Trade Union Governance and Corruption—Royal Commission—Final report—Volume 4, December 2015

TABLE OF CONTENTS

VOLUME 4

Subject Page

PART 8 CFMEU QLD 1

8.1 CORNUBIA HOUSE 1

A – INTRODUCTION 3

The relevant entities 3

Overview 5

B – THE FACTS 8

David Hanna 8

Mirvac representatives and the Orion PAD2 Project 10

Adam Moore 10

Mathew McAllum 11

Background to construction of the Cornubia house 14

Description of the Cornubia house 17

The work accepted but not paid for by David Hanna 17

Unorthodox payments for union events by Mirvac in Queensland 27

Industrial landscape as at 2013 in south east Queensland 38

Subject Page

Initial discussions about the Cornubia house between Adam Moore and David Hanna 46

Initial discussions about the Cornubia house between Adam Moore and Mathew McAllum 56

Initial discussions about the Cornubia house: Adam Moore and Jason Vieusseux 64

Initial discussions about the Cornubia house: subsequent meeting with Jennifer Hanna 67

Subsequent dealings between Mathew McAllum and David Hanna 69

Contest between David Hanna and Mathew McAllum 72

C – CONTRAVENTIONS 77

Section 442B of the Criminal Code 1899 (Qld) 77

David Hanna’s potential liability under s 442B of the Criminal Code 1899 (Qld) 79

Potential liability of Adam Moore and Mathew McAllum 89

Potential liability of Mirvac Constructions 82

Summary of findings 93

APPENDIX 95

Tilecorp and Diane Graham 95

Electrical services 105

Rendering, painting and internal plastering 122

Plumbing goods and services 127

Subject Page

Air-conditioning installation 138

8.2 DOCUMENT DESTRUCTION 149

A – INTRODUCTION 151

B – POTENTIAL CRIMINAL OFFENCES 153

The contempt of court analogy 153

Implied admissions 154

Queensland offences 155

Commonwealth offences 158

C – SUMMARY OF FACTS 164

Background: amalgamation of the BLF and CFMEU in Queensland 164

Background: creation of the Royal Commission 167

On what day did the relevant events take place? 170

At what time on 1 April 2014 did the relevant events take place? 175

Michael O’Connor’s email 187

The events of the ‘clean up’ 190

The nature of the material destroyed 201

Events of 2 April 2014: a bonfire of documents 202

Arranging for the tip truck 203

Events of 4 April 2014: dumping the documents 205

Later events: payment of truck fees 210

Subject Page

Later events: charges by Michael Ravbar against David Hanna 212

Later events: investigation and report by Leo Skourdoumbis 215

D – IMPORTANT MATTERS FOR

CONSIDERATION

216

Credibility of David Hanna 217

Credibility of Michael Ravbar 226

Significance of police investigation 231

Assessment of the competing accounts 232

E – OVERALL FINDINGS 235

8.3 HINDMARSH 243

A – PRELIMINARY 245

The case study in outline 245

The first CFMEU position: should any findings be made? 246

The second CFMEU position: should any findings departing from the Statement of Agreed Facts be made?

249

The third CFMEU position: criticisms 250

B – RELEVANT FACTS 251

The findings requested by counsel assisting: an outline 251

The project 252

Subject Page

Two union delegates 253

Agreement to remove one delegate 256

Water in the lunch room – 28 March 2014 257

Hindmarsh correspondence 262

Change in labour levels 264

Industrial action on 3 April 2014 268

Fair Work Commission orders 270

Breach of the Fair Work Commission orders on 5 and 7 April 272

Court orders 278

Breach of court orders 279

Settlement proposal 281

Disposing of CFMEU’s factual contentions about Ian Busch and Northbuild 283

C – CONCLUSIONS 292

Breach of s 417 of the Fair Work Act 2009 (Cth) 292

Breach of s 421 of the Fair Work Act 2009 (Cth) 294

Breaches of Fair Work (Registered Organisations) Act 2009 (Cth) – breach of Fair Work Commission order of 4 April 2014

296

Contempt of the Federal Circuit Court order of 7 April 2014 298

Breach of s 359 of the Criminal Code (Qld) 299

Subject Page

APPENDIX A – Statement of Agreed Facts 301

PART 9 CFMEU VIC 313

9 ANDREW ZAF 313

A – INTRODUCTION 313

B – NEW MATERIAL 317

C – COUNSEL ASSISTING’S POSITION 320

D – CONSIDERATION 321

PART 10 AUSTRALIAN WORKERS’ UNION 325

10.1 INTRODUCTION 325

10.2 CLEANEVENT 331

A – INTRODUCTION 334

B – THE CLEANEVENT BUSINESS 336

General 336

The casual cleaners 336

C – THE 1999 AWARD 341

D – THE 2004 EBA 342

Negotiations for the 2004 EBA 343

Pay rates for casual employees under the 2004 EBA 346

Certification of the 2004 EBA 351

E – THE 2006 EBA 358

Engagement after execution of the 2006 EBA 363

Subject Page

F – DOUGLAS SITE SERVICES 366

G – RENEWING THE 2006 EBA 381

The MOU and Side Letter 384

Conduct of the negotiations on behalf of the AWU 386

The First Meeting at Cesar Melhem’s office 388

First draft of the side deal 393

August correspondence 394

Drafts of the Side Letter 397

The Second Meeting in Cesar Melhem’s office and

finalising the MOU

400

Execution of the MOU and Side Letter by Cleanevent 404

Did Cleanevent employees approve the MOU and/or

Side Letter?

405

Execution of the MOU by AWU National Office 408

Conclusions to be drawn 421

H – PAYMENTS PURSUANT TO THE SIDE LETTER 424

The first payment 424

The first list of names 425

The second payment 430

The third payment 435

Conclusions regarding membership numbers 437

Subject Page

I – COMPARISON OF THE MOU AND THE MODERN AWARD 449

Permanent employees 453

Overtime 455

Penalties and allowances 456

Casual employees 457

Conclusions 464

J – MEMBERSHIP ARRANGEMENTS: OPT-OUT CLAUSES 466

K – THE FATE OF THE 2006 EBA 469

L – CONCLUSIONS 474

Fiduciary duties 475

Conflict of interest 489

Unlawful commissions 492

Membership issues 504

Liability of the AWU for the conduct of Cesar

Melhem

507

M – RECOMMENDATIONS 515

APPENDIX 1 TO CHAPTER 10.2 517

APPENDIX 2 TO CHAPTER 10.2 521

APPENDIX 3 TO CHAPTER 10.2 527

Subject Page

10.3 THIESS JOHN HOLLAND 533

A – INTRODUCTION 534

B – THE AGREEMENT 536

C – WHAT WAS AGREED AND WHEN? 544

Negotiations to December 2004 545

Negotiations from December 2004 560

D – IMPLEMENTATION OF THE AGREEMENT 572

Joint venture accounting practices 573

Preliminary comments on TJH invoices and payments 580

The 2005 payments 581

The 2006 payments 586

The 2007 payments 607

Accounting and approval of the invoices 614

E – WERE THE INVOICES GENUINE? 615

F – CONCLUSIONS 618

Breach of duty 619

Unlawful commissions: AWU and Cesar Melhem 622

Unlawful commissions: TJH and Julian Rzesiowiecki 624

False accounting records 627

10.4 PAID EDUCATION LEAVE 639

A – INTRODUCTION 639

Subject Page

B – THE CONCEPT 640

C – PAID EDUCATION LEAVE IN ENTERPRISE AGREEMENTS 642

D – PAID EDUCATION LEAVE IN AWU ACCOUNTING RECORDS 645

E – CONCLUSIONS ON PAID EDUCATION LEAVE 650

10.5 ACI 655

A – INTRODUCTION 656

B – THE ACI GLASS BUSINESS IN VICTORIA 657

C – PAID EDUCATION LEAVE PAYMENTS FROM 2003 TO 2005 661

Payments and Invoices 662

Connection between payments and EBA 666

ACI accounting records 668

What became of the funds? 672

The evidence of Mike Gilhome concerning the

payments

674

The evidence of Cesar Melhem concerning the

payments

690

The evidence of Bill Shorten concerning the payments 694

Conclusions regarding the 2003-2005 payments 695

D – CONCLUSIONS REGARDING THE CONDUCT OF THE AWU, CESAR MELHEM AND MIKE GILHOME

702

Subject Page

Fiduciary duties 702

Corrupt Commissions: Cesar Melhem and AWU 705

Corrupt Commissions: Mike Gilhome and ACI 709

E – ‘12 MONTH MEMBERSHIP’ PAYMENTS 2008-2013 710

Conclusions 717

F – RECOMMENDATIONS 718

10.6 CHIQUITA MUSHROOMS 721

A – INTRODUCTION 722

B – EBA NEGOTIATIONS 723

C – THE PAID EDUCATION PAYMENTS 729

The invoices 729

Why were the payments made? 731

What became of the payments? 746

D – UNFAVOURABLE 2004 EBA 747

Redundancies and transfer to labour hire 749

Labour hire workers paid less to do more 753

E – OH&S AND THE 2004 EBA 757

The Piece Rate system 758

OH&S issues identified in the evidence 759

OH&S under the 2004 EBA 761

Subject Page

Conclusion on OH&S 762

F – CONCLUSIONS REGARDING CONDUCT OF AWU AND CHIQUITA 764

Breach of fiduciary duty 765

Corrupt Commissions 767

G – RECOMMENDATIONS 771

10.7 UNIBUILT 773

A – OVERVIEW 774

B – TED LOCKYER’S GROUP OF COMPANIES 775

C – EMPLOYMENT OF LANCE WILSON 777

D – INTERPOSITION OF AWU 781

E – CESSATION OF PAYMENTS 785

F – PURPOSE OF THE ARRANGEMENTS 787

G – EMPLOYMENT OF FIONA WARD 792

Contractual arrangements 792

Resolutions of the National Executive 794

H – EVALUATING THE CONDUCT OF AWU OFFICIALS 799

Arrangements regarding Lance Wilson 799

The conduct of Cesar Melhem 803

Disclosure under the Commonwealth Electoral Act

1918 (Cth)

807

Subject Page

10.8 WINSLOW CONSTRUCTORS 809

A – INTRODUCTION 810

B – ARRANGEMENT FOR THE PAYMENT OF MEMBERSHIP CONTRIBUTIONS 811

C – FALSE INVOICING 812

Cesar Melhem’s roles in the creation of false invoices 816

Why were false invoices sent and paid? 824

Possible false accounting offences 828

Possible contraventions of the Fair Work (Registered

Organisations) Act 2009 (Cth)

837

D – MEMBERSHIP ISSUES 838

Membership numbers falsely inflated 839

E – UNSATISFACTORY ASPECTS OF THE RELATIONSHIP BETWEEN THE AWU AND WINSLOW

843

Disclosure to Winslow of material obtained during

collective bargaining with a competitor 844

Comparison of Winslow and BMD EBAs 848

F – CONCLUSIONS 853

10.9 MISCELLANEOUS MEMBERSHIP ISSUES 857

A – INTRODUCTION 858

B – BMD CONSTRUCTIONS 859

2007 Invoice 859

Subject Page

2010 Invoice 862

Conclusions 868

C – AUSTRALIAN JOCKEYS’

ASSOCIATION/VICTORIAN JOCKEYS’ ASSOCIATION

872

Invoices issued by the AWU 873

Inflated membership numbers 877

Conclusions 880

D – AUSTRALIAN NETBALL PLAYERS’ ASSOCIATION INC 882

Introduction 882

Arrangement between the AWU and ANPA 884

Conclusions 887

E – AJ LUCAS 888

F – GEOTECHNICAL ENGINEERING 890

G – RECOMMENDATIONS 893

10.10 DOWNER EDI 897

A – INTRODUCTION 898

B – SOME UNCONTESTED FACTS 898

C – THE MEETING ON 10 AUGUST 2012 904

D – FAIR WORK AUSTRALIA APPLICATIONS 915

E – INVOICE AND PAYMENT 923

Subject Page

F – CONCLUSIONS 927

False invoice 927

Tony Sirsen 927

Cesar Melhem 930

AWU 934

Abuse of process? 934

G – RECOMMENDATIONS 935

PART 11 INCOLINK 937

11 INCOLINK 937

A – INTRODUCTION 938

B – BASIC OVERVIEW OF INCOLINK ENTITIES 941

Redundancy funds and portable sick leave schemes 941

Insurance schemes 945

Training Fund 947

Building Industry Disputes Panel 951

C – ISSUES 952

D – APPROVED WORKER ENTITLEMENT FUNDS 952

Background 952

Operation of Fund 4, Fund 5, PSL1 and PSL2 956

Should the endorsement for Fund 4, Fund 5, PSL1 and

PSL2 be revoked?

961

Subject Page

E – FORFEITURES 968

APPENDIX A 980

PART 12 INDUSTRY 2020 987

12 INDUSTRY 2020, HSU NO 1 BRANCH ELECTIONS

AND DAVID ASMAR

987

REPORT Volume 4

Royal Commission into Trade Union Governance and Corruption

PART 8: CFMEU QLD

CHAPTER 8.1

CORNUBIA HOUSE

Subject Paragraph

A – INTRODUCTION 1

The relevant entities 1

Overview 5

B – THE FACTS 7

David Hanna 7

Mirvac representatives and the Orion PAD2 Project 11

Adam Moore 13

Mathew McAllum 15

Background to construction of the Cornubia house 24

Description of the Cornubia house 30

1

Subject Paragraph

The work accepted but not paid for by David Hanna 31

Unorthodox payments for union events by Mirvac in Queensland 62

Industrial landscape as at 2013 in south east Queensland 84

Initial discussions about the Cornubia house between Adam

Moore and David Hanna

104

Initial discussions about the Cornubia house between Adam

Moore and Mathew McAllum

125

Initial discussions about the Cornubia house: Adam Moore and

Jason Vieusseux

143

Initial discussions about the Cornubia house: subsequent meeting

with Jennifer Hanna

150

Subsequent dealings between Mathew McAllum and David

Hanna

155

Contest between David Hanna and Mathew McAllum 165

C – CONTRAVENTIONS 172

Section 442B of the Criminal Code 1899 (Qld) 172

David Hanna’s potential liability under s 442B of the Criminal

Code 1899 (Qld)

175

Potential liability of Adam Moore and Mathew McAllum 200

2

Subject Paragraph

Potential liability of Mirvac Constructions 211

Summary of findings 213

APPENDIX 220

Tilecorp and Diane Graham 221

Electrical services 238

Rendering, painting and internal plastering 285

Plumbing goods and services 297

Air-conditioning installation 332

A – INTRODUCTION

The relevant entities

1. From 2011 to 2014 David Hanna was the Secretary of the Builders’

Labourers’ Divisional Branch of the Construction, Forestry, Mining

and Energy Union (CFMEU) (federally registered BLF). In the

same period he was the Secretary of the Australian Building

Construction Employees and Builders’ Labourers’ Federation

(Queensland) Union of Employees (State registered BLF). For

convenience, together the federally registered BLF (a branch of the

CFMEU) and the State registered BLF are referred to as the BLF.

3

2. In 2014 there was a merger between the federally registered BLF and

the Queensland Construction Workers’ Divisional Branch of the

Construction and General Division of the CFMEU. In the same year

there was also a merger between the State registered BLF and the State

registered equivalent of the CFMEU (State registered CFMEU). As

a result of the mergers, David Hanna became President of the CFMEU

Construction and General Division, Queensland and Northern Territory

Divisional Branch and President of the Construction and General

Division of the CFMEU. He resigned from those positions with effect

from 30 July 2015.

3. At all material times Mirvac Ltd had a wholly owned subsidiary,

Mirvac Constructions (Qld) Pty Ltd (Mirvac Constructions).1 Where

the precise identity of a Mirvac entity is relevant in this Chapter, that

entity is referred to. In many circumstances, ‘Mirvac’ is referred to as

shorthand for both organisations, and any related corporations.

4. Between 20 November 2008 and 8 August 2013, Adam Moore was a

director of Mirvac Constructions. Jason Vieusseux (National

Construction Director for Mirvac)2 became a director of Mirvac

Constructions on 19 November 2012. At all relevant times, the Board

of Directors of Mirvac Constructions consisted of four persons.

1 Cornubia House MFI-8, 13/11/15. 2 Adam Moore, 18/9/15, T:569.34.

4

Overview

5.

6.

w

This Chapte

property ow

Cornubia, a

the Cornubi

The follow

submissions

it is noted.

Dur (a)

elec

ren

the

Mir

In

Mir

Au

inte

con

Spr

Ma

con

the

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the

er concerns

wned by Dav

suburb south

ia house.

wing introdu

of counsel a

ring the co

ctrical, plumb

ndering work

Hannas by

rvac Constru

this activity

rvac’s Const

stralia). Bu

ensely contr

ntractors on

ringwood in

athew McAl

ntroversy just

assistance o

e Hannas did

services M

the constru

vid Hanna

h of Brisbane

uctory overv

assisting. W

ourse of 2

bing, air-con

ks for the Co

Mathew Mc

uctions provi

y a role was

truction Dire

ut how larg

roversial.

its wholly u

n Brisbane’s

lum (and, s

t referred to,

f those vario

d not pay for

athew McAl

ction in 20

and his wif

e, Queensland

view is lar

Where there re

013 tiling,

nditioning, pl

ornubia hous

cAllum. He

ding project

s played by

ector for Que

ge or small

Mirvac ha

unrelated Or

s west (Ori

subject to th

perhaps Ada

us subcontra

those works.

llum provide

13 of a hou

fe Jennifer H

d. The house

rgely based

emains a con

interior de

lastering, pai

se were orga

was a contr

managemen

y Adam Moo

eensland and

a role he p

ad engaged

rion PAD2 P

ion PAD2

he resolutio

am Moore) a

actors.

. Nor did the

ed in arrang

use on a

Hanna at

e is called

on the

ntroversy,

ecoration,

inting and

anised for

ractor for

nt service.

ore (then

d Western

played is

d various

Project at

Project).

on of the

acted with

ey pay for

ing those

5

wor

the

eith

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acti

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that

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the

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and

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pro

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led

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con

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hop

a un

and

rks. But they

works not p

her Mirvac

50,412.50.

ivities (if it k

s also in iss

am Moore an

t Mirvac wou

expense to th

proached Ad

building of h

s in issue wh

cause he bel

d willingness

werful positi

ue whether A

ovision of fre

ether he was

industrial a

me, the exten

ntroversy is w

ods and servi

pe or expecta

nion official

d Mathew Mc

y did pay for

paid for by th

or its subc

The extent

knew at all) is

sue whether,

nd David Ha

uld arrange f

he Hannas. I

dam Moore f

his house.

hether David

ieved Mirva

s to extend f

ion of BLF

Adam Moore

ee services fo

s motivated b

action that w

nt of which

whether or n

ices knowing

ation that he

in a manner

cAllum.

r some other

he Hannas, t

ontractors, a

to which M

s in issue.

before the w

anna met in e

for works of t

It is not in is

for some ass

d Hanna appr

ac had the re

favours to a

State Secret

was willing

or David Ha

by the nature

was occurrin

h is also i n

not David Ha

g that they w

would not e

r adverse to M

works. In r

the cost was

and totalled

Mirvac knew

work was pe

early 2013 an

this kind to b

ssue that Dav

sistance in re

roached Ada

esources, con

person who

t ary. It is f

to offer to e

anna’s new h

e and extent

ng in Brisban

n issue. A

anna received

ere being giv

exercise his p

Mirvac, Ada

relation to

borne by

d at least

w of the

erformed,

nd agreed

be done at

vid Hanna

elation to

am Moore

nnections

o held the

further in

ensure the

home, and

of union-ne at the

A further

d the free

ven in the

powers as

am Moore

6

It i (e)

Ma

serv

Mo

the

Cou (f)

Mc

to

Mir

sub

or a

var

whi

the

why

if a

cha

The (g)

org

fals

they

had

Wh

of

nati

frow

reso

is in issue

athew McAll

vices to the

oore asked M

Hannas.

unsel assist

cAllum receiv

union relate

rvac’s Brisba

bcontractors a

alternatively,

riation claim

ich they wer

Orion PAD

y Adam Moo

any, to which

ain within Mi

e quotes or

ganised for th

se. They incl

y created the

d been legitim

hether or not

the Cornub

ional manag

wn upon thi

olution.

whether Ad

lum to facil

Hannas. B

Mathew McAl

ting argued

ved was con

d expenses

ane office at

agree either t

, to include t

s made out

re engaged (i

D2 Project).

ore sanctione

h it was sanc

irvac.

r variation c

he Cornubia

luded the am

e false impres

mately incur

this was don

bia house b

gement team,

s activity, or

dam Moore

litate the pro

But it is not

llum to provi

d that the

nsistent with

that Adam

t the time.

to absorb the

the expense w

to Mirvac f

in the case o

A controve

ed such a pra

ctioned furth

claims in r

house by Ma

mount of the r

ssion that the

rred on the

ne with a view

being conce

, who Adam

r for some o

gave instru

ovision of th

t in issue th

ide some ass

instruction

the general

Moore sanc

This involve

e expense the

within false

for some p

f the Cornub

ersy for reso

actice, and th

her up the hie

relation to t

athew McAl

relevant expe

e expense wo

Orion PAD2

w to Mirvac’

ealed from

m Moore kne

other reason,

uctions to

hese free

hat Adam

istance to

Mathew

approach

ctioned in

ed having

emselves,

quotes or

project on

bia house,

olution is

he extent,

erarchical

the work

llum were

ense. But

ould be or

2 Project.

s funding

Mirvac’s

ew would

, requires

7

B – THE

David Ha

7.

3 These fa Assisting, 4

David Ha

Wa (h)

Or

It

Mc

for

Dav

inv

Mo (i)

Mo

had

quo

mad

are

did

to a

wh

fals

cos

E FACTS3

anna

David Hanna

early 2014.

acts are largely 13/11/15. Whe

anna, 18/9/15,

as Mathew M

was he on a

is not in

cAllum select

someone el

vid Hanna.

volved in sele

ost of the Ori

oore or Math

d been sugge

otes or variat

de this sugge

matters to b

d not even do

act as an inv

o did the wo

se invoices o

st back to Mir

a was the Se

At that latte

y as set out b ere the facts are

T:646.15-17.

McAllum follo

frolic of his

issue tha

ted trades wh

lse to carry

The exten

ecting some t

ion PAD2 Pr

hew McAllum

ested to them

tion claims fo

estion? Whe

be resolved.

the work at

oicing ‘midd

ork at Cornub

n the Orion P

rvac.

cretary of the

er time the S

by counsel ass e in issue and r

owing Adam

own? Thos

at in most

ho would eit

out) the wo

nt to which

rades is in is

roject subcon

m involved

m. They issu

for the Orion

ence did it c

In some cas

the Cornubia

dle man’ pay

bia and then

PAD2 Projec

e BLF in the

State register

sisting in the require resoluti

m Moore’s ins

e matters are

instances

ther carry ou

ork without c

h Adam Mo

sue.

ntractors who

in the schem

ued Mirvac w

n PAD2 Proje

come initially

ses the subco

a house. The

ying for the tr

n included th

ct, thereby pa

e period from

red BLF mer

Submissions o ion, that is mad

struction?

e in issue.

Mathew

ut (or pay

charge to

oore was

om Adam

me did as

with false

ect. Who

y? These

ontractors

ey agreed

tradesmen

hat cost in

assing the

m 20114 to

rged with

of Counsel de clear.

8

the State registered CFMEU,5 and the federally registered BLF merged

with the CFMEU Construction and General Division, Queensland

Construction Workers’ Divisional Branch.

8. When the mergers came into effect, David Hanna occupied the

positions of President of the CFMEU Construction and General

Division, Queensland and Northern Territory Divisional Branch and

President of the Construction and General Division of the CFMEU.6

Prior to taking office as Secretary of the BLF, David Hanna had

worked as the BLF’s Assistant Secretary, and before that as an

organiser with the BLF (a position he first took in 1995).7 David

Hanna resigned from all positions within the CFMEU with effect from

30 July 2015.8

9. On 24 February 2011, David Hanna and his wife purchased a property

at Cornubia. That is a suburb south of Brisbane. But it is within the

Logan City Council local government area.9 At that time, the property

had a house and two sheds already built on it.10

5

Construction, Forestry, Mining and Energy, Industrial Union of Employees, Queensland and Australian Building Construction Employees and Builders’ Labourers’ Federation (Queensland) Union of Employees (No. 2) [2014] QIRC 74. 6

David Hanna, 18/9/15, T:645.27-37. See CFMEU’s annual returns for 2014 available at https://www.fwc.gov.au/documents/documents/organisations/registered-orgs/105N/105n-AR2014-75.pdf. See also Submissions of Counsel Assisting, 13/11/15, paras 23-25. 7

David Hanna, 18/9/15, T:645.45-646.13. 8 CFMEU DD MFI-26, 16/10/15, pp 27-28. 9

Cornubia House MFI-1, 14/9/15, Vol 3, p 1020; Cornubia House MFI-7, 18/9/15, pp 1-2; David Hanna, 18/9/15, T:647.11-26. 10 David Hanna, 18/9/15, T:647.28-44.

9

10. In 2012, in consultation with a builder, Shane Dalby, David and

Jennifer Hanna had plans prepared for the construction of a new house

on the property.11

Mirvac representatives and the Orion PAD2 Project

11. Various companies in the Mirvac group conduct building businesses in

the commercial sector of the building and construction industry in

Queensland and other parts of Australia.12

12. Up until about March 2012, Mirvac was structured in a decentralised

way. Each State company had primary responsibility for its own

affairs.13 In March 2012 a centralised model was adopted. Under it

there existed a national executive management team based in Sydney

sitting above separate executive teams in each State.14

Adam Moore

13. One of the senior Mirvac executives in Queensland at the time of the

relevant events was Adam Moore. He was the Construction Director

for Mirvac in Queensland (as well as in Western Australia).15 Adam

Moore had originally commenced work for Mirvac in Brisbane in

11 David Hanna, 18/9/15, T:651.42-652.22; Shane Dalby, 14/9/15, T:12.6-19. 12 Adam Moore, 18/9/15, T:567.41-568.21. 13

Bradley Garlick, 15/9/15, T:303.46-304.5; Adam Moore, 18/9/15, T:562.37-563.1, 629.26-27; Jason Vieusseux, 30/10/15, T:748.21-26. 14

Bradley Garlick, 15/9/15, T:303.46-304.5; Adam Moore, 18/9/15, T:562.37-563.1, 629.26-27; Jason Vieusseux, 30/10/15, T:748.21-26. 15

Adam Moore, 18/9/15, T:562.19-21; Jason Vieusseux, 30/10/15, T:748.46-749.2.

10

about the mid-1990s and had risen through the ranks of the Brisbane

office over time.16

14. Following the Mirvac restructure in March 2012, Adam Moore began

having to report to Jason Vieusseux. He was the National Construction

Manager of Mirvac. He was part of the national executive team based

in Sydney.17

Mathew McAllum

15. As at April 2013 Adam Moore had a team of Mirvac employees and

contractors working underneath him and reporting to him in

Queensland.18

16. One of those individuals was Mathew McAllum.19 He was a builder

who had commenced employment as a cadet with Mirvac in

Queensland in 1997.20

17. Mathew McAllum initially worked under Adam Moore at Mirvac in

Brisbane up until 2002.21 He then worked for a ‘number of other

larger commercial builders’. Later he started his own small domestic

16 Adam Moore, 18/9/15, T:558.24-32. 17 Adam Moore, 18/9/15, T:562.37-41; Jason Vieusseux, 30/10/15, T:748.21-26. 18

Cornubia House MFI-1, 14/9/15, Vol 1, p 6-1; Bradley Garlick, 15/9/15, T:302.32-35; Jason Vieusseux, 30/10/15, T:747.12-27. 19

Cornubia House MFI-1, 14/9/15, Vol 1, p 6-1. 20 Mathew McAllum, 16/9/15, T:364.41-365.17. 21

Mathew McAllum, 16/9/15, T:364.41-365.17.

11

building company,22 Kylan Construction Pty Ltd (Kylan

Construction).23

18. During their years together at Mirvac between the mid-1990s and

2002, Adam Moore and Mathew McAllum had enjoyed a good

working relationship. Mathew McAllum considered Adam Moore to

be his mentor.24

19. In 2012, after spending a number of years working in the domestic

sector, Mathew McAllum began looking for opportunities to move

back into commercial work.25 He had kept in touch with Adam Moore

over the years. He asked Adam Moore to let him know if any

opportunities at Mirvac arose.26

20. In 2012 Adam Moore contacted Mathew McAllum. He offered him

the chance to work on a contract basis managing the design of a project

for the expansion of the existing Orion Shopping Centre at Springfield

in Brisbane.27 One of the companies in the Mirvac group owned the

centre, and Mirvac Constructions was undertaking the expansion

work.28 That project was called ‘Stage 2’ of the Orion Shopping

Centre.29

22 Mathew McAllum, 16/9/15, T:365.28-33. 23 Mathew McAllum, 16/9/15, T:366.4-5. 24

Mathew McAllum, 16/9/15, T:365.19-26; 18/9/15, T:551.33-34. 25 Mathew McAllum, 16/9/15, T:365.41-45. 26

Mathew McAllum, 16/9/15, T:366.10-18. 27 Mathew McAllum, 16/9/15, T:366.20-24. 28

Mathew McAllum, 16/9/15 T:366.22-38. 29 Mathew McAllum, 16/9/15, T:366.26-45.

12

21. In the end the ‘Stage 2’ expansion project was deferred. Mathew

McAllum was asked to work instead on another project being

undertaken at the Orion Shopping Centre.30 That project involved the

construction of particular buildings on the fringes of the site. These

buildings were to be let out to large retailers who were generally in the

business of selling bulky goods, or in need of substantial floor space.31

The site was referred to as ‘PAD 2’.32 The proposed tenants of the

finalised development included Boating Camping Fishing, AMART, a

Hog’s Breath Café and Pet Barn.33

22. The terms of Kylan Construction’s retainer with Mirvac were set out in

a letter. It was dated 6 December 2012. It was signed by Adam Moore

for Mirvac Projects Pty Ltd (Mirvac Projects). It was also signed by

Mathew McAllum for Kylan Construction.34 This ‘contract for

services’ provided that Mirvac Projects would engage Kylan

Construction to work with Mirvac Constructions.35 It further provided

that it would terminate on 5 December 2013 unless terminated earlier

or extended. It provided that the agreement created a relationship of

principal and contractor (not agency). And it provided that Kylan

Construction would act lawfully in the provision of its services.36

30 Mathew McAllum, 16/9/15, T:367.35-38. 31 David Mullan, 14/9/15, T:28.13-14, 50.19-21; Mathew McAllum, 16/9/15, T:367.13-14, 35-38. 32

Mathew McAllum, 16/9/15, T:367.47-368.18. 33 Cornubia House MFI-1, 14/9/15, Vol 6, p 1810. 34

Cornubia House MFI-1, 14/9/15, Vol 1, p 16. 35 Cornubia House MFI-1, 14/9/15, Vol 1, p 16. 36

Cornubia House MFI-1, 14/9/15, Vol 1, pp 16-19.

13

23. In September 2013 the services of Kylan Construction were

terminated.37 From December 2012 to September 2013 Mathew

McAllum had acted as project manager on the Orion PAD2 Project.38

That role involved Mathew McAllum in the activities of programming

work, budgeting, managing, coordinating and organising

subcontractors. It also involved him in obtaining prices for work (with

the assistance of Mirvac Constructions contract administrator, Natalie

Croghan).39 During that time Mathew McAllum was predominantly

based in the Brisbane city office of Mirvac Constructions, reporting

directly to Adam Moore.40

Background to construction of the Cornubia house

24. On 3 February 2013, the Hannas executed a building contract with

Dalby Constructions Pty Ltd.41 This was a domestic building company

owned by Shane Dalby.42 The contract provided for the construction

of a new house on the Cornubia property.43 At the time at which the

contract was signed, the Hannas were still living in the existing

37 Mathew McAllum, 17/9/15, T:499.37-500.7; Cornubia House MFI-1, 14/9/15, Vol 3, p 1015. 38

Mathew McAllum, 16/9/15, T:368.22-33. 39 Mathew McAllum, 16/9/15, T:368.22-33. 40

Mathew McAllum, 16/9/15, T:368.35-370.3. 41 Cornubia House MFI-1, 14/9/15, Vol 1, pp 20-24. 42

Shane Dalby, 14/9/15, T:7.46-8.12. 43 Shane Dalby, 14/9/15, T:9.2-4.

14

25.

26.

27.

44 Shane D 45 Shane D 46

Cornubia 47 Shane D 48

Shane D pp 36, 330

dwelling on

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Descripti

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52 Cornubia 53 Cornubia 54

Cornubia

ion of the Co

The comple

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505m2, four

bathrooms in

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state of the a

12 metre lon

described the

k accepted b

Counsel assi

David Hanna

tile (a)

paid

inte (b)

$2,

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a House MFI-7

a House MFI-7

a House MFI-7

ornubia hou

eted Cornub

ng material

king size be

ncluding a do

fice’, reverse

oring, a walk

art appliance

ng salt water

e home as ‘o

but not paid

isting submit

a received bu

s and tiling s

d $27,930 pl

erior decorat

240 plus GST

ctrical servic

7, 18/9/15, pp 7

7, 18/9/15, p 7.

7, 18/9/15, p 7.

use

ia house w

described t

edrooms (ea

ouble sized e

e cycle air-c

k through pan

s.52 The pro

pool with a b

ozing luxury

for by Davi

tted and it is

ut did not pay

services prov

us GST);

ing services

T);

ces (in respec

7-8.

.

.

as advertise

the house as

ch with walk

en suite off th

conditioning

ntry, a second

operty has a t

babies’ pool.

y’.54

id Hanna

s not conteste

y for included

vided (in resp

(in respect o

ct of which M

ed for sale

s having an

k in wardrob

the master be

throughout,

d butler’s kit

three car gara 53 The sales

ed that the w

d:

pect of whic

of which Mi

Mirvac paid $

in 2015.

n area of

bes), four

edroom, a

polished

chen, and

age and a

brochure

works that

ch Mirvac

irvac paid

$20,224);

17

32.

33.

Tiling and

34.

pla (d)

whi

plu (e)

resp

air (f)

whi

abs

The total of

identified in

conservative

electrical co

through who

by David Ha

plumbing se

of those serv

The evidenc

were paid fo

the precise f

below appea

d interior des

David Hann

provided by

pay for inter

stering, rend

ich Mirvac p

umbing servic

pect of which

conditioning

ich an unsu

sorb).

the benefits

n the previou

e. It disrega

ontractor eng

om payment

anna. It also

ervices on the

vices as recor

e in relation

or, is summa

facts and cir

ars in the App

sign

na received,

Tilecorp Pty

ior design se

dering and

paid $77,000

ces (totalling

h Mirvac ma

g installation

specting con

received by

us paragraph

ards any ma

gaged by it

was made fo

o includes the

e Cornubia H

rded by the re

to these wor

arised below.

rcumstances

pendix to this

but did not

y Ltd (Tileco

ervices provid

painting ser

inclusive of

$14,984.78

y have paid $

n services (

ntractor was

David Hanna

h is $154,98

ark-up charg

on the Orio

or the electric

e cost possib

House, and n

elevant plum

rks, and the m

A more de

relating to t

s Chapter.

pay for tile

orp). He also

ded by Diane

rvices (in re

GST);

not including

$12,600); an

(totalling $1

ultimately

a based on th

80.28. That

ged to Mirva

on PAD2 Pro

cal contracto

bly paid by M

not the (high

mbing contrac

manner in w

etailed summ

the trades co

es and tiling

o received bu

e Graham.

espect of

g GST, in

nd

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forced to

he figures

figure is

ac by the

oject and

or sourced

Mirvac for

her) value

ctor.

which they

mary as to

onsidered

g services

ut did not

18

35. The relevant representative from Tilecorp with whom Adam Moore

and Mathew McAllum dealt in relation to the matter was its owner,

David Mullan. David Mullan’s de facto partner was Diane Graham.

36. It was Adam Moore who first broached with David Mullan the idea of

Tilecorp and Diane Graham providing tiling and interior design

services for the Cornubia house.55

37. Subsequently David Mullan submitted to Mathew McAllum a quote

for the provision of those services (quoting $27,930 plus GST) and for

the Orion PAD2 Project.56 At Mathew McAllum’s direction, David

Mullan then folded the price for the Cornubia house tiling services

(and a further amount of $2,240 plus GST for Diane Graham’s services

on the house) into a revised quote from Tilecorp for the Orion PAD2

Project.57 The revised quote made no mention of the Cornubia house.

Nor did it mention that the new quoted price included an amount for

work done or to be done on that house.

38. The revised Tilecorp quote was accepted. Tilecorp was awarded the

Orion PAD2 Project subcontract on the basis that it would be paid the

price in the revised quote. In due course that sum was invoiced to and

paid by Mirvac.58 The result was that Mirvac paid $30,170 plus GST

in respect of tiling and interior design work performed on the Cornubia

house.

55 See para 223. 56 See para 230. 57

See paras 229-236. 58 See para 237.

19

Electrical goods and services

39. Works relating to the ‘electrical rough-in’ for the Cornubia house were

undertaken by Darren Wall, a friend of David Hanna’s.59

40. David Hanna organised and obtained a quote from Darren Wall early

on, in December 2012, before he had first spoken with Adam Moore.60

41. After Darren Wall finished some of the works, he asked David Hanna

about issuing an invoice. David Hanna did not ask for an invoice to be

given to him for payment. Instead he told Darren Wall to ring another

person whose name Darren Wall could not remember. He said that

that person would be able to tell Darren Wall what to do with his

invoice. David Hanna gave him the telephone number of that person.61

42. Darren Wall rang the other person who told Darren Wall to address the

invoice to Klenner Murphy Electrical Pty Ltd (Klenner Murphy). He

also told him to describe the works as though they were works on the

Orion PAD2 Project. Darren Wall had not heard of either Klenner

Murphy or the Orion PAD2 Project. He did not know that Klenner

Murphy was, in fact, Mirvac’s electrical sub-contractor on that

project.62

59 See paras 238-239. 60 See para 240. 61

See para 259. 62 See para 260.

20

43. Darren Wall did as he was told. In due course he was paid by Klenner

Murphy. When he later finished the electrical works at the Cornubia

house he issued a further invoice to Klenner Murphy. Again he

misdescribed the works in the same way. Again Klenner Murphy

paid.63

44. Mathew McAllum and Daniel Greenland of Klenner Murphy dealt

with each other on the Orion PAD2 Project. They agreed that Klenner

Murphy would pay Darren Wall’s invoices and then include the cost of

doing so in false variation claims to be submitted to Mirvac on the

Orion PAD2 Project.64

45. Klenner Murphy did this. However, the total amount claimed and paid

appears to have included an additional $5,000 over and above the cost

that Klenner Murphy incurred in meeting Darren Wall’s invoices.

46. The total amount claimed by Klenner Murphy in respect of Darren

Wall’s work on the Cornubia house, and paid by Mirvac, was $20,224.

63 See para 284. 64 See paras 245-257, 266-284.

21

Plastering, painting and rendering

47. Plastering, painting and rendering services were provided to the

Hannas through Mirvac to enable them to complete the Cornubia

house. This was organised by Mathew McAllum, and, counsel

assisting submitted, also by Adam Moore.

48. The services themselves were provided by LAD (plastering), Jason

Manley (painting), and Shuttlewood (rendering and painting).65

49. None of these trades invoiced the Hannas or Mirvac. Each invoiced

Wadsworth Constructions Pty Ltd (Wadsworth Constructions). That

was the company that had been awarded subcontracts for work on the

Orion PAD2 Project in respect of painting, as well as ceilings and

partitions.66

50. Wadsworth Constructions paid those invoices. It then recovered the

cost of doing so (together with a small margin) from Mirvac on the

Orion PAD2 Project. The total amount paid by Mirvac in this regard

was $77,000.67

51. Wadsworth Constructions was able to invoice and recover this $77,000

in two ways. First, it artificially increased its quote for the Orion

PAD2 Project by $40,000. Then subsequently it did not reduce its

contract price and invoice amount for work on the Orion PAD2 Project

65 See para 292. 66 See para 287. 67

See paras 289-292, 295.

22

when there was a narrowing in the scope of works that ought to have

resulted in a negative variation valued at $37,000.68

52. Counsel assisting contended that Adam Moore probably first raised

with Wadsworth Constructions the prospect of it assuming the role

described above. Mathew McAllum also played a part. He was aware

that Wadsworth Constructions had agreed to play that role. The

evidence demonstrates that Mathew McAllum was involved in causing

Shuttlewood to generate and issue false invoices to Wadsworth

Constructions for its work on the Cornubia house. They were false in

the sense that the invoices described the work as having been done on

the Orion PAD2 Project. In fact they squarely related to the Cornubia

house. A detailed summary of the evidence is set out in the Appendix.

53. Adam Moore argued that Mathew McAllum’s evidence in relation to

Glen Wadsworth is detrimental to Mathew McAllum’s credit. Adam

Moore argued that Mathew McAllum faced irrefutable documentary

evidence that he had intervened to have the invoice from Shuttlewood

to Wadsworth changed so as to conceal any connection with the

Cornubia house and make it look as though it was one in respect of the

Orion project. Adam Moore argued that it was therefore important for

Mathew McAllum to sheet knowledge of the transaction home to

Adam Moore. Adam Moore pointed to Mathew McAllum’s evidence

to the effect that he had no relationship with Glen Wadsworth and in

consequence told Adam Moore what was proposed and got him to deal

with Glen Wadsworth. Adam Moore then contends that Mathew

McAllum was ‘contradicted’ by the oral evidence of Glen Wadsworth

68 See para 293.

23

saying ‘[h]e gave no evidence he had spoken at all with Mr Moore but

said that his dealings had been with Mr McAllum’.69

54. However, as the material in the Appendix makes clear, several aspects

of the evidence in relation to Glen Wadsworth support counsel

assisting’s submission that it is more likely than not that Adam Moore

had a greater involvement in the matter than he suggested.70 In

addition, Glen Wadsworth was not a particularly co-operative witness.

He exhibited a casual attitude. More than once he had to be reminded

about appropriate use of language.71 He stated a number of times he

could not remember the details without his file which he had not had

access to prior to entering the witness box. He stated that he had

suffered extreme personal difficulties around the time of the issues in

question arising.72 In any event, he was not directly asked about Adam

Moore’s involvement in the arrangements for the payment of invoices.

Hence the submission that Glen Wadsworth ‘contradicted’ Mathew

McAllum is overstated.

Plumbing

55. The subcontract for the plumbing work on the Orion PAD2 Project was

awarded to a company called Nicoll Industries Pty Ltd (Nicoll

Industries).73 In addition, and at the same time as Nicoll Industries

69 Submissions of Adam Moore, 23/11/15, paras 36-37. 70 See evidence in the Appendix under the heading ‘Rendering, painting and internal plastering at paras 285-296. 71

Glen Wadsworth, 15/9/15, T:260.26-30, 263.28-40. 72 For example, Glen Wadsworth, 15/9/15, T:262.5-10. 73

See para 298.

24

was performing work on that project, it also undertook the internal

plumbing work at the Cornubia house.74 It did so at the direction and

request of Mathew McAllum.75

56. The total cost to Nicoll Industries of performing this work was

$14,984.78. That sum did not include any profit margin that would

normally be charged by the company.76

57. It is probable that Nicoll Industries passed on $12,600 of this cost to

Mirvac by way of a false variation claim submitted by it on the Orion

PAD2 Project.77 At the time that claim was submitted, the cost that

Nicoll Industries had incurred on the Cornubia house work was of that

order. The payment claim that contained that variation also included

an additional false claim. It was said to be for rock breaking work.

But it was, in fact, to cover the cost that Nicoll Industries had incurred

(at Mathew McAllum’s direction) in paying for an invoice that the

BLF had submitted to Mirvac for tickets to a BLF Charity Fight Night.

74 See paras 299-310. 75 See paras 299-310. 76

See para 323. 77 See paras 325-330.

25

Air-conditioning installation

58. Mathew McAllum approached a company called Value Added

Engineering Group Pty Ltd (VAE). He requested it to install air-conditioning systems into the Cornubia house.78 The air-conditioning

units themselves were purchased separately by David Hanna.79

VAE had been awarded the mechanical services subcontract for the

Orion PAD2 Project.80

59. VAE arranged for the systems to be installed in the house. He retained

a business called Gray Brothers Airconditioning Pty Ltd (Gray Bros)

to undertake that work.81 VAE had intended to charge for the work,

with a view to recovering the cost of retaining Gray Bros, plus a

margin.82

60. However, Mathew McAllum subsequently proposed to VAE that it

claim for the work on the Cornubia house by submitting false variation

claims on the Orion PAD2 Project.83

61. Ultimately VAE was not prepared to proceed on this basis. It did not

invoice Mirvac any amount for the Cornubia house.84 It decided

instead to absorb the cost of the Gray Bros invoices, which totalled

78 See para 333. 79 See para 341. 80

See para 332. 81 See para 342. 82

See para 347. 83 See paras 348-349. 84

See paras 351-353.

26

$12,501.50 inclusive of GST.85 The honest and appropriate decisions

taken by VAE and its management, including Benjamin Carter,

deserve commendation.

Unorthodox payments for union events by Mirvac in Queensland

62. It is convenient now to move to a more detailed consideration of some

controversial aspects. It involves a contest of credibility on matters of

substance between Jason Vieusseux and Adam Moore. That contest in

turn has a considerable bearing on a contest of credibility on matters of

substance between Adam Moore and Mathew McAllum. For the

reasons given by counsel assisting, those contests must be resolved in

favour of Jason Vieusseux and Mathew McAllum.

63. During 2012 and 2013 some employees of Mirvac in Queensland, and

some subcontractors with whom they dealt, engaged in a practice under

which donations and other payments made to trade unions (for

functions, fund raising or charity events) were paid for by Mirvac

subcontractors. The subcontractors then recovered the payments from

Mirvac by way of false variation claims. In those variation claims the

amount paid by the subcontractor was misdescribed as being in respect

of work performed by that contractor on a Mirvac job.86

64. Adam Moore endorsed this practice.87 Importantly, Adam Moore

claimed in turn that Jason Vieusseux, the National Construction

85 See para 357. 86 Adam Moore, 18/9/15, T:565.10-566.10; see also Cornubia House MFI-1, 14/9/15, Vol 1, p 83. 87

Adam Moore, 18/9/15, T:566.9-10.

27

Director to whom he reported, had, in or about April/May 2012,

directed that it occur to frustrate a company-wide policy which

frowned upon Mirvac paying for such events directly.88

65. Against this, Jason Vieusseux gave evidence in which he denied

knowing about or condoning the practice Adam Moore described.89 He

gave evidence that, since 2007, his policy has been that Mirvac

employees could attend ‘appropriate Union events’, which were

‘always paid by the business as we were representing Mirvac at those

events’.90 Jason Vieusseux cited events with a ‘safety message’ (for

example those relating to Mates in Construction and an annual Sydney

Safety Dinner) as being ‘appropriate’ ones for Mirvac staff to attend91

He said that any union donation or sponsorship payments would not be

appropriate.92 Jason Vieusseux also relevantly said that ‘there was

absolutely no problem’ with money for appropriate union events going

through ‘Mirvac books’ and that ‘there are a number of examples since

that time where that has occurred’.93 Jason Vieusseux did not refer to

documentary evidence of the examples to which he referred. But his

evidence on this point was not challenged in cross-examination.

88 Adam Moore, 18/9/15, T:566.12-577.23. 89 Jason Vieusseux, 30/10/15, T:750.7-18, 750.28-45. 90

Jason Vieusseux, 30/10/15, T:749.39-43. 91 Jason Vieusseux, 30/10/15, T:756.28-32. 92

Jason Vieusseux, 30/10/15, T:766.18-21. 93 Jason Vieusseux, 30/10/15, T:753.4-7.

28

66.

94 Submiss 95 Adam M

Counsel ass

Vieusseux s

assisting arg

Jas (a)

dem

No (b)

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Vie

sug

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rati

sen

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con

atte

tryi

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see

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pay

ther

sions of Counse

Moore, 18/9/15,

sisting corre

should be pr

ued:

on Vieusseu

meanour in th

records wer

am Moore e

eusseux to

ggesting that

e explanatio

ionale for th

nse.

said, for e

nceal from th

end union re

ing to becom

t ring true in

ended the uni

n at those ev

ere is also

yments would

re was no rea

el Assisting, 13

, T:568.34-569

ectly submitt

referred to th

ux displaye

he witness bo

re produced t

ever sought

act in acc

Jason Vieuss

ons proffere

he practice w

example, tha

he public the

elated events

me a ‘non-EB

circumstanc

ion functions

vents by mem

no reasona

d need to be

asonable exp

3/11/15, para 3

9.7, 569.39-570

ted that the

hat of Adam

ed a notabl

ox;

to the Comm

or obtained

cordance wi

seux was awa

d by Adam

were varied.

at the pract

e fact that M

s because, in

BA company’

es where som

s in question,

mbers of the p

able explana

e concealed f

planation for h

39.

0.6, 570.25-29.

e evidence

m Moore.94

ly more im

mission sugge

approval fro

ith the pra

are of the pra

m Moore a

They did n

tice was int

Mirvac was p

nter alia, Mi

’.95 Howeve

me Mirvac em

, and were lik

public.

ation for w

from the pub

how that con

.

of Jason

Counsel

mpressive

esting that

om Jason

actice, or

actice;

as to the

not make

tended to

paying to

irvac was

er this did

mployees

kely to be

why such

blic. And

ncealment

29

96 Adam M 97 Adam M 98

Jason Vi 99 Jason Vi

(as

for

wou

emp

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intr

man

pol

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man

inst

that

con

bee

Ad (e)

atte

pos

on

evid

task

Mir

Ad

Jas

Moore, 18/9/15,

Moore, 18/9/15,

ieusseux, 30/10

ieusseux, 30/10

well as atten

them), wou

uld succeed

ployees with

am Moore

roduced bec

nagement m

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wever Jaso

nagement te

tigation of th

t he would h

ntrary to it.

en made out.

am Moore

endance cost

ssibly Federa

‘increasing

dence was th

kforce in Vi

rvac Ltd) wa

am Moore’s

on Vieusseu

, T:565.20-25,

, T:567.10-23.

0/15, T:752.31

0/15, T:752.31

ndance at uni

uld have a be

in reaching

hout the invol

elsewhere

cause, when

model, the n

hich Mirvac

on Vieusseu

eam. If that

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have directed

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also suggest

ts related to

al Governmen

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hat he recall

ictoria, of w

as to be a pa

s evidence o

ux’s memory

566.30-567.6.

-38.

-38.

ion events w

earing on w

an enterpris

lvement of th

claimed tha

n Mirvac

national exec

would not p

ux was pa

t policy wa

which he was

d Adam Moo

s for any suc

ted that Mi

union events

nt taskforce,

on costs’.97

led discussin

which James

arty.98 Howe

on the topic

y.99 Adam

without direct

whether or no

se agreemen

he union.

at the prac

adopted a

cutives intro

ay for union

art of the

as introduce

s a part, it is

ore to act in

ch direction

irvac wished

s from a Vic

which was

Jason Vie

ng the forma

MacKenzie

ever, the rem

did not acc

Moore’s ev

t payment

ot Mirvac

nt with its

ctice was

national

oduced a

n events.96

national

ed at the

s unlikely

a manner

have not

d to hide

ctorian or

focussing

eusseux’s

ation of a

(CEO of

mainder of

cord with

vidence is

30

67.

68.

100 Submis 101 Adam M para 14. 102

Submis

diff

refe

hid

Adam Moor

of his eviden

his evidence

assisting su

evidence rel

only in his p

Moore gave

permitted th

purchased b

accounts.101

Adam Moor

relied on ev

He submitte

to the conten

Mirvac wer

charitable U

construction

his own ev

contributions

sions of Adam

Moore, 18/9/15

sions of Adam

ficult to acce

erred to by h

ding those exp

re submitted

nce.100 He s

e to be pref

ubmitted that

iable or cred

public hearing

e evidence o

he cost of t

by Mirvac a

re also subm

vidence based

d that couns

ntion that sin

re accustom

Union events,

of the Cornu

vidence that

s to union ev

m Moore, 23/11

5, T:565.4-47,

m Moore, 23/11

ept. The co

him in evide

penses in the

that counsel

submitted tha

ferred to tha

t consistenc

dible. Couns

g, not in his

of Mirvac co

tables at var

and conceale

mitted that co

d in propens

el assisting’s

nce Adam M

ed to hidin

therefore A

ubia house.

Jason Vieu

vents.

/15, paras 3, 4

566.1-36. Subm

/15, para 48.

osts of the ty

ence hardly j

e first place.

assisting ign

at that was a

at of Jason

cy of itself

sel assisting

earlier privat

orporate poli

rious union-ed through v

ounsel assisti

sity, if not p

s submission

Moore and his

ng evidence

dam Moore

Adam Moor

usseux sanct

, 6, 8(a), 21(b)

missions of Co

ypes of unio

justified the

nored the co

a powerful r

Vieusseux.

does not m

also noted th

ate hearing, th

icy and prac

-related even

variations on

ing have ‘in

pure circums

n can be brok

s Queensland

of contribu

must be link

re went on to

tioned the h

).

ounsel Assistin

on events

effort of

onsistency

reason for

Counsel

make his

hat it was

hat Adam

ctice that

nts to be

n project

the main

stance’.102

ken down

d team at

utions to

ked to the

o point to

hiding of

ng, 3/12/15,

31

69. Adam Moore also pointed to evidence from Jason Vieusseux and

Adam Moore that Brett Draffen contacted Jason Vieusseux to ‘vent his

frustration’ at Mirvac’s involvement in union events and that Jason

Vieusseux confirmed communicating with Brett Draffen about this

topic. He submitted that Jason Vieusseux’s testimony was that he

defended to Brett Draffen the practice of attending union events.103

70. Adam Moore went on to argue that the evidence that Brett Draffen was

displeased with information coming to him that Mirvac was involving

itself at Union events was consistent with Adam Moore’s testimony,

was not contradicted by Jason Vieusseux’s testimony, and explained

Jason Vieusseux’s defensive position over the phone.104

71. Adam Moore also pointed to Jason Vieusseux’s reliance on

documentary evidence which was not placed before the Commission.

He submitted that Adam Moore’s request to obtain documentary

evidence from Mirvac was denied.105 Adam Moore further noted

Mirvac’s Code of Conduct which he claimed show that charitable

donations were acceptable and that they appeared in Mirvac’s annual

report.106

103 Submissions of Adam Moore, 23/11/15, para 52. 104 Submissions of Adam Moore, 23/11/15, para 53. 105

Submissions of Adam Moore, 23/11/15, paras 2, 54-55. 106 Submissions of Adam Moore, 23/11/15, para 57.

32

72. Adam Moore argued that counsel assisting’s reliance upon the practice

of hiding union charitable donations in Mirvac accounts was

undermined. Adam Moore was ‘comfortable’ with that practice as

evidenced by several pieces of documentary evidence.107 The same

cannot be said of the Cornubia payments.108 Further, Adam Moore

argued that to ‘describe as comparable donations such as a $1,500 table

at a charitable event, which was within corporate policy, and nearly

$150,000 of building expenses which was clearly outside the corporate

policy, is to compare apples with oranges.’109

73. Adam Moore also submits that Mirvac’s submissions about Jason

Vieusseux should be treated with caution.110

74. Adam Moore further contended that it is convenient for Mirvac as an

organisation to deny any involvement or knowledge of its current

decision makers in the events evidenced before the Commission. It has

done so by distancing itself from employees no longer a part of their

organisation. Adam Moore contended that Mirvac’s submissions

should be seen as opportunistic. They did not carefully consider the

evidence put before the Commission. He pointed to an ASX

announcement published on 18 September 2015 shortly after the

evidence given by Mathew McAllum and Adam Moore.111

107 Submissions of Adam Moore, 23/11/15, para 59. 108 Submissions of Adam Moore, 23/11/15, para 61. 109

Submissions of Adam Moore, 23/11/15, para 64. 110 Submissions of Adam Moore, 27/11/15, para 2. 111

Submissions of Adam Moore, 27/11/15, paras 4, 19-24.

33

75. Adam Moore pointed to a publicly available document112 which it is

contended shows that charitable donations are acceptable and ‘that they

appear in Mirvac’s Annual Report’.113

76. Mirvac submitted in response that the level of detail in its public

accounts is insufficient to show payments for a union fight night and

that Adam Moore incorrectly denied that proposition.114

77. Counsel assisting, with some support from Mirvac, submitted that the

clandestine manner in which the works on the Cornubia house were

on-charged to Mirvac and concealed in invoices and variations was

identical to the methodology employed for concealing payment not

only for attendance at union events but also other general

entertainment activities from which Adam Moore and other attendees

benefited personally.

78. Counsel assisting agreed with that submission of Mirvac. They further

noted that Adam Moore admitted as much in cross-examination.115

The admission is itself supported by documentary evidence.

79. Thus counsel assisting noted116 the following entertainment expenses

that were referenced on Klenner Murphy’s Client Entertainment

112 http://www.mirvac.com/uploadedFiles/Main/Content/About/Corporate_Governance/1305 03-Code-of-Conduct.pdf 113

Submissions of Adam Moore, 23/11/15, p 13, para 57. 114 Submissions of Mirvac, 27/11/15, para 7; Adam Moore, 18/9/15, T:636.47-637.24. 115

Adam Moore, 18/9/15, T:631.40-43, 633.24-29. 116 Submissions of Counsel Assisting, 13/11/15, para 203; Submissions of Counsel Assisting, 3/12/15, paras 10-11.

34

Expenses document:117 ‘Night for Janice’, ‘Sharks night’, ‘Mirvac

Lions game’, ‘Origin Jerseys’ and ‘Origin tables’. Counsel assisting

further noted that the combined ‘item cost’ and ‘KME cost’ of these

entertainment expenses was $64,261. The expenses were split in the

Client Entertainment Expenses document over a number of variations

and items of work. The ‘approved’ sum of these expenses were then

recovered by Klenner Murphy through work items or variations that

were invoiced by it and misdescribed as relating to the Orion PAD2

Project.118 These were subsequently paid by Mirvac.119

80. Furthermore, counsel assisting noted Natalie Croghan’s evidence. She

said that the ‘Night for Janice’ related to a fundraiser for a woman who

had cancer. She said that she could not recall whether the cost was

ultimately paid by Mirvac. She said that an attempt was made to claim

the cost from Mirvac.120 Natalie Croghan recalled that Janice was

friend or relative of David Flood (a Mirvac project manager) and that

she would have discussed the expense with Adam Moore.121 As

described above, the Klenner Murphy costs that appear to be associated

with the ‘Night for Janice’ were invoiced to Mirvac and paid by it.122

117 Cornubia House MFI-1, 14/9/15, Vol 2, pp 623-627. 118 Cornubia House MFI-1, 14/9/15, Vol 3, pp 948-949. 119

Cornubia House MFI-1, 14/9/15, Vol 5, p 1799. 120 Natalie Croghan, 16/9/15, T:357.6-358.4. 121

Natalie Croghan, 16/9/15, T:357:6-358.4. 122 Paragraph 79.

35

81. In this regard, counsel assisting submitted that Adam Moore’s

submissions failed to acknowledge that the impugned practice of

concealing expenses was not confined to ‘charitable’ union events. It

included other union events and general (costly) entertainment

expenses. The means by which those costs were concealed is

revealing. Further, counsel assisting argued that Adam Moore’s

submission that payment for a ‘$1,500 table at a charity event … and

nearly $150,000 of building expenses … is to compare apples with

oranges’ ignored the purchase of a table for the BLF Fight Night. It

also ignored the significant entertainment expenses incurred by

Klenner Murphy,123 as referred to in more detail above.124

82. Two aspects of this matter should be cleared out of the way. The first

is that counsel assisting noted125 that, in its submissions, Mirvac

referred to Adam Moore’s evidence to the effect that he had requested

and received approval from Jason Vieusseux to attend a BLF Charity

Fight Night.126 Nicoll Industries paid for the cost and then claimed it

as a variation on the Orion PAD2 Project.127 Adam Moore received

the invitation for that Fight Night from the BLF media and

communications officer on 6 June 2013.128 In cross-examination,

Mirvac put to Adam Moore an email dated 25 June 2012.129 The email

had been sent by Adam Moore to, among others, Jason Vieusseux.

123 Submissions of Counsel Assisting, 3/12/15, para 19. 124 Paragraph 79. 125

Submissions of Counsel Assisting, 3/12/15, paras 12. 126 Submissions of Mirvac, 23/11/15, paras 25-27; Adam Moore, 18/9/15, T:621.30-36. 127

See Submissions of Counsel Assisting, 13/11/15, paras 237-242, 245. 128 Cornubia House MFI-1, 14/9/15, Vol 1, pp 347-349. 129

Adam Moore, 18/9/15, T:635.14-366.7.

36

The email was a response to a request sent on behalf of Jason

Vieusseux’s superior, Brett Draffen, asking various Mirvac managers

to disclose sponsorship and community activities towards which they

had made contributions.130 Mirvac placed some significance on the

fact that Adam Moore did not disclose the payment related to the Fight

Night. Mirvac suggested that, if Adam Moore had spoken to Jason

Vieusseux about attendance at the event, the omission by Adam Moore

was inexplicable.131 However, as counsel assisting pointed out, this

submission appears to be erroneous . The invitation to the Fight Night

that Mirvac said was not disclosed was dated 6 June 2013; the

sponsorship email from Adam Moore was dated 25 June 2012.

Accordingly, the fact of the 6 June 2013 invitation could not have been

disclosed in the 25 June 2012 email. The 25 June 2012 email is

therefore neutral in relation to the findings to be made in respect of the

contest between Adam Moore and Jason Vieusseux. The second

aspect to be put aside is this. It was put to Adam Moore in cross-examination that Glen Wadsworth had paid for attendance by Mirvac

staff at a BLF Fight Night in ‘early 2012’ and that he was reimbursed

through a variation on the ‘Park project’, Adam Moore gave evidence

that he did not recall this.132 No documentary evidence in respect of

these matters (ie. any union charity events that preceded the 25 June

2012 email) was shown to Adam Moore by Mirvac. It is not possible

to resolve this.

83. Counsel assisting correctly submitted that the clandestine manner in

which the works on the Cornubia house were on-charged to Mirvac

130 Cornubia House MFI-6, 14/9/15. 131 Submissions of Mirvac, 23/11/15, para 27. 132

Adam Moore, 18/9/15, T:632.27-33.

37

and concealed in invoices and variations was essentially identical to

the methodology employed for concealing payment not only for

attendance at union events but also other general entertainment

activities. This method of charging for both union and non-union

events is relevant to the Cornubia house case study.

Industrial landscape as at 2013 in south east Queensland

84. It was contended by counsel assisting that the period late 2012 to 2013

was part of a particularly difficult period for industrial relations in

south east Queensland. Counsel assisting pointed to August 2012 as

witnessing the beginning of a highly publicised and long running

dispute between Lend Lease and the CFMEU at the Queensland

Children’s Hospital project in Brisbane. This was followed in 2013

with industrial disputation at Laing O’Rourke’s McLachlan and Ann

Project (M&A Project). That led to urgent Federal Court proceedings.

Injunctions were granted in favour of Laing O’Rourke against officers

of the BLF, CFMEU and CEPU.133

85. On 4 March 2013 Adam Moore received an email concerning this state

of affairs, described by counsel assisting as ‘volatile’.134 The email

was from the Project Manager of the M&A Project, attaching an

‘M&A Update’ PowerPoint presentation. Among other matters, the

update claimed that ‘unions had asserted that their permission was

133 Laing O'Rourke Australia Pty Ltd v Construction, Forestry, Mining and Energy Union [2013] FCA 133. 134

Cornubia House MFI-1, 14/9/15, Vol 1, p 61; Submissions of Counsel Assisting, 13/11/15, para 44.

38

required to undertake work outside ordinary hours and had put bans in

place’.135

86. Adam Moore was not an original recipient of the email. He suggested

that he received it from David Mapleton of Fugen Bricklayers.136 But

Adam Moore did forward the email to Jason Vieusseux on 6 March

2013. He wrote that ‘Laing O’Rourke are at war with the brothers’.

And he wrote that the ‘CFMEU are smashing all other Projects other

than Mac & Anne’.137 Adam Moore’s note also stated that the union

‘are calling meetings on most projects weekly’.138

87. Adam Moore said he sent the email because what was happening

industrially was ‘very, very important to us’.139 He said that ‘there

were problems every week with construction in Queensland’.140

88. Counsel assisting submitted that the importance of industrial matters,

and the impact of adverse attention from the BLF and CFMEU, was

further borne out by emails between Adam Moore and Kane Pearson

(then Assistant Secretary of the BLF) on 27 March 2013.141 In an

earlier email, a subordinate of Adam Moore’s had requested approval

from Kane Pearson for the work to be carried out on a Mirvac project

in Kawana over rostered days off to catch up on work lost due to

135 Cornubia House MFI-1, 14/9/15, Vol 1, p 69. 136 Adam Moore, 18/9/15, T:595.8-10. 137

Cornubia House MFI-1, 14/9/15, Vol 1, p 61. See also Adam Moore, 18/9/15, T:600.29-36. 138 Cornubia House MFI-1, 14/9/15, Vol 1, p 61. 139

Adam Moore, 18/9/15, T:595.28-29. 140 Adam Moore, 18/9/15, T:599.23-24. 141

Cornubia House MFI-1, 14/9/15, Vol 1, pp 88-90.

39

rain.142 That approval was not forthcoming. Adam Moore then wrote

to Kane Pearson directly in the following terms:143

Mate, give me a break, Gary Owen, Kris Simcoe and Bob Carnegie, mate I’m carrying them with no budget at all, all I ask is to catch up with works that have been affected by the rain.

89. Counsel assisting contended that that email is instructive for two

reasons:

90. First, counsel assisting submitted that the email clearly showed that

Adam Moore was prepared to go, and in the past did go, some way to

win the favour of the BLF. Kris Simcoe and Bob Carnegie were no

ordinary BLF members. As Adam Moore knew, Kris Simcoe was the

son of former BLF Secretary, Greg Simcoe.144 It is also a matter of

public record that contempt proceedings had been brought (and

ultimately dismissed) against Bob Carnegie in respect of his alleged

involvement in organising industrial action at the Queensland

Children’s Hospital Project.145 A person such as Adam Moore, for

whom industrial and union issues were ‘very very important’, could

not have missed the well-publicised support of the CFMEU and BLF

for Bob Carnegie in respect of those proceedings. The language used

by Adam Moore in the email clearly suggested that he was effectively

doing a favour for the BLF by employing at least two persons with

strong connections to the union in circumstances where their labour

142 Cornubia House MFI-1, 14/9/15, Vol 1, p 88. 143 Cornubia House MFI-1, 14/9/15, Vol 1, p 88. 144

Adam Moore, 18/9/15, T:605.25-39. 145 Abigroup Contractors Pty Ltd v Carnegie [2013] FCCA 1099.

40

was not budgeted for on the project (presumably because it was not

needed).

91. Adam Moore rejected this plain interpretation of the email. He insisted

that his words meant to convey that the BLF had good representation

on site and that there was ‘no budget’ for workers because the costs of

the project had blown out.146

92. Secondly, according to counsel assisting, the email showed that, as in

respect of the M&A Project (and at around the same time), work

outside of hours was required on the Kawana project to catch up on

lost time. Ensuring that the BLF continued not to resist such work was

clearly important for Adam Moore. He admitted that his email to Kane

Pearson was emotive.147 The desire to achieve continuing harmonious

relations with the BLF so that Mirvac would not suffer the fate of the

M&A Project was likely to be one motivating factor behind the

provision of services to David Hanna in respect of the Cornubia House.

93. Mirvac disputed some of the contentions of counsel assisting on this

topic. Mirvac took issue with counsel assisting’s reliance on the email

of 6 March 2013 referring to industrial activity on a Laing O’Rourke

site. It argued that one instance of industrial activity in Queensland on

an unrelated project for a different construction company was not

evidence of an industrial action landscape across the state of

Queensland that would warrant any form of response by a third party.

Mirvac contended that it failed to provide an explanation of the

conduct complained of. Mirvac referred to the evidence of Jason

146 Adam Moore, 18/9/15, T:605.41-606.38. 147 Adam Moore, 18/9/15, T:605.43-47.

41

Vieusseux that this was an ‘unremarkable email in that there was

action on someone else’s site, and that was the extent of what I took it

to be.’148 It further noted that Jason Vieusseux’s evidence was also

that the email did not give him cause for concern about any particular

industrial activity in Queensland at the time.149 It noted that according

to Jason Vieusseux, ‘there was not a lot going on in Queensland [for

Mirvac] at that time.’150 Mirvac also pointed to Jason Vieusseux’s

evidence that the broader construction industry in Queensland and the

construction business of Mirvac in Queensland were relatively inactive

during the relevant period, and that Jason Vieusseux would not

describe the period as being terribly busy for Mirvac in comparison to

other major construction markets in Australia in which Mirvac

operates.151

94. Mirvac also tried to discount the relevance of the chain of emails

dealing with work outside ordinary hours at the Kawana Project.152

Mirvac submitted that the communication relied upon was with Kane

Pearson of the BLF, that there is no evidence that Kane Pearson was

aware of the works to the Cornubia house and that David Hanna’s

evidence was that he did not discuss the matter with anyone.

95. Mirvac further submitted that requests to allow employees RDOs were

ordinary and commonplace within the building industry, and that it was

‘inconceivable’ that such a ‘minor matter’ would result in a substantial

148 Jason Vieusseux, 30/10/15, T:755.29-31; Submissions of Mirvac, 23/11/15, paras 15-16. 149 Jason Vieusseux, 30/10/15, T:756.7-12; 150

Jason Vieusseux, 30/10/15, T:767.8-10; 151 Jason Vieusseux, 30/10/15, T:775.8-14; 152

Submissions of Mirvac, 23/11/15, paras 9-10.

42

benefit being requested by and provided to a union official. Mirvac

submitted that its conduct in negotiating and consulting with union

representatives on such a matter was a ‘minor and common event.’

Entitlements to RDOs are set out in Mirvac’s EBA. As unions are

parties to the EBAs it is common practice to raise such matters

directly. Mirvac stated that that is its practice nationally.

96. Mirvac also noted that by late May 2013, Adam Moore knew that he

had obtained a position with Lend Lease, and that he left Mirvac in

August 2013. Adam Moore and David Hanna had known each other

from 1996. Mirvac submitted that Adam Moore would have had no

motivation to further Mirvac’s interests at the relevant times. In short,

Mirvac appeared to be submitting that the motivation was more

personal rather than Mirvac-related.153

97. In response to Mirvac, counsel assisting noted that David Hanna was

not cross-examined as to whether or not he had any knowledge about

Adam Moore’s intentions to leave. Counsel assisting argued that the

fact that Adam Moore knew by late May 2013 he had a position with

Lend Lease does not negate the probability that the benefits being

received by David Hanna would tend to influence him to favour

Mirvac until such time as Adam Moore resigned, which was not until

August 2013.

98. Counsel assisting also contended154 that union opposition to work

outside ordinary hours is not a ‘minor matter’. Counsel assisting noted

that in the case of Laing O’Rourke the issue was important enough to

153 Submissions of Mirvac, 23/11/15, para 11. 154 Submissions of Counsel Assisting, 3/12/15, para 6.

43

justify the seeking and granting of urgent interlocutory orders that

bound the CFMEU and BLF.155 The email chain between Kane

Pearson and Adam Moore showed that the issue was also important to

the latter.156 Counsel assisting submitted that it was not to the point

that consulting with unions in respect of such work may be a ‘common

event’. Counsel assisting did not submit, as seemed to be suggested by

Mirvac, that the benefits given to David Hanna were for the purposes

of accommodating requests to work outside ordinary hours. Rather,

the submission was that the emails were merely one group of

circumstantial facts that were relevant to understanding Adam Moore’s

intention. In circumstantial cases, it is necessary to approach the

evidence as a whole and not consider it piecemeal.157

99. David Hanna also complained about counsel assisting’s submission

that the email sent by Adam Moore to the BLF is ‘entirely inconsistent

with the evidence given by Adam Moore’. To the contrary, David

Hanna contended that Adam Moore’s evidence is consistent with the

text of the email and is not contradicted by any other evidence. David

Hanna submitted that to assert otherwise raises the ‘spectre of

apprehended bias since it appears to proceed on an assumption that any

company dealing with the BLF necessarily must have taken steps to

“curry favour” with the union or risk adverse consequences’.158

155 Laing O'Rourke Australia Pty Ltd v Construction, Forestry, Mining and Energy Union [2013] FCA 133. 156

Cornubia House MFI-1, 14/9/15, Vol 1, p 88. 157 R v Hillier (2007) 228 CLR 618 at [48]; Submissions of Counsel Assisting, 3/12/15, para 20. 158

Submissions of David Hanna, 23/11/15, para 16.

44

100. This submission is hard to understand. On the simple question of what

the email means, counsel assisting’s submissions are to be preferred.

101. David Hanna also submitted that any link between industrial action

being taken by the CFMEU in relation to Lend Lease and Laing

O’Rourke and the alleged benefit said to be provided to David Hanna

required an ‘extraordinary leap unsupported by evidence’. He also

submitted: [p]erhaps if David Hanna was working at the CFMEU and

Adam Moore at Lend Lease or Laing O’Rourke the issue might require

greater scrutiny’. Then he submitted that ‘there is absolutely no

evidence Mr Moore was in any way concerned about the BLF taking

action against Mirvac, or in any way motivated to offer free services to

Mr Hanna in anticipation of such action.’159

102. Counsel assisting responded by saying that as the PowerPoint

presentation forwarded by Adam Moore to Jason Vieusseux on 6

March 2013 made clear, the BLF were one of the unions (along with

the CFMEU and CEPU) that were bound by orders made in respect of

the M&A Project, and that these orders also applied to ‘Kevin Griffin

and Tim Jarvis of the BLF’.160 Similarly, interlocutory orders were

sought and granted against the CFMEU and the BLF in respect of the

Queensland Children’s Hospital dispute in August 2012,161 with those

orders binding several BLF officials and employees as well as Robert

159 Submissions of David Hanna, 23/11/15, para 18. 160 Cornubia House MFI-1, 14/9/15, Vol 1, pp 64, 66. 161

Abigroup Contractors Pty Ltd v CFMEU & Ors [2012] FMCA 819; Abigroup Contractors Pty Ltd v CFMEU & Ors (No.2) [2012] FMCA 820; Abigroup Contractors Pty Ltd v CFMEU & Ors (No.3) CFMEU v Abigroup Contractors Pty Ltd [2012] FMCA 822.

45

Carnegie162 who was subsequently engaged by Mirvac on the Kawana

Project.

103. Counsel assisting’s submissions on the issue of Adam Moore’s

motivation lying in part in concerns to placate David Hanna in relation

to industrial troubles are accepted.

Initial discussions about the Cornubia house between Adam Moore and David Hanna

104. Adam Moore first came to know David Hanna in about 1996. At that

time Adam Moore held the position of construction manager with

Mirvac.163 David Hanna was an organiser with the BLF. BLF

members worked on Mirvac projects.164

105. Adam Moore’s first substantive dealing with David Hanna concerned

negotiating the terms of an enterprise agreement that would govern the

relationship between Mirvac Constructions and its employees who

were members of the BLF.165 After that, and in 2011, the two of them

worked more closely together on a project that involved arranging and

paying for the reconstruction of a house for a family in Logan

following its destruction in a horrific house fire.166 By this stage David

162 Abigroup Contractors Pty Ltd v Carnegie [2013] FCCA 1099. 163 Adam Moore, 18/9/15, T:559.24-560.40. 164

Adam Moore, 18/9/15, T:560.31-561.26. 165 Adam Moore, 18/9/15, T:561.39-43. 166

Adam Moore, 18/9/15, T:561.43-46.

46

Hanna was the BLF’s Assistant Secretary, and Adam Moore was

Construction Director of Queensland.167

106. According to Adam Moore, he had a chance encounter with David

Hanna at South Bank in Brisbane in early April 2013.168 He passed by

a coffee shop where he saw David Hanna, who said to him ‘Can I

come and meet you?’ To that Adam Moore said ‘Yes’.169

107. Adam Moore gave evidence that David Hanna subsequently

telephoned him and arranged a meeting. They then met in Mirvac’s

office as arranged.170 At that meeting David Hanna told Adam Moore

that he was building a home, had been impressed with Mirvac’s

finishes on the Logan house, and wanted to speak with a Mirvac

interior designer because he was ‘no good at picking colours’.171

Adam Moore said that Mirvac did not have interior designers in

Queensland any more, but that he could recommend someone whose

work he had seen before.172 Adam Moore also gave evidence that

David Hanna told him at this meeting that he was ‘having trouble

procuring windows…due to lead time’. He asked Adam Moore to ‘get

him a price on windows’.173 Adam Moore said he agreed to do so, and

167 Adam Moore, 18/9/15, T:562.10-21. 168 Adam Moore, 18/9/15, T:559.8-16. 169

Adam Moore, 18/9/15, T:575.6-38. 170 Adam Moore, 18/9/15, T:575.40-45. 171

Adam Moore, 18/9/15, T:577.7-578.13. 172 Adam Moore, 18/9/15, T:578.13-23. 173

Adam Moore, 18/9/15, T:580.37-581.37.

47

108.

109.

110.

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48

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49

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50

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response.179

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Hanna, 21/9/15

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Moore, 18/9/15

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not find it od

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Adam Moor

tion surprisi

5, T:663.41-44.

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that’.177

Hanna prov

dam Moore p

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mes, consecu

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David Hanna

necessary if

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nd Mirvac

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.

4.12.

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nothing in

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51

Hanna both knew what had really occurred in relation to Mirvac’s

involvement in the construction of the Cornubia house.

113. Counsel assisting argued that it is to be remembered that the first

relevant meeting between David Hanna and Adam Moore took place in

early April 2013. That was within weeks of Adam Moore having

received the presentation regarding the M&A Project. It was within

weeks of his having forwarding the email to Jason Vieusseux with

reference to industrial ‘war’ and the CFMEU ‘smashing’ Laing

O’Rourke sites, in circumstances where industrial activity and union

relations were ‘very, very important’ to him and Jason Vieusseux180

and in an environment in which ‘there were problems every week with

construction in Queensland’.181

114. Counsel assisting submitted that Adam Moore would have his hearers

believe that, when he met the most senior official of the BLF in

Mirvac’s office for the specific purpose of discussing assistance for

David Hanna with work on his personal residence, the recent industrial

strife which was the subject of the email was not on his mind.182

Counsel assisting argued that his evidence in this regard should not be

accepted.

115. Counsel assisting submitted that it was probable that Adam Moore and

David Hanna had a discussion at the meeting of the kind described

above.183 They submitted further that it is likely that Adam Moore’s

180 Adam Moore, 18/9/15, T:595.28-29. 181 Adam Moore, 18/9/15, T:599.23-24. 182

Adam Moore, 18/9/15, T:598.24-599.24. 183 Paragraph 109.

52

agreement to assist David Hanna in the way described stemmed from

the fact that David Hanna was a senior union official and in a position

of influence in the construction industry, and that Mirvac, or Adam

Moore himself, could be favourably or disadvantageously affected by

the exercise of that influence. Indeed, Adam Moore gave evidence

that, by January 2013, he was speaking with Lend Lease, a competitor

of Mirvac, with a view to the creation of a position for him to

occupy.184 It is likely that Adam Moore intended that any goodwill

generated by his assistance to David Hanna would follow him into any

new roles that he undertook after he left Mirvac.

116. Counsel assisting submitted that it was in Adam Moore’s interests, as

the most senior Queensland based construction executive of Mirvac, to

curry favour with the head of one of the powerful building unions in

that State. David Hanna knew that. He approached Adam Moore

hoping that Mirvac would be able to confer favours on him in the form

of free goods and services for the Cornubia House of the kind he

subsequently received. He received those favours from Mirvac

knowing that Adam Moore hoped it would influence the way David

Hanna would treat Mirvac, and him personally, when performing his

functions as an official of the BLF.

117. Adam Moore took issue with counsel assisting. Adam Moore

submitted that the email received by Adam Moore on 16 April 2013

from David Mullan, and forwarded to Mathew McAllum with contact

details for Diane Graham tended to confirm Adam Moore’s testimony

to the effect that he only spoke to David Hanna about interior design

184 Adam Moore, 18/9/15, T:624.15-38.

53

and advised him he would put him in touch with an interior designer

with whom he was familiar.185

118. Adam Moore also submitted that on 22 April 2013, Mathew McAllum

copied Adam Moore into an email to David Hanna in which he

included a quote for windows. He contended that this piece of

evidence is consistent with Mr Moore’s testimony. He contended that

it was also the behaviour that might ordinarily be expected in a

business where a subordinate (Mathew McAllum) was confirming to

his superior (Adam Moore) that he had attended to some work which

he had been given the task of carrying out.186

119. Adam Moore went on to note187 that the meeting invitation sent to

Adam Moore and Glen Wadsworth by Mathew McAllum on 23 April

2013 with the subject ‘Discuss Cornubia’ was declined by Adam

Moore’s personal assistant. Adam Moore stated that he did not discuss

the meeting with his personal assistant. He said that evidence was not

contradicted. He further gave evidence that he did not see the meeting

invitation at the time, that he was not aware of it, and that he did not

attend the meeting with Mathew McAllum and Glen Wadsworth.

Adam Moore pointed out that evidence was not contradicted. He

submitted that the evidence seemed to suggest that if a meeting took

place, it was between Mathew McAllum and Glen Wadsworth only.

He further submitted that had this meeting been properly drawn to his

attention, he may have prevented the ‘folly’ undertaken by Mathew

McAllum in relation to Cornubia House.

185 Submissions of Adam Moore, 23/11/15, paras 9-10. 186 Submissions of Adam Moore, 23/11/15, para 11. 187

Submissions of Adam Moore, 23/11/15, paras 12-19.

54

120. Adam Moore contended that of the three pieces of documentary

evidence referred to by him, two tend to support his testimony and one

(the meeting invitation) appears not to have been drawn to his

attention. He argues that beyond these three pieces of

contemporaneous documentary evidence, there was no documentary

evidence directly contradicting his evidence. This is despite the great

volume of documentary evidence assembled with the apparent

cooperation of Mirvac.188

121. Counsel assisting responded thus. On the one hand, Adam Moore was

submitting that the fact he was copied to an email from Mathew

McAllum to David Hanna regarding a quote for windows is significant

because it demonstrates that Adam Moore’s discussion with David

Hanna was limited to that topic (and interior decorating).189 On the

other hand, Adam Moore tried to discount the significance of his

having been sent the invitation from Mathew McAllum to meet Glen

Wadsworth to ‘Discuss Cornubia’ on the basis that he did not see or

was not aware of the invitation.190 Counsel assisting asserts that Adam

Moore has adopted inconsistent positions. In any event, whether or not

he was aware of the meeting invitation relating to Glen Wadsworth is

irrelevant. What matters is the circumstantial fact (as one among a

number) that the meeting invitation was in fact sent to him.

122. The submission of counsel assisting on this issue is accepted. The

circumstances disclosed by the evidence of what happened after the

188 Submissions of Adam Moore, 23/11/15, para 20. 189 Submissions of Adam Moore, 23/11/15, para 11. 190

Submissions of Adam Moore, 23/11/15, paras 16-17.

55

David Hanna-Adam Moore meeting strongly support counsel

assisting’s inference about what happened at that meeting.

123. Mirvac argued that the clandestine nature of the way in which the

works were paid for suggests that they could not have been performed

to garner favour for Mirvac. That is, Adam Moore and Mathew

McAllum would not have needed to have concealed the works from

senior management and the Board of Management if the goal was to

garner favour for Mirvac in its dealings with the BLF.191 In response,

counsel assisting contended that the mere fact, if it was a fact, that

Mirvac did not know of the benefits being bestowed upon David

Hanna did not exclude the possibility that the benefits bestowed on him

were intended by Adam Moore or Mathew McAllum, to influence him

in relation to Mirvac. Further, it does not exclude the possibility that

David Hanna understood the benefits bestowed on him to be intended

to influence him in relation to Mirvac.192

124. The submission of counsel assisting on this issue, too, is accepted.

Initial discussions about the Cornubia house between Adam Moore and Mathew McAllum

125. Mathew McAllum gave evidence that after David Hanna’s initial

meeting with Adam Moore, the latter then spoke to Mathew McAllum

in Mirvac’s Brisbane office.193 He told Mathew McAllum that he

191 Submissions of Mirvac, 23/11/15, para 12. 192 Submissions of Counsel Assisting, 13/11/15, para 7. 193

Mathew McAllum, 16/9/15, T:370.12-43.

56

needed help with a house, and wanted assistance in sourcing some

trades and products for the house, including in particular windows and

‘internal finishes’.194 The latter term signified services such as

electrical, plumbing, mechanical (air conditioning) and internal

linings.195 It was Mathew McAllum’s understanding at the time of this

conversation that the house belonged to someone within or associated

with Mirvac in some way.196

126. According to Mathew McAllum, during this conversation Adam

Moore raised with him the fact that work on the house ‘could be

funded out of Orion’.197 He indicated that ‘we’d write it off to

Orion’.198 This would be done by having trades on the Orion PAD2

Project that did the work either absorb the cost themselves or pass it on

to Mirvac by invoices on the Orion PAD2 Project.199 In that way they

‘would cover the costs through Orion…in a way that it could be

concealed’.200 However, there were also discussions between David

Hanna and Mathew McAllum in respect of certain works that were

organised by Mathew McAllum and to be paid by David Hanna (see

further below).201

194 Mathew McAllum, 16/9/15, T:370.45-371.1, 371.16-20. 195 Mathew McAllum, 16/9/15, T:371.22-39. 196

Mathew McAllum, 16/9/15, T:372.21-24. 197 Mathew McAllum, 16/9/15, T:372.29-40. 198

Mathew McAllum, 16/9/15, T:373.4-5. 199 Mathew McAllum, 16/9/15, T:376.45-377.6, 378.15-27; 17/9/15, T:411.24-413.36. 200

Mathew McAllum, 17/9/15 T:460.27-30. 201 Mathew McAllum, 17/9/15 T:410.3-411.9.

57

127. Adam Moore subsequently emailed Mathew McAllum the plans for the

Cornubia house.202 Mathew McAllum noticed that the plans indicated

that the house was owned by the Hannas.203 Mathew McAllum said

that he did not know who David Hanna was at that moment. But soon

after he became aware of David Hanna’s position within the BLF.204

128. Adam Moore denied that the conversation with Mathew McAllum was

in the terms described above.205 His version was that he told Mathew

McAllum to pass on Diane Graham’s contact details to David Hanna,

to chase up a price for windows, to supply subcontractors’ details ‘if he

needs [them]’, and to ‘look after Hanna’.206

129. Counsel assisting made the following point about Adam Moore’s

version of that conversation. Even if that version is correct, it casts

light on what was initially discussed with Adam Moore and David

Hanna in the prior meeting. It is unlikely that Adam Moore would

have told Mathew McAllum to ‘look after Hanna’ and to provide

subcontractors’ details if his earlier conversation with David Hanna

had been as limited as Adam Moore suggested.

130. Counsel assisting submitted that in relation to returning to the

competing accounts of the meeting between Adam Moore and Mathew

McAllum, the evidence of the latter should be preferred.

202 Mathew McAllum, 16/9/15 T:373.37-41. 203 Mathew McAllum, 16/9/15 T:374.19-23. 204

Mathew McAllum, 16/9/15, T:374.25-375.2. 205 Adam Moore, 18/9/15, T:625.46-627.35. 206

Adam Moore, 18/9/15, T:582.14-22, 584.6-9.

58

131. First, if it is accepted that Adam Moore and David Hanna had the

conversation earlier described, Mathew McAllum’s account of his

subsequent meeting with Adam Moore accords with this better than

Adam Moore’s. There are a range of matters unrelated to the content

of the subsequent conversation between Adam Moore and Mathew

McAllum which together demonstrate that the earlier conversation

between Adam Moore and David Hanna probably occurred in the

terms described above.207

132. Secondly, at this time Adam Moore was comfortable with the practice

of making secret arrangements under which Mirvac would pay for

union related matters through subcontractors and false variation claims

so that Mirvac’s national office would not be aware of it. From Adam

Moore’s perspective at the time, the Cornubia house is likely to have

been just another example of that established practice in action. This

makes it more likely than not that he would have spoken to Mathew

McAllum as Mathew McAllum described.

133. Thirdly, as described elsewhere in this Chapter, Adam Moore’s general

demeanour lacked credibility on a range of matters. In contrast,

Mathew McAllum was reasonably frank. He made a range of

admissions very much against his own interests. He gave the

impression of being the more believable witness of the two.

134. Fourthly, when Mathew McAllum commenced giving his evidence he

was not aware of, and had not read, the transcript of Adam Moore’s

private hearing. It was made available to him prior to cross-

207 Paragraph 109.

59

examination by affected parties. On reading that transcript he would

have appreciated that Adam Moore had decided to deny any

knowledge of or responsibility for wrongdoing.

135. Counsel assisting submitted that Mathew McAllum felt a sense of

betrayal from this point. That became apparent from the evidence he

subsequently gave. It was near the end of his period in the witness

box. He was asked about the nature of his relationship with Adam

Moore. He had retained his composure in trying circumstances for

most of his examination, which spread over three days. But he was not

able to do so when this topic was raised. He broke down, and a brief

adjournment was necessary.208 The impression conveyed both by this

incident and by his demeanour was powerful. It was an impression

that Mathew McAllum felt a deep sense of betrayal. It was not the

reaction of a person who had truly acted alone. It was the reaction of

someone whose actions had been authorised by a mentor, and who now

appreciated that this mentor was prepared to let him ‘take the fall’ on

his own.

136. Finally, counsel assisting submitted that there is no doubt that the

account given by Mathew McAllum to police in respect of the

Cornubia house on 21 July 2015 differed substantially from that which

he gave before the Commission. When questioned by police, Mathew

McAllum endeavoured to minimise his role in respect of the Cornubia

house. In summary, Mathew McAllum told police that he had

volunteered to assist David Hanna in obtaining ‘comparison prices’209

when Adam Moore mentioned to him that David Hanna was building a

208 Mathew McAllum, 18/9/15, T:551.20-26. 209 Cornubia House MFI-4, 18/9/15, p 11.8-13.

60

house.210 He told the police that he left trades with David Hanna to

organise once he had sourced prices,211 although he did attend the site

‘a few times’.212 Mathew McAllum gave evidence before the

Commission that he deliberately did not elaborate on certain matters to

the police. He conceded that, in at least one respect, he lied to the

police.213 Mathew McAllum’s reliance on a poor memory for failing to

provide some information to the police can be at least partly

disregarded. But counsel assisting pointed to the following statement

as instructive:214

I had, I guess you could say that I had blanked that out of my memory and I guess in a way of sort of trying to protect my involvement and other people's involvement in what had occurred.

Counsel assisting argued that in his police interview, Mathew

McAllum was shielding not only himself, but his mentor, Adam

Moore. Mathew McAllum confirmed as much in cross-examination.215

Faced with the documentary evidence, Mathew McAllum gave a

credible account of the relevant circumstances. Adam Moore did not.

137. Against this, Adam Moore contended that with the exception of

Mathew McAllum’s evidence, no oral testimony before the

Commission had contradicted Adam Moore’s testimony as it related to

the house at Cornubia.216 Counsel assisting responded that this

210 Cornubia House MFI-4, 18/9/15, p 12.36-42, 56.22-25. 211 Cornubia House MFI-4, 18/9/15, p 59.11-15. 212

Cornubia House MFI-4, 18/9/15, p 23.41. 213 Mathew McAllum, 18/9/15, T:528.23-24. 214

Mathew McAllum, 18/9/15, T:522.12-15. 215 Mathew McAllum, 18/9/15, T:526.41-46. 216

Submissions of Adam Moore, 23/11/15, para 23.

61

submission ignored the striking resemblance between the practices

exhibited in respect of the Cornubia house and those exhibited in

relation to other general entertainment expenses as discussed above.217

138. Adam Moore also submitted that Mathew McAllum unquestionably

made a false statement to police about his involvement in the Cornubia

house. He contended that counsel assisting’s characterisation of

Mathew McAllum’s evidence – that he ‘blanked’ the episode from his

memory – should be rejected as unsound.218 He pointed to Mathew

McAllum’s application to be excused from giving evidence on the

basis of ill-health. He pointed to the unreliability of his recollection.

He pointed to his telling the police only the truth which was convenient

for him (which was consistent with Adam Moore’s testimony),

although he minimised his role in respect of the Cornubia house. He

pointed to his change of evidence, when faced with the overwhelming

documentary evidence and oral testimony assembled against him, by

testifying that his actions were instructed by his superior at Mirvac.

Adam Moore asserted that the fact that ‘no’ documentary evidence

supported Mathew McAllum should not be ignored.

139. Adam Moore contended that counsel assisting was wrong to

characterise Mathew McAllum’s evidence as against his interests.219

He suggested that Mathew McAllum had a choice. He could admit to

being the sole party from Mirvac responsible for any illegal

occurrences in relation to the Cornubia house or he could give false

evidence to seek to hide behind a ‘corporate chain of responsibility’.

217 Submissions of Counsel Assisting, 3/12/15, paras 10-11. 218 Submissions of Adam Moore, 23/11/15, para 28. 219

Submissions of Adam Moore, 23/11/15, para 30.

