

135

138

114

115

132

133

Exhibit No.

14.

14.2 (c)

15.

15.2

16.

16.1 (a)

17.

18.

18. l.

18. 5.

19.

19.2.

19.3.

19.4. 19. 5.

19.6.

5. APPENDIX 8

Exhibit

Documents produced by Centrepoint Custodian Pty. Ltd.

Copy invoice Conran Bros. to Watson James (30/6/1976) for $749-40 being cost of work done by Conran Bros at

McLoughlin's Beach for Gallagher

Bundle of documents produced by Sapri Construction Co. Pty. Ltd.

Invoice 17/8/1978 Electron Electrics to Sapri Constructions Pty.Ltd. and document of variation 15/ll/1978 Sapri to Montvale

Bundle of d6cuments produced by Watson James Pty.Ltd. and Dominion Properties Pty.Ltd.

Original invoice Conran Bros. to Watson James 30/6/1976 in respect of plumbing work done at Gallagher's house

Copy plan produced from the files of Civil & Civic Pty.Ltd. of a residence for Norman Gallagher

Documents produced by W.L. Meinhardt & Partners Pty.Ltd.

Plan of structural details 14/9/1974 prepared by Meinhardt & Partners for N. L. Gallagher

Job costing card of W.L. Meinhardt & Partners re work done for N.L.Gallagher

Bundle of documents being financial records of Neerod Engineering Pty.Ltd. and Hansen & Yuncken Pty.Ltd.

Bank pay-in book, Neerod Engineering Pty. Ltd. for March 1975

Bank statement (p.l07) Neerod Engineering with A.N.Z. Bank

Sales Journal, Neerod Engineering, 4/75

Debtors Ledger Card, Hansen & Yuncken, 4/75

Neerod Engineering Schedule of Debtors Payments, 3/75

28

226

29

86

30

237

30

31

158

925

33

170

174

169

169

169

6. APPENDIX 8

Exhibit No.

19. 7.

19.8.

Exhibit

Ledger Statement in accounts of Neerod for A.J. Day

Monthly statement from Neerod in name of A. J. Day

20. Accounting records produced by

171

173

A.J. Galvin Pty. Ltd. 35

21. Box of documents produced by Maribyrnong

Timber & Building Supplies Pty. Ltd. 36

21.2. Bundle of copy invoices from Maribyrnong

Timber for month of 7/75 203

21.4. Bundle of copy delivery invoices kept

by Maribyrnong Timber for 10/75 200

21.6. Bundle of copy invoices Maribyrnong

Timber for 12/75 206

21.9. Bundle of invoices from Maribyrnong

Timber to Galvin from 4/75 to 8/76 219

22. Bundle of documents produced by Denates

December Nominees Pty.Ltd. relating to the records of Ringwood Shopfitters 37

22.1. Invoices submitted by Ringwood Shopfitters to Montvale and list of payments received 305

22.2(a). List of aluminium fittings used by Ringwood Shopfitters at Yarram 305

22.2 (b). List of employees of Ringwood Shopfitters who worked at Yarram witth their timesheets 305

22.2(c) Job Cost Sheet of Ringwood Shopfitters relating to work done at Yarram 306

22.2(d) Bundle of Ringwood Shopfitters work orders and material invoices relating to job at Yarram 306

23. Two bundles of documents from Registrar

of Titles 41

23.1. Certificate of Title Volume 8568

Folio 726 (Lot 1 on Plan of Subdivision) 56

23.2. Instrument of Transfer re Lot 1 - F751723

(dated 27/6/1975) 56

Exhibit No.

23. 3.

23. 4.

23. 5.

23. 6.

23.7.

23.8.

23.9.

23.10.

23.11.

23.12.

23.13.

7. APPENDIX 8

Exhibit

Certificate of Title Volume 8568 Folio 724 (Lot 4 on Plan of Subdivision)

Instrument of Transfer re Lot 4; G239729

Instrument of Transfer re Lot 4; N.L. Gallagher to N.L. Gallagher and Patricia M. George, G670988 Certificate of Title Volume 8568

Folio 723 (Lot 3 on Plan of Subdivision)

Instrument of Transfer re Lot 3; No. F700719 (7/5/1975)

Certificate of Title Volume 9367 Folio 574 (Consolidation of Lots 1, 3 and 4)

Instrument of Transfer 6/10/1980 from N.L. Gallagher and P.M. George to Undertowers Pty. Ltd.- No.Jl84419; $25,000

Certificate of Title Volume 8568 F o 1 i o 72 5 ( r e Lo t 5 )

Instrument of Transfer 8632309; $2,000; 7/8/1979 (re Lot 5)

Certificate of Title Volume 8289 Folio 975; land of W. Gallagher; Lot 6 on Plan of Subdivision

Certificate of Title Volume 7881 Folio 036 being property of which N.L. Gallagher and Jean Iris Gallagher are joint registered proprietors

57

57

57

57

57

57

58/59

58/59

58/59

60

1146

23A. Certificate of Title Volume 8681

24.

25.

25. 1.

Folio 115 re premises 28/177 Power Street and mortgage documents re mortgage from George to Gallagher 1675

Letter Neville Bird & Clark 22/9/1981 with financial documents of Hunts Refrigeration

Bundle of documents from Montvale Developments

Photostat extracts from Montvale's General Journal relating to the accounting for curtains at Lygon Street apartment

42

42

834

E xh i bit No.

25.2.

25. 13.

25A.

25A. l.

25A.2.

25A.3.

25A.4.

25A. 5.

25A.6.

25A. 7.

25A.8.

25A. 9.

25A.10.

25A.1l.

25A.12.

8. APPENDIX 8

Exhibit Page

Invoice from Brick and Pipe Industries to Montvale re supply of bricks to

M. Lewis at Broadmeadows 1665

Two invoices from Joe Tilli to Montvale in respect of brickwork 303

Further bundle of documents from Montvale 406

File entitled "N.Gallagher 2" setting out invoices from Tilli to Montvale for brickwork done at McLoughlin's Beach 409

File entitled "W. Gallagher 3" containing progress claims by Tilli to Montvale 410

Schedule of Benefits to BLF officials etc. submitted to Commission by Montvale 763 Manila folder marked "N.Gallagher l" produced by Montvale re supply of bricks

to N.L. Gallagher 766

File entitled "N.Gallagher 4" submitted by Montvale re staircase provided by Rocka Steel Co. 770

File produced by Montvale entitled "N.Gallagher 8" re painting of house by J • Ma z e t ti 7 7 3

File entitled "N.L. Gallagher 9" produced by Montvale re carpentry work done by Grandison & Neille 776

File produced by Montvale entitled "N. Gallagher ll" re carpentry work at McLoughlin's Beach and accommodation 779

File marked "W.Gallagher l" re house design 780

File, produced by Montvale, marked "W.Gallagher 2" re recoupment of cost of bricks 781

File, produced by Montvale, entitled "W.Gallagher 4" re steel roof decking 783

File, produced by Montvale Developments, entitled "W.Gallagher 5" relating to steel beams by Rocka Steel 785

Exhibit No.

