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CFMEU NSW: BUILDING TRADES GROUP DRUG AND ALCOHOL COMITTEEE

Submissions on behalf of Mr Ferguson

1. The submissions of counsel assisting concerning the Thiess Payment

should not be accepted, principally for the following reasons:

a. the contention that the payment was made to purchase industrial

peace is not supported by any evidence that the project was beset

by industrial problems, or that Thiess considered that there was

any need to purchase industrial peace;

b. put another way, there is no direct evidence justifying a finding

that THJV was motivated by a desire to buy off the Union;

c. equally the contention that Mr Ferguson arranged a scheme to

which Messrs Dixon, Sharp, Papa and Deegan were parties1, to

disguise the payment was not put to most of those witnesses for

them to comment upon;

d. section 249B of the Crimes Act 1900 has no application on the

facts of this case;

e. the case theory of counsel assisting accords a central role to Mr

Ferguson, but that theory does not accommodate:

i. contemporaneous documents authored by Mr Ferguson

which indicate that he was told, and accepted, that the

payment was made on account of both OH & S and drug

and alcohol issues;

ii. the fact that Mr Ferguson plainly made enquiries of Thiess,

by contacting Mr Miranda.

Section 249B

2. It is appropriate to start at the end of the inquiry, namely the proper

interpretation of s 249B of the Crimes Act.

1 See paragraph 132 of the submissions of counsel assisting

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3. For present purposes, that section was authoritatively considered by the

Court of Criminal Appeal of New South Wales in Mehajer v R [2014]

NSWCCA 167 (Bathurst CJ, Johnson and R A Hulme JJ) (Mehajer). The

Chief Justice referred to the conflicting authorities on the section and its

equivalents in other jurisdictions. He said at para [55] et seq:

[55] By contrast in R v Turner [2001] WASCA 344; (2001) 25 WAR

258, the Full Court of the Supreme Court of Western Australia, in

considering the Western Australian equivalent of s 249B of the

Act, emphasised (Burchett AUJ at [10], Malcolm CJ and Wheeler J

agreeing) that the section was not concerned with the whole

universe of corruption as distinct from that which is related to the

performance of the duties of an agent. Burchett AUJ considered

the corruption in that sense involved the betrayal of trust or at

least a debasement of the disinterestedness a principal is entitled

to expect of an agent. He said that corruption so understood did

not sit with openness or true assent by the principal. In the result

he reached the following conclusion:

[13] In my opinion, these authorities confirm that the sections are directed at the specified conduct done with the intention (properly described as corrupt) of seducing an agent from the duty owed to their principal or of rewarding the forsaking of that duty in favour of another. Consistently with this view of the sections, they will not apply where the principal is known or believed to have assented.

[56] In R v Kelly (1992) 92 DLR (4th) 643 the Supreme Court of

Canada considered the equivalent section of the Canadian

Criminal Code (R.S.C., 1985, c. C-46) to s 249B of the Act. The

majority, Cory J, L’Heureux-Dubé, Gonthier and Iacobucci JJ

agreeing, rejected the approach in Cooper v Slade supra to the

particular section in question. Cory J stated the purpose of the

section in the following terms (at 658):

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There can be no doubt that s. 426 acknowledges both the importance of the agency relationship and the necessity of preserving the integrity of that relationship. It confirms that an agent should not be placed in a position which is in conflict with that of the principal. It recognizes that a benefit taken by an agent from a third party will place that agent in a conflict of interest position with the principal unless the benefit is promptly and adequately disclosed. No one should provide an agent with a benefit, knowing the benefit to be secret, in order to influence the agent with regard to the affairs of the principal. To do so corrupts and destroys the agency relationship. The secret benefit renders the advice and services of an agent so suspect that they cannot be accepted.

In relation to the meaning of corruption he made the

following remarks (at 660):

What meaning should be given to the word “corruptly“ in the context of this section? It is argued that the offence is complete as soon as the agent takes the benefit as consideration for influencing the affairs of the principal. This is based upon decisions such as Cooper v. Slade (1858), 6 H.L.C. 746 ; 10 E.R. 1488, and R. v. Gallagher (1985), 16 Aust. Crim. R. 215 (Vict. C.C.A.). I cannot accept this position. It stems from the old jurisprudence on the corruption of voters. It is true these cases together with those which deal with the bribery of officials are concerned with the interpretation of “corruption“. However, they are readily distinguishable from the secret commissions cases. In bribery cases there is no prerequisite that an agency relationship exists. Yet the whole aim and object of s. 426 is the protection of the vulnerable principal and the preservation of the integrity of the agent-principal relationship. Furthermore, the nature of a commission is very different from that of a bribe.

The interpretation of the word corruptly must take place within the context of s. 426 itself. It is a trite rule of statutory interpretation that every word in the statute must be given a meaning. It would be superfluous to include

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“corruptly“ in the section if the offence were complete upon the taking of the benefit in the circumstances described by the section. The word must add something to the offence.

In my view, “corruptly“, as used in the section, designates secrecy as the corrupting element of the offence. It is the failure to disclose that makes it impossible for the principal to determine whether to act upon the advice of the agent or accept the actions of the agent. It is the non-disclosure which makes the receipt of the commission or reward corrupt. The word “corruptly“, in this context, adds the element of non-disclosure to the actus reus of the offence.

4. Having reviewed the authorities Bathurst CJ summarised the position

thus:

[59] Although generally speaking it may make little difference to

the result, in my opinion it is an element of the offence that the

payment is corrupt. This is so for a number of reasons. First, it can

be presumed that the word “corruptly“ was intended to have

some meaning and effect: see for example, Project Blue Sky Inc v

Australian Broadcasting Authority supra at 382.

[60] Second, the mischief to which the section is directed, as was

pointed out in R v Turner supra and R v Kelly supra, is to prevent

agents from being encouraged to act to the detriment or against

the interests of their principals. A construction which gives no

meaning to the word “corruptly“ could in theory catch a payment

which was made by a person to another’s agent with the consent

of the principal. For example where it was agreed between the

third party and the principal that the third party would pay the

principal’s agent for carrying out certain work which would be to

the benefit of both the principal and third party.

.

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.

.

[62] Fourth, the conclusion I have reached is consistent with what

was said in the Second Reading Speech to which I have referred in

para [44] above.

[63] In these circumstances it is necessary to demonstrate that the

impugned payment was made in circumstances which would be

regarded as being corrupt according to standards of conduct

generally held. However, as was pointed out in C v Johnson supra,

R v Turner supra and R v Kelly supra, a payment to or receipt by an

agent without the knowledge or consent of the principal for one

or other of the purposes described in s 249B(1)(a) or (2)(a) of the

Act or having the tendency to have the effect referred to in

s 249B(1)(b) or (2)(b), would generally be regarded as corrupt

according to such standards. However, that is a matter for the jury

to determine in any particular case.

5. This reasoning of the Court of Criminal Appeal of Western Australia in R

v Turner [2001] WASCA 344 ; (2001) 25 WAR 258 (Turner) bears close

attention for a number of reasons, not the least because of its factual

similarities to the case propounded by counsel assisting.

6. The appeal was brought by the Crown against the trial judge’s decision

that there was no case to answer. The background facts were facts were

stated by Burchett AUJ thus:

[5] The Midland Gate Shopping Centre Project was a large project,

to cost many millions of dollars, for the reconstruction of a

shopping centre. Fletcher Construction Australia Ltd ("Fletcher"),

of which the respondent John Turner was the manager for

Western Australia, secured in 1993 the contract to do the work.

Vital to the planning of the operations was the setting in place of

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arrangements to avoid difficulties with the labour force to be

employed on the site. To this end, a construction manager

employed by Fletcher, Stuart McGregor, conferred with the other

respondent, Ronald Kinney, a union organiser for the Western

Australian Branch of the Australian Builders' Labourers' Federated

Union of Workers ("BLF"). It was after agreement had been

reached about "the manning levels and shop steward and safety

officer" for the project that, according to Mr McGregor, "Mr

Kinney hinted that perhaps a sum of money would make it run

smoother".

[6] The indictment with which this appeal is concerned arose out

of the events that followed Mr Kinney's hint. There were three

counts in it, two against Mr Turner and one against Mr Kinney, to

the following effect:

"(1) Between 1 January 1993 and 30 November 1994 at Perth

JOHN TURNER with intent to defraud Fletcher Construction

Australia Ltd by fraudulent means, caused a detriment to

FLETCHER CONSTRUCTION AUSTRALIA LTD to the value of $40,000

by procuring an employee to negotiate a subcontract with Ketta

Nominees Pty Ltd as trustee for the Concrete Boys Trust trading as

the CONCRETE BOYS for the Midland Gate Shopping Centre

Project which included an allocation of $40,000 for the payment

of a secret commission. [In the margin of this count was noted

'Code S409(1)(d)'.]