62

Adam Moore contended that he chose the latter course to minimise his

culpability even though that account is not supported by the balance of

the evidence.220 Adam Moore argued that Mathew McAllum’s

testimony should be treated with extreme caution because of his

previous false statements.221 He contended that there was an

abundance of documentary evidence implicating Mathew McAllum

and ‘absolving’ Adam Moore.222

140. In response, counsel assisting argued that the fact that Mathew

McAllum gave false evidence on certain matters to the police did not

necessarily tarnish the bulk of Mathew McAllum’s evidence in respect

of his and Adam Moore’s involvement with the Cornubia house.

Counsel assisting pointed to the original submission that Mathew

McAllum was shielding not only himself, but his mentor, Adam

Moore, as Mathew McAllum confirmed in cross-examination.223

141. Counsel assisting in reply further took issue with Adam Moore’s

submission that there is an abundance of documentary evidence

‘absolving’224 him. Counsel assisting submitted that there is no

evidence before the Commission which clears him of any potential

responsibility under s 442BA of the Criminal Code 1899 (Qld).

142. The submission of counsel assisting is correct. Of the reasons they

gave one may be developed further briefly. Much of Adam Moore’s

220 Submissions of Adam Moore, 23/11/15, para 30. 221 Submissions of Adam Moore, 23/11/15, para 31. 222

Submissions of Adam Moore, 23/11/15, para 35. 223 Mathew McAllum, 18/9/15, T:526.41-46. 224

Submissions of Adam Moore, 23/11/15, para 35.

63

evidence was not satisfactory either in its content or in the manner of

its delivery. In contrast, Mathew McAllum’s evidence was given in an

ordered, serious and melancholy way. He seemed sorry for what he

had done. But he seemed ready to reveal what he had done as best he

could in answer to the questions asked.

Initial discussions about the Cornubia house: Adam Moore and Jason Vieusseux

143. Counsel assisting referred to the evidence of Adam Moore that he told

Jason Vieusseux what had been discussed with David Hanna. Adam

Moore said that was limited to procuring prices for windows and

providing contact details for an interior designer. He said he did this

because he told Jason Vieusseux ‘everything to do with unions,

because it was required’.225 He said that he ‘would have’ told Jason

Vieusseux that he had asked someone junior to assist David Hanna in

the task.226 Adam Moore claimed he could recall this conversation,

and the date upon which it occurred, even though these events took

place more than two years ago and he spoke to Jason Vieusseux almost

every day about a very large number of diverse matters.227 Jason

Vieusseux denied having been told about the Cornubia house at this

time.228

225 Adam Moore, 18/9/15, T:584.34-585.7 226 Adam Moore, 18/9/15, T:587.26-588.12. 227

Adam Moore, 18/9/15, T:585.9-587.19. 228 Jason Vieusseux, 30/10/15, T:754.15-19, 764.40-46, 765.21-22.

64

144. Counsel assisting submitted that Adam Moore’s evidence was not

credible and should be rejected. It was not believable that Adam

Moore could have remembered such a short conversation with Jason

Vieusseux. Mirvac endorsed the submission of counsel assisting. It

added that the call from Adam Moore to Jason Vieusseux only lasted

16 seconds – an insufficient time to discuss the matters which Adam

Moore alleged to be the subject of that phone call.229 Mirvac also

referred to Jason Vieusseux’s denial that he was ever informed about

the works on the Cornubia house.230

145. Adam Moore contended that it was open to find, and indeed that it was

likely, that Adam Moore relayed to Jason Vieusseux, by telephone on

17 April 2015, the details of Adam Moore’s conversation with David

Hanna about the Cornubia house. That is consistent with Adam

Moore’s evidence that it was his usual practice to contact Jason

Vieusseux for interactions with trade union representatives.231 It would

be ‘unremarkable’ for such a conversation to have occurred. And it

was not remarkable that Jason Vieusseux might not recall such a

conversation.232 In relation to this latter point, it can be observed,

contrary to Adam Moore’s submission, that Jason Vieusseux’s

evidence went further than saying he could not recall such a

conversation. As was later acknowledged in Adam Moore’s

229 Submissions of Mirvac, 23/11/15, paras 21-22. 230 Submissions of Mirvac, 23/11/15, para 24; Jason Vieusseux, 30/10/15, T:764.40-47. 231

Submissions of Adam Moore, 27/11/15, para 10. 232 Submissions of Adam Moore, 27/11/15, para 11.

65

submissions, he denied it.233 Jason Vieusseux words were: ‘there was

no such discussion’.234

146. Adam Moore continued his criticism of Mirvac’s submissions by

noting that only the outgoing phone call records of Adam Moore were

adduced in evidence, not incoming ones and not Jason Vieusseux’s

phone records. Adam Moore contended that it was appropriate to

surmise that, in the ordinary course of business, Jason Vieusseux

probably returned Adam Moore’s initial (short) call later on 17 April

2013. But that submission rests only on speculation.

147. Counsel assisting submitted that, on the one hand, Adam Moore’s

evidence was that the matter was significant enough for him to raise

with his superior, Jason Vieusseux. Yet, on the other hand, his

evidence was that he did not even bother to discuss the Cornubia house

again with Mathew McAllum.235 There is tension between these two

positions of a kind which suggested his evidence is not credible.

Instead it represented an ex post facto reconstruction created by

reference to Adam Moore’s own best interests.

148. Counsel assisting submitted that Adam Moore repeatedly gave the

impression of being acutely aware of the particular pieces of

documentary evidence which did not reflect well on him. He gave the

impression of being at pains to attempt to distance himself from any

responsibility for those items. He did so, in particular, by suggesting

that Jason Vieusseux had effectively sanctioned his behaviour on each

233 Submissions of Adam Moore, 27/11/15, para 13. 234 Jason Vieusseux, 30/10/15, T:765.22. 235

Adam Moore, 18/9/15, T:591.17-42.

66

occasion. This was ironic, it was said, given the way Adam Moore

sought to distance himself from his subordinate, Mathew McAllum.

149. Counsel assisting argued that the impression that both Adam Moore

and Jason Vieusseux gave through their evidence was that Adam

Moore was a man in a very senior position who knew his own mind.

He was unaccustomed and unwilling to be running ‘cap in hand’ to

Jason Vieusseux, giving disclosure and seeking approval at every

turn.236 Adam Moore’s at times aggressive and brusque manner in

having to answer questions in the witness box reinforced this

impression. Counsel assisting contended that in all of these

circumstances, it is improbable that Adam Moore would have told

Jason Vieusseux about is conversation with David Hanna. The

submissions of counsel assisting on this issue are accepted.

Initial discussions about the Cornubia house: subsequent meeting with Jennifer Hanna

150. Mathew McAllum gave evidence that some time shortly after this first

meeting with Adam Moore, he and Adam Moore met with Jennifer

Hanna at Mirvac’s offices in Brisbane. He said that he attended the

meeting at Adam Moore’s request.237 Mathew McAllum thought the

meeting could have occurred a week or less after his initial meeting

with Adam Moore.238 At the meeting they discussed what work

236 See for example Jason Vieusseux’s evidence concerning the approach to employment and contracting, and the way in which certain external contractors were being billed: Jason Vieusseux, 30/10/15, T.762.40-763.13. 237

Mathew McAllum, 18/9/15, T:553.9-554.10. 238 Mathew McAllum, 18/9/15, T:554.12-27.

67

needed to be done to the house. They agreed that Mathew McAllum

would be the contact and would be attending at the house to organise

the work. They agreed that an interior designer (Diane Graham)239

would be in contact with Jennifer Hanna shortly.240 According to

Mathew McAllum, Adam Moore and Jennifer Hanna did most of the

talking.241 His impression was that Jennifer Hanna was proceeding as

if Mirvac would be completing the house for the Hannas.242

151. Adam Moore unequivocally denied participating in such a meeting.243

However Jennifer Hanna agreed that she did attend a meeting at

Mirvac’s offices at an early stage and discussed the plans for the house

and colour selections.244 She thought David Hanna organised the

meeting. And she thought that Adam Moore was in attendance.245

152. Adam Moore submitted that because the accounts of the meeting are

conflicting, it is unsatisfactory to rely upon it in support of what he

chose to term ‘the case theory of counsel assisting’.246 He contended

that at most it could be said a meeting probably occurred. But it was

entirely unclear who attended or what was said.

153. The only submission made by David Hanna which touched upon this

meeting is: ‘the submissions allege a meeting between Messrs Hanna

239 See paras 223-225. 240 Mathew McAllum, 18/9/15, T:555.39-44, 556.24-25. 241

Mathew McAllum, 18/9/15, T:556.27-29. 242 Mathew McAllum, 18/9/15, T:557.11-19. 243

Adam Moore, 18/9/15, T:592.34-593.8. 244 Jennifer Hanna, 21/9/15, T:709.5-41. 245

Jennifer Hanna, 21/9/15, T:709.5-41. 246 Submissions of Adam Moore, 23/11/15, para 46.

68

and Moore in which an agreement is said to have been reached. There

literally is no evidence that occurred.’247

154. David Hanna’s submission is plainly wrong. For instance, it does not

deal with the evidence of Jennifer Hanna which places Adam Moore at

a meeting with her involving discussion of the Cornubia house. That

evidence is unlikely to have been invented by Jennifer Hanna. On any

view, the evidence of Jennifer Hanna on this point provides some

support for Mathew McAllum’s account. There is no reason to reject

Mathew McAllum’s account.

Subsequent dealings between Mathew McAllum and David Hanna

155. After Mathew McAllum had spoken with Adam Moore and received

the plans, he visited the Cornubia property. There he met David

Hanna for the first time.248 He introduced himself. They walked

around the site. They talked about the trades and services that would

need to be sourced.249

156. The documents and evidence of tradesmen working on the Cornubia

site demonstrate that, from this point onwards, Mathew McAllum

operated as the de facto project manager for the construction of the

Cornubia home. He made arrangements about when different trades

should come and go. He arranged for particular trades to submit their

invoices to Mirvac. He liaised extensively with David Hanna and

Jennifer Hanna in relation to the progress of the works.

247 Submissions of David Hanna, 23/11/15, para 14. 248 Mathew McAllum, 16/9/15, T:376.1-4. 249

Mathew McAllum, 16/9/15, T:376.1-43.

69

157. Mathew McAllum did not, however, organise all the works. There

were a substantial number of trades organised directly by David

Hanna, using contacts known to him. Those trades were paid for their

work directly by David Hanna.

158. The division of responsibilities, as between David Hanna and Mathew

McAllum, for organising and paying for different aspects of the work

was not the subject of much discussion when they first met.250 There

was no discussion and organisation of the kind one would expect if the

Hannas were going to pay for the work Mathew McAllum was going

to organise. There was no discussion about ensuring that the work that

Mathew McAllum was going to organise would not cost more than a

certain amount. To the contrary, Mathew McAllum was informed that

the Hannas would only have a certain amount of money to contribute

to the overall cost of the works, making Mirvac’s role essential to the

completion of the Cornubia house.251

159. Counsel assisting submitted that both men behaved consistently with

each of them having an understanding, independently of the other, of

two components. The first was that Mathew McAllum would be

sourcing the ‘internal finishing’ trades (internal linings, such as tiles

and plastering, plumbing, electrical, air-conditioning, and painting) on

the basis that David Hanna would not need to pay for them. The

second was that David Hanna would be organising the rest of the work

(such as hardware, and unrelated works such as the pool). There was

no need for them to have a detailed discussion about this when they

met. Counsel assisting argued that each of them already understood

250 Mathew McAllum, 16/9/15, T:377.8-14. 251 Mathew McAllum, 16/9/15, T:399.18-400.37.

70

what was to occur. That is because by this time they had each spoken

separately with Adam Moore about it.

160. Counsel assisting submitted that the allocation of responsibility as

between David Hanna and Mathew McAllum for organising and

paying for trades obtained further precision organically, as the project

moved forward and as particular items of work were actually arranged

(or not) by Mathew McAllum or Adam Moore.252

161. In this regard, Mathew McAllum described having conversations with

David Hanna during which the latter would indicate whether or not he

had enough money to pay for certain costs, and if he did, David Hanna

said he would pay.253 The purchase of the air-conditioning units from

Daikin (as opposed to the installation services provided by Gray Bros)

is a good example of this.254

162. Mathew McAllum also described conversations in which he indicated

to David Hanna when he had not been able to organise for the cost of a

particular internal finishing trade to be borne by Mirvac, with the result

that David Hanna would need to organise and pay for it.255 He gave as

an example a discussion he had with David Hanna in relation to joinery

work for the Cornubia kitchen. He told David Hanna that the Orion

PAD2 Project did not have a large joinery package, so that there was

no opportunity to cover the costs of that work, which were a ‘big

252 Mathew McAllum, 16/9/15, T:377.27-39; 17/9/15, T:406.19-23. 253 Mathew McAllum, 17/9/15, T:405.29-38. 254

See paras 339-341. 255 Mathew McAllum, 17/9/15, T:405.41-46, 410.20-26.

71

component’ of the house.256 David Hanna then arranged and paid for

that work himself.257 Another example was the windows, the cost of

which would be covered by David Hanna because Mirvac did not have

a window contractor on the Orion PAD2 Project that supplied domestic

windows.258 David Hanna and Mathew McAllum discussed this.259

163. Mathew McAllum did not suggest that these subsequent discussions

about Mirvac covering costs of certain trades came as a surprise to

David Hanna. He did not suggest that these discussions in some way

represented a departure from what David Hanna then expected would

occur. Counsel assisting contended that this was because David Hanna

had discussed the matter with Adam Moore at the outset.

164. The submissions of counsel assisting are accepted for the reasons just

given and those about to be given.

Contest between David Hanna and Mathew McAllum

165. Counsel assisting submitted that Mathew McAllum’s evidence as to

these dealings with David Hanna should be accepted, and contrary

evidence given by David Hanna (discussed below) should be rejected.

166. David Hanna’s evidence was that he ‘continually asked’ Mathew

McAllum for invoices for the services that Mathew McAllum had

256 Mathew McAllum, 17/9/15 T:410.29-32. 257 Mathew McAllum, 16/9/15, T:395.30-32. 258

Mathew McAllum, 17/9/15, T:410.47-411.2, 417.42-418.12. 259 Mathew McAllum, 17/9/15, T:418.14-24.

72

167.

260 David H 261 Mathew 262

This ex accepted in document evidence f noticeably nothing pr topic reject

organised fo

contrary to t

was to the ef

for much of

initial meetin

Counsel assi

be accepted

Ma (a)

inte

Dav (b)

hou

a s

ass

oth

whi

Oth (c)

to s

be

Hanna, 21/9/15

w McAllum, 16

xplains why mu n this case stu destruction cas following the

different. Ac roposition. A ted.

or the intern

the evidence

ffect that the

f the work o

ng or in the c

isting submit

for the follow

athew McAll

erests.

vid Hanna h

use was his fa

trong interes

et at risk (w

herwise). An

ich did not ex

her evidence

seeking invoi

rejected. In

5, T:669.18-30.

6/9/15, T:377.8

uch of David H udy. These co se study, in wh receipt into

cceptance or re witness’s evid

nal finishing

e that Mathe

ere was no di

rganised by

course of sub

tted that Mat

wing reasons

lum regularl

had a powerf

family’s home

st in giving

whether thro

nd he had a

xpose him to

demonstrate

ices and wan

particular, p

.

8-14.

Hanna’s eviden nsiderations an hich David Han evidence of a ejection of the dence on one t

g trades to

w McAllum

iscussion abo

Mathew Mc

bsequent discu

thew McAllu

s.

ly made ad

ful motive t

e. It was a v

evidence wh

ough confisc

strong intere

o criminal cha

s that David

nting to pay f

prior to havin

nce was not cr nd motivations nna’s demeano a secretly tape

evidence of a topic may be b

provide.260

m gave. His

out the Hann

cAllum eithe

ussion.261

um’s evidenc

dmissions ag

to lie. The

valuable asset

hich did not

cation procee

est in giving

arges.262

Hanna’s ass

for the servic

ng spoken w

redible and sho s were not at p our and the qu ed audio reco a witness is not

believed, and

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evidence

as paying

er at their

ce should

gainst his

Cornubia

t. He had

t put that

edings or

evidence

ertions as

ces should

with Adam

ould not be play in the uality of his ording was

t an all-or-on another

73

263 The evi 264 David H 265

David H

Mo

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ring

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step

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aga

sub

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that

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Hanna, 21/9/15

Hanna, 21/9/15

oore, David H

all, to do elec

en that frien

nna about in

g someone e

and was tol

use to the ele

d to misdescr

oject.263 Far

vid Hanna k

ps to take ad

d divert an i

ainst David

bmissions.

vid Hanna w

en he allege

out invoicing

not he was

en this allege

ontinually”, i

t he could no

ere is no re

quest. If Dav

t to this inciden

5, T:670.35.

5, T:671.7-673.

Hanna had a

ctrical rough-nd completed

nvoicing him

else to discu

d to send a b

ectrician wor

ribe the work

from wantin

knew that he

dvantage of t

invoice elsew

Hanna. H

was unable

edly tried to

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ot recall how

ecord of Da

vid Hanna ha

nt is addressed

.1.

already organ

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d the works

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ss invoicing

bill for the w

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k as having be

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e would not

the arrangem

where. This

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to provide a

o speak with

nconsistent ev

’ chasing M

ccurred. He

few calls’26

many such c

vid Hanna h

ad been press

subsequently.

nised a friend

n the house.

and spoke

id Hanna tol

. The electr

work on the

e Orion PAD

een performe

d attempting

t be paying

ment that was

s is a power

deal with

any estimate

th Mathew M

vidence as to

athew McAl

said later ‘w 64 He repeat

calls he had m

having mad

sing for invoi

d, Darren

However

to David

ld him to

rician did

Cornubia

D2 Project

ed on that

to do so,

and took

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rful point

it in his

e of how

McAllum

o whether

llum, and

when I say

tedly said

made.265

de such a

ices as he

74

266 David H 267 See par 268

David H

sug

the

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as t

Ma

inv

wh

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and

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an

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the

Hanna, 21/9/15

as 221-237.

Hanna, 21/9/15

ggested, it w

activity wou

s unlikely th

d (in having M

m subcontrac

t he wanted t

vid Hanna w

to why, if he

athew McAllu

voices, he di

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d ‘had the fin

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ecorp had do

was asked w

invoice, Dav

ullan had said

ullan never su

nversation is

time it was a

5, T:673.44-47.

5, T:695.38-39.

ould have be

uld exist.

hat Mathew M

Mirvac cove

ctors) if, in f

to receive an

was not able

e had not rece

um or Adam

d not seek

the work. A

nce was that

nance at the ti

David Hann

one the tiling

why he had no

vid Hanna cla

d ‘I’ll get aro

uggested the

inherently i

alleged to ha

.

.

een expected

McAllum wo

er the costs th

fact, David H

d pay invoice

to provide a

eived a satisf

m Moore to hi

invoices from

After all, he

he was ‘hap

ime to do so’

na knew th

g267 (as shor

ot requested

aimed that h

ound to it. It

ere was such

improbable.

ave taken pla

d that some

ould have ac

through false

Hanna was te

es.

a credible ex

factory respo

is alleged req

m the subco

knew some

ppy’ to ‘pay

’.266

at David M

rtly described

David Mulla

he had, and th

will come’.2

h a conversat

That is bec

ace, David M

record of

cted as he

e invoices

elling him

xplanation

onse from

quests for

ontractors

of them.

y the bill’

Mullan of

d below).

an to send

hat David 268 David

tion. The

cause, by

Mullan had

75

168.

269 See par 270 David H 271

David H 272 Cornub 273

David H

alre

for

Mo (h)

to p

cou

inco

inv

of D

inte

rele

Cor

According to

receive any i

been arrange

were only o

have been pu

one missing

argued that l

a single invo

varied trades

offered his e

as 233-237.

Hanna, 21/9/15

Hanna, 21/9/15

ia House MFI-Hanna, 21/9/15

eady caused

the work, an

oreover, Davi

pay for work

uld check de

onsistent wit

voices during

David Hann

ention to pay

evant subco

rnubia house

o David Han

invoices in re

ed through A

ne trade’s w

ut down to lu

invoice. All

luck cannot e

oice in respe

s in question.

extensive ass

5, T:670.10-28.

5, T:681.27-35.

-1, 14/9/15, Vo

5, T:696.41-44.

Tilecorp to

nd Mirvac ha

id Hanna sug

s until after t

fects and ref

th his claime

the second h

a having act

y after comp

ntractors aft

e underwent i

nna, it was ju

espect of the

Adam Moore

work which h

uck. But it w

l the invoices

explain the fa

ect of the wo

. David Han

istance to Da

.

.

ol 3, pp 1016-1

.

send Mirvac

d paid Tileco

ggested that

the house wa

finance the p

ed attempts t

half of 2013.2

ted consisten

pletion by se

fter 6 Janua

its final certif

ust his ‘lucky

work on his

e and Mathe

had not been

was not a ca

s were missin

act that the H

ork done by

nna’s claim th

avid Hanna o

017.

c a quote an

orp.269

he was happ

as completed,

property.270

to ‘chase’ pa 271 There is

ntly with this

eeking invoi

ary 2014, w

fication.272

y day’ that h

family home

ew McAllum

n invoiced, th

ase of there b

ng. Counsel

Hannas did no

any of the m

hat Mathew M

out of the kin

nd invoice

py to wait

, when he

This was

ayment of

no record

s claimed

ices from

when the

he did not

e that had

m.273 If it

hat might

being just

l assisting

ot receive

many and

McAllum

ndness of

76

his heart and as a service akin to that of a pro bono lawyer274 is not

credible.

169. For these reasons counsel assisting contended that David Hanna’s

evidence as to seeking invoices from Mathew McAllum and others is

not believable. That evidence represents an unsuccessful attempt by

David Hanna to explain away, after the event, the fact that he did not

pay for the services. In truth he never intended to pay. And Adam

Moore and Mathew McAllum did not expect him to.

170. David Hanna did not grapple with these submissions of counsel

assisting. He only submitted generally that counsel assisting’s

submissions were based on speculation and supposition.

171. These unanswered submissions of counsel assisting, taken together, are

powerful. They must be accepted. The consequences of that

acceptance are set out below.

C – CONTRAVENTIONS

Section 442B of the Criminal Code 1899 (Qld)

172. Section 442B of the Criminal Code 1899 (Qld) provides as follows:

Any agent who corruptly receives or solicits from any person for himself or herself or for any other person any valuable consideration—

274 David Hanna, 21/9/15, T:675.7-17.

77

(a) as an inducement or reward for or otherwise on account of doing or forbearing to do, or having done or forborne to do, any act in relation to his or her principal's affairs or business; or

(b) the receipt or any expectation of which would in any way tend to influence the agent to show, or to forbear to show, favour or disfavour to any person in relation to his or her principal's affairs or business;

commits a crime.

173. Section 442M(2) of the Criminal Code 1899 (Qld) relevantly provides:

Burden of proof that gift not secret commission

If in any prosecution under this chapter it is proved that any valuable consideration has been received or solicited by an agent from or given or offered to an agent by 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, solicited, given, or offered in contravention of any of the provisions of this chapter shall be on the accused.

174. The term ‘agent’ is defined in s 442A of the Criminal Code 1899 (Qld)

to include any person acting for or on behalf of any corporation, firm,

or person, including any officer of any corporation or association. This

definition captures officers of a trade union.275 The State registered

BLF and federally registered BLF were incorporated entities276 capable

of owning property. Each was therefore both an ‘association’ and a

‘person’277 falling within the language of s 442A of the Criminal Code

275 R v Gallagher [1986] VR 219. 276 Industrial Relations Act 1999 (Qld), s 423; Fair Work (Registered Organisations) Act 2009 (Cth), s 27. 277

Criminal Code 1899 (Qld), s 1.

78

David H (Qld)

175.

176.

278 See Mi 2011-2015

1899 (Qld).

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79

other regularly in relation to worksites.279 Plainly, Mirvac had business

relations with the BLF at the relevant time. Accordingly, s 442M(2) of

the Criminal Code 1899 (Qld) would apply at this point in any

prosecution of David Hanna. Assuming that the BLF (whether through

its Committee of Management or otherwise) did not assent to the

receipt by David Hanna of the valuable consideration discussed

above,280 the burden would fall on him to prove that that receipt was

not in contravention of s 442B of the Criminal Code 1899 (Qld).

There is no record before the Commission in the evidence of any such

assent. This is unsurprising given David Hanna’s evidence that he did

not discuss the matter with anyone.281

177. The evidence does not indicate that David Hanna would be likely to

discharge that burden. Indeed the evidence establishes that the

remaining elements of the section are positively satisfied.

178. The receipt of free goods and services by David Hanna would tend to

influence David Hanna to show favour to each of Mathew McAllum,

Adam Moore and Mirvac282 in relation to the BLF’s affairs and

business. The words ‘in relation to his … principal’s affairs or

business’ are wide words.283

279 See, for example, para 88. 280 Paragraph 175. 281

David Hanna, 21/9/15, T:675.32-38. 282 Note that under s 442B of the Criminal Code 1899 (Qld) it will suffice if the corrupt receipt of any valuable consideration tends to influence an agent to show favour or disfavour to any person not necessarily the person from whom the valuable consideration is received. 283

Morgan v DPP [1970] 3 All ER 1053 at 1057.

80

179. The expression ‘affairs and business’ of the BLF included acting for

and on behalf of members who worked on construction sites in

Queensland. The expression included organising and advising those

members about when and what industrial action to take. David Hanna

held the most senior position in the BLF in Queensland. He held

substantial power and influence with respect to industrial action. He

could form views as to what industrial action should be taken by BLF

members, against which employers, and on which developer’s

worksites. He could give directions to promote and encourage that

action to be taken. He could direct action himself to achieve that end.

His power and influence extended to making decisions about whether

industrial action should be taken on any Mirvac site in Queensland. It

is obvious that the receipt of free goods and services at Mirvac’s

expense would tend to influence David Hanna about whether or not he

would so act in the ways just discussed.

180. So David Hanna received valuable consideration from Mirvac which

would tend to influence him to show favour to Mirvac. This receipt is

properly characterised as ‘corrupt’.

181. The term ‘corruptly’ is not defined in the Criminal Code 1899 (Qld).

It does not connote dishonesty.284 On the current state of the law in

Queensland285 whether a receipt is properly characterised as ‘corrupt’

depends instead on the belief of the recipient as to the hopes and

intentions of the donor in giving the benefit. For example, a person’s

receipt of a benefit will be corrupt when that person believes it is being

given because the donor ‘hopes for an act of favouritism in return’. It

284 R v Gallagher [1986] VR 219 at 230-231. 285 R v Nuttall [2010] QCA 64 at [36].

81

will be corrupt where that person is ‘knowingly putting himself in a

position of temptation as regards the impartial discharge of his duties

in consequence of the acceptance of a benefit’.286 For s 442B to be

satisfied, it is not necessary to establish that the donor actually held

such a hope or intention of influencing the agent. Nor does it matter

that the agent did not actually show favour to the donor.287

182. The test discussed above has been endorsed in Victoria and

Queensland. But as pointed out in the submissions of counsel assisting

in relation to the Cleanevent case study,288 the NSW Court of Criminal

Appeal has diverged, in part, from it. In Mehajer v R,289 the Court held

that to satisfy the elements of the New South Wales equivalent to

s 442B of Criminal Code 1899 (Qld), it is necessary also to establish

that the benefit received is corrupt according to standards of conduct

generally held. A payment or receipt without the knowledge of the

principal for one of the proscribed purposes would generally be

regarded as corrupt according to those standards.290

183. Ultimately, it is unlikely that the adoption of the approach in New

South Wales would make any material difference in the context of the

current circumstances. This so, for example, because on his own

evidence, David Hanna denied telling anyone within the union that

Mathew McAllum was providing him with any assistance and that

286 R v Gallagher [1986] VR 219 at 228 referring to R v Dillon [1982] VR 434 at 436. 287 R v Gallagher [1986] VR 219 at 226-227, 231. See also R v Gallagher (1987) 29 A Crim R 33 at 34-35. 288

Submissions of Counsel Assisting, AWU: Cleanevent Case Study, 6/11/15, para 511. See also Volume 4, Chapter 10.2 of this Report. 289 [2014] NSWCCA 167 at [59]-[63]. 290

Mehajer v R [2014] NSWCCA 167 at [59]-[63].

82

work done on his house had not been invoiced. David Hanna said that

he did not ‘see it as an issue’.291 That evidence cannot be accepted.

184. In the present case, David Hanna knew that the gift of free goods and

services placed him in a position of temptation. He knew that Mathew

McAllum was not simply acting out of the goodness of his heart. He

knew that Mathew McAllum was instead, and at the direction of Adam

Moore, ‘greasing the wheels’ of the relationship between Mirvac and

the BLF in the hope or expectation that it would run smoothly as a

result of the giving of the free goods and services.

185. David Hanna opposed the submissions of counsel assisting on the

ground that they did not properly identify the relevant elements of

s 442B and did not properly apply them to the facts. He contended that

the submissions were ‘tainted with speculation and supposition’. He

also contended that the principal submissions gave rise to a reasonable

apprehension of bias in relation to the authorship of the submissions of

counsel assisting.292

186. Counsel assisting responded that David Hanna has not identified the

misstatement of the law of which he complains. Counsel assisting also

rejected the claim about bias as being without any basis – quite

correctly. Counsel assisting submitted that it was proper to make

submissions about whether the evidence as a whole supports a finding

that a person may have contravened a particular law, including one that

carries criminal penalties.

291 David Hanna, 21/9/15, T:673.40-674.14, 675.32-43. 292 Submissions of David Hanna, 23/11/15, paras 3-4.

83

187. Counsel assisting drew attention to the following passage of the

Interim Report:293

…a finding that a person’s conduct may have been a breach of a relevant law, regulation or professional standard, … is used to convey the view that there is credible evidence before the Commission raising a probable presumption that a breach of law, regulation or professional standard has occurred.

…

Here ‘probable’ means not certain, nor nearly certain, but more than merely possible. On this formulation, a finding could only be made that a breach of law, regulation or professional standard may have occurred where on credible evidence before it, it is probable, and not merely possible, that a contravention occurred.

188. David Hanna also complained, by referring to ‘the standards of a fair

trial’ that no case study materials were disclosed in advance to David

Hanna, but only when the hearing commenced on 15 September

2015.294 Counsel assisting responded that a Royal Commission is not

required to provide notice of particulars of lines of inquiry to a person

being examined, or to provide them with relevant evidence in advance

of their examination. Disclosures of this kind could undermine the

purposes of the factual inquiry sought to be undertaken.295

189. On 23 November 2015 David Hanna further complained, in his written

submissions in reply, that documents seized from him by the Royal

Commission police taskforce were not provided to him before or

293 Royal Commission into Trade Union Governance and Corruption, Interim Report (2014), Vol 1, ch 1, pp 19 [62], 20 [66]. 294

Submissions of David Hanna, 23/11/15, para 5. 295 Submissions of Counsel Assisting, 3/12/15, para 27.

84

190.

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(i) out of the kindness of his heart; 300

(ii) as a service akin to a pro bono lawyer;301

(iii) because he wanted to;302 and

(iv) because both he and David Hanna were ‘good

bloke[s]’.303

191. David Hanna also complained that he is unfairly obliged to answer

counsel assisting’s principal submissions that findings be made against

him. He complained that he ought not be forced to disclose his

defence to the charges referred to by counsel assisting.304 Again he

referred to the supposed obligations and pressures as being inconsistent

with the notion of a ‘fair trial’. Counsel assisting responded that there

is nothing which compelled David Hanna to respond to the principal

submissions. Any decision (if one is made) by a prosecuting authority

formally to charge David Hanna will be taken following a careful

consideration of the admissible evidence against him. Counsel

assisting contended that it is fanciful to suggest that an independent

prosecutor would be improperly influenced by counsel assisting’s

principal submissions.

300 David Hanna, 21/9/15, T:675.12. 301 David Hanna, 21/9/15, T:675.9-10. 302

David Hanna, 21/9/15, T:689.46-690.3. 303 David Hanna, 21/9/15, T:690.5-9. 304

Submissions of David Hanna, 23/11/15, para 7.

86

192. David Hanna further argued that the evidence before the Commission

does not support a finding that David Hanna may have committed an

offence under s 442B(b). He argued that certain identified paragraphs

of counsel assisting’s submissions involve ‘supposition’ and

‘speculation’.305 Counsel assisting rejected that complaint. They

contended in response that the paragraphs in question are rather a

summation of conclusions which are open on the direct and

circumstantial evidence presented to the Commission.306

193. Further, David Hanna contended that the ‘Commission should reject

outright the proposition that David Hanna should now be called upon

to discharge a burden of proof under s 442M of the Criminal Code

1899 (Qld) to prove his innocence in response to [counsel assisting’s]

selection of evidence and commentary upon it’.307

194. Counsel assisting contended in response that this submission was

misconceived. Nothing needed to be proved or disproved by David

Hanna before the Commission. The principal submissions308 merely

made the point that, because Mirvac and the BLF had business

relations, the reverse onus in s 442M would be engaged in any

potential prosecution of David Hanna provided the BLF had not

assented to the receipt of the alleged benefits. The principal

submissions did no more than state the effect of s 442M.309

305 Submissions of David Hanna, 23/11/15, paras 9-11. 306 Submissions of Counsel Assisting, 3/12/15, para 32. 307

Submissions of David Hanna, 23/11/15, para 12. 308 Submissions of Counsel Assisting, 13/11/15, paras 128-129. 309

Submissions of Counsel Assisting, 3/12/15, para 32.

87

195. David Hanna also complained that counsel assisting does not suggest

that the allegations made against David Hanna could be proven beyond

reasonable doubt. He submitted that the phrase ‘more likely than not’

appears five times. He submitted that assertions that some matter is

‘likely’, or ‘unlikely’ appear another 19 times. David Hanna further

complained that certain matters are asserted to be ‘probable’ or

‘improbable’, or to have ‘probably’ occurred, seven times. This

culminates in a submission that ‘[t]hese are not submissions upon

which a finding of guilt could be based.310

196. David Hanna also notes that it is not suggested by counsel assisting

that David Hanna should actually be charged with any offence. He

submits that findings that David Hanna ‘may have committed’ an

offence ought not to be made.311

197. In response, counsel assisting submitted that its reference to matters

being probable or likely is consistent with the approach adopted by the

Commission in respect of the Interim Report. It is also consistent with

the Commission’s lack of power to conclude that a person has (as

opposed to may have) engaged in conduct in contravention of the

law.312 But the principal submissions do not urge that any finding of

guilt be made. That is a matter for the courts, after considering any

prosecution brought by prosecuting authorities. A referral may be

made to the prosecuting authorities, but the grounds for a referral are

quite different from the grounds on which a court might convict.

310 Submissions of David Hanna, 23/11/15, para 21. 311 Submissions of David Hanna, 23/11/15, paras 22-23. 312

Royal Commission into Trade Union Governance and Corruption, Interim Report (2014), Vol 1, pp 18-19 [58]-[59].

88

198. The arguments advanced by David Hanna exhibit numerous fallacies.

They confuse the function of a Royal Commission with the function of

prosecuting authorities and the function of courts. They do so in a

radical way. Notions of a ‘fair trial’, however rhetorically appealing,

do not apply to commissions of enquiry including this Royal

Commission. Criminal trials involve a final adjudication of guilt.

Commissions of inquiry have a duty to inquire. They have a power to

recommend.

199. For the reasons discussed above, David Hanna may have committed an

offence under s 442B of Criminal Code 1899 (Qld).

Potential liability of Adam Moore and Mathew McAllum

200. Section 442BA applies to the giver of a benefit, and is in the following

terms:

442BA Gift or offer of secret commission to an agent

Any person who corruptly gives or offers to any agent any valuable consideration—

(a) as an inducement or reward for or otherwise on account of the agent doing or forbearing to do, or having done or forborne to do, any act in relation to his or her principal’s affairs or business; or

(b) the receipt or any expectation of which would in any way tend to influence the agent to show, or to forbear to show, favour or disfavour to any person in relation to his or her principal’s affairs or business;

commits a crime.

201. Section 442BA strikes at the intention of the giver of valuable

consideration.313 Counsel assisting contended that in the

circumstances, it can be inferred that Mathew McAllum and Adam

313 R v Gallagher [1986] VR 219 at 230-231.

89

Moore intended that the provision of the goods and services described

in these submissions would tend to influence David Hanna to show

favour to each of them and Mirvac in relation to the BLF’s affairs.

202. Counsel assisting further submitted that even if the additional element

required in R v Mehajer314 is adopted, the clandestine way in which

payment for works on the Cornubia house were processed and

attributed to the Orion PAD2 Project strongly suggests that, according

to normally received standards of conduct, the giving of those benefits

was corrupt within the meaning of s 442BA.

203. Counsel assisting also argued that s 442M of the Criminal Code 1899

(Qld) would similarly apply to Mathew McAllum and Adam Moore

assuming that the BLF did not assent to the giving of the benefits.

204. Adam Moore responded that on the evidence it is just as likely that

Mathew McAllum undertook an enterprise ‘entirely of his own accord.

in consultation directly’ with David Hanna. He submitted that the only

involvement required of Adam Moore was that which accords with

Adam Moore’s testimony and the documentary evidence. He further

contended that ‘[i]n light of the absence of documentary evidence

before the Commission contradicting Adam Moore’s testimony, [his]

case theory is to be preferred’.315

205. Adam Moore further argued that counsel assisting had not

demonstrated any actual benefit to Adam Moore or Mathew McAllum

as a result of what transpired at Cornubia house. He conceded that no

314 [2014] NSWCCA 167 at [67]-[71]. 315 Submissions of Adam Moore, 23/11/15, para 67.

90

such element is part of the offence, but submitted that actual benefit

would have gone towards (a) contradicting David Hanna’s evidence

that what occurred at the Cornubia house was no more than generosity

on the part of Mathew McAllum and (b) overcoming the threshold test

difficulties presented by s 442J of the Criminal Code 1899 (Qld).316

206. Adam Moore went on to contend that it is ‘[o]nly the uncorroborated

evidence of Mr McAllum, who has admitted to providing a false

statement to police, [which] links Mr Moore to Cornubia House’. He

further referred to there being ‘no contemporaneous documentary

evidence’ which supports counsel assisting’s ‘case theory’.

207. Counsel assisting responded by noting s 442J provides for a court order

withdrawal of trifling or technical cases dealing with secret

commissions:

If in any prosecution under this chapter it appears to the court that the offence charged is, in the particular case, of a trifling or merely technical nature, or that in the particular circumstances it is inexpedient to proceed to a conviction, the court may in its discretion, and for reason stated on the application of the accused, dismiss the case; but the court may, if it thinks fit, make the order mentioned in section 442I.

208. If charges were brought against Adam Moore under s 442BA, it would

be difficult to categorise payments amounting to $154,980.28, being

the minimum total benefits received by David Hanna based on the

316 Submissions of Adam Moore, 23/11/15, para 68.

91

figures identified in the principal submissions,317 as founding an

offence of ‘a trifling or merely technical nature’.

209. As to Adam Moore’s complaint that no contemporaneous documents

exist that support the findings urged by counsel assisting, and that the

approach of counsel assisting betrays an ‘agenda’,318 counsel assisting

submitted that the rhetoric should be rejected for the reason that it

ignores the whole of the circumstantial evidence, including

documentary evidence.319 For example, Adam Moore was invited to a

meeting with Glen Wadsworth, and Jennifer Hanna said Adam Moore

was present at an initial meeting with her to discuss the house. Whilst

Adam Moore has attempted to make light of these pieces of evidence,

these, along with the balance of the evidence discussed above and set

out in more detail in the Appendix, cannot be ignored.

210. The reasons of counsel assisting are to be preferred to those of Adam

Moore. Adam Moore and Mathew McAllum may have breached

s 442BA of the Criminal Code 1899 (Qld).

Potential liability of Mirvac Constructions

211. Section 442I of the Criminal Code 1899 (Qld) makes it plain that a

corporation can breach ss 442B and 442BA.

317 See para 32. 318 Submissions of David Hanna, 23/11/15, para 77. 319

Submissions of Counsel Assisting, 3/12/15, paras 21- 23.

92

212. Counsel assisting submitted that there is no cogent evidence to suggest

that the activities of Adam Moore with respect to the Cornubia house

could be attributed to Mirvac Constructions (or its holding company,

Mirvac Ltd) in the sense described in Environment Protection

Authority v Caltex Refinery Co Pty Ltd.320 That is correct.

Summary of findings

213. David Hanna, an agent of the BLF, corruptly received free goods and

services from Adam Moore and Mathew McAllum in circumstances

where doing so would tend to influence him to show favour to them

personally as well as Mirvac in relation to the BLF’s affairs.

214. David Hanna may have committed an offence under s 442B of the

Criminal Code 1899 (Qld). Pursuant to s 6P of the Royal Commissions

Act 1902 (Cth) and every other enabling power, this Report and all

other relevant materials have been referred to the Director of Public

Prosecutions of Queensland and the Queensland Commissioner of

Police so that consideration may be given to commencing proceedings

against David Hanna in relation to possible offences pursuant to

s 442B of the Criminal Code 1899 (Qld).

215. Adam Moore and Mathew McAllum both gave free goods and services

to David Hanna with the intent that it would tend to influence David

Hanna to show favour to them and Mirvac in relation to the BLF’s

affairs.

320 (1993) 178 CLR 477 at 514-515. See also Grocon v CFMEU [2013] VSC 275 at [60].

93

216. Pursuant to s 6P of the Royal Commissions Act 1902 (Cth) and every

other enabling power, this Report and all other relevant materials have

been referred to the Director of Public Prosecutions of Queensland and

the Queensland Commissioner of Police so that consideration may be

given to commencing proceedings against Mathew McAllum in

relation to possible offences pursuant to s 442BA of the Criminal Code

1899 (Qld).

217. Pursuant to s 6P of the Royal Commissions Act 1902 (Cth) and every

other enabling power, this Report and all other relevant materials have

been referred to the Director of Public Prosecutions of Queensland and

the Queensland Commissioner of Police so that consideration may be

given to commencing proceedings against Adam Moore in relation to

possible offences pursuant to s 442BA of the Criminal Code 1899

(Qld).

218. There is insufficient evidence for imputing the actions of Adam Moore

and Mathew McAllum to Mirvac Constructions or Mirvac Ltd so as to

render those corporations liable for any breaches of s 442BA of the

Criminal Code 1899 (Qld).

219. Hence no recommendation is made in relation to those corporations.

94

APPENDIX

220. This Appendix, based substantially on the submissions of counsel

assisting, contains a more detailed summary of the evidence

concerning the work done by individual trades on the Cornubia house

that were organised by Mathew McAllum, and describing how that

work was invoiced and paid for. For ease of reference, the paragraph

numbering continues on from the body of the Chapter.

Tilecorp and Diane Graham

221. Tilecorp is a relatively large Queensland based ceramic tiling company

owned by David Mullan.321 It had a lengthy history of working on

Mirvac projects. As a result David Mullan and Adam Moore were well

acquainted.322 Their relationship was such that Adam Moore was

aware that, in 2013, David Mullan had purchased an apartment

constructed by Mirvac. He was aware that he had changed the

finishings in the apartment with interior design input from Diane

Graham. He was aware that Diane Graham was David Mullan’s

personal partner.323 Adam Moore had actually gone to their apartment

and viewed these different finishes.324

222. In about April 2013, following his initial meeting with David Hanna,

Adam Moore telephoned David Mullan and asked him whether Diane

Graham would be interested in picking tile and paint colours for

321 David Mullan, 14/9/15, T:27.21-30. 322 David Mullan, 14/9/15, T:27.43-28.2. 323

Adam Moore, 18/9/15, T:578.25-580.23. 324 Adam Moore, 18/9/15, T:578.25-580.23.

95

someone.325 David Mullan initially said in his evidence that Adam

Moore had identified the person for whom the services were required

as ‘a client’, although later he said he could not recall this detail, and

Adam Moore may have referred to a ‘client of a friend’.326

223. During this call, Adam Moore asked David Mullan to provide him with

Diane Graham’s contact details.327 Adam Moore said that he contacted

David Mullan within a week of his meeting with David Hanna.328

David Mullan subsequently obliged, sending Adam Moore an email on

16 April 2015 attaching a copy of Diane Graham’s business card.329

Adam Moore then forwarded that email on the same day.330 David

Mullan also independently sent Diane Graham’s contact details to

Mathew McAllum on 18 April 2013.331

224. Not long after, Diane Graham received a phone call332 from Mathew

McAllum. They met to discuss the Cornubia house project.333

Mathew McAllum told Diane Graham that he was helping out a person

called Jenny Hanna in relation to a residential building project, and that

some assistance was required with colour selections and internal fit

325 David Mullan, 14/9/15, T:27.38-41. 326 David Mullan, 14/9/15, T:29.21-27. 327

David Mullan, 14/9/15, T:29.1; Adam Moore, 18/9/15, T:603.42-604.16. 328 Adam Moore, 18/9/15, T:604.15-19. 329

Cornubia House MFI-1, 14/9/15, Vol 1, pp 96-97. 330 Cornubia House MFI-1, 14/9/15, Vol 1, p 98. 331

Cornubia House MFI-1, 14/9/15, Vol 1, p 101. 332 Diane Graham, 14/9/15, T:74.43-47. 333

Diane Graham, 14/9/15, T:75.18-28.

96

outs.334 At the time, Diane Graham understood Jennifer Hanna to be a

client of Mirvac’s.335 Though she believed that she was doing work for

Mirvac,336 she had not worked for the company in the past, and her

only other client generally was a different housing company.337

225. Following this initial meeting, Diane Graham then had a number of

meetings with Jennifer Hanna. She provided her with advice and

assistance in relation to matters such as tile selection, internal and

external fittings and the like.338

226. During that same period Mathew McAllum had extensive email

communications with Diane Graham about the progress she was

making.339 He largely used his Mirvac email address in doing so. He

requested and obtained information from her that would enable him to

give directions and coordinate the purchase of materials and the

performance of other works at the Cornubia house.340 At some point,

334 Cornubia House MFI-3, Diane Graham, police statement, 18/9/15, paras 12-15. See also Diane Graham, 14/9/15, T:75.26-28. 335

Diane Graham, 14/9/15, T:75.46-76.3. 336 Diane Graham, 14/9/15, T:79.19-21. 337

Diane Graham, 14/9/15, T:79.30-40. 338 Cornubia House MFI-3, Diane Graham, police statement, 18/9/15, paras 19-36. See also Diane Graham, 14/9/15, T:76.24-42, 78.3-10, 79.3-7, 80.30-39, 83.3-7, 84.17-20, 85.42-44, 86.22-32, 87.6-12; Cornubia House MFI-1, 14/9/15, Vol 2, pp 544-1–544-15. 339

Cornubia House MFI-1, 14/9/15, Vol 1, pp 182, 192, 207, 208, 210, 314, 315, 379, 380, 381, 394, 395, 395-1; Cornubia House MFI-1, 14/9/15, Vol 2, pp 405-406, 426, 464, 465, 472-481, 483, 493, 494-1, 519, 539. 340

Cornubia House MFI-1, 14/9/15, Vol 1, pp 182, 192, 210, 314, 315, 379, 380, 381, 394, 395, 395-1; Cornubia House MFI-1, Vol 2, pp 405-406, 426, 464, 465, 472-481, 483, 493, 494-1, 519, 539.

97

227.

228.

341 Cornub 342 Adam M 343

Cornub 344 Cornub

she learned

Cornubia Ho

Although Ad

demonstrates

Mullan had s

bein (a)

PA

also (b)

pas (c)

hou

way

Pro

In this regard

On (a)

Tile

wor

was

ia House MFI-Moore, 18/9/15

ia House MFI-ia House MFI-

that David

ouse, though

dam Moore d

s that, prior

spoken about

ng awarded

AD2 Project;

o providing t

ssing the cos

use, as well a

y of an infla

oject.

d:

30 June 20

ecorp (not D

rk she had d

s for the sum

-1, 14/9/15, Vo

5, T:627.43.

-1, 14/9/15, Vo

-1, 14/9/15, Vo

Mullan wa

she did not r

denied it,342 t

to 30 June

t Tilecorp:

a subcontra

the tiling for

sts of its wo

as the work o

ated quote fr

013 Diane G

David or Jen

done on the

m of $2,240

ol 2, p 464; Dia

ol 2, p 544-14.

ol 2, p 544-14.

as going to

recall how th

the preponde

e 2013, Adam

act to provid

the Cornubia

ork carried

of Diane Gra

rom Tilecorp

Graham subm

nnifer Hanna

Cornubia ho

plus GST.34

ane Graham, 14

do the tilin

hat came abou

erance of the

am Moore an

de tiling to t

a house; and

out on the

aham on to M

p on the Orio

mitted an in

a) for the c

ouse.343 Th 44 Diane Gr

4/9/15, T:91.35

ng at the

ut.341

evidence

nd David

the Orion

Cornubia

Mirvac by

on PAD2

nvoice to

consulting

he invoice

raham did

5-37.

98

345 Cornub 346 Diane G 347

Cornub 348 David M 349

Cornub

not

serv

Wh (b)

she

Tile

was

that

A (c)

dat

is c

bee

‘Mi

gav

the

imp

inst

job

In (d)

Dia

Mu

ia House MFI-Graham, police

ia House MFI-Mullan, 14/9/15

ia House MFI-

t describe on

vices to. It s

hen interview

e invoiced T

ecorp was pr

s more effici

t project.346

different ver

ed 1 July 201

clear from th

en altered an

irvac Orion

ve evidence t

‘tax year’,

plemented by

tructed to do

’.348

two emails

ane Graham

ullan would

-1, 14/9/15, Vo

e statement, 18/

-1, 14/9/15, Vo

5, T:56.24-57.2

-1, 14/9/15, Vo

that invoice

imply read ‘c

wed by the p

Tilecorp in t

roviding tilin

ent for her to

rsion of Dia

13 was also p

he document

nd that a d

Pad Stage 2

that the chan

, and that b

y someone in

o so ‘because

dated 21 Ju

spoke in te

be undertak

ol 2, p 544-14.

/9/15, para 38.

ol 2, p 544-15.

24.

ol 2, pp 426, 46

what project

colour consu

police, Diane

this way bec

ng for the C

o invoice Tile

ane Graham

produced to t

, that the dat

description o

’ had been a

nge in dates

both change

n his office w

e the costs w

une 2013 to

erms which s

king the tili

64.

t she had sup

ultation as dir

e Graham st

cause she k

Cornubia hou

ecorp for her

m’s invoice,

the Commiss

ate on the inv

of work, wh

added. Davi

was likely r

es would ha

whom he ‘wo

were going to

o Mathew M

suggested th

ing work.349

pplied her

rected’.345

tated that

knew that

use, and it

r work on

this time

sion.347 It

voice had

hich read

id Mullan

related to

ave been

ould have’

o the pads

McAllum,

hat David 9 In the

99

350 Cornub 351 Mathew 352

Mathew 353 Mathew 354

David M 355 David M 356

David M

sec

doi

Ma (e)

Dav

hou

Mo

pos

Dav

saw

Dav (f)

ask

Ma

he

he

resp

Ma (g)

evid

par

Cor

ia House MFI-w McAllum, 16

w McAllum, 17

w McAllum, 17

Mullan, 14/9/15

Mullan, 14/9/15

Mullan, 14/9/15

ond email o

ng the tiles th

athew McAll

vid Mullan

use.351 Prior

oore already

ssibly David

vid Mullan’s

w David Mull

vid Mullan w

ked to provid

athew McAllu

did not spec

did not rem

pect of the O

athew McAl

dence abou

rticipated in

rnubia house

-1, 14/9/15, Vo

6/9/15 T:378.43

7/9/15, T:489.1

7/9/15, T:489.1

5, T:36.31-34.

5, T:36.36-38.

5, T:38.31-36.

f 21 June 20

hat are requir

um gave evi

in relation

r to his inv

had discus

d Mullan.352

s role when

lan already th

was vague ab

de tiling ser

um had aske

cify when thi

member dea

Orion PAD2 P

llum was re

ut his deali

the fraudul

e. His frankn

ol 2, pp 426, 46

3-379.6.

16-25.

16-25.

013 Diane G

red in all bat

idence that h

to Tilecorp

volvement w

ssions with

Mathew M

he attended

here.353

bout how it c

rvices.354 A

ed him to hav

is was.355 D

aling with M

Project.356

easonably fr

ings with

ent invoicin

ness was such

64.

Graham said

throoms…’.3

he did not sp

tiling the

with the hous

Diane Grah

McAllum un

the site one

ame to be th

Although he

ve a look at t

David Mullan

Mathew McA

frank when

other trade

ng of Mirvac

h that it is un

‘David is 50

peak with

Cornubia

se, Adam

ham, and

nderstood

e day and

hat he was

said that

the plans,

n said that

Allum in

he gave

es which

c for the

nlikely he

100

357 David M 16/9/15, T 358

Adam M 359 Cornub 360

Cornub 361 Cornub

wou

pos

Ad (h)

wit

Mc

Mu

inte

On (i)

Hut

‘Co

for)

Tha (j)

resp

pac

On (k)

Tile

tile

Bea

tile

Mullan, 14/9/1 :379.35-37.

Moore, 18/9/15

ia House MFI-ia House MFI-ia House MFI-

uld have den

sition was oth

am Moore ha

th David Mu

cAllum.357 A

ullan and spo

erior design a

9 July 201

tchinson of

ornubia’, ask

) certain quan

at same day

pect of those

cking note rea

9 July 201

es (another

s for the C

aumont Tiles

s to Tileco

15, T:27.43-28

5, T:603.42-604

-1, 14/9/15, Vo

-1, 14/9/15, Vo

-1, 14/9/15, Vo

nied having d

herwise.

ad a more re

ullan than D

Adam Moore

oken to him

assistance.358

13 David M

Tile City (a

king for Tile

ntities of two

Tile City iss

e tiles. The r

ad ‘David: P

3 David Mu

tile supplier

Cornubia pr

s issued a ta

orp; ‘Cornu

8.2, 31.9-16, 3

4.6.

ol 2, p 572-1.

ol 2, p 574.

ol 2, p 573-1.

dealt with Da

ecent, and lon

David Mulla

had origina

m about Dian 8

Mullan sent a

tile supplier

City to supp

o kinds of tile

sued a packin

eference give

AD2’ (not C

ullan sent an

r) requesting

roperty.361

ax invoice fo

ubia’ was l

1.45-47, 33.34

avid Mullan i

nger-term rel

an had with

ally approach

ne Graham p

an email to

r) with a sub

ply (not mer

e.359

ng note to Ti

en by Tile C

Cornubia).360

n email to B

g the supply

The follow

or the supply

listed as th

4-37; Mathew

if the true

lationship

h Mathew

hed David

providing

Michael

bject line

rely quote

ilecorp in

ity on the

Beaumont

of other

wing day,

y of those

he ‘order

McAllum,

101

229.

230.

231.

362 Cornub 363 David M 364

Cornub 365 Cornub 366

Cornub 367 Cornub 368

Cornub 369 Mathew

num

inv

that

Dav (l)

to o

sup

On 25 July 2

at Tilecorp)

Orion PAD2

GST.366

The followi

McAllum an

read simply

$27930.00 +

According to

asked for it

McAllum ab

Cornubia ho

ia House MFI-Mullan, 14/9/15

ia House MFI-ia House MFI-ia House MFI-ia House MFI-ia House MFI-w McAllum, 17

mber’362 On

voice, David

t invoice.363

vid Mullan s

other tile su

pply, of tiles f

2013 Mark V

sent Mathew

2 Project.365

ing day, 26

n email with

y ‘supply an

+ GST’.368

o Mathew M

t, and witho

bout providi

ouse.369 How

-1, 14/9/15, Vo

5, T:45.22-23.

-1, 14/9/15, Vo

-1, 14/9/15, Vo

-1, 14/9/15, Vo

-1, 14/9/15, Vo

-1, 14/9/15, Vo

7/9/15, T:488.3

n some date

Mullan wro

ent various o

uppliers in re

for the Cornu

Veitch (an es

w McAllum a

The quote

6 July 2013

a quote for t

nd install ce

McAllum, he r

out having h

ing Mirvac

wever, in lig

ol 2, p 575.

ol 2, p 574-1–5

ol 3, p 796-797

ol 3, p 796-797

ol 3, p 799; Dav

ol 3, p 799.

32-37.

subsequent

ote the word

other emails o

elation to th

ubia house.36

stimator and

an email atta

ed price wa

3, David M

the Cornubia

eramic tiles

received the

had any disc

with a quo

ght of the fac

574-5.

7.

7.

vid Mullan, 14

to the receip

ds ‘PAD2 M

on 9 and 10 J

e supply, or 64

project adm

aching a quo

as $32,370 e

Mullan sent

a house.367 T

and waterpr

quote witho

cussion with

ote for work

ct he had se

4/9/15, T:51.38

pt of that

Mirvac’ on

July 2013

r possible

ministrator

ote for the

excluding

Mathew

The email

roofing -

out having

h Mathew

k on the

een David

8-52.12.

102

Mullan on the Cornubia site and been told by him (and Diane Graham)

that he was doing the tiling, and having regard to the fact that Tilecorp

had tendered for the Orion PAD2 Project and the conversation he had

previously had with Adam Moore about covering the Cornubia costs

through this project, Mathew McAllum assumed that David Mullan’s

quote for the Cornubia house costs should be treated in that way.370

232. As a result, Mathew McAllum responded to David Mullan 20 minutes

later by email of the same date, stating: 371

David

Can you add this figure [that is, Tilecorp’s figure for Cornubia] to the current quote sent from Mark for Orion plus add Di’s costs [that is, the cost of Diane Graham’s services] and resend please.

233. David Mullan’s evidence was that the direction to add Tilecorp’s costs

for the Cornubia house onto the Orion PAD2 Project quote came from

Mathew McAllum. He agreed that it was ‘not entirely’ appropriate to

do so but that he followed the direction because Mirvac were a ‘good

client’.372 David Mullan presumed that Mathew McAllum had

authority to make the request.373 David Mullan admitted that the costs

of tiling for David Hanna’s house were ‘passed on’ to Mirvac through

the inflated quote, by that time. David Mullan had produced

370 Mathew McAllum, 17/9/15, T:489.3-22. 371 Cornubia House MFI-1, 14/9/15, Vol 3, p 800. 372

David Mullan, 14/9/15, T:45.34-46.13. 373 David Mullan, 14/9/15, T:46.15-21.

103

documents to the Commission that clearly showed this state of

affairs.374

234. Strictly speaking, there is no conflict between the evidence of Mathew

McAllum, and Adam Moore as outlined above.375 David Mullan did

not give evidence that, prior to his provision of the Cornubia house

quote of 26 July 2015, it was to be added to the quote for the Orion

PAD2 Project. That this direction only came after the quote was

received by Mathew McAllum is consistent with the direction referred

to by David Mullan being given after this time; otherwise there would

have been no need for a separate quote for the house or Mathew

McAllum’s written direction that it be absorbed by Tilecorp’s pricing

for the Orion PAD2 Project. It is also consistent with David Mullan’s

statement that, at the time at which he ordered the tiles, he did not

know ‘what was happening [with payment] at that stage’.376

235. On 29 July 2013 David Mullan sent an email to Mathew McAllum

which read ‘revised pricing including additional works as discussed -

$62540.00 + GST’.377 That figure represented the total of the original

Orion PAD2 Project quote ($32,370), the tiling quote for Cornubia

($27,930), and Diane Graham’s invoiced amount of $2,240.378

374 David Mullan, 14/9/15, T:39.44-46, 65.28-30. 375 Paragraphs 229-232. 376

David Mullan, 14/9/15, T:52.23. 377 Cornubia House MFI-1, 14/9/15, Vol 3, p 811. 378

David Mullan, 14/9/15, T:58.4-8.

104

236. Mathew McAllum then sent an email to David Mullan asking him to

amend the previous Orion PAD2 quote and send it to him.379 David

Mullan arranged for that to happen through Mark Veitch,380 and on 30

July 2013 Mark Veitch sent Mathew McAllum the revised quote in the

amount of $62,540 plus GST.381

237. Documents produced by Mirvac demonstrate that this price, together

with other additional sums, was claimed by Tilecorp382 and paid by

Mirvac Constructions to Tilecorp.383

Electrical services

Darren Wall is engaged by David Hanna

238. The electrical works for the Cornubia house were undertaken by

Darren Wall. He carried on business as an electrician under the

business name ‘Wall to Wall Electrical’.384

239. Darren Wall and David Hanna have known each other for between 10

to 15 years.385 Their families lived in the same street for a time.386

They are friends but do not often socialise together.387

379 Cornubia House MFI-1, 14/9/15, Vol 3, p 811. 380 Cornubia House MFI-1, 14/9/15, Vol 3, p 814; David Mullan, 14/9/15, T:58.10-18. 381

Cornubia House MFI-1, 14/9/15, Vol 3, pp 821-822. 382 Cornubia House MFI-1, 14/9/15, Vol 3, pp 1002-1, 1015-2. 383

Cornubia House MFI-1, 14/9/15, Vol 4, p 1396. 384 Darren Wall, 14/9/15, T:103.17-25. 385

Darren Wall, 14/9/15, T:103.30-31.

105

240. In about December 2012, David Hanna called Darren Wall and asked

for a quote for electrical works for the Cornubia house.388 On 14

December 2012 David Hanna sent Darren Wall an email with a list of

the items of the work he wanted undertaken.389

241. Darren Wall considered the job and subsequently gave David Hanna a

quote of $13,844 plus GST.390 David Hanna accepted the quote and

asked Darren Wall to do the work.391

242. Darren Wall did the electrical works in various phases.392 He started

work by laying conduit ready for the slab to be laid.393 That work did

not take very long – perhaps an hour and a half. While Darren Wall

was there doing the work he spoke to David Hanna394 and Jennifer

Hanna.395

386 Darren Wall, 14/9/15, T:103.33-34. 387 Darren Wall, 14/9/15, T:103.36-104.7. See also Shane Dalby, 14/9/15, T:20.25-40. 388

Cornubia House MFI-3, Darren Wall, police statement, 18/9/15, para 7; Darren Wall, 14/9/15, T:104.32-38. 389 Cornubia House MFI-1, 14/9/15, Vol 1, p 19-1; Darren Wall, 14/9/15, T:104.20-26. 390

Cornubia House MFI-3, Darren Wall, police statement, 18/9/15, para 8; Cornubia House MFI-1, 14/9/15, Vol 1, pp 328-329; Darren Wall, 14/9/15, T:104.20-26. 391 Cornubia House MFI-3, Darren Wall, police statement, 18/9/15, paras 8-9; Darren Wall, 14/9/15, T:105.8-12. 392

Cornubia House MFI-3, Darren Wall, police statement, 18/9/15, paras 10-12, 18; Darren Wall, 14/9/15, T:105.29. 393 Cornubia House MFI-3, Darren Wall, police statement, 18/9/15, para 10; Darren Wall, 14/9/15, T:105.31-45. 394

Cornubia House MFI-3, Darren Wall, police statement, 18/9/15, para 11; Darren Wall, 14/9/15, T:106.15-18. 395 Darren Wall, 14/9/15, T:106.7-9.

106

243. On 31 May 2013 Jennifer Hanna sent Darren Wall an email thanking

him for his time that morning, and asking him to say hello to his

wife.396 It appears from this that some services were provided by

Darren Wall to the Hannas that day.

244. In mid-June 2013 Darren Wall returned to the house and laid the

electrical rough in before the gyprocking was undertaken.397 This job

took about four days.398 During that time Darren Wall received an

email from Jennifer Hanna dated 16 June 2013 in which she described

where she wanted various data points placed.399

Mathew McAllum approach to Klenner Murphy

245. Klenner Murphy is an electrical company that concentrates on the

installation of the electrical work on large industrial projects.400 Daniel

Greenland has been one of the owners of that company since around

2010.401

246. In 2013, Klenner Murphy provided services to Mirvac on the Orion

PAD2 Project.402 It submitted quotations for that work to Mathew

396 Cornubia House MFI-1, 14/9/15, Vol 1, p 315-1. 397 Cornubia House MFI-3, Darren Wall, police statement, 18/9/15, para 11; Darren Wall, 14/9/15, T:106.26-107.15. 398

Cornubia House MFI-3, Darren Wall, police statement, 18/9/15, para 12. 399 Darren Wall, police statement, 18/9/15, para 11; Cornubia House MFI-1, 14/9/15, Vol 1, 3461; Darren Wall, 14/9/15, T:106.40-107.15. 400

Cornubia House MFI-3, Daniel Greenland, police statement, 18/9/15, para 3. 401 Cornubia House MFI-3, Daniel Greenland, police statement, 18/9/15, para 2. 402

Cornubia House MFI-3, Daniel Greenland, police statement, 18/9/15, para 4.

107

247.

403 Cornub 404 Cornub 405

Cornub 406 Cornub 407

Cornub 408 Cornub

McAllum in

executed a

Construction

each other in

the Orion PA

Daniel Gree

to police tak

At (a)

Kle

rela

pro

pur

Aft (b)

Mu

Gre

elec

abs

Dan (c)

dec

ia House MFI-ia House MFI-ia House MFI-ia House MFI-ia House MFI-ia House MFI-

n January and

formal sub

ns.404 Mathe

n relation to t

AD2 Project g

nland gave t

en in July 20

some point,

enner Murph

ating to a

ovided Danie

rpose.407

ter Mathew

urphy, which

eenland told

ctrician, but

sorb the costs

niel Greenla

cided that

-1, 14/9/15, Vo

-1, 14/9/15, Vo

-3, Daniel Gree

-3, Daniel Gree

-3, Daniel Gree

-3, Daniel Gree

d April 2013

contract dat

ew McAllum

these matters

generally.405

the following

015.

Mathew Mc

hy to provi

residential p

el Greenland

McAllum r

h he judge

him that it w

that Klenne

s for the work

and spoke w

Klenner M

ol 5, pp 1574-1

ol 5, p 1594.

enland, police

enland, police

enland, police

enland, police

3 (each for o

ted 27 May

m and Daniel

s, and on the

g account to

cAllum appro

ide a quote

property.406

with plans f

received a

ed was too

would be easi

er Murphy ‘w

k’.408

with his bus

Murphy wou

580, 1581-158

statement, 18/9

statement, 18/9

statement, 18/9

statement, 18/9

over $500,00

y 2013 with

Greenland d

progress of

police in a

oached him a

for electric

Mathew M

for the hous

quote from

o expensive

ier to engage

were in a po

siness partn

uld ‘help

87.

9/15, para 5.

9/15, para 6.

9/15, para 6.

9/15, paras 7-8

00).403 It

h Mirvac

dealt with

works on

statement

and asked

cal work

McAllum

e for this

Klenner

e, Daniel

the other

osition to

ners. He

[Mathew

8.

108

409 Cornub 410 Cornub 411

Cornub 412 Cornub 413

Cornub 414 Cornub 415

Cornub

Mc

mar

to M

Dan (d)

elec

to h

elec

wor

abs

pro

Dan (e)

the

acc

Dan (f)

Kle

Ma

that

bui

ia House MFI-ia House MFI-ia House MFI-ia House MFI-ia House MFI-ia House MFI-ia House MFI-

cAllum] out

rketing expe

Mathew McA

niel Greenl

ctrician who

him so that

ctrician to d

rk provided f

sorb this cos

oject’.413

niel Greenla

electrician.

counts team f

niel Greenla

enner Murph

athew McAll

t it was sim

lding custom

-3, Daniel Gree

-3, Daniel Gree

-3, Daniel Gree

-3, Daniel Gree

-3, Daniel Gree

-3, Daniel Gree

-3, Daniel Gree

by absorbi

nse’.410 Dan

Allum.411

land was

he told to fi

he knew ‘w

describe the

for the Orion

st as there w

and subseque

He forwar

for payment.4

and told poli

hy ever rece

lum or Mirv

mply provide

mer relations’

enland, police

enland, police

enland, police

enland, police

enland, police

enland, police

enland, police

ing the cost

niel Greenlan

subsequently

ll out an inv

what it was

work as ‘b

n Project … s

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ently receive

rded them t 414

ice that, he

ived or gain

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.415

statement, 18/9

statement, 18/9

statement, 18/9

statement, 18/9

statement, 18/9

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ts’409 as a

nd communic

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oice and to f

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being for con

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9/15, para 10.

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109

248. In the face of relevant documents, Daniel Greenland’s account to the

Commission eventually differed markedly from the sworn statement he

gave to police. Parts of his police statement are untenable. They

appear to have been intended to mislead the police in their

investigations. Key discrepancies are considered further below.

249. According to Daniel Greenland, Mathew McAllum approached him

when they were both on the Orion PAD2 Project site. He told him that

there was a house he was ‘looking after’. He told him that he wanted

Klenner Murphy to give him a quote to do the electrical work at the

house.416

250. This appears to have occurred in about early May 2013, because on

7 May 2013 Mathew McAllum sent an email to Daniel Greenland

asking him to ‘provide price to supply and install standard electrical

services for the attached property’.417 The email attached plans for the

Cornubia house.418

251. David Hanna had already retained Darren Wall to provide the electrical

services. Hence it was unusual for Mathew McAllum to have made

that request of Daniel Greenland.

252. For this reason, and other reasons set out below, the probable

explanation is that Mathew McAllum and Daniel Greenland were

really discussing an arrangement under which Klenner Murphy could

undertake or at least pay for the Wall to Wall electrical works at the

416 Daniel Greenland, 14/9/15, T:118.26-28, 120.13-15. 417 Cornubia House MFI-1, 14/9/15, Vol 1, p 184. 418

Cornubia House MFI-1, 14/9/15, Vol 1, p 184.

110

Cornubia house, and then invoice Mirvac for those works through the

Orion PAD2 Project, rather than ‘absorbing’ the costs themselves.

253. Daniel Greenland provided Mathew McAllum with a quote for the

Cornubia house by way of an attachment to an email of 21 May

2013.419 The attached quote, numbered 3171, was addressed to

Mathew McAllum at Mirvac, listed items of work to be provided for

the Cornubia house and had the subject line of ‘Re: Electrical Price –

House at Cornubia’. However, the quote itself described the job

location as ‘Orion PAD Sites Stage 2’ and summarised the work as

‘V004-Community services changes’. The quoted price for the works

was $45,209.10 (inclusive of GST) – substantially in excess of the

price Darren Wall had given David Hanna.

254. Initially Daniel Greenland’s evidence was that he worded the quote in

this way because it was administratively easier to do so, as Klenner

Murphy already had the Orion job in the system.420 However when

challenged about his explanation, Daniel Greenland said that Mathew

McAllum had asked for the quote to be worded this way so that he

could ‘relate it back to that job’ because ‘he probably may have wanted

to put the costs there’ possibly to ‘bury’ it.421 Mathew McAllum

admitted that it was likely that this occurred.422

255. A couple of weeks later, on 7 June 2013, Darren Wall resent David

Hanna a copy of his quote, stating in the covering email ‘Please find

419 Cornubia House MFI-1, 14/9/15, Vol 1, pp 271-273. 420 Daniel Greenland, 14/9/15, T:124.17-25. 421

Daniel Greenland, 14/9/15, T:124.33-34, 125.15-17, 125.39-126.5. 422 Mathew McAllum, 17/9/15, T:451.26-28.

111

attached list of electrical requirements for your place’.423 David Hanna

then sent that email on to Mathew McAllum, in the process providing

him with Darren Wall’s mobile number.424 This is consistent with the

fact that each of David Hanna and Mathew McAllum knew, by this

time, that Darren Wall (not Klenner Murphy) was doing the electrical

works at Cornubia.

256. On 13 June 2013 Darren Wall was either conducting, or about to

conduct, the electrical rough in works on the Cornubia site. On that

day Mathew McAllum sent Daniel Greenland an email attaching a

copy of Darren Wall’s quote for the Cornubia house.425 He stated that

the quote still needed to add all fittings including lights, fans, aerial

and smoke alarms.426 In the email Mathew McAllum stated ‘can you

let me know your thoughts’.427

257. About a week later, on 20 June 2013, Daniel Greenland sent Mathew

McAllum an email attaching a quote and a price breakdown.428 Again,

the quote was addressed to Mathew McAllum of Mirvac

Constructions. It was stated to be in reference to ‘Orion PADs Sites

Stage 2’ and the email attached Darren Wall’s original quote.429 It is

clear from the price breakdown that the quote was, in fact, in respect of

423 Cornubia House MFI-1, 14/9/15, Vol 1, p 328. 424 Cornubia House MFI-1, 14/9/15, Vol 1, p 328. 425

Cornubia House MFI-1, 14/9/15, Vol 2, p 421. 426 Cornubia House MFI-1, 14/9/15, Vol 2, p 421. 427

Cornubia House MFI-1, 14/9/15, Vol 2, p 421. 428 Cornubia House MFI-1, 14/9/15, Vol 2, p 421. 429

Cornubia House MFI-1, 14/9/15, Vol 2, pp 422-424.

112

the Cornubia property. The price, including GST, was again stated to

be $45,209.10.

Darren Wall’s first invoice for work

258. Darren Wall’s first invoice for work performed at the Cornubia site

was dated 5 July 2013.430 Its terms, and the circumstances surrounding

its creation, are revealing.

259. Darren Wall’s evidence was that, prior to sending this first invoice, he

had a discussion with David Hanna about how payment was to be

made.431 David Hanna told him to ring someone, and gave him a

telephone number for that person.432

260. Darren Wall could not recall the name of the person he rang. 433 He did

recall, however, that the person he spoke with told him to invoice

Klenner Murphy and include the following description on the invoice

‘Orion Project re: electrical consultancy to carry out various work

items as discussed for the Orion Project at Springfield’.434 The person

with whom he spoke told Darren Wall ‘exactly what he wanted stated

430 Cornubia House MFI-1, 14/9/15, Vol 2, pp 5691-5692. 431 Cornubia House MFI-3, Darren Wall, police statement, 18/9/15, para 13; Darren Wall, 14/9/15, T:107.17-108.17. 432

Cornubia House MFI-3, Darren Wall, police statement, 18/9/15, para 13; Darren Wall, 14/9/15, T:108.14-17. 433 Cornubia House MFI-3, Darren Wall, police statement, 18/9/15, para 13; Darren Wall, 14/9/15, T:108.14-17. 434

Cornubia House MFI-3, Darren Wall, police statement, 18/9/15, paras 13-14; Darren Wall, T:108.19-32. See also Cornubia House MFI-3, Daniel Greenland, police statement, 18/9/15, para 11 (note the contradiction between Daniel Greenland’s statement in this paragraph and his evidence in Daniel Greenland, 14/9/15, T:141.1-28).

113

on his invoice’.435 Darren Wall had never heard of the Orion Project or

Klenner Murphy.436

261. Darren Wall then invoiced Klenner Murphy in this way on 5 July 2013.

He caused the invoice to be sent (by his wife) as an attachment to an

email addressed to Daniel Greenland.437 The invoice totalled $7,150

inclusive of GST.

262. The email and invoice did not come as a surprise to Daniel Greenland.

He maintained his statement to police that Mathew McAllum had told

him that Klenner Murphy’s price for the electrical work was too

expensive, and Klenner Murphy volunteered to do the job and use

Darren Wall as a subcontractor to carry out the works because Darren

Wall’s price was cheaper.438 He also gave evidence that this was

agreed to by Mathew McAllum, who then organised for Darren Wall to

do the work for Klenner Murphy.439

263. This is an unlikely explanation for the relevant sequence of events.

Darren Wall did not act as Klenner Murphy’s subcontractor. He was

never retained or given any instruction by Klenner Murphy. Darren

Wall had already done work before Klenner Murphy was approached.

264. The most likely explanation for the relevant events is that Mathew

McAllum arranged for Darren Wall’s invoice to be sent to and paid by

435 Cornubia House MFI-3, Darren Wall, police statement, 18/9/15, para 14. 436 Darren Wall, 14/9/15, T:108.47-109.5. 437

Cornubia House MFI-3, Darren Wall, police statement, 18/9/15, para 16; Cornubia House MFI-1, 14/9/15, Vol 2, pp 569-1–569-2A. 438 Daniel Greenland, 14/9/15, T:136.17-45. 439

Daniel Greenland, 14/9/15, T:136.42-45.

114

Klenner Murphy for the sole purpose of being able to have that cost

covered by Mirvac on the Orion PAD2 Project. It was nothing more

than a contrivance to enable the cost to be borne by Mirvac and not

David Hanna. The latter knew this was so. That is why he directed

Darren Wall to speak to a stranger about how to invoice for the work

done on the house rather than simply asking for the invoice to be given

to him so he could pay it in the usual way. Daniel Greenland must

have known this at the time Darren Wall contacted him.

265. Darren Wall’s invoice of $7,150 (inclusive of GST) was paid by

Klenner Murphy on 10 July 2013.440

Klenner Murphy includes Cornubia costs in variation claims on Orion PAD2

266. When taken to his police statement, Daniel Greenland gave evidence to

the Commission that initially, when Klenner Murphy ‘took on the job’,

it was not the plan to put the costs through Mirvac, but that after Wall

to Wall’s costs had been borne, he ‘dealt with the costs into variations

across the [Orion PAD 2 Project]’ because Klenner Murphy had to

recover its running costs, and that he had Mathew McAllum’s

permission to do so.441 This is at odds with Daniel Greenland’s

statement to police that the costs of Wall to Wall was a marketing

expense, that it would be absorbed by Klenner Murphy and that the

company received no benefit from providing the service to Mirvac or

Mathew McAllum. Daniel Greenland’s claim that Klenner Murphy

440 Cornubia House MFI-1, 14/9/15, Vol 2, pp 575-1–575-2. 441 Daniel Greenland, 14/9/15, T:137.43-138.13, 141.14-17.

115

267.

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116

269. Later that same day Mathew McAllum sent an email to Daniel

Greenland, in which he wrote: 445

Can you add to these figures to cater for the 2nd half of wall to wall. Ie add $1k to each as required to cover the cost.

There will be light fittings still to add. …

Daniel Greenland responded by way of a further email attaching two

documents, one headed ‘Customer job number 2062’ and another

headed ‘Client Entertainment Expenses – PAD site S2’.446

Mathew McAllum gave evidence that, by that email, he was indicating

to Daniel Greenland that ‘he would be paying for the Wall to Wall

invoices’.447

270. The ‘job number 2062’ document448 was stated to be in respect of

‘Orion PAD Site stage 2’ and was addressed to Natalie Croghan. That

document set out the price for various heads of works and, in addition,

the price for a number of variations. In total the document referred to

15 separate variations.

271. The Client Entertainment Expenses document449 contained a one page

table that included the same variation numbers that appeared on the job

number 2062 document (and also, in some cases, on Mathew

McAllum’s initial email of 15 July 2013). The total cost of each

445 Cornubia House MFI-1, 14/9/15, Vol 2, pp 623-624. 446 Cornubia House MFI-1, 14/9/15, Vol 2, pp 623-624. 447

Mathew McAllum, 17/9/15, T:476.44-45. 448 Cornubia House MFI-1, 14/9/15, Vol 2, p 628. 449

Cornubia House MFI-1, 14/9/15, Vol 2, p 627. Daniel Greenland sent this same document to Mathew McAllum on a further occasion, as an attachment to an email of 18 July 2013: Cornubia House MFI-1, 14/9/15, Vol 2, p 635.

117

variation matched the sum contained in the last column (titled

‘approved’) of the Client Entertainment Expenses document.

272. All three documents (that is the Client Entertainment Expenses

Document, the job number 2062 document, and Mathew McAllum’s

email of 15 July 2013450) referred to a variation number 4 in the

amount of $8,465.

273. Mathew McAllum’s 15 July 2013 email, and the job number 2062

document, both referred to this variation as being in respect of

‘Community services changes’.

274. The Client Entertainment Expense document, however, stated that

variation 4 was made up of two ‘item costs: ‘Mat’s joint $3,800’

(which Daniel Greenland said related to light fitting supplied by

Klenner Murphy for Mathew McAllum’s private residence)451 and

‘Cornubia #1 $7,865’. It also recorded that, of those amounts, a total

of $8,465 (that is, the same figure as set out in Mathew McAllum’s

email and the job number 2062 document for variation 4) had been

‘approved’. The sum of $7,865 appears to include a 10% mark up on

Wall to Wall’s first invoice (referred to in paragraph 261).

275. The job number 2062 document also referred to variations numbered

10-15 inclusive. The description of works set out in that document for

those variations corresponded with the description for the items of

work set out in Mathew McAllum’s 15 July 2013 email in respect of

which he had asked for an ‘extra over’ figure from Daniel Greenland.

450 Cornubia House MFI-1, 14/9/15, Vol 2, p 601. 451 Daniel Greenland, 14/9/15, T:154.31-36.

118

276. Those same variations numbered 10-15 inclusive also appear on the

Client Entertainment Expenses document. In the case of each, the

work was described as being in respect of ‘Cornubia #2’.

277. Variations 2, 3, 5-9 appear on the Client Entertainment Expenses

document as relating to a ‘Night’ for Janice’, ‘Sharks night’, ‘lap top &

screens’, ‘Mirvac Lions game’, ‘Origin Jerseys’ and ‘Origin tables’.

That work was said to total $64,261.

278. Daniel Greenland’s evidence was that the amounts claimed for

variations numbered 10-15 included some genuine Orion PAD2

Project costs and some Cornubia costs which had been misdescribed452

with the actual costs Klenner Murphy had incurred or was expected to

incur in paying Darren Wall for the Cornubia work having been spread

across those items on a proportional basis.453

279. At this stage at least, it appeared that Klenner Murphy was seeking to

recover the costs it had incurred or expected to incur in paying Darren

Wall for the Cornubia work, without charging a margin. Daniel

Greenland said that he had Mathew McAllum’s permission to do

this,454 and that, in giving the permission, Mathew McAllum was

acting in his capacity as a representative of Mirvac.

280. However a similar Client Entertainment Expenses document was later

prepared by Daniel Greenland which described additional sums

(totalling $5,000) as variations recoverable on the Orion PAD2 Project,

452 Daniel Greenland, 14/9/15, T:145.38-45, 149.12-43. 453 Daniel Greenland, 14/9/15, T:148.19-21; 155.6-9. 454

Daniel Greenland, 14/9/15, T:149.45-47.

119

281.

282.

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120

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121

from Mirvac to cover this cost through previous false variation claims

on the Orion PAD2 Project).465

Rendering, painting and internal plastering

285. Wadsworth Constructions is a commercial fit out subcontractor.466 It

was at all relevant times owned and controlled by Glen Wadsworth.

286. Adam Moore and Glen Wadsworth had known each other for about

12 years.467 By contrast, Mathew McAllum had only recently met

Glen Wadsworth. Neither had particularly enjoyed the experience.468

287. In 2013, Wadsworth was engaged to provide services to Mirvac

Constructions on the Orion PAD2 Project in respect of two separate

trades: (a) painting, and (b) ceiling and partitions.469

288. Glen Wadsworth gave evidence that, even though he was not retained

to undertake or organise any work on the Cornubia house, and did not

do so, he was asked by Mathew McAllum to have Wadsworth

Constructions pay for various invoices for painting, plastering and

rendering work done on the house, and to claim the cost of doing so

from Mirvac on the Orion PAD2 Project.470

465 Cornubia House MFI-1, 14/9/15, Vol 3, p 1015-6. 466 Glen Wadsworth, 15/9/15, T:257.5-6. 467

Adam Moore, 18/9/15, T:609.9-17. 468 Glen Wadsworth, 15/9/15, T:264.19-21, Mathew McAllum, 15/9/15, T:390.43-47, 468.26-34. 469

Cornubia House MFI-1, 14/9/15, Vol 6, pp 1805-1806. 470 Glen Wadsworth, 15/9/15, T:270.46-271.1, 272.39-273.7, 274.5-11, 285.30-287.19, 288.42-291.21, 293.19-294.26.

122

289. Mathew McAllum’s evidence was that, although he did have some

dealings with Glen Wadsworth and was involved in organising the

creation of false invoicing in relation to Wadsworth Constructions (as

to which see below), he did not initiate Wadsworth Constructions’

involvement in the matter.471 He assumed that given their good

relationship, Adam Moore had spoken with Glen Wadsworth. Adam

Moore denied this.472

290. It is more likely than not that Adam Moore had a greater involvement

in the matter than he suggested. It was Adam Moore, not Mathew

McAllum, who had a relationship with Glen Wadsworth enabling him

to broach the subject of Glen Wadsworth’s involvement. Further, there

is a substantial lack of documentation concerning approaches to and

dealings with Glen Wadsworth. Had Mathew McAllum been involved

at the start it is likely that there would be a documentary trail leading

back to him (for there exists such a trail in relation to other

subcontractors with whom he dealt on the Cornubia house).

291. In addition, Mathew McAllum was relatively candid in his evidence to

the Commission about his involvement in with the Cornubia house.

That being so, it is unlikely that he would have denied having initiated

the involvement of Wadsworth Constructions if that is what had

occurred.

471 Mathew McAllum, 17/9/15, T:468.40-469.3. 472 Adam Moore, 18/9/15, T:609.19-21.

123

292.

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124

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296.

478 Glen W 479 Mathew 480

Adam S 481 Adam S

and

by

This is con

Wadsworth

the costs for

Orion PAD2

As a result,

it ought to h

represented t

GST), with

Construction

In relation to

by Adam Sh

ultimately pa

Ad (a)

oth

Ma (b)

and

Wadsworth, 15/9

w McAllum, 17

Shuttlewood, 1

Shuttlewood, 1

d Glen Wads

$37,000.478

nsistent with

‘already had

r both’ the re

2 Project wor

Mirvac paid

have for the

the cost of w

the balance

ns’ profit for

o the renderin

huttlewood an

assed on to M

am Shuttlew

her profession

athew McAll

d asked him t

9/15, T:320.22

7/9/15, T:483.1

5/9/15, T:240.

5/9/15, T:240.

sworth, woul

h Mathew

d money wit

ender and pa

rk.479

Wadsworth

e Orion PAD

work done on

of $5,677 e

having partic

ng and the pa

nd invoiced

Mirvac), the e

wood and Ma

nally for som

lum approac

to provide a q

-41, 321.3-13.

19-29; see also

5-9.

26-28.

ld have redu

McAllum’s

thin his cont

ainting of Co

Construction

D2 Project.

n the Cornub

ffectively co

cipated in the

ainting of ren

to Wadswor

evidence esta

athew McAl

me years.480

ched Adam

quote for this

T:510.17-22.

uced the price

evidence th

tract amount

ornubia hous

ns $77,000 m

The sum of

bia house (inc

omprising W

e scheme.

nder work un

rth Construct

ablishes that:

lum had kno

Shuttlewood

s work.481

e payable

hat Glen

t to cover

se and the

more than

f $71,323

clusive of

Wadsworth

ndertaken

tions (and

own each

d in 2013

125

482 Cornub 483 Cornub 484

Cornub 485 Adam S 486

Cornub

On (c)

Ma

app

of

($4

to

pro

Ma (d)

July

to t

The (e)

Shu

Wa

had

On (f)

Wa

und

the

blu

(Or

ia House MFI-ia House MFI-ia House MFI-Shuttlewood, 1

ia House MFI-

12 July 20

athew McAl

plication of r

GST)482 and

4,400 inclusiv

‘the owner’

operty.

athew McAll

y 2013 confi

the Cornubia

e rendering w

uttlewood to

adsworth at W

d not heard of

19 July 201

adsworth at

dertaken on t

invoice read

ue board on

rion 2D)’.486

-1, 14/9/15, Vo

-1, 14/9/15, Vo

-1, 14/9/15, Vo

5/9/15, T:246.

-1, 14/9/15, Vo

013, Adam

llum attachi

ender to the

for gapping

ve of GST).4

of and wer

lum sent an

irming that th

house.484

work was don

o send his

Wadsworth C

f either.485

13 Adam Sh

ttaching an

the Cornubia

d ‘Supply an

residence a

ol 2, pp 580-58

ol 2, pp 582-58

ol 2, p 592.

35-41, 248.40-ol 2, pp 651-65

Shuttlewood

ing quotes

Cornubia ho

g joints and 483 The quote

re said to re

email to Gl

he rendering

ne. Mathew

invoice for

Constructions

huttlewood s

invoice f

a house. The

nd apply rend

at 19 Gramz

81.

83.

-249.13.

52.

d sent two e

for the sup

ouse ($9,823

painting ren

es had been

elate to the

en Wadswor

g work would

w McAllum to

r the work

s. Adam Shu

sent an emai

for renderin

e work descr

der on brick

zow Road,

emails to

pply and

inclusive

nder work

made out

Cornubia

rth on 17

d be done

old Adam

to Glen

uttlewood

l to Glen

ng work

ription on

work and

Cornubia

126

Plumbin

Nicoll Ind

297.

487 Cornub 488 Cornub 489

Cornub T:252.17-3 490

Adam S 491 Lucas N

Gle (g)

Mc

Lat (h)

Shu

des

Pai

2D

Ad (i)

inv

then

Con

g goods and

dustries and

Nicoll Indus

in the comm

ia House MFI-ia House MFI-bia House MFI 30.

Shuttlewood, 1

Nicoll, 15/9/15

en Wadswort

cAllum by em

ter that day,

uttlewood w

scription and

nting servic

’.488

am Shuttlew

voices to be p

n arranged

nstructions.49

d services

Orion PAD2

stries carried

mercial and do

-1, 14/9/15, Vo

-1, 14/9/15, Vo

I-1, 14/9/15, V

5/9/15, T:252.

, T:166.7-23.

th then forw

mail, seeking

, Mathew M

which read

only have th

es to carry

wood oblige

prepared489 a

for them

90

2

on a plumbi

omestic secto

ol 2, pp 651-65

ol 2, pp 653-65

Vol 2, pp 655-

32-36; Glen W

warded that in

his approval

McAllum sen

‘Can you

he following

out works

ed, and arr

and sent to G

to be p

ing business

ors in Queens

52.

54.

1–655-2; Adam

Wadsworth, 15/

nvoice on to

l to pay it.487

nt an email

please rem

– Supply Re

as directed

ranged for

Glen Wadswo

paid by W

in 2013 that

sland.491

m Shuttlewood

/9/15, T:291.38

o Mathew

to Adam

move the

ender and

at Orion

amended

orth, who

Wadsworth

t operated

d, 15/9/15,

8-41.

127

298. By a subcontract dated 3 June 2013 Nicoll Industries was formally

retained by Mirvac Constructions to provide plumbing goods and

services to the Orion PAD2 Project.492 However, Lucas Nicoll believes

that Nicoll Industries began working on the project earlier than that.493

The contract was negotiated between Lucas Nicoll of Nicoll Industries

and Mathew McAllum on behalf of Mirvac Constructions.

Nicoll Industries and Cornubia house

299. At some point in April or early May 2013, Mathew McAllum and

Lucas Nicoll met at Mirvac’s offices in Brisbane.494 Mathew

McAllum asked Lucas Nicoll if he was ‘interested in helping [him] out

with a house’ with some work on a house at Cornubia. He gave Lucas

Nicoll a set of plans for the house. He asked him to provide a price.495

300. On 7 May 2013 Mathew McAllum sent Lucas Nicoll an email, the

subject line of which read ‘Plumbing price – house at Cornubia’.496 In

the body of the email Mathew McAllum asked Lucas Nicoll how he

was ‘progressing with the price for the house at Cornubia’.497

301. Lucas Nicoll gave evidence that he never supplied Mathew McAllum

with a price for doing plumbing work on the Cornubia house.498 He

proceeded on the basis that he would be doing the work for free as a

492 Cornubia House MFI-1, 14/9/15, Vol 4, p 1031. 493 Lucas Nicoll, 15/9/15, T:170.37-43. 494

Lucas Nicoll, 15/9/15, T:169.36-44. 495 Lucas Nicoll, 15/9/15, T:169.30-171.31. 496

Cornubia House MFI-1, 14/9/15, Vol 1, p 183. 497 Cornubia House MFI-1, 14/9/15, Vol 1, p 183. 498

Lucas Nicoll, 15/9/15, T:172.43.

128

favour to Mirvac.499 He said that he did not ‘pursue being paid for [the

work]’, that he assumed it was for ‘someone further in the organisation

of Mirvac’ and that he was ‘trying to progress his business’.500

302. Lucas Nicoll’s attitude does not seem particularly likely in

circumstances where, on his own evidence, he was asked to provide a

price when he met with Mathew McAllum, and was then asked in the

email of 7 May 2013 as to how he was progressing with that price.

Further, in a statement given to police in mid-July 2013, Lucas Nicoll

said that he had assumed during discussion with Mathew McAllum

that he would be paid for the work that was to be performed.501 This

conflict does not reflect well on the reliability of Lucas Nicoll’s

evidence.

303. There were further discussions between Mathew McAllum and Lucas

Nicoll about the Cornubia project subsequent to their first meeting in

April 2013.502 Lucas Nicoll agreed to do the work. Mathew McAllum

liaised with him about when the work should commence.503

304. On 12 June 2013 Mathew McAllum sent an email to Lucas Nicoll

asking whether he would be able to start on the Cornubia house the

following week.504 Mathew McAllum also provided Lucas Nicoll in

that email with some details about other work being undertaken at the

499 Lucas Nicoll, 15/9/15, T:172.11-14. 500 Lucas Nicoll, 15/9/15, T:173.8-13. 501

Cornubia House MFI-3, Lucas Nicoll, police statement, 18/9/15, para 11. 502 Lucas Nicoll, 15/9/15, T:174.20-31. 503

Lucas Nicoll, 15/9/15, T:174.20-35. 504 Cornubia House MFI-1, 14/9/15, Vol 1, p 331.