25A.l3.

25A.l4.

25A.l5.

25A.l6.

25A.l7.

25A.l8.

25A.l9.

25A. 20.

25A. 21.

25A. 22.

25A.23.

25B.(F.l)

25C.

25D.

9. APPENDIX 8

Exhibit

File produced by Montvale, marked "W. Gallagher 8" re carpentry work done for W. Gallagher

File produced by Montvale entitled "R. Dalton 1" re supply of bricks

File produced by Montvale entitled "M. Greaney 1" re delivery of panels

File produced by Montvale entitled "M. Greaney 2" re provision of labour

File marked "R. Dalton 2" produced by Montvale re bricklaying at Rye

File produced by Montvale marked "R. Dalton 3" re glazing for Dalton

File produced by Montvale marked "R. Dalton 4" re roofing supplied to

Dalton

File produced by Montvale marked "R. Dalton 5" re tiles provided to

Dalton

File produced by Montvale marked "P. George 3" relating to labour done

by P. Cauchi at Power Street

File produced by Montvale marked "Woodside SLSCl" relating to bricklaying by Dobie & Banks

File produced by Montvale marked "B. Cummins 1" re bricks supplied to B. Cummins

Invoice dated 26/ll/1979, No. 423, Montvale to Forest Hill Heights Pty. Ltd. and remittance advice 5/12/1979 in respect of invoice

Invoice from Montvale to Camilleri 30/9/1981 and corresponding bank pay-in slip

Correspondence between Hersfield and Montvale re Cranbourne Shopping Centre project

786

787

788

788

802

802

80 3

804

809

810

811

835, 864

855

855

Exhibit No.

25E.

25F.

25F. (part of)

25G.

26.

26 .1.

26.2.

26. 3.

26. 4.

26. 5.

26.6.

26.7.

26.8.

26.9.

10. APPENDIX 8

Exhibit Page

Montvale documents re the accounting to N. Wallace for bricks delivered in 1979 857

Photostat of cash receipt Folio 90, 14/12/1979, being part of Montvale's Unit Trust Cash Receipts and Payments Journal, showing receipt from L. Grollo & Co. of $11,000 873

Photostat copy of cash receipts Folio 88, 7/12/1979, being part of Montvale Unit Trust cash receipts and payments journal showing receipt from Forest Hi 11 Heights Pty. Ltd. for $13,395 936

Photocopies of Montvale private ledger for July 1980-March 1981; photocopy of page 6 of the Montvale Journal in

respect of entries for February 27, 1981 and photocopies of the building construction costs of Montvale for the period July 1980-June 1981 2129

Financial records from Grollo Group of Companies

File, produced by Grollos, containing papers relating to the transfer of truck IDF169 to N.L.Gallagher and copies of registration certificates

File, produced by Grollos, re Aldeck Roofing and Dyers Transport

File, produced by Grollos, and marked "Canterbury Timber"

File, produced by Grollos, entitled "Gallagher receipts on account"

Grollo file marked "Termac Constructions"

Grollo file marked "Bob Dalton"

File, produced by Grollos, marked "M. Lewis"

File, produced by Grollos, marked "Pat Donnelly"

File, produced by Grollos, marked "Wayne Gallagher"

42

1244

1288

1288

1203 / 4

1288

1288

1288

1288

1288

Exhibit No .

26.10 .

26 . 11.

26A.

26B.

26C .

26C . (part of)

26D .

26E.

27.

28 .

29 .1.

29 . 2.

29. 3 .

30.

31.

32 .

33.

34.

11. APPENDIX 8

Exhibit

F i le, produced by Grollos, marked " Gallagher/Pionee r Concrete"

Working Papers of Touche Ross & Partners dated 24th and 25th November 1981 disclosing Gallagher as a sundry debtor to L. Grollo & Co. in the sum

of $4,000

Pay-in book L. Grollo & Co. Pty. Ltd.

from 6/12/1979

Pay-in book Grofarm Pty. Ltd . from 12/4/1980

Cheque dated 16/10/1980 from Grofarm Pty . Ltd. to M.R . B.

3 additio nal cheques drawn by Grollos in favour of M.R.B.

Grollo & Co. Pty. Ltd. Cash Receipts

1288

2746

1238

1238

1245

1363

Book 1366

5 sheets of photocopies of cheque butts from Grofarm P ty. Ltd. and Reblco Pty. Ltd. 13 71

Statement of Claim and other documents filed in F.C. Action V23 of 1981 49

Plan of Subdivision of McLoughlin ' s Beach Township 56

Certificate of Incorporation of Undertowers Pty . Ltd . dated 11/6/1980 58

Notification of registered office of Undertowers Pty. Ltd. 9/6/1980 58

Particulars of Directions of Undertowers Pty . Ltd. 8/9/1980 58

2 photographs of N.L. Gallagher house at McLoughlin's Beach 126

1 photograph of garage in N.L. Gallagher house 126

Photograph of Wayne Gallagher's house 128

Police statement made by Keith Conron 239

Statement of witness Stevens dated 21/9/1981 334

Exhibit No.

35.

36.

37.

37A.

37B.

38.

39.

40.

41.

41A.

41B.

41C.

410.

41E.

41F.

42(F.l)

12. APPENDIX 8

Exhibit Page

Police statement of Harold Redpath 29/9/1981 33 8

File of documents produced by Burton­ Turner Coolrooms Pty.Ltd.

File of documents produced by Haden Engineering Pty. Ltd.

Financial records produced by Haden Engineering Pty. Ltd.

File entitled "outstanding debts" produced by Haden Engineering Pty.Ltd.

Photograph of bungalow at Gallagherrs house

Photograph of coolroom and outbuilding at N.L. Gallagher's house

Working records and handwritten quote by V. Raymond re curtains for

N. L. Gallagher

Quote of Sucol Distributors Pty. Ltd. re curtains for N. L. Gallagher

A list of required drapes given by Grey to Silver (original of Exhibit 41)

Handwritten quote of Silver retained on his own file

2 cheques dated 4/6/1979 and 30/6/1979 paid by Hersfield to Sucol for $2,000 and $3,643 respectively

Sucol quote, 6/10/1980, for curtains at N.L.Gallagher's Lygon Street apartment

Order Form, No.l595, Montvale to Sucol, dated 6/11/1980, for supply of curtains etc. to N.L. Gallagher's Lygon Street apartment

Copy invoices Sucol to Montvale dated 18/11/1980 and 27/11/1980 for $3,644 and $118 respectively

Bundle of delivery manifests dated 29/11/1979 and 4/12/1979 showing deliveries of material made by Mr. Latross with corresponding accounts

351 /2

354

35 7

357

383

383

466

466

662

664

666A

670

671

671

605

Exhibit No.

4 2A ( F .1)

42B(F.l)

42C(F.l)

42D.

42D.l.

42D. 2.

42D.3.

42D.4.

42D.5.

42D.6.

43.

44.

45.

46.

47.