(2) AND FURTHER that on 9 September 1993 at Perth JOHN

TURNER corruptly paid RONALD KINNEY an agent of the Australian

Builders' Labourers' Federated Union of Workers (WA Branch) a

valuable consideration, namely $20,000.00, the receipt of which

would tend to influence RONALD KINNEY to show favour to

FLETCHER CONSTRUCTION AUSTRALIA LTD at its construction site

at the Midland Gate Shopping Centre Project in relation to the

business of the Australian Builders' Labourers' Federated Union of

Workers (WA Branch). [In the margin of this count was noted

'Code S530(b)'.]

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(3) AND FURTHER that on 9 September 1993 at Perth RONALD

KINNEY being an agent of the Australian Builders' Labourers'

Federated Union of Workers (WA Branch) corruptly received a

valuable consideration, namely $20,000.00, the receipt of which

would tend to influence him to show favour to FLETCHER

CONSTRUCTION AUSTRALIA LTD at its construction site at the

Midland Gate Shopping Centre Project in relation to the business

of the Australian Builders' Labourers' Federated Union of Workers

(WA Branch). [In the margin of this count was noted 'Code

S529(b)'.]"

7. Burchett AUJ, who gave the leading judgment said at 25 WAR 266:

[17] It is important to emphasize that this was not a blackmail or

extortion case. The prosecution related to a "secret commission",

alleged to have been paid corruptly to an agent of the union. If it

was in truth a donation to the union itself, in order to further

good relations between Fletcher and the union, it was not a

payment of such a valuable consideration as could come within

s530, nor was its receipt a receipt within s529. The Crown's

Outline of Submissions with respect to Mr Turner refers to the

payment to "the agent of the Union" as made "to make the Union

better disposed to Fletcher". That fundamentally misconceives the

nature of a secret commission, and seems to be directed to some

impropriety (of which there is no evidence) on the part of the

union itself. But, so misconceiving the matter, the Crown case did

not attempt to show, by circumstantial evidence or otherwise,

that the union was in fact ignorant and uninvolved, and Mr Kinney

the recipient of a commission for himself.

[18] On analysis, the decision that there was no case to answer on

counts (2) and (3) does not actually depend upon the correctness

of the view that the Crown had to show an absence of knowledge

and assent by the union. More fundamentally, there was no

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evidence capable of showing that the payment was made or

received otherwise than as a payment, not to the agent, but to

the principal, the union. If a failure to disprove assent would be

fatal to the Crown case, a failure to disprove involvement in the

payment must be so a fortiori.2

8. For the purposes of this submission, it is convenient to proceed upon the

assumption that the facts asserted in paragraphs 142 and 143 of the

submissions of counsel assisting are true and that Mr Dixon was the

agent for the members on the site. However, there is no evidence at all

as to how the alleged payment was capable of causing the CFMEU or Mr

Dixon to show favour towards THJV at the expense of the individual

members. There is nothing to indicate, for example, what the wishes of

the members were at the time the EBA was negotiated or that they had

interests that were not prosecuted by dint of the payment.

9. However, the assumption referred to above is not borne out by the

facts. R v Gallagher [1986] VR 219 was not case that arose from the

negotiations preceding the making of an EBA. The case is not authority

for the proposition that someone in Mr Dixon’s position must

necessarily be acting for multiple parties- as the observations of Fullagar

J cited at VR 225 make plain. Here, on the other hand, the evidence is

plainly is that Mr Dixon was retained by the Union to undertake the

Union’s work. The evidence is entirely silent as to his relationship with

the members generally and indeed how and when he allegedly became

their agent.

10. Such evidence would be critical having regard to the terms of s 170MI

the Workplace Relations Act 1996. That section stated:

(1) If:

2 The emphasis is added

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(a) an employer; or

(b) an organisation of employees; or

(c) an employee acting on his or her own behalf and on behalf of other employees;

wants to negotiate an agreement under Division 2 or 3 in relation to employees who are employed in a single business or a part of a single business, the employer, organisation or employee (the initiating party) may initiate a period (the bargaining period) for negotiating the proposed agreement.

Note: This subsection has effect subject to subsections 170MW(9A) and (10) and 170MZ(7).

(2) The bargaining period is initiated by the initiating party giving written notice to each other negotiating party (see subsection (3)) and to the Commission stating that the initiating party intends to try:

(a) to make an agreement with the other negotiating parties under Division 2 or 3; and

(b) to have any agreement so made certified under Division 4.

(3) In this Division, each of the following is a negotiating party to a proposed agreement:

(a) the initiating party;

(b) if the initiating party is an employer who intends to try to make an agreement under section 170LJ or 170LL or Division 3—the organisation or organisations who are proposed to be bound by the agreement;

(c) if the initiating party is an employer who intends to try to make an agreement under section 170LK—the employees at the time whose employment will be subject to the agreement;

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(d) if the initiating party is an organisation of employees—the employer who is proposed to be bound by the agreement;

(e) if the initiating party is an employee acting on his or her own behalf and on behalf of other employees—the employer who is proposed to be bound by the agreement and the employees whose employment will be subject to the agreement.

11. In short, an agreement can be negotiated by a number of parties and the

Act (in sub-section (1)) drew a distinction between an organisation of

employees (ie the Union) on the one hand and an employee acting on

his or her own behalf and on behalf of other employees. Either or both

might negotiate an agreement, but the section did not treat their

positions as synonymous.

12. What was the case here? The second EBA (MFI 19) was plainly executed

by the Union and it was a party to it, as clause 2 made plain. That

provision also identified (in clause 2(g)) ‘employees of the [THJV]

covered by this agreement’ as constituting a party but, again, there is

nothing to indicate that the Union in fact acted for those persons or

what it may have done on their behalf. The evidence would indicate that

Mr Dixon was the Union’s agent, and no more.

13. On this basis, there could be no breach of s 249B for the reasons given

by Burchett AUJ in Turner, unless Mr Dixon acted secretly and without

regard to his principal (being the Union). The payment was, in part,

received by Mr Dixon’s principal. Mr Ferguson and others within the

CFMEU knew of it.

14. The fact that the Commission cannot as a matter of law find that any

offence has been committed does not necessarily mean that it should

not consider the evidence adduced by counsel assisting. That said, the

Commission ought, with respect, be particularly circumspect in

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reviewing the evidence having regard to the fact that it cannot

recommend that further action be taken and having regard to the

factual problems attending the case theory propounded by counsel

assisting. It is to those facts that these submissions now turn.

Was there a motive for THJV to make the payment of $100,000?

15. Turning to the facts, the case theory referred to above is propounded in

a complete absence of direct evidence as to the state of industrial

relations on the site. In particular no attempt was made to demonstrate

that strike action was imminent at the time the payment was made.

Equally no evidence has been adduced that matters on this front

became quiescent thereafter.

16. Mr Ferguson relies upon the well-known principles given modern

expression in Briginshaw v Briginshaw. There is no need to expound

them for the purpose of these submissions, save to remind the

Commission respectfully that Dixon J (as his Honour was) stated that the

"reasonable satisfaction" which had to be reached by the trier of fact

should not be produced by inexact proofs, indefinite testimony or

indirect inferences: see (1938) 60 CLR 336 at 362. Here the matters

relied upon by counsel assisting do not rise above the categories

identified by Dixon J; and, as importantly, the Commission cannot be

reasonably satisfied of the criminal conspiracy when no attempt was

made to consider the context in which the payment came to be made.

17. Mr Chatburn was a senior Thiess employee; as Construction Director he

reported to the Project Director (Mr Deegan). He and two others

(namely Messrs Jukes and Pearson) negotiated the second EBA. It is a

matter of significance that Mr Deegan apparently played no part in this

process. Mr Chatburn referred to the negotiations for the second EBA

being difficult. In paragraph 9 of his statement he said:

The negotiations were difficult because the EA had expired mid-project and by virtue of the fact that it was necessary for us to

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negotiate with four separate unions and several employee representatives. In addition, I recall that the employees had unrealistic expectations of the outcomes that could be achieved

during bargaining.

18. This, however, is far removed from a claim of industrial militancy that

might justify a secret commission. Indeed, Mr Chatburn clarified his

evidence in this regard during his oral testimony: the parties with the

‘unrealistic expectations’ were the non-union employees.3 The inference

to be drawn from his evidence is that the CFMEU acted reasonably. But

in all events this material qualifies the bold proposition found in the

second and third sentence of paragraph 134 of the submissions of

counsel assisting.

19. His examination by counsel assisting as to the payment of $100,000 was

short.4 It is true that, on his evidence, he was not aware of the payment

of $100,000 at the time it was made; but no attempt was made to

elucidate any evidence from him that might set the context of a secret

commission- even though he would have known about any industrial

problems5- and he was not asked as to why he did not complain to Mr

Deegan, or others within THJV. His duties included ensuring that any

payments made by Thiess were appropriate6 and he became aware of

the payment shortly after it was made, probably in the month after

Thiess raised its invoice.7 It is apparent that he raised no concern about

the payment now under consideration. The most obvious reason for his

quiescence is that he perceived nothing untoward with the payment.