129

site, and Mathew McAllum understood him to be project managing the

construction of the property.505

305. By mid-June 2013 Mathew McAllum had liaised extensively with

Diane Graham in relation to the plumbing details for the Cornubia

property and the tapware selections that the Hannas had made.506

306. On 19 June 2013 Mathew McAllum sent Diane Graham an email

asking her to send him the tapware information so that an order could

be placed to enable the plumbing works to proceed.507

307. Diane Graham provided Mathew McAllum with the tapware details by

an email dated 20 June 2013. Mathew McAllum forwarded that

information on to Lucas Nicoll by email of the same date.508 In doing

so, he asked Lucas Nicoll various questions about lead times for these

items.

308. Later that same day Lucas Nicoll sent Rory Martin (of the tapware

supplier, Reece) an email asking for an amended quote in relation to

various tapware products.509 He referred to a previous quote having

been obtained for the Cornubia house. He also referred to the fact that

Nicoll Industries had started undertaking the plumbing rough-in at the

Cornubia house. The email was copied to Mathew McAllum.

505 Lucas Nicoll, 14/9/15, T:177.29-38. 506 Cornubia House MFI-1, 14/9/15, Vol 1, pp 379, 380, 381, 394, 395, Vol 2, pp 405-406, 426, 472-481,493. 507

Cornubia House MFI-1, 14/9/15, Vol 1, p 380. 508 Cornubia House MFI-1, 14/9/15, Vol 2, pp 405, 407. 509

Cornubia House MFI-1, 14/9/15, Vol 2, p 416.

130

309. Emails of 21 June 2013 indicate a meeting was planned between Diane

Graham, Lucas Nicoll and Mathew McAllum at the Cornubia site for

Monday, 24 June 2013.510 On the same day various documents relating

to tapware materials were emailed by David Mullan to Diane Graham

(which both said was done as a matter of convenience because she did

not have access to an adequate scanner but David Mullan did),511 and

copied to Jennifer Hanna and Mathew McAllum.512

310. It appears that the proposed on-site meeting scheduled for 24 June

2013 proceeded. However, Mathew McAllum was unable to attend

due to a business commitment in Sydney on the same day.

The BLF Fight Night invoice

311. At the same time these communications were taking place in relation to

the Cornubia property, Mathew McAllum was engaging with Lucas

Nicoll about their mutual attendance at a BLF Charity boxing event.

312. In this regard, on 14 June 2013 a BLF media and communications

officer sent Adam Moore an email attaching an invoice for 2 tables (of

10) for the BLF Fight Night.513 Adam Moore forwarded that email to

Mathew McAllum on 16 June 2013.514 The amount to be paid for the

two tables was $4,400 inclusive of GST.

510 Cornubia House MFI-1, 14/9/15, Vol 2, pp 426, 461. 511 David Mullan, 14/9/15, T:35.4-8, 35.43-36.13; Diane Graham, 14/9/15, T:90.29-44. 512

Cornubia House MFI-1, 14/9/15, Vol 2, p 427. 513 Cornubia House MFI-1, 14/9/15, Vol 1, pp 347-349. 514

Cornubia House MFI-1, 14/9/15, Vol 1, pp 347-349.

131

313. The next day, 17 June 2013, Mathew McAllum sent Lucas Nicoll an

email attaching that invoice.515 In his email, Mathew McAllum stated:

Please find attached invoice for payment. Please claim as a variation – excavation in rock (cost + 10%). Let me know if any questions. We can get the invoice name changed as required with your details.

The last sentence of the above passage appears to relate to the fact that

the invoice from BLF Charity Foundation Pty Ltd was addressed to

Mirvac Constructions not Nicoll Industries.

314. Lucas Nicoll replied by email of 20 June 2013 asking whether Mathew

McAllum had had any success in changing the invoice. He added ‘[i]f

not I will just pay it how it is on Friday’.516

315. On 21 June 2013 Lucas Nicoll sent an email to Mathew McAllum

confirming that he had paid the invoice for the BLF Fight Night.517

316. The BLF Fight Night was scheduled for 4 July 2013. On that day

Mathew McAllum emailed Lucas Nicoll. He invited him to come to

his house at 5.30pm so that they could get a lift together to the event.518

Cost of works on the Cornubia house up to 22 July 2013

317. During the course of the works undertaken on the Cornubia site Lucas

Nicoll maintained an electronic accounting system that recorded,

amongst other things, costs incurred by Nicoll Industries on different

515 Cornubia House MFI-1, 14/9/15, Vol 1, 365. 516 Cornubia House MFI-1, 14/9/15, Vol 2, p 401. 517

Cornubia House MFI-1, 14/9/15, Vol 2, p 466. 518 Cornubia House MFI-1, 14/9/15, Vol 2, p 564.

132

projects. In relation to the Cornubia house, those costs were listed in a

dedicated job transactions ledger in this system.

318. That ledger recorded that various goods and services were provided by

Nicoll Industries for the Cornubia house during the course of June and

July 2013. It recorded that as at the end of 22 July 2013 a sum only

slightly in excess of $12,600 had been incurred by Nicoll Industries on

that project.519

319. In evidence to the Commission, Lucas Nicoll admitted that he had paid

for the BLF Fight Night event, and that he was reimbursed for it

through a variation on the Orion PAD2 Project which he was directed

to claim by Mathew McAllum.520 However, he denied that it was odd

that Mathew McAllum sent him the original 17 June 2013 email,

notwithstanding that he did not usually deal with the CFMEU or BLF

and that, on his account, he had not spoken to Mathew McAllum about

the BLF Fight Night event prior to receiving it.521

Invoicing Mirvac

320. On 23 July 2013 Lucas Nicoll sent Natalie Croghan an email, and

copied that email to Mathew McAllum. The subject line of the email

read ‘Claim 3 Orion’.522 The email attached two documents. One of

them was an Excel document which set out Nicoll Industries Progress

Claim 3 for the Orion PAD2 Project.

519 Cornubia House MFI-1, 14/9/15, Vol 4, p 1332-1333. 520 Lucas Nicoll, 15/9/2015, T:177.40-178.21. 521

Lucas Nicoll, 15/9/2015, T:179.42-180.10, 181.4-11. 522 Cornubia House MFI-1, 14/9/15, Vol 2, p 734.

133

321.

322.

523 Cornub 524 Cornub

Lucas Nicol

discussion w

any clarifica

require anyth

The followin

Claim 3 spre

the (a)

the

mad

as s

the (b)

fou

des

des

the (c)

pur

sum

ia House MFI-ia House MFI-

l stated in hi

with regards t

ation please ta

hing further’

ng observati

eadsheet:

tab of the Ex

claim in sum

de for, inter

set out in Ann

tab of Exc

urteen variat

scribed as ‘

scribed as ‘Te

Excel spre

rporting to e

mmarised in A

-1, 14/9/15, Vo

-1, 14/9/15, Vo

is email that

o the formul

alk to him. F

.

ons may be

xcel spreadsh

mmary form.5

alia, ‘variati

nexure C’;

cel spreadsh

tions.524 T h

‘rock breaki

emporary Ser

eadsheet con

explain in m

Annexure C;

ol 2, p 736.

ol 2, p 738.

t ‘Mat and I

ation of this

Following tha

made in rel

heet entitled 523 It stated t

ions complet

eet entitled

hey included

ing June’; a

rvices $12,60

ntained vari

more detail e

and

have been in

claim and if

at please adv

lation to the

‘Annexure A

that a claim w

ted to date $8

‘Annexure

d (i) two v

and (ii) va

00’;

ious standal

ach of the v

n lengthy

f you need

vise if you

Progress

A’ set out

was being

81,999.50

C’ listed

variations

ariation 3

lone tabs

variations

134

323.

324.

325.

525 This is why there concerns v 4); see also 526

Lucas N 527 Lucas N 528

Lucas N 529 Cornub

the (d)

var

it).5

Lucas Nicol

and the costs

Cornubia h

description i

intended to r

he would hav

that variation

seems (on

recouping (a

Cornubia wo

Other docum

submit invoi

that those inv

It is clear th

variation to

only visible w is no docum variation 2) and o Lucas Nicoll,

Nicoll, 15/9/20

Nicoll, 15/9/20

Nicoll, 15/9/20

ia House MFI-

tab of the sp

riation 3 was 525

ll said that th

s incurred by

house was

in the ledger

recoup the co

ve sought a m

n did not cov

his evidenc

and ultimate

ork (which th

ments produc

ices which in

voices were p

at one of the

the Orion

when the docum ment in betwee d Cornubia Ho , 15/9/2015, T:

15, T:198.9-10

15, T:199.4-21

15, T:198.19-3

-1, 14/9/15, Vo

preadsheet th

entirely blan

he proximity

y Nicoll Indu

a coinciden

was ‘Orion C

osts of the Co

much higher

ver his costs5

e) to have

ely did not

he final ledge

ed by Mirva

ncluded the

paid by Mirv

e ‘rock break

PAD2 Proje

ment is viewed en Cornubia H ouse MFI-1, 14 :200.9-25.

0, 199.1-2.

1.

32.

ol 4, pp 1314, 1

hat was desc

nk (as were t

y between th

ustries at that

nce526 notwi

Cornubia’.527

ornubia hous

variation, sin 528 At the sa

been prepa

recoup) any

er recorded as

ac record that

amounts for

vac.529

king’ variatio

ect scope of

d in its native House MFI-1, 4/9/15, p 745 (w

1319, 1329-133

cribed as pert

the tabs that

he sum of va

t date in resp

ithstanding 7 He said tha

se through a

nce, accordin

ame time, how

ared to abst

y of the cos

s being $14,9

t Nicoll Indu

r these variat

ons was not a

f works, an

electronic form 14/9/15, p 7 which concern

31.

taining to

followed

ariation 3

pect of the

that the

at, had he

variation,

ng to him,

wever, he

tain from

sts of the

984.78).

ustries did

tions, and

a genuine

d in fact

m. This is 747 (which ns variation

135

326.

327.

530 Lucas N

represented

BLF fight ni

It also appea

variation to t

it was instea

in performin

the progress

2013).

This possibil

the (a)

gen

hou

the (b)

201

the (c)

rela

the (d)

cos

the (e)

($1

the

Nicoll, 15/9/20

the cost to N

ight. Lucas N

ars more like

the Orion PA

ad intended to

ng work on th

claim was s

lity emerges

practice th

nerally in re

use;

language a

13;

fact Lucas N

ation to the B

fact that L

sts on the Cor

symmetry

2,600) and th

Cornubia ho

15, T:195.9-14

Nicoll Indus

Nicoll seeme

ely than not t

AD2 Project

o cover the c

he Cornubia

submitted to

from:

hat Mathew

elation to co

nd tone of

Nicoll was p

BLF Fight Ni

Lucas Nicoll

rnubia house

between the

he actual cos

ouse up to tha

4.

stries of pay

d to accept th

that variation

scope of wor

costs incurred

house up to

Mathew Mc

McAllum

overing the c

Lucas Nicol

repared to su

ight expense;

l’s accountin

e to ‘Orion Co

e figure cla

st incurred by

at point;

ying for ticke

his.530

n 3 was not a

rks. It is pos

d by Nicoll I

o the date up

cAllum (bein

had been f

cost of the

ll’s email of

ubmit a false

;

ng records

ornubia’;

aimed in va

y Nicoll Indu

ets to the

a genuine

ssible that

Industries

pon which

ng 23 July

following

Cornubia

f 23 July

e claim in

attributed

ariation 3

ustries on

136

328.

329.

531 Lucas N 532 Lucas N 533

Lucas N 534 Lucas N

the (f)

thre

the (g)

exp

the (h)

to M

Lucas Nicol

from Mirvac

house.531 H

building’ ex

described in

Nicoll retrea

the variation

recall exactly

Clearly, Luc

Mathew McA

and Mathew

BLF Fight

possibility th

house were a

Nicoll, 15/9/15

Nicoll, 15/9/15

Nicoll, 15/9/15

Nicoll, 15/9/15

vague descr

ee (‘Tempora

fact that th

planation of t

absence of a

Mirvac in res

l initially de

c in relation

He said he b

xercise with

n t he above p

ated slightly

n 3 was not in

y every – I m

cas Nicoll alr

Allum. The

w McAllum in

Night. Ac

hat costs inc

absorbed by i

, T:198.34-37.

, T:198.39-40.

, T:199.45-46.

, T:166.35-37.

ription of the

ary Services’

he tab of P

that variation

any documen

spect of that v

enied this. H

n to the serv

bore the cos

Mirvac.532 H

paragraph w

and said tha

n relation to C

mean, it was t

ready had a r

y had known

nvited him to

ccordingly, t

curred by N

it in the inter

e variation gi

’);

Progress Cla

n was left com

nts submitted

variation.

He said he di

vices provid

sts of the jo

However as

ere drawn to

at ‘to the bes

Cornubia, an

two years ago

reasonably c

n each other

o his house a

this sheds f

Nicoll Industr

rests of relati

iven in progr

aim 3 devot

mpletely blan

d by Nicoll I

id not claim

ded for the

ob as a ‘rel

some of the

o his attentio

st of his rec

nd added ‘Lik

o’.533

close relation

since aroun

ahead of atte

further doub

ries on the

ionship build

ress claim

ted to an

nk; and

Industries

any sum

Cornubia

lationship

e features

on, Lucas

ollection’

ke, I don’t

nship with

nd 2000534

nding the

bt on the

Cornubia

ding.

137

330. However, it is noted that Mathew McAllum did not give evidence that

variation 3 related to the Cornubia House. Rather, his evidence was

that the variation may have related to State of Origin tickets purchased

by Nicoll Industries on his instructions.535 Given Mathew McAllum’s

frank evidence in respect of how payment for works by other trades

was concealed, his evidence in respect of Nicoll Industries goes some

way to supporting Lucas Nicoll’s account.

331. In any event, and according to the ledger utilised by Nicoll Industries,

the benefit of work provided to David Hanna by that company was

$14,984.78 (which figure would be unlikely to have included GST).

That benefit would not have been provided without Mathew

McAllum’s involvement.

Air-conditioning installation

332. On 7 February 2013 Mathew McAllum invited VAE to submit an offer

for the provision of mechanical services on the Orion PAD2 Project.536

VAE submitted a quote on 21 February 2013.537 Negotiations over the

terms of that contract were conducted between Mathew McAllum on

behalf of Mirvac and Benjamin Carter,538 the chief executive officer of

VAE.539 The result was the execution of a formal instrument of

agreement dated 11 June 2013.540

535 Mathew McAllum, 17/9/15, T:487.3-10. 536 Cornubia House MFI-1, 14/9/15, Vol 5, p 1398. 537

Cornubia House MFI-1, 14/9/15, Vol 5, p 1399. 538 Benjamin Carter, 14/9/15, T:212.26-35. 539

Benjamin Carter, 14/9/15, T:209.13-14. 540 Cornubia House MFI-1, 14/9/15, Vol 5, p 1403.

138

333. Having been awarded that contract, on 7 May 2013, Benjamin Carter

of VAE received an email from Mathew McAllum requesting him to

provide a price to install some air-conditioners for a ‘House at

Cornubia’.541 Mathew McAllum attached to that email some floor

plans for the Cornubia house.542 Benjamin Carter then met Mathew

McAllum. They discussed the Cornubia house in more detail.543

Benjamin Carter asked whether the job was for ‘somebody in Mirvac’,

to which Mathew McAllum said ‘no’.544 Benjamin Carter saw from the

plans that the owners appeared to be David and Jennifer Hanna, but he

did not know who they were.545

334. Following that meeting Benjamin Carter made arrangements for Gray

Bros to provide a quote for the Cornubia works and for the supply of

the necessary air-conditioning units.546 Benjamin Carter did this

because VAE frequently used Gray Bros for smaller jobs.547 He sent

an email on 19 May 2013 to Gary Clark (customer account manager

from VAE) asking him to contact Steven Gray of Gray Bros, which

Gary Clark then did.548

541 Cornubia House MFI-1, 14/9/15, Vol 1, p 185. 542 Benjamin Carter, 15/9/15, T:213.30-32. 543

Benjamin Carter, 15/9/15, T:214.9-13. 544 Benjamin Carter, 15/9/15, T:214.15-22. 545

Benjamin Carter, 15/9/15, T:214.24-34. 546 Benjamin Carter, 15/9/15, T:215.33-37 547

Benjamin Carter, 15/9/15, T:215.39-44. 548 Cornubia House MFI-1, 14/9/15, Vol 1, p 274.

139

335. Two days later Steven Gray sent a letter to Gary Clark at VAE setting

out his quote for the supply of air-conditioning equipment and

installation services.549

336. Following receipt of that quote, Benjamin Carter spoke to Mathew

McAllum about it.550 Mathew McAllum told him that the price was

too high. Benjamin Carter agreed to arrange to obtain a quote directly

from Daikin Australia for the supply of the air-conditioning units, with

Gray Bros to provide a new quote for the cost of installation only.551

337. Benjamin Carter appears to have sought and obtained this revised

pricing from Gray Bros in early June 2013, because on 6 June 2013

Mathew McAllum sent him an email asking whether he was ‘able to

confirm the revised pricing as discussed’.552 Benjamin Carter’s reply

asked whom the quote should be addressed to.553 The quote being

referred to at that time was probably the quote for the air-conditioning

units themselves. This is because, on 10 June 2013, Benjamin Carter

sent Mathew McAllum another email confirming the price for the units

and indicating that the quote was to arrive the following day.554

338. The formal quote for the units did arrive from Daikin on 11 June

2013.555 It was addressed to VAE. Benjamin Carter sent that quote on

549 Cornubia House MFI-1, 14/9/15, Vol 1, p 269 (the document did not have the handwriting on it at that time). 550

Benjamin Carter, 15/9/15, T:216.43-44. 551 Benjamin Carter, 15/9/15, T:217.2-21. 552

Cornubia House MFI-1, 14/9/15, Vol 1, p 326. 553 Cornubia House MFI-1, 14/9/15, Vol 1, p 326. 554

Cornubia House MFI-1, 14/9/15, Vol 1, p 327. 555 Cornubia House MFI-1, 14/9/15, Vol 1, p 334.

140

to Mathew McAllum on 13 June 2013.556 He sent a further email

asking Mathew McAllum how the units would be paid for.557

339. Mathew McAllum then forwarded Benjamin Carter’s email on to

David Hanna. He asked David Hanna how payment for the air-conditioning units would be made.558 David Hanna emailed back,

indicating that he could ‘drop off tomorrow or post a cheque let me

know witch [sic] suits’.559 There was then further email

communication between Mathew McAllum and Benjamin Carter in

relation to payment.560

340. The next day, 14 June 2013, Benjamin Carter sent an email to Mathew

McAllum again asking him how he wanted to proceed with payment

for the air-conditioning units.561 He said that once he knew how

Mathew McAllum wanted to proceed with payment, he would ‘contact

a subby to pick up units and install for you’.562

341. There then followed further email correspondence between Mathew

McAllum and David Hanna in relation to payment for the air-conditioning units on 14 and 17 June 2013. Ultimately arrangements

were made for David Hanna to pay by credit card.563

556 Cornubia House MFI-1, 14/9/15, Vol 1, p 333. 557 Cornubia House MFI-1, 14/9/15, Vol 1, p 335. 558

Cornubia House MFI-1, 14/9/15, Vol 1, p 337. 559 Cornubia House MFI-1, 14/9/15, Vol 1, p 337. 560

Cornubia House MFI-1, 14/9/15, Vol 1, pp 338-339. 561 Cornubia House MFI-1, 14/9/15, Vol 1, p 344. 562

Cornubia House MFI-1, 14/9/15, Vol 1, p 344. 563 Cornubia House MFI-1, 14/9/15, Vol 1, pp 345-346, 350-364.

141

342. With the units paid for, Mathew McAllum and Benjamin Carter then

corresponded further to arrange for delivery of the units to the

Cornubia site, and for the installers (Gray Bros) to undertake the

installation work. On 18 June 2013, Mathew McAllum sent an email

to Benjamin Carter telling him that tradesmen were currently sealing

the floor at the Cornubia site and that the earliest the air-conditioning

installers would be able to start work would be Friday, 21 June 2013.564

Benjamin Carter responded on 19 June 2013 to let Mathew McAllum

know that the installers were ready to commence work that Friday.565

He indicated that the installers wanted to pick up the units as soon as

possible and asked for an order or receipt number from Daikin to

enable this to occur. Mathew McAllum responded by email later that

same day indicating that the ‘order number is David Hanna’.566

343. During this same time frame, and as the above communications

suggested, Benjamin Carter was liaising with Steven Gray with a view

to instructing him to undertake the installation works.567

344. In this regard, Gary Clarke had sent Steven Gray an email on 18 June

2013 describing the works that would be required.568 Steven Gray gave

evidence that upon receiving this information he revised his prices and

564 Cornubia House MFI-1, 14/9/15, Vol 1, p 372. 565 Cornubia House MFI-1, 14/9/15, Vol 1, p 390. 566

Cornubia House MFI-1, 14/9/15, Vol 1, p 390. 567 Benjamin Carter, 14/9/15, T:219.26-31. 568

Cornubia House MFI-1, 14/9/15, Vol 1, p 376.

142

gave Benjamin Carter a price for installing the units.569 The price was

$11,365 plus GST.570

345. On 20 June 2013 Benjamin Carter wrote to Mathew McAllum by

email. He informed him that Gray Bros were ready to start the air-conditioning installation. He confirmed that he had given Mathew

McAllum’s contact details to Steven Gray.571 He also provided

Mathew McAllum with Steven Gray’s telephone number by email.572

Mathew McAllum replied by email later that day in terms which

indicated he had spoken with Steven Gray.573 He also sent an email to

David Hanna to confirm that Steven Gray would shortly commence the

rough-in works for the air-conditioning. He told David Hanna that

Jennifer Hanna should be there, because Steven Gray wanted to be able

to explain the design and confirm locations for the return air grilles.574

346. Steven Gray liaised directly with Mathew McAllum in order to make

arrangements to attend at the site and commence the work.575 He

undertook that work progressively in and around various other works

as they were completed.576 Those works were performed in three

569 Steven Gray, 15/9/15, T:236.11-46. 570 See the handwriting on the original quote at Cornubia House MFI-1, 14/9/15, Vol 1, p 269.

571 Cornubia House MFI-1, 14/9/15, Vol 2, p 396. 572 Cornubia House MFI-1, 14/9/15, Vol 2, p 396. 573

Cornubia House MFI-1, 14/9/15, Vol 2, pp 410, 411. 574 Cornubia House MFI-1, 14/9/15, Vol 2, p 410. 575

Steven Gray, 15/9/15, T:238.10-20. 576 Steven Gray, 15/9/15, T:237.42-238.8.

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separate stages – an initial rough-in, later cutting holes for vents into

the ceilings in every room, and a final fit off stage.577

347. After the commencement of the installation of the air-conditioning

units at Cornubia (that is after late June 2013) Benjamin Carter raised

the issue of payment with Mathew McAllum.578 Benjamin Carter had

priced the job to be $13,751.60, which encompassed the Gray Bros’

price of $12,501.50 (the inclusive of GST figure) plus a 10% margin.579

The price he ultimately proposed to Mathew McAllum was rounded

down to $13,500.580

348. Mathew McAllum responded by indicating that he would provide some

documentation that would enable VAE to claim and receive payment

for this work.581 He said that he wanted VAE to claim payment by

way of a variation on the Orion PAD2 Project.582 On hearing this

Benjamin Carter became very uncomfortable. He asked Mathew

McAllum if the Cornubia house was a legitimate Mirvac job.583

Mathew McAllum said that it was.584

349. On 30 July 2013, Mathew McAllum sent Benjamin Carter an email

asking him to forward variations on the Orion PAD2 Project for five

separate items, which together totalled $13,500 (that is, an amount

577 Steven Gray, 15/9/15, T:238.3-8. 578 Benjamin Carter, 15/9/15, T:223.27-32. 579

Benjamin Carter, 15/9/15, T:221.2-33. 580 Benjamin Carter, 15/9/15, T:226.25-28. 581

Benjamin Carter, 15/9/15, T:223.30-32. 582 Benjamin Carter, 15/9/15, T:223.35-40. 583

Benjamin Carter, 15/9/15, T:224.4-6. 584 Benjamin Carter, 15/9/15, T:224.9.

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almost identical to the price that VAE had quoted for the Cornubia air-conditioning works).585 Each of the five variations was described as if

they concerned works on the Orion PAD2 Project. As Mathew

McAllum admitted, these variations had been priced so as to cover

VAE’s price for the Cornubia work. He had talked to Benjamin Carter

about VAE obtaining payment for that work in this way.586

350. On receipt of this email Benjamin Carter understood that the proposed

variation claims on the Orion PAD2 Project were intended to cover the

VAE price for the Cornubia air-conditioning works.587 Benjamin

Carter was about to take holiday leave. He forwarded the email on to

Ben Getley (a VAE employee) to process.588

351. Although Benjamin Carter forwarded the email for processing, he

continued to feel uncomfortable about what Mathew McAllum was

proposing. That level of discomfort grew while he was on leave, and

particularly following receipt of a further email from Mathew

McAllum, in which Mathew McAllum asked Benjamin Carter to

purchase $3,600 worth of tickets for a table for Mathew McAllum at a

Melbourne Cup function.589 Although the email about the Melbourne

Cup table does not state so, Benjamin Carter understood that Mathew

McAllum was effectively asking him to buy the table, and to then

585 Cornubia House MFI-1, 14/9/15, Vol 3, p 817. 586 Mathew McAllum, 17/9/15, T:491.28-30. 587

Benjamin Carter, 15/9/15, T:226.6-28. 588 Benjamin Carter, 15/9/15, T:230.14-17. 589

Cornubia House, MFI-2, 16/9/15, p 1; Benjamin Carter, 15/9/15, T:230.42-231.2.

145

claim it as a variation on the Orion PAD2 Project.590 Benjamin Carter

gave evidence that the email: 591

changed my view that the way in which we were asked to be invoicing the [Cornubia house] job was no longer plausible … I could see that was blatantly not right

352. As a result Benjamin Carter spoke with his partner in the VAE

business. They agreed that they should not invoice Mirvac for the

work that had been undertaken on the Cornubia house.592

353. Benjamin Carter then gave an instruction to Ben Getley to ensure that

VAE did not invoice Mirvac for that work.593

354. As it transpired, during Benjamin Carter’s absence, Ben Getley had

arranged for VAE to submit to Mathew McAllum the five separate

variation claims (dated 20 August 2013) that Mathew McAllum had

referred to in his email of 30 July 2013.594 Later that same day

Mathew McAllum responded, suggesting a modification to the terms

for one of the five variations.595

355. Although those variation claims had been submitted, they had not been

made the subject of any invoices issued by VAE to Mirvac by the time

Benjamin Carter gave Ben Getley the instruction not to proceed.

590 Benjamin Carter, 15/9/15, T:231.1-5. 591 Benjamin Carter, 15/9/15, T:232.25-26, 232.36. 592

Benjamin Carter, 15/9/15, T:227.20-34, 232.20-27. 593 Benjamin Carter, 15/9/15, T:232.35-41. 594

Cornubia House MFI-1, 14/9/15, Vol 3, pp 975-980. 595 Cornubia House MFI-1, 14/9/15, Vol 3, p 975.

146

356. Documents produced by Mirvac to the Commission do not suggest that

VAE received payment from Mirvac for these ‘variations’, or

otherwise for the work undertaken on the Cornubia house.596 Benjamin

Carter denied that VAE invoiced or received payment for the false

variations.597

357. Gray Bros did invoice VAE for the works undertaken on the Cornubia

project. VAE paid those invoices.598 The invoices were dated 20

August and 23 September 2013 respectively.599 They were for a total

amount equal to the quoted price. Though the invoices referred to an

unrelated construction project on O’Connell Terrace in Brisbane,

Benjamin Carter’s evidence was that for a VAE purchase order to be

generated in its invoice processing system, it had to relate to a

particular project.600 VAE absorbed the whole of that cost.601

596 Cornubia House MFI-1, 14/9/15, Vol 5, p 1570. 597 Benjamin Carter, 15/9/15, T:233.16-18. 598

Benjamin Carter, 15/9/15, T:228.27-31. 599 Cornubia House MFI-1, 14/9/15, Vol 3, pp 966, 1014. 600

Benjamin Carter, 15/9/15, T:228.22-26. 601 Benjamin Carter, 15/9/15, T:233.20-21.

147

148

CHAPTER 8.2

DOCUMENT DESTRUCTION

‘Away, burn all the records of the realm: my mouth

shall be the Parliament of England.’ – Jack Cade

Shakespeare, Henry VI, Part 2, Act 4, Scene 7

Subject Paragraph

A – INTRODUCTION 1

B – POTENTIAL CRIMINAL OFFENCES 6

The contempt of court analogy 7

Implied admissions 8

Queensland offences 11

Commonwealth offences 18

C – SUMMARY OF FACTS 32

Background: amalgamation of the BLF and CFMEU in

Queensland

33

Background: creation of the Royal Commission 39

On what day did the relevant events take place? 43

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Subject Paragraph

At what time on 1 April 2014 did the relevant events take place? 49

Michael O’Connor’s email 53

The events of the ‘clean up’ 60

The nature of the material destroyed 76

Events of 2 April 2014: a bonfire of documents 79

Arranging for the tip truck 81

Events of 4 April 2014: dumping the documents 85

Later events: payment of truck fees 93

Later events: charges by Michael Ravbar against David Hanna 96

Later events: investigation and report by Leo Skourdoumbis 102

D – IMPORTANT MATTERS FOR CONSIDERATION 104

Credibility of David Hanna 105

Credibility of Michael Ravbar 122

Significance of police investigation 132

Assessment of the competing accounts 134

E – OVERALL FINDINGS 140

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A – INTRODUCTION

This Chapter requires the resolution of a controversy surrounding the 1.

destruction of several tonnes of documents. Those responsible were

the officers and staff of a trade union. The trade union was the

Queensland and Northern Territory Divisional Branch of the

Construction, Forestry Mining and Energy Union, Construction and

General Division in early April 2014. In this Chapter, the federally

registered union is called the CFMEU. The divisional branch is called

the CFMEU QLD. The Secretary of the CFMEU QLD was Michael

Ravbar. The President was David Hanna.

This is not the only case study involving the CFMEU and document 2.

suppression and destruction. In February 2014 a solicitor employed by

the CFMEU NSW instructed an employee to remove documents from

files which a barrister conducting an inquiry into that branch on behalf

of the national body had asked for.1 In June 2014 officials and

employees of the CFMEU NSW (some of them solicitors) ‘deleted’ –

that is, destroyed – a large number of emails which might have been

caught by notices to produce that had been issued or were later issued

to the union.2 This Chapter examines a third instance of the union

preventing potential evidence from coming to light. The first two were

serious episodes. The third is much more serious.

The destruction of the documents in April 2014 not only commenced 3.

with their removal from the offices of the CFMEU QLD on the same

1 Royal Commission into Trade Union Governance and Corruption, Interim Report (2014) (hereinafter referred to as ‘Interim Report’), Vol 2, ch 8.6, part C, pp 1355-1395. 2

Interim Report, Vol 2, ch 8.6, part B, pp 1333-1354.

151

day as the CFMEU received its first notice to produce from this

Commission, which had been recently established. It also coincided

with the formal merger of the CFMEU QLD with the Builders’

Labourers Federation (Queensland) Union of Employees (State BLF).

Was the destruction of the documents an innocent part of a routine 4.

office ‘clean up’ organised by Michael Ravbar which coincidentally

commenced on the same day that the first notice to produce was served

on the CFMEU? Or was the destruction a criminal act done with the

intention of destroying documents which were potentially relevant to

the Commission’s inquiries? Counsel assisting posed these as the

essential issues. For reasons given later, it is not desirable to consider

the second question in the precise terms in which it was framed. But

the factual controversies which underlie both questions will be

examined.

The CFMEU contended that this dichotomy was an ‘artifice’.3 That is 5.

not so. Instead it reflects the manner in which the evidence emerged.

The underlying problem turns on what factual conclusions follow from

the evidence.

In summary, as submitted by counsel assisting, the essential facts are 6.

relatively simple.4 They do not appear to be in dispute. At

approximately 12.50pm AEST (1.50pm AEDST) on 1 April 2014, the

CFMEU was served, at its national office in Melbourne, with the first

of a number of notices to produce from the Royal Commission

requiring the production of documents. In the late afternoon and

3 Submissions of the CFMEU, 29/10/15, para 19. 4 Submissions of Counsel Assisting, 20/10/15, para 2.

152

evening of 1 April 2014, several tonnes of documents were removed

from the Bowen Hills office of the CFMEU QLD. During that

process, all the security cameras in the CFMEU QLD office were

covered. The documents were taken in a horse float trailer and a box

trailer to the Cornubia property of the then President of the CFMEU

QLD, David Hanna. The following day an attempt was made to burn

the documents at the Cornubia property. That attempt was largely

unsuccessful. Two days later, on 4 April 2014, the remaining

documents were loaded, along with some soil, into a tip truck and

dumped at a landfill.

B – POTENTIAL CRIMINAL OFFENCES

The contempt of court analogy

The law sets its face against attempts to remove evidence from the 7.

consideration of those institutions which have to decide matters of

legal right (like courts and tribunals). It is a contempt of court to

destroy a document which falls within the terms of a subpoena that has

been served. It is also a contempt of court to destroy a document

which one thinks may be caught by a future subpoena.5 In certain

circumstances it is a contempt of court to persuade the recipient of a

subpoena that a document caught by it need not be produced.6

5 Registrar of the Equity Division, Supreme Court of New South Wales v McPherson [1980] 1 NSWLR 688. 6

Lane v Registrar of the Equity Division, Supreme Court of New South Wales (1981) 148 CLR 245.

153

‘Implied admissions’

Further, conduct of this kind can count in litigation as an ‘implied 8.

admission’ or as damaging circumstantial evidence. Examples include

concealing evidence,7 destroying evidence,8 attempting to procure the

destruction of evidence,9 and destroying chattels.10 It is often said that

the deliberate destruction or hiding of evidence by a party to litigation

can reveal a consciousness of guilt on the part of the responsible

person: a knowledge that the evidence put out of the way would have

established a case against the responsible person. There is a maxim

omnia praesumuntur contra spoliatorem: everything is presumed

against a wrongdoer. The Privy Council has said:11

If any one by a deliberate act destroys a document which, according to what its contents may have been, would have told strongly either for him or against him, the strongest possible presumption arises that if it had been produced it would have told against him. …

The principle depends upon destruction with the intention of

destroying evidence.12

7 Consul Development Pty Ltd v DVC Estates Pty Ltd (1975) 132 CLR 373 at 391; R v Rice [1996] 2 VR 406; R v Burrows (2003) 140 A Crim R 533; R v Chang (2003) 7 VR 236. See also Hargrave v Hargrave (1848) 2 Car & K 701; 175 ER 293; R v Farquharson (2009) 26 VR 410 at [174]; Pollard v R (2011) 31 VR 416. 8

R v Panozzo (2007) 178 A Crim R 323 at [28]; R v Farquharson (2009) 26 VR 410 at [174]; Cooper v R (2012) 293 ALR 17 at [87]. 9 J F Stephen, ‘An Introduction on the Principles of Judicial Evidence’ in The Indian Evidence Act, 1872, p 103, discussing R v Palmer (1856). 10

Katsilis v Broken Hill Pty Ltd Co (1977) 18 ALR 181 at 197-198. 11 The Ophelia [1916] 2 AC 206 at 229-230 per Sir Arthur Channell. 12

Research in Motion Ltd v Samsung Electronics Australia Pty Ltd (2009) 176 FCR 66 at [30], [34]. See also Clark v New South Wales (2006) 66 NSWLR 640 at [77]-[81].

154

The relevant reasoning can apply outside litigation. And it can apply 9.

against people who are not parties to litigation.

In addition, there are a number of criminal offences associated with the 10.

destruction of documents that are potentially relevant to the inquiries

of a Royal Commission or Commission of Inquiry. The following

account is based on the submissions of counsel assisting, which are

correct. In one sense it is not necessary to arrive at any conclusions

about the correct construction of the legislation. That is because, for

reasons to be explained, it is thought wrong in this case study to

consider whether recommendations to prosecuting authorities should

be made that they inquire into whether criminal offences may have

been committed and whether prosecutions should be instituted. But

some account of the legislation is desirable in order to highlight the

attitude of the legislatures to what is alleged to have happened in this

case study.

Queensland offences

In Queensland, s 129 of the Criminal Code (Qld) provides: 11.

A person who, knowing something is or may be needed in evidence in a judicial proceeding, damages it with intent to stop it being used in evidence commits a misdemeanour.

Maximum penalty – 7 years imprisonment.

155

Section 119 defines ‘judicial proceeding’ widely. It includes ‘any 12.

proceeding had or taken in or before any court, tribunal or person, in

which evidence may be taken on oath’. To avoid any doubt, s 22 of the

Commissions of Inquiry Act 1950 (Qld) provides that:

For the purposes of removing any doubt as to the application of the Criminal Code, sections 120, 123, 126, 127, 128, 129, and 130 respectively to and with respect to an inquiry into or with respect to any matter or matters by any commission, it is hereby declared that any reference therein to a ‘judicial proceeding’ shall be deemed to be a reference to an inquiry by a commission, any reference therein to a ‘tribunal’ shall be deemed to be a reference to a ‘commission’, and any reference therein to the holder of a judicial office, howsoever worded, shall be deemed to be a reference to ‘a commissioner’ within the meaning of this Act and that those sections shall be read subject to all such other adaptations thereof as are necessary for purposes of their application as provided in this section.13

Prior to amendments in 2008 by the Criminal Code and Other Acts 13.

Amendment Act 2008 (Qld), s 129 provided:

Any person who, knowing that any book, document, or other thing of any kind, is or may be required in evidence in a judicial proceeding, wilfully destroys it or renders it illegible or undecipherable or incapable of identification, with intent thereby to prevent it from being used in evidence, is guilty of a misdemeanour, and is liable to imprisonment for 3

years imprisonment. (emphasis added)

The Queensland Court of Appeal held that in that provision, ‘knowing’ 14.

meant ‘believing’. Accordingly it held that a person could commit an

offence against s 129 even though the person did not know the

document would be used in a judicial proceeding, and did not know

that a judicial proceeding was then in existence or might be a likely

occurrence.14 It was enough that the person believed that the document

13 The Commissions of Inquiry Act 1950 (Qld) applies to the Commission by virtue of Letters Patent issued on 24 March 2014 by the Governor of Queensland. 14

R v Ensbey [2005] 1 Qd R 159 at 161-162 per Davies JA (Williams and Jerrard JJA agreeing).

156

might be required in a possible future judicial proceeding.15

The drafting amendments to s 129 were not intended to have any

substantive effect (other than increasing the penalty).16 There is no

reason to think that the principles stated by the Court of Appeal would

not apply to s 129 in its current form.

Pursuant to s 7(1) of the Criminal Code (Qld): 15.

(a) every person who does or omits to do any act for the purpose

of enabling or aiding another person to commit an offence;

(b) every person who aids another person in committing an

offence; and

(c) any person who counsels or procures any other person to

commit an offence

is liable as a principal and may be convicted of the offence itself.

Further, any person who procures another to do or omit to do any act 16.

such that, if the person had done the act or made the omission, the act

or omission would have constituted an offence on the person’s part, is

guilty of an offence of the same kind, and is liable to the same

punishment, as if the person had done the act or made the omission;

and the person may be charged with doing the act or making the

omission: s 7(4).

15 R v Ensbey [2005] 1 Qd R 159 at 161-162 per Davies JA (Williams and Jerrard JJA agreeing). 16

Explanatory notes to the Criminal Code and Other Acts Amendment Bill 2008 (Qld), p 9.

157

Accordingly, a person who believes a document may be needed in 17.

evidence in an existing or future possible Commission under the

Commissions of Inquiry Act 1950 (Qld) and who damages, or procures

another to damage, that document with an intent to stop the document

being used in evidence in the Commission commits an offence against

s 129 of the Criminal Code (Qld).

Commonwealth offences

Section 39 of the Crimes Act 1914 (Cth) is similar to the pre-2008 form 18.

of s 129 of the Criminal Code (Qld). Section 39 reads:

Destroying evidence

(1) A person commits an offence if:

(a) the person knows that a book, document or thing of any kind is, or may be, required in evidence in a judicial proceeding; and

(b) the person:

(i) destroys the book, document or thing; or

(ii) renders the book, document or thing illegible, undecipherable or incapable of identification; and

(c) the person does so with the intention of preventing the book, document or thing from being used in evidence; and

(d) the judicial proceeding is a federal judicial proceeding.

Penalty: Imprisonment for 5 years.

(2) Absolute liability applies to the paragraph (1)(d) element of the offence.

158

Section 31 sets out the definitions of ‘judicial proceeding’ and ‘federal 19.

judicial proceeding’. Relevantly, a ‘judicial proceeding’ includes a

proceeding before a person, or body, acting under a law of the

Commonwealth, State or Territory in which evidence may be taken on

oath. A ‘federal judicial proceeding’ relevantly includes a judicial

proceeding before a person or body acting under a law of the

Commonwealth. Thus, the proceeding of a Commonwealth Royal

Commission is a federal judicial proceeding.

The Criminal Code (Cth) applies to an offence against s 39 of the 20.

Crimes Act. Relevantly, the Criminal Code (Cth) requires the

establishment of both the physical elements of the offence and the fault

elements of each of those physical elements for which a fault element

is required. Section 5 provides:

5.1 Fault Elements

(1) A fault element for a particular physical element may be intention, knowledge, recklessness or negligence.

(2) Subsection (1) does not prevent a law that creates a particular offence from specifying other fault elements for a physical element of that offence.

5.2 Intention

(1) A person has intention with respect to conduct if he or she means to engage in that conduct.

(2) A person has intention with respect to a circumstance if he or she believes that it exists or will exist.

(3) A person has intention with respect to a result if he or she means to bring it about or is aware that it will occur in the ordinary course of events.

159

5.3 Knowledge

A person has knowledge of a circumstance or a result if he or she is aware that it exists or will exist in the ordinary course of events.

Under an earlier version of s 39, it was held by the New South Wales 21.

Court of Criminal Appeal that it was necessary to establish that the

accused knew that the judicial proceeding was a federal judicial

proceeding.17 The section in its present form is the result of an

amendment in 2011 to overcome the Court of Criminal Appeal’s

decision. The amended section makes it clear that such knowledge is

not necessary. The reasoning of the Queensland Court of Appeal in R

v Ensbey would seem to be directly applicable to the requirements in

s 39(1)(a). That is, it would be sufficient to establish that the accused

believed that the document or thing may be required in a future or

possible federal judicial proceeding.

As in Queensland, persons who aid, abet, counsel or procure the 22.

commission of an offence by another person are taken to have

committed the offence.18 Further, a person who has, in relation to each

physical element of an offence, a fault element applicable to that

physical element and procures conduct of another person that would

have constituted an offence on the part of the procurer if the procurer

had engaged in it, is taken to have committed that offence.19

Thus, a person who believes that a document is or may be required in 23.

evidence in an existing or future possible Commonwealth Royal

17 R v JS (2007) 230 FLR 276. 18 Criminal Code (Cth), s 11.2(1). 19

Criminal Code (Cth), s 11.3.

160

Commission and destroys, or procures another person to destroy, the

document with the intention of preventing that document from being

used in evidence commits an offence against s 39 of the Crimes Act

1914 (Cth).

In addition to s 39 of the Crimes Act 1914 (Cth), s 6K of the Royal 24.

Commissions Act 1902 (Cth) creates a more specific offence limited to

Commonwealth Royal Commissions. Subsection 6K(1) provides:

(1) A person commits an offence if:

(a) the person acts or omits to act; and

(b) the act or omission results in a document or other thing being:

(i) concealed, mutilated or destroyed; or

(ii) rendered incapable of identification; or

(iii) in the case of a document, rendered illegible or indecipherable; and

(c) the person knows, or is reckless as to whether, the

document or thing is one that:

(i) is or may be required in evidence before a

Commission; or

(ii) a person has been, or is likely to be, required to produce pursuant to a summons, requirement or notice under section 2.

An offence against s 6K(1) is an indictable offence (although in some 25.

circumstances it may be tried summarily) and the maximum penalty is

two years imprisonment or a $10,000 fine.20

20 Criminal Code (Cth), s 6K(2).

161

A significant difference between s 6K on the one hand and s 129 of the 26.

Criminal Code (Qld) and s 39 of the Crimes Act (Cth) on the other is

that s 6K does not require the accused to know or believe that the

document may be required in evidence. It is sufficient if the accused is

reckless as to that circumstance. Section 5.4 of the Criminal Code

(Cth) provides that a person is reckless with respect to a circumstance

if (a) he or she is aware of a substantial risk that the circumstance

exists or will exist and (b) having regard to the circumstances known to

him or her, it is unjustifiable to take the risk.

Further, s 6K(1) creates a separate offence where a person destroys a 27.

document or thing and the person knows, or is reckless as to whether,

the document or thing is one that a person has been or is likely to be

required to produce pursuant to a summons or notice to produce under

s 2 of the Royal Commissions Act.

The CFMEU criticised counsel assisting’s statement of the elements of 28.

the various offences as set out above.21 Counsel assisting contended in

response that contrary to the CFMEU submissions, its submissions

expressly identify the element of intention necessary to establish an

offence against s 129 of the Criminal Code (Qld) and s 39 of the

Crimes Act (Cth). It is clear that this is so. The CFMEU’s criticism

should be rejected.

Counsel assisting further argued that the element of intention can be 29.

satisfied, in essence, from circumstantial evidence.22

21 Submissions of the CFMEU, 29/10/15, paras 9-10, 12-14, 18. 22 Submissions of Counsel Assisting in Reply, 30/11/15, para 9.

162

Counsel assisting also took issue with the CFMEU’s reliance on R v 30.

Selim.23 There Fullerton J distinguished R v Ensby24 on the basis that

‘the definition of knowledge in s 5.3 [of the Criminal Code 1995 (Cth)]

eschews belief and imposes a more exacting standard of conscious

awareness’.25 Counsel assisting is correct to submit that, with respect,

her Honour’s statement requires qualification in view of the definition

of ‘knowledge’ in s 5.3 of the Criminal Code 1995 (Cth). It provides

that a person:

has knowledge of a circumstance or result if he or she is aware that it exists or will exist in the ordinary course of events’. (emphasis added)

The contention that by referring to future circumstances or results that

‘will exist in the ordinary course of events’, the definition necessarily

imports an element of belief is also correct.

The CFMEU alleged that counsel assisting has not properly 31.

particularised the documents allegedly destroyed.26 In reply, counsel

assisting noted that no authority had been cited for the CFMEU’s

proposition. They further submitted that, if accepted, the proposition

would frustrate the legislative purpose of the provisions in question. It

was also submitted by counsel assisting that even if in some cases the

Crown is able to articulate what particular documents or categories of

documents have been destroyed, that does not mean such

particularisation is required in circumstances where there has been a

wholesale destruction of tonnes of paper and there has been no record

23 [2007] NSWSC 362. 24 [2005] 1 Qd R 159. 25

R v Selim [2007] NSWSC 362 at [26]. 26 Submissions of the CFMEU, 29/10/15, paras 11, 17, 18.

163

kept of what has been destroyed. It is contended that the requisite

knowledge and intention can plainly be inferred from the

circumstances surrounding the destruction, depending on what they

are.27 The submissions of counsel assisting are correct.

C – SUMMARY OF FACTS

The following section of the Chapter sets out the main facts. 32.

Background: amalgamation of the BLF and CFMEU in Queensland

The following factual summary, largely taken from the submissions of 33.

counsel assisting28 is not in dispute, except where noted. From 1994 to

early 2014, there were two divisional branches of the federally

registered CFMEU Construction and General Division in Queensland.

One was the Queensland Construction Workers’ Divisional Branch.

The other was the Builders’ Labourers’ Divisional Branch (Federal

BLF).29 Prior to 2014 there were also two separate State registered

unions in the Queensland state industrial system. One was the

Construction, Forestry, Mining and Energy, Industrial Union of

Employees, Queensland (CFMEUQ). The other was the Australian

Building Construction Employees and the State BLF.30

27 Submissions of Counsel Assisting, 30/11/15, para 11. 28 Submissions of Counsel Assisting, 20/10/15, paras 23-72. 29

Michael Ravbar, witness statement, 6/8/14, para 5. 30 Michael Ravbar, witness statement, 6/8/14, para 5.

164

During 2013 there were negotiations about the merger or 34.

amalgamation of the two federal divisional branches and the CFMEUQ

and the State BLF.31 At this time, Michael Ravbar was the Branch

Secretary of the Queensland Construction Workers’ Divisional Branch

and State Secretary of the CFMEUQ. David Hanna was the Branch

Secretary of the Federal BLF and Secretary of the State BLF. The

State and Federal BLF entities operated out of premises at Upper Roma

Street in Brisbane. The Queensland Construction Workers’ Divisional

Branch and the CFMEUQ operated out of premises at 16 Campbell St,

Bowen Hills, a suburb of Brisbane.

In about October 2013, at a CFMEU conference in Cairns, a resolution 35.

was passed approving the amalgamation of the two federal divisional

branches in Queensland.32 It was agreed that the staff at the BLF

offices would relocate to the Bowen Hills offices. The formal

amalgamation of the federal divisional branches occurred on

31 January 2014.33 But the formal amalgamation of the State entities

did not occur until 1 May 2014.34

In about December 2013, David Hanna instructed the BLF office 36.

manager, Lisa Stiller, to start packing up the BLF offices.35 At this

time, a large amount of documentary material from the BLF offices

31 David Hanna, 24/9/15, T:449.31-34. 32 David Hanna, 24/9/15, T:449.31-34. 33

Construction, Forestry, Mining and Energy Union [2014] FWCD 752; Paula Masters, 23/9/14, T:198.19-23. 34 Construction, Forestry, Mining and Energy, Industrial Union of Employees, Queensland and Australian Building Construction Employees and Builders’ Labourers’ Federation (Queensland) Union of Employees (No 2) [2014] QIRC 74; David Hanna, 24/9/15, T:450.9-10. 35

David Hanna, 24/9/15, T:451.17-21.

165

was archived. It was sent to a storage shed in Yatala.36 In addition, in

December 2013 and into early 2014, a large number of documents and

some other materials were boxed and transferred to the CFMEU’s

Bowen Hills offices.37 David Hanna said that Lisa Stiller liaised with

Paula Masters, who was at the time the Administration Manager at the

Bowen Hill offices, about what material should be sent to the archive

at Yatala and what should be transferred to the CFMEU’s offices.38

During January and February 2014, boxes of documents along with 37.

furniture and other items from the BLF offices were transferred.39 The

administrative staff who transferred from the BLF commenced work at

the Bowen Hills office in January 2014,40 as did the training co-ordinators.41 The organisers commenced at the beginning of February

2014.42 However, the BLF staff were not formally transferred off the

BLF payroll until 31 March 2014.43

36 David Hanna, 24/9/15, T:451.21-23. 37 David Hanna, 24/9/15, T:449.40-47, 451.24-30. See also Jessica Kanofski, 22/9/15, T:118.20-44. 38

David Hanna, 24/9/15, T:451.24-30. 39 Bob Williams said most of the material from the BLF had been shifted by February: Bob Williams, 23/9/15, T:240.10-20. Brian Humphrey said that in the week of 6 January he was involved in moving ‘furniture, boxes and a whole heap of stuff across’ to the new office: Brian Humphrey, 23/9/15, T:257.28-258.9. David Hanna said that some stuff was moved in January but in February a lot more was moved: David Hanna, 24/9/15, T:449.45-450.1. On the other hand, Paula Masters said that the office staff brought their own gear including their files in January, and the rest of the files came over in March 2014: Paula Masters, 23/9/15, T:199.1-5. 40

Jessica Kanofski, 22/9/15, T:115.12-116.14; Hollie Bradshaw, 22/9/15, T:152.5; Cherie Shaw, 22/9/15, T:165.19; Paula Masters, 23/9/15, T:199.1-3. 41

Bob Williams, 23/9/15, T:240.1-2; Brian Humphrey, 23/9/15, T:257.24-40. 42 David Hanna, 24/9/15, T:450.2-4. 43

Cherie Shaw, 22/9/15, T:165.18-22; David Hanna, 24/9/15, T:450.4-7.

166

During the early part of 2014, there were also renovations to the 38.

Bowen Hills offices.44 It appears that the majority of the work had

occurred by March, but some parts were still being completed. By the

end of March 2014, the CFMEU QLD had two premises at Bowen

Hills. One was the main office at 16 Campbell St (No 16 office). The

other was an adjoining office connected with a walkway at 14

Campbell St (No 14 office).

Background: creation of the Royal Commission

On 10 February 2014, the Prime Minister, the Minister for 39.

Employment and the Attorney-General issued a joint press release

announcing the Prime Minister’s intention to recommend that the

Governor-General establish a Royal Commission into Trade Union

Governance and Corruption. The statement enclosed proposed Terms

of Reference. They specifically named the CFMEU amongst others.45

On 13 March 2014, Letters Patent establishing the Royal Commission 40.

were signed by the Governor-General. The Letters Patent were

publicly released the next day.46 The CFMEU was specifically named

in the Letters Patent. So was the CEPU.47

Counsel assisting submitted that by mid to late March 2014, staff and 41.

officers of the CFMEU QLD were aware of the existence of the Royal

44 Jessica Kanofski, 22/9/15, T:118.28-29; David Hanna, 24/9/15, T:450.24-43. 45 CFMEU DD MFI-1, 21/9/15. 46

CFMEU DD MFI-1, 21/9/15. 47 The full name of the CEPU is the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

167

Commission, were aware of the specific naming of the CFMEU in the

Terms of Reference and were expecting to receive a notice to produce

documents to the Commission. That submission is correct for the

following reasons.

(a) Leanne Butkus was the Officer Manager of the CFMEU

QLD. She was on leave from 20 March 2014 to 7 April

2014.48 She gave evidence that prior to going on leave she

had learnt of the Royal Commission, she had learnt the fact

that the CFMEU was one of the unions named in the Terms of

Reference and she had come to an understanding that there

was an expectation within the CFMEU QLD office that the

office may be required to produce documents to the Royal

Commission.49

(b) Paula Masters was the Administration Manager for the

CFMEU QLD in April 2014.50 Her evidence was to similar

effect.51 Paula Masters also said that there had been a

briefing by senior officers of the branch to the organisers and

administration staff advising them of the Royal Commission.

She thought, but ‘couldn’t say for sure’, that the briefing had

occurred before 1 April 2014.52

48 Leanne Butkus, 23/9/15, T:320.30-32. 49 Leanne Butkus, 23/9/15, T:322.5-19. 50

Paula Masters, 23/9/15, T:197.22-40. 51 Paula Masters, 23/9/15, T:215.25-43. 52

Paula Masters, 23/9/15, T:227.4-16.

168

(c) Jacqueline Collie was the Executive Assistant to the

Secretary, Assistant Secretaries and President of the CFMEU

QLD.53 She testified that she learnt there was a Royal

Commission, and that the CFMEU was included in the Terms

of Reference, probably soon after she started employment on

3 February 2014.54 She also came to an understanding that

the CFMEU QLD might be required to produce documents to

the Royal Commission. But she did not know when she came

to that understanding.55

(d) Michael Ravbar said that by about mid-March 2014 he knew

that the Royal Commission had been established, that the

Terms of Reference included, among other unions, the

CFMEU and that it was likely that the CFMEU would be

required to produce documents at some point, or some points,

to the Royal Commission.56

In addition the existence of the Royal Commission had been widely 42.

published in the media. It would be expected in the ordinary course of

affairs that senior officers and staff would familiarise themselves with

matters concerning the Royal Commission.

53 Jacqueline Collie, 23/9/15, T:305.31-42. 54 Jacqueline Collie, 23/9/15, T:306.7-11, 309.25-310.5. 55

Jacqueline Collie, 23/9/15, T:309.44-310.5. 56 Michael Ravbar, 24/9/15, T:378.9-32.

169

On what day did the relevant events take place?

During the late afternoon and evening of 1 April 2014, a number of 43.

staff and officers of the CFMEU QLD were involved in various tasks

directed towards the removal and destruction of a large number of

documents held at the CFMEU QLD’s office at 14–16 Campbell

Street, Bowen Hills. The individuals who were principally involved

were:

(a) Michael Ravbar;

(b) David Hanna;

(c) Darren ‘Bob’ Williams, Brian Humphrey, Rob Cameron

(training coordinators57 for the CFMEU QLD);

(d) Phil Blair (the CFMEU QLD’s apprentice coordinator);58

(e) Paula Masters;

(f) Jacqueline Collie;

(g) Stacey Davidson (membership supervisor and acting office

manager in Leanne Butkus’s absence);59 and

57 Bob Williams, 23/9/15, T:239.34-36; Brian Humphrey, 23/9/15, T:257.2-7; Rob Cameron, 23/9/15, T:332.1-2. 58

Phil Blair, 23/9/15, T:346.18-19. 59 Stacey Davidson, 23/9/15, T:286.25-26, 292.19-23.

170

(h) Cherie Shaw (the CFMEU QLD’s part-time finance officer).60

Paula Masters and Stacey Davidson were long term employees of the 44.

CFMEU. They and Michael Ravbar described the events that took

place as merely part of an office ‘clean up’ which would ordinarily

have been done earlier in the year but had been delayed because of the

amalgamation with the BLF.61 Paula Masters’ evidence was that the

‘clean up’ was larger than usual because of the amalgamation. Indeed

she said it was the largest ‘clean up’ that she had been involved with.62

But she said the events of the day were ‘business as usual’.63 She also

gave this evidence:64

Q. But the fact that it seemed that the documents had to be sorted for destruction on one particular afternoon into evening, you say that that’s business as usual?

A. Yes. We would normally do the clean-up over a period of about six hours and it would normally be, as I said before, myself, the Secretary and the Assistant Secretary. In this case we were dealing with bigger volumes, and other people were brought in to assist.

Michael Ravbar’s evidence was that apart from what he alleged was 45.

David Hanna’s ‘stupidity’ in covering the cameras there was nothing

unusual about the activities of the afternoon and evening.65

60 Cherie Shaw, 22/9/15, T:162.17-36. 61 Paula Masters, 23/9/15, T:204.8-19, 213.33-35, 218.9-12; Stacey Davidson, 23/9/15, T:292.42-47, 293.8-9, 294.10-11, 298.44-46, 299.10-14; Michael Ravbar, 24/9/15, 380.37-46. 62

Paula Masters, 23/9/15, T:218.23-24. 63 Paula Masters, 23/9/15, T:227.18-31, see also T:204.5-26. 64

Paula Masters, 23/9/15, T:227.24-31. 65 Michael Ravbar, 24/9/15, T:381.27-32, 423.25-33, 427.32-428.5, 428.16-25.

171

Some of the witnesses could not be sure precisely which day the so- 46.

called office ‘clean up’ occurred. All who could give a date thought it

was either late March or early April. However, the irresistible

conclusion from the evidence is that the ‘clean up’ occurred on 1 April

2014. The CFMEU accepted this.66 Its acceptance is supported by the

following matters.

(a) Cherie Shaw testified that it was on 1 April 2014 that she was

asked to shred some documents and that she heard that ‘stuff’

was being taken out of the office.67 She was confident about

the date because she had checked her payroll records. She

did overtime on that day of 2.5 hours, but had been away on

31 March 2014.68

(b) Michael Ravbar identified 1 April 2014 as the day of the

‘clean up’.69

(c) Bob Williams’ evidence was that he drove, with his son, in a

horse float trailer containing a load of documents from the

CFMEU’s office to David Hanna’s property at Cornubia.70

He went back to the Cornubia property the following day to

66 Submissions of the CFMEU, 29/10/15, para 72. 67 Cherie Shaw, 22/9/15, T:166.36-47, 173.4-21. 68

Cherie Shaw, 22/9/14, T:166.44-167.6. 69 Michael Ravbar, 24/9/14, T:382.9-18. 70

Bob Williams, 23/9/15, T:240.33-42, 246.6-19.

172

try to burn some of the documents.71 Brian Humphrey was

also at the property with Bob Williams on that day.72

(d) Brian Humphrey gave evidence that the burning occurred the

day after he had retrieved the box trailer and assisted loading

it at the Campbell Street offices.73

(e) The call charge records for Bob Williams and

Brian Humphrey both support the conclusion that the

documents were removed from the CFMEU QLD office on

1 April 2014 and the largely unsuccessful burning attempt

occurred on 2 April 2014.74

Counsel assisting submitted that David Hanna also said that the 47.

documents were removed from the CFMEU QLD’s offices on 1 April

2014.75 To the contrary, the CFMEU submitted that ‘Mr Hanna in his

22 September evidence says unequivocally that the clean-up, or

‘shredding’ as he terms it, occurred on 2 April 2014, or sometime after

1 April’.76 It was further submitted by the CFMEU that David Hanna

‘is caught out extolling [sic] falsehoods’ and that he ‘was adamant that

the clean-up occurred after 2 April’.77 The CFMEU further submitted

71 Bob Williams, 23/9/15, T:247.44-248.4. 72 Bob Williams, 23/9/15, T:248.9-10. 73

Brian Humphrey, 23/9/15, T:260.4-9, 261.30-35, 263.36-39. 74 CFMEU DD MFI-8, 23/9/15; CFMEU DD MFI-9, 23/9/15; Bob Williams, 23/9/15, T:250.42-251.15; Brian Humphrey, 23/9/15, T:269.27-270.17. 75

David Hanna, 22/9/15, T:72.3-11, 72.29-73.46. See also CFMEU DD MFI-2, 21/9/15, p 2. 76 Submissions of the CFMEU, 29/10/15, para 72. 77

Submissions of the CFMEU, 29/10/15, paras 72-74.

173

that: ‘The evidence of Mr Hanna in this and other respects on even the

most marginal scrutiny is simply unbelievable.’78

Counsel assisting submitted in reply that David Hanna was not 48.

adamant that the ‘clean up’ occurred after 2 April 2014. Rather, he said

that on 1 April, documents in archive boxes were ‘taken away’ having

been loaded onto a ‘horse float’. David Hanna’s words ‘a day or two

after’ referred to there being an unusual amount of shredding of paper

at the office.79 Counsel assisting was right to characterise this

submission of the CFMEU as a misrepresentation of David Hanna’s

evidence. There was no evidence that contradicted his evidence.

There was no evidence that showed, as the CFMEU wrongly assert,

that it ‘was demonstrably false’.80 The following portion of David

Hanna’s testimony makes it hard to understand how the CFMEU could

submit that David Hanna was adamant that the ‘clean-up occurred after

2 April’:81

Q. What documents do you understand he [Michael Ravbar] was requesting or directing be removed from the office?

A. I don’t know what those documents were other than he had a talk with the staff and, you know, told them what was to go and what not to go and whatever documents the staff put out or pointed to, coordinators and myself would take out and load in the horse float trailer.

Q. What date did this occur, or dates?

78 Submissions of the CFMEU, 29/10/15, para 75. 79 Submissions of Counsel Assisting, 30/11/15, para 21; see David Hanna, 22/9/15, T:79.6-35, 83.11-12. 80

Submissions of Counsel Assisting, 30/11/15, para 21. 81 David Hanna, 22/9/15, T:71.42-72.7.

174

A. 1 April.

Q. You are clear about that?

A. Yes.

At what time on 1 April 2014 did the relevant events take place?

The next factual issue relates to what time of day on 1 April 2014 the 49.

‘clean up’ occurred at. The evidence on this topic is as follows:

(a) On 1 April 2014, the sun set in Brisbane at 5.46pm.82 Civil

twilight ended at 6.10pm.83 Nautical twilight ended at

6.37pm.84 According to Geoscience Australia, for all

practical purposes it is dark at the end of nautical twilight in

the absence of moonlight, artificial lighting or adverse

atmospheric conditions.85 Astronomical twilight ended at

7.04pm.86 According to Geoscience Australia, at this time the

illumination from the Sun is less than from other natural

sources in the sky.

(b) This submission was the subject of criticism by the CFMEU

‘as a further episode of [counsel assisting] leading evidence in

submissions’.87 This characteristic criticism is entirely

82 CFMEU DD MFI-18, 14/10/15. 83 CFMEU DD MFI-18, 14/10/15. 84

CFMEU DD MFI-18, 14/10/15. 85 CFMEU DD MFI-18, 14/10/15. 86

CFMEU DD MFI-18, 14/10/15. 87 Submissions of the CFMEU, 29/10/15, para 93.

175

unfounded. The evidence underlying the submission was

tendered on 14 October 2015, six days before the submissions

of counsel assisting. In any event, counsel assisting

submitted88 that it appears that it is accepted by the CFMEU

in its submission that the clean-up and the loading of the

horse float and trailer ‘all occurred (and were no doubt

completed) after dark.’89 This in turn countered, it was

submitted by counsel assisting, the CFMEU submission that

the loading was done in apparently plain view of the public.90

Counsel assisting also noted that the box trailer was loaded in

the garage and was not visible from the street.91 These points

were fairly made by counsel assisting.

(c) Hollie Bradshaw was the officer junior.92 She was asked to

stay back after work one afternoon by David Hanna to help

with files. But after about 20 minutes spent waiting for

instructions she was told by one of the senior female

administrative officers that she could leave.93 The next day

she complained to a friend, Nick Williams, that she was not

going to be paid for the time she spent staying back.94 Nick

Williams apparently told her that the previous day documents

88 Submissions of Counsel Assisting, 30/11/15, para 23. 89 Submissions of the CFMEU, 29/10/15, para 93. 90

Submissions of the CFMEU, 29/10/15, para 81-82. 91 Submissions of Counsel Assisting, 30/11/15, para 23. 92

Hollie Bradshaw, 22/9/15, T:152.13. 93 Hollie Bradshaw, 22/9/15, T:154.36-44. 94

Hollie Bradshaw, 22/9/15, T:157.14-25.

176

had been moved to David Hanna’s property.95 It is to be

inferred that Hollie Bradshaw was asked to stay back on 1

April 2014. Her time records show that she worked until

4.30pm on that day.96 It is also to be inferred that she left the

office at 4.50pm. It follows that the bulk of the ‘clean up’

activity did not occur until after that time.

(d) Apart from Hollie Bradshaw, junior office staff left at their

usual time at 4.30pm.97 They were not asked to stay back to

be involved in the ‘clean up’.

(e) Cherie Shaw left the office at 3pm on 1 April 2014 to pick up

her daughter. She returned at 5pm.98 From 5pm to 7.30pm

she was involved in shredding and possibly other work in

relation to payroll. She was ‘extremely busy’ at the time.99

When she left work at 7.30pm there were still others at

work.100

(f) Paula Masters said the ‘clean up’ started in the ‘middle of the

afternoon’. She later said around ‘3-ish’. She said it

continued until the middle of the night, by which she meant

95 Hollie Bradshaw, 22/9/15, T:157.8-22. 96 CFMEU DD MFI-19, 14/10/15. See also Hollie Bradshaw, 22/9/15, T:155.31-34. 97

Paula Masters, 23/9/15, T:228.23-34; Stacey Davidson, 23/9/15, T:296.26-31. 98 Cherie Shaw, 22/9/15, T:169.4-27. 99

Cherie Shaw, 22/9/15, T:169.26-47. 100 Cherie Shaw, 22/9/15, T:175.31-42.

177

around 7.30pm or 8pm.101 She was the last to leave and she

locked up the office at around 8pm or 8.30pm.102

(g) Bob Williams recalled receiving a call from David Hanna,

probably late afternoon around 3.30pm or 4pm, to collect the

horse float trailer and bring it to the CFMEU offices.103 Bob

Williams recalled having later conversations with David

Hanna that day. In one of them Bob Williams told David

Hanna that he would pick up his son, Nick Williams, to

assist.104 By that time Bob Williams had collected the horse

float trailer which was empty. He collected his son. They

came to the CFMEU building.105 Bob Williams thought that

was about 4pm or 4.30pm.106 The horse float trailer was

parked outside the No 14 office in the car spaces.107 He and

his son loaded the horse float trailer with boxes.108 Bob

Williams guessed that it took maybe 45 minutes or an hour to

load the trailer.109 He said it was not dark when he left with

the documents.110

101 Paula Masters, 23/9/15, T:205.41-206.14, 221.11-15. 102 Paula Masters, 23/9/15, T:214.31-43. 103

Bob Williams, 23/9/15, T:241.23-242.17. 104 Bob Williams, 23/9/15, T:242.19-24. 105

Bob Williams, 23/9/15, T:242.32-44. 106 Bob Williams, 23/9/15, T:242.47-234.1. 107

Bob Williams, 23/9/15, T:242.43-44. 108 Bob Williams, 23/9/15, T:243.39-244.18. 109

Bob Williams, 23/9/15, T:244.32-47. 110 Bob Williams, 23/9/15, T:244.35-37.

178

Call charge records from 1 April 2014 disclose the following

about Bob Williams’ dealings with David Hanna on that day:

(i) David Hanna called Bob Williams’ phone at

10.38am and again at 11.51am.111

(ii) At 1.56pm and 3.01pm calls made to Bob Williams’

mobile phone show that it was in the vicinity of the

mobile phone tower at Cornubia.112

(iii) The next time that David Hanna called Bob

Williams was 3.44pm.113 That call was followed by

two more calls from David Hanna at 3.48pm and

4.16pm.114 At 4.17pm there was a call made from

Bob Williams’ phone.115 At each of these times,

Bob Williams’ phone was using the Cornubia tower.

(iv) At 4.55pm David Hanna called Bob Williams’

mobile phone. At that time the phone was in the

vicinity of the mobile phone tower at Holland Park

East.116 That is on the way between Cornubia and

the CFMEU offices. At 5.21pm Bob Williams’

phone received a telephone call. At that time it was

111 CFMEU DD MFI-27, 20/10/15; CFMEU DD MFI-29, 20/10/15. 112 CFMEU DD MFI-29, 20/10/15. 113

CFMEU DD MFI-27, 20/10/15; CFMEU DD MFI-29, 20/10/15. 114 CFMEU DD MFI-27, 20/10/15; CFMEU DD MFI-29, 20/10/15. 115

CFMEU DD MFI-29, 20/10/15. 116 CFMEU DD MFI-27, 20/10/15; CFMEU DD MFI-29, 20/10/15.

179

in the vicinity of the mobile phone tower at Bowen

Hills South.117 This is consistent with travel by Bob

Williams from Cornubia to the CFMEU office and

with his arrival there by around 5.20pm.

(v) There were SMS texts and calls between David

Hanna and Bob Williams at 5.49pm, 5.50pm and

5.51pm. They show that Bob Williams’ mobile

phone was in the vicinity of mobile phone towers at

Bowen Hills South, Royal Brisbane Hospital (which

is close to Bowen Hills) and then Bowen Hills.118

(vi) At 6.35pm, a text message received by Bob

Williams showed that his phone was in the vicinity

of Cornubia.119 This is consistent with Bob

Williams leaving the CFMEU offices by shortly

before or around 6pm so as to permit his arrival at

Cornubia by at least 6.35pm.

(vii) A call from Bob Williams to his son was recorded as

occurring at 7.06pm at which time Bob Williams’

phone was in the vicinity of Cornubia.120 There was

a phone call from Bob Williams’ phone to David

Hanna’s phone at 7.07pm which also used the

117 CFMEU DD MFI-29, 20/10/15. 118 CFMEU DD MFI-27, 20/10/15; CFMEU DD MFI-29, 20/10/15. 119

CFMEU DD MFI-29, 20/10/15. 120 CFMEU DD MFI-29, 20/10/15.

180

Cornubia tower.121 At 7.58pm Bob Williams’ phone

was recorded as making a call using the Bowen Hill

South tower.122 These records are consistent with

Bob Williams travelling from Cornubia after 7.07pm

to the CFMEU offices and being there by at least

8pm.

These records suggest that the earliest time Bob Williams

could have arrived to load documents at the CFMEU’s offices

was around 5.20pm. They also disclose that Bob Williams

appears to have been contacted by David Hanna and to have

retrieved the horse float earlier than he recalled.

Bob Williams’ evidence about contacting his son and the call

at 7.06pm suggest that the empty horse float trailer did not

arrive at the CFMEU office until after 7pm. However, it may

be that the call at 7.06pm from Bob Williams to his son was

about another topic.123 It may be that Bob Williams was

returning the empty horse float trailer for a second time to the

CFMEU QLD’s office to pick up another load of documents.

At one point in his evidence, David Hanna suggested this is

what occurred.124

(h) Brian Humphrey gave evidence that he received a call on

1 April 2014 from either David Hanna or Bob Williams to

121 CFMEU DD MFI-29, 20/10/15. 122 CFMEU DD MFI-29, 20/10/15. 123

Bob Williams, 23/9/15, T:251.26-47. 124 David Hanna, 22/9/15, T:72.30-73.17.

181

grab the CFMEU QLD’s box trailer, which was stored at

Cornubia, and bring it into the office at the CFMEU.125

He had a ‘feeling’ that he might already have been at

Cornubia. But he was not sure why this would have been the

case.126

He recalled it was ‘late’ when he had to bring the box trailer

into the office.127 Brian Humphrey later said that he believed

it was ‘late afternoon’ when he arrived and he believed the

horse float trailer was already there.128 Brian Humphrey

assisted loading the box trailer with boxes from the garage to

16 Campbell Street. After that task was complete he left.129

When he finished the trailer was fairly full.130 He thought

that it was late afternoon when he left. It might have been

just on dusk or just after.131

Phone records show that an SMS was sent from David Hanna

to Brian Humphrey at 2.06pm. At that time Brian

Humphrey’s phone was in the Cornubia area.132 Telephone

125 Brian Humphrey, 23/9/15, T:259.28-260.9. 126 Brian Humphrey, 23/9/15, T:260.3-18. 127

Brian Humphrey, 23/9/15, T:260.7-260.9. 128 Brian Humphrey, 23/9/15, T:261.20-27. 129

Brian Humphrey, 23/9/15, T:262.4-45. 130 Brian Humphrey, 23/9/15, T:244.2. 131

Brian Humphrey, 23/9/15, T:262.4-45. 132 CFMEU DD MFI-28, 20/10/15.

182

calls made and received by Brian Humphrey between 3.00pm

and 4.22pm show his phone as using the Cornubia tower.133

The table set out below extracts some of the calls and text

made or received by Brian Humphrey between 4.22pm and

9.12pm, and their location:

133 CFMEU DD MFI-28, 20/10/15. 134 CFMEU DD MFI-28, 20/10/15. 135

CFMEU DD MFI-28, 20/10/15. Note: CFMEU DD MFI-9 contains an error in that it attributes the location of the 4.48pm call to Cornubia, not Gaven. 136

CFMEU DD MFI-28, 20/10/15. 137 CFMEU DD MFI-28, 20/10/15. 138

CFMEU DD MFI-28, 20/10/15. 139 CFMEU DD MFI-28, 20/10/15. 140

CFMEU DD MFI-28, 20/10/15. 141 CFMEU DD MFI-28, 20/10/15. 142

CFMEU DD MFI-28, 20/10/15. 143 CFMEU DD MFI-27, 20/10/15.

Time Mobile Phone Tower

4.22pm Cornubia

134

4.48pm Gaven

135

5.22pm Kerrydale

136

5.28pm Andrews West 137

5.41pm Varsity Lakes

138

5.51pm Mudgeeraba 139

5.53pm Mudgeeraba North 140

6.36pm Loganholme 141

7.12pm Cornubia

142

7.41pm Bowen Hills South 143

8.10pm Bowen Hills

8.17pm Bowen Hills South 8.20pm Spring Hill

8.54pm Logan Hyperdome 9.12pm Mudgeeraba

183

The records suggest that Brian Humphrey, after having

originally been at Cornubia earlier in the day, travelled to the

Gold Coast, returned to Cornubia, picked up the box trailer

and then travelled to the CFMEU offices to arrive at around

7.40pm. Though there had been calls between Brian

Humphrey and David Hanna throughout the day, David

Hanna called Brian Humphrey at 5.22pm, and shortly before

Brian Humphrey started travelling back towards Cornubia.144

Brian Humphrey then remained at the CFMEU’s offices until

at least 8.17pm. He began travelling towards the Gold Coast

shortly thereafter.145

(i) Stacey Davidson remembered ‘working till late at night.’146

She later said she was there until around 7pm.147

(j) Jacqueline Collie was involved on the night of the ‘clean up’

in moving unwanted files selected by either Michael Ravbar

or Paula Masters from the No 16 office to the No 14 office

and placing them on the floor in the No 14 office.148 She

thought she did this for a couple of hours.149 However, during

144 CFMEU DD MFI-27, 20/10/15; CFMEU DD MFI-28, 20/10/15. 145 CFMEU DD MFI-28, 20/10/15. 146

Stacey Davidson, 23/9/15, T:287.23. 147 Stacey Davidson, 23/9/15, T:293.5-8. 148

Jacqueline Collie, 23/9/15, T:307.9-15, 314.30-32. 149 Jacqueline Collie, 23/9/15, T:316.7-9.

184

the night she was also in her office doing her own work.150

When Jacqueline Collie left on 1 April, which was about 7pm

or 7.30pm, there were still piles of files and lots of documents

located in the big open area of No 14.151

(k) Michael Ravbar said he started work in relation to the filing

system at around 2.30pm on 1 April 2014. He finished his

work at around 7.30pm or 8pm that night.152 Call charge

records in respect of Michael Ravbar’s mobile phone show

that he was still in the vicinity of the CFMEU’s office at

8.10pm.153

(l) David Hanna believed he stayed at the CFMEU offices all

afternoon.154 Call charge records in respect of David Hanna’s

mobile phone show David Hanna’s mobile phone being in the

vicinity of the Bowen Hills South mobile phone tower from

2.05pm until at least 8.05pm.155

The following conclusions are probable. The bulk of the ‘clean up’ on 50.

1 April did not commence until close to 5pm. A substantial amount of

the loading of documents into the trailers occurred after 5.30pm (in the

case of the first load of the horse float) and 7.40pm (in the case of the

box trailer) when it was dark. The ‘clean up’ and loading of

150 Jacqueline Collie, 23/9/15, T:318.43-45. 151 Jacqueline Collie, 23/9/15, T:314.14-315.15. 152

Michael Ravbar, 24/9/15, T:410.1-5, 419.31-34. 153 CFMEU DD MFI-30, 20/10/15. 154

David Hanna, 22/9/15, T:74.42. 155 CFMEU DD MFI-27, 20/10/15.

185

documents did not finish until close to or after 8pm on that evening.

As noted above, the CFMEU appears to accept this to be the case.156

The CFMEU, however, relied on this evidence as a matter which 51.

undermines David Hanna’s credibility. His evidence, described as

‘unequivocal’157 was that he thought there was an attempt to burn

material on the afternoon of 1 April.158 It is worth noting the precise

words in which the CFMEU submissions are cast. They stated: ‘No

doubt Mr Hanna in giving this “unequivocal” evidence was motivated

to paint as bleak a picture of Mr Ravbar as possible by contending that

the burning had occurred the day Mr Hanna was aware the notice to

produce was issued.’159 The submissions of counsel assisting

responded to this point by contending that it was not ‘unequivocal’

evidence, but rather just what he thought had occurred. There was no

suggestion that David Hanna was present during the burning. Hence

he could be innocently mistaken as to the date. The submission of

counsel assisting on this point is accepted.

The CFMEU also took issue with what it said was an ‘insinuation’ 52.

suggested by counsel assisting that ‘something malevolent was on foot’

because, with the exception of Hollie Bradshaw, only salaried staff

were asked to stay back to assist in the removal of documents. The

CFMEU contended this is not borne out by the evidence which

indicated that junior wage-earning office staff were not asked to stay

156 Submissions of the CFMEU, 29/10/15, para 93. 157 Submissions of the CFMEU, 29/10/15, para 98. 158

Submissions of the CFMEU, 29/10/15, paras 93-94. 159 Submissions of the CFMEU, 29/10/15, para 98.

186

back and assist for the economically rational reason that they would

have had to be paid overtime.160 This issue need not be resolved.

Michael O’Connor’s email

Earlier on 1 April at 4.16pm AEST, Michael Ravbar, David Hanna, 53.

Paula Masters and Jacqueline Collie were sent an email from Michael

O’Connor, the National Secretary of the CFMEU.161 He was in

Melbourne. The subject of the email was:162

URGENT – Notice to Produce Documents from the Royal Commission – To all CFMEU Division Secretaries/Presidents, Divisional Branch Secretaries and District Branch Presidents

The body of the email included the following:163 54.

Re : URGENT – Notice to Produce Documents from the Royal Commission

Please find attached for your urgent attention, noting the 10.00am 11 April deadline, two attachments:

ξ The Notice to Produce Documents

ξ A letter regarding it

The notice to produce attached required the production of 11 categories 55.

of documents including all financial records kept by each reporting

unit of the CFMEU pursuant to s 252 of the Fair Work (Registered

160 Submissions of the CFMEU, 29/10/15, para 61. 161 CFMEU DD MFI-12, 24/9/15. 162

CFMEU DD MFI-12, 24/9/15. 163 CFMEU DD MFI-12, 24/9/15.

187

Organisations) Act 2009 (Cth). The letter attached to the email was

from Michael O’Connor and contained the following text:164

URGENT

…

To:

All Division Secretaries/Presidents Divisional Branch Secretaries and District Branch Presidents …

Please find attached a Notice to Produce Documents issued by the Royal Commission into Trade Union Governance and Corruption directed to the Union. …

I would request that you all give this matter your very urgent attention and that you take immediate steps to comply with the Notice.

It might be said in passing that this email communication from Michael

O’Connor and its attachments were, with respect, responsible and

appropriate. It will be necessary to return to his conduct in this regard

later.

David Hanna could not recall getting the email at all.165 However, he 56.

gave the following evidence as to what Michael Ravbar said to him on

1 April 2014:166

Michael Ravbar told me that it’s expected to be getting the notice that day. He told me the office staff had been informed not to pass any phone calls through to him, not to look at certain, not to open certain emails, and that

he wanted to – wanted to not have to be in a position of spending the next month photocopying documentation, so he wanted to remove some of

164 CFMEU DD MFI-12, 24/9/15. 165 David Hanna, 24/9/15, T:449.2-25. 166

David Hanna, 22/9/15, T:71.32-40.

188

those items from the office and he, you know, said “We need to do this”, and I followed direction.

On 16 July 2015, David Hanna told Leo Skourdoumbis much the same

thing about Michael Ravbar’s statements concerning the

photocopying.167

Paula Masters said she did not read the email on 1 April 2014. She 57.

said that in all probability she read it on 2 April 2014.168 She also said

that she would have seen the subject on 2 April 2014, which included

the word ‘URGENT’. But she said that, given that the email was

addressed to the Secretary, ‘unless he directed me to read it and do

something with it, I had no reason to read it.’169 Her evidence was to

the effect that emails sent to Michael Ravbar into which she was

copied were not her business.170 She could not recall being told by

anyone not to look at her emails on the afternoon and evening of

1 April 2014.171 However, while she did not hear about the notice to

produce on ‘that particular day’, Paula Masters thought that she ‘had

heard that the Plumbers had received one’.172 This is a reference to the

CEPU. It is consistent with the evidence of Bradley O’Carroll.173

167 CFMEU DD MFI-5, 22/9/15, p 34. 168 Paula Masters, 24/9/15, T:362.20-25. 169

Paula Masters, 24/9/15, T:363.8-22. 170 Paula Masters, 24/9/15, T:362.27-37. 171

Paula Masters, 24/9/15, T:360.32-34. 172 Paula Masters, 23/9/15, T:215.27-28. 173

See paras 70-71.

189

Jacqueline Collie did not recall seeing Michael O’Connor’s email on 58.

1 April 2014.174 Nor could she recall anyone telling her on the

afternoon or evening of 1 April 2014 not to look at her emails or not to

answer telephone calls.175 She could not recall when she saw the

email.176

Michael Ravbar denied seeing Michael O’Connor’s email on 1 April. 59.

He said he did not see it until mid to late morning on 2 April 2014.177

He denied telling David Hanna that he expected to get the notice that

day.178 Michael Ravbar also denied telling David Hanna that he had

told the staff not to open certain emails.179 He did say to the staff that

he was not to be disturbed while he was ‘going through the – with the

filing system’.180 He could not recall telling David Hanna that he did

not want to be in the position of spending the next month photocopying

information.181

The events of the ‘clean up’

What precisely occurred during the ‘clean up’? Most of the evidence 60.

concerning the loading of the horse float trailer and the box trailer with

boxes of documents has already been summarised. The horse float

174 Jacqueline Collie, 24/9/15, T:368.38-369.1. 175 Jacqueline Collie, 24/9/15, T:369.37-370.18. 176

Jacqueline Collie, 24/9/15, T:372.45-47. 177 Michael Ravbar, 24/9/15, T:419.22-420.10. 178

Michael Ravbar, 24/9/15, T:433.15-17. 179 Michael Ravbar, 24/9/15, T:433.32-34. 180

Michael Ravbar, 24/9/15, T:433.25-26. See also Michael Ravbar, 24/9/15, T:380.21-23. 181 Michael Ravbar, 24/9/15, T:434.4-7.

190

trailer, which was parked at the front of No 14, was loaded with boxes

of documents and other documents located in the foyer and open areas

of the No 14 office.182 The box trailer was loaded with boxes and

documents which had been stacked outside the archive room in the

No 16 garage.183

Michael Ravbar’s evidence was that the majority of the documents 61.

loaded at No 14 were boxes which had earlier been brought over from

the BLF.184 However, in addition to the BLF documents, Jacqueline

Collie had throughout the afternoon being transferring files from No 16

which had been selected by Michael Ravbar or Paula Masters for

destruction.185 That is, a number of unwanted CFMEU files were

taken and left in No 14. It is to be inferred that these documents were

collected by those persons loading the horse float trailer and taken for

destruction.

The evidence of Michael Ravbar, Paula Masters and Jacqueline Collie 62.

was that on 1 April 2014, Michael Ravbar sorted a number of files.

Paula Masters said that during the afternoon and evening of the ‘clean

up’ she saw Michael Ravbar looking through the CFMEU ‘green files’.

These were general files containing documents such as property

records and right of entry applications for organisers.186 Paula Masters

estimated that there were about 100 or 150 such files. They varied in

182 Bob Williams, 23/9/15, T:242.43-243.9. 183 Brian Humphrey, 23/9/15, T:261.29-262.2. 184

Michael Ravbar, 24/9/15, T:382.9-18. 185 Jacqueline Collie, 23/9/15, T:307.9-15, 314.14-42. 186

Paula Masters, 23/9/15, T:205.30-39. See also Stacey Davidson, 23/9/15, T:293.28-294.8.

191

size from one or two documents to two or three folders of

approximately 5cm in width.187 These files were stored in a hanging

file arrangement outside the kitchen at No 16.188 Michael Ravbar

asked Paula Masters about certain files and determined which should

be kept.189 The unwanted files were taken by Jacqueline Collie to

No 14.190 Paula Masters guessed it might have taken Michael Ravbar

maybe an hour to complete this task.191

In addition to the ‘green files’, about 300 CFMEU EBA files or ‘blue 63.

files’ were moved from inside a compactus at No 16 to No 14.192

Michael Ravbar sorted through those files.193 Some were put into a

compactus at No 14 and the others put aside for destruction.194 Paula

Masters guessed this task took about 2 hours.195

Paula Masters also gave evidence that she and Michael Ravbar 64.

examined the contents of the BLF files which were in boxes at No

14.196 She said there were a lot of boxes. Some contained EBA files

and old gazettes. Some even had stationery items.197 In contrast,

Michael Ravbar said he had already examined all of the BLF files

187 Paula Masters, 23/9/15, T:206.29-47. 188 Paula Masters, 23/9/15, T:207.16-18. 189

Michael Ravbar, 24/9/15, T:384.42-385.13. 190 Jacqueline Collie, 23/9/15, T:307.9-14, 314.29-31. 191

Paula Masters, 23/9/15, T:207.39. 192 Paula Masters, 23/9/15, T:207.43-210.17. 193

Paula Masters, 23/9/15, T:210.2. 194 Paula Masters, 23/9/15, T:210.2-4. 195

Paula Masters, 23/9/15, T:210.7-8. 196 Paula Masters, 23/9/15, T:205.38-206.27, 211.25-212.8. 197

Paula Masters, 23/9/15, T:212.3-212.4.

192

before 1 April 2014.198 Finally, there were yellow files containing

correspondence which were all destroyed.199

Apart from this, there was a culling of CFMEU membership and 65.

finance records.

(a) Stacey Davidson said that she was involved in ‘working out

which membership documents after seven years were ready to

be destroyed and which ones to be kept’.200 She said that at

the end of every year membership records for that year were

supposed to be wrapped up in brown paper and stored in the

archive room which was in the No 16 garage area.201

Apparently, each year there was supposed to be a clean out of

old membership records from the archive room, but this had

not occurred for a couple years.202 On the day of the ‘clean

up’ Stacey Davidson might have wrapped up a couple of

membership records for 2013.203 But her main task was

clearing out membership records from the archive room.204

She said she took out records for 2006 and prior years and

placed to the side on the ground.205 She did not know what

198 Michael Ravbar, 23/9/15, T:393.24-394.2, 408.7-20. 199 Paula Masters, 23/9/15, T:212.13-24. 200

Stacey Davidson, 23/9/15, T:287.23-26. 201 Stacey Davidson, 23/9/15, T:299.1-300.38. 202

Stacey Davidson, 23/9/15, T:289.16-21, 290.15-21, 299.39-300.5. 203 Stacey Davidson, 23/9/15, T:294.33-35, 300.14-15. 204

Stacey Davidson, 23/9/15, T:294.38-39. 205 Stacey Davidson, 23/9/15, T:288.10-34, 289.43-44.

193

happened after that.206 But she assumed that they were put in

a destruction bin or loaded into a trailer to be taken away.207

(b) Paula Masters said that on the evening of 1 April 2014

finance and membership records were removed from the

archive room under her direction.208 She did not say what

documents were destroyed. She could only say that ‘we

would have been destroying a year’s worth of documents at

that stage from seven years prior’.209 This may be compared

with Stacey Davidson’s evidence. Paula Masters said that she

remembered the training organisers ‘helping carry the files

from the archive room to document destruction bins’. But she

also said she ‘couldn’t tell you exactly what they were

doing’.210 She also said that the two document destruction

bins, which were the size of a garbage bin, were full.211 She

did not recall that any documents were taken away on that

night, or that any documents from the archive area were

shredded that evening.212

(c) Cherie Shaw gave evidence that she understood there had

been a ‘clean out of the archive room’ where old finance and

membership records were kept on the night of the ‘clean

206 Stacey Davidson, 23/9/15, T:290.9-11. 207 Stacey Davidson, 23/9/15, T:289.46-290.11. 208

Paula Masters, 23/9/15, T:217.2-8. 209 Paula Masters, 23/9/15, T:217.11-13. 210

Paula Masters, 23/9/15, T:216.31-34. 211 Paula Masters, 23/9/15, T:217.13-14. 212

Paula Masters, 23/9/15, T:217.31-36, 218.35-36, 224.36-41.

194

up’.213 She and Paula Masters were also involved in

shredding documents from her office, including invoices and

phone bills.214

Finally, at some point during the afternoon or evening all of the 66.

security cameras at the CFMEU office were covered.

(a) There were four cameras in the office. One was in the No 16

office. One in the garage under No 16. One was in the foyer

of No 14. One was on the exterior of No 14.215

(b) Rob Cameron said he covered the cameras at David Hanna’s

direction. He said Michael Ravbar was not present when

David Hanna gave him the direction.216 He covered the one

in No 16 and the one outside No 14 with a large roll out fabric

banner which was leaned against the camera.217 These

banners were stored under the staircases in No 14.218 The

camera in the garage was covered with a shirt.219

(c) Paula Masters said she knew that the No 16 camera and the

camera in the office were covered.220 She thought she saw

the one in the office being covered. But she was not sure

213 Cherie Shaw, 22/9/15, T:176.4-30. 214 Cherie Shaw, 22/9/15, T:171.15-37; Paula Masters, 23/9/15, T:217.31-36, 224.43-225.33. 215

Paula Masters, 23/9/15, T:199.36-38. 216 Rob Cameron, 23/9/15, T:334.29-33, 335.14-16, 336.8-14. 217

Rob Cameron, 23/9/15, T:334.36-47, 336.25-30, 336.32-38. 218 Rob Cameron, 23/9/15, T:336.44-46. 219

Rob Cameron, 23/9/15, T:336.32-38. 220 Paula Masters, 23/9/15, T:219.44-47.

195

about the one in the garage area.221 Inferentially, she saw or

was told about the one in the garage. Paula Masters was not

there when the decision to cover the cameras was made. But

she said David Hanna organised it.222 When asked as to her

understanding why they were covered, she said:223

I honestly have no idea. It wasn’t my decision to make. I saw no necessity for it. To me, we were just doing a clean-up, but it wasn’t my call to make. … That was their decision to make.

(d) David Hanna said that the cameras were covered and he was

involved with covering them up.224 He said Michael Ravbar

gave a direction to him to cover the cameras.225 He thought

that Rob Cameron or Paula Masters might have been there

when the direction was given.226 He said he went to Rob

Cameron to carry out the task he had been ‘assigned’ by

Michael Ravbar because Rob Cameron knew where the

cameras were.227

(e) Michael Ravbar denied seeing or knowing on 1 April 2014

that the security cameras had been covered over on the day.