13. APPENDIX 8

Exhibit Page

Bundle of documents containing Invoice 26991, 29/11/1979 from Cyclone KM Windows with attached order 2053 from Nepean Aluminium Industries and

delivery manifest No.31737 616

Invoice V27340, 29/11/1979, from Cyclone KM Windows to Nepean Aluminium 6 16

Invoice V28579, 29/1/1980, from Cyclone KM Windows to Nepean Aluminium with

attachments 616

File of documents re transactions between Nepean Aluminium and Boral Windows from November 1979 to present 680

File of documents being the originals of documents in Exhibit 42 680

Originals of documents contained in Exhibit 42A 680

Originals of documents contained in Exhibit 42B. 680

Originals of documents contained in Exhibit 42C. 680

Order No.2038 of Nepean Aluminium on Cyclone KM Windows Pty.Ltd. dated 19/11/1979 680

Order No.2035 of Nepean Aluminium on Cyclone KM Windows Pty. Ltd. dated 9/11/1979 680

Documents produced by Australian Basic Design and Drafting Service 796

Financial documents and correspondence re Wayne Gallagher produced by S.E.C. Credit Union Co-op. Ltd. 796

File of documents produced by Pioneer Concrete (Vic.) Pty. Ltd. 797

Bundle of documents including cheque butts etc. re "back pay" payments produced by Hersfield Developments Pty. Ltd. 798

Summary of Montvale's "Construction Management Agreements" finalized with B.L.F. 820

14. APPENDIX 8

Exhibit No. Exhibit Page

48. Bundle of valuations from Valuer

General's office 92 0

48.1. Valuation report of Valuer General of

land and improvements at Lots 1, 3 and

4 Charleton Street, McLoughlin's Beach 1 326

48.2. Valuation report of Valuer General re

land and improvements of Lot 6 Cameron Street, McLoughlin's Beach 1327

48.3. Valuer General's valuation of Lots 18

and 19, McLoughlin's Road - Lewis' land 132 7

48.4. Valuer General's valuation of Lot 6

Government Road - Seaward Street, McLoughlin's Beach- Masterson 1327

48. 5. Valuer General's valuation of Lot 3

Government Road - Seaward Street, McLoughlin's Beach -A. Gallagher 1327

48.6. Valuer General's valuation of Lot 5

Charleton Street, McLoughlin's Beach -N. L. Gallagher 1328

48. 7. Valuer General's valuation of Lot 18

Nero Avenue, Rye- P. Dalton 1329

48.8. Report and valuation from the Valuer

General's Department concerning land and premises situate at and known as 14 Glasgow Avenue, Reservoir 2699

49. Three invoices produced from the

records of Erobin Nominees plus a statement from Montvale Developments Pty. Ltd. 921

50.1. Shire of Flinders building permit

records re Lot 80 Nero Ave, Rye 922

50.2. Septic tank permit document records

re Lot 80 Nero Ave, Rye 922

50. 3. Shire of Flinders garage building

permit records re Nero Ave, Rye 922

50.4. Rate and Valuation records (Flinders

Shire) re Nero Ave 922

51. Documents produced by Canterbury

Timbers Pty. Ltd. 923

Exhibit No.

51.1.

51.2.

51. 3.

51. 4.

52.

52. 1.

52. 2.

52. 3.

52.4.

53. 1.

53. 2.

54.

55.

56.

57.

58.

15. APPENDIX 8

Exhibit

Three invoices produced by Canterbury Timbers Pty. Ltd.

Debtors card (Canterbury Timbers) re L. Groll o & Co.

Cash receipts sheets of Canterbury

923

923

Timbers 923

Bank records of Canterbury Timbers 923

File of documents produced by A.A. Ceramics Pty. Ltd. 988

Schedule of jobs done in 1979 by

A.A. Ceramics for Montvale 988

Photocopies of ledger sheets produced by A.A. Ceramics showing Montvale payments 989

Bundle of photocopy invoices and credits produced by A.A. Ceramics re Montvale transactions 989

Photocopies of bank deposits re payments received and credited to Montvale account

Bundle of documents re Norm Gallagher produced by Rocka Steel

Bundle of documents relating to B.L.F. produced by Rocka Steel

Oliver Davey invoice to Montvale Developments No.l0ll43

Invoice Brick & Pipe Industries No. 429997 to Montvale, l/8/1980

Structural details and computations in respect of premises at Nero Avenue, Rye, prepared by Samuel Engineering P t y . Ltd • in 9/7 6

Copy affidavit sworn by Samuel in action between Retail and Commercial Properties Pty.Ltd. v. H.S. Commercial Developers

Bundle of documents produced by Surrey Engineering Pty. Ltd.

989

1059-60

1059-60

1065

1100

llll

1113

1114

16. APPENDIX 8

Exhibit No. Exhibit Page

59. Job Book of Balwyn Drafting Services to

July 1976; negative of house plan for

house at Lot 272 Nero Avenue, Rye, and

account card and pay-in book 1117

60. File of Woodside Surf Life Saving Club

containing building accounts and receipts together with President's aide memoire 1127

61. Bundle of copy invoices of William

Pearce & Sons re goods supplied to Montvale 1129

62. Invoices and associated documents

produced by Trimview Timber and Hardware Pty. Ltd. re the purchase and supply of a Robin Hood rangehood in 10/1978 1133

63.1. Book of copy invoices from B.P.

Plumbing Services containing Invoice 5381 dated 30/11/1980 1140

63.2. Book of copy invoices from B.P.

Plumbing Services cont ining Invoice 5523 dated 23/2/1981 1141

63.3. Invoice 11/10/1980 No.31932 from

Rayjein Industries to B.P. Plumbing Services 1142

64. Invoices, payment slips and bank slips

of Termac Constructions Pty.Ltd. 1147

65.1. Account card of Rosedale Glass entitled

"Ringwood Shop Fitters" 1150

65.2. Invoice book of Rosedale Glass 1150

66. Cancelled invoice from Aldeck Roofing

Co. to Montvale Developments, 12/10/1970, for $1,925-15 together with handwritten list given by Daly 1227,

to Aldeck 1228

67. Bundle of copy statements and invoices

re delivery of bricks produced by Glen Iris Bricks 1233

68. Two invoices dated 20/2/1979 relating

to carpentry work at McLoughlin's Beach by Grandison & Neille 1235

Exhibit No.

69 .1.

69.2.

69. 3.

69. 4.

69.5.

69.6.

69.7.

69.8.

69.9.

70A.

70A. l.

70A. 2.

70B.

