ROYAL COMMISSION INTO TRADE UNION
GOVERNANCE AND CORRUPTION
Brisbane Magistrates Court
Level 4, 363 George Street,
Brisbane, QLD, 4000
On Monday, 14 September 2015 at 10.00am
(Day 1)
CFMEU QLD
Before the Commissioner: The Hon. John Dyson Heydon AC QC
Counsel Assisting: Ms S McNaughton SC and
Mr M Elliott
Instructed by: Minter Ellison, Solicitors
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1 THE COMMISSIONER: Yes, Ms McNaughton?
2
3 MS McNAUGHTON: Is it convenient to deliver an opening
4 address or would you like to take appearances first?
5
6 THE COMMISSIONER: We will take appearances first and then
7 hear the opening. I think large numbers of people have
8 been given authority to appear, but we might take
9 appearances. I see Mr Agius is there, it is not necessary
10 to take his appearance. Any other appearances? Yes?
11
12 MR A J GLYNN QC: Commissioner, I appear with leave for
13 Mirvac. I am instructed by Gilbert + Tobin.
14
15 THE COMMISSIONER: Thank you.
16
17 MR D KENT QC: Commissioner, I appear instructed by
18 Hall Payne Lawyers for the witness Mr Carter.
19
20 THE COMMISSIONER: Yes, thank you.
21
22 MR J D JOHNSON: Commissioner, I am with Johnson
23 Solicitors and Attorneys, and I appear with leave to appear
24 for David Mullan and Diane Graham.
25
26 THE COMMISSIONER: Thank you. Is Mr Evans present?
27
28 MR P W EVANS: Commissioner, I seek leave to appear on
29 behalf of Mr Greenland?
30
31 THE COMMISSIONER: Yes, thank you, Mr Evans. Yes,
32 Ms McNaughton?
33
34 MS McNAUGHTON: I think there is a further appearance.
35
36 MR J R JONES: My surname is Jones, initials JR. I appear
37 for Mr Mathew McAllum.
38
39 MS McNAUGHTON: Commissioner, over the course of the
40 coming days, evidence concerning a number of different case
41 studies will be placed before this Commission. The first
42 of these will be known as the Cornubia House Case Study.
43
44 This first case study examines whether or not secret
45 commissions were provided to Mr David Hanna during his
46 tenure as Secretary of the Builders Labourers Federation or
47 the BLF as it was known.
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1
2 Following the merger of the BLF with the CFMEU in
3 2014, Mr Hanna went on to become President of the
4 Construction and General Division of the CFMEU
5 Queensland/Northern Territory Branch.
6
7 Mr Hanna and his wife own a 10 acre block of land in
8 Cornubia, 30 kilometres south-east of Brisbane. In the
9 period from 2012 to 2014, whilst Mr Hanna was the BLF
10 Secretary, he and his wife arranged for a new residence to
11 be built on the site.
12
13 The home that was constructed is large, the main block
14 having a total area of approximately 505 square metres.
15 The house has been described as including seven-foot
16 ceilings, four king-sized bedrooms, four bathrooms,
17 reverse-cycle air-conditioning, polished concrete flooring,
18 walk-in wardrobes, a walk-through pantry, a second butler's
19 kitchen, a three-car garage and a 12-metre long saltwater
20 pool.
21
22 At the same time this home was being built the
23 developer, Mirvac, was in the process of constructing
24 a number of large buildings that would stand alongside the
25 Orion Springfield Central Shopping Centre, which had itself
26 opened in 2007, south-west of Brisbane. This project,
27 called the Orion Pad Project, had been broken up into
28 several distinct phases.
29
30 Phase two of the project was referred to as Orion
31 Pad 2. The buildings constructed for this phase were to be
32 leased to various major retailers requiring large warehouse
33 spaces, such as Amart and BCF, or Boating, Camping and
34 Fishing. It is the second phase that will feature in some
35 of the evidence to be placed before the Commission.
36
37 In early 2013, Mirvac's construction manager for
38 Queensland was Mr Adam Moore. He had occupied senior
39 construction management positions within Mirvac for about
40 17 years. Mr Moore was the manager with overall
41 responsibility for the Springfield Orion Pad 2 Project. He
42 resigned in August 2013 during the course of the project.
43
44 The person with the day-to-day responsibility for the
45 management of the Orion Pad 2 Project was
46 Mr Mathew McAllum. Mirvac contracted Mr McAllum's company,
47 Kylan Constructions Pty Ltd, as project manager, and
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1 Kylan's services were provided through Mr McAllum. In his
2 capacity as project manager on the Orion Pad 2 Project,
3 Mr McAllum played a significant role in appointing
4 tradespeople to provide goods and services for the project,
5 and in negotiating the terms upon which they would be
6 retained, including the price they would be paid.
7
8 Information has been provided to the Commission to
9 indicate that while project managing the Orion Pad 2
10 Project for Mirvac, Mr McAllum also provided project
11 management services and assistance to the Hannas in
12 relation to the construction of their new home. This
13 involved obtaining quotes for various trades and organising
14 and instructing what work was to be done by those trades
15 and when.
16
17 Mr McAllum did not organise all of the construction
18 work for the Hannas' new home. For instance, the Hannas
19 had initially retained a builder to perform some of the
20 works, including, in particular, structural works, such as
21 the erection of the frame and the construction of the roof.