He denied directing or approving that the cameras be covered

221 Paula Masters, 23/9/15, T:221.1-3. 222 Paula Masters, 23/9/15, T:219.13-42. 223

Paula Masters, 23/9/15, T:220.4-11, 220.13-31. 224 David Hanna, 22/9/15, T:87.1-16. 225

David Hanna, 22/9/15, T:87.22-27; David Hanna, 24/9/15, T:454.37-455.12. 226 David Hanna, 22/9/15, T:87.41-45, 456.8-9. 227

David Hanna, 22/9/15, T:461.12-15.

196

up. He said he found out about it two weeks later from

Rob Cameron.228

The CFMEU made certain submissions about the covering of the 67.

cameras. The CFMEU argued amongst other things that David

Hanna’s evidence was inconsistent as to who was or was not there

when he received the instruction to cover the cameras. It submitted

that this was a further example of David Hanna’s unreliability.229 The

CFMEU also submitted that Rob Cameron was ‘uncomfortable’ about

David Hanna’s instruction. He did not think they were doing anything

wrong and did not know why there was any need to cover the cameras.

The CFMEU submitted that this evidence had not been undermined to

any extent. It submitted that it belied the theory that the cameras were

covered up to conceal something sinister.230

The CFMEU also referred to Michael Ravbar’s evidence that he did 68.

not direct David Hanna to cover up the cameras. It contended that

counsel assisting’s submission that Michael Ravbar must have seen the

cameras was ‘baseless’. The CFMEU submitted that there is ‘no

reason’ to reject Michael Ravbar’s evidence. It submitted that it is

supported by the testimony of Rob Cameron and Paul Masters.231 The

CFMEU further submitted that the idea that something sinister was

going on that required secrecy was contradicted by the loading of the

228 Michael Ravbar, 24/9/15, T:398.43-399.5, 409.27-32, 410.42-411.15, 426.6-9, 427.28-30. 229

Submissions of the CFMEU, 29/10/15, para 77. 230 Submissions of the CFMEU, 29/10/15, para 79. 231

Submissions of the CFMEU, 29/10/15, para 80.

197

horse float loaded in a public place, directly in front of the CFMEU

offices with peak hour traffic driving by.232

Counsel assisting responded that those submissions misrepresented the 69.

evidence.233 In particular counsel assisting contended that the CFMEU

submission failed to deal with the evidence that in fact almost all of the

loading occurred after sunset and most of it in the dark. Counsel

assisting noted that the CFMEU, far from challenging these

conclusions, as noted above in the context of the discussion about the

evidence about sunset,234 appeared to accept them. Counsel assisting

further pointed to the evidence which showed that the box trailer was

loaded in the garage and was not visible from the street. Counsel

assisting submitted that the covering of the cameras under Michael

Ravbar’s instruction is strong evidence of a consciousness of guilt.

The submission is accepted. The covering of the cameras is an

important part of a circumstantial case against both David Hanna and

Michael Ravbar.

Significant evidence came to light following the oral hearings in 70.

September 2015. Bradley O’Carroll was the Secretary of the

Queensland Branch of the Plumbing Division of the CEPU as at

1 April 2014. On 29 October 2015 he provided an affidavit dealing

with some relevant emails and minutes of meetings. These included an

email from him to Michael Ravbar attaching the notice to produce

which had been served on the CEPU by the Royal Commission on

232 Submissions of the CFMEU, 29/10/15, paras 81-82. 233 Submissions of Counsel Assisting, 30/11/15, paras 22-23. 234

See para 49(b).

198

31 March 2014.235 They also included the minutes of back-to-back

meetings of the board of directors of Construction Income Protection

Ltd (CIPQ).236 Those meetings took place between 8.00am and

10.30am on 1 April 2014. Both Bradley O’Carroll and Michael

Ravbar (amongst others) were in attendance.

Bradley O’Carroll was not required to give oral evidence.237 His 71.

affidavit was neither challenged nor contradicted. It established that by

about 10.06am (AEST) on 1 April 2014 Michael Ravbar was aware (as

a result of a discussion that he had with Bradley O’Carroll that

morning) that the CEPU had been served with a notice to produce from

the Royal Commission on 31 March 2014. It also established that

Michael Ravbar had been emailed a copy of that notice to produce.

The CEPU was one of the other five unions named in the Terms of

Reference, along with the CFMEU.

In submissions to the Commission dated 29 October 2015, and written 72.

before Bradley O’Carroll’s affidavit was tendered, the CFMEU and

Michael Ravbar had advanced the following argument:238

… David Hanna’s evidence was that on 1 April Michael Ravbar told him that he expected to receive a notice to produce that day and directed David Hanna to inform all staff members not to pass any calls through to Michael Ravbar. How Michael Ravbar came to have knowledge of a notice to produce that had not yet been served on the CFMEU National Office is a missing link in the case theory. There is no intercepted telephone

235 CFMEU DD MFI-31, 24/11/15. 236 CFMEU DD MFI-32, 24/11/15. 237

Although the affected persons were invited by the Commission to seek to cross-examine Bradley O’Carroll or adduce further evidence if they so wished, they subsequently notified the Commission that they did not. 238

Submissions of the CFMEU, 29/10/15, para 50.

199

conversation, no email or other evidence from which it could possibly be concluded that Michael Ravbar had notice that the Commission was going to serve a notice to produce on the CFMEU on 1 April 2014. Counsel assisting’s case theory and the first condition precedent to the thesis that what occurred on 1 April 2014 was possibly a criminal act is again exposed as fundamentally flawed as it requires Michael Ravbar to have clairvoyant like powers.

In supplementary submissions,239 counsel assisting submitted that not 73.

only did this submission grossly understate the circumstantial evidence

but that Bradley O’Carroll’s evidence also critically undermined the

CFMEU’s submission. By the time the ‘clean-up’ began on the

afternoon of 1 April 2014, Michael Ravbar need not have possessed

‘clairvoyant like powers’ to anticipate that the CFMEU would shortly

be served with a notice to produce. Rather, based on his earlier

communications with Bradley O’Carroll, Michael Ravbar knew there

was a very high likelihood that service of a notice to produce on the

CFMEU was imminent.

Counsel assisting also submitted that Bradley O’Carroll’s evidence 74.

explained Paula Masters’ testimony that, though she did not hear about

the CFMEU notice to produce on ‘that particular day’ (being 1 April

2014), she thought she ‘had heard that the Plumbers had received

one’.240 The obvious inference was, counsel assisting submitted, that

she had heard this from Michael Ravbar. That added to the

circumstantial case that the ‘clean up’ was not an ordinary event but a

deliberate attempt to remove and destroy documents that Michael

Ravbar believed would or may be required by the Commission.

239 Submissions of Counsel Assisting, 24/11/15, para 8. 240 Paula Masters, 23/9/15, T:215.27-28.

200

Counsel assisting further submitted that Bradley O’Carroll’s evidence 75.

also assisted in explaining why Michael Ravbar would have told David

Hanna that he expected to receive a notice that day and why he would

have instructed staff not to pass calls through to him or open certain

emails.241 They submitted that the evidence was further circumstantial

evidence supporting David Hanna’s account over that of Michael

Ravbar.

The nature of the material destroyed

What material was destroyed? The CFMEU contended, first, in an 76.

argument which is textually somewhat difficult, that ‘[t]here were no

documents not able to be provided by the Queensland branch of the

CFMEU pursuant to the notice to produce served on the National

Office of the CFMEU on 1 April 2014.’242 Secondly, the CFMEU

submitted that all hard copy documents disposed of during the clean-up

were reproducible.243 These propositions underlie a question posed

thus by the CFMEU:244

How can it possibly be established that a person either:

(a) intended to destroy a document that may be or was required for by [sic] the Commission; or

(b) was aware there is a substantial risk that a particular document will be required and it was unjustifiable to destroy a hard copy of such document,

241 David Hanna, 22/9/15, T:71.32-40; Michael Ravbar, 24/9/15, T:433.22-33. 242 Submissions of the CFMEU, 29/10/15, para 66. 243

Submissions of the CFMEU, 29/10/15, paras 66-67. 244 Submissions of the CFMEU, 29/10/15, para 67.

201

in circumstances where there is no contention that any particular document was ever not provided as required to the Commission?

Counsel assisting further submitted that the second submission of the 77.

CFMEU is factually incorrect. The evidence relied upon is the

testimony of Paula Masters. She asserted she could obtain the

telephone records. However, archived finance and membership

records were also destroyed.245 There was no evidence that those

documents could be reproduced. This submission is accepted.

Counsel assisting answered the first of the CFMEU’s submissions and 78.

the concluding question thus. There is no record of what was

destroyed during the ‘clean up’. Therefore, no one at the union can say

that what was produced in answer to any given notice to produce was

everything which the union had before the ‘clean up’ falling within the

terms of the notice. Counsel assisting further submitted that it is wrong

to focus on the terms of the individual notices to produce: it is enough

that a destroyed document might be relevant to the Commission’s

future proceedings. These submissions are plainly correct.

Events of 2 April 2014: a bonfire of documents

On 2 April 2014, an attempt was made by Bob Williams and 79.

Brian Humphrey to burn the documents which had been taken to David

Hanna’s Cornubia property.246 Bob Williams said David Hanna gave

him the direction to do that.247 Brian Humphrey did not recall who

245 Submissions of Counsel Assisting, 20/10/15, para 51. 246 Bob Williams, 23/9/15, T:248.2-24; Brian Humphrey, 23/9/15, T:263.18-264.16. 247

Bob Williams, 23/9/15, T:248.12-13.

202

contacted him, but he thought that it may have been David Hanna.248

However, it became apparent to both men that it would take too long to

burn the documents.249 Bob Williams estimated that the two men

might have attempted to burn around 10 boxes of documents over a

couple of hours.250

In due course they gave up. A call was then put to David Hanna. 80.

Brian Humphrey thought that he was the caller. Either he or Bob

Williams informed David Hanna that it would take too long to burn the

documents. At that point David Hanna told them to stop.251

Arranging for the tip truck

In his conversation with Leo Skourdoumbis on 16 July 2015, David 81.

Hanna said this about the removal of documents:252

Ravbar said ‘aw listen can we take it down your place, can you burn it or something?’

…

So I said, ‘yeah mate I’ll get fucking rid of it, yeah no worries, (INDISTINCT) take it down.’ They took it all down it couldn’t fucking burn, it was just too much to fucking burn the fucking fire brigade would have turned up. So I put it in the old hay shed, right? And organised a tip truck to come get it, loaded it up, got a training coordinator, followed it out to the tip, watched it get tipped over the edge, gone.

248 Brian Humphrey, 23/9/15, T:263.20-22. 249 Bob Williams, 23/9/15, T:248.19-24; Brian Humphrey, 23/9/15, T:264.6-11. 250

Bob Williams, 23/9/15, T:250.1-3. 251 Bob Williams, 23/9/15, T:248.19-31; Brian Humphrey, 23/9/15, T:264.13-45; David Hanna, 22/9/15, T:73.38-74.38. 252

CFMEU DD MFI-2, 21/9/15, p 3.

203

David Hanna’s oral evidence on 21 and 22 September 2015253 was 82.

substantially to the same effect. He maintained that Michael Ravbar

had asked him to take the documents to his property to burn. After this

method failed, there was a discussion between him and Michael

Ravbar during which the suggestion of getting a tip truck to dispose of

the documents was raised, possibly by David Hanna. David Hanna

also said that Michael Ravbar wanted to make sure that someone went

with the tip truck to ensure that the documents were disposed of.254

Michael Ravbar accepted that he directed David Hanna to take the 83.

documents away from the union. But he denied that he had directed or

learnt about any burning of documents at the time. He also denied any

discussion about getting a tip truck.255 He said his only understanding

of where David Hanna was taking the documents was that he said ‘that

he was going to bury it’.256 Michael Ravbar said that he did not

discuss any other method of disposal ‘…[be]cause it should have just

been dumped at the tip, like normally happens’.257

It was submitted by counsel assisting that Michael Ravbar’s evidence 84.

on this topic was inherently unlikely.258 This submission is accepted.

On Michael Ravbar’s own evidence, this was the first year David

Hanna was involved with a ‘clean up’. Apparently, the removal of

253 David Hanna, 21/9/15, T:6.12-39, 7.43-47, 20.40-47, 47.2-48.45, 53.20-54.2; David Hanna, 22/9/15, 73.36-74.38, 83.45-84.8. 254

David Hanna, 22/9/15, T:92.30-33. 255 Michael Ravbar, 24/9/15, T:413.12-415.36. 256

Michael Ravbar, 24/9/15, T:413.26-28. 257 Michael Ravbar, 24/9/15, T:413.38-41. 258

Submissions of Counsel Assisting, 20/10/15, para 58.

204

documents was usually organised by Peter Close, who was away.259

The evidence of a number of witnesses, including Michael Ravbar

himself, was that he had a very ‘hands-on’ leadership style. He was

particular about things being done in the way he wanted, and being

done properly.260 Michael Ravbar agreed with Bob Williams’ evidence

that ‘[n]othing happens in the CFMEU office that Michael doesn’t

oversee.’261 Counsel assisting submitted that it is not credible that

Michael Ravbar would not have given some direction to David Hanna

about the way the documents were to be destroyed. It is a topic which

would naturally arise in any conversation in which Michael Ravbar

directed David Hanna to dispose of trailer loads of documents. That

submission too, is accepted.

Events of 4 April 2014: dumping the documents

After the unsuccessful burning attempt, David Hanna hired a truck and 85.

excavator combo from Harrington Bobcat Hire Pty Ltd to come to his

property on 4 April 2014.262

On the morning of 4 April 2014, the truck arrived at David Hanna’s 86.

Cornubia property at around 7.30am.263 David Hanna, Bob Williams

259 Michael Ravbar, 24/9/15, T:414.16-415.17. 260 David Hanna, 21/9/15, T:53.43-45; David Hanna, 22/9/15, T:71.15-23, 89.34-35; David Hanna, 24/9/15, 463.27-31; Jessica Kanofski, 22/9/15, T:142.8-21; Cherie Shaw, 22/9/15, T:178.6-14; Bob Williams, 23/9/15, T:250.22-25; Brian Humphrey, 23/9/15, T:271.3-4; Stacey Davidson, 23/9/15, T:303.24-30; Michelle Clare, 23/9/15, T:327.28-39. 261

Michael Ravbar, 24/9/15, T:376.39-377.10. 262 CFMEU DD MFI-2, 21/9/15, p 3; David Hanna, 22/9/15, T:66.45-67.5, 75.40-46, 76.35-43. 263

Ben Flanagan, 23/9/15, T:285.17. See also CFMEU DD MFI-7, 22/9/15.

205

and Brian Humphrey were there. Along with the truck driver, Ben

Flanagan, they loaded onto the truck the boxes of documents which

had previously been transported from the CFMEU offices (apart from

the relatively few documents that had been successfully burnt).264 To

help keep the documents from blowing away, some dirt was placed on

the top of the documents and a tarpaulin.265 The truck driver estimated

that between 2–3 backhoe bucket loads of soil (each bucket being

around one-third of a cubic metre) were placed on top. Bob Williams

thought about 4–5 loads were placed, with each bucket being around

one-quarter of a cubic metre.266 Counsel assisting submitted that the

estimates given were consistent with approximately 1–1.7 m3 of soil

being loaded onto the truck. On the evidence, however, the range

would appear to be 0.67–1.25m3. This is an illustration of the extreme

conservatism of counsel assisting’s calculations.

The documents and soil were taken and dumped at the New Chum 87.

landfill.267 The delivery docket recorded the weight of the dumped

material at 10.36 am at 6.86 tonnes.268 Brian Humphrey rode in the

truck with the driver at David Hanna’s request.269 As recorded above,

264 David Hanna, 23/9/15, T:15.5-15, 80.1-46; Bob Williams, 23/9/15, T:249.37-44; Brian Humphrey, 23/09/15, T:265.35-266.37. See also CFMEU DD MFI-2, 21/9/15. 265

David Hanna, 21/9/15, T:14.26-29, 56.11-12, 80.44-46, Bob Williams, 23/9/15, T:249.42-44, 255.22-26; Brian Humphrey, T:265.41-46; Ben Flanagan, 23/9/15, T:279.16-25. 266

Ben Flanagan, 23/9/15, T:279.31-32; Bob Williams, 23/9/15, T:255.31-32. 267 Ben Flanagan, 23/9/15, T:275.15-23. See also CFMEU DD MFI-10, 23/9/15. 268

CFMEU DD MFI-10, 23/9/15. 269 Brian Humphrey, 23/9/15, T:267.8-17. See also Ben Flanagan, 23/9/15, T:280.39-42.

206

David Hanna’s evidence was that Michael Ravbar had asked for this to

occur. But Michael Ravbar denied this.270

How many documents were dumped? Various witnesses gave 88.

different estimates. Rob Cameron, who assisted Bob Williams in

loading the horse float trailer, guessed that there were between 60 to 80

boxes of documents loaded from No 14 into the horse float trailer.271

Michael Ravbar estimated that around 70 to 80 boxes were taken from

that area, plus some material from the garage which he did not know

about because he did not go downstairs.272 Bob Williams estimated

that the total number of boxes at Cornubia was originally 80 boxes, and

that an attempt was made to burn perhaps 10 the day after being

transported to David Hanna’s property.273

A fairly full box trailer of documents was taken from the garage at No 89.

16, in addition to the material from No 14. It is therefore likely that to

estimate the total amount of material dumped at the landfill as 80

boxes is fairly conservative. This is supported by a consideration of

the weight of the documents and soil dumped. The 6.86 tonnes

consisted of the weight of the documents plus the weight of the boxes

plus the weight of the soil. Depending on the type and moisture

content of soil added, the weight of 1 m3 of soil is likely to be between

1 to 2 tonnes.274 Based on the estimates of the volume of soil loaded,

270 Michael Ravbar, 24/9/15, T:421.37-41. 271 Rob Cameron, 23/9/15, T:341.18-24. 272

Michael Ravbar, 24/9/15, T:424.35-425.9. 273 Bob Williams, 23/9/15, T:249.3-7, 249.46-250.6. 274

Bulk (dry) density for soils range from 1.1-1.3 g/cm3 (1.1-1.3 t/m3) for silty or clay soils to 1.6-1.7 g/cm3 (1.6-1.7 t/m3) for sandy soils.

207

the weight of the soil could have been up to 3.4 tonnes, leaving over

3.3 tonnes of documents. By way of comparison:

(a) 1 sheet of standard A4 printer paper (80 gsm) weighs 5

grams;

(b) 1 ream (500 sheets) of standard A4 printer paper weighs 2.5

kilograms;

(c) 1 large box (10 reams) of standard A4 printer paper weighs

25 kilograms; and

(d) 132 large boxes (660,000 sheets) of standard A4 printer paper

weigh 3.3 tonnes.

The CFMEU complained about the lack of formal evidence in relation 90.

to the weight of the paper and the soil.275 In relation to the paper

analysis, counsel assisting submits that the complaints are unfounded.

The estimates given by the witnesses as to the exact number of a large

number of boxes are quite likely to be inaccurate. The exercise

undertaken by counsel assisting276 was an attempt to assess the

accuracy of the estimates. Contrary to the submissions of the CFMEU,

counsel assisting did not purport to state that there was a specific

number of boxes. Rather, they submitted that, based on a combination

of factors including the number of loads, it is probable that there were

at least 80 boxes. The submission of counsel assisting is accepted.

275 Submissions of the CFMEU, 29/10/15, paras 21-26. 276 Submissions of Counsel Assisting, 20/10/15, para 63.

208

As to the soil density figures, the CFMEU made the complaint that 91.

such matters were properly the province of expert evidence. If so,

what is to be made of the sentence following the CFMEU complaint, to

which counsel assisting drew attention? There it was asserted that Ben

Flanagan, the truck driver and back hoe operator, who had no

demonstrated expertise about soil density, could have given evidence

about it. Either the matter is one for expertise or it is not. If it is, Ben

Flanagan could not have given evidence. If it is not, counsel

assisting’s calculations were permissible and useful for the limited

purpose they were designed to serve. Counsel assisting further noted

that the figures provided are based on publicly available information,

the source of which is provided.277 Counsel assisting pointed out that

if the CFMEU wished to present evidence to suggest the figures were

incorrect they could have taken that course. Counsel assisting

submitted that the course was not taken because the estimate of 3.4

tonnes of soil is conservative. It was an estimate being based on the

maximum possible estimate of soil loaded, being just under half the

weight of the entire truck load. No suggestion was made by the

CFMEU that the weight of the soil would be more than half of the

weight of the total load. Further, the reference to A4 boxes was

explicitly made, according to the submissions of counsel assisting, by

way of comparison only. It is contended that an average weight of

25 kg per box is entirely reasonable.278

277 ‘Bulk Density - Measuring’ Fact Sheet, published by soilquality.org.au (an initiative of a range of government, industry and academic partners), https://s3.amazonaws.com/soilquality-production/fact_sheets/26/original/Phys_-_Bulk_Density_Measurement_web.pdf. 278

Submissions of Counsel Assisting, 30/11/15, paras 13-14.

209

The position adopted by counsel assisting is entirely reasonable. The 92.

calculations rest on extraordinarily generous concessions to the

CFMEU point of view. It is necessary, in fact, to record that the

submissions of the CFMEU on these aspects convey an impression of

desperation. They suggest a complete lack of confidence in the more

substantive elements of the case study. For in principle it does not

matter whether the paper weighed 6 tonnes or 3 tonnes or 1 tonne.

Whatever the precise weight, an extraordinarily large quantity of

material was destroyed. Some of it may have been potentially

valuable.

Later events: payment of truck fees

At some time after the documents were dumped at the landfill, David 93.

Hanna was posted an invoice for the cost of the truck and excavator

hire for $770.279 David Hanna went to Cherie Shaw and requested

petty cash to pay for the excavator.280 Cherie Shaw could not

remember how much cash was requested but she thought around $300–

$600.281 The CFMEU’s records show a petty cash payment to David

Hanna for $770 on 21 May 2014.282 David Hanna was paid the cash in

an envelope. It was in turn paid to the truck company.283

279 CFMEU DD MFI-7, 22/9/15; David Hanna, 22/9/15, T:67.4-5, 89.13-14. 280 David Hanna, 22/9/15, T:67.5-6, 77.5-8; Cherie Shaw, 22/9/15, T:178.36-179.18. 281

Cherie Shaw, 22/9/15, T:178.44-46. 282 CFMEU DD MFI-7, 22/9/15. 283

David Hanna, 22/9/15, T:67.8-9, 77.9-10.

210

Cherie Shaw said that she would not ordinarily have needed approval 94.

to make the payment. But on this occasion, because the transaction

was out of the ordinary, she requested and obtained Michael Ravbar’s

approval to make the payment.284 David Hanna gave her a handwritten

document – she could not recall whether it was a receipt or invoice –

and told her to get rid of it.285 Cherie Shaw could not recall whether

she told Michael Ravbar about David Hanna’s request to get rid of the

document or whether she showed the document to Michael Ravbar.286

However, she did say that David Hanna told her that he needed the

petty cash to ‘pay for an excavator, that old documents were being

disposed of and that he was organising for them to be buried’.287

David Hanna admitted that he told Cherie Shaw words to the effect of

‘You’re probably best not keeping that.’288 Michael Ravbar admitted

Cherie Shaw came to him to approve the payment, but he said he

thought it was for tip fees, not for a truck.289 His evidence was that

Cherie Shaw did not tell him the quantum of the payment.290

In the course of the CFMEU submissions about the receipt, it was 95.

contended that David Hanna’s evidence about paying in cash to

conceal what had occurred is ‘unbelievable’ and ‘spurious’. Counsel

assisting responded291 with two submissions. First, the suggestion by

284 Cherie Shaw, 22/9/15, T:179.13-43. 285 Cherie Shaw, 22/9/15, T:179.45-181.22. 286

Cherie Shaw, 22/9/15, T:180.24-25, 181.44-182.3. 287 Cherie Shaw, 22/9/15, T:179.15-18. 288

David Hanna, 24/9/15, T:448.43-44. 289 Michael Ravbar, 24/9/15, T:422.42-46, 437.44-439.25. 290

Michael Ravbar, 24/9/15, T:438.25-32, 439.14-18. 291 Submissions of Counsel Assisting, 30/11/15, para 25.

211

the CFMEU that a cash transaction is not easier to conceal than a

transaction involving a cheque or bank transfer is odd.292 They

contended that there is no document within the CFMEU Qld which

readily explains what the $770 cash was paid for or to whom it was

paid. Secondly, counsel assisting submitted that the submission that

David Hanna was concerned about the invoice because he was

defrauding the CFMEU QLD in having it pay for landscaping work

carried out by Ben Flanagan is baseless and should not have been made

for the reasons referred to elsewhere.293 These submissions are correct.

Later events: charges by Michael Ravbar against David Hanna

On 10 June 2015, Michael Ravbar laid charges against David Hanna in 96.

accordance with the CFMEU Construction and General Rules.294

In summary, Michael Ravbar alleged that David Hanna had in or about

April 2015 engaged in ‘gross misbehaviour’ and ‘gross neglect of

duty’ by:

(a) procuring $3000 from certain employers to the BLF Charity

Foundation Pty Ltd (BLF Charity) for the purpose of the

BLF Charity making payments to assist with IVF treatment

for the partner of a CFMEU organiser (the Organiser); and

292 Submissions of the CFMEU, 29/10/15, para 89. 293 Paragraph 119. 294

CFMEU DD MFI-26, 20/10/15, pp 3-6.

212

(b) directing or instructing officials of the CFMEU QLD to

procure funds from employers to assist with IVF treatment for

the Organiser’s partner.

Initially the charges were to be dealt with by the CFMEU Qld at a 97.

meeting on 17 June 2015.295 However, consideration of the charges

was adjourned to 20 July 2015.296

David Hanna said that, at around the time Michael Ravbar laid these 98.

charges, he formed the view that he should have something to protect

his position and give him leverage in negotiations. He therefore

obtained a copy of the invoice from Harrington Excavators.297 When

he obtained the invoice he said that the invoice should also say

‘CFMEU’. The woman at Harrington Excavators wrote that on the

invoice.298

On 19 June 2015, a motion was circulated among the members of the 99.

CFMEU National Executive Committee to appoint an independent

investigator to investigate the subject matter of the charges against

David Hanna with a view to the investigator preparing a report to the

National Executive Committee.299 That motion was agreed to. On

295 CFMEU DD MFI-26, 20/10/15, pp 7-10. 296 CFMEU DD MFI-26, 20/10/15, pp 12-15. 297

David Hanna, 22/9/15, T:67.11-18. 298 David Hanna, 22/9/15, T:67.18-20. 299

CFMEU DD MFI-26, 20/10/15, pp 16-18.

213

25 June 2015, Leo Skourdoumbis accepted appointment as the

investigator.300

David Hanna’s evidence was that at some time prior to the decision 100.

being made by the National Executive Committee, he attended a

National Executive meeting in Sydney to discuss a number of issues

including those surrounding Michael Ravbar’s charges.301 David

Hanna said that just prior to going to Sydney for this meeting, he

altered the invoice he had obtained by deleting his name and writing in

Michael Ravbar’s.302 David Hanna said that at the meeting in Sydney

he briefly showed Michael O’Connor the document, although

Michael O’Connor did not pay much attention to it.303 David Hanna

said that he told Michael O’Connor about the destruction of the

documents.304

The CFMEU drew attention to the fact that Michael O’Connor was not 101.

called by counsel assisting, and that this showed a failure to ensure

fairness to the CFMEU and Michael Ravbar.305 There was also an

intimation that counsel assisting had been unfair in not calling David

Noonan about whom David Hanna had a vague recollection that he

spoken to about the receipt but was not ‘100 per cent’.306 Whilst

counsel assisting did not specifically respond to these complaints, there

300 CFMEU DD MFI-26, 20/10/15, p 25. 301 David Hanna, 22/9/15, T:90.27-35, 94.42-95.39. 302

David Hanna, 22/9/15, T:67.22-25. 303 David Hanna, 22/9/15, T:67.27-70.12. 304

David Hanna, 22/9/15, T:68.42-45, 69.19-24, 69.37-70.1. 305 Submissions of the CFMEU, 29/10/15, para 36. 306

Submissions of the CFMEU, 29/10/15, para 38; see David Hanna, 22/9/15, T:67.28-29.

214

is nothing to suggest any request by the CFMEU to counsel assisting to

call either Michael O’Connor or David Noonan. Further, David Hanna

stated that Michael O’Connor had a ‘glance at it […] I think that’s

about it’.307 It is not possible to make a positive finding that in the

rushed circumstances in which David Hanna showed it to Michael

O’Connor it made any impact on him. Nor is it possible to make a

finding that David Hanna spoke to David Noonan in any way which

stimulated an understanding of David Hanna’s point. Counsel

assisting did not seek any finding adverse to Michael O’Connor or

David Noonan in this respect. It is not proposed to make any finding

adverse to either of them. The claim that counsel assisting has behaved

unfairly is utterly empty. Submissions of this kind by the CFMEU,

again, convey an impression of desperation.

Later events: investigation and report by Leo Skourdoumbis

As part of his investigation, Leo Skourdoumbis interviewed David 102.

Hanna on two occasions: first on 29 June 2015 and later on 16 July

2015. The second meeting was secretly recorded.

On 27 July 2015, Leo Skourdoumbis provided his report to the 103.

CFMEU National Executive.308 Leo Skourdoumbis concluded in his

report that he believed that David Hanna had acted in a seriously

inappropriate manner in procuring the funds as alleged by Michael

Ravbar. He stated that in his view it was appropriate, at the least, for

307 David Hanna, 22/9/15, T:67.30-31. 308 CFMEU DD MFI-26, 20/10/15, p 26.

215

David Hanna to be censured and reprimanded.309 On 30 July 2015,

David Hanna resigned as the President of the CFMEU QLD and as

National President of the CFMEU Construction and General

Division.310 David Hanna’s evidence was that his resignation was

voluntary, in the belief that it was in the best interests of the union,311

and on the understanding that no-one would stand in his way of getting

re-employment.312

D – IMPORTANT MATTERS FOR CONSIDERATION

To what extent did Michael Ravbar direct, or otherwise become 104.

involved in, David Hanna’s activities on the evening of 1 April 2014

and in the aftermath of the ‘clean up’ which occurred that day? That is

a key issue, about which there is considerable divergence between

David Hanna and Michael Ravbar. In particular, the following

questions are to be considered:

(a) Did Michael Ravbar tell David Hanna that he expected to

receive a notice to produce that day and that he had instructed

staff not to look at certain emails?

(b) Did Michael Ravbar direct David Hanna to cover up the

security cameras?

(c) Did Michael Ravbar tell David Hanna to burn the documents?

309 CFMEU DD MFI-25, 16/10/15, p 7. 310 CFMEU DD MFI-26, 20/10/15, pp 27-28. 311

David Hanna, 22/9/15, T:95.36-39. 312 David Hanna, 22/9/15, T:96.5-7.

216

(d) Did Michael Ravbar, after learning from David Hanna that

the burning operation had been unsuccessful, discuss

arranging a tip-truck to dump the documents?

Credibility of David Hanna

Counsel assisting submit that David Hanna’s evidence in chief can be 105.

divided into four parts.313 That is a convenient way to approach the

evidence. The first part consists of evidence given by him on 21

September 2015 from 2pm until approximately 2.44pm when David

Hanna was stood down and Leo Skourdoumbis gave evidence for the

first time. The second part consists of evidence given by David Hanna

on 21 September 2015 after hearing Leo Skourdoumbis’s evidence but

before hearing a secret recording of the 16 July 2015 conversation.

The third part consists of the evidence given on 21 September 2014

after the recording was played. The fourth part is David Hanna’s

evidence given on 22 September 2015.

There are inconsistencies between the four parts. In the first part of his 106.

evidence, David Hanna said that:

(a) he could not recall the name of the tip-truck company that had

dumped the documents;314

313 Submissions of Counsel Assisting, 20/10/15, para 74. 314 David Hanna, 21/9/15, T:6.34-45.

217

(b) he definitely could not recall getting a receipt in relation to

the tip-truck or taking the documents to the tip and he

definitely did not know whose name was on the receipt;315

(c) he was sure that he had never told anybody in the National

office of the CFMEU about the document destruction;316 and

(d) he had never told anybody that he knew the documents which

were destroyed were relevant to the notice to produce served

on the CFMEU on 1 April 2014.317

Leo Skourdoumbis gave evidence that David Hanna had discussed the 107.

document destruction with him, though he did not say that the

documents were relevant.318 After Leo Skourdoumbis gave that

evidence, David Hanna, in the second part of his evidence, recalled

speaking with Leo Skourdoumbis. However, consistently with Leo

Skourdoumbis’s evidence, he said he was certain that he had not

mentioned document destruction in relation to the notice to produce.319

Even after the secret recording of the 16 July 2015 conversation was

played, David Hanna said he definitely could not recall the name of, or

any details about, the tip-truck operator,320 could not recall the cost of

315 David Hanna, 21/9/15, T:6.47-7.16. 316 David Hanna, 21/9/15, T:15.40-16.8. 317

David Hanna, 21/9/15, T:17.46-18.1. 318 Leo Skourdoumbis, 21/9/15, T:26.24-27. 319

David Hanna, 21/9/15, T:31.26-31. 320 David Hanna, 21/9/15, T:49.26-38.

218

the tip-truck, or how it was paid,321 and denied ever showing Michael

O’Connor a docket or receipt for the tip-truck.322

It was not until David Hanna gave evidence on 22 September 2015 that 108.

he could recall:

(a) the name of the tip-truck company;

(b) the fact that the company had been paid in cash; and

(c) the fact that he had shown Michael O’Connor an altered

invoice which showed Michael Ravbar as the person who had

organised the tip-truck.323

Counsel assisting correctly submitted that on the second day David

Hanna was considerably more forthcoming in his evidence to the

Commission.

David Hanna explained the substantial change in his evidence as 109.

follows:324

… Ah, I had an opportunity to get my thoughts together overnight. It was quite a big week last week and yesterday and so my mind wasn’t set on that matter, it was set on others, other matters, the previous matter, so I’ve had an opportunity to go through that.

…

321 David Hanna, 21/9/15, T:50.4-51.1. 322 David Hanna, 21/9/15, T:32.26-29, 56.41-43. 323

David Hanna, 22/9/15, T:67.3-31. 324 David Hanna, 22/9/15, T:67.37-41, 70.18-25.

219

Q. Why should we accept what you are saying now as opposed to what you said yesterday about the receipt?

A. I guess that’s a view for you. You know, I’ve had an opportunity overnight – as I said earlier, my head was in a different space yesterday. I still had concerns with my wife taking the chair, so it was – you know, I felt a bit ambushed in the afternoon and overnight I’ve had an opportunity to get my thoughts together.

His references to ‘last week and yesterday’ are references to the oral

hearings in the Cornubia case study – for him a serious and much

publicised matter in which many witnesses gave evidence, including

his wife and himself.

The course of the evidence points to a conclusion that parts of David 110.

Hanna’s evidence on 21 September 2015 were deliberately misleading.

Counsel assisting submitted that that is a significant matter which

weighs against accepting David Hanna’s evidence in respect of

Michael Ravbar’s involvement. That submission is accepted. It is

certainly an important factor in deciding which of the two officials

should be believed.

Another matter which is relevant in assessing David Hanna’s evidence 111.

in relation to this issue is David Hanna’s animosity towards Michael

Ravbar. David Hanna described their relationship at the time Michael

Ravbar brought charges against David Hanna, in June 2015, as ‘past

the word of toxic’325 and said there was a ‘hatred … I underline

“hatred”’326 between the two men.

325 David Hanna, 22/9/15, T:95.27-33. 326 David Hanna, 22/9/15, T:96.12-13.

220

David Hanna freely admitted that he had altered a copy of the 112.

Harrington invoice to create a deliberately false document to implicate

Michael Ravbar in the organisation of the tip-truck.327 He freely

admitted, both in the third and fourth parts of his evidence, that he

embellished his account to Leo Skourdoumbis about the documents

being relevant to the notice to produce.328 In cross-examination by

senior counsel for the CFMEU he gave evidence about his motives

when speaking with Leo Skourdoumbis. This evidence was described

by senior counsel for the CFMEU as ‘frank’:329

Q. I’m not challenging you about this, but you freely admit that you were wanting at that time to damage Michael Ravbar and at least for the word to go out through Leo [Skourdoumbis] that you had the goods on him?

A. Yes.

Q. And you hoped that in some way that might influence the

National Executive in relation to your future?

A. Yes.

Q. And I won’t use the word ‘blackmail’, but what you were doing was building the strongest case you could to try to impress upon people that if you went down, you were going to take Michael Ravbar with you?

A. Yes.

Counsel assisting submitted330 that the fact that David Hanna was 113.

willing to go so far as to create a false document to implicate Michael

Ravbar – an inherently dishonest act – also weighs against accepting

David Hanna’s account. This submission is accepted.

327 David Hanna, 24/9/15, T:67.22-25; 460.15-17. 328 David Hanna, 15/10/15, T:34.28-44, 52.34-53.11. 329

David Hanna, 24/9/15, T:458.3-17; Submissions of Counsel Assisting, 20/10/15, para 81. 330 Submissions of Counsel Assisting, 20/10/15, para 82.

221

However, counsel assisting further submitted that contrary to the line 114.

of questioning put to David Hanna in cross-examination by senior

counsel representing Michael Ravbar, the circumstances do not support

a conclusion that on 22 September 2015 David Hanna, after realising

his ‘future was looking pretty black’, made up evidence in relation to

Michael Ravbar directing the covering up of the cameras as part of a

‘last-ditch attempt to take’ Michael Ravbar with him.331 Neither do the

circumstances support a conclusion, also suggested by Michael

Ravbar’s counsel, that David Hanna would go a long way to see

Michael Ravbar come down with him, and would go so far as to forge

an invoice falsely implicating Michael Ravbar.332

First, the evidence shows that David Hanna, in falsifying the invoice 115.

whilst he was still President of the CFMEU, was not motivated by pure

malice against Michael Ravbar. Rather, he was using, or intending to

use, the falsified invoice as a bargaining chip to improve his

negotiating position at the National Executive of the CFMEU with a

view to being allowed to maintain his position and power at the union,

along with Michael Ravbar. That is, David Hanna was motivated by

self-interest, not malice. By the time David Hanna gave evidence in

September 2015, his position had changed in that he had left the union,

but on reasonable terms, at least so far as the public could see.333

In this regard, counsel assisting drew attention to David Hanna’s

331 David Hanna, 24/9/15, T:459.43-460.17; Submissions of Counsel Assisting, 20/10/15, para 83. 332

David Hanna, 24/9/15, T:459.42-460.16 333 CFMEU DD MFI-26, 20/10/15, p 29.

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unchallenged evidence about what happens to those who leave the

CFMEU QLD on bad terms:334

Q. What happens - just to be clear about it - to your understanding, if you are placed on some sort of black-ban list? …

A. Well, I go bankrupt, I lose everything.

Q. You say you can't get a job –

A. Correct.

Q. – what, in any related form of employment?

A. Within the construction industry.

If David Hanna did in fact have such a deep and lasting hatred of 116.

Michael Ravbar that he would have acted in a way which was contrary

to his interest, he would have implicated Michael Ravbar in the first

and second parts of his evidence. But he did not.

Secondly, at no point in David Hanna’s evidence did he suggest that 117.

the documents destroyed were relevant to the notice to produce. On 21

September 2015, he said that that thought had not even crossed his

mind.335 He said that in telling Leo Skourdoumbis otherwise he was

embellishing.336 His evidence on 22 September 2015 was to the same

effect.337 So was his evidence in cross-examination on 24 September

2015.338 In cross-examination, he said he was not surprised by

Michael Ravbar’s evidence that many of the documents in the BLF

334 David Hanna, 22/9/15, T:96.7-97.11. See also CFMEU DD MFI-5, 22/9/15, p 78. Submissions of Counsel Assisting, 20/10/15, para 84. 335

David Hanna, 21/9/15, T:54.30-35. 336 David Hanna, 21/9/15, T:34.41-44, 52.34-53.11. 337

David Hanna, 22/9/15, T:84.10-29. 338 David Hanna, 21/9/15, T:457.10-38..

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boxes were old. He said that it was not unreasonable for Michael

Ravbar to have set a deadline to have all of the materials, which he

accepted were taking up space, cleared away and organised.339 If

David Hanna was motivated to implicate Michael Ravbar falsely,

counsel assisting submitted, he was very half-hearted about it.340

Thirdly, apart from a small number of matters which remain in contest 118.

between David Hanna and Michael Ravbar, David Hanna’s account

given in the fourth part of his evidence is substantially supported by

documents and other witnesses. His evidence that documents were

burnt was supported by other witnesses. His evidence that the security

cameras were covered was supported by other witnesses. His evidence

about the tip-truck was supported by documents and other witnesses.

Despite suggestions in cross-examination, David Hanna’s evidence

about the covering up of cameras and the calling in of training co-ordinators was not contradicted by any witness other than Michael

Ravbar. David Hanna’s evidence on the latter topic was that Michael

Ravbar ‘gave the direction for them to come in’ but he was not sure on

how they were notified to come in.341

The CFMEU raised an additional matter relating to David Hanna’s 119.

credibility.342 It was suggested that David Hanna, by dishonest means,

had the CFMEU pay for earthworks at his Cornubia property, with Ben

Flanagan spending half his time performing landscaping work on

339 David Hanna, 24/9/15, T:453.3-34. 340 Submissions of Counsel Assisting, 20/10/15, para 86. 341

David Hanna, 24/9/15, T:82.29-83.3. This was consistent with the recording of the 16 July 2015 conversation where David Hanna said ‘On that day Ravbar had all the training coordinators come in…’ (see CFMEU DD MFI-2, 21/9/15, p 2). 342

Submissions of the CFMEU, 29/10/15, para 40.

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David Hanna’s property.343 The CFMEU seek to make much of this

submission.344 Counsel assisting submitted345 that this submission

should not have been made. It was also noted by counsel assisting that

David Hanna’s submissions in response346 pointed to evidence which

in fact showed that Ben Flanagan spent less than 10 minutes, out of 5.5

hours charged, in levelling off soil.347 The submissions of counsel

assisting and of David Hanna should be accepted on this issue. This

was another submission by the CFMEU indicating desperation.

A further matter in relation to David Hanna’s credibility was the 120.

subject of additional comment by counsel assisting in reply to the

CFMEU’s submissions. The CFMEU submitted that David Hanna was

motivated by personal gain.348 But, according to counsel assisting, this

submission was not congruent with the lack of any explanation by the

CFMEU why it was in David Hanna’s interests to damage Michael

Ravbar during the Commission. This submission is accepted.

Finally on this point, counsel assisting submitted that having regard to 121.

all matters, the Commission should be cautious in accepting that part

of David Hanna’s evidence which is not supported by other evidence,

whether direct or circumstantial.349 This submission is accepted.

343 Submissions of the CFMEU, 29/10/15, para 40. 344 Submissions of the CFMEU, 29/10/15, paras 41, 90. 345

Submissions of Counsel Assisting, 30/11/15, para 16. 346 Submissions of David Hanna, 5/11/15, paras 5-9. 347

Ben Flanagan, 23/9/15, T:283.32-284.39. 348 Submissions of the CFMEU, 29/10/15, para 41. 349

Submissions of Counsel Assisting, 20/10/15, para 88.

225

Credibility of Michael Ravbar

The CFMEU contended that Michael Ravbar was denied procedural 122.

fairness in that certain matters were not put to him during the course of

the public hearing.350 Counsel assisting rejected that complaint. They

contended that Michael Ravbar, in answer to questions, gave evidence

that he was not concerned that the documents he saw were ones that

the Royal Commission may require during the course of its inquiry.351

Michael Ravbar was also asked whether he was at all concerned that

the material he had sent for destruction might be the subject of a notice

to produce. He gave evidence to the effect that he was ‘very

comfortable’ that it was not.352 When asked whether he was concerned

after learning of the notice to halt the destruction process, he gave

evidence that he was ‘quite comfortable, very comfortable’ that the

material that left the union was ‘basically of no use’.353 Counsel

assisting submitted that in those circumstances, where Michael Ravbar

was asked and gave evidence about the critical factual matters for

consideration, procedural fairness did not require any more detailed

examination of Michael Ravbar. Counsel assisting’s submission is

accepted. Nevertheless, counsel assisting also submit that the

Commission should also be cautious in accepting Michael Ravbar’s

uncorroborated evidence. As with the equivalent submission for David

Hanna, that is accepted.

350 See Submissions of the CFMEU, 29/10/15, p 4, paras 14-15, pp 52-55, 76, paras 6, 11, 15, 17-18, 102. 351

Michael Ravbar, 24/9/15, T:389.33-42. 352 Michael Ravbar, 24/9/15, T:421.4-18. 353

Michael Ravbar, 24/9/15, T:423.16-33.

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It is accepted, as counsel assisting argued,354 that Michael Ravbar was 123.

not frank about the nature of his relationship with David Hanna. He

gave the following evidence:355

Q. You would have also heard, especially from David Hanna, that there was some real hostility between you and him, at least following the merger between the BLF and the CFMEU?

A. You mean David Hanna’s evidence.

Q. Yes.

A. Which version?

Q. Well, do you say there is no hostility between you and David Hanna?

A. I wouldn’t call it hostility. It is that – at the end of the day we had a good, a reasonable working relationship. I wouldn’t call it a hostile working relationship. Sometimes we didn’t agree on the strategy of the Union, some of the decisions of the Union, but at the end of the day we worked together and we did the best that we could for the interests of the members.

Yet, later he gave evidence that as at late-March to early-April 2014, 124.

he ‘didn’t trust David Hanna’.356 He also said David Hanna had a style

of ‘secrecy’, of which he did not approve.357 It is fair to say that these

are not the statements of a person who had a ‘good, a reasonable

working relationship’ with David Hanna.

354 Submissions of Counsel Assisting, 20/10/15, para 90. 355 Michael Ravbar, 24/9/15, T:377.12-28. 356

Michael Ravbar, 24/9/15, T:421.25, 428.32. 357 Michael Ravbar, 24/9/15, T:427.35-40, 429.1-6.

227

In addition, Michael Ravbar characterised David Hanna as the 125.

Commission’s ‘star witness’358 and that there was ‘only one witness,

David Hanna’ in relation to matters concerning document

destruction.359 Yet Michael Ravbar must have known that in fact much

of what David Hanna had said was supported by other witnesses.

When asked a simple question about whether he was the head of the

office, Michael Ravbar gave a lengthy non-responsive answer blaming

David Hanna.360 Michael Ravbar’s attempt to downplay David

Hanna’s evidence by portraying falsely the extent to which David

Hanna’s account was contradicted by the accounts of many other

witnesses. These attempts are suggestive of the deep hostility which

David Hanna referred to and undermine Michael Ravbar’s credit more

generally.

Further, counsel assisting’s submission is accepted that considerable 126.

parts of Michael Ravbar’s evidence were inherently incredible. His

evidence concerning his conversation with David Hanna about the

destruction of the documents has already been considered.361 He gave

implausible evidence about approving the payment for the ‘tip-truck

fees’ but not discussing the amount of the payment or its purpose with

Cherie Shaw, in circumstances where, because of the unusual nature of

the transaction, she had required his approval.

358 Michael Ravbar, 24/9/15, T:427.34. That is an illustration of Michael Ravbar’s occasional use of insults or discourtesies towards counsel assisting. Counsel assisting chose to ignore them. But they do not reflect well on him or his credibility. 359

Michael Ravbar, 24/9/15, T:409.20-22. 360 Michael Ravbar, 24/9/15, T:427.33-428.5. 361

Paragraphs 83-84.

228

Another implausible part of his testimony, according to counsel 127.

assisting’s submissions,362 concerned his assertion that he had gone

through the BLF boxes in No 14 on Friday 28 March 2015 from 11am

to 7pm. Initially Michael Ravbar gave a detailed and lengthy account

along the following lines.363 He had a mid-morning meeting at

Westfield at Garden City and after that he was clear for the day to

review material.364 He said he reviewed 8-10 boxes of BLF wage

claims files. Then he reviewed the BLF EBA files.365 He explained in

some detail that there was a lot of project agreements from the late

1970s to the early 1990s and more recently but there was a big gap

in between.366 He recounted, again in detail, how he went through

boxes concerning superannuation, industry funds, the BERT fund

including manuals, trust deeds and for some reason, a lot of ‘stuff’

from 2003 and 2004.367

Counsel assisting’s submission that that evidence was unbelievable368 128.

is accepted. Michael Ravbar could apparently recall significant detail

about the number of boxes he had reviewed and what was in them. But

he had made no note of what he had reviewed.369 Instead he claimed to

have a reasonable memory.370

362 Submissions of Counsel Assisting, 20/10/15, para 94. 363 Michael Ravbar, 24/9/15, T:385.36-393.35. 364

Michael Ravbar, 24/9/15, T:387.11-27. 365 Michael Ravbar, 24/9/15, T:387.29-44. 366

Michael Ravbar, 24/9/15, T:387.43-388.7. 367 Michael Ravbar, 24/9/15, T:390.3-11. 368

Submissions of Counsel Assisting, 20/10/15, para 95. 369 Michael Ravbar, 24/9/15, T:394.2. 370

Michael Ravbar, 24/9/15, T:394.26.

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However, his memory was shown to be less than reliable. On at least 129.

five occasions371 Michael Ravbar identified Friday 28 March 2014 as

the day he examined (by himself) the BLF materials. He was certain

that that was the day. He said he had no doubt about it. He gave

himself no room for manoeuvre. But call charge records for his mobile

phone for that day in fact showed he was only in the office for a

relatively short period until he left some time prior to 10.49am, went to

Garden City and then went home.372 That is, Michael Ravbar was

nowhere near the CFMEU offices from 11am to 7pm. As observed by

counsel assisting,373 the truth about his day was almost the reverse of

what he had originally claimed – in that he was in the office prior to

11am before being out the office for the balance of the day.

In re-examination, counsel for Michael Ravbar sought to support 130.

Michael Ravbar’s version of events in this way. He pointed to his

electronic diary374 for Thursday 27 March 2014. He elicited evidence

that Michael Ravbar could not recall participating in certain events

recorded in it. Michael Ravbar ultimately said that he was ‘pretty

confident, if not 100 per cent confident, that I did [the review] on

Thursday, 27 March’.375 Michael Ravbar did not recall participating in

a 1–2pm teleconference recorded in his diary.376 This was supported

by contemporaneous documents.377 So was his denial that he attended

371 Michael Ravbar, 24/9/15, T:381.21-24, 387.3-5, 400.30-39. 372 CFMEU DD MFI-14, 24/9/15. 373

Submissions of Counsel Assisting, 20/10/15, para 96. 374 See CFMEU DD MFI-16, 24/9/15. 375

Michael Ravbar, 24/9/15, T:447.8-9. 376 Michael Ravbar, 24/9/15, T:445.47-446.8. 377

CFMEU DD MFI-23, 16/10/15.

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a Gold Coast Sub-branch meeting.378 Counsel assisting submitted that

apart from Michael Ravbar’s own evidence, there is no documentary

material available to the Commission to establish whether Michael

Ravbar did or did not attend the other events recorded in his diary for

27 March 2014.379

It was submitted by counsel assisting that on one view, Michael 131.

Ravbar deliberately concocted an elaborate story to try to establish

that, days before the notice to produce was served, he had adopted

some sort of proper process in reviewing the documents that were

ultimately disposed of. On another view, Michael Ravbar was

completely wrong in his supposedly very clear recollection, albeit

innocently.380 On either view, it is fair to conclude that his evidence on

this matter should be examined very carefully before accepting any

account by Michael Ravbar which is not directly or indirectly

supported by other evidence.

Significance of police investigation

The CFMEU filed submissions responding to the supplementary 132.

submissions of counsel assisting concerning the evidence of Bradley

O’Carroll. In them the CFMEU submitted that given the execution of

a warrant on 18 November 2015, it has become apparent that the ‘Joint

Police Taskforce assisting the Commission’ had commenced a criminal

378 Michael Ravbar, 24/9/15, T:446.41-46; CFMEU DD MFI-24, 16/10/15. 379 Submissions of Counsel Assisting, 20/10/15, para 97. 380

Submissions of Counsel Assisting, 20/10/15, para 98.

231

investigation into the matters dealt with in this case study.381 That

submission is correct. The CFMEU then submitted that in those

circumstances, it was inappropriate that any further submission be

made in this case study. It also submitted that having regard to the

criminal investigation, no finding should be made in relation to the

case study.382

In response counsel assisting submitted that there is no impediment to 133.

the Commission making factual findings in relation to the case study,

and that it was in the public interest that the Commission express a

view on the considerable body of material that has been assembled.383

As to findings in relation to whether criminal conduct may have

occurred, if a police investigation is actively under way with respect to

an issue arising in a case study, then, depending on all the

circumstances arising in the particular case, it may not be desirable for

a Royal Commission to make findings as to whether criminal conduct

may have occurred with respect to that issue. However much will

depend on what findings of fact are made by the Commission in the

particular case study and the precise issues of fact and law arising.

Assessment of the competing accounts

The CFMEU submission was partly right and partly wrong. It was 134.

wrong to contend that this case study should come to an immediate

halt. It was also wrong to contend that no factual findings should be

381 Submissions of the CFMEU, 27/11/15, para 5. 382 Submissions of the CFMEU, 27/11/15, paras 6-7. 383

Submissions of Counsel Assisting, 30/11/15, para 6.

232

made. However, it was right to contend that no expression of opinion

about whether any criminal offence may have been committed should

be stated. To do so in the circumstances arising in this case study

might have undesirable consequences for the ongoing police

investigation.

It was submitted by counsel assisting384 that for the following reasons, 135.

the Commission should accept David Hanna’s evidence that Michael

Ravbar:

(a) told David Hanna that he had told staff not to look at certain

emails;

(b) directed David Hanna to cover the security cameras;

(c) told David Hanna to burn the documents; and

(d) was involved in discussion with David Hanna about tipping

the documents at a landfill after the burning was unsuccessful.

There was evidence of a number of witnesses to the effect that Michael 136.

Ravbar was in charge of the CFMEU QLD, was a tough boss with

exacting standards and was an official who did not permit anything to

occur in the CFMEU QLD’s office without his oversight. That

evidence is clearly significant.385 Another matter of significance is

384 Submissions of Counsel Assisting, 20/10/15, para 99. 385 David Hanna, 21/9/15, T:53.43-45; David Hanna, 22/9/15, T:71.15-23, 89.34-35, 463.27-31; Jessica Kanofski, 22/9/15, T:142.8-21; Cherie Shaw, 22/9/15, T:178.6-14; Bob Williams, 23/9/15, T:250.22-25; Brian Humphrey, 23/9/15, 271.3-4; Stacey Davidson, 23/9/15, T:303.26-32; Michelle Clare, 23/9/15, T:327.28-39.

233

that, on all accounts, Michael Ravbar gave the instructions for the

‘clean up’ to occur.

In relation to David Hanna’s evidence about what Michael Ravbar told 137.

him about staff being instructed not to look at certain emails, it is

extraordinary that none of the four recipients saw Michael O’Connor’s

‘URGENT’ 4.16pm email on 1 April 2014. The ‘clean up’ operation

does not appear to have been in full operation until closer to 5pm.

Granted that the various participants would have been occupied in

various tasks, Jacqueline Collie at least was throughout the evening in

her office doing other work. As personal assistant to Michael Ravbar

and David Hanna, she would be expected to have reviewed their emails

and brought those marked ‘URGENT’ to their attention. It is of some

importance that Jacqueline Collie, who was visibly nervous whilst

giving her evidence, did not deny seeing the email on 1 April 2014 nor

did she deny receiving an instruction not to look at her emails on 1

April 2014. Paula Masters, who otherwise had a fairly good

recollection of the events, did not deny receiving such a direction

either. The circumstantial probabilities support David Hanna’s

account. The evidence of Bradley O’Carroll is also clearly highly

significant.

In relation to the covering of the security cameras, it is not credible that 138.

Paula Masters, who saw or knew the cameras were being covered, but

did not see any reason for this, and who had been involved in

numerous previous CFMEU ‘clean ups’, would not have raised the

matter with Michael Ravbar if she was of the opinion that he did not

otherwise know. It is also difficult to accept that Michael Ravbar,

whose intention was to clean up the offices, would not have noticed a

234

large rolled out banner in the corner of the No 16 office which had

suddenly appeared. Counsel assisting submitted that Michael Ravbar’s

denial that he did not know the cameras were covered should be

rejected. That submission is correct. Given David Hanna’s relative

unfamiliarity with the office – he had only moved into the new office

from January or February 2014 – and his relatively junior status it is

also not credible that David Hanna would have sought, on his own

initiative, to cover the cameras.

It is inherently unlikely that Michael Ravbar would not have given 139.

David Hanna a specific direction on what was to happen to the

documents which were being selected for destruction. Even if this was

a standard ‘clean up’, as Michael Ravbar said, it was David Hanna’s

first ‘clean up’ at the CFMEU. It would be expected that Michael

Ravbar would tell David Hanna what the usual practice was. That is,

Michael Ravbar would direct David Hanna what to do. For the same

reasons, once the burning was unsuccessful, it would be expected that

David Hanna would speak to Michael Ravbar about what to do next.

Those submissions are correct.

E – OVERALL FINDINGS

Counsel assisting submitted that if the events of 1 April 2014 and the 140.

following days were a part of an ordinary ‘clean up’ there would have

been:

(a) no reason for Michael Ravbar to tell staff not to look at

certain emails on 1 April 2014;

235

(b) no reason for David Hanna, at Michael Ravbar’s direction, to

be involved in covering the security cameras at the Bowen

Hills office;

(c) no reason for David Hanna, at Michael Ravbar’s direction, to

arrange for the documents to be taken to his property to be

burned and when that burning was unsuccessful for the

document to be loaded in a tip-truck and dumped at a landfill;

and

(d) no reason for David Hanna to tell Cherie Shaw to destroy the

invoice for payment from Harrington Excavators.

Furthermore, apart from the fact that the Commission had served a 141.

notice to produce documents on the CFMEU on 1 April 2014, it was

probably one of the worst times for the union to have a ‘clean up’. The

new union term ordinarily begins on 1 April. For that reason no staff

are permitted to take leave one week either side of 1 April.386 In

addition, 15 new staff from the BLF were being transferred to the

CFMEU payroll at around the same time.387

The CFMEU contended that there were, in reality, more pedestrian 142.

reasons for 1 April to be chosen for the clean-up.388 Due to the delayed

amalgamation of the CFMEU and BLF offices, no clean-up had

occurred at the end of 2013 or start of 2014. Further, the end of March

and start of April marked the actual physical transportation of much

386 CFMEU DD MFI-21, 14/10/15. 387 Submissions of Counsel Assisting, 20/10/15, paras 104-105. 388

Submissions of the CFMEU, 29/10/15, paras 42-51.

236

material from the BLF offices to the CFMEU offices and that space

was needed. Finally, the CFMEU contended that the official

commencement of the amalgamated union was 1 April and that

Michael Ravbar wanted a clean and orderly office to mark the

beginning of the new union. The CFMEU contended that it was

‘plainly’ an ordinary, run of the mill clean-up. ‘Mr Ravbar chose

1 April 2014 for the mundane reasons set out above.’

Counsel assisting submitted that if Michael Ravbar is to be believed, 143.

he saw the notice to produce on the morning of 2 April 2014.389 In

such circumstances, a person in Michael Ravbar’s position who was

honest and not reckless would have made immediate inquiries of David

Hanna as to where the documents were and would have immediately

halted the process of destruction. That is so even if the person knew

exactly what documents were removed for destruction. That is because

in circumstances where documents were destroyed so closely in time to

the notice to produce, there would be natural suspicion that the

documents had been destroyed inappropriately. That is even more the

case in the present circumstances, where the amount of material

removed from destruction was so large and where Michael Ravbar

apparently had no specific knowledge of the documents removed from

the archive room in the No 16 garage. Counsel assisting contended

that the fact that Michael Ravbar took no such steps suggests that

either he was highly reckless as to the identity of the documents

destroyed or he wanted to destroy documents that could have been

relevant to the Commission’s inquiries.

389 Submissions of Counsel Assisting, 20/10/15, para 106.

237

Counsel assisting further noted in reply390 that the CFMEU had no 144.

adequate answer to the contention that an honest and not reckless

person in Michael Ravbar’s position would have immediately taken

steps to arrest the destruction on 2 April 2014. The best that is asserted

is that Michael Ravbar knew that the documents were all available to

be produced electronically.391 Counsel assisting further emphasised

the importance of the evidence of Michael Ravbar himself that he did

not know what was destroyed from the archive room. They stressed

that there was no evidence that the finance and membership records

that were removed from there and destroyed were available

electronically. He had no list of the documents that had been

destroyed. He did not care what was destroyed. He did not care

because he wanted the documents to be destroyed so they could not be

put before the Commission. These observations are cogent.

David Hanna submitted that s 6DD of the Royal Commissions Act 1902 145.

‘forecloses the use of evidence given by Mr Hanna in relation to two of

the three findings against him’ ultimately recommended by counsel

assisting.392 Counsel assisting contended in response that that section

has no application to the Commission itself nor any charge under that

Act, and further submitted that in any event the evidence of David

Hanna is not, by any measure, the only evidence supporting the

suggested finding that he may have breached s 129 of the Criminal

Code (Qld) or s 39 of the Crimes Act 1914 (Cth). The other evidence

includes, amongst other things, the admissions made by David Hanna

390 Submissions of Counsel Assisting, 30/11/15, para 28. 391 Submissions of the CFMEU, 29/10/15, para 102. 392

Submissions of David Hanna, 28/10/15, paras 13-16.

238

in the course of the Skourdoumbis interview.393 That submission is

accepted.

David Hanna invited the Commission, in considering what findings 146.

should be made, to consider the consequences for David Hanna if those

findings are not open to be resolved by a fair trial in due course. An

example is that the possibility of a fair trial may have been rendered

impossible or futile for a number of stated reasons, including the extent

of publicity and the possibility of obtaining evidence from David

Hanna in examination might fall foul of the principles considered in

Lee v The Queen.394 Counsel assisting submitted in response that

neither Lee v The Queen nor any other case supported the proposition

that a person who has not been charged with an offence and who is

required to give evidence before a Royal Commission cannot be later

afforded a fair trial in relation to an offence about which the person

was asked questions. Counsel assisting further points to section 6A of

the Royal Commissions Act 1902 (Cth) which preserves the privilege

of self-incrimination in respect of natural persons who have been

charged with an offence, but abolishes it in respect of those who have

not been charged.395 The submissions of counsel assisting are

accepted.

Having regard to all of the circumstances, the conclusion is that the 147.

conduct of Michael Ravbar and David Hanna may have been done with

an intention to conceal the removal and destruction of documents

393 Submissions of Counsel Assisting, 30/11/15, para 3. 394 (2014) 253 CLR 455, Submissions of David Hanna, 28/10/15, para 33. 395

Submissions of Counsel Assisting, 20/10/15, para 4.

239

which they believed were or could be relevant to the conduct of the

Commission’s future proceedings.

The above findings place the primary responsibility for the destruction 148.

of documents on Michael Ravbar. It was he who gave the operative

orders. But David Hanna must share the responsibility. The short term

consequences of disobeying Michael Ravbar’s orders might have been

inconvenient or even painful, but he was not subjected to any duress.

He went along with Michael Ravbar’s desires when he should not have

done.

The conduct of Michael Ravbar and David Hanna would have been 149.

open to serious criticism even if no notice to produce had been served

on 1 April 2014 and even if the motive was spring cleaning. It was at

best foolish and at worst sinister to destroy documents shortly after a

Royal Commission had been announced and set up. It was for the staff

of the Royal Commission to decide which documents in the possession

of the union should be examined. It was no excuse to say that some of

the documents were fairly old. In many of the case studies conducted

by the Commission quite old documents have proved crucial. One

example concerns the business records analysed in the CFMEU NSW

Drug and Alcohol Foundation case study. This is not surprising,

because with the best will in the world witnesses cannot be expected to

give accurate accounts of conversations and other events which may

have taken place years earlier. Contemporary documents are an

essential aid to factual investigation.

The conduct discussed in this Chapter is important for many reasons. 150.

But the fundamental reason is that the law depends on institutions with

240

the power to find facts. Depending on what facts are found and by

which institutions, rights under the law can be enforced, or legislatures

can create or amend laws in their future application to the conduct of

those within the Queen’s peace. These processes are obstructed and

thwarted from the outset if the core material for fact-finding – evidence

– is destroyed or kept secret. The mass destruction of documents by

the CFMEU QLD was as great a danger to the rule of law as any threat

of violence on a building site, any illegal strike, any corrupt payment,

any blatant non-compliance with legal governance standards.

Finally, the CFMEU submitted that police interrogation of four of the 151.

CFMEU office staff was open to criticism in various ways.396 The

submission abstained from any contention that the interrogation was

unlawful. The submission requested an apology from the Commission.

No apology is called for. The evidence about the police interrogation 152.

was elicited through questions by senior counsel for the CFMEU. The

subject was outside the Terms of Reference. Had there been an

objection, the questions would have been rejected. The evidence even

on its face appears to be exaggerated. The evidence does not justify

the criticisms which are purportedly based on it. Finally, the

Commission is not responsible for the conduct of Police Taskforces

which are autonomous and operate independently of it.

396 Submissions of the CFMEU, 29/10/15, pp 5-7, paras 20-29.

241

242

CHAPTER 8.3

HINDMARSH

Subject Paragraph

A – PRELIMINARY 1

The case study in outline 1

The first CFMEU position: should any findings be made? 5

The second CFMEU position: should any findings departing

from the Statement of Agreed Facts be made?

12

The third CFMEU position: criticisms 15

B – RELEVANT FACTS 16

The findings requested by counsel assisting: an outline 16

The project 18

Two union delegates 20

Agreement to remove one delegate 34

243

Subject Paragraph

Water in the lunch room – 28 March 2014 39

Hindmarsh correspondence 53

Change in labour levels 61

Industrial action on 3 April 2014 73

Fair Work Commission orders 78

Breach of the Fair Work Commission orders on 5 and 7

April

86

Court orders 111

Breach of court orders 115

Settlement proposal 122

Disposing of CFMEU’s factual contentions about Ian Busch

and Northbuild

128

C – CONCLUSIONS 157

Breach of s 417 of the Fair Work Act 2009 (Cth) 158

Breach of s 421 of the Fair Work Act 2009 (Cth) 165

Breaches of Fair Work (Registered Organisations) Act 2009

(Cth) – breach of Fair Work Commission order of 4 April

2014

171

244

Subj

Cont

Brea

Appe

A – P

The

1.

2.

3.

ect

tempt of the F

ch of s 359 o

endix A – Sta

PRELIMIN

case study in

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the CFM

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ase study c

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time when co

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arsh matter

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chael Ravbar

dent), Jade

rganiser).

ting served s

ctober 2015,

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Fair Work

Forestry, M

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of officers

General Div

on Australia

on the Brook

e.

r (Branch Sec

Ingham (A

submissions

there were

rt to do w

k Buildin g I

Mining and

ragraph

179

182

of the

vision of

Pty Ltd

klyn on

cretary),

Assistant

in chief

on foot

with the

Industry

Energy

245

4.

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5.

1 Roy (2014

Union,

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decided

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case stu

primary

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first CFME

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Act 200

supporte

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Chad Bragd

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position is

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be made whi

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a repetition

the case stu

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f Agreed Fact

document is

the tertiary p

CFMEU

ctober 2014.

should any

CFMEU pa

s true, but on

of Agreed F

relating to c

hich they we

Statement of

Union Govern

ngham and J

he CFMEU

October 20

ile the Proce

ated with tha

dmarsh case s

they wished

rties take thr

of last year’

dy. If that

findings mad

ts arrived at

Annexure A

position is th

parties of

findings be

arties is that

nly in a limite

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contravention

ere willing t

f Agreed Fa

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John Cumm

and certain

14 submissio

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study in 2014

d to proceed w

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by the partie

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hat various cr

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es to the

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air Work

de, were

principal

m Report

246

6.

7.

8.

2

Vict Feder

remainin

have ag

remains

the decla

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its first

position

position

Counsel

Jade Ing

under s

concessi

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substant

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action in

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not crea

have alr

toria v Austra ration (1982) 1

ng issue is t

greed to an

to be determ

arations yet b

MEU parties

position. T

ns. However,

n will be exam

l assisting ag

gham and D

359 of the

ion, it is unn

rst position o

tablish a neg

mmission re

tial risk of inj

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t Chad Brag

n the period

r Work Act 20

ate a substant

ready admitte

lian Building 152 CLR 25 at

the quantum

order impo

mined by the

been made.

s did not adv

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, in deference

mined.

greed that n

David Hanna

e Criminal

necessary to

of the CFME

gative answer

each its co

njustice’ in w

el assisting’s

gdon and Jad

3-14 April 2

009 (Cth). T

tial risk of in

ed that they h

Construction E 99 per Mason

m of penalties

sing penalti

Federal Circ

vance any arg

ntrated on th

e to the CFM

o findings s

a may have

Code (Qld)

examine or

EU parties is

r to the follo

onclusions w

what remains

submissions

de Ingham e

2014 in contr

To make find

njustice. Tho

have engage

Employees’ an J.

s. The resp

ies, but the

cuit Court. N

gument in su

he second an

MEU parties,

should be m

committed o

. In view

evaluate the

to be accept

owing questio

without crea

of the Procee

s of 31 Octob

ngaged in in

ravention of

dings about th

ose two resp

ed in at least

nd Builders La

pondents

amount

Nor have

upport of

nd third

the first

ade that

offences

of that

reasons

ted, they

on. Can

ating ‘a

edings?2

ber 2014

ndustrial

s 417 of

hat does

pondents

parts of

abourers’

247

9.

10.

3 Para 4 State

the cond

have ag

penaltie

Work A

findings

influenc

decides.

Another

October

in cond

contrave

April 20

Court.

The Sta

findings

substant

A furth

Michael

Bragdon

Proceed

mention

inconsis

substant

agraphs 12-20.

ement of Agre

duct in quest

greed to the

s claimed ar

ct: they are

s of fact m

ce the quantu

r claim mad

r 2014 was th

duct in contr

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014 in cont

This does no

atement of A

s about it by t

tial risk of inj

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l Ravbar co

n and Jade

dings. Micha

ned in the Sta

stent finding

tial risk of inj

ed Facts, paras

ion in the St

making of d

re claimed un

e civil penal

made by the

um of penalty

de in counse

hat Chad Bra

ravention of

ders of the Fa

travention of

ot appear to

Agreed Facts

the Commiss

justice.

n counsel as

ndoned or a

Ingham.

ael Ravbar is

atement of A

gs. Again,

justice.

s 36(b) and (c).

tatement of A

declarations t

nder ss 545

lties. It is d

e Commissio

y which the F

el assisting’s

agdon and Ja

f s 417 afte

air Work Com

f orders of

be an issue

s says nothin

sion would n

ssisting’s sub

approved th

This is no

s not a party

Agreed Facts.

there does n

.

Agreed Facts

to that effec

and 546 of t

difficult to s

on could a

Federal Circu

s submission

ane Ingham e

er 4 April 2

mmission and

the Federal

in the Proc

ng about it.

not appear to

ubmissions w

he conduct o

ot an issue

y to them. H

. There is no

not appear

s.3 They

ct.4 The

the Fair

see how

ffect or

uit Court

ns of 31

engaged

2014 in

d after 8

Circuit

eedings.

Hence

create a

was that

of Chad

in the

He is not

o risk of

to be a

248

11.

The State

12.

13.

5 Subm

The prim

second CFM ement of Ag

The sec

made sh

debate a

since th

very littl

principa

is much

Howeve

position

The CFM

those in

the Proc

second g

by coun

injustice

managed

Proceed

of determ

to the C

success

a matte

missions of the

mary position

MEU positio reed Facts b

ond position

hould not dep

about this is

he factual co

le from those

al difference

h more deta

er, it is desira

n.

MEU parties

the Statemen

ceedings. T

guess’ them

nsel assisting

e has been d

d to negotia

dings about w

mining civil

CFMEU par

in negotiatio

r of fact m

e CFMEU, 16/

n of the CFM

n: should a be made?

n of the CFM

part from the

very close t

onclusions ur

e stated in the

lies in this:

ailed than th

able to exam

s said that to

nt of Agreed

They said th

‘by making

g’.5 Again,

demonstrated

ate an agree

what facts sho

penalties, an

rties, they ar

on. But a cou

merely becau

10/15, para 10

MEU parties i

any findings

MEU parties

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to being an

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what counse

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mine the CFM

arrive at fin

d Facts could

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the inconsis

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d. If the CF

ment with t

ould be relie

nd the facts a

re to be con

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use it is adm

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is therefore re

departin g fr

is that any

f Agreed Fac

academical t

unsel assistin

of Agreed Fa

el assisting ha

nt of Agreed

MEU parties’

ndings differe

d ‘tend to und

mission ‘sho

stent findings

o substantial

FMEU parti

the applican

d on for the

agreed are fav

ngratulated f

und to accep

mitted or ag

ejected.

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cts. The

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as urged

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risk of

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nt in the

purpose

vourable

for their

pt as true

greed as

249

14.

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15.

6

Gra Motor Cavey 5; D

Comp 321 a

between

to accep

agreed

matter (u

by the

prejudic

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not to, i

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view of

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unlikely

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third CFME

The thir

criticism

obviousl

at appr

submiss

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amophone Ltd rs Ltd (in liq) ( y [1947] KB 20 amberg v Da petition and Co

t [42]-[51]; Ho

n the parties.6

pt as true a m

as between

unless, perha

Commission

ce the CFME

o accept the a

it would do

ot differ from

the length o

eed Facts wa

y that the Fed

he second po

EU position:

rd position o

ms at the su

ly permissibl

opriate poin

ions. There

n relation to

v Magazine H (1925) 37 CLR 04; Termijtelen amberg (2001 onsumer Comm oldway v Arcur

6 And a Roy

matter of fact

the parties

aps, it create

n differing

EU parties. I

agreed facts

so on the ba

m that which

of time which

as agreed on

deral Circuit C

osition of the

criticisms

of the CFM

ubmissions

le. The criti

nts in the a

e are not in

credit.

Holder Co (191 R 1 at 7; Adam n v Van Arkel [ 1) 52 NSWL mission v Leahy

ri Lawyers [200

yal Commiss

merely beca

to litigation

s a judgment

from the f

It will be for

if it wishes.

asis of evide

h is before t

h has passed

n 11 June 2

Court will de

CFMEU par

MEU parties

of counsel

icisms will b

analysis of

n fact many

1) 28 RPC 22 ms v Naylor [19 [1974] 1 NSWL LR 492 at [

hy Petroleum P 09] 2 Qd R 18

ion cannot b

ause it is adm

n on similar

t in rem). A

facts agreed

r the Federal

If it were to

ence which m

the Commiss

d since the St

2015, it seem

epart from it.

rties is reject

is to direct

assisting.

be taken into

counsel as

concrete cr

21; Davison v 946] AC 543; R LR 525 at 530 157]-[163]; A Pty Ltd (2007)

at [5] and [65]

be bound

mitted or

subject

A finding

d cannot

l Circuit

o decide

might or

sion. In

tatement

ms very

ted.

specific

That is

account

sisting’s

riticisms

Vickery’s Royster v 0 and 534-Australian

160 FCR ].

250

B – R

The

16.

RELEVANT

findings req

The find

follows

followin

substant

(a)

(b)

(c)

T FACTS

quested by co

dings reques

(apart from

ng the conce

tial considera

Chad Bragd

in industria

from 3 to

April 2014

made by th

They did

breaching o

Circuit Cou

By so ac

contravened

(Cth), they

Work (Reg

they acted i

On 7 Apri

that, unless

project, th

against Hin

ounsel assist

ted by couns

m those alle

ession by co

ation in this C

don and Jade

al action on

14 April 201

4 knowing th

he Fair Work

so after 8

orders made

urt.

cting, Chad

d ss 417 and

contravened

gistered Orga

in contempt o

il 2014 Jade

s it allowed Z

e CFMEU

ndmarsh to c

ting: an out

sel assisting

eging crimin

ounsel assist

Chapter).

e Ingham org

the project

14. They di

hat they we

k Commissio

April 2014

e on that da

d Bragdon

d 421 of the F

d ss 297, 300

anisations ) A

of court.

e Ingham thr

Zoran Bogun

would caus

continue. He

tline

were, in ou

nal conduct,

ting, do not

ganised and

site across a

id so on and

ere breaching

on on 4 Apr

knowing th

ay from the

and Jade

Fair Work A

0 and 302 of

Act 2009 (C

reatened Hin

novic to work

se industrial

e did so inten

utline, as

which,

receive

engaged

a period

d after 7

g orders

ril 2014.

hat they

Federal

Ingham

Act 2009

the Fair

Cth) and

ndmarsh

k on the

l action

nding to

251

17.

The

18.

(d)

(e)

Counsel

submiss

dealt wit

project

In 2014

on a pro

building

Brisbane

compel Hin

on the proje

do otherwis

On 11 Apr

that industr

signed a de

rights again

their condu

Bogunovic

compel Hin

Bogunovic

lawfully en

Michael R

described a

l assisting s

ions are acc

th as they ari

Hindmarsh w

oject that invo

g called ‘Bro

e.

ndmarsh to a

ect, when Hi

se.

ril 2014 Dav

rial action w

eed of relea

nst the CFME

uct as desc

a good refe

ndmarsh to

a good re

ntitled to refu

Ravbar cond

above.

set out the

cepted, save

ise.

was carrying

olved the con

ooklyn on B

allow Zoran

indmarsh was

vid Hanna th

ould continu

ase (effective

EU and its o

cribed above

erence. He

sign the de

eference wh

se to do so.

doned behav

background

that points

g out work as

nstruction of

Brookes’ in

Bogunovic

s lawfully en

hreatened Hin

ue unless Hin

ely signing a

officers as a r

e) and gave

did so inten

eed and give

hen Hindmar

viour of th

d as follows

of controve

s the head co

a 14 floor ap

Fortitude V

to work

ntitled to

ndmarsh

ndmarsh

away its

result of

e Zoran

nding to

e Zoran

rsh was

he kind

s. The

ersy are

ontractor

partment

Valley in

252

19.

Two

20.

21.

22.

23.

7 Ian B

Ian Bu

Hindma

He com

sometim

project.

union deleg

When h

learn tha

was Jac

employe

the proje

The sec

from the

employe

Ian Busc

Roland C

work on

‘industri

The pre

enterpris

not prov

Busch, witness

usch was th

arsh. He was

mmenced wo

me after the

gates

e first becam

at there were

ck Cummins

ee of the Lac

ect.

ond delegate

e BLF branch

ed by the Lac

ch was infor

Cummins an

n the site an

ial peace’ for

sence of two

se agreemen

vide for it.

s statement, 5/8

he Queensl

s involved in

orking for H

company h

me involved i

e two union

s, who was

ck Group, th

e was Zoran

h of the CFM

ck Group.

rmed by the H

nd Zoran Bog

nd also act

r the project.7

o delegates

nt between H

8/14, para 7.

land constru

n the manage

Hindmarsh i

had commen

in the project

delegates on

s a CFMEU

he labour hir

Bogunovic.

MEU in Quee

Hindmarsh P

gunovic had e

as delegates 7

on site was

Hindmarsh an

uction mana

ement of the

in Decembe

nced works

t, Ian Busch

n the site. T

U delegate,

re sub-contra

He was a d

ensland. He

Project Mana

each been all

s in order to

unusual, in

nd the CFM

ager of

project.

er 2013,

on the

came to

The first

and an

actor for

delegate

too was

ager that

lowed to

o ensure

that the

MEU did

253

24.

25.

26.

27.

28.

8 Mich

The ente

and cont

Clause 6

[A rel em Ag of

Clause 6

Union se

Clause 4

Althoug

union ha

Division

General

4 that th

entity, a

These c

CFMEU

organisa

Union’.

and bran

entities

hael Ravbar, w

erprise agree

tinued to app

6.15 of that a

A]n employee levant union to mployed by t greement shall

f a Union Deleg

6.14 of the sa

et out in clau

4 in turn, onl

gh it is true t

ad a Queensl

n and a Quee

Division, it

hey were no m

and that there

contract term

U was a s

ation called t

That legal

nches. Neith

in their own

witness stateme

ement8 was e

ply throughou

agreement de

elected by un o represent the the Company l be notified as

gate.

ame agreeme

use 4 of this A

ly referred to

that clause 4

land branch

ensland BLF

was perfectl

more that div

was only on

ms were con

single legal

the ‘Construc

entity, the u

her the divisi

n right. Th

ent, 6/8/14, MR

entered into

ut the life of

fined ‘Union

nion members industrial inte as required. s soon as pract

ent defined ‘

Agreement’ (

one union, n

4 acknowledg

of the Const

F branch of th

ly clear from

visional branc

ne Union.

nsistent with

entity, be

ction Forestr

union, had a

ions nor the

his fact was

R-1.

in about Ma

the project.

n Delegate’ to

s and endorse erests of union All parties ticable after the

Union’ to m

(emphasis ad

namely the C

ged the fact

truction and

the Construct

m the terms o

ches of the o

h the fact t

eing the re

ry Mining &

number of d

branches we

well unders

ay 2013,

o mean:

ed by the

members s to this

e election

mean ‘the

dded).

CFMEU.

that the

General

tion and

of clause

one legal

that the

egistered

& Energy

divisions

ere legal

stood by

254

29.

30.

31.

32.

9 Mich 10 Mic 11

Me

Michael

him in h

In these

CFMEU

could ha

both.

Michael

meaning

branch e

That pr

expressi

National

operator

by the f

consiste

Counsel

although

insisted

its way

industria

hael Ravbar, w

chael Ravbar, w

dy Hassan, 5/8

l Ravbar, as

his witness st

e circumstan

U was only en

ave had Zor

l Ravbar’s e

g and operati

endorsed it [s

ractice, if an

ion in the

l General

r in the cons

fact that ther

nt with his ex

l assisting su

h the enterpr

upon having

in circumst

al peace coul

witness stateme

witness statem

8/14, T:216.19-

is apparent

atement.9

nces, under

ntitled to hav

ran Bogunov

vidence was

ion of clause

sic] own dele

nd to the e

enterprise a

Manager of

struction indu

re were two

xperience.11

ubmitted that

rise agreemen

g two delegat

tances where

ld not be assu

ent, 6/8/14, par

ent, 6/8/14, pa

-217.11, 218.2

from the lan

the enterp

ve one delega

vic or Roland

s that, notwi

e 4, ‘[t]he pr

egate’.10

extent it ex

agreement.

f Hindmars

ustry, said th

delegates, an

the appropri

nt did not pe

tes on site, a

e, if its dem

ured.

ra 5.

ra 6.

6-36.

nguage empl

prise agreem

ate on the Pro

d Cummins,

ithstanding th

ractice was th

xisted, did n

Medy Hass

sh, an expe

hat he was s

nd that this

iate finding w

ermit it, the C

and was able

mands were n

oyed by

ment the

oject. It

but not

he plain

hat each

not find

san, the

erienced

surprised

was not

was that

CFMEU

e to have

not met,

255

33.

Agre

34.

12 Sub 13 Mic

The CFM

Th en pr ev tw am de pr

This sub

submiss

that the

it disput

its way.

accepted

eement to re

Counsel

became

internal

division

Constru

mean th

branche

bmissions of th

chael Ravbar, w

MEU parties

he CFMEU c ntitlement to h ior to the am

vidence13 … th wo delegates malgamation. A ebate in circum

ior to the agree

bmission do

ion head on

enterprise ag

te the propos

. The subm

d.

emove one de

l assisting th

apparent tha

structural ch

nal branch

ction and Ge

hat there wo

s within the u

he CFMEU, 16

witness statem

put the follo

contests the have two deleg malgamation at it was not u

on Queensl A debate over mstances where ement to reduc

es not actua

n. The subm

greement per

ition about th

missions of c

elegate

hen submitte

at the CFME

hange pursua

would be

eneral divisio

ould no long

union.

/10/15, para 12

ent, 6/8/14, pa

owing submis

finding sough gates under th with the BLF unusual as a ma

land construc the terms of th e there were tw ce the number t

ally confront

mission does

rmitted two d

he ability of

ounsel assist

ed as follow

EU was about

ant to which t

folded int

onal branch.

ger exist two

2(a).

ras 5-6.

ssion:12

ht … concer he enterprise a F. Mr Ravb

atter of practic ction sites

the agreement wo recognised to one.

t counsel as

not seek to

delegates. N

the CFMEU

ting just set

ws. In late

t to embark

the Queensla

to the Que

That chang

o separate di

rning the

agreement bar gave ce to have prior to

is an arid delegates

sisting’s

explain

Nor does

U to have

out are

2013 it

upon an

and BLF

eensland

ge would

ivisional

256

35.

36.

37.

38.

Wate

39.

14 Ian 15 Ian

Ian Bus

the proj

number

CFMEU

the proje

By early

delegate

Zoran B

Chad Br

soon as

assuranc

In early

contract

project.

the wor

The emp

transferr

The CFM

er in the lun

Counsel

CFMEU

Busch, witnes

Busch, witnes

ch thought t

ject (let alon

of meeting

U organiser,

ect from two

y March 201

es should be

Bogunovic a

ragdon said t

the union fo

ces that the tr

March 2014

t arrangemen

The Lack G

rk was sub-c

ployment of

red to Global

MEU parties

nch room – 2

l assisting t

U parties took

ss statement, 5/

ss statement, 5/

that there wa

ne two from

gs and discu

about reduc

to one.14

14 Chad Brag

removed fr

s the one w

that Zoran B

ound him ano

ransfer would

4 there was

nts that Hin

Group withdr

contracted to

Zoran Bogu

l HR.

did not critic

28 March 20

then put so

k issue with s

/8/14, paras 14

/8/14, paras 16

as no need f

m the same

ussions with

ing the num

gdon had ag

rom the proj

who would le

ogunovic wo

other site to t

d take place w

a change in

ndmarsh had

rew their serv

o a company

novic and Ro

cise these sub

014

me further

some of them

-16.

-18.

for two deleg

union). He

h Chad Bra

mber of deleg

greed that on

ject. He no

eave. In pa

ould leave th

transfer to, a

within two w

the labour h

d in place

vices. In the

y called Glob

oland Cumm

bmissions.

submissions

m.

gates on

e had a

agdon, a

gates on

ne of the

ominated

articular,

he site as

and gave

weeks.15

hire sub-for the

eir place,

bal HR.

mins was

s. The

257

40.

41.

42.

43.

44.

16 And 17 Rav

During t

of 28 M

The rain

of 28 M

workers

recently

developm

A video

2014 de

area.17

There w

that wer

workers

affected

where w

not affec

to be ex

good sp

health an

The imp

of water

drew Toms, 6/

vbar MFI-3, 7/

the evening o

arch 2014, h

nfall caused a

March 2014 so

’ lunch roo

constructe

ment.16

o of the lunch

emonstrated t

were consider

re not affecte

standing in

d by water. I

water was app

ct the good h

xperiencing

pirits. They

nd safety or t

pression to b

r on the floo

8/14, T:295.12

8/14; Michael

of 27 March

eavy rain fel

a pipe to burs

ome water le

m. That lu

ed baseme

h room take

the extent to

rable portion

ed by water.

n and aroun

In those area

parent, the wa

humour of th

any discomf

y were in no

that of anyon

be gained fro

or of the lun

2-29.

Ravbar, 7/8/14

2014 and in

ll in the Brisb

st or overflow

aked onto pa

unch room w

nt of the

n at about 6

which wate

ns of the floo

There wer

d the lunch

as of the floo

ater was not

he workers.

fort whatsoe

o way conce

ne else on the

om the video

nch room wa

4, T:379.23-34

nto the early m

bane area.

w. In the ear

art of the floo

was situated

e building

6.30am on 28

er had penetr

or of the lunc

re a large nu

room in ar

or of the lunc

deep. The w

They did no

ever. They

erned for th

e site.

is that the p

as a relativel

4.

morning

rly hours

or of the

d in the

under

8 March

rated the

ch room

umber of

reas not

ch room

water did

ot appear

were in

heir own

presence

ly minor

258

45.

46.

47.

18 And 19 And

occurren

would h

That im

By abo

squeege

affected

shed wa

available

In additi

to the c

They w

water an

Andrew

accomm

Michael

big eno

Bogunov

be acce

rooms h

crowdin

basemen

gantry ‘

drew Toms, wi

drew Toms, wi

nce, and with

have been abl

mpression is c

out 7.15am

ed away and

d areas. Onl

as unusable.

e.18

ion, the origi

onstruction o

ere in the g

nd tea and co

Toms was

modate everyo

l Ravbar tried

ough, even

vic tried to a

epted, particu

had actually

ng or contro

nt. As Ian B

were the one

itness statemen

itness statemen

h a modicum

le to be dealt

confirmed by

the water

d the vinyl fl

ly about 35%

All fridge a

inal crib room

of the basem

gantry, fully

offee facilitie

s that those

one working

d to argue th

though he

argue the sam

ularly when

functioned

oversy, prio

Busch said in

es that were

nt, 6/8/14, para

nt, 6/8/14, para

m of good wil

with swiftly

y the evidenc

in the lunc

loor had been

% of the tota

and hot wate

ms which had

ment remaine

operational,

es ready to u

e rooms we

on the site th

at the alterna

had never

me thing. T

it is appre

as such, w

or to the c

n evidence, th

used from t

a 14.

a 25.

ll and commo

y.

ce of Andrew

ch room ha

n stripped ou

al area of th

er systems re

d been install

ed available

with all wa

use. The evid

ere big eno

hat day.19

ative rooms w

seen them

This evidence

ciated that t

without any a

construction

he crib room

the beginnin

on sense

w Toms.

ad been

ut in the

he lunch

emained

led prior

for use.

ater, hot

dence of

ough to

were not

. Zoran

e cannot

the crib

apparent

of the

ms in the

ng of the

259

48.

49.

20 Ian 21 And

project f

througho

Thus the

of the l

majority

original

union de

took it u

closed d

replacem

of itself

became

those de

Andrew

remain o

Chad Br

are to go

The wor

union d

Toms on

workers

Busch, 5/8/14

drew Toms, wi

for all the w

out.20

e position w

lunch room

y of the lun

crib rooms

elegates on s

upon themse

down for th

ment lino flo

f did not mak

aware of th

elegates. T

Toms said t

open. The d

ragdon. He

o home’.21

rkers left the

delegates. P

n site was to

were on site

, T:229.23-29.

itness statemen

workers’, and

as as follow

had been r

nch room rem

were also a

site, Roland C

elves to deter

he day and

ooring materi

ke the space

he fact that t

They told him

that was not

delegates the

had told them

e site in acco

Part of the d

o make sure

e each day.

nt, 6/8/14, para

d remained in

s. The wate

resolved by

mained avai

available for

Cummins an

rmine that th

all workers

ial had not y

unusable. W

this was occ

m that the

t correct and

en indicated

m ‘the site is

rdance with

daily respons

e records we

As such, he

as 9-11.

n working c

er penetration

7.15am. T

ilable for us

use. Howe

nd Zoran Bog

he project sh

s sent home

yet arrived.

When Andrew

curring, he s

project was

d that the site

they had sp

s closed and

the direction

sibilities of

ere kept as to

took a recor

ondition

n in part

The vast

se. The

ever, the

gunovic,

hould be

e. The

But that

w Toms

spoke to

closed.

e was to

poken to

all men

ns of the

Andrew

o which

rd of the

260

50.

51.

52.

22 An paras 23

Ian 24 Sub 25

Sub 26 Sub 27

Mic 28 Zor

workers

of their d

The resu

CFMEU

workers

on 28 M

The CF

events o

Th Pr su an ev mi ex Sa

Let it be

was a s

argumen

than a re

do not d

drew Toms, 6/ 9-25.

Busch, witnes

bmissions of th

bmissions of C

bmissions of C

chael Ravbar, w

ran Bogunovic

as they wer

departure.22

ult of the dire

U representat

on the proje

March 2014.23

FMEU partie

of 28 March 2

he CFMEU dis roject on 28 ubmissions.25 I nd the contemp

vents. The wat inor occurrenc xplains …27 it w afety Committe

e assumed, fo

safety issue.

nt, that for a

elatively min

deny that with

/8/14, T:294.15

ss statement, 5/

he CFMEU, 16

ounsel Assistin

ounsel Assistin

witness statem

, witness statem

re leaving. It

ections given

tives on site

ect, other than 3

es put the f

2014:24

sagrees with th March 2014 It is contrary to poraneous vide

er on the floor e” as counsel a was a safety iss ee as Mr Bogun

or the sake o

Let it als

a time the ev

nor occurrenc

h a modicum

5-303.47; And

/8/14, para 39.

/10/15, para 12

ng, 31/10/14, p

ng, 31/10/14, p

ent, 6/8/14, pa

ment, 2/9/14, p

t is plain tha

n by Chad Br

on 28 Marc

n plumbers,

following su

he description o described in o the accounts g eo and docume

of the crib roo assisting sugge sue. It was als novic describe

of argument,

o be assum

vent might b

ce. But even

m of goodwil

drew Toms, wit

2(b).

paras 25-35.

para 29.

ras 16-18.

paras 12-13.

at he did not

ragdon and t

ch 2014 was

performed an

ubmission ab

of events on H … counsel a given by Mr B ents which des om was not “a est …..26 As M so considered b ed ….28

that for a tim

med, for the

be regarded

n the CFMEU

ll and commo

tness statemen

approve

the other

s that no

ny work

bout the

Hindmarsh assisting’s Bogunovic scribe the

relatively Mr Ravbar by the site

me there

sake of

as more

U parties

on sense

nt, 6/8/14,

261

Hind

53.