7 OB. l.

17. APPENDIX 8

Exhibit Page

Bundle of documents relating to transactions between Brick & Pipe Industries and Montvale Developments between 1976 and 1981 1236A

Bundle of documents re transactions between Brick & Pipe Industries, P. George, McMahon, Wallace, Dalton and Lewis 1236A-7

Bundle of documents re Brick & Pipe Industries and Gregson 1237

Bundle of documents re Brick & Pipe Industries and H.S. Constructions Pty.Ltd. 1237

Bundle of documents re Brick & Pipe Industries and Lloyd Williams 1237

Bundle of documents re Brick & Pipe Industries and Dominion Properties Pty. Ltd., Dodd, Grey and Murragong Nominees Pty. Ltd. 1237

Bundle of documents re Brick & Pipe Industries and Grollo 1237

Bundle of documents re Brick & Pipe Industries and Hersfield 1237

File of sundry documents produced by Brick & Pipe Industries 1237

Bundle of documents produced by Fletcher Watts re the Collins Place project 1296

Requisition order, purchase order, delivery note and invoice re supply of flexiglass in 2/1981 1296

Bundle of documents produced by Fletcher Watts in relation to supply of

Flexiglass and timber in October and November 1980 1299

Documents produced by Fletcher Watts re World Trade Centre project 1303

Order book containing copy order forms P.P.A2401-2500 1303

E xh ibit No.

708. 2.

708.3.

71.

72.

73 .1.

73. 2.

73. 3.

73.4.

73. 5.

73.6.

7 3. 7.

73. 8.

73.9.

74.

75.

18. APPENDIX 8

Exhibit

Bundle of orders and invoices relating to materials o rdered by Fletcher Watts from A.G . Coombs Pt y .Ltd. and Monfax Pty. Ltd. in 8/1979

Invoice of Power Tool Specialists Pty. Ltd., No.12392, and related documents re purchase of a power saw but noted

as repairs

Order 2 445 Watts Constructions to Power Tool Specialists Pty.Ltd., dated 16/8/1979, re radial arm saw and

1303

1305

invoices from P.T.S. to Watts 1310

Two invoices Presswell Panels to Montvale 12/1977 and 8/1978 1329

Invoice of Bowen and Pomeroy, 8/7/1976, to Dil1inghams with attached order 1351

Invoice of Bowen and Pomeroy, 13/10/1975 to Dillinghams with attached order 1351

Invoice Gunnerson & Nosworthy to Di 11 inghams, 10 / 12 / 1975, re timber 1352

Invoice George Tolhurst Pty.Ltd. to Dillinghams, 20 / 11 / 1975, re canary wire 1352

Purchase order from Dil1inghams to Sussex Timber & Trading Co., 27/10/1975 1353

Purchase order from Dillinghams to Renhurst Industries, 18/9/1975, re sisalation 1353

Order form, 10 / 7 / 1975, Dillinghams to Sussex Timber 1353

Invoice Sussex Timber to Dillinghams, 21 / 8 / 1975, re plywood 1353

Invoice Bowen and Pomeroy to Dillinghams, 10/4/1975 1353

Documents produced from the office of the Industrial Registrar relating to the B.L.F. 1355

M.R.B. documents re motor vehicle IDF 169 1357

Exhibit No.

76.

77.

78.

79.

79.1.

79.2. 79. 3.

79A.

79B.

79C.

79D.

79E.

79F.

79G.

79H.

19. APPENDIX 8

Exhibit

Copy letter from Pavlides' solicitor to Hersfield 3/1980

Copy ledger sheets W. Tolson Pty.Ltd. No.3136 with invoice from Maxwells Electrical Retailers re T.V. set for

1391

$399 1395

Photocopy of a receipt dated 24/12/1979 from Grey to N.L. Gallagher 1417

File of C.B.A. Victoria Street, re Undertowers Pty.Ltd., N.L. Gallagher and P.M. George 1465

C.B.A. bank statement for Undertowers Pty'.Ltd., Account No.l09311 1462

C.B.A. bank statement of N.L.Gallagher 1463

Bundle of documents in Account No.109346 re P.M. George 1463

Account of B.L.F. Loy Yang Repayment Fund 1591

Account of B.L.F. at Commonwealth Savings Bank entitled Mortuary Benefit Fund 1591

B.L.F. (Vic.Branch) General Working Fund account at Commonwealth Savings Bank

B.L.F. Federal Working Account

1591

maintained by Commonwealth Savings Bank 1591

Vouchers and Statements kept by Commonwealth Bank re B.L.F. (Vic.Branch) Working Fund and general account 1592

Vouchers maintained by Commonwealth Savings Bank, Victoria Street Branch re account of P.M. McMahon No.23287 1652

2 cheques drawn by P.M. McMahon on account 063008 at Commonwealth Bank, Victoria Street Branch for $4,000 and $3,000 in 8/1981 1652

Vouchers maintained by Commonwealth Savings Bank, Victoria Street, in Account No.500976 in name of N.L. Gallagher 1652

20. APPENDIX 8

Exhibit No. Exhibit Page

79J. Vouchers maintained by Commonwealth

Savings Bank, Victoria Street Branch re Account No.5000012 in name of B.L.F. 1652

79K. Certificate of Interest Bearing Deposit

by N.L.Gallagher dated 29/11/1977 together with "pay in slip" and withdrawal notice of that Deposit on 7 /7 /1 9 8 0 1 6 7 4

79L. Certificate of Term Deposit by

N.L.Gallagher dated 9/7/1980 together with "pay in slip" and notice of

withdrawal of 13/4/1981 1674

79M. Letter dated 4/2/1982 from Manager

Commonwealth Savings Bank, Victoria Street Branch in response to Commissioner's request 1783

79N. Letter dated 22/2/1982 with enclosures

from Acting Manager, Commonwealth Savings Bank, Victoria Street Branch re Builders Labourers Federation Long Service Leave Accounts 2508

790. Vouchers produced from the Victoria

Street Branch of the Commonwealth Savings Bank account in the name of N. L. Gallagher No. 5001066 2699

79P. Vouchers produced from the Commonwealth

Savings Bank, Victoria Street Branch, in the name of N.L. Gallagher No.500976 2699

80.1. Company file of Undertowers Pty.Ltd. 1489

80.2. Deed of Indemnity from N.L. Gallagher

to Undertowers Pty. Ltd. 1490

81. Audit files prepared by Pratt Peterson

for B. L.F. 1508

81.1. Audit files prepared by Pratt Peterson

for Victorian Branch of B.L.F. 1540

82. Bundle of files maintained by Pratt

Peterson for purposes of preparing tax returns for B.L.F. officials 1509

83. Statement addressed by Greany to the

Commission 1519

Exhibit No.

84.

85. 1.

8 5. 2.

86.

86. (part of)

86. (part of)

8 7. 1.

87. 2.

87. 3.

88.

88A.

88B.

sse.

88D.

