Office of the Australian Building and Construction Commissioner

Background:

• In October 2003, a head contractor engaged an excavating subcontractor, A & L Silvestri Pty Ltd, to carry out earth moving works at a building site in Wollongong.
• Three local CFMEU officials, Michael Lane, Peter Primmer and David Kelly, took issue with the subcontractor for a variety of reasons, including that he was not a union member and did not have a union agreement.
• On 21 October 2003, the officials visited the Wollongong site raising traffic management concerns and safety issues related to the subcontractor’s excavating machine.
• Mr Lane parked his car across the driveway to the site which was the only vehicular access. He refused to move the vehicle until directed by a police officer.
• A meeting took place between the head contractor and the CFMEU the next morning.
• The head contractor terminated the subcontractor’s contract for services the next day.
• The ABCC alleged the head contractor terminated the subcontractor’s contract for services in response to action, and threats of further action by the CFMEU officials.
• The CFMEU officials also threatened the head contractor’s management with disruption of the site if it did not sign a certified agreement with the CFMEU.

Contraventions of the Workplace Relations Act 1996 (WR Act):

• The ABCC sought orders for:
• Contravention of s.170NC of the WR Act by the Federal CFMEU, CFMEU NSW and Mr Lane. The respondents threatened to take action against the head contractor with intent to coerce the head contractor to make a certified agreement.
• The subcontractor sought damages for:
• Contravention of s.45D of the Trade Practices Act 1974 because the respondents engaged in conduct that hindered or prevented the head contractor from using the subcontractor’s services.
• Claims at common law for inducing breach of contract.

Prosecution:

• The ABCC’s predecessor, the Building Industry Taskforce, filed proceedings in the Federal Court at Sydney on 7 June 2005.
• The hearing commenced on 9 October 2006 and Justice Gyles reserved his decision on 8 November 2006.
• Justice Gyles on 13 July 2007 ruled:
• the Federal and NSW CFMEU breached s.45D of the Trade Practices Act 1974 and
• s.170NC of the WR Act and also induced a breach of the contract between a subcontractor and head contractor.
• Mr Lane breached s.45D of the Trade Practices Act 1974 and s.170NC of the WR Act. He also induced a breach of the contract between a subcontractor and head contractor.
• Mr Primmer and Mr Kelly breached s.45D of the Trade Practices Act 1974 an induced a breach of the contract between a subcontractor and head contractor.
• Justice Gyles has reserved his decision on penalty and damages.

Penalties:

• The maximum penalties for breach of s.170NC of the pre-reform WR Act in October 2003 were $2,000 for an individual and $10,000 for each organisation.
• The Judge has indicated that the damages awarded will be the same for both the common law and the s.45D claims.