54.

55.

56.

57.

29 Ian

the issu

which th

line of

Qualifie

submiss

dmarsh corr

The sub

CFMEU

level.

The foll

Hindma

contract

March 2

March 2

out that

sub-cont

had occu

The CF

swift.

The foll

rolling s

Busch, witnes

e could have

he CFMEU p

reasoning u

ed by the

ions are acce

respondence

bmissions of

U parties too

owing day, 2

arsh then r

tors seeking

2014. Hindm

2014 Hindma

it would be

tractors to pa

urred on 28 M

FMEU’s resp

lowing day,

stoppages, w

ss statement, 5/

e been dealt

parties referre

underlying c

two assum

epted.

counsel assi

ok issue with

29 March 201

received cla

pay for work

marsh refuse

arsh sent the

a breach of t

ay their work

March 2014.2

ponse to Hi

1 April 201

without prior

/8/14, paras 41

with swiftly

ed do not ma

counsel assis

mptions set

sting continu

h them, but

14, work occ

aims for pa

kers who ha

ed to pay th

e sub-contrac

the Fair Wor

kers for the i 29

indmarsh’s c

14, the proje

warning. K

, 43.

y. The mate

aterially unde

sting’s subm

out above

ued as follow

at a rather

curred as norm

ayment from

ad not worke

hose claims.

ctors a note p

rk Act 2009 (

industrial act

corresponden

ect was subj

Key structura

erials to

ercut the

missions.

e, those

ws. The

general

mal.

m sub-ed on 28

On 31

pointing

(Cth) for

tion that

nce was

ected to

al trades,

262

58.

59.

30 Ian 31 Ian 32

Ian 33 Ian

such as

meeting

Bogunov

the ‘2 h

Bogunov

stoppage

The refe

32.9 of

provided

attend u

some im

First, the

manager

Secondl

reasonab

frequenc

At the t

disruptio

against

respect t

2014.33

the ob

Busch, witnes

Busch, witnes

Busch, witnes

Busch, witnes

form worke

s. The exc

vic was that

hour meeting

vic told Ian

es ‘for as lon

erence to the

Hindmarsh’s

d that emplo

union meeting

mportant cond

e union had t

r. No suc

y, the meeti

ble. There i

cy and occurr

time, Ian Bu

ons formed

Hindmarsh

to the payme

He was righ

bvious coin

ss statement, 5/

ss statement, 5/

ss statement, 5/

ss statement, 5/

ers, were pul

cuse given b

t they were c

clause’ in th

n Busch th

ng as it takes’

e ‘2 hours cl

s enterprise a

oyees were e

gs of up to t

ditions and li

to give at lea

ch notice ha

ings could n

is no eviden

rence of the m

usch had no

part of an

in response

ent of worke

ht to hold th

cidence in

/8/14, para 44.

/8/14, para 44.

/8/14, para 44.

/8/14, para 45.

lled off the p

by Roland C

conducting m

he enterprise

hat there wo

’.31

lause’ was a

agreement w

entitled to ha

two hours. H

imitations at

ast 24 hours’

ad been giv

not be more

nce to suppor

meetings wa

doubt that t

escalating

e to Hindma

ers who went

his belief. Th

time betw

project for tw

Cummins and

meetings pur

e agreement.3

ould be con

a reference to

with the CFM

ave paid tim

However the

ttaching to th

notice to the

ven in this

e frequent th

rt a finding

as reasonable

these stoppa

industrial ca

arsh’s positio

t home on 28

his is appare

ween Hind

wo hour

d Zoran

rsuant to 30 Zoran

ntinuing

o clause

MEU. It

me off to

ere were

his right.

e project

case.32

han was

that the

.

ages and

ampaign

on with

8 March

ent from

dmarsh’s

263

60.

Chan

61.

34 Ian

correspo

absence

such sto

Further,

made by

Bragdon

the lette

workers

Hindma

stoppage

referenc

another

made it

dictate h

Roland

him inst

to come

and pay

nge in labou

The pos

the role

Zoran B

Busch, witnes

ondence and

of any evid

oppages.

Ian Busch’s

y Chad Brag

n said to Ian

ers that Hind

on 28 M

arsh intended

es, it would

ce to industr

Hindmarsh

clear to Ia

how sub-cont

Cummins to

tructions that

e to an end,

the workers

ur levels

sition was tha

e of hoist op

Bogunovic w

ss statement, 5/

d the comme

dence demon

s conclusion

gdon on 1 A

Busch that

dmarsh sent a

March 2014.

d to go ‘run

d create ano

rial unrest

project in S

n Busch tha

tractors paid

old Ian Busc

t if Hindmar

Hindmarsh w

for the day t

at both the p

perator and Z

as able to op

/8/14, paras 46

encement of

nstrating the

ns were reinf

April 2014.

the action w

about the ind

Chad Br

nning to Fai

ther ‘Ark T

that the uni

South Austra

at it was no

their employ

h that Chad

rsh wanted th

would have

they performe

person who h

Zoran Bogu

perate the ho

-48.

f stoppages,

e appropriate

forced by co

On that da

was in the co

dustrial actio

ragdon said

ir Work’ ab

Tribe’. That

ion had cau

alia. Chad B

ot for Hindm

yees. The sa

Bragdon ha

he rolling st

to retract th

ed no work.3

had been per

unovic were

oist. The pro

and the

eness of

omments

ay, Chad

ontext of

on of the

that if

bout the

t was a

used on

Bragdon

marsh to

ame day,

ad given

toppages

he letters 34

rforming

on site.

oject did

264

62.

63.

64.

35 Hin 36 Ian 37

Mic 38 Hin

not requ

wanted t

This vie

employe

taken ov

result th

deploye

by Glob

The CFM

the treat

was noth

in quest

relocated

with Glo

the Hind

because

CFMEU

On the

Bragdon

that me

been sen

and the

ndmarsh Additi

Busch, witnes

chael Ravbar, w

ndmarsh Additi

uire both of

the hoist ope

ew was com

ed both indiv

ver from the

he previous h

d elsewhere

bal HR to ope

MEU has, fro

tment of the

hing of the s

tion remaine

d by Global

obal HR. In

dmarsh site.

of the ind

U.38

following d

n met Ian Bu

eeting, Chad

nding ‘bullsh

men paid in

ional Hearing B

ss statement, 5/

witness statem

ional Hearing B

f them to be

erator to leave

mmunicated t

viduals, Glob

Lack Group

hoist operator

by Global H

erate the hois

om time to ti

previous ho

ort, as the C

ed in the em

HR to anoth

ndeed he wo

Unfortunate

dustrial acti

day, 2 April

sch and othe

Bragdon c

hit letters’.

full for 28 M

Bundle, 2/9/14

/8/14, paras 50

ent, 6/8/14, pa

Bundle, 2/9/14

e on site. H

e.

to the labour

bal HR. Glo

p as labour h

r was rotated

HR. Zoran B

st on the Hind

me, attempte

oist operator

FMEU well

mploy of G

her site. He

ould shortly b

ely he was u

ion instigate

l 2014 Jade

ers on the Hin

omplained t

He wanted

March 2014

4, Vol 1, p 20.

-51.

ra 21.

4, Vol 1, p 23.

Hindmarsh th

r hire compa

obal HR had

hire provider.

d off the pro

Bogunovic wa

dmarsh site.3

ed to mischar

as a ‘sackin

knows. The

Global HR a

did not lose

be allocated

unable to wo

ed on site

e Ingham an

ndmarsh site

that Hindma

the letters r

despite the f

herefore

any that

by then

.35 As a

oject and

as asked 36

racterise

ng’.37 It

e worker

and was

e his job

back to

ork there

by the

nd Chad

. During

arsh had

retracted

fact they

265

65.

66.

67.

68.

39 Ian 40 Ian

had not

were. J

have ask

day befo

not drive

Jade In

previous

this at t

platform

no genu

As Chad

Zoran B

on the si

Counsel

the CFM

hoist op

should b

The Hin

had no r

right to

Under c

entitled

Busch, witnes

Busch, witnes

been workin

Jade Ingham

ked a delegat

ore’. Chad B

e the hoist as

ngham’s sug

s hoist opera

the time. It

m from which

ine ground fo

d Bragdon ha

Bogunovic re

ite on 2 Apri

l assisting su

MEU that Zo

perator on 2 A

be rejected.

ndmarsh ente

right to refu

insist upon

clause 30.1 o

to paid tim

ss statement, 5/

ss statement, 5/

ng. Ian Bus

m replied say

te to do the w

Bragdon add

s he had unio

ggestion that

ator was not

t was an att

h to make a c

or complaint

ad indicated i

efused to per

l 2014.40

ubmitted that

ran Bogunov

April 2014 b

erprise agreem

se to perform

attending o

of the enterpr

me off work

/8/14, para 57.

/8/14, para 58.

sch asked wh

ying ‘[w]hat

work of som

ded that Zora

on duties to d

t Hindmarsh

t correct. H

tempt by hi

omplaint in c

existed.

in the discus

form any wo

t the proposi

vic could not

because he w

ment gave th

m work on s

on site for un

rise agreeme

k to represe

hat the issue

do you thin

meone you sac

an Bogunovi

do.39

h had ‘sack

He must have

im to create

circumstance

sion with Ian

ork as hoist

ition put forw

t perform the

was a union

he CFMEU

site. It gave

union purpos

ent, the deleg

ent the inte

es really

nk? You

cked the

ic would

ked’ the

e known

a false

es where

n Busch,

operator

ward by

e role of

delegate

delegate

e him no

es only.

gate was

erests of

266

69.

70.

71.

41 Mic 42 Ian 43

Ian

member

during n

The clau

work. I

of every

Michael

Contrary

that it w

position

proposit

evidence

There w

normal

relieved

duties th

issues ar

that time

Hindma

normal w

Zoran B

chael Ravbar, 6

Busch, 6/8/14

Busch, 6/8/14

rs. The deleg

normal work

use said noth

It said nothin

y day carryin

l Ravbar was

y to that acce

would be the

n that Zoran B

tion, which

e, was rejecte

was no reason

work duties

d for a period

hat were req

rose, the CFM

e.43

arsh’s respon

work duties w

Bogunovic re

6/8/14, T:337.3

, T:274.10-20.

, T:279.9-19.

gate was also

king hours t

hing about d

ng about dele

ng out tasks

prepared to

epted positio

e ‘reasonable

Bogunovic w

was contra

ed by Ian Bu

n why Zoran

s as hoist

d for the pu

quired of him

MEU still ha

nse to Zoran

was to inform

eturning to th

36-44.

o entitled to r

o consult w

delegates bein

egates being

s on behalf o

accept this w

on, the CFME

e expectation

would do no

ary to Mich

usch as well.4

n Bogunovic

operator and

urpose of und

m. Equally,

ad two delega

Bogunovic’

m Global HR

he site. It s

reasonable p

with union m

ng entitled t

entitled to s

of the union

was so.41

EU put to Ian

n’ of anyon

work on sit

hael Ravbar 42

could not c

d, if necess

dertaking an

to the exten

ates on the p

s refusal to

R that it did n

said that it e

aid time

members.

to do no

spend all

n. Even

an Busch

ne in his

te. That

r’s own

carry out

sary, be

ny union

nt union

project at

perform

not want

expected

267

72.

Indu

73.

74.

75.

44 Ian 45 Mic 46

Hin 47 Hin

Global H

an appro

Again,

describe

‘sacking

Bogunov

not be s

Zoran B

by his

contract

ustrial action

Hindma

elsewhe

The foll

the proje

It is inc

became

thereafte

that he

Busch, witnes

chael Ravbar, w

ndmarsh Additi

ndmarsh Additi

HR to deal w

opriate discip

there has be

e this occurr

g’ of Zora

vic was not

sacked by it

Bogunovic wa

employer.

tor and return

n on 3 April

arsh’s request

re was sent b

lowing day,

ect site.

conceivable

aware of th

er each indiv

or she wo

ss statement, 5/

witness statem

ional Hearing B

ional Hearing B

with Zoran Bo

plinary proce

een some at

rence, and t

an Bogunov

employed by

t. Further,

as not sacked

He was la

ned to site.46

2014

t of Global

by an email a

3 April 2014

that all of

his email of

vidually deter

uld not sho

/8/14, para 58.

ent, 6/8/14, pa

Bundle, 2/9/14

Bundle, 2/9/14

ogunovic’s d

ss.44

ttempt by th

to pretend t

vic by Hin

y Hindmarsh

and perhaps

d by anyone.

ater employe

HR to deplo

at 6.01pm on

4, no worker

the worker

f 6.01pm on

rmined of hi

ow up to w

ra 23.

4, Vol 1, p 15.

4, Vol 1, p 21.

disobedience

he CFMEU

that it const

ndmarsh.45

h and therefo

s more signi

He was red

ed by anoth

oy Zoran Bo

2 April 2014

r performed

rs on site so

n 2 April 20

is or her own

work at 6.00

through

to mis-tituted a

Zoran

re could

ficantly,

deployed

her sub-

ogunovic

4.47

work at

omehow

014, and

n accord

0am the

268

76.

77.

48 Sub 49 Sub 50

Sub

followin

presence

workers

position

CFMEU

Bragdon

The CFM

Co ac M tre the ex wo su tha ab

The ente

show er

assisting

argumen

criticism

that the

purpose

in a con

supporte

applican

bmissions of th

bmissions of C

bmissions of C

ng morning.

e of a centra

of what had

n. It is beyo

U did, includ

n, the CFMEU

MEU parties

ounsel assistin tions of the C March 2014, the eatment of Mr

e Commission xistence of a di orth, the Comm ubmission,50 th

at Mr Boguno bout 2 April 20

erprise on wh

rror in the

g. The quote

nt of counsel

m comes to p

e applicant

s, agreed on

ntention by c

ed by evide

nt may not h

he CFMEU, 16

ounsel Assistin

ounsel Assistin

This could

al co-ordinat

d occurred an

ond doubt th

ding in part

U officers de

argued:48

g’s attempts49 CFMEU conce e removal of Bogunovic in

n. Put at it

ispute on the si mission will no he statement of vic’s employm

14 at the direct

hich the CFM

reasoning i

ed passage d

l assisting in

particularity i

and the res

a factual pos

counsel assis

ence. That

have been a

/10/15, para 12

ng, 31/10/14, p

ng, 31/10/14, p

d not have o

ing body wo

d marshallin

hat this is w

ticular Jade

ealing with th

9 to argue the rning the claim the hoist oper early April 20 s highest this ite at the relev ote, contrary to

f agreed facts a ment at the pro tion of Hindma

MEU parties

in the subm

does not dem

n any particu

is the last sen

spondents h

sition does n

sting that a

t is particul

ttuned to th

2(c).

paras 36-57.

para 54.

occurred with

orking to inf

ng them to a c

what officers

Ingham an

he site.

industrial mer ms for payme rator from site 14 is of no ass s analysis ref

ant time. For o … counsel a at paragraph 1 oject was term

arsh.

have to emb

missions of

monstrate erro

ular. The clo

ntence. But

have, for the

not demonstra

different po

larly so wh

he precise nu

hout the

form the

common

s of the

nd Chad

rits of the ent for 28 e and the istance to

flects the what it is assisting’s 6 records minated on

bark is to

counsel

or in the

osest the

the fact

eir own

ate error

sition is

here the

uance in

269

Fair

78.

79.

80.

51 Hin

paragrap

CFMEU

does not

any way

points to

submiss

Work Com

Counsel

No work

4 April

from th

organisa

not orga

Work Ac

The part

CFMEU

employe

worked

member

industria

ndmarsh Hearin

ph 16 of the

U parties now

t demonstrate

y . Even if it

o which coun

ions.

mission ord

l assisting tur

kers perform

2014. Hindm

he Fair W

ations bound

anise industr

ct 2009’.51

ties bound by

U and its

ees employed

at the proje

rs of the C

al action.

ng Book, 5/8/1

e Statement

w rely. The su

e error in wh

t did, that w

nsel assisting

ers

rned to the fo

med work at th

marsh then a

Work Commi

by this order

rial action a

y the order w

officials, em

d by any su

ct and who

FMEU and

4, p 39.

of Agreed

ubmission of

hat counsel a

would not aff

g then turned

ollowing subm

he project sit

applied for an

ission that

r must stop, n

as defined in

were stated to

mployees a

ub-contractor

were membe

who were

Facts on wh

f the CFMEU

ssisting subm

fect the fund

d in the balan

missions.

te the follow

nd obtained a

‘All perso

not engage in

n s 418 of t

o be Hindma

and delegate

r to Hindmar

ers or eligib

taking unp

hich the

U parties

mitted in

damental

nce of its

wing day,

an order

ons and

n and/or

the Fair

arsh; the

es; and

rsh who

ble to be

protected

270

81.

82.

83.

84.

52 Hin 53 Bus

That ord

Senior D

was repr

At the

Commis

orders w

employe

on the p

parties w

(a)

(b)

In accor

Work C

marked

CFMEU

Althoug

examina

took ste

ndmarsh Hearin

sch MFI-1, 5/8

der was made

Deputy Presi

resented duri

same time

ssion also m

were to be se

ees, agents a

project. Und

was to be effe

sending a

documents

the Nationa

by posting

the project

rdance with t

Commission

for the att

U.53

gh he did no

ation Michae

eps on 4 Apr

ng Book, 5/8/1

8/14.

e on 4 April

ident Richar

ing the cours

as that ord

made orders

erved on the

nd members

er the terms

ected by:

copy of t

by fax or e

al Secretary o

a copy of th

site.52

those orders f

made on 4

tention of t

t admit to it

el Ravbar a

ril 2014 to i

4, p 43.

2014 follow

ds. The CF

e of that argu

der was ma

as to the m

CFMEU, its

, and on the

of those ord

the orders

email marked

of the CFME

he documents

for service, t

April 2014

the Nationa

t in his writt

acknowledged

inform its of

wing argumen

FMEU appea

ument.

ade, the Fai

means by wh

s delegates,

employees w

ders, service o

and variou

d to the atte

EU; and

s on a noticeb

the orders of

were sent b

al Secretary

ten statemen

d that the C

fficers and m

nt before

ared and

ir Work

hich the

officers,

working

on those

us other

ntion of

board at

f the Fair

by email

of the

nt, under

CFMEU

members

271

85.

Brea

86.

87.

88.

54 Mic 55 Mic

that the

CFMEU

notified.

As Mich

getting

Commis

had been

April 20

The CF

assisting

ach of the Fa

Counsel

Althoug

served

workers

working

The nex

chael Ravbar, 6

chael Ravbar, 6

orders had

U website.

. They were

hael Ravbar

out to any

ssion.54 Mic

n made awar

014.55

FMEU parti

g’s argument

air Work Co

l assisting the

gh the orders

and dissem

performed w

g day, 5 April

xt working da

6/8/14, T:342.3

6/8/14, T:346.3

been made

The CFMEU

e told to pass

said, ‘he ha

workplace’

chael Ravbar

re of the Fair

es did not

.

ommission o

en argued as

s of the Fai

minated as M

work at the H

l 2014.

ay after that w

30-32.

33.

. The orde

U delegates

s the messag

as never had

orders made

r confirmed

r Work Com

criticise th

rders on 5 a

follows.

ir Work Co

Michael Rav

Hindmarsh s

was Monday,

ers were put

and officia

ge on to the w

d a problem

e by the Fai

that Chad B

mmission ord

his part of

and 7 April

ommission ha

vbar describ

site on the fo

, 7 April 201

t on the

als were

workers.

about…

ir Work

Bragdon

ders on 4

counsel

ad been

bed, no

ollowing

4.

272

89.

90.

91.

92.

93.

56 Ian 57 Ian 58

Ian 59 Ian

On that

make su

Ian Bus

the notic

noticed

just insi

He also

on the h

Ian Bus

issued e

of the pr

At abou

standing

Roland

Busch th

meeting

fact, the

As Ian B

project

that wa

Industria

Busch, witnes

Busch, 5/8/14

Busch, 5/8/14

Busch, witnes

day Ian Bus

ure copies of

ch noticed th

ce board out

that another

ide the gate

noticed a la

hoarding at th

ch was furth

electronically

receding wee

ut 6.15am on

g on the foo

Cummins at

hat the union

was being h

project site w

Busch came

site earlier th

s being held

al Relations

ss statement, 5/

, T:234.19.

, T:234.25-27.

ss statement, 5/

ch attended

the orders ha

hat a copy o

tside the lunc

r copy had b

where day-t

arge copy of

he gate into th

her aware tha

y to all of the

ekend.58

7 April 201

tpath outside

the front ga

n was holdin

held offsite b

was not bugg

to learn, Ch

hat morning

d in the lun

Advisor, Th

/8/14, para 64.

/8/14, para 65.

the project s

ad been poste

of the orders

ch rooms and

been placed

to-day site ac

the orders, p

he site.57

at a copy of

e sub-contrac

2, Ian Busch

e the project

ate. Roland C

ng a meeting

because ‘the p

ged.59

had Bragdon

. He had in

nch room be

eresa Molton

site before 6.

ed around the

had been pl

d the basem

on the notic

ctivities wer

printed on A

the orders h

ctors over the

h saw Chad B

t site. He a

Cummins sai

offsite, and

place is bugg

had come o

nterrupted a

etween Hind

ni, and work

00am to

e site.56

laced on

ent. He

ce board

re listed.

A3 paper,

had been

e course

Bragdon

also saw

id to Ian

said the

ged’. In

on to the

meeting

dmarsh’s

kers who

273

94.

95.

96.

97.

60 Ian 61 Ian 62

Ian 63 Bus

had retu

He had

footpath

for him

When C

walked b

permit. C

Ian Busc

Work C

unaware

unaware

given b

position

point an

4 April 2

After hi

again an

Ian Busc

Chad Br

None of

passiona

Busch, 5/8/14

Busch, witnes

Busch, witnes

sch MFI-2, 5/8

urned to the s

d called the

h.60 There w

on the footpa

Chad Bragdo

back onto the

Chad Bragdo

ch then spok

Commission

e of them.62

e of the orde

by Michael

n within the C

nd the CFME

2014.

is exchange

nd joined the

ch took a vid

ragdon and R

f the workers

ate about any

, T:237-239.

ss statement, 5/

ss statement, 5/

8/14.

site in compl

workers ou

ere approxim

ath outside.61

on noticed Ia

e site. Ian B

on refused.

ke to Chad B

orders. Ch

It is inconc

ers on 7 Apr

Ravbar and

CFMEU, his

EU managem

with Ian Bu

workers who

deo of this.63

Roland Cumm

s standing aro

ything.

/8/14, para 67.

/8/14, para 66.

liance with C

ut and take

mately 100 or 1

an Busch on

usch asked h

ragdon abou

had Bragdon

ceivable that

ril 2014 in li

d Ian Busch

involvement

ent’s knowle

usch, Chad B

o were standi

The video sh

mins all at th

ound appear

Commission’

n them out

r so workers

n the project

him to show

ut the fact of

n pretended

t Chad Bragd

ight of the e

h, Chad Br

t with the sit

edge of the o

Bragdon left

ing outside.

howed Jade

he site that m

agitated or r

’s order.

t to the

waiting

site, he

an entry

the Fair

d to be

don was

evidence

ragdon’s

te to that

orders on

the site

Ingham,

morning.

remotely

274

98.

99.

100.

101.

64 Ian 65 Ian

In spite

the know

represen

Chad Br

with the

In fact,

he wou

Hindma

Ingham

work if

Jade Ing

to go w

When Ia

return t

action n

through

guarante

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represen

project s

Busch, witnes

Busch, witnes

of the existen

wledge of th

ntatives, none

ragdon) took

e orders that h

they adopted

uld ensure

arsh changed

said to Ian

[Hindmarsh]

gham also sa

where it’s goi

an Busch sai

to work, Jad

now by gu

the gate. W

ee, Jade Ingh

Jade Ingham

ntatives and

site. Ian Bu

ss statement, 5/

ss statement, 5/

nce of the Fa

he orders he

e of these of

any step to e

had been mad

d a contrary

the indust

its position

Busch that

] let [Boguno

aid to Ian Bu

ing, because

id that Hindm

de Ingham s

uaranteeing

When Ian Bu

ham said ‘Ok

m joined Cha

the worker

usch was the

/8/14, para 68.

/8/14, para 71.

air Work Com

eld by the C

fficers (includ

encourage th

de.

position. Jad

trial action

towards Zora

he would ‘g

ovic] walk thr

usch ‘Are you

this will go

marsh simply

said Hindma

Zoran Bogu

usch said he

, we’ll see w

ad Bragdon

rs gathered

en informed b

mmission ord

CFMEU offic

ding Jade Ing

he workers to

de Ingham in

continued

an Bogunovi

get the men

rough the gat

u sure you w

o to the poin

y wanted the

arsh could s

unovic coul

could not g

what happens

outside, th

at a park n

by other Hin

ders and

cers and

gham or

o comply

ndicated

unless

ic. Jade

back to

te’.64

want this

nty end’.

e men to

stop the

ld walk

give that

now’.65

he union

near the

ndmarsh

275

102.

103.

104.

66 Ian 67 Bus 68

Mic

staff me

being ‘c

Shortly

project

Chad B

workers

of the p

Chad B

demonst

workers

degree o

The vid

the ring

CFMEU

is visib

audibly

was lead

Michael

these ma

Q.

Busch, witnes

sch MFI-5, 6/8

chael Ravbar, 6

embers that w

called in’ to p

after, Ian Bu

site. The v

Bragdon was

waving CFM

project site i

Bragdon and

tration stand

who were

of passion or

eo confirms

g leader of th

U’s initiation

ly evident

evident from

ding.

l Ravbar vie

atters in the f

. You h

secret activit orders

ss statement, 5/

8/14.

6/8/14, T:347.2

workers from

participate in

usch began to

video of the

leading tha

MEU flags an

in an intimid

d the work

ds in sharp

simply stand

irritation.

that Chad B

he disruption

and encoura

from the pr

m the cry of

wed this foo

following exc

have no issue tary, with off ties of the kind s having been m

/8/14, para 72.

25-39.

m other sites w

further activ

o hear chanti

demonstrati

at chanting.

nd banging a

dating manne

ers participa

contrast to

ding around,

Bragdon, a C

ns by worke

agement of th

resence of C

‘CFMEU’ w

otage and th

change:68

e, do you, as

ficials of the d we just saw made injunctin

within the ar

vity.66

ing from out

ion67 confirm

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and rocking th

er. The con

ating in th

many of th

, not exhibit

CFMEU offic

ers on this d

he industrial

CFMEU fla

which Chad B

hen was aske

the divisiona CFMEU eng on that footag ng that sort of a

rea were

tside the

med that

pack of

he fence

nduct of

e vocal

he other

ting any

cial, was

day. The

activity

ags, and

Bragdon

ed about

al branch gaging in e, despite activity?

276

105.

106.

107.

108.

109.

A.

This evi

Ravbar a

Orders

CFMEU

orders.

delibera

Commis

The con

Michael

existenc

in Queen

An orde

CFMEU

have a ri

Obedien

not opti

and Cha

. At the

no. If return wante they’r right, with, disput there’ you’v came

idence demo

and the CFM

had been m

U, Chad Bra

They delib

ately organis

ssion’s order

nduct exhibit

l Ravbar’s ac

ce of a troub

nsland.

er of the Fai

U or some ot

ight of appea

nce to an ord

ional. It is c

ad Bragdon

e end of the da f the decision h n to work, if t ed to send a

re not happy, I whether it’s t to send a me tes are very ro

s always a littl e got to look about. It was c

onstrates a la

MEU for the r

made by the

gdon and Ja

berately acte

sed the wo

s.

ted by Chad

cceptance of

ling state of

r Work Com

ther person i

al. They can

der that has n

compulsory.

knew this to

ay, I don’t hav had been made they want to message back

I don’t think – the official or essage back to obust in the co

le bit of emotio at the circum certainly set up

amentable di

rule of law.

Fair Work

ade Ingham

ed in defian

rkers to de

Bragdon an

f that conduc

f lawlessness

mmission is t

s not happy

choose to ex

not been ove

Michael R

o be so. Ho

ve a problem w of the workfo send a protes k to the comp

– I think peop r the workers o the company onstruction indu

on and passion mstances of how p by the compa

isregard by

Commission

all knew ab

nce of them

efy the Fair

nd Jade Ingh

ct, demonstr

within the C

to be obeyed

with the ord

xercise that ri

erturned on a

Ravbar, Jade

owever they

with that, rce not to t, if they

pany that le have a that he’s y. These

dustry and n in it, but w this all any.

Michael

n. The

bout the

m. They

r Work

ham, and

rates the

CFMEU

d. If the

der, they

ight.

appeal is

Ingham

did not

277

110.

Cour

111.

112.

113.

69 Ian

care. Th

to opera

The con

encourag

police a

was perf

rt orders

Despite

any app

the proje

On 8 A

the Fair

Inspecto

against

Cummin

That app

On that

Jade Ing

or being

engaging

Busch, witnes

hey consider

ate outside of

nduct of the

ging was so

arrived. In d

formed on th

the Fair Wo

peal successfu

ect site on 8 A

pril 2014, as

r Work Com

orate comme

the CFMEU

ns. Urgent in

plication wa

date an orde

gham and Ro

g involved in

g, in any ind

ss statement, 5/

red themselv

f it. They wer

union offic

o bad that th

due course, th

he project site

ork Commiss

ful against th

April 2014.

s a result of

mmission’s o

enced an acti

U, Chad Bra

njunctive reli

as heard by J

r was made t

oland Cummi

organising,

dustrial actio

/8/14, para 76.

ves to be abo

re seriously m

cers and the

he police had

he workers d

e that day, 7 A

sion’s orders

hem, no work

f continued n

orders, the F

ion in the Fe

gdon, Jade I

ief was sough

Judge Burne

that the CFM

ins be restrai

or engaging

on as defined

ve the law, a

mistaken.

workers the

d to be calle

dispersed. N

April 2014.69

s and the abs

k was perfor

non-complian

Fair Work B

ederal Circu

Ingham and

ht.

ett on 8 Apr

MEU, Chad B

ined from org

or being inv

d in s 19 Fa

and able

ey were

ed. The

No work 9

sence of

rmed on

nce with

Building

uit Court

Roland

ril 2014.

Bragdon,

ganising

volved in

air Work

278

114.

Brea

115.

116.

70 Hin 71 Hin 72

Bus

Act 200

against a

The CF

apparent

lawyers

April 20

The effe

operatio

ach of court

Notwith

2014, an

on 8 an

That act

work, b

the proje

For exam

of the p

obviousl

and the

his true

ndmarsh Hearin

ndmarsh MFI-1

sch MFI-4, 5/8

9 (Cth) again

any sub-cont

MEU was s

t from a lette

to Michael R

014 to a vari

ect of the 9

on of the injun

orders

hstanding the

nd notwithsta

nd 9 April 2

tion compris

ut also the p

ect site.

mple, on 10 A

project site w

ly aware of t

Court. That

identity.

ng Book, 5/8/1

1, 31/10/14, pp

8/14.

nst Hindmar

tractor of Hin

served with

er dated 10 A

Ravbar noting

iation of the

April variat

nction for a f

e Fair Work

anding the or

2014, indust

sed not only

presence of

April 2014 a

wearing dark

the existence

is why he hi

4, pp 45-46.

p 1-3.

rsh in respec

ndmarsh enga

that and oth

April 2014 se

g that the par

orders made

tion in order

further period

Commission

rders of the F

trial action c

y the worker

intimidating

large man st

k glasses and

of the order

id behind a m

ct of the proj

aged at that s

her orders.

ent by the CF

rties had agre

e on 8 April

rs was to ext

d.

n orders on

Federal Circu

continued un

rs not attend

g ‘enforcers’

tood at the fr

d a mask.72

s of the Com

mask so as to

ject, and

site.70

That is

FMEU’s

eed on 9

l 2014.71

tend the

4 April

uit Court

nabated.

ding for

outside

ront gate

He was

mmission

conceal

279

117.

118.

119.

73 Ian 74 Bus

Complai

that thei

and mak

towards

Events o

contract

to confir

9, 10 a

concern

employe

11 Apri

entering

and thre

that they

significa

It would

this intim

the work

7 April

of the p

presence

event. T

Bragdon

Busch, 5/8/14

sch MFI-8, 6/8

ints were ma

ir employees

king commen

work.73

of this kind w

tors in emails

rm that its em

nd 11 April

s for their

ees had soug

il 2014 but h

g the site by p

eatening lang

y had under

ant risks to th

d be fanciful

midatory beh

kers of their

2014. Many

presence of

e of these p

The conducto

n and Jade In

, T:244.25-245

8/14.

ade to Hindm

s were being

nts to them a

were reporte

s sent at the t

mployees had

l 2014, but

personal s

ght to enter t

had been pr

persons unkn

guage. Anoth

rtaken a risk

heir staff thro

to think that

haviour had

own volition

y had been u

‘enforcers’

persons aroun

or of the orc

ngham were t

5.45.

marsh by var

g intimidated

as they were

ed to Hindma

time.74 One s

d attempted t

had been in

safety. An

the site on 8

revented on

nown who ha

her wrote to

k assessment

ough intimida

t the individu

been organis

n. The work

unable to retu

at and arou

nd the site w

chestra was t

the CFMEU o

rious sub-con

d by people s

e attempting

arsh by vario

sub-contracto

to attend for w

ntimidated a

nother said

April, 10 A

each occasio

ad used intim

Hindmarsh t

t and had id

ation.

uals who took

sed into doin

kers had dispe

urn to work

und the gate

was an orch

the CFMEU

officers deal

ntractors

standing

to walk

ous sub-or wrote

work on

and held

that its

April and

on from

midating

to report

dentified

k part in

ng so by

ersed on

because

e. The

hestrated

U. Chad

ing with

280

120.

121.

Settl

122.

123.

75 Hin 76 Ian 77

Ian

the site.

this orch

On 11

Industry

Court jo

of name

Followin

there wa

lement propo

Faced w

Fair W

11 April

Queensl

He had

Michael

BLF rec

presente

The dee

action; H

Fair Wo

ndmarsh Hearin

Busch, witnes

Busch, witnes

They must

hestration.

April 2014

y Inspectorat

oining Heinri

ed employees

ng the makin

as a progressi

osal

with complain

Work Commi

l 2014, Dav

land, met Ian

spent much

l Ravbar’s in

cords. Now

ed a form of d

ed recited tha

Hindmarsh h

ork Commis

ng Book, 5/8/1

ss statement, 5/

ss statement, 5/

, therefore, h

the Directo

te obtained o

ich Construc

s to the proce

ng of these o

ive return to

nts concernin

ission and t

vid Hanna, th

n Busch. Da

time in the p

nstructions to

w he turned h

deed for Hind

at workers on

ad applied fo

sion; and H

4, tab 9, pp 51

/8/14, para 85.

/8/14, Exhibit I

have been in

or of the F

orders from

ctions, Globa

eeding.75

orders, and f

work on the

ng defiance

the Federal

he President

avid Hanna h

period 1-4 A

o destroy ton

his attention

dmarsh to sig

n the project

or and obtain

indmarsh wa

-53.

IB-1.

ntimately inv

Fair Work B

the Federal

al HR and a

from 14 Apr

project site.7

of the order

Circuit Co

t of the CFM

had been ver

April complyi

nnes of CFM

to Hindmar

gn.77

had taken in

ned an order f

as claiming

olved in

Building

l Circuit

number

ril 2014, 76

rs of the

ourt, on

MEU in

ry busy.

ing with

MEU and

rsh. He

ndustrial

from the

to have

281

124.

125.

126.

78 Ian

suffered

CFMEU

The prop

pay Hin

satisfact

person a

Hindma

claims a

action.

When D

that ‘[o]

David H

meeting

Hindma

remain

project.

good ref

hell brea

fight, an

long as

and this

dollar th

Busch, witnes

d loss and dam

U was liable f

posed form o

ndmarsh $100

tion of all cla

arising out o

arsh would re

arising out of

David Hanna

thers with bi

Hanna also m

, including t

arsh would h

as a delegat

Another w

ference for Z

aks loose’.

nd that if nec

those that w

would occur

he union spen

ss statement, 5/

mage as a re

for that loss a

of deed conte

0. The paym

aims that Hin

f or connecte

elease the C

f, or in any w

presented th

igger lawyers

made a numbe

the following

have to accep

e for the du

as that Hind

Zoran Boguno

A third was

cessary the s

were experien

r if the deed

nt, it would c

/8/14, para 88.

esult of indus

and damage.

emplated that

ment was to

ndmarsh mig

ed with the i

CFMEU and

way connected

his deed to Ia

s than yours h

er of other st

g. If the ma

pt that Zoran

uration of the

dmarsh woul

ovic and if th

s that the un

stoppages wo

nced at the

was not sign

cost Hindma

strial action

at the CFMEU

be in full a

ght have aga

industrial act

its officers f

d with, the in

an Busch he t

have signed

tatements dur

atter was to

an Bogunovic

e form work

ld have to pr

his did not oc

nion was prep

ould continu

Children’s H

ned. Fourthl

arsh double.

and that

U would

and final

ainst any

tion and

from all

ndustrial

told him

it’.78

ring that

resolve,

c would

k on the

rovide a

ccur ‘all

pared to

ue for as

Hospital,

ly, every

Finally,

282

127.

Disp Nort

128.

129.

130.

79 Ian 80 Sub

he could

the deed

The CFM

depart f

The Com

It has he

not dem

Indeed,

of coun

former i

not reve

osing of C thbuild

Counsel

The CFM

to do so

provoke

There ar

Busch, witnes

bmissions of th

d have the si

d.79

MEU parties

from what a

mmission wa

eard evidence

monstrate err

there is no fu

nsel assisting

is simply mu

eal inconsiste

FMEU’s fa

l assisting’s s

MEU sought

ome work on

e the industria

re a number o

ss statement, 5/

he CFMEU, 16

ite operation

s submitted t

appears in th

as not party t

e. The argum

ror in the

fundamental d

g and the S

uch more det

ency.

actual conte

submissions p

t to contend t

n 2 April 201

al action whi

of problems w

/8/14, para 89.

/10/15, para 12

nal as soon a

that the Com

he Statement

o the Statem

ment of the C

argument of

difference be

tatement of

tailed than th

entions abou

proceeded as

that, by askin

14, Ian Busc

ich followed.

with this theo

2(d).

as Hindmarsh

mmission sho

t of Agreed

ment of Agree

CFMEU part

f counsel a

etween the ar

Agreed Fac

he latter. Th

ut Ian Bus

s follows.

ng Zoran Bo

ch was attem

.

ory:

h signed

ould not

Facts.80

ed Facts.

ties does

assisting.

rgument

cts. The

hat does

sch and

ogunovic

mpting to

283

131.

132.

133.

(a)

(b)

The fact

Ian Bus

industry

incurred

wish to p

Aware o

invent a

aberrant

against h

managin

The reas

been sac

way he

had purs

at a factua

rejected fo

paragraphs;

the theory

consideratio

between Z

been, it doe

to work, an

whether off

action unde

tual proposit

sch was an

y. He was aw

d by contract

provoke anyt

of the illogi

a reason why

t a fashion as

his own emp

ng.

sons which th

cked by his f

had treated Z

sued some ye

al level, it

or the reaso

; and

y is irrele

on. Whatev

oran Bogun

es not excuse

nd has nothi

ficers of the C

er considerati

tion advanced

experienced

ware of the en

tors if indust

thing of the k

icality of th

y Ian Busch

s effectively

ployer and th

he CFMEU

former empl

Zoran Bogun

ears earlier.

is nonsensi

ons set out

evant to t

er the history

ovic and Ia

e Zoran Bogu

ing to do wi

CFMEU eng

ion.

d by the CFM

d operator

normous cost

trial action is

kind.

is theory, th

would have

to seek to in

he project he

invented was

oyer, Northb

novic on a p

ical and sho

t in the fo

the matters

y of the rela

an Busch ma

unovic from

ith an assess

gaged in the u

MEU is imp

in the cons

ts and losses

s taken. He

he CFMEU

behaved in

ncite industria

e was respons

s that Ian Bu

build, becaus

project that c

ould be

ollowing

under

ationship

ay have

refusing

sment of

unlawful

probable.

struction

s that are

e did not

tried to

such an

al action

sible for

usch had

se of the

company

284

134.

135.

136.

137.

81 Mic 82 Mic 83

Mic

The initi

in the fo

It an em Fr thi wo No ha did M Ac fo be the

As was

Ravbar d

Althoug

‘recalled

examina

matters

him, be

unknow

Bogunov

Michael

CFMEU

chael Ravbar, w

chael Ravbar, 6

chael Ravbar, 6

ial peddler o

ollowing pass

is my under nimosity towar mployed for a riday afternoon

ings and leave ouldn’t be c orthbuild’s Qu ad just sacked

dn’t know any Mr Bogunovic ccordingly, M llowing Mond

een sacked by N e worksite on t

the case w

did not have

gh Michael

d’ a certain in

ation it was

at all.82 He w

eing persons

wn sources.

vic about it.

l Ravbar’s so

U theory wa

witness statem

6/8/14, T:309.1

6/8/14, T:309.3

of this theory

sage of one o

rstanding that rds Mr Boguno company call n Mr Busch ab

e the site wher coming back. ueensland State d him. The M

ything about tha could stay on Mr Bogunovic t day morning an

Northbuild a fe the previous Fr

with a good

a reliable ba

Ravbar clai

ncident relat

revealed tha

was relying o

who (alleg

Michael Rav

Nor had he a

o called ‘ev

as therefore

ent, 6/8/14, pa

15-310.7.

36-45, 310.23-

was Michae

of his stateme

t Mr Busch

ovic when they led Northbuild bruptly told M re they were w

Mr Bogun e Manager and Manager told M at and that as f

n the job for turned up for nd was inform ew hours after riday.

deal of his

asis for advan

imed in tha

ing to the all

at he had no

on something

gedly) had h

vbar had no

asked anyone

vidence’ to s

e the produ

ra 8.

43.

el Ravbar. H

ents:81

developed a y were both p d. I recall tha Mr Bogunovic t

working on an unovic then s told him that M Mr Bogunovic

far as he was c r as long as

work as usua med that Mr B Mr Bogunovi

s evidence,

ncing his theo

at passage t

leged sackin

o knowledge

g that others

heard it from

ot even aske

e from North

support this

uct of comp

He did so

personal previously at on one to get his nd that he

spoke to

Mr Busch c that he

concerned he liked.

al on the

Busch had ic had left

Michael

ory.

to have

g, under

e of the

had told

m other

d Zoran

hbuild.83

unlikely

pounded

285

138.

139.

140.

84 Bus 85 Mic

multiple

primary

To make

witness

letter ha

every in

The lett

Paul B

Constru

letter Pa

resigned

Northbu

entitlem

that peri

I w ye the ex

Michael

he enter

the term

contrary

sch MFI-9, 6/8

chael Ravbar, 6

e hearsay. I

source.

e matters wo

box and ver

ad been tend

ndication that

er in questio

Boddington,

ction Pty Ltd

aul Boddingto

d on 30 M

uild would be

ments and fina

iod. The lette

would like to ears of commit e growth and c xtend sincere w

l Ravbar was

red the witne

ms of the re

y, he swore it

8/14.

6/8/14, T:314.3

It was not p

orse, by the t

rified the pas

dered and re

t Michael Rav

on was dated

the mana

d. It was ad

on acknowle

May 2012. H

e 30 June 20

al pay would

er ended:

take this oppo tment and serv continued succ wishes for your

s aware of th

ess box.85 Ye

levant parag

t was true.

36-39.

possible to t

time Michael

ssage in his

eceived in ev

vbar’s statem

d 4 June 2012

aging direct

ddressed to I

edged the fac

He noted th

012. He conf

d be account

ortunity to tha ice. You have cess of Northbu future.

hat letter, and

et he made n

graph of his

trace it back

l Ravbar ent

statement on

vidence whi

ments were w

2. It was si

tor of No

Ian Busch.84

ct that Ian Bu

hat his last

firmed that a

ted for at the

ank you for yo e played a maj uild and I wou

d its contents

no attempt to

statement.

k to any

tered the

n oath, a

ich gave

wrong.

igned by

orthbuild

In that

usch had

day at

all of his

e end of

our many or role in uld like to

s, before

o change

To the

286

141.

142.

143.

144.

86 Mic 87 Mic 88

Mic

When th

he admi

one that

miscond

He said

consider

some do

statemen

the matt

remaine

say that

Michael

evidence

real idea

correspo

much to

prepared

reputatio

reason t

the beha

Zoran B

subject.

chael Ravbar, 6

chael Ravbar, 6

chael Ravbar, 6

his was point

itted that, on

t would been

duct.86

d that, hav

ration to the

oubt about w

nt. He said t

ter that mor

d ‘comfortab

he believed t

l Ravbar app

e smearing I

a whether the

ondence whic

o his discredi

d to make ser

on of others

to suspect th

aviour of an h

Bogunovic a

He was pre

6/8/14, T:314.4

6/8/14, T:316.4

6/8/14, T:317.1

ted out to Mi

n the face of

written to a

ving seen

e possibility

what he had

that he had s

rning. But h

ble with my

that the parag

pears to hav

Ian Busch’s

e smear was j

ch, on its fac

it. It reflecte

rious stateme

, when he e

at those state

honest person

also gave u

epared to sta

41-44.

4-11.

16.

ichael Ravba

f it, the letter

person who

the letter,

of saying t

d said agains

spoken to his

he said that

y statement’.8

graph was tru

ve been wil

reputation,

justified, and

e, indicated i

ed very poor

ents, potentia

ither knew o

ements are n

n.

unimpressive

ate in the wi

ar in the witn

r did not sou

had been sac

he actuall

that there m

st Ian Busch

s legal couns

having done 87 He conti

ue.88

lling to give

without hav

d indeed hav

it was not. T

rly on him.

ally damagin

or at least ha

not true. Th

e evidence

itness box th

ness box,

und like

cked for

ly gave

might be

h in his

sel about

e so, he

inued to

e sworn

ving any

ing seen

This was

He was

ng to the

ad good

his is not

on this

hat when

287

145.

146.

89 Zor 90 Hin 91

Hin

they wer

the blue

was term

Northbu

company

Howeve

Zoran B

an alterc

Friday b

Ian Busc

was not

is that Z

contract

complai

Zoran B

spoken t

all of th

terms.91

suggesti

view ca

commun

Ian Bus

letter, he

ran Bogunovic

ndmarsh Additi

ndmarsh Additi

re both work

e, approached

minated, and

uild foreman

y for trying t

er, document

Bogunovic’s e

cation betwe

before Ian Bu

ch had given

as Zoran Bo

Zoran Bogun

tor was in

ned, Ian Bus

Bogunovic ha

to.90 The do

e Northbuild

Ian Busch

ion that one o

annot be ac

nications with

ch gave evid

e resigned fr

, witness statem

ional Hearing B

ional Hearing B

king on the N

d him one F

that the foll

that Ian Bu

to sack him.8

ts produced

evidence was

een Ian Busc

usch left Nor

n notice of his

ogunovic des

novic had sp

n receivers

sch had repr

ad agreed to

ocuments also

d foremen, Ia

was not sac

of Northbuild

ccepted in

h those men.

dence that, c

rom that com

ment, 2/9/14, p

Bundle, 2/9/14

Bundle, 2/9/14

Northbuild sit

riday afterno

owing Mond

sch had been 9

by Northbui

s false. Ther

ch and Zoran

rthbuild (and

s resignation

scribed it. W

pread a false

hip, the

rimanded Zo

apologise to

o show that,

an Busch left

cked or aske

d’s foremen

light of th

consistently

mpany. He w

paras 3-4.

4, Vol 1, pp 1-2

4, Vol 1, pp 4-8

te, Ian Busch

oon and told

day he was to

n asked to le

ild demonstr

re certainly h

n Bogunovic

d about a mon

n). But the alt

What in fact o

e rumour tha

sub-contracto

oran Boguno

o the people

to the know

t Northbuild

ed to leave,

expressed a

he contempo

with the No

was not sack

2.

8.

h, out of

d him he

old by a

eave the

rate that

had been

c on the

nth after

tercation

occurred

at a sub-or had

vic, and

e he had

wledge of

on good

and the

contrary

oraneous

orthbuild

ked. He

288

147.

148.

149.

92 Ian 93 Sub 94

Sub 95 Sub

was no

Bodding

confirme

even tho

in place

Ultimate

Zoran B

was aba

The CFM

follows:

As as mo 20 Ra Bo un Bo for as ma the cre su

This is

Counsel

provoke

Busch, 5/8/14

bmissions of th

bmissions of C

bmissions of C

ot asked to

gton in an af

ed that it did

ough an offe

for this to oc

ely then, bu

Bogunovic’s

ndoned.

MEU parties 93

s to the credi sisting make otives in direc 014. The evide

avbar and Mr B ogunovic prev nderstood that ogunovic. Th

rmer employer Mr Busch had atter was irrel en go to some edit. The CFM ubmits that the

a misunder

l assisting sa

e industrial a

, T:242.10-20.

he CFMEU, 16

ounsel Assistin

ounsel Assistin

resign.92

ffidavit tende

d not wish to

er had been m

ccur if requir

ut far too lat

credit, the u

s made sever

t of Mr Ravb much of the cting Mr Bogu ence that is de

Bogunovic had viously on a Mr Busch had he Commission

r indicating th d resigned …. levant to the m e length to rel

MEU agrees t challenge to M

rstanding of

aid that even

action, that w

/10/15, para 15

ng, 31/10/14, p

ng, 31/10/14, p

This was

ered in evid

cross-examin

made for arra

red.

te to save M

unwarranted a

al submissio

bar and Mr B evidence giv unovic to per ealt with is the

d about Mr Bu another buildi d been dismis n obtained a l hat that unders

[Counsel assis matters under ly upon it to c that the matter Mr Ravbar’s cre

f counsel as

n if Ian Busc

was irrelevan

5.

paras 108-124.

para 109(b).

confirmed b

dence. The C

ne Paul Bod

angements to

Michael Ravb

attack on Ian

ons. The firs

Bogunovic94 … ven as to Mr rform work on e understanding usch’s dealings

ing site. B

ssed for mistre letter from Mr standing was m sting contend]9

consideration challenge Mr r is irrelevant edit fails.

ssisting’s ar

ch was attem

nt to whethe

by Paul

CFMEU

ddington,

o be put

vbar’s or

n Busch

st was as

… counsel r Busch’s n 4 April

g that Mr s with Mr oth men

eating Mr r Busch’s misplaced 95

that the although Ravbar’s and also

rgument.

mpting to

er Zoran

289

150.

151.

152.

96 Sub 97 Sub 98

Sub

Bogunov

counsel

credit, a

The CFM

Th cre for wa ev

The actu

the reck

said, and

Then the

It ch Ho ref tha M tha sit wa be no dis tol ba his tha

bmissions of th

bmissions of th

bmissions of C

vic could b

assisting d

and that was n

MEU parties

he CFMEU do edit is impugn r Mr Busch’s as based on w vidence why th

ual reason is

klessness of w

d perhaps wo

e CFMEU pa

is suggested b hange the evid owever, a fair fute this submi

at there was p Mr Bogunovic b at Mr Busch w te. The provis

as sacked only elief. The belie ot be dispelled sproven. The

ld Mr Bogunov asis for the beli s statement did

at event. He

he CFMEU, 16

he CFMEU, 16

ounsel Assistin

be excused f

discussed is

not without im

next put the

oes not accept ned by the exer termination o what they had

ey held that be

s important

what Michae

orse than reck

arties put the

by counsel assi dence in …

reading of [the ission. Mr Ra personal animo based on a rep was sacked afte

sion of the lette y deals with on ef, that there w d by the evide

fact that Mr B vic to collect h ief that there w d not state as a

stated that M

/10/15, para 16

/10/15, para 17

ng, 31/10/14, p

from refusin

relevant to

mportance.

following su

that Mr Ravba rcise of establi f employment been told. T elief.

because it d

el Ravbar an

klessness.

following su

isting98 … that his statement e] statement is avbar simply st

osity on behalf ort that Mr Bo er he asked Mr er that Mr Bus

ne aspect of th was animosity ence that part Bush had, on h

his things and was animosity. fact that Mr B Mr Bogunovic

6.

7.

paras 116-121.

ng to work.

o Michael R

ubmission:96

ar and Mr Bog ishing the actu t. The belief t They indicated

demonstrates

nd Zoran Bo

ubmission:97

t Mr Ravbar’s was to his

s all that is nec tates that he un f of Mr Busch ogunovic had

Bogunovic to sch resigned ra he basis for ho from Mr Busc

of the reason his last day on leave may still Further, Mr R Busch was dism

was told that

What

Ravbar’s

gunovic’s ual reason they held d in their

at least

ogunovic

failure to discredit. cessary to nderstood h towards

been told leave the ather than olding the ch’s, need n for it is

n the site, l justify a Ravbar in missed for

t. Those

290

153.

154.

155.

99 Sub 100 Su

cir co

Unfortun

convinci

Finally,

… de dis pe Co ad cir

It is nec

sentence

rehabilit

endeavo

counsel

Bogunov

content

he seem

saying.

had put

Busch’s

Busch h

ground

have it

redound

bmissions of th

ubmissions of C

rcumstances d ounsel assisting

nately the re

ing than the r

the CFMEU

… Mr Bogunovi escribed by c scredit.100 T eripheral to t

ommission in t dverse finding rcumstances. T

cessary to reg

e s. It is n

tate the cha

oured to ass

assisting ar

vic gave ev

of what he s

med extremely

He had goo

forward evid

reputation.

had a perso

assigned wa

on that grou

d badly to

he CFMEU, 16

Counsel Assisti

do not justify g’s submission.

easoning of

reasoning set

U parties put t

ic’s evidence a counsel assist The matters d the matters

the case study. gs about M

The Commissi

gister strong

necessary to

aracter of a

assinate. In

re supported

vidence. He

said and his

y ill at ease a

d reason for

dence which

Zoran Bogu

nal animosit

as a material

und was rele

the credit o

/10/15, para 18

ing, 31/1-/14, p

the attack on .

counsel assi

t out in this p

the following

about his dealin ting as unim dealt with in

being investi . There can be Mr Bogunovic on should not d

disagreemen

deal with

a witness w

ncidentally,

d by the wa

e was unimp

demeanour w

and uncertain

this behavio

, if true, was

unovic suppo

ty to Zoran

fact. Evide

evant. That

of both Zor

8.

para 18.

Mr Ravbar’s

isting is muc

passage.

g submission

ngs with Mr B mpressive and these paragr igated by th

e no purpose in c’s credit i

do so.

nt with the la

credit in o

which the C

the submiss

ay in which

pressive in b

while giving

n about what

our. Michael

s very advers

rted it. Whe

n Bogunovic

ence that he

evidence te

ran Boguno

credit in

ch more

:99

Busch was d to his

raphs are he Royal

n making in those

ast three

order to

CFMEU

sions of

h Zoran

both the

g it – for

t he was

l Ravbar

se to Ian

ether Ian

on the

did not

ended to

vic and

291

156.

C – C

157.

Brea

158.

Michael

peripher

bearing

In subst

correct.

CONCLUSI

What co

ach of s 417 o

Section

(1

(2

l Ravbar.

ral. In anoth

on facts in is

ance the sub

IONS

onclusions sh

of the Fair W

417(1) of the

) A person re engage in in

(a) an ent nomin

(b) a wor nomin

(c) wheth dealt w

) The person

(a) an em

who is

(b) an off the ag

In one sen

her sense they

ssue. That w

missions of c

hould be draw

Work Act 200

e Fair Work A

eferred to in ndustrial action

terprise agreem nal expiry date

rkplace determ nal expiry date

her or not the with in the agre

ns are:

mployer, an em s covered by th

ficer of an emp greement or det

nse credit fi

y can be cen

was the case h

counsel assis

wn from these

09 (Cth)

Act 2009 (Ct

subsection (2) n from the day o

ment is approve has passed; or

mination comes has passed;

industrial act eement or dete

mployee, or e he agreement o

ployee organisa termination, ac

findings are

ntral because

here.

sting on the f

e facts?

th) provides:

) must not org on which:

ed by the FWC r

into operation

tion relates to ermination.

employee orga or determinatio

ation that is co cting in that cap

always

of their

facts are

:

ganise or

C until its

n until its

a matter

anisation, on; or

overed by pacity.

292

159.

160.

161.

162.

163.

‘Industri

2009 (C

work or

employe

authoris

concern

safety w

other av

Employ

industria

14 April

As the f

Ingham

(Cth) by

they hav

Proceed

recitatio

workers

accord i

video fo

It is inhe

Section

provisio

In addit

make an

ial action’ is

Cth) as the fa

r a failure

ees who atte

ed or agreed

of the empl

where the em

vailable work

ees of sub-co

al action on

l 2014 by fai

facts set out

may have b

y organising a

ve admitted

dings. For rea

on of the fact

were protest

s false. It is

ootage, of wh

erently impro

417 (1) of th

on.

ion, the Fed

ny order tha

s defined in

ailure or refu

or refusal to

end for wor

d to by the em

oyee about a

mployee did n

k when direct

ontractors en

28 March an

ling to work

above demo

reached s 41

and engaging

this in the S

asons that hav

ts, the sugges

ting and refu

not supporte

hat actually o

obable.

he Fair Work

deral Court o

at it consider

s 19(1)(c) of

sal by an em

o perform a

k, except w

mployer or ba

an imminent

not unreason

ed to do so.

ngaged by Hi

nd again from

during that p

onstrate, Cha

17(1) of the F

g in that indu

Statement of

ve been expl

stion by Mic

using to atten

ed by the evi

occurred on t

k Act 2009 (C

or the Federa

rs appropriat

f the Fair W

mployee to at

any work at

where such a

ased on a rea

risk to his h

nably fail to

indmarsh eng

m 2 April to

period.

ad Bragdon a

Fair Work A

ustrial action.

Agreed Fact

lained in deta

chael Ravbar

nd work of th

idence, inclu

the days in q

Cth) is a civil

al Circuit Co

te if satisfie

Work Act

ttend for

t all by

action is

asonable

health or

perform

gaged in

o at least

and Jade

Act 2009

. In part

ts in the

ail in the

that the

heir own

uding the

question.

l remedy

ourt may

d that a

293

164.

Brea

165.

166.

person h

This i

compen

contrave

The max

or its of

s 417 o

This is m

since be

well. T

officers

required

break th

ach of s 421 o

Where t

the Fair

applies m

2009 (C

The CFM

fact of t

2014, a

industria

has contraven

ncludes, w

sation for lo

ention: s 545

ximum penal

fficials for or

of the Fair W

manifestly d

een increased

The penaltie

of the CFM

d to give ser

he law before

of the Fair W

he Fair Work

r Work Act

must not con

Cth) s 421.

MEU, Chad

the order of t

and contrave

al action in th

ned s 417 of

without lim

oss that a per

(2) of the Fa

lty capable o

rganising ind

Work Act 20

eficient. It i

d to $10,800.

s should be

MEU, and o

rious consid

they decide

Work Act 200

k Commissio

2009 (Cth),

ntravene a ter

Bragdon and

the Fair Wor

ened a term

he period fro

f the Fair W

mitation, an

rson has suff

air Work Act

of being impo

dustrial action

009 (Cth) in

is no deterre

. That is ma

substantiall

other trade

deration to w

whether to ta

09 (Cth)

on makes an

the person

rm of that or

d Jade Ingha

rk Commissi

m of that o

m 4 to 14 Ap

Work Act 200

n order a

ffered becaus

t 2009 (Cth).

osed on the C

n in contrave

2014 was $

ent. The pen

anifestly defi

ly increased

union offici

whether they

ake action.

order under

to whom th

rder: Fair W

am each knew

ion made on

order by org

pril 2014.

09 (Cth).

awarding

se of the

CFMEU

ention of

$10,200.

nalty has

ficient as

so that

ials, are

y should

s 418 of

he order

Work Act

w of the

n 4 April

ganising

294

167.

168.

169.

170.

As s 42

provisio

Building

Bragdon

the Fede

up to $1

In addit

Court o

amongst

the loss

Act 2009

The ma

organisa

of an or

They do

study. P

An offic

order o

punishm

financia

21 of the Fa

on, either Hi

g Inspectorat

n, Jade Ingha

eral Circuit C

0,200 each:

tion, Hindm

or the Feder

t other thing

it has suffere

9 (Cth) s 545

aximum pen

ations such a

rder of the F

o not deter b

Penalties shou

cer of a regis

of the Fair

ment by a sign

al sanctions.

air Work Ac

indmarsh or

te may comm

am and the C

Court seekin

Fair Work A

marsh may ta

ral Circuit C

gs, an order a

ed because o

5.

nalties that m

as the CFME

Fair Work Co

behaviour of

uld be substa

stered organis

Work Com

nificant perio

ct 2009 (Cth

an Inspecto

mence proce

CFMEU in t

ng the imposi

Act 2009 (Cth

ake proceedi

Court seekin

awarding co

of the contrav

may be imp

EU, and their

ommission a

f the kind re

antially incre

sation who d

mmission sh

od of impriso

h) is a civil

or of the Fai

edings again

the Federal C

ition of a pe

h) s 539.

ings in the

ng relief in

mpensation

ventions: Fa

posed on re

r officers, for

are grossly d

evealed in th

eased.

deliberately d

hould be li

onment in add

penalty

ir Work

nst Chad

Court or

enalty of

Federal

ncluding,

to it for

air Work

egistered

r breach

deficient.

his case

defies an

iable to

dition to

295

Brea brea

171.

172.

173.

174.

aches of Fai ch of Fair W

Section

2009 (C

must no

Work C

Section

2009 (C

must no

contrave

organisa

to whe

contrave

Section

2009 (C

prohibiti

registere

contrave

reckless

a contrav

As has a

knew on

its orde

ir Work (Re Work Comm

300 of the

Cth) provides

t knowingly

ommission p

297 of the

Cth) provides

ot do anyth

ene an ord

ation from do

ther, the d

ention.

302 of the

Cth) provide

ing an empl

ed organisat

ene the order

as to whethe

vention.

already been

n 4 April 201

er, and the

egistered Or mission order

Fair Work

s that an off

or recklessly

prohibiting th

Fair Work

s that an off

hing that wo

der of the

oing somethin

doing of th

Fair Work

s that, if th

oyee from d

tion must

r if the order

er, the doing

n explained,

14 that the F

terms and e

rganisations) r of 4 April 2

(Registered

ficer of a reg

y contravene

he officer from

(Registered

ficer of a reg

ould cause

Commissio

ng either kno

he thing wo

(Registered

he Commissi

doing someth

not do an

had applied

of the thing

Chad Bragdo

air Work Co

effect of th

) Act 2009 2014

Organisatio

gistered orga

e an order of

m doing som

Organisatio

gistered orga

the organisa

on prohibiti

owing, or rec

ould result

Organisatio

ion makes a

hing, an offi

nything that

to him, know

would result

on and Jade

ommission ha

e order. B

(Cth) –

ons) Act

anisation

f the Fair

mething.

ons) Act

anisation

ation to

ing the

ckless as

in the

ons) Act

an order

icer of a

would

wing, or

t in such

Ingham

ad made

But they

296

175.

176.

177.

178.

continue

that in d

By so ac

Fair Wo

Those s

Federal

(Registe

imposin

those pr

penalty

penalty

sanction

power to

Aside f

(Registe

may ma

provisio

reason o

It is wor

Chapter

(Cth), c

Court or

in the A

Circuit C

this Part

ed to organi

doing so they

cting, they m

ork (Registere

ections are c

Court has

ered Organis

g on a person

rovisions, a

units ($51,0

units ($10,

ns are too low

o impose pris

from civil p

ered Organis

ake an order

ons pay comp

of those contr

rth observing

9 of the Fai

oncern contr

r the Fair W

Act to mean

Court is sepa

t of the Act

se the indus

were acting

may have brea

ed Organisat

civil penalty

power unde

sations) Act

n or organisa

pecuniary

000) in the c

200) in any

w. And they

son sentences

penalties, un

sations) Act

that the per

pensation to

raventions.

g that the civ

ir Work (Reg

raventions o

Work Commis

n the Federa

arately define

because the

strial action

in contraven

ached ss 297

tions) Act 20

y provisions.

er s 306 (1)

2009 (Cth)

ation whose c

penalty of n

case of a bo

y other case

y should be c

s.

nder s 307

2009 (Cth)

rson who ha

a party who

vil penalty pr

gistered Orga

f an order o

ssion. ‘Feder

al Court of

ed. There ap

e civil penalt

thereafter, k

ntion of the o

7, 300 and 30

009 (Cth).

That being

) of the Fai

) to make a

conduct cont

not more th

ody corporate

e. These f

omplemente

of the Fai

, the Federa

as contravene

o suffers dam

rovisions in P

anisations ) A

of either the

ral Court’ is

Australia.

ppears to be

ty provisions

knowing

order.

02 of the

g so, the

ir Work

an order

travened

han 300

e, or 60

financial

d by the

ir Work

al Court

ed these

mage by

Part 3 of

Act 2009

Federal

defined

Federal

a gap in

s do not

297

Cont

179.

180.

181.

extend t

This ga

legislatio

Court in

2009 (C

tempt of the

Section

(Cth) pr

punish c

contemp

For the

finding

continue

scare su

prohibit

There is

fact of th

In these

Jade Ing

the orde

to be pu

to contravent

ap should b

on so as to

n s 297 of th

Cth) and the s

e Federal Cir

17 of the F

rovides the F

contempts of

pts of its auth

reasons set

is that the

ed to organis

ub-contractor

ed from doin

s no suggesti

he orders and

circumstanc

gham and Ch

er of the Fede

unished by tha

tions of orde

be closed b

include a r

he Fair Work

ections whic

rcuit Court

Federal Circu

Federal Circu

f its authority

hority.

out earlier

CFMEU, Ja

se industrial

rs away from

ng so by ord

ion that any

d their effect

ces, the evide

had Bragdon

eral Circuit C

at Court.

ers of the Fe

by way of

reference to

k ( Registered

h follow it.

order of 7 A

uit Court of

uit Court with

y as the High

in this Chap

ade Ingham

action, and

m returning

der of the Fe

of them did

.

ence establish

n may have a

Court. If they

ederal Circui

amendment

the Federal

d Organisatio

April 2014

f Australia A

h the same p

h Court has to

pter, the app

and Chad B

d use intimid

to work afte

ederal Circui

not know ab

hes that the C

acted in cont

y did, they a

it Court.

to the

l Circuit

ons) Act

Act 1999

power to

o punish

propriate

Bragdon

dation to

er being

it Court.

bout the

CFMEU,

tempt of

are liable

298

Brea

182.

101 Su

ach of s 359 o

The sub

Jade In

Crimina

assisting

ubmissions of C

of the Crimin

bmissions of

gham and D

al Code Act

g is now cont

Counsel Assisti

nal Code Ac

counsel assi

David Hann

1899 (Qld).1

tent for this n

ing, 31/10/14,

ct 1899 (Qld)

isting consid

na in relatio 01 As expla

not to be deal

paras 153-157

)

dered the pos

on to s 359

ained earlier,

lt with.

.

sition of

9 of the

counsel

299

300

APPENDIX A

301

302

303

304

305

306

307

308

309

310

311

312

PART 9: CFMEU VIC

CHAPTER 9

ANDREW ZAF

Subject Paragraph

A – INTRODUCTION 1

B – NEW MATERIAL 10

C – COUNSEL ASSISTING’S POSITION 16

D – CONSIDERATION 19

INTRODUCTION A –

1. For reasons which will appear below, this case study has had an

inconclusive outcome. It is therefore not desirable to analyse in detail

either the complaints which Andrew Zaf has made about others or the

complaints which others have made about him.

2. Counsel assisting set out the substance of the background in the

following way.1

1 Submissions of Counsel Assisting, 13/11/15, paras 1-6.

313

3. In October 2015 further evidence was adduced in a case study which

was originally before the Commission in 2014. The case study

concerns evidence given by Andrew Zaf, a witness from Victoria. In

2014, it had reached a final stage, but as set out at Chapter 8.11 of the

Interim Report, shortly before that report was completed (but after

submissions had been made by counsel assisting and affected parties)

material came to the attention of the Commission which required

further investigation before any concluded findings could be made.

The material did not come to the attention of the lawyers assisting the

Commission until after 27 November 2014.2

4. The issue to be dealt with in these submissions is whether or not, in

light of the new material coming to the Commission’s attention, the

submissions made last year by counsel assisting stand or should be

changed.

5. Last year counsel assisting submitted:3

(a) That many of the events Andrew Zaf described in his

evidence had occurred a long time ago, and there were no

longer any records available that would assist the

Commission in undertaking a thorough investigation into the

matters raised. Accordingly, it was then further submitted

that it was undesirable to give consideration to whether any of

the conduct Andrew Zaf described might properly be

characterised as criminal or unlawful, and unrealistic to

2 Submissions of Counsel Assisting, 25/11/14, para 3. 3 Submissions of Counsel Assisting, 31/10/14, ch 8.11, paras 71-72.

314

expect that, even if it could be so characterised, legal action

would be taken at this time.

(b) It was further submitted that the matters raised by Andrew

Zaf appeared to demonstrate:

(i) the improper use of pressure and intimidation by

John Setka in order to advance his own personal

interests – for example the acquisition of free

building materials for his own home, and the

payment of moneys claimed by his partner in a

matter which had nothing to do with the CFMEU.

He was able to exert this pressure and intimidation

by reason of the fact that he was, at the time, an

officer of the union able to threaten and implement

industrial action against those who did not please

him; and

(ii) the improper use of pressure by officers of the

CFMEU (and its predecessors) to influence a

builder, here Andrew Zaf, to employ particular

individuals as a ‘favour’ to the union. In agreeing to

do these favours, Andrew Zaf was buying industrial

peace.

6. The CFMEU’s submissions in reply dated 14 November 2014 stated

among other things:4

4 Submissions of the CFMEU, 14/11/14, p 94, para 2.

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The CFMEU agrees with the candid conclusions reached by counsel assisting at paragraph [71], p936 that the historical nature of the events means that there are no longer any records available that would assist the Commission in undertaking a thorough investigation into the matters raised.

7. In 2014 Andrew Zaf had given evidence by way of a statement dated

29 June 2014,5 and oral evidence on 8 July and 17 September 2014.

Other witnesses had also been called who gave evidence in relation to

some of the matters raised by Andrew Zaf which put a number of

matters in issue.

8. The additional material which came to the attention of the Commission

and which was the subject of a hearing in 2015 went only to the

credibility of Andrew Zaf. It was initiated by Gary Cheetham. Gary

Cheetham had been a business associate and friend of Andrew Zaf.6 In

2014 the two men had had a falling out.7 Given the nature of their

relationship and the material provided by Gary Cheetham, the

Commission attempted to investigate the claims of Gary Cheetham

with a view to seeing if they had independent support. In this regard, a

number of additional statements from other witnesses,8 together with

other material,9 were obtained. In the 2015 hearing, Andrew Zaf also

returned to the witness box.10

5 Andrew Zaf, witness statement, 8/7/14. 6 Gary Cheetham, witness statement, 29/10/15, paras 5-6. 7

Zaf MFI-1, 29/10/15, p 81; Zaf MFI-1, 29/10/15, pp 2, paras 9, 48. 8 Tom Boglis, witness statement, 29/10/15; Hamish McDonell, witness statement, 29/10/15. 9

Zaf MFI-1, 29/10/15, pp 36-285 (including material received from Victoria Police, Whittlesea Council, The Environment Protection Authority Victoria, Telstra, WorkSafe and Stockland). 10

Andrew Zaf, 29/10/15, T:85.16-129.40.

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9. Counsel assisting then set out certain aspects of the conflict between

Gary Cheetham and Andrew Zaf along the following lines.

NEW MATERIAL B –

10. Gary Cheetham provided evidence about a number of matters

including the following. He stated that Andrew Zaf had made a

number of admissions to him, namely: that Andrew Zaf had lied to the

Royal Commission;11 that Andrew Zaf had stated that he had provided

John Setka with roofing materials at cost ‘as a suck job’ rather than at

no cost;12 that Andrew Zaf had admitted that the injuries sustained by

Andrew Zaf in March 2014, described by him as retribution for being

involved in an ABC television story on the 7.30 program, were self-inflicted;13 that Andrew Zaf had submitted false invoices to the

developer Stockland;14 that Andrew Zaf had illegally dumped asbestos

and that Gary Cheetham could prove this.15

11. Because of the conclusions reached about the overall state of the

evidence, it is not proposed to analyse Gary Cheetham’s evidence in

detail. However, it can be observed that whilst in many ways Gary

Cheetham’s evidence was unsatisfactory and his demeanour

11 Gary Cheetham, 29/10/15, T:9.31-38; Zaf MFI-1, 29/10/15, pp 5, 23, 26, 111, 204, 207. 12 Gary Cheetham, 29/10/15, T:21.4-10; Zaf MFI-1, 29/10/15, p 27. 13

Gary Cheetham, 29/10/15, T:19.3-7; Gary Cheetham, witness statement, 29/10/15, paras 8-11; Gary Cheetham, supplementary witness statement, 29/10/15, paras 11-13; Zaf MFI-1, 29/10/15, pp 5, 22. 14

Gary Cheetham, witness statement, 29/10/15, para 19; Zaf MFI-1, 29/10/15, pp 23, 28, 44, 114, 116, 119, 120, 164-176; Gary Cheetham, 29/10/15, T:22.10-23.16. 15

Zaf MFI-1, 29/10/15, p 26.

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unconvincing, some aspects of his evidence were supported, at least to

an extent.

12. For instance, information obtained from Victoria Police in 2015 (which

was not available to the Commission in 2014 because of a claim of

public interest immunity based on (then) ongoing investigations)

indicated that Victoria Police had commenced its investigations into

the possibility of the self-infliction of injuries by Andrew Zaf shortly

after the incident in question and, significantly, well prior to any

complaint by Gary Cheetham.16 A forensic medical report prepared for

the police in April 2014, and obtained by the Commission in 2015, was

not definitive one way or the other, in that it stated that certain features

of the incident and injuries raised the possibility of self-infliction,

whilst other features did not.17 The police prepared a wide-ranging

report in September 2015.18 A note from a senior police officer

commenting on the September 2015 report stated that the evidence

relating to the incident indicated that a false report had been made, but

there was insufficient evidence to support that charge.19

13. As to the allegation of false invoices, the Commission obtained

supportive independent evidence which showed that the invoices in

question were not true, did not reflect actual work done, and were in

16 Zaf MFI-1, 29/10/15, pp 61-70. 17 Zaf MFI-1, 29/10/15, p 68. 18

Zaf MFI-1, 29/10/15, pp 72-79. 19 Zaf MFI-1, 29/10/15, p 71.

318

fact obtained by Andrew Zaf from a business colleague of his and were

supplied by Andrew Zaf to Stockland.20

14. On the other hand, in relation to Gary Cheetham’s allegation that

Andrew Zaf had illegally dumped asbestos and that he could prove that

allegation, not only was the Commission unable to find any direct

evidence to support this claim, but Gary Cheetham was not able to

make good his claim that he could prove the allegation.

15. Andrew Zaf entered the witness box to respond to Gary Cheetham’s

claims. His evidence included the following. He maintained that he

had only told the truth to the Commission.21 He maintained his

evidence that he had supplied roofing materials to John Setka at no

cost.22 He rejected the claim that he had self-inflicted injuries.23 He

denied illegally dumping asbestos.24 As to the issue of false invoices

he gave the following evidence:25

Q. Did you submit false invoices to Stockland? A. The invoices in question were submitted by myself under the advice of Gary Cheetham.

Q. So you did submit false invoices to Stockland? A. Yes, we did – I did.

Q. You arranged to get those invoices, did you? A. I called up Tom upon Gary Cheetham’s request to fabricate the invoices for a variation that he wanted to get through.

20 Tom Boglis, witness statement, 29/10/15, paras 17-43. 21 Andrew Zaf, 29/10/15, T:85.34-36. 22

Andrew Zaf, 29/10/15, T:85.38-46. 23 Andrew Zaf, 29/10/15, T:86.1-6. 24

Andrew Zaf, 29/10/15, T:87.27-32. 25 Andrew Zaf, 29/10/15, T:86.17-37.

319

Q. Right. You realise, do you, that providing false invoices to a company is the wrong thing to do? A. I thought it was a little bit innocent but very naïve on my part as being so stupid as to do that and requesting to get a variation

approved that actually never occurred.

Q. Well, do you realise it was wrong to provide a false invoice? A. Yes, it was wrong.

COUNSEL ASSISTING’S POSITION C –

16. Counsel assisting then stated the following conclusions.

17. Gary Cheetham’s evidence was unsatisfactory in a number of ways,

albeit supported in some respects. However, even if one disregards his

evidence entirely there remains the evidence independent of him which

has emerged since counsel assisting’s 2014 submissions were made.

This includes the police material which at the very least indicates that

the police suspected that Andrew Zaf’s injuries may have been self-inflicted well before any complaint was made by Gary Cheetham.

Further, the evidence about the false invoices obtained and submitted

by Andrew Zaf, whilst initially brought to the Commission’s attention

by Gary Cheetham, was independently corroborated by other cogent

evidence.26 It is also of note, as can be seen from the above extract of

transcript, that Andrew Zaf was initially reluctant to admit the

wrongfulness of his actions in submitting false invoices to Stockland.

18. The present controversy is in many ways a narrow one. In 2014

counsel assisting submitted that the evidence did not support any

finding of criminal or unlawful conduct. The only issue is whether the

26 Tom Boglis, witness statement, 29/10/15, paras 17-43.

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evidence as it now stands would prove to ‘the reasonable satisfaction’

of the Commissioner even the narrower findings described above in

paragraph 5(b).27 The evidence which the Commission heard in 2015

does not bear directly on the substantive issues. However it does have

some impact upon Andrew Zaf’s credibility. The evidence identified

in the preceding paragraph, which did not depend in any way on the

oral evidence of Gary Cheetham, has particular weight in this regard.

Given the impact that this evidence has had on Andrew Zaf’s

credibility, and given the limitations on the evidence already identified

as set out above,28 counsel assisting submitted that no positive

submission based on Andrew Zaf’s evidence can now be maintained.29

CONSIDERATION D –

19. The effect of counsel assisting’s reference to the authority they cited,

Rhesa Shipping Co SA v Edmunds, is that while they do not urge

positive acceptance of the conclusions which might flow from Andrew

Zaf’s evidence if it were believed, they do not urge acceptance of the

positive case which persons affected by that evidence might wish to be

accepted either. Rhesa Shipping Co SA v Edmunds is a House of Lords

decision holding that a judge in a civil case is not bound always to

make a positive finding one way or the other. In appropriate cases it

may be necessary to hold that the plaintiff has simply failed to prove its

case without deciding that the contrary position urged by the defendant

is correct.

27 Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362. 28 See para 5(a). 29

See Rhesa Shipping Co SA v Edmunds [1985] 2 All ER 712 at 715.

321

20. In view of the stance adopted by counsel assisting, making either the

findings advocated by counsel assisting last year or any other findings

adverse to persons affected by the substance of Andrew Zaf’s claims is

not open. That could not be done without informing affected persons

of the possibility of departure from what counsel assisting urged so that

they might deal with that possibility. This has not happened.

21. Two points should be made.

22. The first is that counsel assisting is unduly laudatory about Gary

Cheetham’s evidence. He was very ably cross-examined. The effect

was extremely damaging.

23. The second is that while it would tell heavily against the credibility of

most witnesses that they had submitted false invoices, that is not

necessarily so in the trade union world or the construction industry

world. There are copious examples appearing in the Interim Report

and this Report of the preparation of false and misleading invoices and

other documents. They can be found in studies affecting the AWU

WA, the AWU Vic (in many spheres), the HSU (involving three State

Secretaries), the TWU WA, the NUW, the CFMEU NSW and BLF

Qld. There are also several examples of the destruction or non-production of documents in a way which is capable of conveying a

false or misleading effect. Those examples emerged from studies

concerning the CFMEU NSW and the CFMEU Qld. These practices,

incidentally, are very far from being confined to unions. They have

been engaged in most extensively by large corporations as well. In a

world where conduct causing documents to have a false or misleading

appearance seems very common, it is not necessarily correct to treat

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Andrew Zaf’s false invoicing as automatically having ‘some impact’

on his ‘credibility’. There may be a distinction between discreditable

commercial behaviour and the willingness of a witness to endeavour to

be truthful on entering the witness box.

24. Those appearing for the CFMEU and other persons and those

appearing for Gary Cheetham have advanced very detailed arguments

adverse to Andrew Zaf’s credibility.

25. Gary Cheetham has requested a finding that his evidence is ‘a truthful

account’ and has also requested that ‘no adverse findings or comments

in relation to his credit or demeanour’ should be made. It is not

possible to comply with these requests. In view of the fact that it is not

proposed to make any finding adverse to those about whom Andrew

Zaf complained, there is no utility in explaining in detail why it is not

possible to comply with those requests.

26. Those appearing for the CFMEU and other persons have requested a

recommendation that the Report be referred to the Director of Public

Prosecutions of Victoria in order that consideration may be given to

prosecuting Andrew Zaf for (a) forgery and uttering, and attempting to

obtain a financial advantage by deception in relation to the false

Stockland invoices; and (b) handling stolen goods. They have also

requested a finding that Andrew Zaf has been conducting a campaign

to besmirch the reputations of the CFMEU and its officers on nine

bases.30 However, it has not been shown that to make the findings

implicitly or explicitly requested would be within the Terms of

30 Submissions of the CFMEU, 20/11/15, pp 5-10, paras 7-15.

323

Reference. The findings are not within the governance-related

paragraphs ((a)-(f) and (k)). Nor are they within the paragraphs

centring on misconduct by officers of employee associations ((g)-(k)).

27. The CFMEU and other persons have also requested a finding that

Andrew Zaf inflicted certain injuries on himself.31 They also request

another credit-related finding.32 The issue of whether the injuries were

self-inflicted, and the other issue raised, go only to credibility. In view

of the decision not to disagree with counsel assisting’s submissions

that Andrew Zaf’s evidence should not be relied on, his credibility

becomes irrelevant.

31 Submissions of the CFMEU, 20/11/15, pp 3-5, para 6. 32 Submissions of the CFMEU, 20/11/15, p 3, para 5.

324

PART 10: AUSTRALIAN WORKERS’ UNION

CHAPTER 10.1

INTRODUCTION

1. Over the course of about five weeks in 2015, the Commission received

evidence concerning a number of case studies dealing with the conduct

of the Victorian Branch of the AWU and its officials. Those case

studies are examined in the following chapters of this Report. They

are:

(a) Cleanevent, which includes consideration of Douglas Site

Services (Ch 10.2);

(b) Thiess John Holland (Ch 10.3);

(c) Paid education leave (Ch 10.4);

(d) ACI (Ch 10.5);

(e) Chiquita Mushrooms – a continuation of hearings that had

been conducted in 2014 – (Ch 10.6);

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(f) Unibuilt (Ch 10.7);

(g) Winslow (Ch 10.8);

(h) A series of separate case studies referred to as Miscellaneous

Membership Issues (Ch 10.9); and

(i) Downer EDI (Ch 10.10).

2. Submissions were received from counsel assisting and from numerous

affected parties. Not each and every aspect of those submissions is

specifically addressed in this Report. All submissions, however, have

been considered.

3. Several themes pervade these case studies. It will be helpful to identify

them by way of introduction.

4. The first is the payment of large sums to the Victorian Branch of the

AWU by employers. In some cases the arrangements pursuant to

which these payments were made were undocumented and their precise

purposes described in oral evidence in vague terms. In the case of

Cleanevent, the arrangement was documented and its purpose clear. In

all cases, the arrangements were made in the context of bargaining for

enterprise agreements. In all cases, they were undisclosed to the

members on whose behalf that bargaining was taking place.

5. Arrangements of this kind are highly unsatisfactory. They inhibit the

ability of a union to pursue the interests of its members. It is of the

nature of arrangements of this kind that their precise effect on

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negotiations is difficult to pinpoint. Often these arrangements are

undocumented precisely because their impropriety makes those

involved uncomfortable about the arrangement being discovered.

6. That discomfort was apparent in the Cleanevent case study but,

nonetheless, the arrangement was documented. That documentation

gives a very clear indication of how highly disadvantageous these

arrangements can be for members. In exchange for payments of

$25,000 per year, the Victorian Branch of the AWU in substance

agreed for three years not to seek better terms and conditions for those

of its members employed by Cleanevent. It would not have been

difficult to obtain better terms and conditions. But the Victorian

Branch of the AWU preferred to take money for itself. For workers

employed by Cleanevent the outcome was appalling. The members of

the Cleanevent management team involved in the deal described it as

saving the company amounts ranging from $1 million to $2 million.

All involved benefited from the deal except the people the union was

supposed to be representing.

7. The case studies do not, generally, seek to explore why it was that

AWU officials were prepared to enter into arrangements of this kind.

There are a number of possible motivations. One is that wealthy

unions with many members obtain power and prestige for themselves

and their officials. That can be an end in itself. It can also lead to

other things. As the Industry 2020 case study in the Interim Report

demonstrates, a career in public office may be but a short step away for

an official at the head of a powerful union. There are other possible

motivations. The issue considered in this part of the Report is not

327

motivation but whether particular conduct may have amounted to

breaches of duty or offences.

8. A second theme is the false inflation of membership numbers. This

also was a feature of the Cleanevent case study, together with the

Winslow and Miscellaneous Membership case studies. A common

feature here is a focus on membership numbers rather than on whether

particular individuals truly wish, and are truly entitled, to become

members. These case studies throw up examples of persons added to

the membership register in circumstances where they could not have

known about it and, in some examples, where they were already

members of other branches; indeed in one case the purported ‘member’

had previously refused to join the union.

9. A similar focus on membership numbers was apparent in the CFMEU

ACT case study. There was no suggestion in any of the AWU case

studies of coercion or undue pressure placed on employers to ensure

their employees became union members. However the result of the

AWU’s conduct was substantially the same as in some of the ACT

case studies: persons with no apparent desire, and no entitlement, to

become union members come to have their names recorded on the

membership register. This gives the appearance of membership

growth but it is a result driven not by the desires of employees to

become members but instead by the desires of employers who wish to

be on good terms with the union.

10. A third theme is falsification of documents, for the most part, invoices.

To some extent this was a feature of all of the case studies. In the

Thiess John Holland case study it was the mechanism for

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implementing a side deal negotiated during the bargaining process for

the payment of $100,000 per year to the AWU. In the Winslow case

study it was the mechanism for implementing an arrangement under

which an employer paid membership fees. In the Unibuilt case study it

facilitated the payment by a labour hire company of the wages of an

individual working on the electoral campaign of the National

Secretary. In other cases, such as the ACI and Chiquita Mushrooms

case studies, descriptions on invoices were not so much false as

misleadingly vague and inaccurate descriptions of the true purpose of

the payments.

11. As the above remarks indicate, these three themes overlapped. The

false inflation of membership numbers was combined with the

payment of membership fees by employers to AWU. The

implementation of side deals was facilitated by false or misleading

invoices.

12. These three themes together paint an unattractive picture of a union

concerned not with its role as the instrument through which to protect

the interests of its members but with self-interest – interest in itself and

its officials as a self-perpetuating institution – an institution more

concerned with gathering members than servicing them. The

Cleanevent case study demonstrates clearly how the pursuit of the

Union’s interests can be to the detriment of the members, or a class of

them.

13. The following Chapters of this Report conclude that the conduct of the

AWU and its officials and, in some cases, the conduct of employers,

may have involved breaches of duty and criminal offences. The case

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studies also raise issues of policy that are considered later in this

Report.

14. Before turning to the Cleanevent case study, it is convenient to refer to

two matters in connection with the general approach taken in the

following Chapters. It is the same as the general approach taken in the

Report as a whole.

15. First, many of the possible contraventions considered are serious.

Proof of elements of criminal offences before a court, generally, must

be proof beyond reasonable doubt. These matters require clear and

cogent evidence as a basis for finding facts sufficiently to make a

decision to recommend that the prosecuting authorities examine

whether or not to charge in relation to possible offences. This has been

borne consistently in mind.

16. Secondly and relatedly, generally this Report seeks to rely upon the

contemporaneous documents and the objective probability of events,

rather than on the recollections of persons called to give evidence.

That is, for the most part, a reflection of the fact that memory is fallible

and some of the events in question occurred some time ago. There are

some exceptions to this approach. For example, evidence given

against self-interest may generally be taken to be reliable. However,

where reliable contemporaneous documents are available, usually great

weight is accorded to them.

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CHAPTER 10.2

CLEANEVENT

Subject Paragraph

A – INTRODUCTION 1

B – THE CLEANEVENT BUSINESS 6

General 6

The casual cleaners 8

C – THE 1999 AWARD 25

D – THE 2004 EBA 28

Negotiations for the 2004 EBA 30

Pay rates for casual employees under the 2004 EBA 38

Certification of the 2004 EBA 47

E – THE 2006 EBA 67

Engagement after execution of the 2006 EBA 81

F – DOUGLAS SITE SERVICES 89

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Subject Paragraph

G – RENEWING THE 2006 EBA 134

The MOU and Side Letter 142

Conduct of the negotiations on behalf of the AWU 148

The First Meeting at Cesar Melhem’s office 154

First draft of the side deal 164

August correspondence 169

Drafts of the Side Letter 179

The Second Meeting in Cesar Melhem’s office and finalising the

MOU

191

Execution of the MOU and Side Letter by Cleanevent 206

Did Cleanevent employees approve the MOU and/or Side Letter? 209

Execution of the MOU by AWU National Office 215

Conclusions to be drawn 256

H – PAYMENTS PURSUANT TO THE SIDE LETTER 261

The first payment 262

The first list of names 267

The second payment 286

332

Subject Paragraph

The third payment 302

Conclusions regarding membership numbers 307

I – COMPARISON OF THE MOU AND THE MODERN

AWARD

328

Permanent employees 340

Overtime 343

Penalties and allowances 347

Casual employees 351

Conclusions 360

J – MEMBERSHIP ARRANGEMENTS: OPT-OUT

CLAUSES

366

K – THE FATE OF THE 2006 EBA 376

L – CONCLUSIONS 391

Fiduciary duties 392

Conflict of interest 414

Unlawful commissions 423

Membership issues 453

333

Subject Paragraph

Liability of the AWU for the conduct of Cesar Melhem 461

M – RECOMMENDATIONS 480

APPENDIX 1 TO CHAPTER 10.2

APPENDIX 2 TO CHAPTER 10.2

APPENDIX 3 TO CHAPTER 10.2

A – INTRODUCTION

1. There is a company which provides cleaning services predominantly at

events, such as sporting events, shows and concerts, and at particular

entertainment venues, known as Cleanevent Australia Pty Ltd

(Cleanevent). Cleanevent is part of a corporate group which provides

cleaning, waste management and associated services around Australia

and internationally.

2. This case study centrally concerns an arrangement entered into in 2010

by Cleanevent and the Victorian Branch of the Australian Workers’

Union (AWU Vic). The arrangement concerned a Workchoices-era

Enterprise Bargaining Agreement (EBA). The effect of the

arrangement was to extend the EBA beyond its nominal expiry date.

In exchange, Cleanevent agreed to make a payment of $25,000 per

annum to the AWU.

3. The issues that arise include the following:

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(a) whether the AWU and its officials owed duties of a fiduciary

nature to members on whose behalf they acted in the course

of the business of the union, including in relation to

negotiations for enterprise agreements on behalf of workers;

(b) whether, by accepting payments from employers in the course

of representing workers in negotiations for enterprise

agreements and other matters, the AWU and its officials were

in a position of actual or potential conflict of interest and

duty;

(c) whether, by seeking, paying, and/or receiving payments in the

course of representing workers in negotiations for enterprise

agreements and other matters, the AWU, employers and their

respective officers might have been guilty of offences

associated with corrupt commissions contrary to s 176 of the

Crimes Act 1958 (Vic);

(d) whether the AWU and relevant employers were liable for the

conduct of their officers in respect of the above offences and

other contraventions of industrial relations legislation; and

(e) whether as a result of the implementation of the arrangement,

membership numbers were falsely inflated.

4. The evidence and submissions also examined the manner in which

enterprise bargaining agreements were negotiated by the AWU Vic

over the period between 2004 and the present.

335

5. Many of these issues in the Cleanevent case study arose in other AWU

case studies considered in this Report. Consequently, the reasoning

applied in some aspects of this Chapter will be applied, where

appropriate and subject to any relevant factual differences, in other

Chapters of this Report concerning the AWU.

B – THE CLEANEVENT BUSINESS

General

6. The Cleanevent business related to the provision of cleaning services

for sporting and other events, including the Australian Formula One

Grand Prix, the Melbourne Cup and the Sydney Royal Easter Show.

Steven Webber summarised the Cleanevent business as follows:1

Predominantly, prior the Spotless acquisition, it was a cleaning business that started in Australia that grew to, you know, the USA, and the United Kingdom in regards to major events. Wimbledon in the UK, for instance, and predominantly stadiums and racecourses, anywhere where there was, you know, a sporting, I guess, attachment to it.