21. APPENDIX 8

Exhibit Page

Statement made to the Commission by Wallace and its attachments 1521

Photograph of A.R. Gallagher's house at McLoughlin's Beach 1526

Photograph of J. Masterson's house at McLoughlin's Beach 1526

Ledger cards, invoice book, cash books of Victorian Plaster 1528

2 invoices to Victorian Plasterers from Australian Gypsum plus the cash receipts and payments book of Victorian Plasterers 1677

Cheque drawn by Victoria Fibrous Plasters Manufacturers Pty.Ltd. dated 3/9/1980 in favour of G. Grey 1694

Delivery dockets of Cyclone Scaffolding Pty. Ltd. 1530

Return dockets of Cyclone Scaffolding Pty. Ltd. 1530

Master job ledger of Cyclone Scaffolding Pty. Ltd. 1530

Bundle of correspondence between B.L.F. and National Mutual re establishment of Superannuation Fund 1555/6

Letter from the National Mutual Life Association of Australasia Ltd. dated 18th March 1982 setting out particulars of contributions made to the

Superannuation Fund by the B.L.F. 2700

Letter dated lst April 1982 from National Mutual to this Commission setting out details of contributions made by the Federation to the

Superannuation Scheme 2830

Letter dated 8th April 1982 from National Mutual to the Commission itemising contributions made by the Federation and its Branches to the Fund 2830

Bundle of correspondence passing between the Federation and Mr. Harry Giesen of the National Mutual in April and May 1981 2846

22. APPENDIX 8

Exhibit No. Exhibit Page

88E. Copy Trust Deed between B.L.F. and

National Mutual relating to Superannuation Fund established by the B.L.F. 2858

88F. National Mutual proposal for Managed

Fund Policy 2858

88G. Booklet entitled "Superannuation Fund" 2858

89.1. "Age" advertisement, 12/5/1981, re

monthly branch meeting of B.L.F. 1575

89.2. "Age" advertisement, 14/7/1981, re

monthly branch meeting of B.L.F. 1576

90. Report of General Secretary of B.L.F.

to members dated September 1981 1577

91. Affidavits of G.J. Capogreco,

6/10/1981, and their attachments 1579

92. Subpoena demanding the attendance

of P.M. George 1586

93. Copy subpoenaes served on P.J. Redlich

and R. F. Betts 1620

94. Cheque butt of T.J.&.S.Constructions

Pty. Ltd. corresponding with cheque delivered to Victorian Fibrous Plaster on 1632

95. Photograph of Mrs. P.M. George 1644

96. Statement made and read to Commission

by N. L. Gallagher 1659

97.1. Deed of Trust made between

Peter Joseph Redlich and Norman Leslie Gallagher dated 8/9/1980 1692

97.2. Deed of Trust made between

Ross Frederick Betts and Norman Leslie Gallagher dated 8/9/1980 1692

98. Deed of Settlement dated 9/9/1980

establishing the Norman Gallagher Family Trust 1693

99. File of Cedric Ralph Gorman & Dawson

re George and Gallagher to Undertowers Pty. Ltd. 1714

Exhibit No.

99. (part of)

100.

101.1.

101.2.

101.3.

101.4.

101.5.

102.

103.

104.

105.

106.

107.

23. APPENDIX 8

Exhibit Page

Letter from Jean Gorman to the Crown Solicitor dated 18th February 1982 2508

Extract produced by National Bank relating to history and details of bank cheques 601 and 777; together with typical application form for

bank cheque 1726

B.L.F. membership ticket issued to John Haddon 1728

Receipt issued by B.L.F. to S.L. Beggs, 25/9/1981 l733A

2 B.L.F. membership tickets issued to B.& .s. Klaster 1741

Receipt issued by B.L.F. to Schraver for B.L.F. membership dated 19/10/1981 1752

Bundle of receipts given to witness Zagni by B.L.F. 1796

Site instruction report from Evans to Schraver 14/4/1981 together with copy letter of apology from Hany Group to Lewis of B.L.F. 1749

Photocopy of P417 of the Trust Account Ledger maintained by Yarwood Vane & Co. in the name of the M.B.A.V. Tender

Registration Service and Pages 161 and 162 of cash book of Yarwood Vane 1772

Photocopies of Pages 169 and 170 of Yarwood Vane cash book in respect of period February 1975 1772

Form of Application for membership of B.L.F. as prescribed by Federation's Rules

Details of B.L.F. memberships effected

1794

by Warwick Concrete Pty. Ltd. l802A

Correspondence between Target and Myers of the one part, and Brownbuilts Ltd. of the other, between September and December 1981, together with 4 receipts

issued by B.L.F. in respect of union dues paid for 4 Brownbuilt employees 1854

24. APPENDIX 8

Exhibit No. Exhibit Page

108. Cheque drawn by Mrs. A.D. May dated

2/12/1980 on C.B.A. Bank at Mooroolbark and transfer from A.N.Z. Bank to C.B.A. Bank of $76,036-75 on 28/11/1980 1917

109. Cheque butts of Perry Johnson Beardmore

and Wilton dated 8/11/1974 and 15/11/1974 for $5,000 and $10,000. Also ledger card of same firm revealing payments of those sums; diary entry in Wilton's diary for 8/11/1974 1923

110.1. Undated agreement between Victorian

Trades Hall Council and Riddell Exhibition Promotions 1936

110.2. Receipt from B.L.F. dated 20/8/1981

for monies paid to "join up" cleaners

at Exhibition Building 1937

111. Correspondence of October 1981 between

Reid Wood and Land Securities Aust. Pty.Ltd. 1973

112. Disputes settlement agreement 11/1981

and decision of Victorian Building Industry Disputes Board re claim for re-instatement of 2 men put off by Reid Wood 1989

113. Memo of Agreement between N.L.Gallagher

on behalf of B.L.F. and Land Securities dated 25/11/1981 1990

114. Extracts of evidence given by Ekberg

to Industrial Registrar in 1977 2000

115. Certified copy of B.L.F. rules produced

from office of Industrial Registrar 2012

116. Correspondence passing between Orinda

Associates Pty.Ltd. and Downards in 11/1980 re movement of equipment into Wentworth Hotel 2041

117. Letters of resignation written to

B.L.F. resigning B.L.F. membership of Downards employees 204 3

118. Bank documents produced from the

custody of the Commonwealth Bank of Australia re Canberra transactions 2046

Exhibit No.

ll8A.

118.1.

119.1. 119. 2 .

120. l.

1 20.2.

120.3.

120.4.

120. s.

121. l.

121. 2.

122.

123.1.

123. 2.

25. APPENDIX 8

Exhibit Page

Bank documents in respect of B.L.F., South Australian Branch, produced from the custody of Commonwealth Bank 2508

Cheque drawn by B.L.F. payable to cash dated 10 / 2 / 1981 for $6,000 2315

M.B.A. v. copyright form of sub-contract 2048

Watts Construction Pty. Ltd. sub-contract agreement 2048

Invoice 2908 dated 22nd September 1980 from Helmys Pty. Ltd. to Montvale 2067

Invoice 2898 dated 2nd October 1980 from Helmys Pty. Ltd. to Montvale 2067

Receipt 1017 dated 6th November 1980 Helmys to Montvale Developments 2068

Pay-in book of Helmys showing Montvale cheque paid into Helmys bank account 2068

Cheque No.5780 in the sum of $1,786 dated 5th November 1980 drawn by Montvale Developments in favour of Helmys 2508

Photograph of concrete being rectified after stoppage of pour on the Sydney International Centre on the 24th July 1980 2144

3 photographs taken on 30th July 1980 showing damage done by members of the B.L.F. by tramping through concrete at the Sydney Entertainment Centre 2146

Pamphlet authorised by New South Wales Secretary of the B.L.F. headed "Stocks and Holdings" 2159

Proposal schedule dated 12th June 1981 signed by N.L. Gallagher in respect of house and contents at McLoughlin's Beach 2168

Superseded policies in respect of building and contents at McLoughlin's Beach dated respectively 9th June 1976 and 14th September 1976 2168

Exhibit No.