20. No criticism is intended by the observation that Messrs Jukes and

Pearson were not called to give evidence to the Commission, although it

is curious that their whereabouts are not known to Thiess (having regard

to its resources and sophistication). The fact remains, however, that the

3 Chatburn, 11/8/15, T 147.16

4 Chatburn, 11/8/15, T 153-155

5 Andrew Ferguson, 17/8/15, 721.7

6 Chatburn, 11/8/15, T 156.35

7 Chatburn, 11/8/15, T 154.13

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central contention advanced by counsel assisting is that the Thiess

Payment was ‘to ensure Mr Dixon’s agreement in relation to the

negotiations concerning the Second EBA.’8 The Commission should, with

respect, proceed cautiously when it knows that critical witnesses have

not given evidence to it.

21. Such caution is justified further when consideration is given to the fact

that not one document has been tendered which records examples of

actual or threatened industrial militancy. Given the size and

sophistication of the THJV, the Commission can assume that any such

example would have been documented and produced to it under

summons.

22. The only THJV representative who was closely pressed on the issue of

industrial action denied that there was any unrest- other than as

concerned safety- and that matters were out of control. Mr Deegan’s

evidence in this regard bears close analysis, not the least because no

attempt was made to contradict it. The following exchange is recorded9:

Q. Was there any sense of industrial unrest at this time?

A. Not that I recall. In fact, the purpose of my weekly

communication was to keep people informed and let them know

what was going on. That hadn't occurred before and I think

people were - the feedback I had from the workforce was that

they appreciated being kept informed of developments and that -

I can't recall any industrial unrest other than concerns about

safety.

Q. They're fairly major, aren't they? A. Absolutely, but I was dealing with those.10

8 See paragraph 135 of the submissions of counsel assisting.

9 Deegan, 6/10/15, T 896.47

10 See also T 900.31 and T 909.44

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23. Turning to the other side of the ledger, Mr Dixon was a bargaining

representative on the site. 11 However, counsel assisting never raised

with him that the payment of $100,000 was some form of quid pro quo

for industrial peace. He was challenged as to the truth of his evidence as

to how the figure of $100,000 was reached12 and as to the veracity of Mr

Knott’s alleged conversation with him13; but no attempt was made to

put to him the hypothesis that now informs counsel assisting’s

submissions.

24. Mr Ferguson was only asked about his knowledge of the state of

industrial relations on the project by his own counsel. At T 720. 25 the

following exchange is recorded:

Q. My learned friend Counsel Assisting asked you some questions about industrial peace on the Chatswood to Epping Rail Project. What was your understanding, again in about 2005 and 2006, about the nature of industrial relations on that site? A. My recollection of a job where there wasn't any industrial disputation. I know there was an issue where a worker died in 2005 but I don't regard that as industrial disputation. I regard it as a job that was well run by Thiess management in terms of industrial relations. Q. Of course, if there had been industrial unrest, or the threat of industrial unrest, Mr Dixon would have known about that, wouldn't he? A. He would have known about it and would have conveyed it to me.

25. None of this evidence is considered by counsel assisting in their

submissions. Whilst they submit that the evidence of Mr Ferguson, and

others, is untrue, that contention does not carry with it the implication

that evidence such as that cited above can be safely ignored or

11

Dixon, 12/8/15, T 351.8 12

Dixon, 12/8/15, T 358.39 13

Dixon, 12/8/15, T 364.29

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subsumed under some over-arching claim of unreliability: particularly

where Mr Ferguson’s evidence is corroborated by other witnesses,

Should the case theory of counsel assisting been put squarely to Mr

Ferguson?

26. It cannot be doubted that this Commission is obliged to act fairly in the

course of its investigations.14 In Ferguson v Cole [2002] FCA 1411; (2002)

121 FCR 402 at 416 [38], Branson J said:

[34] It is not in dispute that the rules of natural justice, or

procedural fairness as it is now commonly described, impose

obligations on the Commissioner acting as a Royal Commission.

Except in one respect there is no dispute as to the content of

those obligations. It is agreed that the content includes:

(a) a duty to ensure that any person represented at the inquiry

who might be affected adversely by a finding should know of the

risk of such a finding being made and be given an opportunity to

adduce additional material that might deter the Commissioner

from making that finding (see Mahon v Air New Zealand Ltd [1984]

1 AC 808 at 820; Annetts v McCann (1990) 170 CLR 596 per Mason

CJ, Deane and McHugh JJ at 599) ("the hearing rule"); and….

27. It may be accepted that the content of this duty is not prescriptively

defined. That said, the risk of an adverse finding being made against a

witness required the central proposition advanced by counsel assisting

to be put to him or her. Mr Ferguson has an interest in this as much as,

say, Mr Dixon- he is said to be an accessory to Mr Dixon’s activities. It

was not put to him for his comment.

28. This submission does not rely upon the application of the rule in Browne

v Dunn (1893) 6 R 67 and a proposition founded on it that, if a court is to

be invited to disbelieve a witness, the grounds upon which the evidence

14

See, for example, Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581.

16

is to be disbelieved should be put to the witness in cross-examination so

that the witness can have the opportunity to offer an explanation.15

However, the rule is capable of application to inquisitorial tribunals, as

Logan J, sitting as a member of the Full Court of the Federal Court

explained in Sullivan v Civil Aviation Safety Authority [2014] FCAFC 93;

(2014).

29. His Honour said:

46. The so-called “rule in Browne v Dunn”, derived from observations (quoted by Flick and Perry JJ) made by the then Lord Chancellor, Lord Herschell, in Browne v Dunn (1894) 6 R 67 at 70-71, was held in S154 to be inapplicable to proceedings in the Refugee Review Tribunal. There is no relevant distinction to be drawn between that tribunal and the Administrative Appeals Tribunal so far as the rejection of the direct applicability of that rule is concerned. 47. The reference in the amended ground of appeal to “relevant matter” cannot be to a “relevant consideration” in the sense authoritatively described by Mason J in Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 39-40. There was nothing in the CAR or in the CAA which expressly or by necessary implication made what is described in the amended ground a relevant consideration. What did follow from the nature of the review which the Tribunal conducted was that it was bound to afford Mr Sullivan procedural fairness. Even in its amended form, the ground does not expressly assert such a denial but, even reading it benignly and as if it did, there is no substance in this basis of challenge. 48. Since S154, the High Court has returned to the nature of administrative review proceedings in Minister for Immigration and Citizenship v SZIAI [2009] HCA 39; (2009) 83 ALJR 1123 and Minister for Immigration and Citizenship v SZGUR (2011) 241 CLR 594. In light of these cases, it must now be held that, while, in form, a tribunal such as the Administrative Appeals

15

See Cross on Evidence, 9th

edn at p 566, para [17435].

17

Tribunal is strictly inquisitorial, the “core function” of such a tribunal is one of review. In undertaking such a review and where there are interested parties to the review with conflicting positions, there can be circumstances where it would be procedurally unfair for the Administrative Appeals Tribunal to base its decision on the acceptance of a particular witness called by one party without affording another party due notice of a differing version. To recognise this is not to subvert S154 by assimilating the differing nature of judicial and administrative review proceedings. It is just that the inherently flexible content of a procedural fairness obligation can, where that obligation attends the exercise of administrative power, entail a requirement which resembles that which would flow in a judicial proceeding from observance of the rule in Browne v Dunn. 49. In some cases, and the present was not one, procedural fairness may dictate that the nature of a differing version be put in the course of the oral testimony of a witness called by one party. So far as the evidence of Ms Anna Parsissons was concerned and insofar as there were any differences between her evidence and that of those on whom CASA relied, there was no denial of procedural fairness by the Tribunal to Mr Sullivan. That is because Ms Parsissons’ statement, which became part of the evidence before the Tribunal, was prepared after Mr Sullivan had the benefit of being provided with the statements of the witnesses upon whose evidence CASA proposed to rely. All of this occurred well before the hearing undertaken by the Tribunal and in accordance with the Tribunal’s pre-hearing requirements. He thereby had notice of the nature and content of the factual bases upon which CASA would submit that the Tribunal ought on review to be satisfied that his licence ought to be cancelled. Ms Parsissons’ statement was prepared with the benefit of this notice.

30. In this case, no attempt was made to put to Mr Ferguson the indicia now

relied upon to support the submission (referred to in paragraph 16

above) that THJV had a motive to make the impugned payment.

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The amount of the payment

31. Turning to other matters, counsel assisting assert in paragraph 129 of

their submissions that it is implausible that THJV would spend as much

as $100,000 on drug and alcohol training, as distinct from safety issues

generally. That asserted discrepancy was not apparent to Mr Miranda,

even after his investigations, nor was it apparent to Mr Chatburn,

despite his close association with the project. The contention that the

figure was excessive was not put to either witness. Objectively, it seems

an appropriate figure given- as Mr Deegan emphasised- 1,200 people

were to receive training16 and given the serious safety issues that Mr

Dixon observed. The latter opined that the project was the worst- in the

context of safety- he had seen.17

32. Mr Miranda- whose evidence is not the subject of any analysis by

counsel assisting- was tasked to investigate the circumstances of the

payment by a senior representative of Thiess.18 Regardless of what the

invoice received by Thiess may have said, what plainly struck him was

the amount of the payment and its consistency with the terms of the

EBA in so far as it related to drug and alcohol training. His oral evidence

in this regard was as follows:

Q. What do you recall struck you as similar to the EBA clause? A. Well, as I say, the amount of money was very similar

to the amount of money we owed with regards to the time we had on the site, and I think it was $1 per person entering

the site or working on the project, and this $100,000 amount. The amount I was given originally was

$98,000-whatever, and I can't quite remember, and that was only taking off some of the monthly figures.