7. At any one time the Cleanevent business had about 40 or 50 fulltime

employees.2 It also had a number of casual cleaners. It is necessary to

consider the latter in more detail.

The casual cleaners

8. Cleanevent’s casual cleaners did the bulk of the actual cleaning work.

The number of casual employees varied from time to time depending

1 Steven Webber, 28/5/15, T:13.2-8. 2 Steven Webber, 28/5/15, T:13.29-30.

336

on Cleanevent’s requirements. For example, the Melbourne Cup

Carnival was Cleanevent’s largest event. It required the services of

some 500 casual cleaners.3 Cleanevent kept a ‘staff pool’. That was a

database of people that it could call on to come in and carry out casual

work as and when required.4

9. On the other hand, many of Cleanevent’s casual cleaners were long-

standing employees of Cleanevent. While classified as casual, in a

practical sense they held permanent, or at least longstanding, positions.

10. Cleanevent maintained a division of labour as between venues and

events. A venue was a permanent site for regular sporting events or

entertainment such as the Opera House, ANZ Stadium or the Rosehill

Racecourse. By contrast, events such as the Royal Easter Show,

International Tennis, or the Mercedes Benz Fashion Week were

seasonal one-off events that are not held in a venue in regular use.

Employees at venues worked regularly at that venue. But they were

employed on a casual basis.5

11. For example, Robyn Cubban was employed by Cleanevent as a casual

cleaner. She had worked as such at Cleanevent since 2004.6

12. Robyn Cubban described her work in more detail as follows:7

3 Steven Webber, 28/5/15, T:13.39-45. 4 Steven Webber, 28/5/15, T:14.8-14. 5

Robyn Cubban, 28/5/15, T:83.9-28. 6 Robyn Cubban, witness statement, 28/5/15, para 2. 7

Robyn Cubban, witness statement, 28/5/15, para 3.

337

In my role as a casual cleaner, I work at major events in and around Sydney, New South Wales. These events include the Sydney Royal Easter Show, the APIA International Tennis Tournament, the Manly Surfing Competition and the Mercedes Benz Fashion Week Australia. I also clean boats owned by Spotless called MV Epicure I and MV Epicure II which are used for functions located at Jones Bay Wharf, Pyrmont, NSW. I am not based at a particular event and instead work wherever an event is being held.

13. The casual cleaners carried out hard, grinding work. In the nature of

things the work tended to be carried out at night, when the crowds had

left. The nature of the work is revealed in part by a letter Robyn

Cubban wrote to her employer headed ‘to whom it may concern’ in

2011.8 This letter set out many of the practical difficulties which

Robyn Cubban and persons in her position faced. Robyn Cubban said

among other things:

Stephine and myself worked from 6.30am to midnight due to lack of staff was rang by night supervisor at 2.00am screaming he had no staff, crap everywhere. Stephine ended up going back in at 2.30am trying to get it up to standards before the client arrived. When client did arrive we were told that a formal complaint would be made regarding the situation. Lack of staff/mess.

14. Robyn Cubban’s letter included other observations:9

I worked every day from April 2 to April 29 in the lead up to and during the Sydney Royal Easter show I had two days off and returned for a further 6 days for Fashion Week during this time.

15. Robyn Cubban confirmed in oral evidence that she had worked on the

public holidays during the Easter Break and ANZAC Day. She had

also worked on Sundays.10

8 Cubban MFI-1, 28/5/15, pp 16-21. 9 Cubban MFI-1, 28/5/15, p 17. 10

Robyn Cubban, 28/5/15, T:82.29-31.

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16. Ken Holland had started working for Cleanevent as a casual cleaner in

2003, before moving to Melbourne in 2004 and continuing to work for

Cleanevent.11 Ken Holland said that in 2006 he had become a cleaning

supervisor in which role he managed a team of seven to eleven

cleaners working at major events such as the Melbourne Cup, the

Australian Grand Prix and the Moto GP.

17. Nayan Debnath had started working at Cleanevent as a casual cleaner

in 2007 working on night shifts.12 In around 2009 or 2010 he became a

superviser of the cleaning nightshift at the Sydney Opera House and in

September 2004 was promoted to venue manager (second in charge) of

the Sydney Opera House.

18. The nightshifts which Nayan Debnath was working required him to

start at 11 o’clock in the evening and work through to 7 o’clock in the

morning.13

19. Colleen Ellington had worked as a casual cleaner at Cleanevent since

2004.14 Her role included: ‘cleaning toilets, removing garbage and

cleaning offices, the VIP area and change rooms’. She became a

member of the AWU NSW in 2004 when she started working for

Cleanevent and paid her union membership fees via payroll

deduction.15

11 Ken Holland, witness statement, 28/5/15, paras 3-4. 12 Nayan Debnath, witness statement 29/5/15, para 3. 13

Nayan Debnath, 29/5/15, T:165.40-46. 14 Colleen Ellington, witness statement, 29/5/15, para 2. 15

Colleen Ellington, witness statement, 29/5/15, paras 8-9.

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20. Shalee-Nicole Allameddine had started working for Cleanevent in

2003 as a casual cleaner at ANZ Stadium at Sydney Olympic Park.16

She also became a member of the AWU NSW at about the time she

started working for Cleanevent. She paid her membership dues by

payroll deduction.

21. Marcin Pawlowski had started work at Cleanevent in 2010 as a casual

cleaner at major events. The first one was at Flemington Racecourse in

Victoria.17

22. Brian Miles was a casual cleaner at Dandenong Market in Victoria. He

had been since August 2011.18 His role at Cleanevent included

pressure washing, operating ride on scrubbers, cleaning toilets and

waste management.19

23. The evidence of the Cleanevent casual employees was consistent in

many respects. Each was a loyal, long term employee, having worked

for Cleanevent in most cases for many years. Each did hard work,

often at night, on public holidays or on weekends. The work included

tidying up after crowds, including cleaning toilets.

24. No disrespect is intended in saying that these witnesses did not appear

to be sophisticated in the detail of industrial relations laws. Nor did

they appear to be sophisticated in dealing with management. In short

they were the very people who need and depend upon a strong union,

16 Shalee-Nicole Allamedine, witness statement, 29/5/15, para 4. 17 Marcin Pawlowski, witness statement, 28/5/15, para 5. 18

Brian Miles, witness statement, 28/5/15, para 2. 19 Brian Miles, witness statement, 28/5/15, para 3.

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dedicated to advancing their interests, and unswervingly loyal to them

and their interests.

C – THE 1999 AWARD

25. The reference award for many of the EBAs considered in this case

study20 was the Cleaning Industry – AWU/LHMU – Cleanevent Pty Ltd

Award 1999 (1999 Award).21

26. The 1999 Award was of national application.22 It contained,

relevantly, the following provisions in relation to the employment of

casual labour:

(a) Employees were to be paid minimum weekly rates of pay

appropriate to seniority-based classification levels, subject to

arbitrated safety net adjustments each year (cl 9);

(b) Casual employees were entitled to a base hourly rate of 1/38th

of the appropriate weekly classification rate plus a 20%

loading (cl 6.3);

20 Being the Cleanevent Australia Pty Ltd Enterprise Agreement 2004 certified 20 December 2004 (2004 EBA) (Shorten MFI-5, 8/9/15, Vol 2, p 3 cl 6.1), and the Cleanevent Australia Pty Ltd AWU Agreement 2006 (2006 EBA) (Shorten MFI-5, 8/9/15, Vol 2, p 127). Clause 39 of the 2006 EBA expressly excluded the operation of any award in relation to relevant matters, including penalty rates, consistently with the provisions of the Workplace Relations Act 1996 (Cth) then in force. By the time of negotiation of the 2010 MOU, the AWU proceeded on the basis that the 1999 Award remained applicable: Cleanevent MFI-1, 19/10/15, p 307, cl 2.7(c). 21

Winter MFI-2, 20/10/15 (containing all consolidations as at 23 June 2005). The relevant substantive terms of the 1999 Award were unchanged over the period considered in this case study: Craig Winter, 20/10/15, T:718.5-21, but the rates of pay were varied by review from time to time. 22

Winter MFI-2, 20/10/15, p 3, cl 4.1.

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(c) All employees were entitled to overtime for work performed

in excess of the hours mutually arranged (cl 6.4.7), payable as

time and a half for the first two hours and double time

hereafter (cl 13.1);

(d) All employees were entitled to overtime for work performed

on Saturdays at the rate of time and a half for the first two

hours and double time thereafter (cll 13.2, 14.1.1);

(e) All employees were entitled to overtime for work performed

on Sundays at double time (cl 14.2);

(f) All employees were entitled to payment at a rate of double

time and a half for work performed on a public holiday

(cl 14.9).

27. The 1999 Award did not make any distinction between employees

engaged to work at venues (such as sporting grounds and concert halls)

and those engaged to work at events (such as major sporting

tournaments, agricultural shows and music festivals).

D – THE 2004 EBA

28. Cleanevent and the AWU entered into an enterprise bargaining

agreement in 2004 (the 2004 EBA).

342

29. Bill Shorten was, from 1996, an organiser for Cleanevent. In 1998 he

became Victorian State Secretary. He continued to deal with

Cleanevent, with organisers directly servicing worksites.23

Negotiations for the 2004 EBA

30. Negotiations for the 2004 EBA took place in 2002 and 2003. Peter

Smoljko was the organiser responsible for the negotiations on behalf of

the AWU. Bill Shorten also participated in discussions.24 Graeme

Beard later participated in negotiations on the AWU side. Ivan Dalla

Costa and Bruce McNab participated on the Cleanevent side. Jo-Anne

Schofield participated in the negotiations on behalf of the Australian

Liquor Hospitality and Miscellaneous Workers Union (LHMU).25

This union also had coverage in the industry.

31. The negotiations proceeded as follows.

32. The position of the AWU and the LHMU was that the rate for casuals

employed at events was not appropriate: it did not take into account

weekend and holiday loadings. Cleanevent’s position was that the

event rate was in line with industry standards. Craig Lovett contended

in a letter dated 25 March 2003:26

It is our firm belief that a Cleanevent rate of $17.44 for new entrants is well above that of similar deployment within our industry.

23 Bill Shorten, 8/7/15, T:43.32-38. 24 Shorten MFI-5, 8/9/15, Vol 1, pp 350-352, 356; Bill Shorten, 8/7/15, T:87.44-46, 88.9 25

This union, or the successor to it, has been known as ‘United Voice’ since 1 March 2011. 26 Shorten MFI-5, 8/7/15,Vol 1, p 356.

343

33. In a letter to Bill Shorten dated 29 March 2004, Bruce McNab wrote:27

…I again suggest that your proposals are not supported by what is actually occurring in the industry. Are you able to provide hard evidence of actual cases where the rates you are claiming are actually paid?

Jo-Anne Schofield has indicated that our proposed rates will not pass the ‘no disadvantage’ test. This does not seem to us to be the case, however if you or Jo-Anne are able to direct us to any authorities which would support the contention that the rates would not be sufficient then I would be grateful if you would do so.

34. The AWU pushed for an increase to the specialised ‘event rate’ to

account for the fact that the existing rate was worse than that provided

for in the relevant award. In a letter dated 3 May 2004, Graeme Beard

stated:28

I have discussed the issue with Jo-Anne Scofield [sic] and we believe that the rate does not properly represent an appropriate ‘all-up’ rate for casuals engaged at events. Events are usually active over weekends and can also include public holidays. Eg. Sydney Royal Easter Show.

Your rate does not provide adequate compensation for these matters. Currently, under the award with the Safety Net Review May 2003, a level I employee would receive $31.30 per hour for work performed on a public holiday.

…

To ensure that casual employees would not be subject to any disadvantage, we believe that overtime, weekend work and public holidays for [sic] should be calculated in accordance with the award.

35. Cleanevent strenuously resisted any increase in their preferred rate of

$17.44 per hour for event casuals.29 It contemplated cancelling

27 Shorten MFI-5, 8/7/15, Vol 1, pp 361-363. 28 Shorten MFI-5, Vol 1, pp 369-371. 29

Shorten MFI-5, Vol 1, pp 356, 374, 378-379 (some compromise was made in Cleanevent’s letter dated 20 May 2004, page 379), 385-386. The ‘no disadvantage’ test arose from ss 170LT(1)-(3) and 170XA(2) of the Workplace Relations Act 1996 (Cth). In essence it permitted the Australian Industrial Relations Commission to refuse to certify an

344

negotiations to secure its preferred rate. In an internal memorandum

dated 29 September 2004, Bernadette Mynott of Cleanevent noted that

the draft EBA put forward in 2003 did not pass the ‘no disadvantage’

test, and that casuals were at that time being paid below the 120%

loading provided for in the Award.30

36. On 21 May 2004 Ivan Dalla Costa, Group Finance Director of

Cleanevent, observed that another certified agreement reached in

relation to specific venues would not pass the no-disadvantage test

because the rate was substantially short of the award rate.31 Bill

Shorten stated that that EBA must have passed the no-disadvantage test

in order to obtain approval. He did not know whether Graeme Beard

showed him the correspondence,32 or whether there were specific

discussions as to whether the 2004 EBA passed the no-disadvantage

test.33 Bill Shorten said that whether an EBA satisfied the no-disadvantage test was not the primary focus of the AWU. The primary

focus was achieving an agreement that members thought was fair and

reasonable.34

EBA if it would be contrary to the public interest to do so because the EBA reduced the overall terms and conditions of employment of employees covered by the agreement under relevant or designated awards or laws of the Commonwealth, a State or a Territory.

30 Shorten MFI-5, 8/7/15, Vol 1, pp 393-394. 31 Shorten MFI-5, 8/7/15, Vol 1, p 381. 32

Bill Shorten 8/7/15, T:91.40-45. 33 Bill Shorten 8/7/15, T:94.17. 34

Bill Shorten 8/7/15, T:92.13-17.

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37. LMHU withdrew from negotiations on 5 November 2004.35 AWU and

Cleanevent then engaged in discussions to finalise an AWU-only

agreement.36

Pay rates for casual employees under the 2004 EBA

38. The casual rates propounded by Cleanevent were included in the EBA

that was put to members and signed by Bill Shorten in 2004.37 Bill

Shorten stated that the AWU had, during his time as AWU Vic

Secretary, a practice of State Secretaries reviewing EBAs prior to

execution. Organisers were expected to give monthly reports and

submit summaries when putting forward EBAs for approval.38 He

relied on those summaries to form a view of the appropriateness of the

EBA.39

39. The relevant provisions of the 2004 EBA were as follows:40

8.3 Subject to clauses 8.4 and 8.5, the minimum hourly rates of pay for casual workers shall be as specified below:

1 Aug 2003

1 Aug 2004

1 Aug 2005

1 Aug 2006

Level 1 15.62 16.28 17.45 17.80

Level 2 16.24 16.94 18.15 18.51

Level 3 17.73 18.49 19.81 20.21

35 Shorten MFI-5, 8/7/15, Vol 1, p 403. 36 Shorten MFI-5, 8/7/15, Vol 1, p 404. 37

Shorten MFI-5, 8/7/15, Vol 2, pp 1-12, esp p 4, para 8.4. 38 Bill Shorten, 8/7/15, T:97.44-47, 98.1-7, 105.1-12. 39

Bill Shorten, 8/7/15, T:98.20-31. 40 Shorten MFI-5, 8/7/15, Vol 2, pp 4-5.

346

8.4 Notwithstanding the provisions of clause 8.3, the minimum hourly rate for level 1 casual workers working at events shall be $16.28 per hour, $17.44 per hour for level 2 casual workers and $18.44 per hour for level 3 casual workers.

8.5 Notwithstanding the provisions of clause 8.3, the minimum hourly rate for casual workers working on weekends and public holidays, but not at events, shall be $19.17 until 1 August 2005, $20.50 until 1 August 2006 and $20.90 thereafter.

…

8.6.3 Cleanevent Australia Pty Ltd shall pay in addition to any wages or other entitlements due, a Public Holiday Event Allowance of $55.00 to casual workers who work a minimum of 7.6 hours at an event on a gazetted public holiday.

40. The 2004 EBA had the following consequences for Cleanevent casual

workers:

(a) The casual rates provided for in clause 8.3 were slightly

above 120% of the hourly rate of pay for permanent

employees provided for in clause 8.1, and there was provision

for pay rises for these casuals.

(b) Casuals working at events were not entitled to a pay rise over

the term of the agreement, though they would have been

under the 1999 Award by operation of the arbitrated safety

net adjustments.

(c) The weekend and public holiday rates for venue casuals were

less than time and a half. The workers would have been

entitled to that rate for the first two hours of work on a

Saturday under the 1999 Award. The rates were far below the

allowances for Sundays and public holidays under the 1999

Award.

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(d) Casuals working at events were not entitled to penalty rates

for work on Saturdays or Sundays. Event casuals were

entitled to an allowance for working in excess of 7.6 hours on

a gazetted public holiday. The allowance breaks down to

$7.23 per hour worked over the 7.6 hours (and nothing for

time exceeding 7.6 hours).

41. Appendix 1 contains a comparison of the rates of pay to which

Cleanevent casual workers would have been entitled under the 1999

Award and the rates they were entitled to under the 2004 EBA.

Significantly, the base rates of pay for venue casuals and event casuals

were above those payable under the 1999 Award, but:

(a) the flat penalty rate to which venue casuals were entitled on

Saturdays, Sundays and public holidays was below time and a

half, being the rate applicable for Saturday work under the

1999 Award;

(b) the public holiday allowance payable to event casuals that

worked more than 7.6 hours was above time and a half, but

well below double time and a half which was the public

holiday rate under the 1999 Award; and

(c) event casuals were otherwise not entitled to penalty rates,

which they have under the 1999 Award.

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42. At the time of certification of the 2004 EBA, 194 of the 244 employees

of Cleanevent covered by the EBA were casuals.41

43. The result was not a good one for members who were casual workers.

Why did the AWU agree to it? There is no suggestion, as there was in

2010, that Cleanevent paid money to the AWU to secure the deal. It

seems that the AWU simply accepted the position put forward by

Cleanevent that commercial and competitive constraints prevented it

from paying in line with the 1999 Award.

44. Bill Shorten described the notion that event cleaners were being paid

award penalty rates as ‘fanciful in the real world’42 and said that double

time and a half was a ‘gold standard’ rate in that industry.43 But these

rates were not so outlandish that the AWU and LWHC did not advance

them in negotiations. Nor were they so fanciful that they were not

reflected in the various State-based awards that would have applied in

the absence of the 1999 Award. With two exceptions,44 each of these

awards provided for casual loadings of 20% or higher on the base

41 Shorten MFI-5, 8/7/15, Vol 2, p 16. 42 Bill Shorten, 8/7/15, T:82.1-8. 43

Bill Shorten, 8/7/15, T:88.21-26. 44 The New South Wales Cleaning and Building Services Contractors (State) Award applied a casual loading of 8.3% (cl 7.2) and lower penalty rates than time and a half and double time on Saturdays and Sundays for casual cleaners, but double time and a half on public holidays. The Award included a special rate for events with a slightly higher loading and a flat penalty rate on Saturdays, Sundays and public holidays that was well below time and a half (cl 9(i), Part B). Unlike the public holiday loading in the 2004 EBA, the rate applied without having worked a full day. The (Building and Property Services)(ACT) Award 1998 applied a casual loading of 6% (cl 15.4; Schedule A). However it applied a Saturday rate of time and a half (cl 30), a Sunday rate of time and three quarters (cl 31) and a public holiday rate of double time and a half (cl 37.6).

349

rate.45 Each of them also provided for casuals to be paid penalty rates

on Saturdays, Sundays and public holidays, most at standard rates,46

some at a slightly lower rate.47

45. If it was the case that there was a general practice of employers in the

event cleaning industry to fail to pay workers their award entitlements,

it is a very odd course for a union to assist in continuing that practice.

Award entitlements cannot be treated as ‘gold standard’. They are the

minimum conditions to which workers are entitled. Moreover, the

1999 Award was an enterprise award obtained specifically for

Cleanevent’s employees.

46. There is some evidence of the communications with Cleanevent

employees in relation to the 2004 EBA.48 It reveals that employees

were provided with a copy of the proposed agreement. They were

advised that they would be eligible for back pay in respect of the pay

rises provided for in the agreement. There is no evidence that the

employees were advised of the differences between the 2004 EBA and

45 Building Services (Victoria) Award 2003 (cl 12.4.3), Contract Cleaning Industry Award - State 2003 (Queensland) (cl 5.2.2(c)); Cleaning Contractors (Hygiene and Pollution Control) Industry (Northern Territory) Award 2003 (cl 12.3.3); Caretakers and Cleaners Award (South Australia) (Part A, S1.4.2); Cleaning and Property Services Award (Tasmania) (cl 22(c)); Contract Cleaners Award (Western Australia) (cl 20). 46

Building Services (Victoria) Award 2003 (cll 25, 27.1), Contract Cleaning Industry Award - State 2003 (Queensland) (cll 6.5, 6.2 and 7.6); Cleaning (Building and Property Services) (ACT) Award 1998 (cl 37.6); Cleaning Contractors (Hygiene and Pollution Control) Industry (Northern Territory) Award 2003 (cll 29.13, 29.14, 38.18); Caretakers and Cleaners Award (South Australia) (cll 6.2, 6.4); Cleaning and Property Services Award (Tasmania) (cll 18(e)(i), 22(c), 29); Contract Cleaners Award (Western Australia) (cl 6.4). 47

Another consent award covering LHMU, the Cleaning Services - Spotless Services Australia/ALHMWU - Outdoor Facilities - Consent Award 1998 provided for a 20% casual loading (cl 13.3.2(a)) and lower penalty loadings for casual and permanent employees on Saturdays, Sundays and public holidays (cll 25.2, 25.3 and 13.3). 48

Shorten MFI-5, 8/9/15, Vol 1, pp 404-411.

350

the 1999 Award. Nor is there evidence that it was explained to them

why the 2004 EBA was fair and reasonable. There is also no evidence

that they indicated (other than by voting in favour of the 2004 EBA)

that they believed that the 2004 EBA was fair and reasonable. This is

of particular concern when it is considered that casuals employed at

events, those most disadvantaged by the agreement, may not all have

had the terms of the proposed 2004 EBA brought to their attention.

Certification of the 2004 EBA

47. All of the above matters give rise to considerable cause for concern.

Of greatest concern, however, is that the parties side-stepped the

scrutiny of the Australian Industrial Relations Commission.

48. Both the AWU and Cleanevent were conscious during the negotiation

process that, if Cleanevent’s rates were accepted, it was unlikely that

the 2004 EBA would meet the no disadvantage test. However, that

was a matter kept from the Australian Industrial Relations

Commission.

49. Craig Winter prepared and ran the application for certification of the

2004 EBA with the Australian Industrial Relations Commission

(AIRC).49 Craig Winter had been an industrial officer at the AWU

since 1988. His responsibilities included representing members in

various tribunals, negotiating agreements and running applications for

certification of those agreements.50

49 Shorten MFI-5, 8/7/15, Vol 2, p 1; Craig Winter, 20/10/15, T:699.1-5. 50 Craig Winter, 20/10/15, T:698.6-24.

351

50. Craig Winter gave evidence as to the process that was undertaken at

that time when preparing for certification of EBAs. He was not in any

sense a satisfactory witness. He generally sought to avoid any

responsibility for his conduct. Both his demeanour and general

approach to giving evidence were poor. The surly manner he adopted

to senior counsel assisting was quite different from that which he

adopted to counsel appearing for clients whom he seemed to regard as

more meritorious. His evidence at times strained credulity.

51. Craig Winter said that he did not believe that an organiser’s report was

prepared for the 2004 EBA. He said that the usual practice was that he

was provided with a signed copy of the agreement and a copy of the

statutory declaration of the employer. He spoke to the responsible

organiser to obtain any additional information required. He then

completed a statutory declaration, on the basis of the information in the

employer’s statutory declaration and the information he received from

the organiser.51

52. The statutory declaration form completed by Craig Winter identified

the relevant award as the 1999 Award. The statutory declaration

contained three questions addressed to the no-disadvantage test then

applicable under ss 170LT(1)-(3) and 170XA(2) of the Workplace

Relations Act 1996 (Cth), as follows:52

7.3 State whether certification would result, on balance, in a reduction in the overall terms and conditions of employment of employees covered by the agreement under relevant or designated awards or laws of the Commonwealth, a State or Territory (see s 170XA(2)).

51 Craig Winter, 20/10/15, T:701.12-19, 702.1-14, 41-42. 52 Shorten MFI-5, 8/7/15, Vol 2, p 22.

352

7.4 To be answered only if there is any reduction in the terms and conditions of employees covered by the agreement or under any relevant or designated award or other law but not resulting in a reduction in the overall terms and conditions of employees.

By referring to specific clauses in the agreement, specify any such reductions.

By referring to specific clauses in the agreement, specify any terms or conditions which result, on balance, in there being no reduction in the overall terms and conditions of employment of the employees under the agreement.

7.5 To be answered only if certification would result in a reduction of the overall terms and conditions of employees covered by the agreement.

Indicate why the Commission should be satisfied that certifying the agreement is not contrary to the public interest...

53. The intention of these questions in the statutory declaration forms is

plain. They enabled the Commissioner hearing the application: (a) in

respect of question 7.3, to assess the deponent’s opinion as to whether

the no-disadvantage test was satisfied; (b) in respect of question 7.4, to

test the deponent’s opinion by requiring that he or she identify whether

there were any reductions in the terms of the agreement when

compared with competing instruments and explain with specificity

why there was no disadvantage on balance; and (c) where there is an

overall disadvantage, to assess whether there were any circumstances

attracting the public interest exception.

54. Bruce McNab completed the employer’s statutory declaration on

behalf of Cleanevent. He did so by ticking a box beside question 7.3

stating: ‘certification would not result in a reduction in the overall

353

terms and conditions of employment.’53 The responses to questions

7.4 and 7.5 were left blank.

55. Craig Winter’s statutory declaration contained the same box beside 7.3.

It was not ticked and the responses to questions 7.4 and 7.5 were left

blank.54

56. Thus, both statutory declarations before the Australian Industrial

Relations Commission were to the effect that there was neither any

reduction in the overall terms and conditions of employment (question

7.3) nor any reduction in specific terms and conditions (question 7.4).

57. On any view, at least question 7.4 should have been answered in the

affirmative. Bill Shorten agreed that it should have.55 It is likely also

that question 7.3 should have been as well.

58. Craig Winter adopted a contrary position in his evidence. His evidence

was that, regardless of the difference in rates as between the 1999

Award and the terms of the 2004 EBA, clauses 6.1 and 6.3 of the 2004

EBA operated to incorporate the 1999 Award so that the event casuals

were not disadvantaged.56 He described this as an ‘industrial fact’ that

led to there being no reduction in the terms and conditions of the event

casuals that would require an answer to questions 7.3 or 7.4.57

53 Shorten MFI-5, 8/7/15, Vol 2, p 17. 54 Shorten MFI-5, 8/7/15, Vol 2, p 22. 55

Bill Shorten, 8/7/15, T:103.9-11, 41. 56 Craig Winter, 20/10/15, T:721.8-13. 57

Craig Winter, 20/10/15, T:721.20-38.

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59. This highly artificial, legalistic argument was advanced with some

eagerness by Craig Winter in oral evidence. It was then pursued by

him in submissions. It is a hopeless argument. Clauses 6.1 and 6.3

provided as follows:

6.1 This agreement shall be read and interpreted in conjunction with the AWU/LHMU Cleanevent Pty Ltd Award 1999 (or its successor) (“the Award”). Where there is inconsistency between this agreement and the Award, the provisions contained in this agreement shall prevail. No person shall be disadvantaged in any way by the operation of this agreement.

…

6.3 Should an employee have reasonable grounds for believing that this agreement results in an overall disadvantage in comparison to the Award, Cleanevent Australia Pty Ltd will conduct an audit of the employee’s employment records over a 12 month period. Cleanevent Australia Pty Ltd, the employee concerned and, if the employee elects, the AWU, agree to consult in accordance with clause 17 to resolve any matter arising as a result of such an audit.

60. It is obvious from the terms of clause 6.1 that the 2004 EBA prevails

over the Award in the event of an inconsistency. What of the last

sentence of clause 6.1? On a generous view, it might be thought of as

aspirational. On a less generous view, it might be thought of simply as

false. On any view, it did not rewrite the rest of clause 6.1 or anything

else in the 2004 EBA. Clause 6.3 reinforced the point. It gave

employees the right to assert that they were disadvantaged in

comparison with the Award and then for an audit to take place to

ascertain the true position. It would be entirely unnecessary if Craig

Winter’s argument were correct. That is because there could be no

disadvantage. Counsel assisting made a variety of other criticisms of

this argument in submissions. It is not necessary to deal with all of

them. That is because the argument is obviously wrong. It is

355

significant that the AWU itself did not advance or support the

argument.

61. Although it is not necessary to make any finding, it is difficult to

accept Craig Winter actually believed in an argument of this kind.

Belief in the validity of the argument would be inconsistent with what

transpired in the negotiations that preceded the 2004 EBA. It would

also be inconsistent with what occurred after the EBA was entered

into. Cleanevent paid its workers in accordance with the 2004 EBA

and not in accordance with the Award. If Craig Winter’s view were

correct, the AWU ought to have done something about that. It did not.

62. Craig Winter appeared on behalf of the AWU before Commissioner

Mansfield on 20 December 2004. The extent of the submissions on the

question of the no-disadvantage test are contained in the following

exchange:58

THE COMMISSIONER: Good. Now, Mr Winter, my question: do you generally assert that this agreement meets the no disadvantage test?

MR WINTER: Yes, we believe it does, and---

THE COMMISSIONER: Good, that is sufficient.

63. It is evident that the Commissioner was reliant on Craig Winter’s

submissions in satisfying himself that the no-disadvantage test was

satisfied. Craig Winter tried to defend his conduct before the

Commission in the following way. He asserted that the transcript

showed that he was cut off, and that the Commissioner required

summary answers to be given in relation to the operation of the

58 Shorten MFI-5, 8/7/15, Vol 2, pp 30-31.

356

agreement.59 He said that it was apparent that the Commissioner had

read the terms of the EBA. He posited that the Commissioner may

have come to the same conclusion as Craig Winter says he did.

64. This submission involves speculation as to the Commissioner’s state of

mind. It understates both Craig Winter’s role and his capacity. It was

for him to identify the relevant terms of the 2004 EBA to the

Commissioner. It was for him to satisfy the Commissioner that the

agreement conferred no disadvantage. On his own evidence, clause 6.3

was unusual.60 It should have been brought to the Commissioner’s

attention if it was relevant to the question of disadvantage. Fairness to

the members whom Craig Winter represented required that he

discharge his role as their advocate fully.

65. The position was thus that the Australian Industrial Relations

Commission was presented with misleading statutory declarations

regarding a critical aspect of the 2004 EBA. That position was not

corrected by Craig Winter’s oral submissions. As a result, the

Commission was prevented from considering whether the

disadvantages that accrued to workers under the 2004 could be

justified in the public interest. What the Commission would have done

had it considered this issue is quite uncertain. However it will be seen

that in 2010 one of Cleanevent’s competitors, Douglas Site Services,

was in a similar position. It made proper disclosure to the Fair Work

Commission that its proposed agreement did not satisfy the no-disadvantage test. It argued that it was in the public interest that the

59 However, the portion of the transcript relied upon relates to an entirely different question. 60 Craig Winter, 20/10/15, T:721.5-6.

357

agreement be approved because otherwise it would be unable to

compete with Cleanevent. The argument found no favour.

66. The overall result in 2004 was that the Cleanevent employees were

deprived of one of the important protections afforded to them under the

industrial legislation at the time. As will be seen, this occurred again

in 2010.

E – THE 2006 EBA

67. In 2006 the AWU and Cleanevent entered into an enterprise bargaining

agreement which came into force on 22 December 2006 (2006 EBA).61

68. The 2006 EBA applied to all employees of Cleanevent in Australia

who fell within the classification structures set out in the 2006 EBA,

including permanent and casual employees. Because the 2006 EBA

operated Australia wide it was signed off by the AWU at National

Office. At that time the National Secretary was Bill Shorten. In fact

the 2006 EBA was ultimately signed by Graham Roberts, then

Assistant National Secretary to Bill Shorten. From August 2006,

negotiations were primarily undertaken by John-Paul Blandthorn, by

then an organiser for Cleanevent.62 John-Paul Blandthorn reported to

Bill Shorten, Cesar Melhem, Peter Smoljko and Mick Eagles.63

61 SW1, 28/5/15, pp 1-33. 62 John-Paul Blandthorn, 20/10/15, T:733.24-26. 63

John-Paul Blandthorn, 20/10/15, T:733.32-41.

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69. The Cleanevent executives who negotiated the 2006 EBA were Craig

Lovett, then Chairman, and Ivan Dalla Costa, then the Chief Financial

Officer.64

70. The negotiations were canvassed in some detail in the evidence. It is

not necessary to deal with all of this evidence. There were some

matters which the evidence left unexplained.

71. The first arose out of an email sent on 2 October 2006 by Ivan Dalla

Costa. 65 The email circulated a draft by email of the 2006 EBA that

had been presented to John-Paul Blandthorn on 29 September 2006. In

his email Ivan Dalla Costa stated:

None of the issues we have re-drafted present a problem, except for the leave loading whereby our proposal to build the amount in the weekly rate will present a fundamental political issues [sic] to Bill Shorten – (not a real issue for us).

72. John-Paul Blandthorn was not able to shed any light on what this

referred to. Nor was Bill Shorten.66

73. Another unexplained matter arose out of an email sent by John-Paul

Blandthorn. The email was sent on 20 October 2006. It provided a

further proposed version of the agreement to Cleanevent. It was sent to

Ivan Dalla Costa. It was copied to (amongst others) Bill Shorten and

64 Steven Webber, 28/5/15, T:15.31-37. 65 Shorten MFI-5, 8/7/15, Vol 2, p 40. 66

John-Paul Blandthorn, 20/10/15, T:735.21-34; Bill Shorten, 8/7/15, T:47.20-24.

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Cesar Melhem (then State Assistant Secretary). In that email he

stated:67

I have spoken to the hierarchy of the AWU and they can’t afford to trade core Award conditions at the moment, because we can’t afford other unions attacking us.

74. The evidence did not reveal what this was a reference to. Bill Shorten

confirmed that he was in the hierarchy of the AWU at the time.68 But

he said that he would not have communicated this position to John-Paul Blandthorn as that was not what he thought.69 John-Paul

Blandthorn said that the reference to hierarchy was ‘more likely’ to

refer to Cesar Melhem or Mick Eagles, but that he had no memory of

the conditions referred to.70 The reference to other unions appears to

be a reference to the LHMU with which AWU had a history of

demarcation disputation in this industry.71

75. The process by which the 2006 EBA was negotiated was similar to that

preceding the 2004 EBA. In particular, penalty rates and the

application of the no-disadvantage test were features of discussions.72

76. Bill Shorten stated that, on the basis that the document went to a vote

of the members, he was satisfied that it was appropriate for his delegate

to sign the 2006 EBA.73 That is what occurred. The 2006 EBA was

67 Shorten MFI-5, 8/7/15, Vol 2, p 116A. 68 Bill Shorten, 8/7/15, T:48.1-3. 69

Bill Shorten, 8/7/15, T:48.35-36. 70 John-Paul Blandthorn, 20/10/15, T:736.22-30. 71

Bill Shorten, 8/7/15, T:50.43-47. 72 See for example, Shorten MFI-5, 8/7/15, Vol 2, p 117B; Bill Shorten, 8/7/15, T:55.7-12. 73

Bill Shorten, 8/7/15, T:57.9-15.

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signed by Graham Roberts, Assistant National Secretary of the AWU

on 21 December 2006,74 with acceptance by a majority of Cleanevent

employees on a formal vote undertaken on 21 and 22 December

2006.75 It was lodged with the Office of the Employment Advocate on

22 December 2006.76

77. Clause 39 of the 2006 EBA provided that the agreement excluded any

protected conditions in an Award, including those relating to shift

loadings and penalty rates.77 Some of the conditions in the 2006 EBA

were less favourable to workers than the corresponding conditions

under the 1999 Award. Appendix 2 to this Chapter contains a

comparison of the rates of pay to which Cleanevent casual workers

would have been entitled under the 1999 Award and the rates they

were entitled to under the 2006 EBA. The comparison reveals that:

(a) Level 1 event casuals in other States were being paid at the

award minimum base rate and Level 2 event casuals in other

States were being paid below the 1999 Award minimum base

rate;

(b) All casuals at all levels in all states were being paid below

time and a half for Saturdays, Sundays and public holidays,

74 Shorten MFI-5, 8/7/15, Vol 2, pp 123A, 159. 75 Shorten MFI-5, 8/7/15, Vol 2, p 159A; Cleanevent MFI-1, 19/10/15, pp 8-9. The voting results were 77 for and 15 against. No votes were recorded for workers at a number of Cleanevent sites, including Bluetongue Stadium, Brisbane Cricket Ground, Homebush Tennis Centre, Melbourne Convention Centre, and Rosehill Racecourse. 76

Shorten MFI-5, 8/7/15, Vol 2, p 125. 77 SW1, 28/5/15, p 32.

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whereas they would have been entitled to standard penalty

rates under the 1999 Award; and

(c) Level 1 and 4 event casuals were not entitled to penalty rates,

or a public holiday allowance. Level 2 and 3 event casuals

were entitled to a public holiday allowance after working

more than 7.6 hours on a public holiday, which was lower

than time and a half and well below the double time and a

half entitlement under the 1999 Award.

78. As indicated above, Cleanevent employees voted to approve the

agreement. The evidence was that 92 employees voted, 77 in favour

and 15 against.78 The evidence does not make it clear how many of

these were casual employees. Since all of the votes took place at

venues, it may be that the voters were not event casuals.

79. It is unlikely that the attention of the workers was drawn to any

comparison between their position under the proposed agreement and

their position under the 1999 Award. The practice of the AWU was

that that delegates ascertained the attitude of the workers.79 On this

occasion, John Paul Blandthorn visited Cleanevent’s Melbourne sites

on 21 December 200680 and Cleanevent prepared ‘talking points’ for

its management to discuss with employees.81 Six of the ten talking

points related to permanent employees rather than casuals. None of the

78 Cleanevent MFI-1, 19/10/15, p 9. 79 Bill Shorten, 8/7/15, T:106.1-22. 80

Cleanevent MFI-1, 19/10/15, p 5. 81 Cleanevent MFI-1, 19/10/15, p 7.

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ten talking points dealt with the disadvantages to casual employees as

compared with the position under the Award.

80. Although, as stated above, some consideration was given to the

application of the ‘no disadvantage test’ during the negotiation of the

2006 EBA, that test in fact had no application. The 2006 EBA was

made under Part 8 of the Workplace Relations Act 1996 (Cth). In other

words, the Work Choices regime was in force. As a result, the fact that

some workers in some respects were worse off under the 2006 EBA

than under the 1999 Award was not a matter that required disclosure to

the Commission in the certification process.

Engagement after execution of the 2006 EBA

81. After execution of the 2006 EBA, the AWU and Cleanevent engaged

in discussions in relation to ongoing demarcation disputes with the

LHMU. On 29 January 2007 Nicko Mavro, Managing Director of the

Cleanevent Group emailed personnel at the Sydney Opera House in

relation to these disputes. He then sent an email to John-Paul

Blandthorn stating:82

Mate, Please look below at the email I have just sent the client at the Opera House. I think that you could help us here. If the LHMU is talking to our clients at your sites, maybe your NSW guys can do the same. The client this that their operations will be effected [sic] by the LHMU and are quite concerned. Can you assist? Please pass this on to Bill.

82. John-Paul Blandthorn responded the same day, stating:83

82 Shorten MFI-5, 8/7/15, Vol 2, pp 161-162. 83 Shorten MFI-5, 8/7/15, Vol 2, p 160.

363

I will chat to Bill and explain to him the situation (we will help). Bill mentioned some time ago that Cleanevent were going to make some donation to the AWU so as they could have one organiser, rather than a number around the country. Is this still happening. I think it would help to defuse the situation with the LHMU and make sure there are no mixed messages getting around.

83. John-Paul Blandthorn said that his understanding at the time was that

Cleanevent wanted to have one organiser look after their sites across

the country, and they had raised the issue with Bill Shorten. His

evidence was that Cleanevent ‘wanted to be able to pay for the

organiser.’84 He did not know the quantum of the donation.85 He was

not, at that stage, aware of whether arrangements pursuant to which

donations were made referable to the costs of an organiser had

occurred in the past.86

84. Bill Shorten stated that, during the negotiations in relation to the 2006

EBA, there was a single discussion with Cleanevent about making a

donation to the AWU during the negotiation of the 2006 EBA.87 He

described the proposal as follows:88

Cleanevent was a national business. We'd looked at having, to the best of my recollection, one organiser, so you'd have different individuals, as I think I said in evidence this morning; you know, someone from the Queensland Branch can visit the Queensland venue of work, someone from the Sydney branch, the Sydney venue and in Melbourne, Melbourne venues. Quite often it is useful to have a single point of contact for resolving issues. What we raised or what – Cleanevent might have said, "We want one organiser", we might have raised having one organiser. What we might have asked Cleanevent for is to assist with the airline costs and duties out of the ordinary to service a national agreement. There's

84 John-Paul Blandthorn, 20/10/15, T:738.5-22. 85 John-Paul Blandthorn, 20/10/15, T:738.24-25. 86

John-Paul Blandthorn, 20/10/15, T:739.1-17. 87 Bill Shorten, 8/7/15, T:84.47. 88

Bill Shorten, 8/7/15, T:85.4-19.

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plenty of precedent across the union movement that you might ask the company, whose workers you're organising, to help pay the transportation costs.

85. Bill Shorten said that he did not recall whether the donation was in fact

made.89

86. Nicko Mavro responded to John-Paul Blandthorn’s email, again on the

same day, stating:90

Thanks JP. We will definitely entertain the one organiser principal [sic] and happy for you and Ivan to come up with the details. Thanks for your prompt response regarding the Opera house, but we do need your involvement.

87. John-Paul Blandthorn responded on 30 January 2007, indicating that

he would ‘talk to Bill about it’ later that day.91 He did not recall

whether he in fact had a conversation with Bill Shorten.92 He did not

know whether any donation was ultimately made.93 The evidence does

not support a finding that a donation was in fact made.

88. The significance of this evidence is the factual similarity between what

was occurring at this stage of the dealings between Cleanevent and the

AWU, its earlier dealings with Thiess John Holland,94 and its later

dealings with Cleanevent, detailed below.

89 Bill Shorten, 8/7/15, T:86.7. 90 Shorten MFI-5, 8/7/15, Vol 2, p 160. 91

Shorten MFI-5, 8/7/15, Vol 2, p 163. 92 John-Paul Blandthorn, 20/10/15, T:741.35-37. 93

John-Paul Blandthorn, 20/10/15, T:742.14-16. 94 As to which see Submissions of Counsel Assisting, AWU, 6/11/15, Ch 3, and Ch 10.3 of this Report.

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F – DOUGLAS SITE SERVICES

89. A substantial amount of evidence was received concerning the dealings

between the AWU and Douglas Site Services (DSS). This could have

been a separate case study, although there were factual connections

with the Cleanevent case study. No submission was made that the

AWU or its officials may have contravened any law or breached any

duty as a result of the evidence. No finding to this effect is made

either. Nonetheless, much of the evidence was challenged and there

were substantial debates about it in submissions.

90. The main point of significance in the DSS evidence is that it provides

another example of the AWU seeking benefits or payments from an

employer during EBA negotiations. It reveals that this sort of conduct

cannot be regarded as unusual or isolated in nature.

91. Steven Hunter was an employee of Cleanevent between 1996 and

2001. He held the positions of Venue Manager of the Melbourne

Exhibition Centre and later the Acer Arena in Homebush.95 From

2001 to 2003 he was employed by Cleanevent International in the

United Kingdom.96

92. From 2003, Steven Hunter went out on his own. He operated a

company known as Douglas Site Services (DSS) which provided

95 Steven Hunter, witness statement, 19/10/15, paras 4-5. 96 Steven Hunter, witness statement, 19/10/15, para 7.

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consultancy services to Cleanevent and tendered for cleaning work,

initially outside of events and entertainment venues.97

93. By early 2006, DSS had begun bidding for cleaning work at events.98

By that time, DSS had full time staff of between 25 and 30, full time

contract staff of 20 workers and fluctuating levels of casual workers

numbering between 120 to 150.99 In about 2006 DSS had also

acquired a hospitality cleaning business.100 It had obtained a cleaning

contract for the Commonwealth Games.101

94. Steven Hunter approached the AWU to seek an EBA covering all of

his workers. He contacted John-Paul Blandthorn in early 2006 and

negotiations commenced.

95. It is necessary, at the outset, to say something about the significant

attacks on the credit of Steven Hunter by John-Paul Blandthorn in

submissions. None was persuasive. Many were not put to Steven

Hunter in oral examination. For example, it was submitted, without

any supporting evidence and without it having been put to Steven

Hunter, that DSS was an operator ‘that paid discounted cash-in-hand

rates to independent contractors in order to secure work and undercut

operators such as Cleanevent.’102 Steven Hunter gave his evidence

carefully and in a reasoned way. His demeanour was calm, even under

97 Steven Hunter, witness statement, 19/10/15, paras 9-10. 98 Steven Hunter, 19/10/15, T:641.14-19. 99

Steven Hunter, 19/10/15, T:616.31-617.24. 100 Steven Hunter, 19/10/15, T:618.19-21. 101

Steven Hunter, 19/10/15, T:616.45-46. 102 Submissions of John-Paul Blandthorn, AWU, 20/11/15, paras 10-11.

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sustained cross-examination. He made appropriate concessions. The

attacks on his credit are rejected. It is not necessary to canvass them

here in any detail because the primary points of significance emerge

from the documents themselves.

96. On 21 February 2006, John-Paul Blandthorn sent an email to Steven

Hunter. It attached a copy of the Cleanevent 2004 EBA. It stated that

it ‘will give you some indication of the pay rates we will discuss.’103

97. At that time, much of DSS’s business concerned a contract at Mt

Hotham ski resort. The staff of DSS were covered by the Victorian

Alpine Resorts Award 1999 (Alpine Award). The Alpine Award was

relatively generous to casuals. It provided for a casual loading of 25%

which was the base for calculation of penalty rates, a site allowance of

$2.60 per hour, and standard penalties for weekends and public

holidays.104

98. In about early February 2006, Steven Hunter attended a meeting at the

offices of the AWU. His evidence is that the meeting was attended by

John-Paul Blandthorn and, briefly, Cesar Melhem and Mick Eagles.105

99. Negotiations in relation to the draft EBA continued between March

2006 and early 2007.106 There appears to be some uncertainty during

this period as to whether the DSS EBA had been executed, as John-Paul Blandthorn emailed on more than one occasion seeking

103 Hunter MFI-1, 19/10/15, p 1. 104 Steven Hunter, witness statement, 19/10/15, paras 11-12; Hunter MFI-1, 19/10/15, p 47. 105

Steven Hunter, witness statement, 19/10/15, para 17. 106 Steven Hunter, witness statement, 19/10/15, para 21.

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confirmation as to whether DSS was operating under the EBA.107 On 5

February 2007, John-Paul Blandthorn sent an email to Steven Hunter

attaching a copy of the Cleanevent 2006 EBA and stating ‘thought you

may want to look before we finish ours up.’108

100. On 3 December 2007, John-Paul Blandthorn sent an email to Steven

Hunter with a copy to Cesar Melhem. It attached a substantially

different proposed agreement.109 The covering email contained the

statement:

For the AWU to agree to be a party to the Agreement we would need a guarantee of membership as discussed.

101. Steven Hunter’s evidence was that in late 2007 John-Paul Blandthorn

had begun asking him to guarantee a minimum number of members in

order to secure agreement to the EBA. This was described as making a

‘financial commitment’ to the Union. Steven Webber understood that

John-Paul Blandthorn was asking DSS to make a commitment to the

number of staff that would remain members of the Union.110 Steven

Hunter said that a numerical figure was not proposed by John-Paul

Blandthorn. Rather he requested a commitment from DSS.111

102. Steven Hunter said that his initial response was that he thought it was

the job of the union to market their services to staff, but that he was

more than happy to give John-Paul Blandthorn access to the staff for

107 Hunter MFI-1, 19/10/15, pp 115-116. 108 Hunter MFI-1, 19/10/15, p 121. 109

Hunter MFI-1, 19/10/15, p 156. 110 Steven Hunter, 19/10/15, T:598.9-12. 111

Steven Hunter, 19/10/15, T:598.18-20.

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the purpose of recruiting members.112 The staff base of DSS was quite

transient. Most casual employees at Mt Hotham did not stay in

employment for more than one season. Hence there was a high

turnover of staff.113 Steven Hunter said that, in response to the email,

he told John-Paul Blandthorn that he could not and would not

guarantee union memberships.114

103. John-Paul Blandthorn placed a different characterisation on the

reference to ‘guarantee of membership.’ He stated in his oral evidence

that the email was ‘clumsily written.’115 He said that Steven Hunter’s

account of the conversation between them is ‘a lie’ – rarely a

satisfactory course for one witness to take about the evidence of

another.116 John-Paul Blandthorn’s account of the 3 December 2007

email was as follows:117

What the AWU had been seeking with Douglas Site Services for a large period of time, without much success, was access to recruitment. They were not necessarily forthcoming in doing that, and to enter into an enterprise agreement with this organisation at the time, we had to have members to be able to do so. That had been made very clear.

104. It was suggested to Steven Hunter that AWU representatives could not

have demanded a guarantee of membership numbers if they did not

know how many staff were employed by Steven Hunter. Steven

Hunter responded that the AWU knew the size of the business that

112 Steven Hunter, witness statement, 19/10/15, para 24. 113 Steven Hunter, 19/10/15, T:599.20-24. 114

Steven Hunter, witness statement, 19/10/15, para 26. 115 John-Paul Blandthorn, 20/10/15, T:761.12. 116

John-Paul Blandthorn, 20/10/15, T:762.11; Submissions of John-Paul Blandthorn, 20/11/15, para 22. 117 John-Paul Blandthorn, 20/10/15, T:761.12-18.

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DSS conducted because he told them about the contracts DSS had won

and the representatives he engaged with were well versed in the

cleaning industry and aware of the fluctuating employment that

characterised that industry.118 That explanation should be accepted. It

is evident from the history of the AWU’s dealings with Cleanevent that

the responsible officials were familiar with the industry. That is

evident also from the evidence of John-Paul Blandthorn, Cesar

Melhem and Bill Shorten in relation to their dealings with Cleanevent.

Further, it is consistent with the logic of events that the AWU would

seek some financial guarantee of membership precisely because

employment in the industry is transient.119

105. When John-Paul Blandthorn’s interpretation of the email was put to

Steven Hunter by senior counsel for Cesar Melhem, he disagreed with

it.120 He said that Cesar Melhem asked for a firm commitment as to

the number of staff that would become members of the AWU.121

106. Steven Hunter’s account of the request made of him is accepted. As

will be seen, the proposition advanced by John-Paul Blandthorn,

namely that what was sought was merely ‘access’ to members for

recruitment purposes, is inconsistent with the fact that access was in

fact given. Notwithstanding that, as will be seen, similar requests of

this nature continued to be made. None was ever phrased in terms of a

request for ‘access’. It was not a case of just one clumsily written

118 Steven Hunter, 19/10/15, T:623.28, 33-41, 635.27-44, 636.13-40. 119 See, for example, Cesar Melhem’s evidence in relation to the services that were provided to Cleanevent employees, whether members or non-members: Cesar Melhem, 22/10/15, T:886.23-25, 37-46, and to like effect, John-Paul Blandthorn, 20/10/15, T:747.42-47. 120

Steven Hunter, 19/10/15, T:633.14-20. 121 Steven Hunter, 19/10/15, T:633.22-37.

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email. For the reasons explained in Chapter 10.1 of this Report, great

weight should be given to the contemporaneous documents.

107. Steven Hunter said that at a further meeting attended by John-Paul

Blandthorn and Cesar Melhem, the issue of providing a guarantee of a

certain number of AWU memberships was again raised.122 It would

appear that at this meeting, in this context, a suggestion was raised that

DSS include an opt-out clause in the application forms provided to

applicants. Steven Hunter did not remember whether it was he who

proposed the opt out clause or whether it was the AWU.123 Steven

Hunter said that he agreed to this on the basis that the clause was

prominent, that it clearly described that membership was optional and

that it stated the financial commitment for which the employees would

be liable if they did not opt out.124

108. Shortly after the meeting, Steven Hunter amended the DSS job

application forms to include a box with the words:125

It is an option for employees to become a union member. You have the option now to opt out of membership by putting a tick in this box.

109. John-Paul Blandthorn stated that he did not remember a conversation

in which an opt-out clause was discussed. He stated that he was ‘not

sure where [Steven Hunter’s] evidence came from.’126 Later, faced

with further correspondence referring to the opt-out clause, John-Paul

122 Steven Hunter, witness statement, 19/10/15, para 27. 123 Steven Hunter, 19/10/15, T:598.39-46, 624.2-16. 124

Steven Hunter, witness statement, 19/10/15, para 28; Steven Hunter, 19/10/15, T:599.4-8. 125 Steven Hunter, witness statement, 19/10/15, para 28. 126

John-Paul Blandthorn, 20/10/15, T:763.29-37.

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Blandthorn conceded that it was ‘possible’ that there were discussions

to that effect.127 An inference arises on the face of these

contemporaneous documents. The inference is that John-Paul

Blandthorn, Cesar Melhem and Steven Hunter discussed the inclusion

of an opt-out clause as a means of attracting membership from DSS

workers, and that Steven Hunter introduced an opt-out clause

accordingly.128 That inference is drawn.

110. The DSS EBA was finalised at about this time. On 23 July 2008,

Steven Hunter sent an email to employees attaching the proposed EBA

and informing them that a vote will be taken on the agreement.129 The

email stated:

A representative from the (AWU) will be available to meet with staff at the locations:

• Mt Hotham - Time and Date to be confirmed

• Prince of Wales - Time and Date to be confirmed

Following the opportunity to meet with both the AWU and DSS representatives a vote will be taken. Every employee has the option to place a vote, although it is not compulsory.

…

Employees have the right to choose to be and or not to be a member of the AWU. Once the agreement is ratified formal documentation will be forwarded to all active employees confirming the details of the agreement. Staff who do not wish to become members will need to complete and return either by email or post a section noting their intent not to become members. All employees will be covered by the agreement, regardless of membership status with the AWU.

127 John-Paul Blandthorn, 20/10/15, T:765.20-23. 128 See, in particular Hunter MFI-1, 19/10/15, p 387. 129

Hunter MFI-1, 19/10/15, p 230.

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111. The email also included contact details for John-Paul Blandthorn. The

attached EBA contained some changes to the rates set out in the

previous draft. But the rates remained identical or very similar to those

in the Cleanevent 2006 EBA.130

112. On 24 July 2008, John-Paul Blandthorn responded to Steven Hunter

proposing a date to meet with the workers.131 Further email

correspondence ensued, during which John-Paul Blandthorn indicated

his unavailability to meet that week.132

113. On 5 August 2008, John-Paul Blandthorn sent an email to Steven

Hunter stating:133

Just wondering if you could send the names of the people who will be attending our function on Friday, otherwise Cesar was happy for just a donation if you can’t attend.

114. Steven Hunter does not remember what the function was that he was

invited to.134 His evidence was that he had been asked by John-Paul

Blandthorn to donate an amount in the region of $10,000, being

equivalent to a table of 10 at $1,000.00 per head.135 John-Paul

Blandthorn also said that his recollection was that various businesses

were asked by the AWU to buy a table for an event.136

130 Hunter MFI-1, 19/10/15, pp 242-245. 131 Hunter MFI-1, 19/10/15, p 299. 132

Hunter MFI-1, 19/10/15, p 302. 133 Hunter MFI-1, 19/10/15, p 307. 134

Steven Hunter, 19/10/15, T:600.24-28. 135 Steven Hunter, 19/10/15, T:600.43-45, 601.1-3. 136

John-Paul Blandthorn, 20/10/15, T:765.1-2

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115. On 6 August 2008, Steven Hunter responded stating:137

I have left a message on your phone last week. Unfortunately we will not be able to attend this coming Friday. Niamh and Scott are booth [sic] out of the country and I am packing my bags to jump on a plane as well. I will speak with Niamh about the option of making a donation to the AWU. I might suggest to Niamh that as soon as we get the award up and running that we make a donation at that point. I am hoping that with your visit to the Hotham and a visit to St Kilda that we are very close to getting it signed off.

116. The reference in the email to ‘award’ was to the enterprise

agreement.138 Steven Hunter gave the following account of his attitude

at the time of sending the email:139

At that point I was playing a little bit of a standoff. We needed to get an agreement in place. I wasn't going to have my hands tied behind my back and forced to make commitments that I didn't see as fair and reasonable, but I did see that there'd been, on both sides of the fence, an amount of work, quite a considerable amount of work had gone in to getting our award to what should have been finalisation and having it ratified, and, at that point, a donation in my mind would have been in recognition for works completed.

117. John-Paul Blandthorn responded on the same day, stating:140

…This is the only function we will ask for tickets as it goes to the reelection of the Secretary.

Will be up there tomorrow and happy to do St Kilda at your conveniance [sic].

118. On 28 October 2008 Steven Hunter sent an email to employees

stating:141

137 Hunter MFI-1, 19/10/15, p 307. 138 Steven Hunter, 19/10/15, T:600.36-38. 139

Steven Hunter, 19/10/15, T:601.3-12. 140 Hunter MFI-1, 19/10/15, p 307.

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Staff have now been given the opportunity to meet with myself and John-Paul from the AWU to discuss any concerns and or questions which they may have had regarding the proposed agreement.

119. The email invited votes on the proposed EBA by return email. John-Paul Blandthorn said that he does not recall ever meeting with DSS

employees, but accepted that it was possible that he did so.142 The

correspondence reveals that Steven Hunter made several attempts to

have John-Paul Blandthorn meet with his workers. The meetings were

expressly referred to in the email to DSS workers above. Whether

such meetings ever took place is unclear on the documents following

the distribution of the proposed EBA to employees. What is clear is

that several attempts were made to arrange meetings with staff. The

principal reason for them not occurring was John-Paul Blandthorn’s

unavailability. The evidentiary position is against John-Paul

Blandthorn’s suggestion that the references to ‘guaranteed

membership’ were to the provision of access to prospective AWU

members in the employ of DSS.

120. On 6 November 2008, Steven Hunter sent an email to John-Paul

Blandthorn stating:143

Our voting closed last night at 5pm and I am pleased to say that we have had 3 votes, all in favour of the agreement. Can you please confirm if you need copies of the emails and forward a sample of the opt out clause to be included on our application forms for new employees.

121. Steven Hunter said that at that stage DSS was already using an opt-out

clause in its application forms but he wanted to see John-Paul

141 Hunter MFI-1, 19/10/15, p 315. 142 John-Paul Blandthorn, 20/10/15, T:764.26-28. 143

Hunter MFI-1, 19/10/15, p 351.

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Blandthorn’s proposed wording to ensure that it was agreeable to both

parties.144

122. John-Paul Blandthorn responded on the same day stating:

I have been reading the agreement and there are a couple of tidy ups that I will forward shortly that are marked up.

Cesar will also need some sort of commitment regarding membership. (emphasis added)

123. Steven Hunter said that after receipt of this email, John-Paul

Blandthorn then sent a further email to Steven Hunter, copying in

Cesar Melhem and stating:145

I have marked up changes to the document for you to look over.

Clause 19.4 can only be changed by increasing the overall rate or else it will fail the no-disadvantage test.

As discussed Cesar will only sign if we are guaranteed membership through some arrangement. (emphasis added)

124. The changes to the EBA (that had, by this stage, been voted on by

members) included changes to the rates of pay.146 Steven Hunter’s

understanding of the ‘arrangement’ referred to in this email, based on

his conversation with John-Paul Blandthorn, was as follows:147

What he was asking me to do was enter into - whether he's asking - he never directly asked me for a list of names that would marry up against a set number of memberships or agreed memberships. He was asking - from what I take from the conversation, or took from the conversation was that if - at that point he still hadn't confirmed what the rate per membership

144 Steven Hunter, witness statement, 19/10/15, para 32. 145 Hunter MFI-1, 19/10/15, p 353. 146

Hunter MFI-1, 19/10/15, pp 364-367. 147 Steven Hunter, 19/10/15, T:603.23-32.

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was going to be, but let's just say it was $12 a fortnight per member, he was asking for 20 members, and do your calculation on that for an annual amount.

125. The correspondence between John-Paul Blandthorn and Steven Hunter

supports this interpretation. The AWU was not seeking a guarantee of

access to members. Nor was it seeking a guarantee that DSS had at

least one member whose employment would be subject to the

agreement and whom the AWU was entitled to represent in relation to

the work covered by the agreement.148 The correspondence from John-Paul Blandthorn was seeking a guarantee that the AWU would receive

an unspecified number of members in return for signing the EBA:

‘Cesar will only sign if we are guaranteed membership through some

arrangement’ (emphasis added).149

126. Steven Hunter said that once the employment form was distributed to

employees, all of the staff had ticked to opt out of AWU

membership.150 Steven Hunter said that he had raised with the

representatives of the AWU that he could not as a matter of practicality

commit his workers to membership.151

127. Steven Hunter responded to John-Paul Blandthorn the same day,

stating:152

With regard to membership, we are already using the opt out clause on our application forms. We have not nominated the rate for employee contributions. From the conversations we had with yourself and Cesar

148 Workplace Relations Act 1996 (Cth) s 328. 149 Hunter MFI-1, 19/10/15, p 353. 150

Steven Hunter, 19/10/15, T:601.42-47. 151 Steven Hunter, 19/10/15, T:602.23-32. 152

Hunter MFI-1, 19/10/15, p 387.

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when we last met, I took it that we were to agree on a 1% of gross wage with a cap of $12 per fortnight for all employees who do not opt out.

128. Steven Hunter said that he does not recall receiving wording for an

opt-out clause, or confirmation of what the membership fee would be

for DSS employees who became members of the AWU.153

129. Steven Hunter said that, for reasons he cannot recall, the EBA that he

had been negotiating with the AWU was never finalised.154

130. In about August 2009, DSS engaged solicitors to prepare a single-enterprise EBA.155 The EBA was drafted on the basis that it would

not, on its terms, pass the no-disadvantage test when compared with

two State awards.156 DSS submitted to Fair Work Australia that the

exceptional circumstances warranting approval of the agreement in the

public interest were that DSS’s main competitor was Cleanevent which

had an award and EBA providing for low casual rates, and without

equivalent rates, DSS would not be able to compete for events.157

131. On 10 February 2010, Commissioner Lewin declined to approve the

EBA on the basis that it did not pass the no-disadvantage test.158

Commissioner Lewin rejected the argument identified above,

observing:

153 Steven Hunter, 19/10/15, T:605.32-42. 154 Steven Hunter, witness statement, 19/10/15, para 39. 155

Steven Hunter, witness statement, 19/10/15, para 40; Hunter MFI-1, 19/10/15, pp 389-464. 156 Steven Hunter, witness statement, 19/10/15, para 41; Hunter MFI-1, 19/10/15, pp 478-479. 157

Hunter MFI-1, 19/10/15, pp 483, 510-511. 158 Douglas Labour Services Pty Ltd; re Douglas Labour Services Pty Ltd Agreement 2009 [2010] FWA 555 (Hunter MFI-1, 19/10/15, p 514).

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[20] The Applicant submits that because a competitor was fortunate to avail itself of the window of opportunity to apply and have approved a collective agreement against the lesser or less demanding test of approval operating between 26 March 2006 and 6 May 2007, it would not be contrary to the public interest to approve an agreement which fails the no-disadvantage test prescribed by the Fair Work Act 2009. The potential implication of accepting this Submission should be starkly apparent. It is difficult to see how, if adopted, such an approach should not also apply to any employer which operates in an industry in which competitor companies operate with existing agreements approved under the test which applied under the Workplace Relations Act 1996 in the period between 26 March 2006 and 6 May 2007. This would give rise to what would seem to be a new and exotic basis for the approval of enterprise agreements made during the bridging period. One which would have particular rather than general application and arise serendipitously for some employers and not for others operating in the same marketplace, depending upon what agreements were approved in the period between 26 March 2006 and 7 May 2007 and remain in operation.

[21] To introduce such a novel test of approval against what appears to be the clear and determined policy of the Parliament in the circumstances would seem to me to be contrary to a well established and considered view of the legislature of what the public interest requires in respect of the level of terms and conditions of employment to be provided by collective agreements between employers and employees, in order to be given statutory force by Federal legislation.

132. DSS was not a successful business. On 19 December 2012, it was

placed into administration and was ultimately wound up.159

133. There was a debate on the evidence and in submissions as to the causes

of the failure of the business. It is not necessary to enter into that

debate. Much of it involved unpersuasive attacks on the credit of

Steven Hunter. Those attacks have been rejected. It is sufficient to

note that the Administrators’ report to creditors identified the reasons

for the insolvency of the company as including high operating costs,

including substantial employment costs.160

159 Steven Hunter, witness statement, 19/10/15, para 44. 160 Hunter MFI-1, 19/10/15, p 524.

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G – RENEWING THE 2006 EBA

134. The nominal expiry date of the 2006 EBA was 1 December 2009. As

at 1 January 2010, the new industrial relations regime in the Fair Work

Act 2009 (Cth) was due to commence. This included the introduction

of the National Employment Standards, the ‘better off overall test’ for

approval of enterprise agreements and the Modern Awards (subject to

applicable transitional provisions).

135. There was a significant change in the environment in which the AWU

could conduct its negotiations for a new EBA after this date. In

particular, it was open to the AWU to apply to the Fair Work

Commission for the termination of:

(a) the 1999 Award, pursuant to Item 5 of Schedule 6 to the Fair

Work (Transitional Provisions and Consequential

Amendments) Act 2009 (Cth); and

(b) the 2006 EBA, pursuant to item 16 of Schedule 3 to the Fair

Work (Transitional Provisions and Consequential

Amendments) Act 2009 (Cth) applying ss 225-227 of the Fair

Work Act 2009 (Cth).

136. In the event that both of these instruments were terminated, a Modern

Award would apply to determine the terms and conditions of

employment for cleaning workers. The Modern Award which was

relevant, for reasons set out below, was the Cleaning Services Award

2010. If the 1999 Award was terminated and approval was requested

for a new enterprise agreement, the ‘better off overall’ test would be

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applied by reference to the Modern Award.161 Application of the

Modern Award would have resulted in significantly more beneficial

terms and conditions of employment for Cleanevent employees. This

did not occur until 2015, in circumstances described below.

137. The legislative changes effected by the Fair Work Act 2009 (Cth) did

not, however, require the AWU or Cleanevent to apply to terminate

either the 1999 Award or the 2006 EBA. From Cleanevent’s

perspective, it was highly important not to do so. Application of the

‘better off overall test’ would have required Cleanevent to pay casual

workers penalty rates of up to double time and half for public holidays.

The cost to the Cleanevent business in being required to comply with

the Modern Award was estimated by Steven Webber in 2012 as being

as in the order of $2,000,000.162 At an early stage of negotiations

Michael Robinson (Cleanevent’s General Manager of Human

Resources and Risk) in an internal Cleanevent email referred to a

‘saving of $1.5M’.163 In another internal email after negotiations had

concluded, Michael Robinson spoke of a saving of ‘greater than $1

million in wages’.164

138. Michael Robinson’s evidence further explained the importance of

avoiding the Modern Award:165

161 Item 18(2)(b) of Schedule 7 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth). 162

SW1, 28/5/15, pp 119-120. 163 Cleanevent MFI-1, 19/10/15, pp 55-56. 164

Cleanevent MFI-1, 19/10/15, p 312. 165 Michael Robinson, witness statement, 29/5/15, para 17.

382

It was very commercially important to Clean Event to maintain the rates of pay contained in the 2006 EBA, as far as possible in any renewed or renegotiated arrangement. In December 2009, the 2006 EBA reached its nominal expiry date and prior to its expiry, negotiations for a renewed EBA began. I recall that the beneficial casual pay rates and overall agreement terms were very attractive to Spotless and one of the reasons it acquired the Clean Event business in 2010.

139. Michael Robinson agreed in oral evidence that the casual rates were

very attractive to Spotless because there were many casual workers

working for Cleanevent; the bulk of their work was on weekends and

public holidays or at night; and this ‘army’ of casual workers was not

receiving penalty rates for their weekend or public holiday work

comparable to those which would have been paid pursuant to the

Modern Award.166

140. Before the nominal expiry date of the 2006 EBA John-Paul Blandthorn

initiated discussions with Cleanevent concerning a replacement EBA.

John-Paul Blandthorn was the organiser employed by AWU Vic in

connection with Cleanevent at this time. He reported to the then State

Secretary of the AWU Vic, Cesar Melhem.167 AWU Vic prepared a

commencement of bargaining letter to Cleanevent on about 9

November 2009.168

141. Various negotiations on this subject proceeded as between John-Paul

Blandthorn for the AWU and Steven Webber and Michael Robinson

for the company in the latter part of 2009 and early 2010. At least

initially, the negotiations were directed at replacing the 2006 EBA with

166 Michael Robinson, 29/5/15, T:102.35-103.10. 167 John-Paul Blandthorn, 3/6/15, T:426.14-15. 168

Cleanevent MFI-1, 19/10/15, pp 48-49.

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a standalone agreement on similar terms.169 Subsequently it was

decided that the better course was to ‘roll over’ the 2006 EBA, rather

than enter into a replacement EBA.170

The MOU and Side Letter

142. It is convenient at this point to examine the two end results of the

negotiations. One was the execution by Cleanevent and the AWU of a

memorandum of understanding continuing the 2006 EBA (‘MOU’).

The other was a promise by Cleanevent pay $25,000 per annum to the

AWU Vic: it was contained in a side letter dated 13 October 2010

(Side Letter).

143. The MOU was executed by Steven Webber on behalf of Cleanevent on

13 October 2010. It was executed by Paul Howes on behalf of the

AWU on 12 November 2010.171 The circumstances in which that

document came to be executed by Paul Howes are set out in more

detail below. For present purposes it is convenient to note the

following matters about it. In substance, it was an agreement between

the AWU and Cleanevent to continue the 2006 EBA subject to some

minor changes, including small increases in wages. By clause 2.7 it

purported to prevent the AWU, Cleanevent and Cleanevent employees

from taking industrial action, commencing enterprise bargaining or

seeking to terminate the MOU or the 1999 Award. It is doubtful

whether this clause was enforceable. It certainly could not have been

enforceable against Cleanevent employees without their express

169 Cleanevent MFI-1, 19/10/15, pp 14-15, 26-28, 31. 170 Michael Robinson, witness statement, 29/5/15, para 23. 171

Cleanevent MFI-1, 19/10/15, pp 313-318.

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agreement. There is no doubt however that the intention of both

Cleanevent and the AWU was to abide by the clause.

144. The MOU endeavoured, therefore, to obtain for Cleanevent what

would have been one of the results of an enterprise agreement certified

under the Fair Work Act 2009 (Cth) but without embarking on the

statutory process required under that Act. As occurred in 2004, the

parties avoided subjecting their arrangement to the scrutiny that the

legislative regime required to be applied to arrangements of this kind.

145. The AWU Vic and Cleanevent had an agreement collateral to the

MOU. It was documented in the Side Letter. It was signed by Michael

Robinson on behalf of Cleanevent. It was in the following terms:172

Dear Cesar,

I am writing to you regarding the implementation of new pay scales and the continuation of the terms and conditions as prescribed in the “Cleanevent Australia Pty Ltd AWU Agreement 2006” (Cleanevent EBA) and the agreements by Cleanevent to pay membership fees on behalf of some employees who wish to join the AWU.

While the MOU is in operation, Cleanevent will pay, on behalf of employees of Cleanevent who are or become members of the AWU, the employees’ union fees up to $25,000 for each financial year up to 30 June 2013. Payments will be made by Cleanevent biannually (December and June) to the AWU on receipt of a list of Cleanevent employees and the associated membership fees that Cleanevent are being requested to pay.

During the period of operation of the MOU it is understood that the AWU will not commence or take any step which may result in the

commencement of enterprise bargaining under the Fair Work Act 2009; or seek to terminate (or support or encourage the termination of) the Cleanevent EBA or the aforementioned MOU

172 Cleanevent MFI-1, 19/10/15, p 241.

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146. The last paragraph quoted above repeated, in substance, what was

promised by the AWU in paragraph 2.7 of the MOU. The promise in

the first two paragraphs was expressed to be a promise to pay ‘up to’

$25,000. On one view, it contemplated that the amount to be paid

might be dependent upon the number of workers who wished to

become members of the AWU. However, as will become apparent, the

agreement was treated by both parties as an agreement to pay $25,000

per annum. In substance what occurred was that Cleanevent, at the

time of payment, provided a list of its employees to the AWU Vic

without regard to whether they were already members of the AWU and

without regard to whether they wished to become members. The

AWU Vic then entered their names on the membership roll.

147. There was a substantial amount of evidence, and discussion in

submissions, about how the above arrangements were negotiated.

Much of that evidence is set out in what follows. Some of the details

about how the arrangement was negotiated are unclear. But it is not

necessary to deal, in what follows, with every aspect of these

negotiations or make precise findings about what occurred at every

step.

Conduct of the negotiations on behalf of the AWU

148. There is no controversy surrounding the fact that the negotiations in

relation to renewing or replacing the 2006 EBA were led on behalf of

Cleanevent by Michael Robinson and Steven Webber.

149. There was a dispute as to the role of Cesar Melhem in the negotiations

on behalf of the AWU Vic. On the one hand, while John-Paul

386

Blandthorn said that he had carried out many of the day to day

negotiations himself he also said that at all times he kept Cesar

Melhem informed as to the progress of those negotiations. This

included regularly seeking instructions from Cesar Melhem as to what

to do next.

150. On the other hand Cesar Melhem claimed that he was not personally

involved in the negotiation of the replacement to the 2006 EBA.

Indeed he said that he did not even familiarise himself with the terms

of the 2006 EBA. By way of example, Cesar Melhem’s oral evidence

included the following:173

Q. You were personally involved, were you not in the negotiation of the MOU, certainly in 2010?

A. I wasn’t directly; no, I was not.

Q. You familiarised yourself, I take it, with the content of the 2006 EBA for the purposes of the negotiations you conducted in 2010?

A. No.

Q. Not at all?

A. No.

Q. Wouldn’t that have been an important thing for you to do, in the interests of your members?

A. No, the EBA is a national EBA; it is a not a state based EBA, and I don’t necessarily get involved in every single EBA. I’ve got 2000 employers, 2000 EBAs and don’t expect me to get involved in every single EBA discussion.

151. The truth is that Cesar Melhem did have direct involvement in the

conduct of the negotiations, in the sense that he received regular

173 Cesar Melhem, 1/6/15, T:189.1-18.

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reports from, and gave regular instructions to, John-Paul Blandthorn

throughout the process. He also attended meetings with Cleanevent

representatives, as set out below.

152. Cesar Melhem’s submissions to the contrary are rejected. The

contemporaneous documents clearly show that Cesar Melhem knew of

and approved the arrangements that ultimately were entered into, and

that he was centrally involved in their negotiation. They also indicate

that he was centrally involved in the implementation of the

arrangement in the Side Letter. John-Paul Blandthorn’s evidence to

this effect is supported by the surrounding circumstances. He was not

an especially experienced organiser. On the other hand, Cesar Melhem

was highly experienced and held the office of State Secretary. It is

unlikely that Cesar Melhem would have relinquished any role in the

negotiations and left matters in the hands of John-Paul Blandthorn.

153. Cesar Melhem was in general not a credible witness. His evidence was

not satisfactory on many points, including this one. Often he gave

implausible evidence in the face of what was obvious from documents.

An example was his insistence in oral evidence that the arrangement in

the Side Letter was a ‘service fee’, discussed below. It is not possible

to accept his evidence on controversial points unless it is against his

interest or corroborated.

The First Meeting at Cesar Melhem’s office

154. The electronic calendars of both John-Paul Blandthorn and Cesar

Melhem suggest that there were two meetings at the AWU offices

388

between AWU officials and Cleanevent representatives.174 The first

meeting in those calendars is recorded as being scheduled for 13 May

2010, with Cesar Melhem, Michael Robinson and John-Paul

Blandthorn attending. The second is recorded as being scheduled for

17 September 2010. There is no record of who attended.

155. There was some confusion in the evidence regarding what was said at

which meeting, engendered in part because the above calendars were

not produced by the AWU until after the examination of Steven

Webber, Michael Robinson and the first examination of Cesar

Melhem.175 No one made notes at either meeting.

156. It is not necessary to review the oral evidence about this meeting. It is

likely that there was a discussion about Cleanevent paying a sum of

money to the AWU as part of the process of rolling over the 2006

EBA. So much is suggested by two emails sent by Michael Robinson

to Julianne Page.

157. The first, sent on 17 May 2010, attached a comparison of the 1999

Award to the proposed MOU with the AWU.176 Julianne Page was at

that time the Group General Manager for the Spotless Cleaning

Division.177 She was the person responsible for giving approval to the

agreement that was being negotiated. She did so on the

recommendation of the HR Department and after taking advice from

174 Blandthorn MFI-3, 4/6/15; Blandthorn MFI-4, 4/6/15. 175 Blandthorn MFI-3, 4/6/15; Blandthorn MFI-4, 4/6/15. 176

Cleanevent MFI-1, 19/10/15, pp 55-56. 177 Steven Webber, 28/5/15, T:21.2-3; Julianne Page, 19/10/15, T:545.30-33.

389

the legal department.178 She was not herself involved in meetings with

the AWU concerning the negotiations in relation to the MOU. The

email was sent to her by way of update.179

158. In his email of 17 May 2010 Michael Robinson noted that the

difference between the 1999 Award and the 2006 EBA was

approximately $420,000 for event casuals and about $1,200,000 for

venue casuals. He then said:180

The union are looking for an “opt out” clause in our casual application forms. Whilst this is not illegal there is some grey area surrounding the freedom of association and whether our part would constitute a violation of this. There is also the ethical argument that we are taking advantage of poor literacy in our workforce to push our own agenda.

On the flip side of this we are using the same form and trusting the same level of literacy to provide details of workcover injuries and criminal records and while it could be argued that these are usual parts of the application process these cleaners are used to, we are not hiding the process and could certainly highlight this again during inductions and assist in the “opt out” process to balance any disadvantage the cleaner may have.

… The union are looking at $2 per shift for casuals which if they were lucky they would get, lets say, 100 at Victoria tracks and stadiums. Multiply that $200 by about 50 footy games and race meets and the union would be lucky to pull $10K per annum. For a saving of $1.5M we could make a donation of $20K to the union in some way, shape or form (tables at the AWU ball, paying our level 3 casuals membership, etc) and this would get over the line. This deal would only be locked to the Consent Award/ MOU while it stands, and after that all bets are off.

I am sure that making this “donation” in what ever [sic] form we choose would be legal but then this becomes a question of scruples. I have run this past Amanda (cc’d) she is certainly in favour of the high road on both the above scenarios, it saves any issues with integrity. While I share Amanda’s concerns for any exposure we may be opening ourselves to I feel there is

178 Julianne Page, 19/10/15, T:550.35-47. 179 Julianne Page, 19/10/15, T:547.10-20. 180

Cleanevent MFI-1, 19/10/15, pp 55-56.

390

definitely merit in fleshing this out simply for the massive competitive advantage that we will be creating for ourselves in the market.

159. The reference to making a donation indicates that a proposal by the

AWU Vic that Cleanevent pay it a sum of money was made at the first

meeting. It is not clear from the email, and does not matter very much,

whether it involved both a donation and a sum of money per casual.

But both John Paul Blandthorn and Cesar Melhem accepted that that

the latter matter was raised, at least at some point in discussions.181

160. The email also suggests that the AWU was looking for an ‘opt out’

clause. It is likely that this, too, was discussed at the meeting. Cesar

Melhem accepted that it was.182 John-Paul Blandthorn had no

recollection but accepted that it was possible.183

161. The second email that suggests that a proposal to pay money was

raised at this time was an email sent on 27 May 2010 by Michael

Robinson to Steven Webber and Julianne Page.184 In the email he

referred to a meeting with David Jenkinson, Julianne Page and

Amanda Ratnam at which a proposed further meeting with the AWU

was discussed. Michael Robinson referred to Amanda Ratnam’s

suggestion that an MOU should be drafted in advance of the meeting,

and continued as follows:

…Amanda felt the terms of our payment of membership should sit within this document. The union will never agree to having any trade off for lower wages with a payment of membership in the one document. They indicated in our initial discussion on the MOU by saying “a separate

181 Cesar Melhem, 22/10/15, T:888.4-13; John-Paul Blandthorn, 20/10/15, T:746.30-42. 182 Cesar Melhem, 22/10/15, T:887.24-45. 183

John-Paul Blandthorn, 20/10/15, T:743.29-43, 745.25-31. 184 Cleanevent MFI-1, 19/10/15, p 175.

391

agreement”. It would be crazy for the union to put that down on a page and to be honest I wouldn’t feel happy with it being on the same document either.

…

First, lets agree with the union on a price. JP phoned me this morning to discuss changing the meeting time to Tuesday and we bantered around amounts, he suggested $20K may be too high and that he feels Cesar would go for a little less (what a great relationship). His flawed rationale though was that $20K was about 1.2% of payroll and Cesar would be

happy with 1%. Now we know that our payroll is much larger than that so I don't think we mess around with trying to save a thousand or two when we have a much bigger prize at the end. I don't want to alert them to the true payroll percentage of what we are going to offer because it may put an unnecessary sour on a negotiation we want to keep positive. So lets assume that $20K is our resting agreement with the union.

…

Thirdly we need to work out the documentation. The reality is no matter what we sign at any time the AWU can pull this deal out from under us (Which we are pretty sure they wont [sic] if we can get the deal finalised) We need to document in the MOU that we agree to a set of pay scales and that the union agree to not terminate the consent agreement or the MOU until the MOU has expired.

…

As far as documentation of the membership agreement I think we could go either way depending on our legal advice from Amanda. If we have a handshake deal, the union will be happy, there is no risk to the union that we wont [sic] pay it as they will simply terminate all privileges and send us straight to the Modern Award rates. Why would we need a document of that, I suggest that we simply stage our payments of membership so that if the MOU for some reason fell through mid year then we wouldn't have paid all the memberships for nothing. Even if we agree to pay all memberships after 6 months then we would have saved that $20K thirty fold in wages by then. I don't care if we document that part or not.

I also suggest that we commit to a tick box for the union on our application forms and invite them to our inductions…

162. It would seem from this email that by 27 May 2010 a specific proposal

to pay $20,000 had been floated. It is clear, too, that the discussions

with John-Paul Blandthorn referred to as having occurred on the

392

morning on which the above email was sent were not the first occasion

on which a proposal of that kind had been made.

163. The email also addresses a question that seems to have greatly

exercised the minds of those involved in the arrangements. Should it

be documented and, if so, how? It was clearly a sensitive matter. As

has been seen, the ultimate decision was to record the arrangement in

writing, but in a separate document.

First draft of the side deal

164. The attention given to this topic is apparent from Michael Robinson’s

email of Monday 31 May 2010, sent an email to Steven Webber and

Julianne Page.185 It attached a draft MOU which incorporated a draft

of what became the Side Letter. Michael Robinson’s email of 31 May

2010 was in the following terms:

See the attached MOU adjusted by the legal team. Note clause 2.2 and 2.3 that tied the membership to the EBA. This cannot be our approach. These clauses need to be omitted. Please comment.

165. Clauses 2.2 and 2.3 of the draft MOU attached to this email provide in

substance that Cleanevent would pay on behalf of the employees of

Cleanevent ‘who are or would become members of the AWU,’

amounts described as ‘union fees’ up to $10,000 for the next three

financial years.

166. It would seem from the content of the 31 May 2010 email (taken with

the earlier email dated 27 May 2010) that Michael Robinson had

185 SW1, 28/5/15, p 34-37.

393

serious reservations about recording the payments suggested in the

draft MOU attached to his email.

167. John-Paul Blandthorn accepted that he indicated that the AWU did not

wish the arrangement in respect of membership and the MOU to be

recorded in the one document.186 His reasoning was that the MOU was

to govern the employment terms of the employees.187 He did not

accept, but would not demur, from the proposition that a reason for this

suggestion was that it could be seen as a trade-off for the low wages

provided for in the MOU.188

168. Cesar Melhem said that he did not recall whether there was any

discussion about recording the side deal separately to the MOU. He

said that he did not really care how the agreement was recorded. ‘A

handshake would have done the job.’189

August correspondence

169. The next email produced to the Commission by either Cleanevent or

the AWU Vic relating to these negotiations was dated 19 August

2010.190 It is apparent from the evidence that there was no cessation in

negotiations between 31 May 2010 and this time. Why were no

documents produced? This question was canvassed with various

witnesses. But no clear answer is apparent.

186 John-Paul Blandthorn, 20/10/15, T:748.9-12. 187 John-Paul Blandthorn, 20/10/15, T:748.14-20. 188

John-Paul Blandthorn, 20/10/15, T:748.14-40. 189 Cesar Melhem, 22/10/15, T:887.1-22. 190

SW1, 28/5/15, tab 3, p 39.

394

170. Whether the production is incomplete or not, it is at least clear that on

19 August 2010 Michael Robinson sent an email to John-Paul

Blandthorn with a copy to Steven Webber under the subject heading

‘EBA Changes’.191 Michael Robinson’s email of 19 August 2010

noted that Cleanevent accepts certain changes to what was presumably

a draft memorandum of understanding under discussion at that time.

Michael Robinson’s email of 19 August 2010 concluded:192

I trust these adjustments find you favourably. I think we are getting close to finalising this document.

171. On 31 August 2010 John-Paul Blandthorn sent an email in response to

Michael Robinson, with a copy to Steven Webber.193 John-Paul

Blandthorn’s response was as follows:

This seems fine.

Cesar would like a letter or email from Cleanevent stating that it is happy to pay a contribution to the AWU if you are ok with that?

Do we need to meet to wrap this up?

Probably best if I bring Cesar as well.

172. Cesar Melhem’s evidence was that it was possible – although he also

said ‘I don’t quite remember’ – that he told John-Paul Blandthorn that

he wanted a letter or email from Cleanevent stating it was happy to pay

a contribution.194

191 SW1, 28/5/15, tab 3, p 39. 192 SW1, 28/5/15, tab 3, p 39. 193

SW1, 28/5/15, tab 3, p 38. 194 Cesar Melhem, 1/6/15, T:206:22-26.

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173. The following day, 1 September 2010, Michael Robinson responded by

email as follows:195

I will get the letter to you, and then if you are happy with that we will come over and sign it off.

174. A short time later John-Paul Blandthorn sent an email back to Michael

Robinson stating ‘Sounds good’.196

175. Later, on 1 September 2010 Michael Robinson sent a further email to

John-Paul Blandthorn with a copy to Steven Webber, this time with the

subject heading reading ‘Membership contribution’.197 Michael

Robinson’s email of 1 September 2010 read as follows:

I thought Cesar might like this membership contribution drafted as an MOU also. Let me know if this is acceptable or if you think changes are required (This is what I understood was agreed to by both parties). It will be good to set this part of the relationship out formally so that each party understands the process.

176. Michael Robinson’s email of 1 September 2010 at 1.56pm had

attached a draft memorandum of understanding.198 This memorandum

of understanding was in similar terms to that which was that sent under

cover of Michael Robinson’s email of 31 May 2010 (see above),

except that clause 2.2 now refers to an amount of $20,000 rather than

$10,000. It is not clear why Michael Robinson’s position has changed

from that which articulated in his email of 31 May 2010, namely that

the side deal could not be recorded in the MOU.

195 SW1, 28/5/15, tab 3, p 38. 196 SW1, 28/5/15, tab 3, p 38. 197

SW1, 28/5/15, tab 4, p 41. 198 SW1, 28/5/15, tab 4, pp 43-45.

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177. On 2 September 2010 John-Paul Blandthorn sent an email in response

in the following terms:199

I think this is too formal and we should steer clear of a MOU or deed as such.

Cesar is just looking for an undertaking that Cleanevent will contribute the money each year as discussed from year to year by us.

178. Cesar Melhem said it was possible but he did not recall whether John-Paul Blandthorn had showed him the draft letter. However he denied

that he had said words ‘I’m just looking for an undertaking’. His

evidence was: ‘no, I don’t recall I’ve said that, and I wouldn’t say

that’.200 He gave that evidence on 1 June 2015. On 22 October 2015,

his position was that he did not care at the time whether a signed

document was prepared. As he put it: ‘A handshake would have done

the job.’201 It is likely that John-Paul Blandthorn in the above email

was accurately conveying to Michael Robinson a position that had

been communicated to him by Cesar Melhem. This underscores the

proposition, discussed earlier, that Cesar Melhem had a significant role

in the negotiations. It also indicates the close consideration given by

all concerned to the question of whether the side deal should be

documented, and if so how.

Drafts of the Side Letter

179. Michael Robinson accepted the approach suggested by John-Paul

Blandthorn in the above email. On 6 September 2010 he sent an email

199 SW1, 28/5/15, tab 4, p 41. 200 Cesar Melhem, 1/6/15, T:207.1-4. 201

Cesar Melhem, 22/10/15, T:887.1-22.

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to John-Paul Blandthorn with the subject heading ‘Email to Cesar’. It

began:202

Just looking for your thoughts on this letter. Does this reflect your understanding of our agreement? If you think it is fine ill [sic] wack [sic] it on letterhead or send it straight to Cesar and then we can meet to finalise.

180. The email went on to set out the text of what would become in due

course the Side Letter.

181. John-Paul Blandthorn was asked in evidence if he got instructions from

Cesar Melhem on the form of letter contained within Michael

Robinson’s email and he replied that that would have been his

practice.203 It is likely that he did get such instructions.

182. The draft prepared by Michael Robinson on 6 September 2010 was in

the following terms (save that John-Paul Blandthorn struck through the

indicated parts of the text in circumstances described below):204

Cesar,

I am writing to you regarding the implementation of new pay scales and the continuation of the terms and conditions as prescribed in the “Cleanevent Australia Pty Ltd AWU Agreement 2006” (Cleanevent EBA) and the agreement by Cleanevent to pay membership fees on behalf of some employees who wish to join the AWU.

While the MOU is in operation, Cleanevent will pay, on behalf of employees of Cleanevent who are or become members of the AWU, the employees’ union fees up to $20,000 for each financial year up to 30 June 2013 (This approximately represents 1% of payroll). Payments will be made by Cleanevent biannually (December and June) to the AWU, and

202 SW1, 28/5/15, tab 5, p 46. 203 John-Paul Blandthorn, 3/6/15, T:446.46-447.2. 204

SW1, 28/5/15, tab 5, p 46.

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Cleanevent will provide a list of names that the union fees will be paid for. on receipt of a list of Cleanevent employees and the associated membership fees that Cleanevent are being requested to pay.

During the period of operation of the MOU it is understood that the AWU will not commence or take any step which may result in the

commencement of enterprise bargaining under the Fair Work Act 2009; or seek to terminate (or support or encourage the termination of) the Cleanevent EBA or the aforementioned MOU.

Cleanevent look forward to continuing the many years of positive association with the AWU.

183. John-Paul Blandthorn struck through the indicated parts in an email

sent on 7 September 2010:205

I would make the following change that I have highlighted.

184. The change which John-Paul Blandthorn seems to have made was the

deletion of the words in ‘strikethrough’ in the above quote. It makes it

plain that it was not intended that the AWU Vic provide any lists of

members to Cleanevent for the purposes of calculating the amount of

membership fees. As stated at the outset, the arrangement was in fact

implemented by the provision of lists by Cleanevent to the AWU.

185. On 12 September 2010, Michael Robinson sent an email to John-Paul

Blandthorn, stating:206

I have the letter and MOU ready, just need a time and place to meet with Cesar and yourself to sign this off and then work out the back pay to the permanent staff members.

186. That email was forwarded to Cesar Melhem on 14 September 2010.207

205 SW1, 28/5/15, tab 5, p 46. 206 Cleanevent MFI-1, 19/10/15, p 191. 207

Cleanevent MFI-1, 19/10/15, p 193.

399

187. On 15 September 2010 Michael Robinson sent an email to John-Paul

Blandthorn with the following words:208

Please find attached the MOU and pay scales as agreed and below and the email to Cesar regarding the contribution of membership fees.

188. As is apparent from the above words, this email included a draft of the

Side Letter. The draft was an amended version of the draft sent in his

email of 6 September 2010.209

189. On 15 September 2015, John-Paul Blandthorn forwarded the above

email from Michael Robinson to Cesar Melhem, with the message

‘HERE IT IS.’210 Cesar Melhem maintained that he did not recall

seeing the letter.211 However it is likely that he read it at the time.

190. There was evidence concerning the processes through which the Side

Letter and MOU were approved within Cleanevent. It is not necessary

to canvass that evidence. It is sufficient to note that both the MOU and

Side Letter were approved by Julianne Page. That approval was within

the scope of her authority.

The Second Meeting in Cesar Melhem’s office and finalising the MOU

191. On 19 September 2010 a second meeting took place in Cesar

Melhem’s office attended by Cesar Melhem, John-Paul Blandthorn,

Steven Webber and Michael Robinson. There was oral evidence given

about it. But there were no contemporaneous notes which recorded

208 SW1, 28/5/15, tab 6, p 48. 209 SW1, 28/5/15, tab 6, p 48. 210

Cleanevent MFI-1, 19/10/15, p 194. 211 Cesar Melhem, 22/10/15, T:891.44-46.