123.3.

123.4.

124.

125.1.

125. 2.

125. 3.

126.

127.

128.

128A.

12 9. l.

129.2.

130.

26. APPENDIX 8

Exhibit

Policy of September 1980 in respect of personal effects and contents at premises in Lygon Street, Carlton, in the name of N.L. Gallagher

Extracts from the files of South British Insurance Co. with regard to the insurance of W. Gallagher's premises at McLoughlin's Beach including a proposal form dated 1/10/1980 and a further proposal

form dated 1/4/1981

Photocopy Trust Account cheque drawn by Schneider and Semple for $14,000 payable to B.L.F., drawn 21/7/1980, together with receipt issued to Rice Marketing Board

Computerized accounting records re A.C.T. Branch of B.L.F.

General Journal of A.C.T. Branch of B.L.F.

Working file of B.L.F.'s Canberra auditors

Cheque dated 23/3/1981 from B.L.F. to P. Coward & Associates for $64,000

File of Pamela Coward & Associates re B.L.F. (A.C.T. Branch) investment transactions

2 cheques for $500 and $375 paid by

B.L.F. to C. Holden in 11/1980 and

3/1981

Letter dated 11th August 1980 from P.J. O'Dea to Mr. W.L. Hall and

2 letters dated 21st April 1981 from O'Dea to Messrs. Hall and Daly re

payments of back pay

Agreement between Able Landscaping and B.L.F. 26/3/1980

Agreement between Able Landscaping and A.w.u. 26/3/1980

Copy of advertisement in Canberra Times 26/2/1982 advertising sittings of Commission

2168

2699

2198, 2199

2203

220 3

220 3

2234

2239/41

2255

2508

2268

2268

2272

E xh i bit No.

131.

132.

133.1.

133.2.

133.3.

134.

135.

136.

137.

138.

139.

140.

141.

27. APPENDIX 8

Exhibit

2 invoices numbered 133353, Lehman Tiles to P.D.C. and debtor's ledger of Lehman Tiles

Sample of quarry tile delivered by Lehman Tiles to O'Dea

Copy invoice 21554, 20/6/1980, Tiles & P.C.'s Pty.Ltd. for $320-33

2 statements for June and July 1980 from Tiles & P.C.' s to P.D.C.

Payment advice for $320-33 dated 26/6/1980 from P.D.C. to Tiles & P . C. ' s P t y. Ltd.

Bundle of Burns Philp "ledger cards" in name of "Kingston Book Shop" relating to B.L.F. (A.C.T.) transactions

Letter dated 11th June 1981 from L.W. Contracting to P.J. O'Dea

Receipts issued by B.L.F. (A.C.T. Branch) in favour of L.W. Contracting in the sum of $15,289

Photocopy of group certificates of the witness, Radovanovic, and cheque drawn by B.L.F. in his favour for

$1,170

Cheque drawn by B.L.F. (A.C.T. Branch) in favour of W. Selway for $1,902-44

Cheque drawn by B.L.F. (A.C.T. Branch) payable in favour of Mr. B. Selway

dated 15th October 1981 in the sum of

$1,902-44

Cheque dated 23rd October 1981 drawn by the B.L.F. in favour of

D. Stevanovic for $219-52

Letter from L.W. Contracting to Detective Flentjar dated 28th February 1982 enclosing 9 photocopy group certificates being the group

certificates of L.W. Contracting employees on National Gallery site

2297

2301

2303

2303

2303

2321

2345

2348

2350

2351

2351

2353

2354

28. APPENDIX 8

Exhibit No. Exhibit Page

142. Bundle of 5 cheques all dated

15th October 1981 drawn by B.L.F. and paid in favour of 5 employees of

L.W. Contracting, who are referred to in the letter which is Exhibit 141 2354

143. Report of Oates to Stocks and Holdings

concerning the Baulkham Hills dispute dated 4th June 1979 2432

144. File of Stocks and Holdings concerning

industrial matters 2432

145, Declaration of Loss of Stocks and

Holdings 2435

146. Photographs of damage to concrete

at Baulkham Hills 2435

147 .1. Proposed prosecution briefs relating

to offences in respect of incidents at Baulkham Hills 2438

147.2. Memorandum of correspondence between New South Wales Police, Stocks and Holdings and B. L.F. 2438

148. Minutes of Meeting of Master Builders

Association, Western Australia, of 9th June 1979 2441

149. Minutes of the Broadmeadows Council

meeting and Final Certificate of Tract Consultants dated 28th August 1980 2479

150. Edition of the "Labour News" for July,

August and September 1981 2504

151. Letter dated 2nd March 1982 directed

to this Commission by Civil & Civic in explanation of the payment of $7,771-50 referred to in the evidence of

Mr. J. Wilkinson at Page 2090 of the

transcript 2508

152.1. Cash books and ledgers of B.L.F.,

Tasmanian Branch, for period 1962-1980 2510

152.2. Working papers of A.R. Hewer & Co. in

respect of the preparation of its monthly returns of the B.L.F., Tasmanian Branch, between the years 1962-1980 2510

Exhibit No.

153.

154.

155.

156.

157.

158.

159.

159.1.

159. 2.

159. 3.

159. 4.

159. 5.

29. APPENDIX 8

Exhibit

Transcript of proceedings before Commissioner Merriman in Matter C248 of 1981 dated 13th February 1981

Letter dated 18th September 1981 from Rider Hunt & Partners to Clampton with enclosures

Photocopy of cheque for $10,878-74 drawn by Police Credit Co-operative in favour of Graham Evans & Co. in

respect of payment of wages to members of the B.L.F.

Copy site allowance agreement between Graham Evans & Co. and various unions in respect of Police Credit Co-operative site

Letter from Rider Hunt & Partners to Police Credit Co-operative dated l7 th March 1982

Building Construction Employees and Builders Labourers Award 1978 together with amendments and associated Awards certified by the Deputy Industrial

Registrar

File of the Commercial Bank of Australia Limited, West Perth Branch, concerning Construction Plant Hire

2533

2535A

2535A

2535A

2537

2547

Pty. Ltd. 2566

Certificate of Incorporation of Construction Plant Hire Pty. Ltd. 2566

Diary Note dated 15th December 1980 from the State Controller of the Commercial Bank of Australia 2566

2 invoices from Construction Plant Hire Pty. Ltd. to Sabemo Ltd. dated

15th November 1980 and 15th December 1980 for a total of $240,000 2567

2 diary notes from the Accountant, C.B.A. Bank dated 12th December 1980 and 15th December 1980 concerning the "Sabemo transaction" 2569

Authorization given by Martinazzo to the C.B.A. Bank, West Perth, authorising Reynolds and Millman as signatories on the account of Construction Plant Hire 2569