Q. Did you ever have an opportunity, sir, in the course

16

Deegan, 6/10/15, T 907.5 17

Dixon, 12/8/15, T 376.14 18

Miranda, 6/10/15, T 874

19

of your investigation, to look at the bank accounts of Thiess to see whether or not there were regular payments? A. Yes, that's what they asked for. Q. For drug and alcohol? A. Yes, there was none. Q. Did you look at them?

A. I requested them from Ken Kerr and he told me there was none and Ken Kerr was the financial, like, the Secretary of the --

Q. Just allow me a moment. You were told by Mr Kerr that there were no regular payments so far as --

A. There had been none up until that time, and they should have been done, in my opinion, monthly and there was none.19

33. Far from criticising Mr Deegan, Mr Miranda stated that he was ‘glad’

that Mr Deegan had fixed up a problem with THJVs’ compliance with the

EBA.20

34. Much is made by counsel assisting of the contents of THJV’s records, and

the fact they do not record the provision of services totalling $100,000.21

That submission assumes much about the accuracy and completeness of

THJV’s records, particularly given the passage of time. Whether more

than 16 sessions of training in fact occurred is lost in time. It is likely that

the training of a workforce of 1,200 (and those who later filled jobs)

would cost $100,000, or more. In fact, as the submissions below

indicate:

a. although Mr Knott was clearly satisfied that at least $18,000

worth of work was performed by Mr Simpson, it is by no means

clear that that amount was ever included in THJV’s records;

19

Miranda, 6/10/15, T876.31-877.9 20

Miranda, 6/10/15, T 878.21 21

See paragraph 127 of the submissions of counsel assisting.

20

b. the work sheets which Mr Simpson kept, recording his time on

site, are now lost to the union; and

c. Mr Chatburn thought that ‘there were a lot of separate training

sessions with employees’, which bespeaks the possibility that

more than 16 were conducted.

35. The submissions founded on the contents of THJV’s records do not

reflect the nature and extent of the training that was, in fact, provided.

Mr Simpson’s work was more varied than the reference to training

‘sessions’ suggests. Referring to Mr Simpson, Mr Sharp said:

A. He said he'd do it. That was his job. You see, we provided two different types of training, sir. We provided a general 45-minute presentation to all workers on building and construction sites. That included the showing of our video "Not At Work Mate", and an explanation of The Building Trades Group Drug and Alcohol program and policy, an outline of what services were available at Foundation House, should anyone have problems, and we finished that off with endorsing the program on that site. Now, that took about 45 minutes and we endeavoured to present that to everyone on site. We then had a two-hour safety course or a Safety Committee training course that was in far greater detail, and we presented that to safety committees on sites, and it was that that I told Tom to go out and present to as many workers as possible on that site, the two-hour Drug and Alcohol training course.22

36. A striking aspect of the submissions of counsel assisting is that they

assert that the whole of the sum of $100,000 was a corrupt commission.

In this context, no distinction is drawn between the two components

and, in particular, no attempt is made to explain why the smaller

component of $18,000 was inherently suspicious. There was nothing

unusual in payments being received by the DAC for safety training. Mr

Knott was not alarmed by the fact that the DAC was to receive a

payment of about $18,000, because he knew that “Tommy Simpson did

22

Sharp, 12/8/15, T 314.2

21

education and so forth”.23 He was satisfied that the $18,000 was for

legitimate work performed. 24At T 111.18 the following exchange is

recorded:

Q. Going back to page 107, that $18,191 could have been for training at Thiess? Part of those expenses, for example?

A. You mean the $18,000? Q. Yes. A. Absolutely it was. That's what Trevor Sharp told me when I queried that payment.

37. Mr Chatburn’s witness statement corroborates that Mr Simpson

conducted drug and alcohol awareness training for the Project

Workforce in 2006; indeed he attended a training session.25 In his oral

testimony he referred to ‘concerns regarding drug and alcohol issues’ on

the site.26 He also said of Mr Simpson:

I just remember that he was actually on site and I do remember that we tried to train all of the employees on the site, so there were a lot of separate training sessions with employees.27

38. When he questioned Mr Sharp about the payment, he was told by Mr

Sharp that ‘the work sheets were on file and that [he] could inspect

them if [he] wanted to next time [he] was in Roselle [sic]’.28 It is not

surprising that those sheets should no longer be in existence, given the

passage of time. But the important point is that Mr Sharp is hardly likely

to have justified that component of the payment by reference to

23

Michael Knott, 10/8/15, T 68.7 24

Michael Knott, 10/8/15, T 117.27 25

See paragraph 12 of his statement 26

Chatburn, 11/8/15, T 147.25 27

Chatburn, 11/8/15, T 148.3 28

See paragraph 36 of Mr Knott’s statement.

22

documents which Mr Knott could have readily examined. Counsel

assisting did not challenge this part of Mr Knott’s testimony, or

otherwise seek to undermine his evidence that this particular payment

appeared to be regular.

39. Counsel assisting do not challenge Mr Knott’s credit; they deploy some

of it to advance matters in support of their ultimate contention.29

However, the making of an allegation of serious criminal conduct carried

with it the burden of considering the evidence as a whole. No reason is

given for discounting Mr Knott’s evidence as to this particular segment

of the payment, which begs the following further question- if Mr Knott

believed it, pro tanto, why was Mr Ferguson not entitled to conclude

that the payment was to this extent, or to some greater extent still,

legitimate?

40. Another objective factor justifying the payment was the safety culture –

or initial lack thereof- on the project. There is no reason to doubt Mr

Deegan’s evidence in this regard. His oral evidence included the

following exchange:

Q. You mentioned seeing one person. Did you only see one person involved? A. The one that I suggested he leave the job and not come back was the first indicator, pretty clear, that the man was under the influence of drugs. I observed a number of other people who, in my view, were under the influence of drugs. I was also concerned about the - I found men sleeping in the cross-passages, again remote, waking them up, just checking if they were okay. Some were obviously tired; others had either had a big night or a big weekend beforehand. There was evidence of, in my view, a lack of safety culture on the job in relation to drugs and alcohol.30

29

See paragraph 132 (b) 30

Deegan, 6/10/15 T 892.23

23

Mr Dixon also gave evidence of significant drug use on site.31

41. It is fair to say that Mr Deegan’s evidence identified the safety problems

attending the project and both his and the Union’s concern to improve

conditions.

The timing of the payment

42. It is also important to refer to the timing of the negotiation for the

second EBA. Mr Chatburn claimed that he negotiated the agreement

between October 2005 and January 200632; the EBA was signed on 9

January 200633 and ratified by the Australian Industrial Relations

Commission on 7 February 2006.34 The payment of $100,000 was made

approximately two months after the latter date. The gap of two months

does not suggest that the payment was made in consideration of the

finalisation of the EBA. The more anodyne explanation comes from the

contemporaneous records- namely that Mr Simpson gave his address to

the Project Safety Committee on 15 February 2006. 35 The payment fits

the chronology of services being performed by Mr Simpson.

43. Yet the issue of timing is critical to counsel assisting’s submissions in so

far as s 249B is concerned. Paragraph 142 thereof identifies Mr Dixon’s

function as the union’s agent as its representative in ‘enterprise

bargaining considerations’.

44. Why then was the payment delayed? There may be –in theory- good

reasons for this, but none were put to the witnesses for their comment.

Mr Chatburn is not the subject of criticism by counsel assisting, but he

and two others (who have not been called) were THJV’s representatives

in the very process which is said to engage Mr Dixon’s corrupt conduct.

Other matters which are inconsistent with the case theory

31

Dixon, 12/8/15, T 351.40 32

See paragraph 8 of his statement. 33

MFI -20 34

See paragraph 10 of Mr Chatburn’s statement. 35

See Dixon, 12/8/15, T 355.41

24

45. The second EBA included a ‘no strike clause’: see clause 9 of MFI-20.

There is no evidence that THJV ever complained that that clause had

been breached and it curious (to say the least) that an entity as large and

powerful as THJV did not (in any form) make complaint to the industrial

umpire if there was any actual or threatened breach of that provision.

46. Against these matters, it is apt to ask why Mr Deegan might have been

the person at Thiess who procured the payment. As Mr Chatburn

indicated, Mr Deegan was not involved in the negotiation of the second

EBA. His scope of his duties apropos the CFMEU was not explored in his

oral testimony. Why he should have made the payment of $100,000

when he was not directly involved in maintaining industrial relations is a

mystery.