400

what occurred during it. It is not necessary to canvass that evidence,

save to say that it appeared to be common ground that there was some

discussion about the payment of a fee by Cleanevent to the AWU.

This is to be expected, having regard to the negotiations that had been

ongoing since the time of the first meeting.

192. The circumstances in which approval of the MOU by the AWU

National Office was requested and given are discussed below. For

present purposes it is sufficient to note that this approval process seems

to have commenced with a 21 September 2010 email sent by John-Paul

Blandthorn to Zoe Angus, an AWU legal officer.212 More is said later

in this Report about that email and its response. For present purposes

it is sufficient to note that there then followed communications

involving John-Paul Blandthorn, Cesar Melhem and Zoe Angus about

aspects of that draft document.213

193. The result of the above process was that on 5 October 2010 John-Paul

Blandthorn sent an email to Michael Robinson and Steven Webber

attaching the draft memorandum of understanding and the proposed

letter to Cesar Melhem (now on letterhead).214

194. John-Paul Blandthorn’s email of 5 October 2010 read as follows:

Attached are two documents.

If you are happy Cesar will send to National Office for signing.

212 Zoe Angus, witness statement, 20/10/15, Annexure 1; Cleanevent MFI-1, 19/10/15, pp 202-210. 213

Cleanevent MFI-1, 19/10/15, p 211; Cleanevent MFI-1, 19/10/15, pp 224-228; Cleanevent MFI-1, 19/10/15, p 229. 214 SW1, 28/5/15, pp 62-69.

401

195. It is clear that the draft letter to Cesar Melhem did not need to be sent

to the National Office ‘for signing’. The only proposed signatory of

the draft letter was Michael Robinson.215 Nonetheless, the terms of

John-Paul Blandthorn’s email suggest that, at that time, he may have

thought that the Side Letter would be provided to the National Office.

196. There followed email correspondence between Michael Robinson and

John-Paul Blandthorn about these draft documents. The

correspondence suggests that Cesar Melhem was kept closely informed

by John-Paul Blandthorn and was overseeing the negotiation process.

197. On 8 October 2010 at 11.51am Michael Robinson sent an email to

John-Paul Blandthorn with a copy to Steven Webber, responding to

John-Paul Blandthorn’s email of 5 October 2010.216

198. Michael Robinson’s email raised questions or issues concerning the

draft documentation, in relation to clauses 2.6 and 3.3, and the

proposed fee of $25,000. In relation to the last point Michael

Robinson’s email of 8 October 2010 stated as follows:

For the purposes of signing off this document we need to keep the fee at $20k because this is what we have gained sign off for. It is outside our authority limits to approve anything higher at this particular point though you have SW’s word that upon winning an additional contract of some significance we will meet with you and discuss the amount again. We will certainly be on the front foot with this discussion or we can delay this process further with the Spotless bureaucracy and request an increase. Thoughts?

215 SW1, 28/5/15, p 69. 216 SW1, 28/5/15, p 71.

402

199. On 8 October 2010 at 3.37pm John-Paul Blandthorn sent an email in

response to Michael Robinson.217 In his email John-Paul Blandthorn

provided some information concerning the operation of clause 2.6 and

stated that he had changed the wording of clause 3.3. He also states:

Cesar is keen on the $25K I would have to get his approval to go back to $20K.

200. Sixteen minutes later, at 3.53pm on 8 October 2010 Michael Robinson

sent an email to John-Paul Blandthorn in the following terms:218

Thanks for that.

I’ll work on getting the fee to $25K if we can look at 3.3 again. I am just concerned that, as happened with the consent agreement, by signing this I may preclude Cleanevent from a competitive advantage that I am not

aware of. I understand that the consent will probably not be in existence by the time we renegotiate and the modern award will probably be the reference document at that time but in absence of sending this back past our legal team I would not like to box us into that without allowing the business to explore other options. Can you move on this so I don’t have to involve legal?

201. Eight minutes later, at 4.01pm on 8 October 2010 John-Paul

Blandthorn responded to this email in the following terms:219

The beauty of a MOU is it is not enforceable.

Cesar is pretty keen in putting something in their [sic] but I understand if you need to run it past your legal department.

202. At 4.32pm on 8 October 2010 Michael Robinson responded to John-Paul Blandthorn’s email as follows:220

217 SW1, 28/5/15, tab 9, p 71. 218 SW1, 28/5/15, tab 9, p 71. 219

SW1, 28/5/15, tab 9, p 70.

403

The issue that I have here is twofold.

1. It is my understanding that Cleanevent was bought under certain warranties that included governing industrial instruments. When I take this to legal I am sure that a response to that effect will prevent a clause like this being agreed to.

2. The appropriate reference agreement cannot be “agreed to”, it must be one that applies by law. The commission will make that determination based on both our submissions depending on the business and industrial environment at the time.

Can you please run this past Cesar, I am happy to come down and discuss this position and the reasoning behind it with him if he so wishes.

203. At 5.43pm on 8 October 2010 John-Paul Blandthorn responded to

Michael Robinson’s email stating:221

I will run it pass [sic] Cesar and get back to you.

204. On 11 October 2010 at 12.27pm John-Paul Blandthorn sent an email to

Michael Robinson stating in respect of clause 3.3:222

What if we shifted that clause or something similar into the letter?

205. At 3.10pm on 11 October 2010 Michael Robinson responded to John-Paul Blandthorn’s email rejecting that proposal:223

Execution of the MOU and Side Letter by Cleanevent

206. On 13 October 2010 at 9.05am John-Paul Blandthorn sent an email to

Michael Robinson attaching the draft memorandum of understanding

220 SW1, 28/5/15, tab 9, p 70. 221 SW1, 28/5/15, tab 9, p 70. 222

SW1, 28/5/15, tab 10, p 73. 223 SW1, 28/5/15, tab 10, p 73.

404

and the letter to Cesar Melhem from Cleanevent and stating as

follows:224

Attached are final documents.

1. We have removed the reference to any Modern Award.

2. The $25,000 needs to remain.

This is as far as the AWU are prepared to move from the attached documents.

I am very keen to meet with members on Thursday or Friday to do a vote for approval because I will be away the next two weeks.

If you could let me know if Cleanevent are happy to proceed that would be appreciated.

207. The draft letter to Cesar Melhem was the final version of the Side

Letter that has been set out in full earlier in this Report.

208. Shortly after this email was received, both the MOU and Side Letter

were executed by Cleanevent: the former by Steven Webber and the

latter by Michael Robinson. The documents were sent to John-Paul

Blandthorn by Michael Robinson by email on 13 October 2010.225

Did Cleanevent employees approve the MOU and/or Side Letter?

209. There is some suggestion in the evidence that the MOU was approved

by Cleanevent employees. John-Paul Blandthorn’s email of 13

October 2010 at 9.05am suggested that he would be meeting with

members on either 14 or 15 October 2010.226 Michael Robinson’s

224 SW1, 28/5/15, tab 10, p 73. 225 Cleanevent MFI-1, 19/10/15, pp 234-241. 226

SW1, 28/5/15, tab 10, p 73.

405

email of the same day likewise referred to a meeting with

employees.227 On 15 October 2010 in an email to Zoe Angus, John-Paul Blandthorn stated ‘We have polled the member [sic] and they are

100% in favour of the deal’. Zoe Angus gave evidence that she did not

enquire of John-Paul Blandthorn as to records of polling of members or

a breakdown of voting on the agreement.228 Although voting records

were produced to the Commission in respect of the 2004 and 2006

EBAs, none was produced in respect of the 2010 MOU.

210. Cesar Melhem deposed that he did not know ‘specifically’ whether a

meeting with members took place but he assumed that a meeting took

place.229 Steven Webber was unsure as to whether the MOU was

authorised or approved by employees by Cleanevent, although he said

also ‘I would say it would have been put through the delegates’.230

211. None of the Cleanevent workers who gave evidence said they recalled

voting on an enterprise agreement or the MOU. Shalee Nicole

Allameddine gave evidence that she thought that she would have been

aware of any EBA negotiations in 2010 if they had occurred.231 Robyn

Cubban recalled that in 2010 there was ‘talk around Cleanevent of a

new enterprise agreement coming into place’, but to the best of her

227 Cleanevent MFI-1, 19/10/15, p 234. 228 Zoe Angus, 20/10/15, T:677.29-47. 229

Cesar Melhem, 1/6/15, T:216.6-8. 230 Steven Webber, 28/5/15, T:41.45-46. 231

Shalee-Nicole Allameddine, witness statement, 29/5/15, para 10

406

knowledge, it never did come into place. She was not aware that the

MOU had been entered into.232

212. It is not possible to be satisfied on the above evidence that the MOU

was approved by any Cleanevent workers. However, there was no

suggestion in the evidence or submissions that John-Paul Blandthorn

was attempting to mislead Zoe Angus when he suggested that there had

been a ‘poll’ of some kind. As indicated, the evidence suggests that a

meeting of some kind was planned. However the evidence does not

enable any finding to be made as to what precisely occurred.

213. It is, however, unlikely that any attempt was made to inform any

Cleanevent employees of the existence or terms of the Side Letter.

Julianne Page accepted that, looking back, Cleanevent should have

informed the workers about the Side Letter, because its effect in her

mind was that ‘we had signed them up’.233 It follows, from that

acceptance, that she took no steps to ensure that the casual workers

were made aware that they were entitled to access the services of the

union following the execution of the Side Letter. Steven Webber

himself did not take any steps himself to notify members of the AWU,

or for that matter Cleanevent’s employees generally, about it.234

Neither John-Paul Blandthorn nor Michael Robinson suggested that

they took any such steps.

232 Robyn Cubban, witness statement, 28/5/10, paras 15, 17. 233 Julianne Page, 19/10/15, T:564.1-29. 234

Steven Webber, 28/5/15, T:42.9-21.

407

214. The Cleanevent workers who gave evidence said that they were not

aware of any arrangement pursuant to which Cleanevent paid money

on their behalf for union membership fees.235

Execution of the MOU by AWU National Office

215. The MOU regulated all Cleanevent employees regardless of which

State they were in. The practice at the AWU was that such agreements

required approval by the AWU National Office.236 In the

circumstances that are discussed below, that approval was given.

These circumstances raise three factual issues. The first is whether

approval of the Side Letter was ever sought by the AWU Vic or given

by the National Office. The second is whether and under what

circumstances the consent of the Queensland Branch was obtained.

The third is the level of consideration given by the National Office to

the agreement: how did such a disadvantageous agreement find favour

at National level?

216. The first issue is relatively straightforward. It is fairly clear that the

Side Deal was never sent to National Office for approval, or in fact

approved. It would seem National Office knew nothing about it. What

is less clear is why.

235 Ken Holland, witness statement, 28/5/15, para 12; Robyn Cubban, witness statement, 28/5/15, para 8; Brian Miles, witness statement, 28/5/15, para 9; Marcin Pawlowski, witness statement, 28/5/15, para 11; Graeme Heatley, witness statement, 28/5/15, para 12; Nayan Debnath, witness statement, 29/5/15, para 7; Colleen Ellington, witness statement, 29/5/15, para 12; Shalee-Nicole Allameddine, witness statement, 29/5/15, para 12. 236

See, for example, Zoe Angus, 20/10/15, T:674.3-22; John-Paul Blandthorn, 3/6/15, T:453.11-22, 36-46; John-Paul Blandthorn, 3/6/15, T:451.32-45.

408

217. On 13 October 2010 John-Paul Blandthorn sent an email to Cesar

Melhem stating:237

Cesar,

Attached are the final documents.

Do you want me to send to National Office?

218. There was no attachment to the email. Cesar Melhem responded

seeking the attachment and John-Paul Blandthorn responded attaching

both of the documents sent to him by Michael Robinson earlier that

day, the MOU and the Side Letter.238

219. On 15 October 2010 John-Paul Blandthorn sent an email to Zoe Angus

attaching only the MOU and not the Side Letter. The email stated:239

Attached is the MOU Cesar has agreed to with Cleanevent.

We have polled the member [sic] and they are 100% in favour of the deal.

We are hoping you could get Paul or Scott to sign on behalf of the National Office.

220. Counsel assisting submitted that the appropriate inference to draw from

these emails is that Cesar Melhem instructed John-Paul Blandthorn not

to send the Side Letter to National Office. Cesar Melhem disagreed.

221. John-Paul Blandthorn’s evidence supports the submission of counsel

assisting. He stated that, as per his email, he had tried to discuss with

237 Cleanevent MFI-1, 19/10/15, p 242. 238 Cleanevent MFI-1, 19/10/15, p 243. The attachments bore the same file names as the attachments to Michael Robinson’s email. 239

Zoe Angus, witness statement, 20/10/15, Annexure 4; Cleanevent MFI-1, 19/10/15, pp 251-257.

409

Cesar Melhem whether the documents attached to his email should be

sent to the National Office.240 He said that he did not have a specific

recollection.241 But he said that to the best of his memory the effect of

the conversation he had with Cesar Melhem was that the letter was

between the AWU Vic and Cleanevent, and he should send the

document to National Office that pertained to the National Office.242

He agreed that a decision was made not to send the Side Letter to the

National Office.243 He accepted that, in hindsight, the existence of a

Side Letter was an important matter that should have been referred to

the National Office.244 The decision not to do so was taken by Cesar

Melhem as Secretary, with whom he was in contact.245

222. Cesar Melhem in his evidence denied that he told John-Paul

Blandthorn not to send the Side Letter to the National Office.246 He

would not accept that proposition that it was apparent from these two

emails the Side Letter was not sent (although he did not positively

assert that it was sent).247 He gave evidence that he had no

recollection of instructing John-Paul Blandthorn not to send the Side

Letter to National Office and that there was no reason for him to do

so.248

240 John-Paul Blandthorn, 20/10/15, T:752.32-37. 241 John-Paul Blandthorn, 20/10/15, T:754.7-10. 242

John-Paul Blandthorn, 20/10/15, T:752.39-43. 243 John-Paul Blandthorn, 20/10/15, T:753.4-6. 244

John-Paul Blandthorn, 20/10/15, T:753.15-18, 755.30-34, 756.20-24. 245 John-Paul Blandthorn, 20/10/15, T:753.26-43. 246

Cesar Melhem, 22/10/15, T:878.15-31. 247 Cesar Melhem, 22/10/15, T:882.14-31. 248

Cesar Melhem, 22/10/15, T:879.21-24.

410

223. Not entirely consistently, Cesar Melhem also maintained that the

arrangement reflected in the Side Letter was a matter for the Victorian

Branch, and had nothing to do with the National Office.249 Asked

whether he considered that the other Branches might be interested in

knowing that the Victorian branch was receiving an additional benefit,

he responded:250

It’s the matter for other branches to negotiate their own things.

224. If, as he suggested, his view was the Side Letter was nothing to do with

National Office, then it is likely that Cesar Melhem would have

expressed that view to John-Paul Blandthorn if asked. In John-Paul

Blandthorn’s email of 13 October 2010 Cesar Melhem was asked. It is

clear from John-Paul Blandthorn’s email of 15 October 2010 that the

Side Letter was not sent. It is highly likely that this was because of an

instruction from Cesar Melhem. Counsel assisting’s submission that

the decision not to inform National Officer was deliberate is correct.

225. Both Zoe Angus and Paul Howes disclaimed any knowledge of the

side deal.251 Having regard to the above emails, and to the absence of

any positive evidence from John-Paul Blandthorn or Cesar Melhem

that the Side Letter was drawn to their attention, that evidence should

be accepted.

226. The failure of the Victorian Branch to draw the attention of National

Office to the Side Letter was highly unsatisfactory. It obviously would

have been important for the National Office to know about it,

249 Cesar Melhem, 22/10/15, T:882.37-46. 250 Cesar Melhem, 22/10/15, T:884.47-885.4. 251

Zoe Angus, 20/10/15, T:674.28-38; Paul Howes, witness statement, 20/10/15, para 16.

411

particularly when, as discussed below, a number of problematic aspects

of the MOU were identified by Zoe Angus.

227. The above deals with the first issue identified above: whether the Side

Letter was drawn to the attention of the National Office. The second

and third issues can be dealt with together. They concern the process

of approval of the MOU within National Office.

228. Also on 19 October 2010 at 10.50am, Zoe Angus forwarded John-Paul

Blandthorn’s email of 15 October 2010 to a large number of AWU

staff, setting out the key effects of the MOU and requesting that

branches contact Scott McDine with any concerns about committing to

the MOU on a National basis by 22 October 2010.252

229. Zoe Angus then sent a further email to John-Paul Blandthorn on 19

October 2010 at 10.52am, stating:253

I’ve only just twigged this is a national agreement … gotta go through the internal process of consultation … will take about a week, will advise if any probs emerge.

230. John-Paul Blandthorn responded on 20 October 2010:254

It is a national agreement but there is [sic] very few people it has an impact on outside Victoria.

231. On 22 October 2010, Zoe Angus sent an email to John-Paul

Blandthorn, copying Scott McDine and stating the following:255

252 Zoe Angus, witness statement, 20/10/15, Annexure 6; Cleanevent MFI-1, 19/10/15, pp 261-268. 253

Zoe Angus, witness statement, 20/10/15, Annexure 5; Cleanevent MFI-1, 19/10/15, p 269. 254 Cleanevent MFI-1, 19/10/15, p 269.

412

…Looks like we’ve hit a snag with the Cleanevent MOA.

After circulating the MOA to other Branches, Qld Branch sent back some concerns, most particularly in relation to the “other states” wage rates. See the email from Tom Jeffers below. Scooter then asked me to review the MOA against the relevant award. I include below my comments to Scooter about the MOA. As you will see, there is a problem with the wage rates falling below the award rates.

What do you want to do? Clearly Paul is unlikely to sign the MOA in its current form. Do you want to raise these issues with Cesar and/or Cleanevent? Let me know…

232. This email in substance identified two areas of concern. The first arose

out of Zoe Angus’ own analysis of the MOU. That is explored below.

The second was that the Queensland Branch had identified that wages

payable to Queensland workers under the MOU were less than those

paid to workers in Victoria and New South Wales.256 The person

dealing with the matter at the Queensland Branch was Tom Jeffers,

Branch Vice President and Southern District Secretary. He was

reporting on this issue to Ben Swan, Branch Assistant Secretary.

233. It was unclear from the evidence how, if at all, the second issue was

resolved to the satisfaction of the Queensland Branch. The

discrepancy between wage rates was not changed. On 11 November

2010, Cesar Melhem sent an email to John-Paul Blandthorn stating ‘I

spoke to Tom Jeffrey [sic] from QLD branch his [sic] OK with it’.257

Tom Jeffers’ evidence was to the effect that he had no recollection of

speaking with Cesar Melhem; that the usual practice would have been

for Cesar Melhem to speak to Ben Swann or to the Branch Secretary;

255 Zoe Angus, witness statement, 20/10/15, Annexure 9; Cleanevent MFI-1, 19/10/15, pp 273-277. 256

Zoe Angus, witness statement, 20/10/15, Annexure 9; Cleanevent MFI-1, 19/10/15, p 277. 257 Cleanevent MFI-1, 19/10/15, p300.

413

and that neither of those two officers contacted him about this issue.258

Tom Jeffers’s evidence was to the effect that he had no further role in

the process after identifying this issue.259 Zoe Angus gave evidence

that she was advised, she did not say by whom, that Tom Jeffers had

discussed the MOU with Cesar Melhem on 12 November 2010 and had

agreed to it.260 The documentary record does not assist in explaining

what occurred.

234. There was a degree of misinformation provided by John-Paul

Blandthorn to Zoe Angus regarding the position of the Queensland

Branch. On 2 November 2010 Zoe Angus by email asked John-Paul

Blandthorn how many Cleanevent employees worked in

Queensland.261 John-Paul Blandthorn responded that, as far as he

knew, there were two permanent employees at the Gabba in

Queensland.262 This response made no reference to casuals. In that

respect it was misleading. John-Paul Blandthorn affirmed that the

contract that Cleanevent had with the Gabba involved work by casual

cleaners at events, who were members of the AWU. He could explain

why he referred only to the two permanents in the email.263 It is not

possible to say whether the provision of the correct information would

have made any difference. However, as noted below, two of the three

258 Tom Jeffers, 20/10/15, T:695.9-30. 259 Tom Jeffers, 20/0/15, T:695.1-3. 260

Zoe Angus, witness statement, 20/10/15, para 35. 261 Zoe Angus, witness statement, 20/10/15, Annexure 11; Cleanevent MFI-1, 19/10/15, p 285. 262

Zoe Angus, witness statement, 20/10/15, Annexure 12; Cleanevent MFI-1, 19/10/15, p 292. 263 John-Paul Blandthorn, 20/10/15, T:757.1-23.

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concerns identified by Zoe Angus in doing her own analysis of the

MOU related to the position of casual workers.

235. Zoe Angus’ email of 22 October 2010 also raised concerns based on

her own analysis of the MOU. That email forwarded to John-Paul

Blandthorn an email dated 21 October 2010 that Zoe Angus sent to

Scott McDine. The latter email contained a comparative analysis of

the MOU wage rates, the Cleaning Services Award 2010 and the

Amusement, Events and Recreation Award 2010. The analysis, which

was done at the request of Scott McDine264, identified what were

described as three ‘problems’ with the MOU.265

236. The first problem was that the ordinary wage rates for level 1 and level

3 cleaners in other states were below those provided for in the

Cleaning Services Award 2010.

237. The second problem identified by Zoe Angus was that the casual

loading was approximately 15% for all casuals, regardless of location,

rather than 25% as provided for in the Cleaning Services Award 2010

and the Amusement, Events and Recreation Award 2010;

238. The third problem identified by Zoe Angus in her 21 October 2010

email was that casual event cleaning rates were below the federal

minimum wage for level 1 casuals and below both award rates for all

levels.

264 Zoe Angus, witness statement, 20/10/15, para 30. 265 Zoe Angus, witness statement, 20/10/15, Annexure 9; Cleanevent MFI-1, 19/10/15, pp 273-277.

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239. Zoe Angus’ evidence was that she was made aware by the organiser

that there was a high level of permanent employment in Cleanevent,

but could not recall whether she turned her attention to this at the time

of undertaking the above analysis.266 It is unlikely that she in fact

thought this at the time. The email from John-Paul Blandthorn to Zoe

Angus on 21 September 2010267 refers to the ‘high nature of casuals in

the industry’ and the likelihood that casuals would replace any

permanents that took industrial action. Two of the three problems

identified in her own analysis on 21 October 2010 concern casual

cleaners.

240. John-Paul Blandthorn responded to Zoe Angus on 1 November

2010.268 The email was copied to Cesar Melhem. The email sought to

alleviate all of the concerns that she had identified. The concern raised

by the Queensland Branch was addressed by the statement that

historically rates in New South Wales and Victoria had been different

from those in other states.

241. The other concerns that the analysis by Zoe Angus raised were

addressed in the following way. The first concern, dealing with the

rates of permanent employees, was said to be incorrect because the

applicable award was the 1999 Award and not a new Modern Award.

In one sense the 1999 Award was ‘applicable’: it would remain in

force until 2013 unless the AWU applied to terminate it. That begs the

question why the AWU would not apply to terminate it if doing so

266 Zoe Angus, 20/10/15, T:680.21-46. 267 Cleanevent MFI-1, 19/10/15, p 202. 268

Zoe Angus, witness statement, 20/10/15, Annexure 10; Cleanevent MFI-1, 19/10/15, pp 278-279.

416

would result in more favourable conditions of employment for AWU

members.

242. This latter question was addressed, albeit indirectly, by John-Paul

Blandthorn in the email. His answer, in substance, was that

Cleanevent could not afford to pay. He then explained that in more

detail in a series of bullet points that included the following:269

Most cleaning companies (Cleanevent included) have a 28-day termination clause with the venue operator.

If Cleanevent were forced to pay the new Modern Award they would have to seek to renegotiate all their agreements to remain viable.

The result would be that every contract would be terminated and we would lose all the members but more importantly they would either lose their job or be re-employed on lower wages (as most big cleaning companies have a NAPSA).

The biggest problem is that the cleaning industry is so competitive and has such low union membership that shonky operators dominate the industry.

The other issue is that whilst a reputable company may get a contract they often sub-contract to other companies that will pay cash or just withhold monies.

243. The last two of the above matters were issues that, one might have

thought, would lead a union to take action to ensure that workers in the

industry were paid in accordance with what had been determined by

the legislature to be the minimum rates acceptable. The AWU,

however, appear to have treated them as reasons not to take steps to

ensure Cleanevent employees would be paid in accordance with a

Modern Award.

269 Cleanevent MFI-1, 19/10/15, pp 278-279.

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244. John-Paul Blandthorn’s email did not at any point address the concern

of Zoe Angus regarding the payment of event casuals beneath the

minimum wage rate. That concern was taken no further until 2015,

when the AWU applied to terminate the MOU.

245. The concern expressed by the Queensland Branch and the exchange

between John-Paul Blandthorn and Zoe Angus were the only

suggestions of any substantive concerns expressed within the AWU

about the appropriateness of the terms and conditions in the MOU.

246. In substance, it would seem, Zoe Angus accepted John-Paul

Blandthorn’s response to her concerns. When asked whether she

responded to John-Paul Blandthorn and asked why the AWU was not

pressing for the Modern Award, Zoe Angus responded that it was her

view that whatever was the best outcome for employees was what

should be advanced.270 She did not put this proposition to John-Paul

Blandthorn, but rather put the issues she had identified to him and

asked how he wished to proceed.271 She did not see it as her role to

question John-Paul Blandthorn’s ‘industrial judgment.’272 She

accepted John-Paul Blandthorn’s explanation in his email of 1

November 2010, notwithstanding that it did not address the point she

had raised about the level 1 event casuals being paid below the Federal

Minimum Wage.273

270 Zoe Angus, 20/10/15, T:682.34-39. 271 Zoe Angus, 20/10/15, T:682.41-44. 272

Zoe Angus, 20/10/15, T:683.4-17. 273 Zoe Angus, 20/10/15, T:683.19-30.

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247. The next communication was on 11 November 2010, when John-Paul

Blandthorn sent an email to Zoe Angus and Scott McDine, copying

Cesar Melhem and stating:274

…Wondering how you are progressing with the Cleanevent deal?

Not to put too much pressure on but I am getting calls on the hour every hour from delegates and the bosses wanting information.

248. Zoe Angus said that she went to Alice Springs between 9 November

and 14 November 2010, and that she was unlikely to have been

progressing the matter during that period.275

249. Paul Howes, the National Secretary of the AWU, signed the MOU, it

would appear on 16 November 2010.276 His evidence was that he did

not recall the circumstances in which he signed it.277 His evidence as

to his practice was as follows:278

Whilst I was National Secretary of the AWU, I required a report to accompany industrial agreements brought to me for signing. As National Secretary, it was not my role to personally analyse the terms of industrial agreements to check their adequacy. I was dependent on the report to highlight any relevant issues.

250. The report referred to by Paul Howes was an organiser’s report

prepared by Zoe Angus on 16 November 2010 and forwarded him on

274 Zoe Angus, witness statement, 20/10/15, Annexure 13; Cleanevent MFI-1, 19/10/15, p 299. 275

Zoe Angus, witness statement, 20/10/15, para 34. 276 SW1, 28/5/15, tab 11, p 88. Zoe Angus witnessed the signature. Her signature is dated 15 November 2010. However according to her diary she returned from holidays on 16 November 2010. Her evidence was that it was in fact signed on 17 November. It is not necessary to make any finding. 277

Paul Howes, witness statement, 20/10/15, para 15. 278 Paul Howes, witness statement, 20/10/15, para 14.

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that day, together with the MOU for signing. The report is a two page

document.279 There is nothing in the report which identifies any of the

issues that had been referred to by Zoe Angus and John-Paul

Blandthorn in the email correspondence referred to above. The report

is a pro forma document headed ‘Agreement Summary’. The word

‘Agreement’ is struck through and replaced with ‘MOU’.

251. Zoe Angus says that she does not recall why she completed the

organiser’s report, but says that she thinks it likely that John-Paul

Blandthorn had not done it and it was a simple administrative task for

her to complete.280 She accepted that the usual practice was for the

organiser to undertake this task.281 The organiser’s report contains two

notes in Zoe Angus’ handwriting282 additional to the information

required in the form.283

252. A note at the bottom of the page stated:

Circulated nationally. Only branch to respond – QLD gave OK (after Tom Jefferies [sic] talked Cesar on 12/11/10)

253. Another note on a post-it stuck to the form stated:

There has been delay on this (due internal consultation) ALL CLEARED WITH BRANCHES. Vic now keen for $.

279 Cleanevent MFI-1, 20/10/15, pp 302-303. 280 Zoe Angus, witness statement, 20/10/15, para 35. 281

Zoe Angus, 20/10/15, T:687.26-32. 282 Zoe Angus, witness statement, 20/10/15, paras 40-41. 283

Zoe Angus, witness statement, 20/10/15, Annexure 14; Cleanevent MFI-1, 19/10/15, pp 301-303.

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254. The first note supports Zoe Angus’ account of her information that the

MOU was now approved nationally (although not the source of this

information). Zoe Angus says the following in respect of the latter

note:284

In this note I was referring to the fact that the Victorian Branch was anxious to get the pay rise provided by the MOU which had been agreed to commence almost five months earlier, from 1 July 2010. I certainly recall the impression at the time that Blandthorn was checking in with me regularly to ensure that the agreement was signed so the wage increase would flow to employees as soon as possible. This persistence from Organisers was not unusual where the commencement date of an agreement had already passed. I also note that Blandthorn had told me in the email of 11 November 2010 that delegates had been contacting him asking about when they would get their pay increases.

255. Zoe Angus denied that the reference to “$” was a reference to the

arrangement in the Side Letter.285 Zoe Angus disclaimed any

knowledge of that arrangement.286 Paul Howes also denied any

knowledge of the Side Letter.287 Their evidence is consistent with the

contemporaneous documents referred to above. It has been accepted.

It follows from that acceptance that Zoe Angus’ explanation for the

reference to ‘$’ should also be accepted.

Conclusions to be drawn

256. Counsel assisting submitted that the process by which the MOU came

to be signed on behalf of the National Office of the AWU reveals

serious failures in the processes that were in place to ensure that

284 Zoe Angus, witness statement, 20/10/15, para 41. 285 Zoe Angus, witness statement, 20/10/15, para 43; Zoe Angus, 20/10/15, T:688.22-24. 286

Zoe Angus, witness statement, 20/10/15, para 42. 287 Paul Howes, witness statement, 20/10/15, para 16.

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Enterprise Agreements with national coverage were properly

scrutinised.

257. That submission must be accepted. The entire approach of the AWU

was flawed from the start because of the position adopted by John-Paul

Blandthorn and Cesar Melhem in seeking a payment for the Victorian

Branch in exchange for keeping the MOU on foot. The consequences

that flow from that are explored in the concluding section of this

Chapter of the Report. For present purposes, however, the point to be

made is that this approach comprised the position of the officials

negotiating the MOU. The failure to draw the attention of the National

Office to the Side Letter meant that those involved at the National

Office could not be expected to have known that or to have understood

that the process of negotiation of the MOU was fundamentally flawed.

258. The above matters in one sense excuse those involved at a National

Office level from any serious falling short in their conduct. On the

other hand, the conduct of those involved can hardly be regarded as

exemplary. Zoe Angus was legally qualified. She was capable of

turning an independent mind to whether the MOU was properly in the

interests of members and compliant with the then prevailing legislative

requirements. She in fact performed an analysis of the MOU and

identified serious concerns. She decided not to question the ‘industrial

judgment’ of John-Paul Blandthorn in giving his response to those

concerns. His response did not address perhaps the most important

difficulty that she had identified, namely that the rates provided for in

the MOU, fell below the Federal Minimum Wage in some instances.

But, at the same time, she took it upon herself to prepare the

organiser’s report, being the document required for the National

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Secretary to make an informed decision about whether to sign off on

the MOU. The report did not identify any of the concerns that she had

raised.

259. Against the above matters, it must be said that Zoe Angus was

examining the MOU in a context in which she had circulated it to all

Branches and only one had raised any objection. That objection

appears to have fallen away. Further, the Branch that contained the

most members affected by the MOU, AWU Vic, was pressing strongly

for its approval by National Office, in circumstances where,

unbeknownst to Zoe Angus, it had an ulterior motive for doing so.

260. Counsel assisting submitted that as National Secretary at the time, Paul

Howes should take ultimate responsibility for the various failures of

process that occurred. Paul Howes perhaps misunderstood the import

of the submission and was critical of it. His evidence, which is

accepted, was that he was dependent on the organiser’s report to

identify any relevant issues for his consideration. No such issues were

identified. Nor was anything drawn to his attention in any other way

which could have alerted him to the various difficulties with the MOU.

Nonetheless, he was National Secretary. He executed the MOU. The

defects in the MOU and the process that produced them are his

ultimate responsibility even if he lacked personal knowledge of those

defects. Thus so far as what operated could be described as a ‘system’,

the system failed. One question is whether there could have been a

better system.

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H – PAYMENTS PURSUANT TO THE SIDE LETTER

261. This section of the Chapter examines the circumstances in which the

arrangement in the Side Letter was implemented.

The first payment

262. On 6 December 2010 an employee of the AWU Vic, Rebecca Eagles,

sent an email to Cesar Melhem with the subject heading: ‘Final

documents from Cleanevent’.288 The email from Rebecca Eagles of

6 December 2010 attached the copy of the letter of 13 October 2010

signed by Michael Robinson.

263. Two days after receipt of this email, John-Paul Blandthorn telephoned

Steven Webber and Michael Robinson about Cleanevent making a

payment to the AWU Vic. Until that time the AWU did not appear to

have taken any steps with respect to seeking payment by Cleanevent of

the first ‘biannual’ instalment of what were described in the Side Letter

as ‘union fees’ payable in December 2010.

264. At 2.25pm on 8 December 2010 John-Paul Blandthorn sent an email to

Michael Robinson and Steven Webber, with a copy to Cesar Melhem,

stating:289

…Just following up from our phone call today that you guys will action the payment?

288 Melhem MFI-2, 1/6/15. 289 SW1, 28/5/15, p 92.

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265. There followed attempts by Steven Webber and John-Paul Blandthorn

to ensure that payment was arranged. On 13 December 2010 at

2.47pm John-Paul Blandthorn sent an email to Steven Webber with a

copy to Cesar Melhem and Mei Lin giving two ways of making the

payments sought, namely by cheque or by electronic funds transfer.290

266. At 4.10pm on 13 December 2010 Steven Webber sent an email to

John-Paul Blandthorn, with a copy to Cesar Melhem, Mei Lin and

Rohan Harris advising that: ‘An EFT will take place before the end of

the week’.291 It was paid on 17 December 2010.

The first list of names

267. On 17 December 2010 Mei Lin sent an email to Cesar Melhem, copied

to John-Paul Blandthorn, stating:292

We receive $12,500.00 from Cleanevent today. Record it as membership??

268. Cesar Melhem responded the same day, stating:293

Yes, Ask JP to get them to send us a list

269. Mei Lin sent an email to John-Paul Blandthorn stating:294

Could you please ask Cleanevent to send us a list for $12,500 we receive today?

290 SW1, 28/5/15, p 91. 291 SW1, 28/5/15, p 94. 292

Cleanevent MFI-1, 19/10/15, p 322. 293 Cleanevent MFI-1, 19/10/15, p 322. 294

Cleanevent MFI-1, 19/10/15, p 322.

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270. On 26 May 2011 Steven Webber sent an email to Michelle Ference, a

payroll officer at Cleanevent, stating:295

I need 100 names of our regular cleaners, these names will go to the union as new members as I pay for there [sic] memberships

In [sic] need this fairly quickly

271. It would appear that Steven Webber did not receive a response to his

email to Michelle Ference immediately. On 30 May 2011 at 1.35pm

Steven Webber sent a further email to Michelle Ference and, this time

Kim Dodd with a copy to Michael Robinson stating:296

Michelle, the request below has now become urgent, I need these names to me by 10.00am tomorrow morning

272. At 2.01pm on 30 May 2011 Michelle Ference sent an email to Steven

Webber in response providing a list of the ‘regular cleaners’ that

Steven Webber had sought.297

273. As Steven Webber accepted in evidence, it was clear from this list that

it was simply a set of names collected at random with no regard for

whether those persons had actually made, or communicated, any

conscientious wish to join the AWU. Among other things it had been

prepared some 26 minutes after Steven Webber’s email, and the list of

names was simply set out in alphabetical order culminating at the letter

‘G’.

295 SW1, 28/5/15, p 100. 296 SW1, 28/5/15, p 99. 297

SW1, 28/5/15, p 97.

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274. Steven Webber’s oral evidence included the following exchange

concerning the list of names put together on 30 May 2011:298

Q. She [i.e, Ms Ference] has simply inserted in the body of the email a list of names. Do you see that?

A. Yes.

Q. And the list goes from pages 97 through to 98 through to 99?

A. Yes.

Q. And it looks as though that is simply an alphabetical list of names?

A. It appears that way, yes.

Q. It gets to “G” and stops?

A. It does.

Q. At page 99 – presumably because she’d got to 100.

A. I imagine so, yes.

Q. You didn’t give her any instructions about how to pick the names?

A. No.

Q. As far you were concerned, your evidence earlier was that they would be picked at random.

A. Yes.

Q. No thought was given, was there, as to where these employees worked? They could work anywhere in Australia; is that right?

A. Well, if it’s alphabetical, then yes.

Q. I am sorry?

A. Yes. Yes.

298 Steven Webber, 28/5/15, T:44.2-43.

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Q. You gave no thought, did you, to whether they were levels 1, 2, or 3 employees.

A. Correct, yes.

Q. As far as you were concerned, she just had to grab 100 names, whoever they might be, and you would pass that on?

A. That was my note to her, yes.

275. One minute after he had received Michelle Ference’s email, Steven

Webber forwarded it to John-Paul Blandthorn, with a copy to Michael

Robinson, stating:299

100 names below as requested.

276. The short period of time that elapsed between his receiving Michelle

Ference’s email and his forwarding it (namely, one minute) confirms

the oral evidence given by Steven Webber.

277. At 2.06pm on 30 May 2011 John-Paul Blandthorn sent an email to

Angela Leo, with a copy to Cesar Melhem and Ben Davis, stating:300

100 names from Cleanevent for May intensive they are forwarding addresses on.

278. According to Cesar Melhem the ‘May Intensive’ was an ‘intensive

campaign to recruit members throughout industries’ which was carried

out on a national basis.301

299 SW1, 28/5/15, p 97. 300 SW1, 28/5/15, p 97. 301

Cesar Melhem, 1/6/15, T:225.41-226.1.

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279. At 2.46pm on 30 May 2011 Cesar Melhem sent an email to Angela

Leo, with a copy to Claire Raimondo, John-Paul Blandthorn and Ben

Davis stating:302

As you know we have received a cheque for $ 15000 in Dec 2010, can you allocate that amount to members listed below.

280. There are several errors in Cesar Melhem’s email. The amount seems

to have been paid by EFT not cheque. Further, the amount was

$12,500, not $15,000. Nevertheless the intention was clear enough.

Cesar Melhem wished to have the first instalment paid by Cleanevent

allocated to the 100 names of casual cleaners which had been

forwarded by Cleanevent earlier that day.

281. Claire Raimondo then sent an email to Angela Leo at 2.58pm on 30

May 2011 stating:303

Full year’s membership December to December.

100 members $150 membership payment for each member.

282. At 3.02pm on the same day, Claire Raimondo sent a further email to

Angela Leo stating:

Checked with Accounts it was only 12,500 so its [sic] $125 per member not $150

283. Angela Leo confirmed that, consistently with Claire Raimondo’s

advice and Cesar Melhem’s instructions, she entered the names of the

100 persons on the membership roll and allocated a membership fee of

$125 to each name, regardless of what the formal fee structure was

302 SW1, 28/5/15, p 97. 303 Angela Leo, witness statement, 21/10/15, Annexure 1, p 7.

429

under the AWU rules.304 She did not know whether the employees on

the list were aware of their inclusion on the membership roll. She said

that her role was to take the information supplied and process it

accordingly.305

284. The names forwarded by Cleanevent on 30 May 2011 included those

of Shalee-Nicole Allameddine, Robyn Cubban, Nayan Debnath and

Colleen Ellington.306 Each of these persons gave evidence to the

Commission. Each was at all relevant times including May 2011, a

resident of New South Wales. None knew of, let alone authorised or

permitted, the release of his or her name by Cleanevent to the AWU.

Each, except for Nayan Debnath was a member of AWU NSW and

making membership payments by payroll deduction.307

285. It is apparent from the above analysis that Cesar Melhem was closely

involved at each step of the way in the process: in procuring payment

from Cleanevent, in procuring a list of names from Cleanevent, and in

ensuring that the payment would be allocated as membership fees to

the names on the list.

The second payment

286. It would not appear that any further payments were sought until 2012.

304 Angela Leo, witness statement, 21/10/15, para 26; Angela Leo, 21/10/15, T:797.39-43. 305 Angela Leo, 21/10/15, T:797.39-43. 306

SW1, 28/5/15, pp 98-99. 307 Robyn Cubban, witness statement, 28/5/15, paras 5-7; Colleen Ellington, witness statement, 29/5/15, paras 8-9; Shalee-Nicole Allemeddine, witness statement, 29/5/15, paras 6-7.

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287. On 18 April 2012 Cesar Melhem appears to have left a telephone

message for Michael Robinson to ring him.308

288. On 18 April 2012 Mei Lin sent an email to Michael Robinson, with a

copy to Cesar Melhem, and the subject ‘Re: Membership Invoice’.

The email stated:309

…Please find attached invoice for membership for financial year 2011-2012. It would be much appreciated if you could arrange the payment as soon as possible.

Please feel free to contact me should you have any queries…

289. The email attached tax invoice 023590 from AWU Vic to Cleanevent,

marked to the attention of Steven Webber.310 The description of

services for which payment was sought in tax invoice 023590 was

‘membership fees for Financial Year 2011-2012’. The tax invoice was

in a total amount of $27,500, inclusive of GST. The item code was

‘membership’.

290. At 5.27pm on 18 April 2012, Michael Robinson responded to Cesar

Melhem by email in the following terms:311

Good afternoon Cesar, you were on my call back list but I see the subject below. I have sent that through to Steven Webber and the Accounts payable department and spoken to them both and this should be sorted soon for you. Please let me know if there is any delays [sic] and I will chase it up for you (sometimes the cogs can turn a little slow here)

Talk to you soon.

308 SW1, 28/5/15, p 103. 309 SW1, 28/5/15, pp 103-104. 310

SW1, 28/5/15, p 111. 311 SW1, 28/5/15, p 103.

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291. Cesar Melhem responded three minutes later by email sent at 5.30pm

to Michael Robinson stating:312

We need an up to date list of employees for the financial year so we can put them on our system.

292. On 20 April 2012 Steven Webber sent an email to Cesar Melhem, with

a copy to Michael Robinson. The subject was ‘Names of Cleanevent

Employees’. The email said:313

Hope all is well in your world and they are not making you work to [sic] hard!!

Following on from your request to Michael, I have attached the names of cleaning staff

293. Steven Webber’s email of 20 April 2012 attached a list of 100

employees. In at least some instances the list included names that had

been provided in the earlier list of casual cleaners sent on 30 May

2011.314

294. The list of names forwarded by Steven Webber on 20 April 2012 is not

so obviously at random as the alphabetical list sent 30 May 2011.

Nevertheless it is clear that it was simply a list of names pulled

together for no discernible reason, and did not represent persons who

had indicated a desire to become members of the AWU. This emerges

from the following evidence of Steven Webber:315

Q. How did you cause that list to be drawn up?

312 SW1, 28/5/15, p 103. 313 SW1, 28/5/15, pp 106-108. 314

SW1, 28/5/15, pp 97-99. 315 Steven Webber, 28/5/15 T:29.33-30.1.

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A. I got someone from administration to pull together a list.

Q. So it was simply a list of the names of certain cleaning staff of Cleanevent.

A. Yes.

Q. That someone had pulled together—

A. Yes.

Q. – more or less at random?

A. Yes.

295. On 13 June 2012 Duc Vu sent an email to Steven Webber, requesting

payment of the invoice.316 Subsequent to receiving that email Steven

Webber sent an email to Simon Jaensch forwarding the email from

Duc Vu, and stating:317

Simon can you please put in a prompt payment for these please, we have to keep the union happy!!!

296. Despite Steven Webber’s request the invoices were not paid. Mei Lin

sent emails to Steven Webber requesting payment on 15 June 2012, on

20 June 2012318 and again on 27 June 2012.319

297. On 25 June 2012 at 11.36am Wendy Field (the group general manager-cleaning services at Spotless) sent an email to Steven Webber, with a

316 SW1, 28/5/15, pp 109-112. 317 SW1, 28/5/15, p 109. 318

Cleanevent MFI-1, 19/10/15, p 327. 319 SW1, 28/5/15, p 114.

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copy to others seeking an explanation for the payment. Steven Webber

responded in the following terms:320

The below is all associated with our EBA

In May 2010 the EBA was reworked, this was a very difficult negotiation and at times looked as though it would not get done. We managed to lock a new agreement away through an MOU for a further 3 years.

The $25k was part of that negotiation and was approved by Julianne, the $25k is an annual cost

The implication to the business by not having the EBA and employing labour through the modern award is circa $2Mill per annum. We are about to enter our third and final year of this agreement to which we will need to start discussing how we can continue this

…

The relationship with the union has been long and very good which has allowed us to continue to remain competitive with what is a pretty good EBA

298. Tom Gibbons was the national cleaning manager.321 Steven Webber

reported to Tom Gibbons, who in turn reported to Wendy Field.322 The

email is an accurate reflection of the importance of the MOU to

Cleanevent. Steven Webber described the figure of $2,000,000 as his

‘best guesstimate’ as to the savings to the business by not being

required to comply with the Modern Award.323 As indicated above,

figures of $1,500,000 and ‘greater than’ $1,000,000 were referred to by

Michael Robinson in contemporaneous documents. Clearly the saving

to Cleanevent was in this order of magnitude.

320 SW1, 28/5/15, pp 119-120. 321 Steven Webber, 28/5/15, T:55.7-9. 322

Steven Webber, 28/5/15, T:55.11-15. 323 Steven Webber, 28/5/15, T:57.46-58.12, 58.42-59.8.

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299. Mei Lin at 10.00am on 29 June 2012 sent a further email stating:324

We have not received the payment. Could you please investigate how it is processing? It would be much appreciated if you could make the payment by today.

300. Two minutes after receiving this email, Steven Webber forwarded it to

Simon Jaensch, Jeremy Johansson and Andrew McBride stating:325

This one has been going around in circles for 3 weeks

This has the ability to cost us some $2Mil if we pee them off

Can this be finalised today!!

301. After a further series of emails within Cleanevent which it is

unnecessary to reproduce, Julianne Page approved payment. The

money was paid on the same day.

The third payment

302. On or about 4 March 2013 the AWU Vic issued tax invoice 024239 to

Cleanevent, marked to the attention of Steven Webber, seeking an

amount of $27,500 inclusive of GST in respect of what was described

as ‘Membership Fees for Financial Year 2012-2013’.326

303. On 14 March 2014 Mei Lin sent an email to Steven Webber attaching

tax invoice 024962 from AWU Vic to Cleanevent in respect of

324 SW1, 28/5/15, p 114. 325 SW1, 28/5/15, p 113. 326

SW1, 28/5/15, p 132.

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Membership fees for financial year 2013-2014 in the amount of

$27,500.327

304. On 26 March 2014 Mei Lin sent a further email to Steven Webber

asking when tax invoice 024962 would be paid.328 Steven Webber

responded on 26 March 2014 stating: ‘Hi, this was sent to accounts last

week for payment Should be with you shortly’.329

305. Steven Webber gave evidence to the effect that he authorised invoice

024962 to be paid and did not notice that the term of the MOU had on

its face expired.330 This is confirmed by a payment requisition form

dated 19 March 2014, raised by Ashley Hill and authorised by Steven

Webber.331 The requisition is in the amount of $27,500 payable to

AWU Vic, referring to invoice number 024962. The requisition is

stamped as being received by accounts payable on 28 March 2014.

306. No list of names was produced in respect of this payment. However, it

may be assumed that this payment was dealt with in the same way as

the first two. The payment was recorded as membership income in the

general ledgers of the AWU Vic. The evidence of Angela Leo was to

the effect that the payment would have been allocated to employees on

327 SW1, 28/5/15, pp 137-138. 328 SW1, 28/5/15, p 144. 329

AWU MFI-14, 6/11/15, pp 1-2. 330 Steven Webber, witness statement, 20/5/15, para 17. 331

SW1, 28/5/15, p 135.

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a list provided by the company and that, if no list was provided, the

Membership department would contact the company for one.332

Conclusions regarding membership numbers

307. The arrangements pursuant to which Cleanevent provided lists of

members in exchange for payment resulted in falsely inflated

membership numbers. Because the question of falsely inflated

membership numbers arises in a number of other AWU case studies, it

is convenient to examine the position under the AWU rules in some

detail.

308. Section 166 of the Fair Work (Registered Organisations Act) 2009

(Cth) makes membership subject to, amongst other matters, ‘payment

of any amount properly payable in relation to membership’. Neither

that section nor any other section of the Act specifies how such an

amount may be paid.

309. Rule 7 subsections 1 and 2 of the AWU Rules provides:333

RULE 7 – ADMISSION TO MEMBERSHIP

(1) Application for membership in the Union may be made by:

a. electronically completing and submitting an application form including consent to the method of payment of the contribution as prescribed by Rule 9, through the official website of The Australian Workers’ Union or a Branch of The Australian Workers’ Union, or

332 Angela Leo, witness statement, 21/10/15, para 11. 333 AWU MFI-2, 30/10/15, pp 61-62. Rules 7-10 of the registered rules of the Australian Workers Union 23/5/06 are quoted here. They are substantially the same as rules 7-10 of the registered rules of the Australian Workers Union 19/3/15 being Melhem MFI-1, 1/6/15, pp 58-65.

437

b. signing of an application form of which the original must be provided to the union; and

i. the signing of a payroll deduction authority, or

ii. the signing of a Financial Institution Direct Debit Authority which has been approved by the National Executive, or

iii. the payment of the contribution as prescribed by Rule 9.

(2) Any person having made application for membership as prescribed in sub-rule (1) of this Rule must, except as otherwise provided for in these Rules, be admitted to membership of the Union. A person will become a member from the date that the first payment of the contribution as prescribed in Rule 9 is received.

310. The last sentence of subsection 2 makes admission to membership

conditional upon the receipt of the first payment of the membership

contribution fee. However, it does not impose any limitations on how

that fee can be paid. Rule 7(1)(b)(iii) refers to payment of the

contribution ‘as specified by Rule 9’. Rule 9 relevantly provides that

contributions ‘to be paid by members’ are those determined by the

National Executive from time to time. Provision is made for the

waiver of contributions by the National Executive.334

311. Rule 10 provides:335

RULE 10 - CONTRIBUTIONS – WHEN AND HOW PAYABLE

WHEN CONTRIBUTIONS ARE PAID

(1) Quarterly contributions are due and payable on the first day of the first month of each quarter and must be paid no later than the last day of the first month of each quarter. Quarters are deemed to begin on the first day of July, October, January and April respectively.

334 AWU MFI-2, 30/10/15, p 65 (r 9(1)). 335 AWU MFI-2, 30/10/15, pp 66-67.

438

(2) Annual contributions are payable by members as determined from time to time by the National Executive. Annual contributions become payable on the first day of July each year and must be paid either by way of a lump sum or over such period and in such part payments as may be determined by the relevant Branch Secretary.

RECOVERY OF OWED CONTRIBUTIONS

(3) Members who continue in arrears after 31st July each year, after being notified, may be sued for the recovery of any contributions owing.

PAYING CONTRIBUTIONS

(4) All contributions, fines, levies and dues owing by a member must be paid to the Branch Secretary or other duly appointed representative of the Branch on whose register the member is enrolled, and such duly appointed representatives must immediately pay all such moneys received into the registered office of the Branch. Where there is no Branch established members must pay their dues to the National Secretary.

WAIVING PAYMENT OF CONTRIBUTIONS

(5) National Executive may if it sees fit and subject to the agreement of any affected Branch Executive, waive payment of the whole or any portion of contributions, levies or other dues owing by any member or class of member if in its opinion special circumstances exist which make it desirable or reasonable to do so.

PAYROLL DEDUCTIONS

(6) Notwithstanding anything elsewhere contained in the Rules, Branch Secretaries or other authorised Officers may, subject to the approval of the National Executive, make an arrangement with an employer for deducting, on the written authority of a member in the employment of the employer, amounts by way of contributions, levies, or other moneys payable to the Union, from the wages or moneys payable to a member by the employer. So long as such arrangement is in force, and a written authority by a member employed by the employer for the making of deductions in accordance with the arrangement remains in force, the member is (unless the member was an unfinancial member of the Union at the end of the quarter immediately preceding that during which he gave the authority) to be deemed to be a financial member of the Union and of their Branch and to be fully financial in the Union and their Branch, notwithstanding any other provision of these Rules. If such member owes any money to the Union (whether by way of arrears owing at the time the authority came into force, or other amounts the collection of which is not provided for by the arrangement) such money remains owing by the member and may be

439

recovered by the Union, but does not affect their financial status as determined under this subrule. A member who was unfinancial at the end of the quarter immediately preceding that during which he gave the authority continues to remain unfinancial until he pays all amounts owing at such end of quarter, but as from the date of such payment their financial status is to be determined as if he had made such payment prior to giving authority.

Where such an arrangement was made, or such an authority was given before this subrule came into force, the financial status of any member who has given the authority, or has given any authority pursuant to the arrangement, is to be determined as if this subrule had been in force at that time.

DIRECT DEBIT PAYMENTS

(7) Notwithstanding anything elsewhere contained in the Rules, Branch Secretaries or other authorised Officers may, subject to the approval of the National Executive, make an arrangement with a financial institution for deducting, on the written authority of a member who holds an account with the financial institution, amounts by way of contributions, levies or other moneys payable to the Union, from the member's account. So long as such arrangement is in force, and a written authority by a member who holds an account with the financial institution for the making of deductions in accordance with the arrangement remains in force, the member is (unless an unfinancial member of the Union at the end of the quarter immediately preceding that during which he gave the authority) to be deemed to be a financial member of the Union and of their Branch and to be fully financial in the Union and their Branch, notwithstanding any other provision of these Rules. If such member owes any money to the Union (whether by way of arrears owing at the time the authority came into force, or other amounts the collection of which is not provided for by the arrangement) such money remains owing by the member and may be recovered by the Union, but does not affect their financial status as determined under this subrule. A member who was unfinancial at the end of the quarter immediately preceding that during which he gave the authority continues to remain unfinancial until he pays all amounts owing at such end of quarter, but as from the date of such payment their financial status is to be determined as if he had made such payment prior to giving authority.

Within this subrule "financial institution" includes a bank, building society, credit union or credit card organisation.

Where such an arrangement was made or such an authority given before this subrule came into force, the financial status of any member who has given the authority or has given any authority pursuant to the

440

arrangement, is to be determined as if this subrule had been in force at the time.

312. In the period 2008 to 2013 the contribution rates set by the National

Executive was as follows:336

313. It is apparent from rule 10(2) that annual contributions are ‘payable by

members’. There is a question as to whether the words ‘payable by

members’ in rule 10(2) and the words ‘paid by members’ in rule 9(1)

preclude the payment of membership fees by employers. The answer

probably depends on the circumstances. If a payment is made by an

employer with the knowledge and consent of an employee then it may

be that, on analysis, the payment is made by the member within the

336 See BMD bundle, 29/5/15, pp 356-360.

1 July 2008

1 July 2011

1 July 2013

Adult $450 $500 $550

Part Time $374.40 $375 $390

Junior (under 21) $324.50 $325 $325

Apprentice 1st and 2nd year $52

Apprentice 3rd year $324.50 $325 $360

Apprentice 4th year $324.50 $325 $463

WorkCover (not receiving makeup pay) $274.55 $275 $275

Offshore $600 $630 $630

Offshore – KTT Members $652

Shearers $450 $500

Wool Classers $400 $450

Shed Hands $320 $370

Learners (1st Year Pastoral Trainees) $250 $300

Netball Players Assoc $125 $200

Australian Jockeys Assoc $125 $125

Stable Employees Assoc $260 $332

Retired $9.00 $10

441

meaning of these rules because in effect, the employer is acting as the

employee’s agent. On the other hand, in circumstances where an

employer makes a payment purportedly for membership but without

the knowledge of the employee in question it is difficult to see how the

payment could in this situation be described as one in which the

contributions is paid ‘by’ the member.

314. As discussed above, there are difficulties with a person becoming a

member by virtue of a payment made by his or her employer,

particularly where, as in the case of the employees on the lists

randomly compiled at the request of Steven Webber, the employees

had no idea membership was being paid on their behalf and cannot be

taken to have authorised it.

315. An additional problem that arises, fairly obviously, from an

arrangement pursuant to which an employer pays the membership

contributions of an employee and does not tell the employee is that the

employee is not in a position to take advantage of many of the benefits

of membership of the union for which the employer is paying.

316. The evidence discloses that amounts less than the required amounts

under rules 9 and 10 of the AWU Rules were paid by way of

membership contributions. As is apparent from the terms of those

rules, the amount of the contribution that has to be paid is fixed by the

National Executive. Only the National Executive has the power to

vary or waive that contribution amount.337 A person can only become

a member if the amount of that contribution is paid. It is clear from the

337 See Rule 9 (1): AWU MFI-2, 23/10/15, p 65.

442

terms of Claire Raimondo’s emails to Angela Leo of 30 May 2011 that

the amounts allocated to each member for a full year’s membership

were far below the prescribed contributions.

317. Thus, in the case of the 100 persons referred to in the email of 30 May

2011, those persons would not have become members at all if the

payment was applied as their first membership contribution. In the

case of those persons who were already members, the effect of the

payment depends upon the operation of rule 15(3). That rule provides

that a member is deemed to have resigned if he or she has not paid the

annual contribution for a continuous period of 24 months.338 However,

if the existing member was up-to-date with membership contributions,

by way of payroll deductions or direct debit, he or she would be

entitled to a refund or credit against future membership contributions

to the extent of the overpayment.

318. There is no evidence that steps were taken to obtain from the

employees in question signed membership applications as required

under rule 9 of the AWU rules. Angela Leo, who has been Team

Leader of the Membership department since 30 September 2009, gave

evidence that it was the practice of the membership department, in

relation to Company Paid membership, to enter names into the

membership roll on the basis of lists provided by the company to the

AWU, even if persons on the list had not filled out membership

applications.339

338 See Rule 9 (1): AWU MFI-2, 23/10/15, p 69. 339 Angela Leo, 21/10/15, T:785.33-44, 796.37-41.

443

319. An analysis of the membership status of 100 of the named employees

provided by Cleanevent to the AWU on 30 May 2011 in the light of

the membership register shows the following: 340

(a) all 100 names were recorded in the membership register;

(b) 99 were recorded as having joined the AWU on 1 January

2011;

(c) of these 99:

(i) each is recorded as having last paid membership

contributions on 30 June 2011;

(ii) 98 were archived from the membership register on

14 August 2014;

(iii) 98 had their address listed as the address of

Cleanevent rather than their personal address; and

(iv) no membership applications were produced by the

AWU in respect of those names.

320. One name on the list was recorded in the membership register as

having joined the AWU on 14 December 2011. The register records

the member as being paid (as at December 2014) up to September

2014, and the address recorded in the register is the member’s personal

address. An application form has been produced for this member.

340 Melhem MFI-10, 2/6/15.

444

321. Other members of the AWU recorded on the list have given evidence

that they were members of the AWU NSW Branch and paid

contributions by payroll deduction.341 They were not aware that the

AWU Vic was also paying membership fees on their behalf.342 Their

membership was not previously recorded on the AWU Vic register

(rather, it was recorded on the register of a different branch) and

therefore they are listed as AWU members twice. One member gave

evidence that he was not, to his knowledge, ever a member of the

AWU and had no dealings with the AWU while employed at

Cleanevent.343

322. A similar analysis has been performed in respect of a list of 100 names

provided by Cleanevent on 20 April 2012.344 The reconciliation with

the AWU’s membership register reveals the following:

(a) All 100 names were recorded on the membership register;

(b) 21 were recorded as having authorised payment of

membership contributions by payroll deduction;

(c) AWU produced membership applications in respect of 5 of

the names;

341 Robyn Cubban, witness statement, 28/5/15, paras 5-7; Colleen Ellington, witness statement, 29/5/15, paras 8-9; Shalee-Nicole Allameddine, witness statement, 29/5/15, paras 6-7. 342

Robyn Cubban, witness statement, 28/5/15, para 8; Colleen Ellington, witness statement, 29/5/15, para 12; Shalee-Nicole Allameddine, witness statement, 29/5/15, para 12. 343 Nayan Debnath, witness statement, 29/5/15, paras 5-7. 344

Melhem MFI-11, 2/6/15.

445

(d) For each of the names referred to in (b) and (c) above, the

date on which they were recorded as having joined varied,

and the address recorded in the register was a personal

address;

(e) 66 became members on 27 April 2012, none of whom

responded to the descriptions in (b) and (c) above. Of these 66

names:

(i) all had their address listed as the address of

Cleanevent rather than their personal address;

(ii) all except one of the names were recorded as having

last paid membership on 27 March 2014;

(iii) no membership application forms were produced in

respect any of them.

323. Thus, the arrangement with Cleanevent has resulted in a significant

number of persons becoming recorded as members of the AWU when

in truth what happened did not make them members under the rules,

and in circumstances in which some of the employees on the list were

already paying members of the AWU, and others did not know that

they had become members.

324. Other arrangements entered into with other companies had a similar

effect. The arrangements with entities such as Winslow, BMD, the

Australian Jockeys Association and the Australian Netballers’

Association are dealt with in Chapter 10.9 below. It is convenient in

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this connection to deal with one submission made by Cesar Melhem.

In a statement dated 9 October 2015, he said that the issue of losing or

gaining a seat on the National Executive did not concern him.345 He

said this on the basis that membership of the National Executive was

conferred on the basis of 1 seat for every 11,000 members or part

thereof, and that the Branch always had three members during his time

as State Secretary. When he gave evidence on 1 June 2015, it was put

to Cesar Melhem that he was seeking to inflate membership numbers at

the AWU, and put to him that he was seeking to inflate membership

numbers at the AWU for the purposes of increasing the influence of

the Branch at National Level. He denied these propositions.346 His

assertion in his statement of 9 October 2015 regarding seats on the

National Executive was not taken up with him when he gave evidence

on 22 October 2015.

325. Cesar Melhem submitted, on the basis of what was described as his

unchallenged evidence in his statement of 9 October 2015, that it

should be found that there was no advantage to the AWU in inflating

its membership numbers.347 The evidence was challenged, sufficiently,

on 1 June 2015: his statement of 9 October 2015 was a response to the

challenge. The more important point is that the submission extends

well beyond that evidence. There are a number of reasons why

increasing membership numbers might be perceived as advantageous

by officials of a Branch. Some were identified by counsel assisting in

opening. They include prestige, increased income arising from the

345 Cesar Melhem, witness statement re membership for the purpose of AWU National Executive, 22/10/15, para 3. 346

Cesar Melhem, 1/6/15, T:264.1 - .10. 347 Submissions of Cesar Melhem, 20/11/15, ch 2, para 30; ch 9, para 2.

447

inflated membership, and demonstration that the union in a particular

Branch area is industrially strong. They also include various delegate

and voting advantages, over and above representation on the National

Executive, that flow under the rules. Those include:

(a) For every 2,500 members or part thereof a Branch was

entitled to one delegate at the National Conference.348

(b) For every 1,000 members or part thereof a Branch was

entitled to one vote at the National Conference.349

(c) For every 1,000 members or part thereof a Branch was

entitled to one vote at the National Executive.350

326. Thus, inflating membership numbers had a number of advantages for

the Branch over and above the advantage Cesar Melhem referred to. It

is significant that he did not in his statement address any of these other

advantages or deny that they were of importance to him and the

Branch.

327. According to Cesar Melhem’s statement dated 9 October 2015, the

numbers of members of the AWU Vic varied between 2006 to 2013

from 22,525 in 2006 to a high of 28,852 in 2012, and down to 26,697

in 2013.351 It is not possible to isolate any particular respect in which

the various membership arrangements conferred an advantage on Cesar

348 Melhem MFI-1, 1/6/15, p 71, rule 20(2). 349 Melhem MFI-1, 1/6/15, p 72, rule 20(6)(a). 350

Melhem MFI-1, 1/6/15, p 76, rule 24(3)(a). 351 Cesar Melhem, witness statement (AWU Membership issues), 22/10/15, para 4.

448

Melhem or the AWU Vic. It is certainly not possible to say that they

did not confer such advantages. It is likely that they were pursued in

order to obtain such advantages.

I – COMPARISON OF THE MOU AND THE MODERN AWARD

328. The purpose of this section is to set out in more detail the extent to

which the arrangements in 2010 were to the detriment of Cleanevent

employees. This detriment is a corollary of the fact that the

arrangements conferred large financial benefits on Cleanevent.

329. What follows is a comparison of the wage rates applicable under the

MOU with those that would have been applicable had the employees

been paid under the Modern Award. The Modern Award adopted as

the comparison is the Cleaning Services Award 2010.

330. The reason that this is the relevant comparison has already been

articulated but is worth repeating. It is that it was open to the AWU to

apply to the Fair Work Commission to terminate both the 1999 Award

and the 2006 MOU. Had it done so successfully then the conditions of

employment of Cleanevent employees would have been determined on

the basis of the Modern Award. There is no reason to think an

application of this kind would not have been successful.

331. Whether the relevant Modern Award is the Cleaning Services Award

2010 is presently a matter of dispute in the Federal Court.352 That is a

dispute about which Award applies at the present time. Cesar Melhem

in submissions argued that the relevant Modern Award in 2010 was the

352 Submissions of Cesar Melhem, 20/11/15, ch 2, para 3.

449

Amusement, Events and Recreation Award 2010. The submission is

unmeritorious. Neither the AWU nor Cleanevent took that position in

2010. It was the AWU’s position that the Cleaning Services Award

2010 was the relevant Modern Award. That is apparent from the

analysis done by Zoe Angus in October 2010, referred to above.

332. It is also apparent from an amendment proposed to the draft MOU by

the AWU. The amendment was the result of a request sent by John-Paul Blandthorn to Zoe Angus, copied to Cesar Melhem on 21

September 2010.353 Part of the request stated ‘Cesar has told the

company he is not willing to recommend the deal to National Office

unless there is a preamble that includes the following things’. One the

things was ‘[t]hat the future agreement will be tested against the new

modern cleaning award’. Zoe Angus responded by sending a draft

MOU with an additional clause 3.3 that stated that the ‘appropriate

reference instrument for the purpose of the FWA better off overall test

is the Cleaning Services Award 2010’.354 John-Paul Blandthorn then

forwarded the email to Cesar Melhem.355

333. It was also Cleanevent’s position in 2010 that the Cleaning Services

Award applied. That is apparent from Michael Robinson’s response:356

As our business changes and our relationships with our client’s [sic] develop, it would be our preference that our business be tested against the most suitable instrument at the time of renegotiation. This may mean that our discussion around the amusements award be reignited if our business aligns closer to this award than the CSA.

353 Cleanevent MFI-1, 19/10/15, pp 202-210 354 Cleanevent MFI-1, 19/10/15, pp 225-228 355

Cleanevent MFI-1, 19/10/15, p 229. 356 SW-1, 28/5/15, p 72.

450

The effect of this response was: the Cleaning Services Award 2010 is

presently applicable, but may not be at the time the MOU is

renegotiated in 2013. This indicates that both sides accepted its

applicability in 2010.

334. In any event, even if the Amusement, Events and Recreation Award

2010 been the applicable award,357 the employees covered by it would

have been entitled to casual loadings and Sunday and Public Holiday

penalty rates better than those provided for in the MOU.358

335. Cesar Melhem also sought to challenge the proposition that there was

any relevance in the comparison between a Modern Award and the

MOU.359 The submission was made on the basis that whilst the 1999

Award was in force, that was the relevant point of comparison. The

argument proceeded to submit that, since the 1999 Award remained in

force until its expiry in 2013, there was no proper basis to compare

wages under the MOU with wages under a Modern Award.

336. Cesar Melhem’s submission, for the most part, ignores the fact that it

was open to the AWU to apply to the Commission to terminate the

1999 Award. It appears to take this position on the basis that it was

never put to Paul Howes that such an application should have been

357 A doubtful proposition when regard is had to clauses 4.1 and 4.2 of that award which gives coverage to employers operating various amusements, event and recreation venues, not their contractors: Fair Work Ombudsman, Amusement, Events and Recreation Award 2010 http://awardviewer.fwo.gov.au/award/Version/321219#_Hlt210096405, (as at 4 November 2010), accessed 28 November 2015. 358

Fair Work Ombudsman, Amusement, Events and Recreation Award 2010 http://awardviewer.fwo.gov.au/award/Version/321219#_Hlt210096405, (as at 4 November 2010), accessed 28 November 2015, clauses 23.3(a), 23.3(b), 10.4(d). 359

Submissions of Cesar Melhem, 20/11/15, ch 2, paras 7-16.

451

made. There is no substance to this submission. It is significant that

the AWU does not itself make any submission of this kind. It must

have been obvious to all involved in 2010 that the AWU could have

terminated the 1999 Award: that is why the MOU itself in clause 2.7c)

contains an express promise not to seek to terminate it, or encourage its

termination.360 If the 1999 Award had been terminated, then the

Modern Award was the relevant reference point for the application of

the ‘better off overall’ test.

337. There is the additional point that, even if the 1999 Award is the

relevant comparison, most Cleanevent employees were worse off in

any event because their entitlement to penalty rates was vastly reduced

under the MOU. An analysis of the position appears at Appendix 3 to

this Chapter of the Report.

338. Cesar Melhem takes a further legal point on this topic. It is that,

because the 1999 Award had not terminated in 2010, the ‘better off

overall test’ never had any application. The point assumes that only

Modern Awards could be used under that test. The assumption is

wrong. The ‘better off overall’ test applies to the EBA against the

relevant award-based transitional instrument and the transitional

Australian Pay and Classification Scale.361 The 1999 Award (since it

was not terminated) was the relevant award-based transitional

instrument.

360 Cleanevent MFI-1, 19/10/15, p236. 361 Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), Sch 7, item 18(2)(b).

452

339. For the above reasons, the comparison between the Modern Award and

the MOU is the relevant one. For the purposes of the comparisons that

follow, only employees working in New South Wales and Victoria are

considered. Employees working outside of those states receive lower

rates. Therefore these calculations are a best case scenario for

employees. For the purposes of these comparisons the following

employee classifications362 are used as comparators:

(a) Level 1 under the MOU most closely aligns to Level 1 under

the Modern Award;

(b) Level 2 under the MOU most closely aligns to Level 1 under

the Modern Award;

(c) Level 3 under the MOU most closely aligns to Level 2 under

the Modern Award; and

(d) Level 4 under the MOU most closely aligns to Level 3 under

the Modern Award.

Permanent employees

340. At face value363 the base rates of pay in the MOU are higher when

compared to the Modern Award.

362 See Schedule D of the Modern Award at Melhem MFI-1, 1/6/15, pp 443-445; see cl 15 of the 2006 EBA at SW1, 28/5/15, p 10. 363

That is, without taking into account the effect of transitional phasing in the Modern Award which may affect these calculations.

453

341. For permanent employees the Modern Award base rate ranges from

approximately 3% to 18% lower in comparison to the MOU during the

2010 to 2014 financial years.

MOU vs. Modern Award (permanent base rate Monday to Friday)

1.07.2010 1.07.2011 1.07.2012

Level MOU MA364 MOU MA365 MOU MA366

MOU Lvl 1

MA Lvl 1

632.32 3.86% higher

608.80 656.64

4.3% higher

629.49 682.10

5.2% higher

647.80

MOU Lvl 2

MA Lvl 1

657.40 608.80

7.98% lower

682.86 629.49

8.47% lower

709.08 647.80

9.45% lower

MOU Lvl 3

MA Lvl 2

717.82 629.90

13.9% lower

753.16 651.31

15.63% lower

774.44 670.20

15.5% lower

MOU Lvl 4

MA Lvl 3

773.68 663.60

16.5% lower

803.32 686.16

17% lower 834.10 706.10

18.1% lower

364 Cleaning Services Award 2010 as at 30 June 2010 which provides wages for the 2010-11 financial year, Fair Work Ombudsman, http://awardviewer.fwo.gov.au/award/Version/312343, accessed 5/11/15. 365

Cleaning Services Award 2010 as at 23 June 2011 which provides wages for 2011-12 financial year, Fair Work Ombudsman, http://awardviewer.fwo.gov.au/award/Version/351866, accessed 5/11/15. 366

Cleaning Services Award 2010 as at 21 June 2012 which provides wages for 2012-13 financial year, Fair Work Ombudsman, http://awardviewer.fwo.gov.au/award/Version/363596#_Ref208655928, accessed 5/11/15.

454

1.07.2013 1.07.2014

Level MOU MA367 MOU MA368

MOU Lvl 1

MA Lvl 1 -

666.59 6.37% lower369

-

686.58 3.27% lower370

MOU Lvl 2

MA Lvl 1

- 666.59

6.37% lower

- 686.58

3.27% lower

MOU Lvl 3

MA Lvl 2 -

689.64 12.2% lower

- 710.32

9% lower

MOU Lvl 4

MA Lvl 3

- 726.58

14.7% lower

- 748.37

11.4% lower

342. Whilst the base rates of pay for permanent employees under the MOU

are higher in comparison to the Modern Award, shift work, weekend

and public holiday penalties and overtime are significantly lower.

Overtime

343. Clause 2.8 of the MOU provides that all time worked by permanent

employees in excess of 76 hours in a fortnight will be paid overtime at

the rates attached in the schedules. These overtime rates equate to a

fixed 33% loading on the permanent base rate regardless of when the

overtime is worked.

367 Cleaning Services Award 2010 as at 27 June 2013 which provides wages for 2013-14 financial year, Fair Work Ombudsman, http://awardviewer.fwo.gov.au/award/Version/383236, accessed 5/11/15. 368

Cleaning Services Award 2010 as at 27 June 2014 which provides wages for 2014-15 financial year. Fair Work Ombudsman, http://awardviewer.fwo.gov.au/award/Version/394810, accessed 5/11/15. 369

In comparison to the wages for the 2012-13 financial year in the MOU. 370 In comparison to the wages for the 2012-13 financial year in the MOU.

455

344. Clause 24 of the Modern Award provides that the ordinary hours of

full-time employees will not exceed 38 hours per week, to be worked

in periods of not more than 7.6 hours per day, in not more than 5 days,

on any day Monday to Sunday inclusive.

345. Clause 28 of the Modern Award provides that all time worked outside

a permanent employees rostered hours is overtime and all time worked

in excess of 7.6 hours per day, five days per week or 38 hours in any

week by part-time employees is overtime. Overtime worked from

Monday to Saturday will be paid at the rate of time and a half for the

first two hours and double time thereafter. Overtime worked on

Sundays will be paid at the rate of double time. Overtime worked on

public holidays will be paid at the rate of double time and one half.

346. Whilst the base rates in the MOU for permanent employees are higher

than those in the Modern Award, the rate and entitlement to overtime

in the MOU, particularly for overtime worked on weekends and public

holidays, is less than that provided for in the Modern Award.

Penalties and allowances

347. The pay rates included in the schedules to the MOU do not provide any

shift work, weekend or public holiday percentage loading for

permanent employees. Rather the continued operation of clause 22 of

the 2006 EBA provides a fixed payment of $55 for permanent

employees who work 7.6 hours on a public holiday.371

371 This equates to an additional $7.23 per hour over 7.6 hours. This calculation has not been incorporated into the comparison tables in this section.

456

348. In comparison, clause 27 of the Modern Award provides that early

morning, afternoon and non-permanent shift workers are paid an

additional 15% loading on their ordinary hourly rate. Employees who

work permanent night shifts are entitled to an additional 30%

loading.372 Employees are also entitled to time and a half on Saturday,

double time on Sunday and double time and a half on public holidays.

349. Clause 18 of the 2006 EBA provides that employees staying away

from home for an event are entitled to accommodation, meals and an

out of pocket expense allowance. Employees are also entitled to a one

off first aid allowance of $250 plus the fees for their first aid

qualification. Under the Modern Award, employees are entitled to 11

different allowances as set out in clause 17.373

350. Permanent employees who work shift work, weekends, public holidays

or overtime would be better off under the Modern Award in

comparison to the MOU.

Casual employees

351. The MOU does not provide for penalties for work on weekends, public

holidays or shift work for casual employees who work at events. These

employees also receive a lower rate (up to 10%) in comparison to

casuals who do not work at events.

372 These shift loadings have not been incorporated into the comparison tables in this section. 373

These allowances have not been incorporated into the comparison tables in this section.

457

352. The Modern Award does not delineate between casual work at events

or otherwise. This results in the base rates for casuals working at

events under the MOU ranging from approximately 1% to 19% lower

in comparison to the base rates under the Modern Award from the

2010 financial year.

MOU vs. Modern Award – Minimum casual rate (Monday to Friday at events)

1.07. 2010 1.07.2011 1.07.2012

Level MOU MA MOU MA MOU MA

MOU Lvl 1

MA Lvl 1

18.05 11.1% lower 20.07 18.59

11.4% lower

20.07 19.15

11.2% lower

21.31

MOU Lvl 2

MA Lvl 1

18.14 20.07

10.6% higher

18.50 20.71

11.9% higher

18.87 21.31

12.9% higher

MOU Lvl 3

MA Lvl 2

19.86 20.72

4.3% higher

20.26 21.42

1.25% higher

20.87 22.05

5.65% higher

MOU Lvl 4

MA Lvl 3

21.58 21.83

1.15% higher

22.29 22.57

1.15% higher

22.74 23.22

2.1% higher

1.07.2013 1.07.2014

Level MOU MA MOU MA

MOU Lvl 1

MA Lvl 1

-

21.86 14.1% higher 374

- 22.51

17.5% higher 375

MOU Lvl 2

MA Lvl 1

- 21.86

15.8% higher

- 22.51

19.2% higher

MOU Lvl 3

MA Lvl 2 -

22.61 8.3% higher

- 23.30

11.6% higher

MOU Lvl 4

MA Lvl 3 -

23.83 4.7% higher

- 24.55

7.9% higher

374 In comparison to the wages for the 2012-13 financial year in the MOU. 375 In comparison to the wages for the 2012-13 financial year in the MOU.

458

353. Casual base rates (Monday to Friday) for casuals not working at events

under the MOU are also lower for employees classified as Levels 1 and

2 in comparison to the Modern Award from the 2010 financial year.

354. Casuals employed under Levels 3 and 4 receive a higher base rate

under the MOU in comparison to the Modern Award for the 2010-2013

financial years.

355. From 1 July 2014, all casual base rates for all classifications regardless

of whether they are working at an event or not are higher under the

Modern Award.

MOU vs. Modern Award – Minimum casual rate (Monday to Friday not at

events)

1.07. 2010 1.07.2011 1.07.2012

Level MOU MA MOU MA MOU MA

MOU Lvl 1

MA Lvl 1

19.22 4.4% lower

20.07 19.50

6.2% lower 20.71 19.89

7.1% lower 21.31

MOU Lvl 2

MA Lvl 1

20.02 20.07

0.2% higher

20.42 20.71

1.42% higher

20.83 21.31

2.3% higher

MOU Lvl 3

MA Lvl 2

21.82 20.72

5.3% lower

22.28 21.42

4% lower 22.71 22.05

2.9% lower

MOU Lvl 4

MA Lvl 3

23.53 21.83

7.78% lower

24.00 22.57

6.3% lower 24.45 23.22

5.2% lower

459

Level 1.07.2013 1.07.2014

MOU MA MOU MA

MOU Lvl 1

MA Lvl 1 -

21.86 9.9% higher376

-

22.51 13.1% higher377

MOU Lvl 2

MA Lvl 1

- 21.86

4.9% higher

- 22.51

8% higher

MOU Lvl 3

MA Lvl 2

- 22.61

0.44% lower

- 23.3

2.59% higher

MOU Lvl 4

MA Lvl 3

- 23.83

2.5% lower - 24.55

0.4% higher

356. Casuals who work on weekends or public holidays but not at events

receive approximately a 12.8% loading on their base rate. This 12.8%

loading applies regardless of whether the casual employee works on a

Saturday, Sunday or public holiday. In comparison, clause 27 of the

Modern Award provides that casuals are entitled to the Saturday,

Sunday and public holiday penalties which are significantly higher

than the 12.8% loading set out above. Therefore they are

disadvantaged under the MOU.

357. Casuals who work at events which fall on weekends or public holidays

are the most disadvantaged by having their employment regulated by

the MOU instead of the Modern Award. For example, casuals who

work at events on a Saturday have rates which range from

approximately 146% to 167% lower in comparison to the rates they

would receive if they were covered by the Modern Award.

376 In comparison to the wages for the 2012-13 financial year in the MOU. 377 In comparison to the wages for the 2012-13 financial year in the MOU.

460

MOU (casuals at events) vs. Modern Award (Saturday casual rate)378

1.07. 2010 1.07.2011 1.07.2012

Level MOU MA MOU MA MOU MA

MOU Lvl 1

MA Lvl 1

18.05 166.7% lower

28.03 18.59

167% lower

28.98 19.15

166.8% lower

29.83

MOU Lvl 2

MA Lvl 1

18.14 28.03

154.5% higher

18.50 28.98

156.6% higher

18.87 29.83

158% higher

MOU Lvl 3

MA Lvl 2

19.86 29.00

146% higher

20.28 29.99

147% higher

20.87 30.86

147% higher

MOU Lvl 4

MA Lvl 3

21.58 32.74

151% higher

22.29 33.85

151% higher

22.74 34.83

153% higher

Level 1.07.2013 1.07.2014

MOU MA MOU MA

MOU Lvl 1

MA Lvl 1

- 30.69

160% higher379

- 31.61

165% higher380

MOU Lvl 2

MA Lvl 1

- 30.69

162% higher

- 31.61

167% higher

MOU Lvl 3

MA Lvl 2

- 31.75

152% higher

- 32.71

156% higher

MOU Lvl 4

MA Lvl 3

- 35.74

157% higher

- 36.82

161% higher

358. Casuals who work at events on a Sunday have rates which range from

approximately 182% to 215% lower in comparison to the rates they

would receive if they were covered by the Modern Award.

378 Calculated by multiplying the permanent base rate by 1.75 (casual loading of 25% (cl 12.5(a)) plus Saturday loading of 150% (cl 27.2(a)). 379

In comparison to the wages for the 2012-13 financial year in the MOU. 380 In comparison to the wages for the 2012-13 financial year in the MOU.

461

MOU (casuals at events) vs. Modern Award (Sunday casual rates)381

1.07.2010 1.07.2011 1.07.2012

Level MOU MA MOU MA MOU MA

MOU Lvl 1

MA Lvl 1

18.05 199% lower

36.04 18.59

200% lower

37.27 19.15

200% lower

38.35

MOU Lvl 2

MA Lvl 1

18.14 36.04

198% higher

18.50 37.27

201% higher

18.87 38.35

203% higher

MOU Lvl 3

MA Lvl 2

19.86 37.29

187% higher

20.28 38.56

190% higher

20.87 39.68

190% higher

MOU Lvl 4

MA Lvl 3

21.58 39.29

182% higher

22.29 40.62

182% higher

22.74 41.80

183% higher

Level 1.07.2013 1.07.2014

MOU MA MOU MA

MOU Lvl 1

MA Lvl 1

- 39.46

206% higher382

- 40.65

212% higher383

MOU Lvl 2

MA Lvl 1

- 39.46

209% higher

- 40.65

215% higher

MOU Lvl 3

MA Lvl 2

- 40.83

195% higher

- 42.05

201% higher

MOU Lvl 4

MA Lvl 3

- 43.00

189% higher

- 44.31

194% higher

359. Casuals who work at events on a public holiday have rates which range

from approximately 22% to 263% lower in comparison to the rates

they would receive if they were covered by the Modern Award.

381 Calculated by multiplying the permanent base rate by 2.25 (casual loading of 25% (cl 12.5(a)) plus Sunday loading of 200% (cl 27.2(b)). 382

In comparison to the wages for the 2012-13 financial year in the MOU. 383 In comparison to the wages for the 2012-13 financial year in the MOU.

462

MOU (casuals at events) vs. Modern Award (Public Holiday casual rates)384

1.07.2010 1.07.2011 1.07.2012

Level MOU MA MOU MA MOU MA

MOU Lvl 1

MA Lvl 1

18.05 244% lower

44.05 18.59

244% lower

45.54 19.15

244% lower

46.86

MOU Lvl 2

MA Lvl 1

18.14 44.05

242% higher

18.50 45.54

246% higher

18.87 46.86

248% higher

MOU Lvl 3

MA Lvl 2

19.86 45.37

228% higher

20.28 47.10

232% higher

20.87 48.48

232% higher

MOU Lvl 4

MA Lvl 3

21.58 48.01

222% higher

22.29 49.63

222% higher

22.74 51.09

224% higher

Level 1.07.2013 1.07.2014

MOU MA MOU MA

MOU Lvl 1

MA Lvl 1 -

48.23 251% higher385

-

49.66 259% higher386

MOU Lvl 2

MA Lvl 1

- 48.23

255% higher

- 49.66

263% higher

MOU Lvl 3

MA Lvl 2

- 49.88

239% higher

- 51.39

246% higher

MOU Lvl 4

MA Lvl 3

- 52.52

230% higher

- 54.14

238% higher

384 Calculated by multiplying the permanent base rate by 2.75 (casual loading of 25% (cl 12.5(a)) plus public holiday loading of 250% (cl 27.3). 385

In comparison to the wages for the 2012-13 financial year in the MOU. 386 In comparison to the wages for the 2012-13 financial year in the MOU.

463

Conclusions

360. The above comparisons speak for themselves.

361. Cesar Melhem submitted that, because the cleaning services industry is

heavily casualised, and because union representation is low, it is

somehow acceptable to disregard the applicable award provided that

regularity of income and work is secured. Moreover, acceptance of a

payment from the employer for doing so is also acceptable.387 The

fallacy in assertions of this kind is addressed in connection with the

2004 EBA, in section D, above.

362. Cesar Melhem also tried to cast blame on John-Paul Blandthorn for

‘selling out’ the workers.388 This submission was rather inconsistent

with his submission that the arrangement was acceptable from the

point of view of the workers because of the reality of the cleaning

industry. John-Paul Blandthorn in turn seeks to cast blame on Cesar

Melhem.389 In truth they are both to blame.

363. Cesar Melhem’s assertion that he was not responsible for the

negotiations with Cleanevent in 2010 fails on the facts. A plain reading

of the evidence, and in particular the contemporaneous documents,

shows that both Cesar Melhem and John-Paul Blandthorn were

involved in and directly responsible for what occurred in relation to the

MOU.390 John-Paul Blandthorn could not properly have been

387 Submissions of Cesar Melhem, 20/11/15, ch 2, paras 21-23. 388 Submissions of Cesar Melhem, 20/11/15, ch 2, para 24. 389

Submissions of John-Paul Blandthorn, 20/11/15, paras 35-37; Submissions of Cesar Melhem, 26/11/15. 390

See Submissions of Counsel Assisting, 6/11/15, ch 2, paras 169-173.

464

described as a senior organiser at this time, but even if one accepts

Cesar Melhem’s submissions that he was, Cesar Melhem himself

actually took responsibility for both the negotiation and

implementation of the Side Letter.

364. Cesar Melhem also submitted that the assessment of Ben Davis that

acceptance of payments from employers weakens the bargaining

position of the AWU should be disregarded.391 However, what

occurred in 2010 in respect of Cleanevent actually demonstrates the

point made by Ben Davis. As the Side Letter documented, the AWU

Vic accepted $25,000 per annum in return for agreeing to continue the

2006 EBA and not terminate the 1999 Award. Negotiations in 2010

between Cleanevent and the AWU Vic were at least as much

concerned with two questions: ‘What amount is to be paid to the

AWU Vic?’ and ‘How if at all is the arrangement to be documented?’

as they were with the terms and conditions on which Cleanevent

workers were to be employed. It is pure fantasy to suggest that in these

circumstances the payment did not influence those negotiations

adversely from the point of view of those workers. The AWU Vic had

a very powerful bargaining chip in negotiations: a new statutory

regime which required satisfaction of the ‘better off overall test’.

Cesar Melhem and John Paul Blandthorn cashed in that chip not for the

benefit of the Cleanevent workers but for the benefit of the AWU Vic.

365. In section L, below, consideration is given to whether these matters

may have involved contraventions of the law.

391 Submissions of Cesar Melhem, 20/11/15, ch 2, paras 25, 27.

465

J – MEMBERSHIP ARRANGEMENTS: OPT-OUT CLAUSES

366. It is convenient at this point to diverge briefly to discuss opt-out

arrangements. It is clear that, for some time, Cleanevent included in its

employment application forms an ‘opt out clause’ for AWU

membership. The effect of the clause was that, if the employee did not

tick the box next to the clause when completing the application form,

he or she was deemed to have joined the AWU. As has been indicated,

a similar arrangement was proposed with Steven Hunter from DSS.

367. The precise time at which the arrangement was in force was not clear.

Steven Hunter said that the form was in use during his time at

Cleanevent from 1996 through to about 2001.392 Bill Shorten stated

that he ‘might well have aspired to an opt-out arrangement’ during his

time as a Cleanevent organiser, but that he would have to see the

membership forms to confirm whether that arrangement was in

place.393 He denied that the AWU was forcing people to be in the

union.394 Cesar Melhem said such an arrangement was in place up to

about 2009. 395

368. It is evident that, by 2010, this practice was no longer in place.

Julianne Page said that she did not believe that opt-out forms were ever

392 Steven Hunter, 19/10/15, T:591.28-30. 393 Bill Shorten 8/7/15, T:59.6-8. 394

Bill Shorten 8/7/15, T:59.14-15. 395 Cesar Melhem, 22/10/15, T:887.24-34.

466

put into practice. To her understanding, the application forms for

Spotless workers always had an area for them to join any union.396

369. Nonetheless, it would appear that the AWU continued to seek that

Cleanevent use clauses of this nature. This seems to be what was

referred to in an email from Michael Robinson to Julianne Page of 17

May 2010.397 The issue was still being pursued in late 2012. On 7

September 2012 the executive assistant to Cesar Melhem sent an email

to Michael Robinson proposing a meeting with Cesar Melhem and

John-Paul Blandthorn at the offices of AWU Vic.398 Several dates for

the meeting are proposed between 17 September 2012 and 25

September 2012. On 8 October 2012 John-Paul Blandthorn sent an

email to Steven Webber, copied to Cesar Melhem, stating:399

As per our discussions attached is a clause drafted by our lawyers to be included in the letter of offer to employees.

Cleanevent has a sound, cooperative and collaborative relationship with The Australian Workers’ Union. Together, Cleanevent and the AWU strive towards best practice standards for service to clients and working terms and conditions for all workers. Cleanevent promotes full AWU membership across its workforce. By accepting your offer of employment you agree to become a member of the AWU, unless you advise Cleanevent to the contrary, by ticking the box below.

[ ] I do not wish to become a member of the AWU.

396 Page MFI-1, 19/10/15, T:8.43-47, 9.3-4. 397 Page MFI-1, 19/10/15, p 2 398

Cleanevent MFI-1, 19/10/15, p 330. 399 Cleanevent MFI-1, 19/10/15, p 331.

467

370. Cesar Melhem again affirmed that this issue was raised in 2012 and

that the AWU Victorian Branch sought legal advice in relation to the

clause at that time.400

371. Opt-out clauses raise several issues.

372. First, the adoption of such forms, particularly in circumstances in

which applicants for casual cleaning work might be transient and may

well not be sophisticated in matters of industrial relations, carries a risk

of denying workers an informed choice as to whether to join a union.

That denial is inconsistent with right of free association.

373. Secondly, depending on the wording of the form, the worker may not

be properly informed about the financial consequences of membership.

If payroll deductions or direct debits are processed without some

express written authorisation of the worker (rather than a failure to tick

a box on an unrelated form) it is likely that AWU rules 10(6) and (7)

would not be complied with.401

374. Thirdly, there are obvious privacy issues associated with the union

learning personal information about workers who became members

without having read or understood the opt-out clause.

375. The use of opt-out forms to secure increases in membership is beset

with many of the problems associated with payment of membership

contributions by an employer, discussed in section G above. The

problems are also akin to some that arose in the CFMEU ACT case

400 Cesar Melhem, 22/10/15, T:887.38-45. 401 See para 311.

468

study, which dealt in part with the attempts by organisers to compel

employers to make their workers become union members. All of these

categories of conduct undermine freedom of association.402

K – THE FATE OF THE 2006 EBA

376. Despite the fact that the term of the MOU came to an end on 1 July

2013, Steven Webber gave evidence that the AWU and Cleanevent

proceeded on the basis that it was still on foot following after that

time.403 It would seem that no further payments under the Side Letter

were made.

377. On 4 July 2013 Steven Webber sent an email to John-Paul Blandthorn

stating:404

A note to inform you that we have made a decision to pass on to all staff under the EBA a 2.6% increase pending finalisation of our agreement.