30. APPENDIX 8

Exhibit No. Exhibit Page

159.6. Minute of the 13th December 1980 of

Construction Plant Hire Pty. Ltd. authorising signatories to cheques drawn on the company's account 2569

160. File relating to Construction Plant

Hire Pty. Ltd. produced by the witness Ball 2570

161. Message book maintained by the late

Mr. Arthur Millman 2571

162. Deed of Indemnity from Martinazzo

to Millman 2572

163. 4 invoices for a total of $297,000

directed by Construction Plant Hire to Sabemo, together with cheque requisition forms of Sabemo 2591

164. Letter written by Millman to Sabemo

on the letterhead of Construction Plant Hire dated 22nd June 1981 enclosing a cheque for $2,441-50 being the balance of funds no longer

required 2592

165. Account and receipt from W.A. Opticians

& Associates for $70 plus cash docket in the sum of $12-50 from Wellington Surplus Stores for 1 shirt 2601

166. Receipt issued by the B.L.F. (W.A.

Branch) dated 30th October 1980 to Crewe & Sons for the sum of $3,261-92 2664

167. Payment advice forming part of the

records of the Commonwealth Bank, 86 James Street, Perth, showing donations to a total of $3,331 in

relation to the Wagerup dispute 2666

168. Poster circulated on building sites

regarding Selpack, Fitzpatrick and Carter 2690

169. Copy subpoena served on the Secretary

of the W.A. Branch of the B.L.F.

commanding him to produce documents before the Commission 2697

170. Copies subpoenaes served on H. Olsen

commanding him to produce documents before the Royal Commission 2697

Exhibit No.

171.

1 71A.

171B.

172.

173.

17 3A.

174.1.

174.2.

174. 2A.

174.3.

174. 4.

31. APPENDIX 8

Exhibit

Working files of K.F. Holmes & Associates, Auditors of the Western Australian Branch of the B.L.F.

Letter dated 5th Aril 1982 written by Mr. Watt of K.F. Holmes & Associates, Auditors of the Western Australian Branch of the B.L.F., in response to

the Commission's invitation

Bundle of pay-in documents produced by the witness Watt in the course of

his evidence

Group Certificates produced by the S.E.C. in respect of Wayne Alfred Gallagher from the lst July 1975 to

lst July 1981 together with other records

Working papers produced by the auditors of the South Australian Branch of the B.L.F.

Letter dated 8th April 1982 written by Mr. Deane of Forge & Partners, Auditors of the South Australian Branch of the B.L.F., in response to

the invitation extended to him by this Commission Cheque for $2,500 of the

22nd February 1980 paid by the South Australian Branch of the B.L.F. to Hughes

Cheque dated 22nd July 1981 for $2,000 paid by the South Australian Branch of the B.L.F. to Porter

Letter from the Bank of New South Wales, Elizabeth Branch, South Australia, dated 7th April 1982 concerning the account of Mr. Porter

2 cheques payable to "cash" dated lOth November 1980 and 3rd December 1980 for a total of $5,000 payable to

Owens

2 cheques drawn by the South Australian Branch of the B.L.F. in favour of the

National Mutual dated 29th September 1981 in the sum of $3,543-92 and 22nd October

2700

2831

2831

2747

2747

2831

2758

2758

2846A

2759/60

1981 in the sum of $1,492-70 2759/60

32. APPENDIX 8

Exhibit No. Exhibit Page

174.5. Cheque dated 11th March 1981 drawn by

the South Australian Branch of the B.L.F. paid to the Long Service Leave

account in the sum of $5,000 2759/60

175.1. Working papers produced by Mr. Maizey

of Coopers and Lybrand, auditors of the B.L.F., N.S.W. Branch, for the period September 1975 to September 1978 2761

175.2. Working papers produced by Coopers and

Lybrand in respect of the audit of the

New South Wales Branch of the B.L.F. books for the period September 1978 to September 1981 2761

176. Working papers of Robinson & Jolly,

Auditors of the B.L.F., Queensland Branch, from March 1975 to September 1981 2763

177. Folder containing tables and attached

documents, prepared by Counsel assisting, representing part of their preliminary submissions as to materials and services provided to union officials 2767

178. Bundle of documents produced from the

A.N.Z. Bank, Elizabeth Centre, South Australia, relating to the accounts in the names of L.J. & A. Hughes 2831

179. Further submissions in writing

delivered by Counsel assisting 3247

180. Copy of Pages 129 to 134 of the

edition of the Australian Penthouse, June 1982, purporting to contain an interview between Adrian Tame and Norman Gallagher 3258

181. Circular dated 4th May 1982 headed

"Statement to Members" over the hand of P.J. O'Dea 3258

C.&.C.l. Document identifying Lend Lease Corporation employee benefits 321

C.&.C.2. Documents circulated periodically by Lend Lease to its employees informing them of company benefits 321

C.&.C.3. 1972 and 1981 agreements between Lend

Lease and A.C.T.U. 323

APPENDIX 9

TABLE OF WITNESSES WHOSE EVIDENCE REVEALS THAT THEY (AND/OR THEIR EMPLOYEES) HAVE BEEN COERCED INTO B.L.F. MEMBERSHIP AGAINST THEIR WISHES

Witness

HADDON

RIDETT

BEGGS

KOZMA

RICHES

KLASTER

SABLATNY

SCHRAVEN

COLUSSA

ABBOTT

LONGHI

HOOD

PORTEOUS

HARKIN

DOREVIC

ALABOCOS

HERRINGTON

BAKER

CONBOY

1726

1729

1730

1734

1737

1739

1744

1745

1752

1753

1755

1757

1764

1775

1777/8

1783

1786

1788

1791

Details

Self-employed in AUSTRALIAN ASPHALT. Forced to join.

HADDON'S partner enrolled in his absence.

Self-employed and forced to join.

Self-employed cleaner, forced to join .

ACE CONCRETE SAWING employees forced to join. Self-employed drainer forced to join.

Self-employed and forced to join.

Forced to join his employees.

Self-employed as ABLE CONCRETE - forced to join but not by union.

Self-employed landscape gardener forced to join but not by union .

Self-employed as YARRA PAVING and forced to join.

Safe removalist forced to join B.L.F.

Forced to join to be able to work on

site. Employees of irrigation contractor forced to join.

Fabricator of D.V.P. ENGINEERING forced to join.

Self-employed hoe operator forced to join. Landscaping contractors emmployees forced to join .

Asphalt workers forced to join as well as A.W.U. -men joined up by contractor.

Men forced to join B.L.F. as well as

T.W. U.

Witness

ZAGNI 1795

CARRARO 1797A

PUNT 1800

DISANTE 1802A

WARREN 1804

HOGAN 1806

HARRIS 1808

BROWN 1811

DELAFINO 1812

THOMPSON 1815

MASTERTON 1816

WALL 1818

RHODES 1819

GRESTY 1821

GATFORD 1842

CAELLI 1847

MORRIS 1849

McKIE 1850

HUTCHISON 1855

THOMPSON 1858

TINDAL 1859

SUTHERLAND 1862

FAVERO 1864

MACHIN 1866

DENNY 1867

2. APPENDIX 9

Details

Forced to join up and pay BAKER'S

(1788) men

Boilermakers first forced to join B.L.F. too - not forced by union but by

DILLINGHAMS

A.W.U. men forced to join B.L.F.