47. On 1 September 2006 Mr Deegan wrote to Mr Ferguson thus:

48. Mr Deegan was not directly challenged as to his motives in writing this

letter. Counsel assisting did not contend in their examination that this

letter was other than true or that it did not reflect Mr Deegan’s thinking.

Its praise of the Union does not comprehend the possibility that Mr

Ferguson extorted a large sum of money.

49. The Commission should treat this letter as a fair indication of the Union’s

role in the project and a counter-poise to any contention that it was

25

engaged in a corrupt scheme. No reason has been advanced as to why

Mr Deegan should write such a letter unless it truly reflected his views.

50. There is another logical problem with case propounded by counsel

assisting. They properly concede that the recollections of various

witnesses have been affected by the passage of time. It is one thing,

however, to reject the evidence of witnesses; it is another thing to

conclude that the ‘only available conclusion is that their accounts were

self-serving fabrications.’36 The position is much more nuanced, as Gibbs

J (as his Honour was) recognised in Steinberg v Federal Commissioner of

Taxation (1975) 134 CLR 640 at 694. His Honour said:

"The fact that the witness is disbelieved does not prove the

opposite of what asserted: Scott Fell v LLoyd (1911) 13 CLR 230 at

241: Hobbs v Tinling (CT) and Co Ltd [1929] 2 KB I at 21. It has

sometimes been said that where the story of a witness is

disbelieved, the result is simply that there is no evidence on the

subject (Jack v Smail (1906) 2 CLR 684 at 698; Malzy v Eichholz

[1916] 2 KB 308 at 321; Ex parte Bear; Re Jones (1945) 46 SR

(NSW) 126 at 128, but although this is no doubt true in many cases

it is not correct as a universal proposition. There may be

circumstances in which an inference can be drawn from the fact

that the witness has told a false story, for example, that the truth

would be harmful to him; and it is no doubt for this reason that

false statements by an accused person may sometimes be

regarded as corroboration of other evidence given in a criminal

case: Eade v The King (1924) 34 CLR 154 at 158; Tripodi v The

Queen (1961) 104 CLR 1. Moreover, of the truth must lie between

two alternative states of fact, disbelief in evidence that one of the

state of facts exists may support the existence of the alternative

state of facts: Lee v Russell [1961] WAR 103 at 109."37

36

Cf paragraph 132 of the submission of counsel assisting 37

The emphasis is added

26

51. Mr Knott’s reaction to the payment was founded only on guesswork.38

He assumed that the payment was made to ‘influence the Union’s

proceedings.’39 However, he was unable to identify in any more detail

the purpose of the payment ; when pressed by Mr Latham at T 131.17

he could not say what ‘influence [was] being bought’.

52. This lacuna is all the more surprising when it is appreciated that

organisers, of whom Mr Dixon was one, reported to Mr Knott ‘on various

matters, from car problems through to whatever….there was a whole

range of issues that organisers would report to [him], yes’.40 Mr Knott

asserted that he had authority to issue directions to Mr Dixon.41

53. No weight should be placed on Mr Knott’s claim that he complained that

the payment was corrupt. Although he accepted that the conversation,

as he recounted it, was a very significant one42, he could not recall taking

a note of the exchange43, and none has been found. His concern was

apparently discharged by reporting the matter to Mr Ferguson, even

though the latter did not embrace his case theory. He did not report the

matter to the police.44 He did not refer to the matter in his farewell

email of 12 December 2011, even though he considered the records

relating to the Thiess transaction to be irregular. 45. He justified his

silence by reference to a naïve expectation that he would be asked for

his views when the relevant investigation was conducted46. Mr Knott’s

experience and senior position would not normally justify the

Commission in concluding that he might be naïve in believing that he

would be approached when an investigation was launched, but the

38

See, for example, Michael Knott, 10/8/15, T 129.37 39

Michael Knott, 10/8/15, T 129.41 40

Michael Knott, 10/8/15, T 133.37 41

Michael Knott, 10/8/15, T 134.1 42

Michael Knott, 10/8/15, T 131.38 43

Michael Knott, 10/8/15, T 132.1 44

Michael Knott, 10/8/15, T 133.16 45

Michael Knott, 10/8/15, T 138 46

Michael Knott, 10/8/15, T 136.37.

27

simple fact is that he took the matter no further when he was not

further approached.

Mr Ferguson’s evidence

54. Mr Ferguson submits that:

a. he was not told by Mr Knott of the latter’s alleged concerns about

the legitimacy of the proposed payment;

b. he properly raised his concerns with Mr Dixon about the payment

of $100,000 and his concerns were allayed;

c. he did not conspire with Mr Sharp to keep the payment out of the

records of Foundation House, by putting it through the BTG D& A

account;

d. the Commission should find that Mr Ferguson approached Mr

Miranda- which fact strongly speaks to the former’s integrity.

55. As to the first of those matters, Mr Knott’s evidence suffers from the

fundamental problem that he had no basis to reach an informed view

about the propriety of the payment. His purported opinion was not

shared by anyone else and Mr Knott was not directly involved in the

bargaining process for the second EBA, which counsel assisting opine

constituted the raison d’etre for the payment.

56. As to the second of those matters, Mr Ferguson’s evidence was as

follows:

Q. Yes. Did Mr Dixon say something? A. Mr Dixon responded that Thiess had offered a donation of $100,000 to the Union and I then quizzed him on the purposes of the donation proposed. The words I remember is actually dealing with the issue that Michael had raised and Peter had raised about donations, so I know that word was used in this discussion, and Mr Dixon indicated it was a

donation to the Union for safety purposes. I know the word "safety" was used. I recollect him very specifically indicating that, in addition, Thiess had a preference or a need or a

28

desire, I don't know the word, in that area for some drug and alcohol training to be done on the project and I questioned Steve about, "What's the scale of the training required?" And he responded, "A number of courses for the workforce on the job." He wasn't in a position to quantify the number of courses or days or hours, but he said Thiess wanted some training in respect of alcohol and drug awareness and so on, and we focused on that issue and

got an understanding of perhaps 10 or 15 courses on the project. That probably dealt with that subject matter. Q. Right. A. And then I quizzed him in relation to the contribution for safety for what - did Thiess indicate specifically how

they wanted the money to be expended and Steve advised that they weren't prescriptive, that it was for the safety work of the Union, and I asked him was it specifically for the

job and the response was for safety work plus, more broadly, for safety and I know there was a reference to tunnel safety and I know at this particular point of time

Steve was involved in a working committee with WorkCover on the issue of developing a code of practice for tunnel

safety and was working on that and we had a discussion about the code of practice and the work that he had done and was doing on the issue. I specifically asked, "Are you sure this is aboveboard? Is there no issue of duress? Is it voluntary?" And I got assurances in respect to those issues.

57. A number of things may be said about this version of events:

a. first, it is inherently credible: the answers attributed to Mr Dixon

are, for example, consistent with the evidence about the level of

drug use on the project;

29

b. secondly, the evidence is consistent with Mr Dixon’s evidence, to

the extent that the latter recalled reporting to Mr Ferguson about

the offer of payment47;

c. thirdly, and most importantly, Mr Ferguson’s evidence is

consistent with- and corroborated by- his note to Mr McClelland

of 2 October 2007 and his handwritten annotations to an email of

10 December 2011.

58. As to the third of those matters, Mr Sharp’s evidence is to the effect that

the payment of $100,000 into the accounts of Foundation House would

cause suspicion may well be true; its vice is that a payment of 20% (ie

$20,000) would be equally likely to excite concern.

59. On 2 October 2007 Mr Ferguson wrote to Mr McClelland. It stated,

according to Mr Ferguson48:

I finally caught up with a backlog of work today. As you are aware the ABCC have been pestering T Sharp re a payment made to BTG D & Alcohol last year. I got off M Knott last week a copy of invoice sent for $100,000. The invoice says for BTG Drug & Alcohol etc & Safety Consultancy. I got Tony Papa to get invoice sent last year when [Steve] Dixon told me what Thiess Hochtief had agreed. I was a bit perplexed at the time but [Steve Dixon] assured me etc. You know what SD [Steve Dixon] was like. Anyway I double checked this recently with SD who now has a different story. He says really money was only for Drug & Alcohol, not OHS. When we got the payment BTG Exec officers met & decided $18,181.82 for Drug & Alcohol & $72727.29 for BTG for safety. As BTG did not have a safety officer they allocated this to CFMEU as we do [99% of the industry OHS work]. In any case I am not comfortable with this and therefore arrange for the full amount to go to T Sharp, ie CFMEU pay $72,000 [sic] to D&A.

47

Steve Dixon, 12/8/15, T 368.15 48

Andrew Ferguson, 14/8/15, T 622

30

60. Mr Ferguson was plainly speaking candidly to Mr McClelland about the

payment. His letter corroborates that he was assured by Mr Dixon as to

propriety of the payment in 2006, including that the payment was in

part justified by ‘OHS’ or (as Mr Ferguson called it in his oral evidence,

‘safety work plus’). In addition, the letter reinforces the submission

made above that the split in the payment was not the result of any

decision made by Mr Ferguson- as he put it, it was made by the ‘BTG

Exec officers’. All of this serves to undermine Mr Sharp’s contention that

he and Mr Ferguson agreed privately to split the payment 80:20 to avoid

scrutiny.

