In early 2006, Paper Australia embarked on the process of expanding its Maryvale mill at Morwell in the Latrobe Valley. Construction commenced at the same time as regular production work and maintenance work on the existing mill was occurring.
In addition to its own construction work as part of this expansion, Paper Australia engaged a range of contractors and subcontractors to perform the construction work required for the expansion. These included Transfield Services (Australia) Pty Limited, Broadspectrum Australia (Qld) Pty Ltd (a wholly owned subsidiary of Transfield) and BMC Welding & Construction Pty Ltd. Transfield has since been replaced by John Holland as the principal contractor.
John Holland applied to the Federal Court for penalties, injunctions and compensation in the wake of industrial action in May 2008 over the question of payment of certain allowances and rates of pay. The industrial action complained of by John Holland was just one of a series of problems that have beset the project.
At a directions hearing on 8 December 2008 Gray J made orders for the matter to be referred to mediation and that was conducted on 23 January 2009. When the matters in dispute remained unresolved, Gray J made further orders on 3 February 2009 regarding filing and serving of documents. On 1 June 2009 Gray J granted leave to John Holland to discontinue its application after it reached a settlement with the respondents.