Once we finalise all staff will be back payed [sic] any short pay.

I am sure you will receive some calls on this so I wanted to ensure you were fore armed with our position.

378. John-Paul Blandthorn responded on 4 July 2013, attaching the 1999

Award and noting that the rates were ‘not right’.405

379. On 7 July 2013, Steven Webber sent an email to John-Paul Blandthorn

attaching a letter from the Fair Work Commission and stating that he

402 See Ch 6.4. 403 Steven Webber, witness statement, 28/5/15, para 16. 404

Cleanevent MFI-1, 19/10/15, p 334. 405 Cleanevent MFI-1, 19/10/15, pp 334-372.

469

would ring John-Paul Blandthorn on Monday to discuss.406 The letter,

dated 3 July 2013, refers to the 1999 Award and advises that, by

operation of Schedule 6 to the Fair Work (Transitional Provisions and

Consequential Amendments) Act 2009 (Cth), the 1999 Award will be

terminated unless an application to modernise the Award is made and

granted by 31 December 2013.407

380. John-Paul Blandthorn responded on 8 July 2013, stating:408

This is what I was talking to you guys about.

You have a short window of opportunity to make a new agreement with this as the reference award before you fall under the Modern award.

It is unlikely you will get the Enterprise Award extended because United Voice will easily be able to knock it off by claiming the Modern Award already deals with it.

I am around today and tomorrow if you want to catch up.

381. It appears that, following this exchange, John-Paul Blandthorn and

Steven Webber continued negotiations with a view to agreeing an EBA

with the 1999 Award as the relevant award, prior to the termination

deadline. A diary invitation sent from Steven Webber to John-Paul

Blandthorn and Ryan Murphy proposed an ‘EBA Workshop’ at

Cleanevent’s offices on 31 July 2013.409

382. On 31 July 2013 at 8.25am, John-Paul Blandthorn sent an email to

Steven Webber. It confirmed that the correct industrial instrument for

406 Cleanevent MFI-1, 19/10/15, p 373. 407 Cleanevent MFI-1, 19/10/15, pp 378-379. 408

Cleanevent MFI-1, 19/10/15, p 394. 409 AWU MFI-14, 6/11/15, p 3.

470

the then applicable Better Off Overall Test was the 1999 Award. It set

out a table showing the weekly increases in weekly and hourly pay

rates for level 1 and 2 employees following the increases granted by

the Australian Fair Pay Commission and Fair Work Australia. The

email concluded ‘See you shortly.’410

383. It is evident from the above exchange that John-Paul Blandthorn

continued to be alive to the commercial attractiveness of retaining the

rates in the 1999 Award as the comparator, compared with the Modern

Award. The fact that he actively sought to assist Cleanevent to extend

its advantage in the face of a clear legislative provision that

Cleanevent’s employees should be benefiting from a more generous

industrial regime further illustrates the extent to which the AWU Vic’s

capacity to represent its members was undermined by what occurred in

2010.

384. The next dealing between the AWU and Cleanevent appears to have

occurred in June 2014, when Cleanevent approached the AWU seeking

approval of a proposed EBA underpinned by the Amusement, Events

and Recreation Award 2010.411 The proposed agreement was

circulated nationally and officials of several branches expressed

concern about the terms of the proposed EBA. On 27 June 2014 Daniel

Walton, Assistant National Secretary of the AWU, informed Steven

Webber that the AWU would not sign the agreement and would oppose

approval by the Commission.412 It appears, from submissions to the

Fair Work Commission on the AWU’s application to terminate the

410 Cleanevent MFI-1, 19/10/15, p 395. 411 Shorten MFI-5, 8/7/15, Vol 2, p 196. 412

Shorten MFI-5, 8/7/15, Vol 2, p 197.

471

EBA, that further negotiations proceeded between Cleanevent and the

AWU after this time.413

385. Ben Davis gave evidence that he first became aware of the Side Letter

when he came upon it when preparing documents in response to a

Notice to Produce issued by the Commission.414 After that, he spoke

with John Douglas of Cleanevent on about 13 March 2015 and told

him that the arrangement was off.415 Ben Davis’s evidence is that he

did so because he believed that the arrangement was ‘untoward’. He

said:416

Q. You thought it was untoward that – well, what particular aspect of the arrangement did you regard as untoward?

A. As well as the whole notion of paying – the employer paying membership fees, the fact that it was attached to the MOU.

386. On 4 June 2015 the AWU filed with the Fair Work Commission and

served on Cleanevent an application to terminate the 2006 EBA.417

The letter of service advised that the AWU’s position was that the

Cleaning Services Award 2010 was the relevant Modern Award, and

not the Amusement, Events and Recreation Award 2010.

387. In the submissions filed with the Fair Work Commission, the AWU

contended:418

413 Shorten MFI-5, 8/7/15, Vol 2, pp 200-201. 414 Ben Davis, 4/6/15, T:647.12-27. 415

Ben Davis, 4/6/15, T:647.29-46, 653.27-40. 416 Ben Davis, 4/6/15, T:648.1-9. 417

Shorten MFI-5, 8/7/15, Vol 2, pp 177-181. 418 Shorten MFI-5, 8/7/15, Vol 2, p 189 [11]-[12].

472

Employees covered by the 2006 Agreement are currently being denied access to the safety net contemplated by the Fair Work Act 2009.

This is because their employment conditions are still governed by the 2006 Agreement which was negotiated under predecessor legislation which did not require an assessment of whether employees would be better off overall under the proposed agreement than they otherwise would be under the relevant modern award.

388. The submission also noted that the casual loading and rates of pay in

the 2006 EBA both fell below the 2014 National Minimum Wage

Order.419

389. On 12 June 2015, the 2006 EBA was terminated by order of the Fair

Work Commission.420 The submissions put forward by the AWU and

accepted by the Fair Work Commissioner included statements to the

effect that:421

(a) the view of the AWU, and employees the AWU has spoken

with, is that the 2006 EBA should be terminated;

(b) under the 2006 EBA, employees working at events do not

receive higher rates when they work on weekends and public

holidays;

(c) although the termination of the 2006 EBA might result in

higher operating costs for the employer, the Award rates have

been carefully determined by the Fair Work Commission and

are presumably being paid by Cleanevent’s competitors; and

419 Shorten MFI-5, 8/7/15, Vol 2, p 189 [15]. 420 Shorten MFI-5, 8/7/15, Vol 2, pp 217-221. 421

Bill Shorten 8/7/15, T:63.43, 65.18-25, 41, Shorten MFI-5, 8/7/15 Vol 2, pp 189-190, 208, 219 [15], [17]-[18].

473

(d) there does not seem to be any real benefit for an employee

from the 2006 EBA remaining operative, the only purpose of

which is to deny employees, particularly casual employees,

access to penalty rates.422

390. The accuracy of all of these statements is borne out by the evidence.

They were all equally valid statements in 2010. All, it is

overwhelmingly likely, would have been accepted by the Commission

in 2010 had an application been made to terminate the 1999 Award and

2006 EBA.

L – CONCLUSIONS

391. Counsel assisting submitted that, as a result of the conduct described

above, findings should be made that various persons may have

breached their fiduciary duties and may have committed criminal

offences. Many of the features of this case study were present in the

Thiess,423 ACI424 and Chiquita425 case studies, discussed below. Some

of these issues arise also in the CFMEU NSW Building Trades Group

Drug and Alcohol426 and CFMEU CSI and CCW427 case studies. It is

convenient, in dealing with counsel assisting’s submissions, to deal

also with some common legal issues that arise and which were debated

422 Shorten MFI-5, 8/7/15, Vol 2, pp 189-190, 208. 423 Chapter 10.3. 424

Chapter 10.5. 425 Chapter 10.6. 426

Chapter 7.4. 427 Chapter 6.6.

474

in submissions. At times in what follows, some familiarity is assumed

with some of the other AWU case studies.

Fiduciary Duties

392. Counsel assisting submitted that the relevant industrial officers

undertaking negotiations on behalf of AWU members and other

workers to be covered by an industrial agreement owed fiduciary

duties to those workers. The submissions by affected parties denied

any duty of this nature, and said that if the duty existed, it was not

breached. Similar submissions were made in the other case studies

referred to above. Some of the various issues thrown up in these

submissions are addressed in this section.

Circumstances in which the duties arose

393. There are some categories of fiduciary duty which are accepted as

automatically arising, for example, trustee/beneficiary, agent/principal,

solicitor/client, employee/employer, director/company, partners,

certain receivers, guardian/ward. The relationship of union official and

member is not one of these established categories of fiduciary duty.

Those categories are not closed. Other categories of fiduciary duty

arise out of the circumstances of the particular case. The question of

whether fiduciary relationships arise outside of those categories

depends upon a close analysis of the particular facts involved. The

answer to that question depends upon the application of the principle

expressed in the following passage of the judgment of Mason J in

475

Hospital Products Ltd v United States Surgical Corporation (1984)

156 CLR 41:428

… The critical feature of these relationships is that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense. The relationship … is therefore one which gives the fiduciary a special opportunity to exercise the power or discretion to the detriment of that other person who is accordingly vulnerable to abuse by the fiduciary of his position. …

It is partly because the fiduciary's exercise of the power or discretion can adversely affect the interests of the person to whom the duty is owed and because the latter is at the mercy of the former that the fiduciary comes under a duty to exercise his power or discretion in the interests of the person to whom it is owed.

394. All of the case studies in which this question arises concern

negotiations for industrial instruments by unions and their officials.

For that reason, it is relevant, in considering whether any fiduciary

duties are owed, to consider the statutory framework within which

those negotiations took place. Different provisions were applicable in

different case studies. Some of the submissions of affected parties

appeared to approach the matter from the perspective that these

provisions were the only matters capable of giving rise to a fiduciary

relationship. That perspective is incorrect. They are one of many

matters. The question requires the application of the principle

articulated by Mason J in all of the factual circumstances.

395. The statutory provisions relevant in respect of the Cleanevent case

study and the CFMEU CSI and CCW case study are contained in the

Fair Work Act 2009 (Cth). From 1 July 2009, s 176 of the Fair Work

428 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 96-97 per Mason J (emphasis added).

476

Act 2009 (Cth), provided that a union is automatically a ‘bargaining

representative’ for each employee who is a member of the union who

will be covered by a proposed enterprise agreement which is not a

‘greenfields agreement’ (the union member employees), provided that

the union is entitled to represent the industrial interests of the

employees in relation to work that will be performed under the

agreement: ss 176(1)(b), 176(3).

396. A union member employee who will be covered by the proposed

agreement may appoint another person as his or her bargaining

representative, but in the absence of such appointment the union will

be the bargaining representative of the union member employee:

ss 174(3), 176(1)(b).

397. The role of a union bargaining representative is to engage in ‘good

faith bargaining’ with employer bargaining representatives. While s

228 of the Fair Work Act 2009 (Cth) is directed in the main at the

conduct of a bargaining representative with respect to his or her

employer counterpart, it is an inherent aspect of the process of

enterprise bargaining that during negotiations the union, through its

relevant officers, acts on behalf of and represents the interests of the

union member employees.

398. A bargaining representative cannot bind members to an enterprise

agreement. In order for an agreement that is not a greenfields

agreement to be made, the employees who will be covered by it need

to approve it (Fair Work Act 2009 (Cth), ss 181, 182). This was said

by many affected parties to have the consequence that bargaining

representatives are not fiduciaries. Such submissions take too narrow a

477

view of the circumstances in which a fiduciary relationship may arise.

They put to one side Mason J’s reference to the capacity of a fiduciary

to affect the interests of a principal in a ‘practical sense’. Some of the

established categories of fiduciaries cannot affect the interests of their

principals in a legal sense: to take just one example, the relationship of

doctor and patient.

399. These submissions also do not reflect the reality of the bargaining

process. In the ordinary course, workers asked to vote on an

agreement will not know any or all of the complexities of the

bargaining process that preceded it. They will not ordinarily be in a

position to judge to what extent that process has been undertaken in

their interests. They are in a position where they are asked to trust that

it has been. They are free at any point during this process to appoint

some other bargaining agent. But if they do not they must assume that

the agreement they are asked to approve is the best that the union has

been able to achieve on their behalf. All of these matters point

strongly to the conclusion that the bargaining representative is a

fiduciary.

400. The above analysis has dealt with the position under the Fair Work Act

2009 (Cth). The other case studies pre-date the coming into force of

that Act. The statutory provisions in the ACI and Chiquita Mushrooms

case studies are different but the differences are not overly significant.

The Workplace Relations Act 1996 (Cth) as in force at the times of the

negotiations of the enterprise agreements considered in those case

studies did not include a statutory recognition of the role of ‘bargaining

agent’. However the position was in substance no different. The

AWU was negotiating with ACI and Chiquita Mushrooms for the

478

purposes of making an enterprise agreement under s 170LJ. In doing

so, the AWU was negotiating on behalf of its members who were

employed by those respective companies. Workers were not bound by

that agreement unless and until it was approved by a requisite majority

and certified by the Commission (see ss 170LJ(2), 170LT(5)). The

absence of any statutorily defined concept of bargaining agent does not

detract from the proposition that the negotiations affected the interests

of the workers in question in a real and practical sense.

401. The Thiess case study throws up a different situation because it

concerned a greenfields project. In one sense the negotiations for the

Thiess project more clearly involved a fiduciary relationship than do

ordinary enterprise negotiations. That is because under the statutory

regime in force, the agreement reached between the AWU and Thiess,

once certified, bound those who came to be employed by Thiess.429

Thus, this is an example of a situation where someone has the capacity

to affect the interests of another in both a legal and a practical sense. It

was submitted by Thiess that the AWU must have negotiated the

agreement as principal and not agent because (since no employees had

at that time been engaged by the joint venture) there was no identified

principal. Let it be assumed that the AWU was not an agent. However

that does not conclude the question of whether fiduciary duties were

owed. It is perfectly possible for fiduciary duties to be owed by

persons who contemplate the creation of a relationship which will be

fiduciary even though the relationship in its substantive operation will

exist only in the future. A joint venture arrangement, not yet formally

documented, for the development of certain land has been held

429 Workplace Relations Act 1996 (Cth), ss 170LL, 170M.

479

analogous to a partnership, so that the relationship between the

venturers was fiduciary in character even before the execution of the

joint venture agreement.430 Similarly, a fiduciary relationship was

found between parties who were negotiating for, but had not yet

concluded, a partnership to operate a pharmacy.431 It is true that in

those instances the identity of those whose interests the fiduciary must

protect is known to the fiduciary. But a promoter of a venture can be a

fiduciary even though the ‘principals’ are not known to the promoter.

If it is objected that this cannot be so, because of the difficulty facing

the promoter in getting informed consent to conduct while in a position

of conflict – a difficulty which may be even greater for a union and its

officials negotiating corporations in relation to a greenfields project –

there is an answer. Equity does not say: ‘It is a precondition to

recognition of a fiduciary duty that the fiduciary be able to avoid

breach by getting the principal’s informed consent.’ Equity rather

says: ‘If there is a fiduciary duty, the fiduciary can avoid breach by

establishing informed consent if it can; if it cannot, unfortunately, the

consequences of breach follow.’ An illustration of that arises when a

fiduciary relationship is based on or is governed by a contract and the

fiduciary wishes to vary the contract to its advantage. At once the

fiduciary is in a position of conflict between the burden of its duty

under the original contract and its self-interest in lightening that

burden. It can be very hard for the fiduciary to make sufficient

disclosure to ensure that any consent given is fully informed. It can be

very difficult to formulate in advance which fiduciary protections are

being surrendered and which types of hitherto forbidden conduct on

430 United Dominions Corp Ltd v Brian Pty Ltd (1985) 157 CLR 1. 431 Fraser Edmiston Pty Ltd v AGT (Qld) Pty Ltd [1988] 2 Qd R 1.

480

the fiduciary’s part are thus being permitted. But in a sense this debate

does not matter. That is, it does not matter whether or not a fiduciary

duty is owed by a trade union (or its officials) in negotiating an

agreement with a proprietor or a construction company on a

greenfields project. Even if there is no fiduciary duty, there are other

duties. They are the duties which paragraphs (f) and (g) of the Terms

of Reference mention – the professional standards applying to officers

of an employee association. Trade union officials acting for the union

and negotiating with proprietors or construction companies, behaving

professionally, could not take money either for themselves or for the

union in the course of negotiations. To do so would tend to weaken the

zeal and skill with which they attempt to secure the interests of those

persons who will eventually become the workers on the contemplated

project.

402. For the reasons given above, unions and their officials involved in the

bargaining process owe duties of one kind or another to those members

who are or who may be employed by the company in question. It is

necessary to deal with further submissions said by affected parties to

undermine this conclusion. They were not persuasive.

403. In relation to the Cleanevent case study, it was submitted by Cesar

Melhem that the statutory context was irrelevant because the MOU

was not covered by the Fair Work Act 2009 (Cth). It was said that the

employees were ‘entirely at liberty’ to negotiate their own terms and

conditions.432 This is a highly unattractive submission because it

ignores the fact that the plain intention of everyone involved in the

432 Submissions of Cesar Melhem, 20/11/15, ch 2, para 14.

481

negotiations was to reach an agreement which would govern the rights

of Cleanevent employees despite their non-participation in

negotiations.

404. In any event, if Cesar Melhem’s submission is right, it makes the

existence of the fiduciary duty all the more plain. Because the

provisions of the Fair Work Act 2009 (Cth) were not followed, the

MOU purported to bind Cleanevent employees. It is certain that not all

of them consented. It is unlikely that any of them consented.433 The

scrutiny of the Fair Work Commission was avoided. These

circumstances make it all the more obvious that the AWU had the

capacity to affect the interests of Cleanevent employees in a practical

sense. In addition, the AWU’s role as a default bargaining

representative was factually relevant to the course of events that led to

the MOU. As the correspondence outlined in section G makes plain,

Cleanevent negotiated with the AWU to secure the MOU precisely

because, as Michael Robinson indicated an email to Steven Webber

and Julianne Page, the AWU was in a position under the prevailing

legislation to ‘send us straight to the Modern Award rates.’434

405. A number of affected parties advanced the proposition that neither the

AWU nor its officials were agents of the workers on behalf of whom

they were negotiating. It may be accepted that neither the AWU nor its

officials had authority to bind those workers to the terms of the

agreements that were negotiated. For reasons already given, that is not

433 As stated in section G, above, a ‘poll’ of some kind was conducted by John-Paul Blandthorn. There is no suggestion that this involved the MOU itself as distinct from a survey of some unspecified persons as to their attitude to the wage increases for which the MOU provided. 434

Cleanevent MFI-1, 19/10/15, p 175.

482

decisive. The question of whether they were agents in some particular

sense during the bargaining process is debatable but not necessary to

determine. Not every agent will owe fiduciary duties.435 The issue is

whether fiduciary duties were owed.

406. A number of affected parties submitted that union officials owed

duties to their respective unions, and not to the members of those

unions. The submission that union officials owe duties to their union is

correct.436 But it does not entail the conclusion that they do not, in

particular circumstances, also owe duties to their members. Thus, for

example, in particular circumstances, a company director can owe

fiduciary duties to shareholders notwithstanding that it also owes

fiduciary duties to the company.437 As Evatt and Northrop JJ pointed

out in Allen v Townsend:438

In our opinion, members of the committee of management of an organization, a branch of an organization or a sub-branch of a branch of an organization owe a fiduciary duty to members of the organization, to members within the branch and to members within the sub-branch as the case may be. Members of committees of management are to be compared with directors of incorporated bodies being companies incorporated under legislation such as the Companies Acts of the States of Australia. 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.

435 See Meagher Gummow & Lehane’s Equity: Doctrines and Remedies (5th ed) LexisNexis Butterworths, Sydney 2015 [5-215]-[5-225]. 436

See Chapter 3, Volume 5 of this Report. 437 Brunninghausen v Glavanics (1999) 46 NSWLR 538 at 558 per Handley JA, and the authorities cited at 549-560; Charlton v Baber (2003) 47 ACSR 31. 438

(1997) 31 FLR 431 at 483-484.

483

There are many similarities between organizations and legal persons incorporated under the Companies Acts. Each is a creature of statute. Their essential similarity is that each has a legal personality separate and distinct from its members. Each has an independent existence as a legal person. Each is given a personality which is distinct from that of all or any of its members and which continues to subsist unchanged notwithstanding the changes which are bound to occur from time to time in its membership. Each has perpetual succession. Each maintains its identity and its personality notwithstanding changes in its membership, which may occur from day to day. The property of each does not belong to its members from time to time. Each must act at the direction of individuals who manage its activities. The powers of these individuals depend upon the rules which regulate the affairs of the incorporated body. The rules may be included in the memorandum and articles of association of companies incorporated under the Companies Acts or in the rules of organizations made pursuant to the Act. The rules include not only the objects to be pursued by the incorporated body but also the powers by which those objects are to be pursued. The rules also contain provisions regulating the affairs of the members as between themselves. Normally the rules provide for a small group of natural persons to be the appropriate group to manage the affairs of the incorporated body subject to eventual control by all the members. Though in theory the ultimate control is conferred upon and retained by the members of the incorporated body, in practice, the group managing the affairs of the incorporated body has a very substantial control over the affairs of that body, the affairs of its members, and the privileges and obligations affecting different groups of members within that body. Within organizations, the committees of management constitute the managing group.

The analogy between company directors and union officials suggests

that the latter, like the former, owe fiduciary duties. And the analogy

also suggests that those fiduciary duties are owed not only to the

company or the registered organisation, but to the members.

407. Nor is it possible to see, at least in the particular situation of the

enterprise bargaining process, how there could be any conflict between

duties owed by officials to their union and duties owed to the members

on behalf of whom they are bargaining. Some of the primary objects

484

of the AWU include the object of acting in the interests of members.439

It is not without significance that union officials themselves perceived

that during the EBA negotiation process they were acting on behalf of

AWU members. John-Paul Blandthorn for example accepted that

when undertaking negotiations for the EBA and the MOU, he was

acting on behalf of the AWU members employed by Cleanevent.440

Cesar Melhem said that in that capacity he was acting for the members,

the employees and the enterprise.441

408. Counsel assisting drew attention to the potential difficulty that might

arise by reason of the potential for conflict as between the interests of

members on behalf of whom the union and its officials are bargaining.

So, for example, a particular EBA might be a better result for

permanent workers than for casual workers. This, however, does not

undermine the proposition that fiduciary duties are owed directly to

members. The particular duty in question is a duty during the

bargaining process. It is not a duty to obtain any particular outcome

for members at the end of that process. And, in any event, if there is a

significant risk of conflict during that process, the union and its

officials can declare it and seek consent to proceed, or withdraw.

There is the further point that balancing the competing interests of

classes of persons to whom duties are owed is not unknown to the law

of fiduciaries. For example, it can arise in a trust with different classes

of beneficiary. It can arise in a trust where there are beneficiaries

interested in income and other beneficiaries interested in remainder,

439 See AWU Rules, 2006, r 4 (AWU MFI-2, 23/10/15, pp 23-24), AWU Rules, 2015, r 4 (Melhem MFI-1, 1/6/15, p 8). 440

John-Paul Blandthorn, 20/10/15, T:758.29-31. 441 Cesar Melhem, 22/10/15, T:889.1-5.

485

and therefore in capital. In a slightly different context, a director when

discharging his duties to a company in financial difficulties must have

regard to the interests of shareholders and creditors,442 notwithstanding

that the interests of each may differ, or the interests of different

creditors may differ as between them.

409. Counsel assisting drew attention to the decision of the Fair Work

Commission in Jupiters Ltd v United Voice.443 That was a

determination of an application under s 229 of the Fair Work Act 2009

(Cth) for bargaining orders against a union. The complaint was that

the union was disseminating false information about a wages offer

made by an employer during the bargaining process. This was said to

contravene the requirement that the union bargain in good faith. The

particular orders sought were orders requiring the union to desist from

displaying and disseminating particular information about the

bargaining process. The Commission accepted that a deliberate

misrepresentation of the kind alleged could trigger the discretion to

make a bargaining order but found that the union was not making any

misrepresentations, deliberate or otherwise. On this basis, the

application was dismissed.444

410. A submission was made by the applicant that the union during the

bargaining process owed fiduciary duties to its members. That

submission was rejected by the Commission. Counsel assisting

submitted that the reasoning on this point was plainly wrong. That

submission, with great respect to the Commission, is accepted

442 Walker v Wimborne (1976) 137 CLR 1 at 6-7 per Mason J. 443 [2011] FWA 8317. 444

[2011] FWA 8317 at [40]-[41], [49].

486

(although there is, also with respect, no reason to doubt the correctness

of the ultimate result reached by the Commission). The reasoning

commences with the proposition445 that ‘Fiduciary obligations arise

from a general rule that a fiduciary must not benefit or gain an

advantage from a fiduciary position in terms of conflict of duty or

interest, without the informed consent of the beneficiary’. It is then

said446 that ‘[i]t is difficult to see how a union (or its officials…) could

obtain a personal benefit, profit or advantage in the context of

representing members in negotiations for an enterprise agreement’.

The first step incorrectly treats the result of the existence of a fiduciary

relationship as a reason for finding that a fiduciary relationship exists.

The second step asserts a factual proposition that is demonstrated by

the AWU case studies to be false. The reasoning goes on to refer to

the argument that unions cannot affect the legal interests of their

members during the bargaining process. The difficulties with that

argument have been dealt with above. It is also said that the

obligations imposed on bargaining representatives by s 228 of the Fair

Work Act 2009 (Cth) are sufficient to ensure they ‘conduct themselves

properly’. However, these obligations are obligations to the other

bargaining party. They are not obligations to the persons represented

by the bargaining representatives. This rather reinforces the

proposition that the persons represented by the bargaining

representatives are, in the relevant sense, vulnerable and may have

their interests affected in a practical sense.

445 [2011] FWA 8317 at [36]. 446 [2011] FWA 8317 at [37].

487

411. What would follow if the submissions for affected parties were correct,

and no fiduciary duties were owed? It would greatly undermine the

enterprise bargaining process, unless there were equivalent standards

of a professional character in operation. Absent any provision to the

contrary in their rules (and there is none in the AWU rules), and

provided they obeyed the criminal law, unions would be entitled to use

that process to extract from employers as much money as possible for

the union’s own benefit and leave employees with terms and

conditions of employment no better than award rates. Workers would

have no interest in permitting unions to be bargaining representatives.

They could have no confidence that the bargaining process was

conducted in their interests, and no redress if it was not.

412. These consequences may not compel rejection of the submissions of

the affected parties on this point. But they sit very comfortably with

that rejection.

413. The submissions of counsel assisting on this topic are, generally,

accepted. A union and its officials negotiating enterprise agreements

on behalf of members are fiduciaries. That may be so even in

‘greenfields’ circumstances.447 But even if it is not so there, there must

be equivalent duties arising out of the operation of professional

standards. As such, they owe those members duties to:

447 See above para 401.

488

(a) avoid a position where there is a conflict, or a sensible, real or

substantial possibility of conflict, between their interest and

duty or between their duties;448 and

(b) avoid using their positions to confer an advantage on

themselves or someone else or to act to the detriment of the

members.449

Conflict of interest

414. Counsel assisting submitted that Cesar Melhem, John-Paul Blandthorn

and the AWU all acted in a position of conflict of interest in relation to

the Cleanevent MOU. That submission is accepted. The conflict was

stark. The AWU Vic wanted an amount of $25,000 a year for three

years. The price for obtaining it was abstention from seeking better

terms and conditions for its members employed by Cleanevent.

415. Submissions for affected parties asserted, both in the Cleanevent case

study and in other AWU case studies, that there was no conflict of

interest. These submissions were cast in different terms but in

substance came down to two propositions. First, that the payments of

money to the union procured during or as a result of the negotiation

process were for the ultimate benefit of the union’s members.

Secondly, that the bargaining process was not compromised in any

way, and that the workers in question obtained good results or the best

results that could have been achieved in the circumstances.

448 Breen v Williams (1996) 186 CLR 71 at 113; Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165 at 197 [74], 198 [77]-[79]; Clay v Clay (2001) 202 CLR 410 at 436; Howard v FCT (2014) 88 ALJR 667 at 677 [33], 681 [56], [59], [61]. 449

Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41.

489

416. Both propositions, even if correct, are irrelevant to the question of

whether there was a breach of fiduciary duty. To establish a breach it

is not necessary to show actual conflict or actual detriment as a result.

It is necessary only to show that a fiduciary duty exists and that the

fiduciary acted in a position of real or sensible possibility of conflict.

417. On a factual level, these submissions are most obviously wrong in the

case of the Cleanevent case study. To obtain a better deal for workers

all that was necessary was for the AWU to go to the Fair Work

Commission. It did not because of the promise in the side-letter to pay

$25,000 a year to the union. It is true that that money was an ultimate

benefit to the union, but the side deal was contrary to the interests of

the AWU members who were employed by Cleanevent because (for

the reasons explained in section I, above) it resulted in less favourable

conditions of employment than would otherwise have been achieved.

The union and its officials acted in a position of actual conflict. This

resulted in demonstrable detriment to those members.

418. In the ACI, Thiess and Chiquita case studies these submissions also

cannot be accepted. Particular factual issues that arise in those case

studies are considered in the Chapters of this Report dealing with those

case studies. The general difficulty with submissions of this kind is

that they are no more than speculation. The basic problem with an

assertion that these EBAs were good (or bad) results for workers is that

it is impossible to assess what those EBAs would have been like, or

how they would have been implemented, had the corrupt payments not

been made (or had full disclosure of them been made). It is often in

the very nature of such payments that their precise effect cannot easily

be assessed.

490

419. Both Cesar Melhem450 and John-Paul Blandthorn endeavoured to

suggest that the payment of $25,000 was not really a benefit to the

AWU because it was really a payment to compensate the AWU for the

work that it was doing. John-Paul Blandthorn put the matter this way

in his evidence:451

It was to compensate for the extra work the AWU was doing servicing people who were not members of the Union.

…I'm not necessarily sure it was a benefit to the AWU for the amount of time and effort. I mean, it could be well argued by the AWU that the time and effort put in was at the cost of $100,000 or $5 million and that receiving $25,000 went nowhere near to making it a benefit…

420. Similar evidence was given by Cesar Melhem, who persisted in

describing these payments as ‘service fees’. These characterisations of

the payments cannot be accepted. They are inconsistent with what

appears on the face of the Side Letter. They are inconsistent with the

emails that document the negotiations that preceded it. They are

inconsistent with the implementation of the Side Letter. Non-members

never asked the AWU to provide services to them. Members of the

AWU employed by Cleanevent never asked the AWU to provide

services to non-members. The result of the provision of the ‘services’

that Cesar Melhem and John-Paul Blandthorn appear to claim were

provided was that both classes of worker were worse than they would

have been had no services at all been provided and the matter left to

the Fair Work Commission.

421. Arguments of this kind do not, in any event, show that the AWU Vic

did not obtain a benefit. And they do not show that the Side Letter was

450 Cesar Melhem, 22/10/15, T:889.7-17. 451 John-Paul Blandthorn, 20/10/15, T:758.38-759.3.

491

not arrived at in circumstances where there was a real possibility of a

conflict or an actual conflict. In the absence of the Side Letter, no

amount would have been paid to the AWU Vic. Therefore the Side

Letter was a benefit to the AWU Vic.

422. It is for those reasons that it is necessary to accept the submission of

counsel assisting that Cesar Melhem, John-Paul Blandthorn and the

AWU by their conduct in negotiating the Cleanevent 2010 MOU and

Side Letter, may have breached their fiduciary duties to members

employed by Cleanevent.

Unlawful commissions

423. Section 176 of the Crimes Act 1958 (Vic) relevantly provides:

(1) 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 or having done or forborne 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 affairs or business; or

shall be guilty of an indictable offence, and shall be liable if a corporation to a level 5 fine and if any other person to level 5 imprisonment (10 years maximum) or a level 5 fine or both.

424. The term ‘agent’ is defined in s 175(1) to include:452

452 This is the present definition. In 2005 the term ‘legal practitioner’ was inserted to replace ‘barrister or solicitor’. The amendment is immaterial.

492

any corporation or other person acting or having been acting or desirous or intending to act for or on behalf of any corporation or other person whether as agent partner co-owner clerk servant employee banker broker auctioneer architect clerk of works engineer legal practitioner surveyor buyer salesman foreman trustee executor administrator liquidator trustee within the meaning of any Act relating to bankruptcy receiver director manager or other officer or member of committee or governing body of any corporation club partnership or association or in any other capacity either alone or jointly with any other person and whether in his own name or in the name of his principal or otherwise and a person serving under the Crown

425. The term ‘principal’ is defined in the same section to include ‘a

corporation or other person for or on behalf of whom the agent acts has

acted or is desirous or intending to act’.

426. Counsel assisting submitted that the conduct concerning the entry into,

and payments in accordance with, the MOU may constitute offences

against s 176 of the Crimes Act 1958 (Vic). Similar submissions are

made in relation to similar conduct arising in the AWU case studies

concerning Thiess John Holland,453 ACI454 and Chiquita

Mushrooms.455 The operation of the equivalent section in New South

Wales also arises in the CFMEU NSW Building Trades Group Drug

and Alcohol case study.456 It is convenient, in the course of dealing

with the position in relation to Cleanevent, to deal with some of the

common issues raised in these other case studies.

453 See Ch 10.3 paras .

454 See Ch 10.5 paras .

455 See Ch 10.6 paras .

456 See Ch 7.4 paras .

493

Agency

427. The Full Court of the Supreme Court of Victoria observed in R v

Gallagher457 that ‘it is clear that the definition [of agent] includes

many who would not be within the common law concept of an agent’.

In R v Gallagher itself a union official engaged in negotiating terms of

industrial agreements for members was found to be their ‘agent’ within

the meaning of s 176 (notwithstanding that he was also, at the same

time, the agent of his union).

428. A number of affected persons have submitted458 that neither the AWU

nor any of its officials was, at common law, the agent of its members

employed by the company with whom EBA negotiations were being

conducted. The point made is that neither the AWU nor its officials

had the capacity to bind those members to industrial agreements

without their express approval. So much is expressly accepted in

counsel assisting’s submissions. However, the point is not material. It

does not deal with the definition of ‘agent’ in s 175 of the Crimes Act

1958 (Vic), which plainly extends beyond the common law concept.

As the Full Court observed in R v Gallagher, ‘the requirements of the

section in relation to agency are … not strong’.459

429. In the present case, Cesar Melhem and John-Paul Blandthorn were

bargaining representatives for Cleanevent AWU members in respect of

any enterprise agreement that was to have been reached with

457 [1986] VR 219 at 224. 458 See for example Submissions of the AWU, 20/11/15, para 54; Submissions of Cesar Melhem, 20/11/15, ch 1, paras 23-26. 459

R v Gallagher [1986] VR 219 at 226.

494

Cleanevent in 2010. They assumed an equivalent role in relation to the

negotiations for the MOU and were, consistently with authority, an

‘agent’ within the meaning of s 176.

430. Cesar Melhem submitted that he could not have been an agent in

connection with the Thiess John Holland and ACI case studies because

there was no recognition in the statutory regimes in force at the time of

those arrangements of the role of a bargaining representative.460 This

is a similar point to that raised by various affected parties and

discussed above in relation to the issue of whether the AWU and its

officials owe fiduciary duties to the members. In the present context, it

is irrelevant. There is no doubt that Cesar Melhem was, in fact,

bargaining ‘for or on behalf of’ AWU members. He was negotiating

the terms and conditions on which these members would be employed

with these respective companies. Nobody suggests that he was doing

this ‘for or on behalf of’ himself. It does not matter that the bargaining

role was not defined in express terms in the Workplace Relations Act

1996 (Cth): that does not detract from the fact that he was negotiating

industrial agreements under that Act on behalf of his members.

431. Cesar Melhem’s position in this regard is no different from the union

official in R v Gallagher.461 The Full Court observed in that case that

the jury in that case might have concluded the official was an ‘agent’

460 Submissions of Cesar Melhem, 20/11/15, ch 1, para 22. The submission wrongly states that the only basis on which he is said to be an ‘agent’ is either common law agency or as a result of the statutory position of bargaining representative. In fact, the submission is made in each relevant case study that he is an ‘agent’ because, as a matter of fact, he was acting or intending to act ‘for or on behalf of’ the employees for whom he was negotiating the industrial agreement in question: see Submissions of Counsel Assisting, 6/11/15, ch 2, paras 508, 512, ch 3, paras 196, 207, ch 5, para 112. 461

[1986] VR 219.

495

simply because he was entitled to negotiate the terms and conditions of

employment of the union’s members.462 Cesar Melhem had that

entitlement in each of the case studies in question, regardless of the

statutory designation of his role.

Section 176(1)(b) and ‘influence’

432. The reference in ss 176(1)(b) to ‘would in any way tend to influence’

invites attention to whether the benefit would objectively have that

tendency, whether it influences the agent or not.463

433. In relation to the offence under s 176(1)(b), a number of decisions have

held that an agent acts ‘corruptly’ within the meaning of the statute if

‘he receives a benefit in the belief that the giver intends that it shall

influence him to show favour in relation to the principal’s affairs’.464 It

is not necessary for the agent to have an actual intention to be

influenced by the payment.465 The New South Wales Court of

Criminal Appeal has, however, qualified the Victorian approach in

holding that it is necessary to establish that the benefit is corrupt

according to standards of conduct generally held.466 It held that a

payment or receipt without the knowledge of the principal for one of

462 R v Gallagher [1986] VR 219 at 226. 463 Mehajer v R [2014] NSWCCA 167 at [100]. 464

R v Dillon and Riach [1982] VR 434 at 436; R v Gallagher [1986] VR 219 at 231 (FC); R v Jamieson [1988] VR 879 (FC). See also R v Nuttall [2011] 1 Qd R 270 at [36]. 465

R v Dillon and Riach [1982] VR 434 at 436; Mehajer v R [2014] NSWCCA 167 at [101]. 466 Mehajer v R [2014] NSWCCA 167 at [59]-[63].

496

the proscribed purposes would generally be regarded as corrupt

according to such standards.467

434. Cesar Melhem submitted that the requirement in s 176 that the

payments ‘tend to influence’ the agent to show favour is not an

objective one.468 It is said, instead, that the ‘relevant tendency to

influence will be the recipient’s perception of the intended effect’. R v

Dillon469 is cited for that proposition. However, that case dealt only

with the meaning of ‘corruptly’ in s 176. That the requirement is

objective is obvious from the phrase ‘tend to’, as was confirmed in

Mehajer v R.470

435. The consequence of the above construction is that s 176 is of

potentially very broad application. It may, for example, apply to

conduct that may not immediately be considered criminal because the

relevant benefit was not obtained personally. So much was recognised

by the New South Wales Court of Appeal in Mehajer v R:471

The Second Reading Speech of the Bill added the following remarks:

"The target of the bill ... is the corrupt activities of those agents who either accept bribes in relation to their principals' affairs, or who do not make full disclosure to their principals of matters which may affect the carrying out

of the agents' duties ... Because these offences are very broad in their scope, and could cover activity which it is not intended to cover, and which few people would consider criminal, the present provision, which allows a court to dismiss a charge which is trivial or purely technical, has been retained ... This bill brings the offences covered by this legislation

467 Mehajer v R [2014] NSWCCA 167 at [59]-[63]. 468 Submissions of Cesar Melhem, 20/11/15, ch 1, para 40. 469

[1982] VR 434 at 436. 470 [2014] NSWCCA 167 at [100], [103]. 471

[2014] NSWCCA 167 at [44].

497

into line with other comparable offences of dishonesty ... The aim...is to ensure that corrupt practices by agents, such as the receiving or the soliciting of bribes, are dealt with..."

436. The Cleanevent Side Letter was arrived at during negotiations for the

extension of the 2006 EBA. The Side Letter provided that money

would be paid to the AWU Vic in return for substantial advantages that

accrued to Cleanevent by the extension of that EBA through the MOU.

In these circumstances, both of paragraphs (a) and (b) of s 176(1) may

have been satisfied. That is, by seeking the side deal, Cesar Melhem

and John-Paul Blandthorn were soliciting payments as an inducement

or reward for doing something (agreeing to the MOU) or forbearing to

do something (applying to terminate the 2006 EBA and/or 1999

Award). Similarly, they were soliciting payments, the receipt or

expectation of which would tend to influence them to show favour to

Cleanevent in respect of the MOU negotiations.

437. The relationship between the payment and the MOU was made plain –

to the extent it was not already - in the concluding stages of the

negotiations. In John-Paul Blandthorn’s email dated 13 October 2015

he stated ‘the $25,000 needs to remain … This is as far as the AWU is

prepared to move from the attached documents’. Payment of the

AWU’s nominated sum was the price of assent to the MOU.

438. Cesar Melhem and John-Paul Blandthorn must have understood that

Michael Robinson and Steven Webber agreed to make the payments

referred to in the Side Letter for the desired purpose of those officials

showing favour towards Cleanevent, or refraining from doing the

things identified in the final paragraph of the Side Letter. So much is

obvious from the Side Letter itself. As noted above, for the purposes

498

of an offence against s 176(1)(b) it does not matter whether either of

the officials had any intention to show favour.

439. Cesar Melhem’s submissions contended, in relation to Cleanevent, that

there was no evidence, and it was never put to him, that he believed

that the payees intended that the payments should influence him to

show favour in relation to the affairs of AWU members.472 In fact the

proposition was put to Cesar Melhem and denied by him.473 However,

his denial cannot be accepted in the face of the contemporaneous

documents and the probabilities arising from events. The best

evidence that, contrary to his denials, he had that understanding is to be

found in the terms of the Side Letter itself and the objective

circumstances that the 2006 EBA was due to expire and the AWU

could have sought a new EBA on the basis of the Modern Award.

A requirement for actual influence?

440. The submissions of various affected parties contended that, in fact, the

AWU’s bargaining position was not weakened by the side deals or by

the payments made pursuant to them. Additionally or alternatively,

they contended that the EBAs in connection with which the side deals

were negotiated were good outcomes for the workers in question (or

not demonstrably bad outcomes).474

472 Cesar Melhem’s Submissions in Reply to Counsel Assisting, 20/11/15, Ch 1, para 41. 473 Cesar Melhem, 22/10/15; T:889.19-35, 892.9-13. 474

See for example Submissions of Cesar Melhem, 20/11/15, ch 1, paras 16, 17, 35, 37; ch 4, para 5, ch 5, paras 10-14; ch 8, para 7; Submissions of Julian Rzesniowiecki, 20/11/15, para 44; Submissions of Mike Gilhome, 23/11/15, paras 37-41; Submissions of Frank Leo, 20/11/15, paras 54-58.

499

441. The submission is similar in substance to the one considered above in

connection with fiduciary duties. The submission fails in the present

context also. The factual difficulties with it have been dealt with

above. As a matter of law in the present context it is bad because

s 176(1)(b) of the Crimes Act 1958 (Vic) does not require that the

corrupt payment actually influence the agent. It requires that the

receipt or expectation of the payment ‘would in any way tend to

influence’ the agent to show favour or disfavour. It requires proof of

an objective tendency of the payment to have that influence, not proof

of actual influence. Nor does s 176(1)(b) require proof that the agent

intends to show or withhold favour. As Brooking J put it in R v Dillon

[1982] VR 434 at 436:

In my view, an agent does act corruptly if he receives a benefit in the belief that the giver intends that it shall influence him to show favour in relation to the principal's affairs. If he accepts a benefit which he believes is being given to him because the donor hopes for an act of favouritism in return, even though he does not intend to perform that act, he is, by the mere act of receiving the benefit with his belief as to the intention with which it is given, knowingly encouraging the donor in an act of bribery or attempted bribery, knowingly profiting from his position of agent by reason of his supposed ability and willingness, in return for some reward, to show favouritism in his principal's affairs and knowingly putting himself in a position of temptation as regards the impartial discharge of his duties in consequence of the acceptance of a benefit.

442. Thus, the submissions of affected persons do not answer the

proposition that offences have been committed under s 176.

Is a conflict of interest required?

443. Cesar Melhem made submissions in relation to the decision in R v

Gallagher along the following lines.475 He contended that in R v

475 Submissions of Counsel Assisting, 20/11/15, ch 1, paras 32-37.

500

Gallagher the interests of the recipient of the benefit (the official)

conflicted with the interests of his principals (the members). He then

said that, because the recipient in the present cases was the AWU, the

submissions of counsel assisting ‘must be contending’ that the interests

of the AWU and its members were conflicting. He then said that there

was no such conflict and therefore that he is not liable under s 176.

444. This argument does not get to grips with the terms of s 176(1)(b). To

establish an offence under that section it is necessary to establish (a)

that a person was an agent; (b) that the person corruptly receives or

solicits for himself or anyone else valuable consideration; (c) that the

receipt or expectation of that valuable consideration would tend to

influence him to show or forbear to show favour or disfavour in

relation to his principal’s affairs. It is not necessary to show that the

interests of the AWU must have been in conflict with its members or

some class of them. The question is not whether the payments tended

to influence Cesar Melhem in dealings as between the AWU and its

members. The question is whether they did so in dealings between the

respective employers and AWU members.

445. Nor is it correct to assert, as did some affected parties, that because the

Side Letter reflected an arrangement whereby each of Cleanevent and

the AWU acted in their respective best interests, the arrangement

carried no risk of a conflict of interest or did not satisfy s 176 of the

Crimes Act 1958 (Vic).476 Indeed, many such arrangements would

have these features.

476 Submissions of Michael Robinson, 26/11/15, paras 17-18.

501

Corrupt nature of the payments

446. It is not suggested, nor is it necessary, that the Side Letter was

completely secret from persons within Cleanevent or the AWU for it to

be a corrupt arrangement.477 A number of submissions take issue with

the proposition that the various side deals were secretive in nature. For

the reasons set out below, these criticisms are ill-founded. Before

dealing with them, it is worth noting why the issue is relevant to the

question of whether the payments under the side deals were ‘corrupt’.

They were ‘corrupt’ from the point of view of the person making the

payments because they were made for the purpose of influencing the

AWU or its officials to show favour in relation to the affairs of AWU

members. They were corrupt from the point of view of AWU officials

because they believed that this was the purpose for which the payments

were made.

447. It is not necessary to establish that the payments under the side deals

were secretive in order to make good that they were ‘corrupt’ in either

of the two senses described above. However, the secretive nature of

the side deals supports that proposition. It supports it, amongst other

matters, because it is easier to influence the affairs of an agent vis-à-vis

his principal if the principal is not told about the payment.

448. Thus, the relevant issue is not whether the payments were secret within

the AWU, or for that matter secret within the organisation of the

employer in question. The relevant issue is whether the payments were

kept secret from employees.

477 See Submissions of Counsel Assisting, 6/11/15, ch 2, paras 510, 517.

502

449. The submissions of affected parties on this issue for the most part

ignore the above distinction.478 Cesar Melhem, for example, claimed

that the Cleanevent Side Letter was ‘open and transparent’ –

apparently because John-Paul Blandthorn also knew about it and

because John-Paul Blandthorn acceded to the proposition put to him by

Cesar Melhem’s counsel that the arrangement was ‘well known’ within

the Victorian Branch.479 However the fundamental point is that the

arrangement was kept secret from the persons whose interests it most

affected: the Cleanevent employees.

450. Further and in any event, the Cleanevent deal was secretive in

numerous other ways. A deliberate decision was made not to disclose

it to National Office. A deliberate decision was made, after careful

consideration, not to include it in the MOU. A deliberate decision was

made to record the income from the Side Letter as membership income

notwithstanding that none of the persons added to the AWU

membership roll as a result of it were entitled to be recorded as

members unless they were already on it. Even if they were already on

it, none of the income was ‘membership’ income.

451. Finally, the AWU is and was a body corporate by operation of s 27 of

the Fair Work (Registered Organisations) Act 2009 (Cth) and its

predecessor legislation. Counsel assisting submitted that the conduct

and position of Cesar Melhem, being at the relevant time the Branch

Secretary and the person who provided the directions to enter into the

side deal and issue the invoices pursuant to the side deal, is a sufficient

478 See for example, Submissions of Frank Leo, 20/11/15, para 60. 479 Submissions of Cesar Melhem, 20/11/15, ch 1, para 42.

503

basis on which to find that for the purposes of soliciting the payments,

he was the ‘directing mind and will’ of that organisation.480 The

AWU, it is submitted, on any view adopted Cesar Melhem’s conduct

by receiving the payments in question and dealing with them for its

own benefit.481 These submissions were disputed by the AWU. The

merits of that objection are addressed in the following section. They

are, for the reasons there given, rejected.

452. Accordingly:

(a) Cesar Melhem may have committed an offence against

s 176(1)(a) and/or (b) of the Crimes Act 1958 (Vic) by

soliciting a corrupt commission; and

(b) The AWU may have committed an offence against

s 176(1)(a) and/or (b) of the Crimes Act 1958 (Vic) by

soliciting a corrupt commission.

Membership issues

453. Turning to the inflation of membership numbers through the

implementation of the side deal, the following potential contraventions

arise.

480 See Tesco Supermarkets v Nattrass [1972] AC 153 at 170; Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2000) 100 FCR 530 at [82]. 481

See Grocon v CFMEU [2013] VSC 275 at [60] (adopting Brennan J’s analysis in Environment Protection Authority v Caltex Refinery Co Pty Ltd (1993) 178 CLR 477 at 514-515).

504

454. The payments were recorded as membership income in the financial

statements of AWU Vic. As explained above, they were not in truth

membership income. As a result, s 253(3) of the Fair Work

(Registered Organisations) Act 2009 (Cth) may have been contravened

by the AWU. That section requires that the financial statements of a

reporting unit must give a true and fair view of its financial position.

This is a civil penalty provision.

455. The AWU submitted that it cannot be held to have contravened the

section because the conduct of the officials involved in the

contravention cannot be attributed to it. The submission fails on the

facts for reasons set out in more detail below. It has an element of

absurdity in the present context. The reporting unit is the AWU Vic.

Although a separate reporting unit, it is not a separate legal entity. It

would be a surprising result of the legislation if a union could avoid

liability under this section by an argument of this kind.

456. The resulting inflation of membership numbers has the result that the

AWU may have contravened s 230 of the Fair Work (Registered

Organisations) Act 2009 (Cth). The AWU Vic Branch failed to keep

records of the members of the AWU so as to record persons who had

in fact become members. A similar submission is made by the AWU

in response to this submission as is made in connection with s 253(3).

It is rejected for the substantially the same reasons.

457. Counsel assisting submit that Cesar Melhem may have contravened s

285 of the Fair Work (Registered Organisations) Act 2009 (Cth). In

procuring the payment of the amounts received by Cleanevent, and in

making directions as to how the membership records were to be treated

505

in relation to those payments, Cesar Melhem was acting in the exercise

of the powers or duties of his office in relation to the financial

management of the Branch. He did so recklessly and contrary to the

requirements of the AWU Rules, including the rules requiring payment

by members of prescribed membership contributions. He also acted so

as to expose the AWU Vic Branch to civil penalties arising from

contraventions of the above provisions of the Fair Work (Registered

Organisations) Act 2009 (Cth).

458. Counsel assisting also submitted that Cesar Melhem may have

contravened s 286 of the Fair Work (Registered Organisations) Act

2009 (Cth), in that he acted otherwise than in good faith and for an

improper purpose in falsely inflating the membership numbers of the

AWU Vic Branch at the expense of the other branches of the AWU. In

the circumstances in which his conduct exposed the Union to a penalty,

and operated to bring disadvantage to the other branches of the AWU,

counsel assisting submitted that it would not be accepted that Cesar

Melhem genuinely believed he was acting in the best interests of the

Union by falsely inflating its membership.

459. For his part, Cesar Melhem suggested482 that a finding that he

contravened s 285 of the Fair Work (Registered Organisations) Act

2009 (Cth) is not available because it was not put to him by counsel

assisting that he did not have a defence under s 285(2) of the Act. He

did not refer to any evidence that would suggest that each element of

the defence in s 285(2) is made out. There was no relevant unfairness.

Cesar Melhem was examined by counsel assisting about the factual

482 Submissions of Cesar Melhem, 20/11/15, Ch 2, para 29.

506

matters surrounding the MOU and the manipulation of the membership

register on two occasions, and has had the opportunity to make

submissions about it. Prior to the first occasion on which Cesar

Melhem was examined, counsel assisting opened on the factual issues

concerning the Cleanevent arrangements.483 On both occasions on

which he was examined, Cesar Melhem was given the opportunity to,

and did, put on a statement addressing any matters he wished to

address. On both occasions, he was represented by senior counsel who

were given the opportunity to ask Cesar Melhem questions in relation

to the evidence he gave.

460. Counsel assisting’s submissions are accepted. Cesar Melhem may

have contravened ss 285 and 286 of the Fair Work (Registered

Organisations) Act 2009 (Cth).

Liability of the AWU for the conduct of Cesar Melhem

461. As indicated, the AWU contested all of the findings that counsel

assisting submitted should be made against it on the basis that the

conduct of various officials could not be attributed to it.

462. Counsel assisting submitted in connection with the Cleanevent case

study that the conduct and state of mind of Cesar Melhem is to be

attributed to the AWU for the purposes of s 176. The AWU, and, at

times, Cesar Melhem, disputed that. These submissions are made also

in connection with the other AWU case studies. The question also

arises in connection with liability for false invoices under s 83 of the

Crimes Act 1958 (Vic) and with breach of the obligation under the Fair

483 Counsel Assisting, 28/5/15, T:2-7.

507

Work (Registered Organisations) Act 2009 (Cth) to keep an accurate

register of members. There is no dispute that these provisions are

capable of applying to unions (at least if incorporated). The issue is

whether, in the circumstances under consideration, the AWU should be

liable.

463. The basic proposition advanced on behalf of the AWU is that Cesar

Melhem (and, in relation to Chiquita Mushrooms, Frank Leo) did not

have actual authority under the rules of the AWU to do any of the

things that it is alleged they did and thus, it is said, their conduct

cannot be attributed to the AWU.484 Counsel assisting submitted that

this argument takes both too narrow a view of the AWU rules and too

narrow a view of the circumstances in which the conduct and state of

mind of an individual may be attributed to a corporation. In substance,

counsel assisting’s submission is correct in both respects.

464. Under rule 39(1), as Branch Secretary, Cesar Melhem had powers,

duties and functions that included:485

(a) responsibility for the administration of the Branch

(r 39(1)(a));

(b) control of clerical and accountancy staff (and other staff)

(r 39(1)(b));

(c) responsibility for there being a correct account of all moneys

received and expended (r 39(1)(c)); and

484 Submissions of the AWU, 20/11/15, paras 10-29, 36-44, 48-50, 54-74. 485 AWU MFI-2, 23/10/15, p 97.

508

(d) keeping a correct membership register (r 39(1)(h)).

465. In his capacity as Branch Secretary, therefore, Cesar Melhem had

actual authority and responsibility under the Rules for the issuing and

keeping of invoices, for the Branch accounts, and for the maintenance

of the membership register (and for the control of the Branch staff

charged with attending to these matters). That is sufficient to deal with

all of the attribution points taken by the AWU on the false invoicing

and membership arrangements whilst Cesar Melhem was Branch

Secretary.

466. That leaves the side deals in the Cleanevent, Thiess John Holland, ACI

and Chiquita case studies. So far as actual authority under the rules is

concerned, the offence under s 176 is concerned with solicitation and

receipt of corrupt payments. In the case studies under consideration,

the solicitation of the corrupt payments was not confined to negotiating

the deals in question. It extended to the issuing of invoices pursuant to

which those corrupt commissions were paid. Whilst he was Branch

Secretary Cesar Melhem, under the rules of the AWU, had actual

responsibility for the issuing of those invoices. The invoices were

issued in the name of the Branch. As required by r 51(6), the invoices

sought payment into accounts maintained by the Branch. Thus, the

payments were solicited by the purported exercise of actual authority

under the AWU rules. Similarly, the effect of the rules was that the

payments were received by the AWU: r 51(2) deemed monies paid to

the Branch to be ‘absolutely vested’ in the AWU.486

486 AWU MFI-2, 23/10/15, p 107.

509

467. Thus, even accepting the premise of the AWU’s argument, namely that

the question must be considered solely by reference to the rules, Cesar

Melhem’s conduct in soliciting payments whilst Branch Secretary

should be attributed to the AWU.

468. The above matters deal with the payments from Cleanevent and the

payments from Thiess John Holland solicited after Cesar Melhem

became Branch Secretary on 1 August 2006.487

469. So far as the payments made by Thiess John Holland and ACI whilst

Cesar Melhem was Assistant Branch Secretary are concerned, the only

reasonable inference to be drawn is that he was also exercising

authority under the rules. The AWU submitted that the position of

Assistant Branch Secretary was a ‘relatively lowly’ position.488 But

that is a mischaracterisation, both under the rules and in practice. By

r 39(2), an Assistant Branch Secretary must carry out such functions as

are determined from time to time by the Branch Executive or the

Branch Secretary.489 Bill Shorten made it quite clear in his evidence

that he had nothing to do with the issuing of any of the Thiess John

Holland or ACI invoices. He did not view the issuing of invoices as

part of his role.490 He said, in connection with the Thiess John Holland

Project, that once the EBA was negotiated Cesar Melhem became

responsible for day-to-day project administration.491 So far as the ACI

487 That is, the payments pursuant to the invoices at Shorten MFI-9, 9/7/15, pp 204, 206, 207, 210, 211, 217, 218, 229 and 233. 488

Submissions of the AWU, 20/11/15, para 40. 489 AWU MFI-2, 23/10/15, p 98. 490

See Bill Shorten, 9/7/15, T:112.41-113.7 (regarding Thiess); T:152.38-40 (regarding ACI). 491 See Bill Shorten, 9/7/15, T:114.5-8, 114.45-115.1.

510

deal was concerned, Bill Shorten was not involved in the issuing of

invoices.492 There is no evidence of any specific act on the part of Bill

Shorten or the Branch Executive delegating authority to Cesar Melhem

to issue invoices. However it is plain that in fact this was a function

for which he had assumed sole responsibility: it was he who gave the

actual instructions for the issue of the Thiess John Holland and ACI

invoices.

470. Thus, even if one focuses on the question of actual authority under the

rules, Cesar Melhem’s conduct in implementing the side deals should

be attributed to the AWU.

471. Counsel assisting identify a further answer to the AWU’s submission.

The AWU’s submission is founded on the proposition that the question

of whether the conduct of Cesar Melhem and Frank Leo is to be

attributed to the AWU depends solely on the construction of the

AWU’s rules.493 That proposition is incorrect. The true position is that

the question of attribution depends upon the circumstances in which

attribution is sought to be made (including the terms of any statute

under which it is said the corporation has committed an offence). This

is apparent from the speech of Lord Diplock in Tesco Supermarkets v

Nattrass494 referred to in the AWU’s submissions.

492 See Bill Shorten, 9/7/15, T:146.27-29, 147.21-30, 151.47-152.12. 493 Submissions of the AWU, 20/11/15, para 19. 494

[1972] AC 153 at 200.

511

472. In The Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9),

Owen J made the following points.495 The knowledge and state of

mind of directors (and to a lesser extent senior officers) will generally

be taken to be that of the company. But this will not always be the

case. Management and control are not things to be considered

generally or in the round. It is necessary to identify the natural person

or persons having management and control in relation to the act or

omission in point. The directing mind and will of the company in

relation to a given transaction will not necessarily be that of a single

person. This person may vary from transaction to transaction. People

will often be treated as the directing mind and will of the company if

they have been granted authority to act on behalf of the company in

relation to the transaction, or have been vested with autonomy, control,

discretion or a significant degree of responsibility in relation to the

transaction (or similar transactions).496

473. This approach to corporate attribution has been taken in all Australian

jurisdictions, including Victoria.497 It is a broader approach than that

urged by the AWU. Some concrete examples of its application include

Nationwide News Pty Ltd v Naidu,498 where the conduct of a

company’s national fire and safety officer was attributed to the

495 (2008) 70 ACSR 1 at [6143]-[6144]. The authorities to which his Honour referred are well worth perusal. This statement of principle was not the subject of any challenge on appeal (see Westpac Banking Corporation v The Bell Group Ltd (in Liq) (No 3) (2012) 270 FLR 1 at [2177] and [2189]). There was a distinct issue on appeal as to the circumstances in which knowledge of different employees of a company could be aggregated: on this issue the trial judge’s findings were upheld (see at [1100], [2178] - [2199]). 496

El Ajou (at All ER 705-6; BCLC 482-4); Re Morris v Bank of India [2005] 2 BCLC 328 at [126]; Highwater Nominees Pty Ltd v Mead [2006] WASC 17 at [49]. 497 See, for example, Christian Youth Camps Ltd v Cobaw Community Health Services Ltd (2014) 308 ALR 615 at [102] - [110] (Vic CA). 498

(2007) 71 NSWLR 471.

512

company that employed him. The fire and safety officer supervised the

work of the employee of an independent contractor and in the course of

doing so humiliated and harassed him. His conduct was attributed to

the company.499 Bunnings Group v CHEP Australia500 is another

example. In that case the knowledge of a national supply chain

manager was attributed to a company. The attribution was made for

the purposes of the question of whether the company knew that it had

goods in its possession that were the subject of a demand for return.

The national supply chain manager was described as part of senior

management.501 His superior, another senior manager, and his ultimate

superior, the CEO, did not have the same knowledge.502

474. It was not contested by the AWU, that a corporation can commit an

offence under ss 83 and 176 of the Crimes Act 1958 (Vic). That

concession is correct.503 It would be surprising if the legislature were

to confine the circumstances in which an individual’s conduct could be

attributed to a company to those in which the articles of the company

(or rules of the union) conferred actual authority to engage in the

conduct in question. It is unlikely that any articles or rules would be

construed to authorise criminal conduct. And indeed the AWU

submitted504 that side deals of the kinds in question are not authorised

under the rules. In other contexts, it is well established that conduct

499 (2007) 71 NSWLR 471 at [84]-[86], [236]-[238]. 500 (2011) 82 NSWLR 420. 501

(2011) 82 NSWLR 420 at [101]. 502 (2011) 82 NSWLR 420 at [103]-[105]. 503

Section 38 of the Interpretation of Legislation Act 1984 (Vic) defines ‘person’ to include a body corporate. 504 Submissions of the AWU, 20/11/15, paras 26, 39.

513

not authorised by union rules can be attributed to a union.505 The

position is the same in the present context.

475. Section 176 focuses on the corrupt ‘recei[pt]’ or ‘solicit[ation]’ of

valuable consideration. It is not clear whether the AWU contested the

proposition that Cesar Melhem had actual authority to negotiate the

industrial agreements in question on behalf the union.

476. So far as the Cleanevent Side Letter is concerned, the AWU correctly

submitted that it was not sent to National Office for approval and was

not in fact approved by it.506 However this adds weight to the

proposition that Cesar Melhem’s conduct should be attributed to the

AWU. The Side Letter was a matter dealt with only by the Victorian

Branch. Cesar Melhem was the Branch Secretary. In negotiating and

implementing the Side Letter on behalf of the Branch of which he was

secretary, he was the directing mind of the Branch. The Branch was no

more than an emanation of the AWU in Victoria.

477. For the above reasons, even to the extent Cesar Melhem’s conduct in

relation to the above side deals was not actually authorised under the

rules, it was for all practical purposes, and for the purposes of s 176,

the conduct of the AWU.

478. There is a high degree of artificiality in the stance taken by the AWU.

Its position would appear to be that, since under the rules the Branch

Executive and/or National Executive were the relevant decision

505 Employment Advocate v NUW (2000) 100 FCR 454 at [121]; Hanley v AFMEPKIU (2000) 100 FCR 530 at [84]; Hamberger v CFMEU (2000) 104 IR 45 at [71]; Alfred v Wakelin (No 2) (2008) 176 IR 430 at [59](5). 506

Submissions of the AWU, 20/11/15, para 28.

514

making bodies of the union, it is to the members of those bodies that

one needs to look in the present context. But neither body played any

role in the negotiation or implementation of any of these side deals.

The way the AWU operated was to negotiate industrial agreements

through Branch Secretaries or Branch Assistant Secretaries and then, if

what was involved was a national agreement, seek approval of the final

arrangement from the National Secretary. The side deals in the case

studies under consideration were entered into during the negotiation

process – that is, during that part of the process that had expressly been

left to Branch Secretaries and Branch Assistant Secretaries to oversee.

The AWU now endeavours to ignore the reality of how it operated and

to hide behind rules that were never followed.

479. For the above reasons the AWU’s submissions on this topic are

rejected.

M – RECOMMENDATIONS

480. Pursuant to s 6P of the Royal Commissions Act 1902 (Cth) and every

other enabling power, this Report and all relevant materials have been

referred to the Victorian Commissioner of Police and the Director of

Public Prosecutions of Victoria so that consideration can be given to

the commencement of a prosecution of Cesar Melhem in relation to

possible offences under s 176(1)(a) and/or (b) of the Crimes Act 1958

(Vic).

481. Pursuant to s 6P of the Royal Commissions Act 1902 (Cth) and every

other enabling power, this Report and all relevant materials have been

referred to the Victorian Commissioner of Police and the Director of

515

Public Prosecutions of Victoria so that consideration can be given to

the commencement of a prosecution of the Australian Workers’ Union

in relation to possible offences under s 176(1)(a) and/or (b) of the

Crimes Act 1958 (Vic).

482. Pursuant to s 6P of the Royal Commissions Act 1902 (Cth) and every

other enabling power, this Report and all relevant materials have been

referred to the General Manager of the Fair Work Commission so that

consideration can be given to the General Manager commencing

proceedings against the Australian Workers’ Union for pecuniary

penalty orders in relation to possible contraventions of s 253(3) of the

Fair Work (Registered Organisations) Act 2009 (Cth).

483. Pursuant to s 6P of the Royal Commissions Act 1902 (Cth) and every

other enabling power, this Report and all relevant materials have been

referred to the General Manager of the Fair Work Commission so that

consideration can be given to the General Manager commencing

proceedings against the Australian Workers’ Union for pecuniary

penalty orders in relation to possible contraventions of s 230 of the

Fair Work (Registered Organisations) Act 2009 (Cth).

484. Pursuant to s 6P of the Royal Commissions Act 1902 (Cth) and every

other enabling power, this Report and all relevant materials have been

referred to the General Manager of the Fair Work Commission so that

consideration can be given to the General Manager commencing

proceedings against the Cesar Melhem for pecuniary penalty orders in

relation to possible contraventions of ss 285 and 286 of the Fair Work

(Registered Organisations) Act 2009 (Cth).

516

APPENDIX 1 TO CHAPTER 10.2: COMPARISON OF CLEANING

AWARD 1999507 AND 2004 AGREEMENT RATES508

Permanent employees509

1999 Award rates

Level Ordinary rate (cl 9.1) 510 Saturday rate (time and a half: cl

14.1)511

Sunday rate (double time: cl 14.2)512

Public holiday rate (double time and a half: cl 14.9)513

Level 1 $13.02 ($495.10/38) $19.53 ($13.02 x 1.5)

$26.04 ($13.02 x 2)

$32.50 ($13.02 x 2.5)

Level 2 $13.88 ($527.50/38) $20.82 ($13.88 x 1.5)

$27.76 ($13.88 x 2)

$34.70 ($13.88 x 2.5)

507 Winter MFI-1, 20/10/15. 508 Shorten MFI-5, 8/7/15, Vol 2, pp 1-13. 509

As at 15 December 2004, the date the 2004 EBA was certified. 510 Winter MFI-1, 20/10/15, p 6; Shorten MFI-5, 8/7/15, Vol 2, p 255. 511

Winter MFI-1, 20/10/15, pp 9-10. 512 Winter MFI-1, 20/10/15, p 10. 513

Winter MFI-1, 20/10/15, p 11.

517

2004 Agreement rates (employed on a weekly basis)

Level Ordinary rate (cl 8.1)514 Saturday rate (Award applies)515

Sunday rate (Award applies) Public holiday rate (Award applies)

Level 1 $13.42 ($510.10/38) $20.13 (13.42 x 1.5)

$26.84 (13.42 x 2)

$33.55 (13.42 x 2.5)

Level 2 $13.96 ($530.50/38) $20.94 (13.96 x 1.5)

$27.92 (13.96 x 2)

$34.90 (13.96 x 2.5)

Level 3 $15.24 ($579.10/38) $22.86 (15.24 x 1.5)

$30.48 (15.24 x 2)

$38.10 (15.24 x 2.5)

2004 Agreement rates (employed on a yearly basis)

Level Ordinary rate (cl. 8.2)516 Saturday rate (cl 8.2.1)517

Sunday rate (cl. 8.2.1) Public holiday rate (cl. 8.2.1)

Level 2 $17.64 ($34,870/52/38) $17.64 $17.64 $17.64

Level 3 $19.26 ($38,064/52/38) $19.26 $19.26 $19.26

514 Shorten MFI-5, 8/7/15, Vol 2, p 4. 515 The 2004 EBA is silent on whether permanent employees employed on a weekly basis are entitled to weekend and public holiday penalty rates. Whilst it is a matter of construction the operation of section 170LY of the Workplace Relations Act 1996 and cl 6.1 of the 2004 EBA may result in weekend and public holiday penalty rates in the 1999 Award applying to permanent employees employed on a weekly basis. 516

Shorten MFI-5, 8/7/15, Vol 2, p 4. 517 Shorten MFI-5, 8/7/15, Vol 2, p 4.

518

Casual employees518

1999 Award rates

Level Ordinary rate (cll 6.3,519 9.1520) Saturday rate (time and a half:

cl 14.1) 521

Sunday rate (double time: cl 14.2) 522 Public holiday rate (double time and a half:

cl 14.9) 523

Level 1 $15.63 (495.10/ 38 x 1.2) $22.14 (13.02 x 1.7)

$28.64 (13.02 x 2.2)

$35.15 (13.02 x 2.7)

Level 2 $16.65 (527.50/38 x 1.2) $23.59 (13.88 x 1.7)

$30.53 (13.88 x 2.2)

$37.47 (13.88 x 2.7)

2004 Agreement non-event casual rates

Level Ordinary rate (cl 8.3)524 Saturday rate (cl 8.5)525

Sunday rate (cl 8.5) Public holiday rate (cl 8.5)

Level 1 $16.28 $19.17 $19.17 $19.17

Level 2 $16.94 $19.17 $19.17 $19.17

Level 3 $18.49 $19.17 $19.17 $19.17

518 As at 15 December 2004, the date the 2004 EBA was certified. 519 Winter MFI-1, 20/10/15, p 3. 520

Shorten MFI-5, 8/7/15, Vol 2, p 255. 521 Winter MFI-1, 20/10/15, pp 9-10. 522

Winter MFI-1, 20/10/15, p 10. 523 Winter MFI-1, 20/10/15, p 11. 524

Shorten MFI-5, 8/7/15, Vol 2, p 4. 525 Shorten MFI-5, 8/7/15, Vol 2, p 4.

519

2004 Agreement event casual rates

Level Ordinary rate (cl 8.4)526 Saturday rate (cl 8.4)

Sunday rate (cl 8.4) Public holiday rate (cl 8.4)

Level 1 $16.28 $16.28 $16.28 $16.28

($23.51)527

Level 2 $17.44 $17.44 $17.44 $17.44

($24.67)

Level 3 $18.44 $18.44 $18.44 $18.44

($25.67)

526 Shorten MFI-5, 8/7/15, Vol 2, p 4. 527 Clause 8.6.3 of the 2004 EBA provides that event casuals who work 7.6 hours on a public holiday are paid a $55 allowance. $55 divided by 7.6 hours equates to an additional $7.23 per hour for 7.6 hours; Shorten MFI-5, 8/7/15, Vol 2, p 5.

520

APPENDIX 2 TO CHAPTER 10.2: COMPARISON OF CLEANING

AWARD 1999528 AND 2006 AGREEMENT529

Permanent employees

1999 Award rates

Level Ordinary rate (cl 9.1)530 Saturday rate (time and a half:

cl 14.1)531

Sunday rate (double time: cl 14.2)532

Public holiday rate (double time and a half: cl 14.9) 533

Level 1 $13.47 ($512.10/38) $20.20 ($13.47 x 1.5)

$26.94 ($13.47 x 2) $33.67 ($13.47 x 2.5)

Level 2 $14.32 ($544.50/38) $21.48 ($14.32 x 1.5)

$28.64 ($14.32 x 2) $35.80 ($14.32 x 2.5)

*

528 As at 22 December 2006, the date the 2006 EBA was certified; Shorten MFI-5, 8/7/15, Vol 2, p 260. 529

Shorten MFI-5, 8/7/15, Vol 2, p 127. As a sample, rates applicable are for the period to 1 December 2006 to 1 July 2007. 530 Shorten MFI-5, 8/7/15, Vol 2, p 266. 531

Shorten MFI-5, 8/7/15, Vol 2, p 269. 532 Shorten MFI-5, 8/7/15, Vol 2, p 270. 533

Shorten MFI-5, 8/7/15, Vol 2, p 271.

521

2006 Agreement rates in NSW and VIC (employed on a weekly basis)

Level Ordinary rate (cl 16.2)534 Saturday rate (cll 16.2, 39)535

Sunday rate (cl 16.2 & 39) Public holiday rate (cll 16.2, 22.10, 39)

Level 1 $14.24 $14.24 $14.24 $14.24

($21.63)536

Level 2 $14.81 $14.81 $14.81 $14.81

($22.04)

Level 3 $16.17 $16.17 $16.17 $16.17

($23.40)

Level 4 $17.43 $17.43 $17.43 $17.43

($24.66)

2006 Agreement rates in NSW and VIC (employed on a yearly basis)

Level Ordinary rate

(cl 16.3)537

Saturday rate (cl 16.4) Sunday rate (cl 16.4)

Public holiday rate (cl 16.4)

Level 2 $18.89

(37,346/ 52 / 38) $18.89 $18.89 $18.89

Level 3 $20.63

(40,766/ 52 / 38) $20.63 $20.63 $20.63

Level 4 $22.23

(43,940/ 52 / 38) $22.23 $22.23 $22.23

534 Shorten MFI-5, 8/7/15, Vol 2, p 137. 535 Shorten MFI-5, 8/7/15, Vol 2, pp 137, 158. 536

Cl 22.10 of the 2006 EBA provides permanent employees who work 7.6 hours on a public holiday receive a $55 allowance. $55 divided by 7.6 hours equates to an additional $7.23 per hour for 7.6 hours; Shorten MFI-5, 8/7/15, Vol 2, p 143. 537

Shorten MFI-5, 8/7/15, Vol 2, p 137.

522

2006 Agreement rates in other States (employed on a weekly basis)

Level Ordinary rate (cl 16.11)538 Saturday rate (cll 16.11, 39)539

Sunday rate (cl 16.11, 39) Public holiday rate (cll 16.11, 22.10, 39)

Level 1 $13.53 ($514.05/38) $13.53 $13.53 $13.53

($20.76)540

Level 2 $14.20 ($539.46/38) $14.20 $14.20 $14.20

($21.43)

Level 3 $15.36 ($583.63/38) $15.36 $15.36 $15.36

($22.59)

Level 4 $16.56 ($629.19/38) $16.56 $16.56 $16.56

($23.79)

2006 Agreement rates in other States (employed on a yearly basis)

Level Ordinary rate

(cl 16.12)

Saturday rate (cll 16.13, 39) Sunday rate (cll 16.13, 39)

Public holiday rate (cll 16.13, 39)

Level 2 $17.95

($35,479/ 52 / 38) $17.95 $17.95 $17.95

Level 3 $19.59

($38,728/ 52 / 38) $19.59 $19.59 $19.59

Level 4 $21.12

($41,743/ 52 / 38) $21.12 $21.12 $21.12

538 Shorten MFI-5, 8/7/15, Vol 2, pp 138-139. 539 Shorten MFI-5, 8/7/15, Vol 2, pp 138-139, 158. 540

Clause 22.10 of the 2006 EBA provides permanent employees who work 7.6 hours on a public holiday receive a $55 allowance. $55 divided by 7.6 hours equates to an additional $7.23 per hour for 7.6 hours; Shorten MFI-5, 8/7/15, Vol 2, p 143.

523

Casual employees

1999 Award rates

Level Ordinary rate (cl 6.3, 9.1)541 Saturday rate (time and a half:

cl 14.1)542

Sunday rate (double time: cl 14.2)543

Public holiday rate (double time and a half: cl 14.9)544

Level 1 $16.17 (512.10/ 38 = $13.47 x 1.2)

$22.89 (13.47 x 1.7)

$29.63 (13.47 x 2.2)

$36.36 (13.47 x 2.7)

Level 2 $17.19 (544.50/38 = 14.32 x 1.2)

$24.34 (14.32 x 1.7)

$31.50 (14.32 x 2.2) $38.66 (14.32 x 2.7)

* 2006 Agreement non-event rates for NSW and VIC

Level Ordinary rate (cl 16.6)545 Saturday rate (cl 16.8)546

Sunday rate (cl 16.8) Public holiday rate (cl 16.8)

Level 1 $17.80 $20.09 $20.09 $20.09

Level 2 $18.54 $20.90 $20.90 $20.90

Level 3 $20.21 $22.81 $22.81 $22.81

Level 4 $21.50 $24.27 $24.27 $24.27

*

541 Shorten MFI-5, 8/7/15, Vol 2, pp 263, 266. 542 Shorten MFI-5, 8/7/15, Vol 2, pp 269-270. 543

Shorten MFI-5, 8/7/15, Vol 2, p 270. 544 Shorten MFI-5, 8/7/15, Vol 2, p 271. 545

Shorten MFI-5, 8/7/15, Vol 2, p 138. 546 Shorten MFI-5, 8/7/15, Vol 2, p 138.

524

2006 Agreement event rates for NSW and VIC

Level Ordinary rate (cl 16.7)547 Saturday rate (cl 16.7)

Sunday rate (cl 16.7) Public holiday rate (cll 16.7, 22.9)

Level 1 $16.28 $16.28 $16.28 $16.28

Level 2 $17.44 $17.44 $17.44 $17.44

($24.67)548

Level 3 $18.44 $18.44 $18.44 $18.44

($25.67)

Level 4 $20.00 $20.00 $20.00 $20.00

2006 Agreement non-event rates for other States

Level Ordinary rate (cl 16.15)549 Saturday rate (cl 16.17)550

Sunday rate (cl 16.17) Public holiday rate (cl 16.17)

Level 1 $16.91 $19.08 $19.08 $19.08

Level 2 $17.59 $19.85 $19.85 $19.85

Level 3 $19.20 $21.67 $21.67 $21.67

Level 4 $20.43 $23.05 $23.05 $23.05

547 Shorten MFI-5, 8/7/15, Vol 2, p 138. 548 Clause 22.9 of the 2006 EBA provides that Level 2 and 3 casuals who work 7.6 hours at an event on a public holiday are paid a $55 allowance. $55 divided by 7.6 hours equates to an additional $7.23 per hour for 7.6 hours; Shorten MFI-5, 8/7/15, Vol 2, p 143. 549

Shorten MFI-5, 8/7/15, Vol 2, pp 139. 550 Shorten MFI-5, 8/7/15, Vol 2, p 140.

525

2006 Agreement event rates for other States

Level Ordinary rate

(cl 16.16)551

Saturday rate (cl 16.16) Sunday rate (cl 16.16)

Public holiday rate (cll 16.16, 22.9)

Level 1 $16.16 $16.16 $16.16 $16.16

Level 2 $17.04 $17.04 $17.04 $17.04

($24.27)552

Level 3 $18.06 $18.06 $18.06 $18.06

($25.29)

Level 4 $19.00 $19.00 $19.00 $19.00

551 Shorten MFI-5, 8/7/15, Vol 2, pp 139-140. 552 Clause 22.9 of the 2006 EBA provides that Level 2 and 3 casuals who work 7.6 hours at an event on a public holiday are paid a $55 allowance. $55 divided by 7.6 hours equates to an additional $7.23 per hour for 7.6 hours; Shorten MFI-5, 8/7/15, Vol 2, p 143.

526

APPENDIX 3 TO CHAPTER 10.2: COMPARISON OF 1999 AWARDi

AND 2010 MOUii

Permanent Employees

1999 Award rates

Level Ordinary rate (2010 National Min. Wage Order)

Saturday rate (time and a half: cl 14.1)iii

Sunday rate (double time: cl 14.2)iv

Public holiday rate (double time and a half: cl 14.9)v

Level 1 $15.00 $22.50

($15.00 x 1.5)

$30.00 ($15.00 x 2)

$37.50 ($15.00 x 2.5)

Level 2

$15.00

$22.50 ($15.00 x 1.5)

$30.00 ($15.00 x 2)

$37.50 ($15.00 x 2.5)

MOU non-event rates in NSW and VIC vi

Level Ordinary rate Saturday rate Sunday rate Public holiday rate

Level 1

$16.64 $16.64 $16.64 $16.64 ($23.87)vii

Level 2

$17.30 $17.30 $17.30 $17.30 ($24.53)

Level 3

$18.89 $18.89 $18.89 $18.89 ($26.12)

Level 4

$20.36 $20.36 $20.36 $20.36 ($27.59)

MOU non-event rates in other Statesviii

Level Ordinary rate Saturday rate Sunday rate Public holiday rate

Level 1

$15.81 $15.81 $15.81 $15.81 ($23.04)ix

Level 2

$16.58 $16.58 $16.58 $16.58 ($23.81)

Level 3

$17.95 $17.95 $17.95 $17.95 ($25.18)

Level 4

$19.34 $19.34 $19.34 $19.34 ($26.57)

527

MOU event rates in NSW and VIC (clause 2.5)x

Levels Ordinary rate Saturday rate Sunday rate Public holiday

rate

Levels 1-4 $20.36 $20.36 $20.36 $20.36 ($27.59)xi

MOU event rates in other States (clause 2.5)xii

Levels Ordinary rate Saturday rate Sunday rate Public holiday

rate

Levels 1-4 $19.34 $19.34 $19.34 $19.34 ($26.57)xiii

Casual employees

1999 Award rates

Level Ordinary rate (cl 6.3 and 2010 National Min. Wage Order)xiv

Saturday rate (time and a half: cl 14.1)xv

Sunday rate (double time: cl 14.2)xvi

Public holiday rate (double time and a half: cl 14.9)xvii

Level 1 $17.17

($14.31 x 1.2)

$24.32

(14.31 x 1.7)

$31.48

(14.31 x 2.2)

$38.63

(14.31 x 2.7)

Level 2 $17.17

($14.31 x 1.2)

$24.32

(14.31 x 1.7)

$31.48

(14.31 x 2.2)

$38.63

(14.31 x 2.7)

528

MOU non-event rates for NSW and VIC

Level Ordinary rate Saturday rate Sunday rate Public holiday rate

Level 1 $19.22 $21.69 $21.69 $21.69

Level 2 $20.02 $22.56 $22.56 $22.56

Level 3 $21.82 $24.63 $24.63 $24.63

Level 4 $23.53 $26.55 $26.55 $26.55

MOU event rates for NSW and VIC

Level Ordinary rate Saturday rate Sunday rate Public holiday rate

Level 1 $18.05 $18.05 $18.05 $18.05

Level 2 $18.14 $18.14 $18.14 $18.14 ($25.37)xviii

Level 3 $19.86 $19.86 $19.86 $19.86 ($27.09)

Level 4 $21.85 $21.85 $21.85 $21.85

MOU non-event rates for other States

Level Ordinary rate Saturday rate Sunday rate Public holiday rate

Level 1

$18.26 $20.61 $20.61 $20.61

Level 2

$18.99 $21.43 $21.43 $21.43

Level 3

$20.73 $23.40 $23.40 $23.40

Level 4

$22.35 $25.23 $25.23 $25.23

529

MOU event rates for other States

Level Ordinary rate Saturday rate Sunday rate Public holiday rate

Level 1 $18.05 $18.05 $18.05 $18.05

Level 2 $18.14 $18.14 $18.14 $18.14 ($25.37)xix

Level 3 $19.43 $19.43 $19.43 $19.43($26.66)

Level 4 $20.76 $20.76 $20.76 $20.76

i

Cleaning Industry – AWU/LHMU – Cleanevent Pty Ltd Award 1999 as at 15 November 2010, the date the MOU was finalised, as modified by Annual Wage Review 2009-10 [2010] FWAFB 4000 (order PR072010); Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), Schedule 9, Items 13(3), 13(4); Shorten MFI-5, 8/7/15, Vol 2, p 324. ii

Cleanevent MFI-1, 19/10/15, pp 248-249. As a sample, rates applicable are for the period from 1 July 2010 to 30 June 2011. iii Shorten MFI-5, 8/7/15, Vol 2, p 333. iv

Shorten MFI-5, 8/7/15, Vol 2, p 334. v Shorten MFI-5, 8/7/15, Vol 2, p 335. vi

Cleanevent MFI-1,19/10/15, p 249. vii Clause 22.10 of the 2006 EBA provided permanent employees who work 7.6 hours on a public holiday receive a $55 allowance. $55 divided by 7.6 hours equates to an additional $7.23 per hour for 7.6 hours; Shorten MFI-5, 8/07/15, Vol 2, p 143. viii

Cleanevent MFI-1, 19/10/15, p 248. ix Clause 22.10 of the 2006 EBA provided permanent employees who work 7.6 hours on a public holiday receive a $55 allowance. $55 divided by 7.6 hours equates to an additional $7.23 per hour for 7.6 hours; Shorten MFI-5, 8/7/15, Vol 2, p 143. x

Cleanevent MFI-1, 19/10/15, pp 245, 249. xi Clause 22.10 of the 2006 EBA provided permanent employees who work 7.6 hours on a public holiday receive a $55 allowance. $55 divided by 7.6 hours equates to an additional $7.23 per hour for 7.6 hours; Shorten MFI-5, 8/7/15, Vol 2, p 143. xii

Cleanevent MFI-1, 19/10/15, p 248. xiii Clause 22.10 of the 2006 EBA provided permanent employees who work 7.6 hours on a public holiday receive a $55 allowance. $55 divided by 7.6 hours equates to an additional $7.23 per hour for 7.6 hours; Shorten MFI-5, 8/7/15, Vol 2, p 143. xiv

Shorten MFI-5, 8/7/15, Vol 2, p 263; Annual Wage Review 2009-10 [2010] FWAFB 4000. xv Shorten MFI-5, 8/7/15, Vol 2, p 333. xvi

Shorten MFI-5, 8/7/15, Vol 2, p 334. xvii Shorten MFI-5, 8/7/15, Vol 2, p 335.

530

xviii Clause 22.9 of the 2006 EBA provided Level 2 and 3 casual employees who work 7.6 hours on a public holiday receive a $55 allowance. $55 divided by 7.6 hours equates to an additional $7.23 per hour for 7.6 hours; Shorten MFI-5, 8/7/15, Vol 2, p 143. xix

Clause 22.9 of the 2006 EBA provided Level 2 and 3 casual employees who work 7.6 hours on a public holiday receive a $55 allowance. $55 divided by 7.6 hours equates to an additional $7.23 per hour for 7.6 hours; Shorten MFI-5, 8/7/15, Vol 2, p 143.

531

532

CHAPTER 10.3

THIESS JOHN HOLLAND

Subject Paragraph

A – INTRODUCTION 1

B – THE AGREEMENT 6

C – WHAT WAS AGREED AND WHEN? 28

Negotiations to December 2004 31

Negotiations from December 2004 72

D – IMPLEMENTATION OF THE AGREEMENT 99

Joint venture accounting practices 100

Preliminary comments on TJH invoices and payments 109

The 2005 payments 114

The 2006 payments 128

The 2007 payments 180

Accounting and approval of the invoices 202

533

Subject

E – WER

F – CON

Breach of

Unlawful

Unlawful

False acc

INTR A –

1.

2.

1 Stephen S 2 Rzesniow

RE THE INV

NCLUSIONS

f duty

l commission

l commission

ounting reco

RODUCTIO

The Eastlin

roadway con

opened ahea

The design

venture. On

Holland Pty

John Hollan

Construction

Sasse, witness

wiecki MFI-1, 1

VOICES GE

S

ns: AWU and

ns: TJH and J

ords

ON

k project in

nnecting Mit

ad of schedule

and constru

ne party was

Ltd (John H

d (TJH). T

n of the roadw

statement, 12/

13/10/15, p 4.1

ENUINE?

d Cesar Melh

Julian Rzesio

nvolved the

tcham and F

e and on bud

uct contract

Thiess Pty L

Holland). Th

The contract w

way commen

10/15, p 1.

14-21.

hem

owiecki

constructio

Frankston. I

dget on 28 Jun

for the roa

Ltd (Thiess).

he joint ventu

was let in ab

nced in 2005.

Pa

on of a 39 k

It cost $2,50

ne 2008.1

ad was let t

. The other

ure was calle

bout Novemb

.2

aragraph

205

212

214

222

229

236

kilometre

00,000. It

o a joint

was John

ed Thiess

ber 2004.

534

3. This Chapter concerns an arrangement whereby TJH paid to the AWU

the sum of $100,000 per year plus GST per year for the three year life

of the project.

4. This Chapter considers the following potential consequences of this

arrangement:

(a) Whether the arrangement was made and implemented in

circumstances where the AWU and its officials owed

fiduciary duties and, if so, whether the making and

implementation of this arrangement may have involved

breach of these duties;

(b) Whether the implementation of the arrangement involved the

payment of corrupt commissions in such a way that offences

may have been committed under s 176 of the Crimes Act

1958 (Vic); and

(c) Whether the implementation of the arrangement involved

false invoices in such a way that offences may have been

committed under s 83 of the Crimes Act 1958 (Vic).

5. Some of the legal issues involved in the first and second of the above

matters have been considered in the previous Chapter in the context of

the Cleanevent case study. The potential operation of s 83 of the

Crimes Act 1958 (Vic) arises in relation to a number of other case

studies concerning the AWU, namely, those in relation to ACI,

Winslow Constructors, Downer EDI and miscellaneous membership

issues. The law applicable to the offence will be considered in this

535

THE B –

6.

7.

8.

3 Shorten M 4 Shorten M 5

Rzesniow 6 Bill Shor 7

Rzesniow 8 Rzesniow

Chapter. W

particular cir

Chapters.

E AGREEM

TJH and the

which came

bargaining a

the Victorian

2005.4

Negotiations

instance by

Thiess) an

Rzesniowiec

For the AW

Later, Cesar

the 2005 EB

negotiations

MFI-9, 9/7/15,

MFI-9, 9/7/15,

wiecki MFI-1, 1

ten, 9/7/15, T:

wiecki MFI-1, 1

wiecki MFI-1, 1

Whether the

rcumstances

MENT

e AWU ente

into force on

agreement in

n Branch of

s on behalf o

Stephen Sas

d later, o

cki.5

WU, initial ne

r Melhem and

BA.7 John C

on behalf of

p 1.

p 63.

13/10/15, p 5.3

113.39-42.

13/10/15, p 5.2

13/10/15, p 6.2

offence ma

of each case

ered into an

n 18 March 2

identical term

CFMEU wh

of the joint v

sse (for John

once the c

egotiations w

d Craig Win

Cummins and

f the CFMEU

36-47, 6.1-12.

29-34.

27-31.

ay have bee

e study will

enterprise b

2005 (2005 E

ms was reach

hich came int

enture were

n Holland) an

contract wa

were undertak

nter undertoo

d Tom Watso

U.8

en committe

be addressed

bargaining a

EBA).3 An e

hed between

to force on 1

conducted in

nd Mike Con

as awarded

ken by Bill

ok the negotia

on participat

ed in the

d in other

agreement

enterprise

n TJH and

18 March

n the first

nnell (for

d, Julian

Shorten.6

ations for

ted in the

536

9. Following entry into the 2005 EBA, Cesar Melhem was responsible for

the day to day administration of the project.9 The person with day-to-day management of industrial relations and human resources on the

project for TJH was Julian Rzesniowiecki. He reported to Chris

Herbert, managing director for TJH.10 From about September 2005,

Julian Rzesniowiecki reported to Gordon Ralph who replaced Chris

Herbert as project director.11

10. During the course of the Eastlink project, from early 2005, the AWU

invoiced TJH and was paid an amount of $300,818.17 plus GST.12

The descriptions on the invoices issued in 2005 and 2006 referred to

advertising in the Australian Worker magazine, tickets to the AWU

Members’ Ball, attendance at OH&S training and IR Regulations

Seminars, sponsorship for OH&S conferences, and research projects.13

The details of the various invoices will be outlined further below.

11. It is clear, from correspondence and documentation that emerged

during the course of the project, that there was an agreement to pay a

sum of $100,000 per year plus GST, and that the payment would be

accounted for by the AWU issuing invoices for various services as

described above, without many of the services in fact being delivered

by the AWU. That an agreement of this kind was reached is, to a large

9 Bill Shorten, 9/7/15, T:114.7-8. 10 Rzesniowiecki MFI-1, 13/10/15, p 10.6-9. 11

Rzesniowiecki MFI-1, 13/10/15, p 15.18-19. 12 Shorten MFI-10, 9/7/15 is a summary prepared by the solicitors assisting the Commission reconciling the payments recorded in the general ledgers of the Victorian and National branches of the AWU against the invoices issued to TJH. 13

Shorten MFI-9, 9/7/15, pp 168A-233.

537

extent, undisputed by those persons affected who made submissions in

relation to the Thiess John Holland case study.14

12. The first document evidencing the agreement is an undated

handwritten table apparently prepared by someone at the joint venture

which contemplates three years of annual payments yielding a total of

$300,000.15 The payments include three payments for ‘research

grants’. The grant for year one is described as ‘attracting employees to </