61. Much the same can be said about Mr Ferguson’s handwritten note of 10

December 2011.49 According to Mr Ferguson it stated:

When Steve Dixon an official he had discussion I think with John Lee of Thiess in 2006.They resolved to donate $100,000 (inclusive of GST) to BTG for OHS/D&A work in the industry. BTG donated $20,000 inclusive of GST to D&A. Tom Simpson specifically did D&A training etc on a Thiess project. Balance of money used by CFMEU for OHS. Recently T Sharp indicated to B Parker if he did not get a job with BTG doing D&A he would blow this issue up. This was a form of blackmail/extortion.

62. Again, the letter corroborates Mr Ferguson’s view that the payment

related to, inter alia, OHS and that the no impropriety attached to the

payment. The comments concerning Mr Sharp reflect adversely on his

credit and should be taken into account by the Commission when

considering his credit.

63. Another important piece of evidence stems from Mr Miranda’s

testimony. He corroborated Mr Ferguson’s evidence to the effect that

49

Drug and Alcohol Case Study MFI-17

31

the two men spoke in the context of the investigation launched by the

ABCC. Mr Miranda said:

A. He also asked what - you know, what was coming from it and I said, "Nothing. We owed the money, we'd paid the money, I'm not going any further with it." He began to tell me a few things about what was happening there. I actually said I didn't want to know. I don't get involved ever with the Union's internal politics - and I mean that, ever - and that's - we left quite amicably, but I just didn't want to, you know, deal with any of the issues he had.

64. Regardless of whether Mr Miranda would have been upset if he had

known the payment ‘had been done in the way it’s reported to be

done50’ (whatever that precisely means), the fact remains that Mr

Ferguson approached him to discuss the payment and elicit his views

about his investigation.

65. This is not the action of a guilty man. No explanation has been proffered

as to why Mr Ferguson would embark upon a course of conduct that

would likely only harm him if he was a participant to a fraud.

The evidence of Mr Sharp

66. In light of the foregoing, the evidence of Mr Sharp requires little

attention. However, because Mr Sharp’s evidence in places conflicts with

Mr Ferguson’s, it is appropriate to make short submissions about his

credibility.

67. First, it is plain that his recollection of events in 2012 was poor, because

(as he said not unreasonably) ‘it’s a long period of time, yes, for me to

50

Miranda, 6/10/15, T 881.17

32

remember…2012, that’s 365 days, man’.51 The Commission can have

little confidence that he was able to recall events more distant in time.52

68. Secondly, his evidence- which he said was ‘very clear in his mind’ and

admitted no doubt53- that he did not contact the ABCC investigator was

shown to be wrong having regard to the running sheet for 20 September

2007, recorded in the transcript at T 279.7.

69. Thirdly, not only was that evidence wrong but it was plainly deployed to

discredit Mr Ferguson. It reflects poorly on Mr Sharp that he persevered

in blaming Mr Ferguson for, in effect, muzzling him vis-à-vis the

investigator, when the running sheet entry records no hesitation on his

part in communicating with the investigator.

70. In this regard, there is no doubt that Mr Sharp harboured hostility

towards Mr Ferguson. Mr Miranda observed that everybody in the

construction industry knew there was a blue going on between Mr Sharp

and Mr Ferguson54. Mr Ferguson gave his evidence in relation to Mr

Sharp; the latter, however, employed extravagant language which

suggests a far from dispassionate approach.55 It is also telling that Mr

Sharp made complaint in this regard when he wrote his letter of

complaint on 23 June 2012.56

71. When he was asked about his views of Mr Ferguson, he answered that

he was ‘indifferent’ to him and had ‘no respect’ for him. 57 This was a

rather circumspect answer having regard to his description of Mr

Ferguson as a ‘dog’.58

51

Sharp, 12/8/15, T 275.7 52

See also T 286.43 (12/8/15) where he conceded that his recollection of the events of 2004 was somewhat poor and T 325.45 53

Sharp, 12/8/15, T 278.21-.41 54

Miranda, 6/10/15, T 883.16 55

See, for example T281.30 (12/8/15) “Mr Ferguson controlled me absolutely.” 56

Sharp, 12/8/15, T 294 57

Sharp, 12/8/15, T 293.9 58

Sharp, 12/8/15, T 293.35

33

72. A theme of Mr Sharp’s evidence was that he believed that Mr Ferguson

amended the EBAs to remove funds from Foundation House. 59 This view

was espoused without any supporting evidence and is objectively

unlikely, having regard to Mr Ferguson’s evident concern for the welfare

of his workers and the fact that many EBAs did not contain the clause

that purportedly excited Mr Sharp’s concerns. The allegation was made

despite the absence of any supporting documents60 and sits

incongruously with Mr Sharp acknowledgement that Mr Ferguson

supported the Foundation.61

73. In paragraph 132(a) of their submissions, counsel assisting contend that

Mr Sharp spoke ‘against interest’ when he asserted that the invoices was

‘bogus’. Having regard to the foregoing, it was in fact in the ‘interest’ of

Mr Sharp to impugn Mr Ferguson.

74. Fourthly, he gave other evidence that was inherently improbable. Given

his long association with the union and the fact that he was a union

official62, it is surprising that he did not know that EBAs varied between

employers63, as he said initially.

75. The evidence about the letter of February 2005 is considered in more

detail below. It is relevant, however, to note one aspect of Mr Sharp’s

evidence in this regard at this juncture. Mr Sharp asserted that the

arrangement was to be kept secret from everyone, including the

Union.64 He then qualified that answer.65 In all events, it is difficult to

understand why, if this evidence was true, the arrangement was

documented and the letter kept in a filing system which could be

inspected.66

59

Sharp, 12/8/15, T 284 60

Sharp, 12/8/15, T 297.46 61

Sharp, 12/8/15, T 296.8 62

Sharp, 12/8/15, T 316.2 63

Sharp, 12/8/15, T 288.1 64

Sharp, 12/8/15, T 303.10-.14 65

Sharp, 12/8/15, T 303.21 66

Sharp, 12/8/15, T 305.10

34

76. For these reasons the evidence of Mr Sharp should not be accepted

where it is in conflict with that of Mr Ferguson.

Events after 2006

77. Lastly, it is necessary to deal with the events which occurred after 2006,

having regard to the submission that those events are important to an

assessment of what occurred.67

78. The focus on these events does not detract from the submission made

above that there is no evidence of substance justifying the submission

that there was a corrupt payment in 2006.

79. Further, regard should be had to the competing pressures on Mr

Ferguson. He did not exercise day to day control of the Union’s

finances68 and what he was told by Mr Dixon seems to have varied as

between 2006 and October 2007. He may be forgiven, in those

circumstances for not having a completely consistent recollection of the

events.

80. Again, a close analysis of the various documents should not divert

attention from 2 matters. First, his report of 2 October 200769 makes

plain that Mr Ferguson accepted and relied upon such information as Mr

Dixon gave him. As the note says, ‘I was a bit perplexed at the time but

[Mr Dixon] assured me etc’. The balance of the report makes plain that

Mr Ferguson was told that some of the money was used for OHS

purposes.

81. There is no reason to doubt that this report accurately summarised Mr

Ferguson’s then understanding of what he had been told. In those

circumstances, nothing untoward arises from the fact that a proportion

of the $100,000 was allocated to the union- it appears to be common

67

See, for example, paragraph 71 of the submissions of counsel assisting. 68

Thus, for example, he seems to have had nothing to do with the transfer of funds that occurred on 20 April 2006 69

Reproduced at page 95 of the submissions of counsel assisting

35

ground that the Building Trades Group (BTG) of Unions Drug & Alcohol /

Safety Program did not retain a safety officer.

82. Secondly, and as submitted above, Mr Ferguson’s approach to Mr

Miranda does not bespeak earlier misconduct on his part.

83. Having regard to the foregoing, Mr Ferguson’s actions at the time of the

ABCC bear an innocent explanation. Mr Ferguson acted with propriety in

ensuring that the funds were paid to the BTG D & A Safety account

pending the outcome of that investigation. The fact that he later caused

the money to be returned to the union reflected his understanding that

Mr Dixon’s first explanation was correct- a fact which was given some

support by the termination of the ABCC investigation.

The BTG D & A Clause

84. At relevant times the BTG D & A clause stated:

“The Company will contribute $1.00 per week per Employee to an

administrator nominated by the Building Trades Group (BTG) of

Unions Drug & Alcohol/Safety Program, to assist with the

provision of drug & alcohol rehabilitation services/safety

programs for the building industry.”

85. The clause has a number of levels of complexity that deny the simple

application of the law of trusts.

