On 5 August 2003, following the death of a Shepparton construction worker the previous week, the CFMEU conducted a safety audit at 336 Russell St, Melbourne. This resulted in industrial action on site against B&P Caelli Construction Pty Ltd (Caelli). Approximately three weeks later, further action occurred against Caelli on another site.
On 24 December 2004, the Building Industry Taskforce commenced proceedings against Caelli for paying strike pay and against the CFMEU and two officials, Mr Crnac and Mr Spernovasilis, for demanding strike pay. This prosecution was subsumed by the ABCC upon its inception in October 2005.
Caelli admitted to the contraventions, signed an agreed statement of facts and agreed to a penalty of $6,000 to be wholly suspended for 12 months. The CFMEU also admitted a contravention by it and its two officials. It signed an agreed statement of facts, but no agreement could be reached as to penalty.
On 11 September 2006, the application was dismissed in the Federal Court. The ABCC filed an appeal in the Full Court of the Federal Court on 29 September 2006.