Men forced to join B.L.F.

Men forced to join B.L.F.

Men forced to join B.L.F.

Monumental masons forced to join by contractor not union

Enforced a joinder of B.L .F.

Concretors forced to join B.L.F.

Enforced a joinder of B.L.F.

Steel erectors forced to join B.L.F.

Forced to join B.L.F.

Corroborated WALL'S evidence

Self-employed and forced to join.

EMOLEUM'S men forced to join.

Enforced a joinder of B.L.F.

Enforced a joinder of B.L.F.

Delivery men forced to join B.L.F.

CHOGM forced to join B.L.F.

Concrete drillers forced to join (including boy on work experience).

B.L.F. membership when fitting out new store. Crane drivers forced to join.

Concretors forced to join.

Scaffolders forced to join.

Self-employed men forced to join.

Wi tness

PEAR S ON 1869

BENETTI 1883

SA DLER 1891

BRITCHFORD 1892

P OL! 1894

S ANDERS 1899

PETTINELLA 1909

EVANS 1911

GILMARTIN 1928

BORMAN 1929

ECKERSLEY 1931

RIDDELL 1934

BROWN 1938

STANKOVICH 1945

BIANCON 1948

JACKSON 1950

GRAY 1952

BARRETT 1954

DAVIS 1956

PARKINSON 1956

ORSINO 1961

CARACELLA 1962

3. APPENDI X 9

Details

Self-emplo yed steel fixer forced to join.

Bobcat driver forced t o j o in - BENETTI

paid dues.

BORAL RESOURCES concreto rs f o rced to join B.L.F.

Co ncrete workers f o rced t o j o in B.L.F.

Concrete wo rkers f o rced t o j o in B.L.F.

Forced t o join up empl o yee but stopped

cheque.

Self-employed concretor f o rced to join B.L.F.

Self-employed and f o rced t o j o in B.L.F.

Enforced a joinder to d o asphalting.

Brush fence man forced t o join up men.

Landscapers forced to join B.L.F.

Forced to join men up, Exhibition Buildings a "building site".

Corroborated RIDDELL'S evidence.

Forced to join up men in A.C.T.

Forced to j o in his unwilling men in

B.L.F.

Self-employed (DEVON GARDEN CONSTRUCTIONS) and f o rced t o join.

Fo rced to join ALTO men in false names.

Fo rced to join plant hire men up.

Steel fabricat o rs f o rced t o join.

Men forced to join the B.L.F.

Self-emplo yed concreto rs f o rced t o j o in B.L.F.

Sprinkler installers f o rce d t o join B.L.F.

Witness

MATERIA 1964

WOOD 1966

HARRICK 1994

EKBERG 2002

ROBERTS 2012

LONG 2015

FROST 2018

TEAL 2027

HART 20 29

HOPKINS 2032

MUDGE 2033

LODGE 2036

WALSH 2039

FITZPATRICK 2042

REYNOLDS 2044

ASS ETTA 2085

MILTON 2086

PETERS 2086

CATTARINOZZI 2086

PETHYBRIDGE 2120

BATE 2187

4. APPENDIX 9

Details

Self-employed, o f QUICK DRILL, and forced to join.

Corroborated ECKERSLEY and BORMAN

v. H.A. forced t o pay rack erectors

membership.

Sometimes principal contractors have had to take out membership for

EKBERG'S men

Demands of asphalters to join B.L.F.

Corroborated ROBERTS.

Shop Assistants join B.L.F. at TARGET SUPERMARKETS.

Similar evidence to FROST.

Employees forced to join B.L.F. when preparing RED ROOSTER store.

Corroborated HART.

Concrete testers forced to be members.

BORAL RESOURCES won't give in re A.W.U.-B.L.F. asphalting dispute.

DOWNARD'S men had to join when delivering to WENTWORTH HOTEL.

Same evidence as WALSH.

Forced to join but at insistence of

DILLINGHAMS.

Forced to join B.L.F.

A.W.U. men forced to join the B.L.F.

Men forced to join B.L.F.

Concretors forced to join.

Has been forced to buy tickets for his

sub-contractors' men - in fictitious names.

Pressures for membership at RICE MARKETING BOARD'S site at Burraboi.

Witness

LUCAS 2243

MORRISON 2258

WEBSTER 2270

BELCHER 2278

Me LEOD 2278A

SPINELLI 2279

VAN DER GRABLE 2281

SPINKS 2316

GIBSON 2319

WHITEHEAD 2450

MOODY 2475

McGREGOR 2483

WEHBE 2554

POGORELIC 2596

LEE 2600

FERGUSON 260 3

COLLINS 2613

McCULLOCH 2617

5. APPENDIX 9

Details

Demands for B.L.F. membership at Burraboi.

Demands for B.L.F. membership on HIGH COURT site

Forced to pay ABLE LANDSCAPING men's B.L.F. tickets on HIGH COURT site.

Union's demands to secure B.L.F. memberships.

Unreasonable demands re B.L.F. membership made on BOTANY FORK & CRANE HIRE.

Forced to join B.L.F.

Forced to buy tickets for his

concretors.

Pressure on T.C. WHITTLE to pay B.L.F. membership.

House maids forced to join B.L.F. at

CANBERRA INTERNATIONAL MOTOR INN

Pot plant men forced to join at WALK

ARCADE site.

BROADMEADOWS LEISURE CENTRE - DEVON GARDENS men forced to join - Council paid.

Corroborated MOODY.

Demands to join B.L.F. on Prospect, N.S.W. site preceded assault and damage to property.

TECON (W.A.) forced to pay membership in B.L.F. of other person's employees.

BALCATTA ROLLERDROME - fights to enforce B.L.F. membership.

Fight at BALCATTA ROLLDERDROME over B.L.F. membership.

Enforced B.L.F. membership at Waneroo Road, Balcatta.

Enforced membership - similar to COLLINS.

Witness

RUTHVEN 2623

FISHLEY 2627

WATSON 2634

HEALEY 2638

FITZPATRICK 2688

DYER 2695

6. APPENDIX 9

Details

KERB-QIC'S men forced to join B.L.F. on WATER BOARD site.

MULTIPLEX insisted on KERB-QIC'S mens' joinder.

Similar to RUTHVEN and FISHLEY.

Enforced B.L.F. joinder (including young man on work experience).

GOSNELL'S church site- victimization of conscientious objector - scab poster.

Had to pay BELLM IX ASPHALTING mens' B.L.F. membership.

R82/688 Cat. No. 82 1942 8

Printed by Authority by the Commonwealth Government Printer. Canberra J983

I-(R82/ 688 (I)) Cat. No. 82 2375 6 ISBN 0 644 02346 5 (Pari. Paper) ISSN 0727-4181