86. First, the clause contemplates that an administrator will act as trustee.

Neither the CFMEU nor Mr Ferguson acted as trustee, and no claim is

made that the former acted as a trustee de son tort. The trustee was the

Building Trades Group (BTG) of Unions Drug & Alcohol / Safety Program

or Laytins Mayfair. Such liability as Mr Ferguson has must arise from

36

another source; yet no submissions are made that he is liable as an

accessory pursuant to the principles articulated in Barnes v Addy.

87. Secondly, any analysis founded on Barnes v Addy (or some other

equitable principle apportioning liability) needs to start with the

proposition that Mr Ferguson did not control the expenditure of the

monies raised by the BTG D & A Clause. He was not a member of the

BTG D & A Committee and he did not participate in any of the decisions

that implemented the agreement manifested in the letter of 25 February

2005.

88. In this regard Mr Ferguson’s evidence was to the following effect:

Q. Are you saying that you had no knowledge of what the BTG component of that division was going to be used for? A. Well, the clause makes no reference to

Foundation House. I'm aware that the Building Trades Group of Unions Drug and Alcohol/Safety Committee had discretion about where they spent their money, and I'm also aware that money went to Foundation House. I'm not in a position to verify that 100 per cent of the money went to Foundation House. I don't know that detail.70

89. He was not challenged as to this evidence.

90. Thirdly, the BTG D & A clause contemplates two uses for the

contributions- including ‘safety programs for the building industry’. On

the true construction of the clause, this object is in addition to, and

distinct from, the provision of ‘drug & alcohol rehabilitation services’.

Grammatically, the two concepts are separated by a slash (solidus),

which is conventionally used the word substitute for "or", which

indicates a choice (often mutually-exclusive) is present. In truth what it

separates are discrete: there is no reason to think that the former 70

Ferguson, 14/8/15, T 581.23

37

qualified the latter, particularly having regard to the Union’s long-held

concern with industrial safety.

91. The Full Bench in The Australasian Meat Industry Employees Union v

Golden Cockerel Pty Limited [2014] FWCFB 7447 summarised the

principles applying to the interpretation of EBAs thus:

[19] The general approach to the construction of instruments of

the kind at issue here is set out in the judgment of French J, as he

then was, in City of Wanneroo v Australian Municipal,

Administrative, Clerical and Services Union(Wanneroo):

“The construction of an award, like that of a statute, begins

with a consideration of the ordinary meaning of its words.

As with the task of statutory construction regard must be

paid to the context and purpose of the provision or

expression being construed. Context may appear from the

text of the instrument taken as a whole, its arrangement

and the place in it of the provision under construction. It is

not confined to the words of the relevant Act or instrument

surrounding the expression to be construed. It may extend

to ‘...the entire document of which it is a part or to other

documents with which there is an association’. It may also

include ‘... ideas that gave rise to an expression in a

document from which it has been taken’ -Short v FW Hercus

Pty Ltd (1993) 40 FCR 511 at 518 (Burchett J); Australian

Municipal, Clerical and Services union v Treasurer of the

Commonwealth of Australia (1998) 80 IR 345 (Marshall J). ”

[20] To this we add the oft-quoted observations of Madgwick J

in Kucks v CSR Limited that a narrow pedantic approach to

interpretation should be avoided, a search of the evident purpose

is permissible and meanings which avoid inconvenience or

injustice may reasonably be strained for, but:

38

“. . . the task remains one of interpreting a document

produced by another or others. A court is not free to give

effect to some anteriorly derived notion of what would be

fair or just, regardless of what has been written into the

award. Deciding what an existing award means is a process

quite different from deciding, as an arbitral body does, what

might fairly be put into an award. So, for example, ordinary

or well-understood words are in general to be accorded

their ordinary or usual meaning.”

[21] Although their Honours were each dealing with the proper

interpretation of an award, the same principles are apt to apply to

the interpretation of enterprise agreements. For example, similar

observations were made in Amcor Limited v CFMEU (Amcor):

“Clause 55.1.1 must be read in context. It is necessary,

therefore, to have regard not only to the text of cl 55.1.1,

but also to a number of other matters: first, the other

provisions made by cl 55; secondly, the text and operation

of the Agreement both as a whole and by reference to

other particular provisions made by it; and, thirdly, the

legislative background against which the Agreement was

made and in which it was to operate.”

[22] The fact that the instrument being construed is an enterprise

agreement is itself an important contextual consideration. As

French J observed in Wanneroo:

“It is of course necessary, in the construction of an award,

to remember, as a contextual consideration, that it is an

award under consideration. Its words must not be

interpreted in a vacuum divorced from industrial realities -

City of Wanneroo v Holmes (1989) 30 IR 362 at 378-379 and

cases there cited. There is a long tradition of generous

construction over a strictly literal approach where industrial

awards are concerned - see eg George A Bond and Co Ltd (in

39

liq) v McKenzie [1929] AR (NSW) 498 at 503-504 (Street J). It

may be that this means no more than that courts and

tribunals will not make too much of infelicitous expression

in the drafting of an award nor be astute to discern

absurdity or illogicality or apparent inconsistencies. But

while fractured and illogical prose may be met by a

generous and liberal approach to construction, I repeat

what I said in City of Wanneroo v Holmes (at 380):

“Awards, whether made by consent or otherwise,

should make sense according to the basic

conventions of the English language. They bind the

parties on pain of pecuniary penalties.” 71

92. This approach to the construction of EBA reinforces some obvious

matters. The composite expression ‘safety programs’ has its own

independent meaning. It is, on the other hand unlikely that the BTG

should confine its concerns to drug and alcohol programs; it was

naturally interested in the full range of safety courses for the sake of

their workers. A further consideration in this regard is that there may

not be a bright line separating safety generally from a more specific

concern with drugs and alcohol. Still further is the fact that in about

2005 the levy increased by 100%, to $2. It was hardly surprising that that

sum should be split 50:50.

93. The construction of the BTG D & A clause has significance on two levels.

Its true construction bears on the question of whether a breach has

occurred. However, a construction that was open to the reader (even if

not correct) would absolve him from liability as an accessory to a breach

of trust. There was nothing inherently implausible about Mr Ferguson’s

construction of the clause as authorising the use of the contributions for

safety programs simpliciter.

71

The emphasis is added; the footnotes have been excised

40

94. Fourthly, the submissions of counsel assisting invoke, without much

analysis, a Quistclose trust.72 However, that submission does not survive

close scrutiny of the relevant legal principles.

95. There are a number of reasons for this. The principles of trust law are

not readily invoked in commercial transactions. Secondly, as Brereton J

said in Re Vivo International Corp Pty Ltd (in liq) [2015] NSWSC 1556:

[22] I accept that where funds are advanced for a purpose and

that purpose fails, that does not necessarily mean that the funds

revert to the person making the advance. Whether they do so

depends on the nature of the transaction. Many loans are made

by financial institutions nominally for a purpose. The fact that the

funds are not applied to that purpose is, generally speaking,

beside the point. On the other hand, cases such as Barclays Bank

Ltd v Quistclose Investments Ltd [1968] UKHL 4 ; [1970] AC 567

recognise that there are circumstances in which, where there is an

agreement that funds provided by one party to another will be

used exclusively for a particular purpose, a trust may result to the

provider of the funds if that purpose fails. I also accept that

whether a Quistclose trust arises or not is judged not according to

the subjective intention of the provider of the funds, but

according to the mutual intention of the parties objectively

ascertained.

The authors of Young, Croft and Smith, On Equity (2009) Lawbook Co, at [6.1020] said in a passage considered as correct by Campbell JA in Raulfs v Fishy Bite Pty Ltd [2012] NSWCA 13573 (Raulfs):

Cases in this area will often depend on a close analysis of the facts, and in particular, whether the person who provided the money annexed a trust or equitable obligation that it was only to be used for the nominated purpose. The mutual intention of the parties … will be important. A trust will not necessarily arise just

72

Barclays Bank Limited v Quistclose Investments Limited [1970] AC 567 73

At para [49]; Meagher and Barrett JJA agreed with Campbell JA

41

because a lender inquires into the purpose for which a loan is sought and money is paid over for that particular purpose.

96. The facts of Quistclose were somewhat unusual. Gummow J summarised

the ratio decidendi of the case thus, in Australian Elizabethan Theatre

Trust; Lord v Commonwealth Bank of Australia (1991) 30 FCR 491 (at

501.5):

… the essential reason why the insolvency law did not strike at the transaction in question in Quistclose was that the moneys represented by the cheque drawn by Quistclose in favour of Rolls Razor and banked in the special account of Rolls Razor never any at stage became the beneficial property of Rolls Razor. It acquired no more than what Dixon J called a dry legal interest: see Commissioner of Stamp Duties (NSW) v Perpetual Trustee Co Ltd (1941) 64 CLR 492 at 510. On its part, Quistclose had both a contractual right to repayment out of the general assets of Rolls Razor, as a general creditor, and the beneficial interest in a fund, whether by way of resulting trust or as the second limb of an express trust.

97. To the same effect is the reasoning of Needham J in Re Associated

Securities Limited and the Companies Act [1981] 1 NSWLR 742, a case

arising from a company’s failure to issues shares despite the fact that

applicants had paid money to it in anticipation of the share issue. At

NSWLR 747-8 his Honour said:

The most recent case is Re Nanwa Gold Mines Ltd [1955] 1 WLR 1080; [1955] 3 All ER 219. The company issued a circular to its shareholder together with an application form for allotment of new shares. The circular informed the shareholders that, if £50,000 was raised by the issue, the company would resume surface mining. The scheme involved also a reduction of capital, which had been lost. The shareholders were told that resumption of mining was dependent upon the raising of the sum referred to and the consent of the court. The application form contained the following: “Should either of these conditions not be

42

fulfilled, application moneys will be refunded and meanwhile will be retained in a separate account.” Harman J held that these words constituted the company a trustee of the sums paid if the conditions were not fulfilled. His Lordship conceded that the authorities showed that a mere promise to repay was not sufficient to achieve that result (Moseley's case (1865) LR 1 Eq 405) and also noted that it was conceded that the mere placing of the money in a separate account was also insufficient. The promise to do so was the effective instrument for the creation of the trust.

In the present case, no such feature exists; in fact, there is not even a promise to repay in respect of the allotment to which the stockholders were entitled, and, accordingly, the decision of Harman J ([1955] 1 WLR 1080; [1955] 3 All ER 219), is distinguishable. There is nothing in the present case which would not be found in every case where a company offers to allot shares, receives money on the faith of that offer and fails to meet its obligation.

98. Counsel assisting refers to the reasoning of Gibbs ACJ in Australasian

Conference Association Ltd v Mainline Constructions Pty Limited (in liq)

(1978) 141 CLR 335 ‘as authority for the…proposition’ set out in

paragraph 160 of their submissions. However, as Campbell JA pointed

out in Raulfs, that passage needs to be read in context. After citing the

passage reproduced at paragraph 160, his Honour said:

[43] Notwithstanding that Gibbs ACJ referred to “the argument advanced by counsel for the Bank in reliance on the decision in Barclays Bank Ltd v Quistclose Investments Ltd” (353), it appears that in truth counsel for the Bank advanced a somewhat different argument to that which had been advanced in Quistclose. Gibbs ACJ continued at 353:

In the present case it was submitted not that a trust was created, but that there was a contract express or implied between the appellant and the bank that so much of the money as was not spent in the discharge of the obligations

43

of Mainline would be refunded to the Bank. However, there was no evidence from which it can be concluded that it was intended that the money should not form part of the general assets of Mainline. There was no requirement that it should be kept in a separate fund; in this report the provisions under which the security was given — those of cl 30(c) — may be contrasted with those of cl 30(d) which require the retention fund to be paid to an interest bearing deposit in joint names, the amount of which was to be held in trust. Further, the obligations of Mainline under the contract were various, and the likely amount of Mainline’s final liability to the appellant was quite unknown when the guarantee was given. The payment by the bank was not a provisional payment, or a payment on account; the money was provided as a security and was used for that purpose. In all these circumstances it should be concluded that the intention of the parties to the guarantee was that the money was to form part of the general assets of the appellant, to be used as it wished, subject only to an obligation to account (to Mainline) for any surplus. No stipulation to repay the money to the bank can be implied.

99. Here there exists no matter that converts a payment for a purpose into

an express trust. The payment made by the employers was

unaccompanied by any offer to repay the contributions if the purpose

failed and there was no holding out that the monies would be paid into a

separate account, discrete account.

100. Further, the clause contemplated the provision of funds for two

broad classes of services, each of which in turn embraced a wide sphere

of operation. The provision of drug and alcohol rehabilitation services

might cover many forms of assistance. In these circumstances, it is likely

that employers considered that the administrator had a wide discretion

to apply the funds as he/she saw fit and without any recourse to them.

101. Of course, a Quistclose trust only arises if the purpose of the

payment fails. This has not occurred. The relevant clause permitted

payments to be made to facilitate ‘safety programs for the building

44

industry.’ There is no doubt that the CFMEU promotes such programs.

Simply put, there has been no breach and (having regard to what is said

above) there is no evidence that Mr Ferguson and others were

knowingly concerned in that breach.

Counsel assisting also invoke the possibility of a charitable trust. Again,

the fact that the alleged trust arose in a commercial context militates

against a finding that any trust was objectively intended. The BTG did

not have as its principal object and pursuit charitable purposes and the

money formed part of a much larger agreement between the parties to

the EBA.

102. Having regard to the above, it is convenient now to turn to Mr

Ferguson’s evidence on this topic.

103. He should be accepted in his denial of Mr Sharp’s evidence that he

(Mr Ferguson) instructed him to remain quiet about the new clause. For

the reasons given above, Mr Sharp presented as an unreliable witness.

However, as importantly, the clause and its ramifications were made

well known to the Union’s committee of management, in circumstances

where there was no suggestion in the minutes of the meeting held on 8

March 200574 that Mr Ferguson’s letter of 25 February 2005 should be

kept confidential.

104. The minutes of that meeting record that:

a. 26 members were present; and

b. the letter of 25 February 2005 was noted and minuted in an

explicit and transparent way.

105. The circumstances in which the letter came before the Committee

of Management was described by Mr Ferguson in terms which are

consistent with good sense and the likely position:

74

P 393 of the Chronological Bundle

45

Q Did you ask to keep the contents of a 25 February letter secret; that is, you asked the 26 persons present to keep that document secret? A. Definitely not. Q. Had you made such a request, would it have been in vain? A. Definitely. Q. Yes. The Committee leaks stuff, does it, from time to time? A. I wouldn't use the word "leaks". People are elected to represent constituency. They report back. This issue was discussed, it was topical in the Union, and it had a lot of attention on it.

106. According to Mr Ferguson, he agreed to inform the Committee of

Management of the letter of 25 February 2005 whilst Mr Sharp disclosed

the agreement with the Drug and Alcohol Safety Committee and

Foundation House.75 That evidence is consistent with a common sense

division of tasks, having regard to the different responsibilities of the

two men. However, the fact that Mr Ferguson indubitably reported to

the Committee in an explicit way strongly corroborates the truth of Mr

Ferguson’s evidence in this respect.

107. In these circumstances Mr Ferguson was perfectly entitled to

believe that Mr Sharp had kept his end of the consensus and that the

committee members for Foundation House were apprised of the true

position.

108. Those committee members included representatives of

employers. In these circumstances, Mr Ferguson could properly form the

belief that those representatives knew of the 50:50 split.

109. Indeed, it is submitted that Mr Sharp’s evidence concerning

concealment, and the submissions to the same effect made by counsel

assisting, strain credulity. As submitted the split was documented and

the letter doing so recorded on the union’s records. No one has

75

Ferguson, 14/8/05, T 548.35

46

suggested that a fable was composed for consistent use by the union’s

organisers in the event that they were asked about the clause, and it is

unlikely- in any event- that so many people could have consistently

adhered to it.76

110. Document MFI-1977 is the only document which records Mr

Ferguson’s contemporaneous instructions to his colleagues within the

union apropos the letter of 25 February 2005. By a series of handwritten

notes, he instructs Mr Knott and Mr Kelly78 to ‘follow up’ on the letter.

To labour the point: he told the union’s co-ordinator for enterprise

bargaining to follow up the letter without urging or insinuating that he

should keep the compact confidential. 79

111. Both Mr Ferguson and Mr Papaconstuntinos gave evidence that

they had discussed the ramifications of the BTG D & A clause at

meetings attended by both union and non-union members.80

112. There was another reason why Mr Ferguson was entitled to take

this view. At T 554.15 the following exchange is recorded:

Q. Do you say there is something in that clause which would alert a reasonable employer that the money was to be split up in some way? A. I think the fact that the money has very clearly been contributed to the Building Trades Group of Unions flags

that it is a contribution to the union movement, and I think without any doubt, if it is a CFMEU agreement, and the CFMEU is

76

Mr Ferguson thought that the Union probably had 50 organisers negotiating EBAs: see Andrew Ferguson, 17/8/15, T 711.41 77

Andrew Ferguson, 17/8/15, T 714.45 78

The CFMEU’s co-ordinator for enterprise bargaining: see Andrew Ferguson, 17/8/15, T 713.29 79

At T 715.7 Mr Ferguson said:

Q. Mr Ferguson, did you ask Mr Knott to keep the contents of this document secret? A. Definitely not. Q. What about Mr Kelly?

A. Definitely not. He coordinated our enterprise bargaining work. 80

Andrew Ferguson, 17/8/15, T 718

47

the dominant Union in the building industry, there would be perhaps an understanding that the money might be contributed to the dominant Union that did the overwhelming amount of safety work in the industry.

113. That logic was correct. It would have been apparent to most

employers, and certainly their representatives, that the Building Trades

Group of Unions was associated with the Union movement.

………………………………..

Miles Condon

Counsel for Mr Ferguson

Ph:

Email: condon@newchambers.com.au