22 That builder was Shane Dalby of Dalby Constructions. There
23 is no evidence to suggest Mr Dalby was involved in any
24 wrongdoing.
25
26 Mr Dalby's work did not extend to the construction of
27 many of the interior aspects of the home, such as the
28 plumbing, air-conditioning, tiling and electrical works.
29
30 Further, although Mr Dalby had initially been retained
31 to do a substantial quantity of works, as the project moved
32 forward, some of that work was removed from the scope of
33 his building contract by way of variations. Rather than
34 having Mr Dalby do that work, the Hannas, sometimes with
35 the assistance of Mr McAllum, made arrangements for it to
36 be done by various different tradespeople.
37
38 One of the important matters to be investigated
39 concerns whether and, if so, to what extent, the Hannas
40 paid for the work done by the tradespeople that worked on
41 their home. In this regard, questions have arisen as to
42 whether Mr McAllum arranged for the cost of some of the
43 work to the Hannas' home to be included within invoices
44 that were issued to Mirvac by trades working on the Orion
45 Pad 2 Project, such that some of the costs of building the
46 Hannas home were borne by Mirvac.
47
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1 Questions arise as to the extent of the knowledge and
2 involvement of Mr Hanna and various trades in a scheme of
3 this kind. If Mr McAllum, Mr Hanna, and some tradespeople
4 were involved in such a scheme, questions would arise as to
5 why and how the scheme came to be implemented and why each
6 of them acted as they did. Questions would also arise as
7 to whether or not any other representative of Mirvac, that
8 is, apart from Mr McAllum, knew about what was occurring
9 and, if so, why they did not act to prevent its occurrence.
10
11 In respect of such questions, a recurring issue will
12 be the extent to which individuals behaved as they did
13 because Mr Hanna was at that time a very senior official of
14 the BLF, holding a position of considerable authority and
15 influence in the construction industry.
16
17 This will include considering whether benefits were
18 bestowed on Mr Hanna in order to induce or reward him to
19 act in a particular way in relation to the Union's affairs
20 or business, or, that the receipt of such benefits would in
21 some way tend to influence him to show favour, or, forebear
22 him to show disfavour in relation to the Union's affairs or
23 business.
24
25 Apart from considering whether or not the evidence may
26 amount to an offence contrary to the relevant secret
27 commissions provision in Queensland, section 442B of the
28 Criminal Code, possible breaches of other laws by Mr Hanna,
29 and possibly by others, may also need to be considered.
30 For example, the offence of fraud in section 408C of the
31 Criminal Code makes it a crime for a person to dishonestly
32 obtain property from, gain a benefit from, or cause
33 a detriment to another - in this case, Mirvac.
34
35 Consideration may also be given as to whether Mr Hanna
36 departed from Union policies or the professional standards
37 expected of an official of a registered organisation.
38
39 A number of individuals have been summonsed to give
40 evidence this week in relation to this case study. They
41 include Mr Hanna and Mr McAllum, along with the directors
42 and employees of a number of trades who worked on either or
43 both of the Hannas' home or the Orion Pad 2 Project in
44 2013.
45
46 Following the Cornubia House Case Study, the
47 Commission will examine some other Queensland based case
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1 studies. It is expected that they will commence next week.
2
3 THE COMMISSIONER: Yes. Thank you.
4
5 MS McNAUGHTON: By way of housekeeping, Commissioner,
6 there are a number of matters.
7
8 THE COMMISSIONER: Yes.
9
10 MS McNAUGHTON: First of all, I have a Draft Practice
11 Direction for the Cornubia Case Study to make available for
12 you, Commissioner.
13
14 THE COMMISSIONER: That has been circulated amongst the
15 legal representatives involved?
16
17 MS McNAUGHTON: Yes.
18
19 THE COMMISSIONER: I will make the practice direction for
20 the Cornubia Case Study, a copy of which has just been
21 handed up, and I'll sign that copy in the absence of any
22 objection to it. The next matter?
23
24 MS McNAUGHTON: We would be seeking a non-publication
25 order over the house number and the street name of the
26 Hanna house because that is a family home.
27
28 THE COMMISSIONER: Again, in the absence of any
29 opposition, it seems appropriate to make a non-publication
30 order in relation to the street number and name of the
31 house.
32
33 MS McNAUGHTON: Thank you. It is convenient now to tender
34 five volumes of material that will be used in the course of
35 the case study.
36
37 THE COMMISSIONER: They will be called CFMEU Queensland
38 Hanna House Bundle. Is that what the folders bear on their
39 outside?
40
41 MS McNAUGHTON: Yes.
42
43 THE COMMISSIONER: So far as there are folders?
44
45 MS McNAUGHTON: Yes. Because, in fact, Mr Hanna was a BLF
46 Secretary at the time, another alternative name would be
47 the Cornubia House Case Study.
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1
2 THE COMMISSIONER: I think let's call them Cornubia House
3 Case Study MFI-1.
4
5 MS McNAUGHTON: Yes, thank you.
6
7 CORNUBIA HOUSE CASE STUDY MFI-1 FIVE VOLUMES OF MATERIAL
8
9 THE COMMISSIONER: You said five, is that the right
10 number?
11
12 MS McNAUGHTON: It should be five.
13
14 THE COMMISSIONER: All right. Five. I appreciate some
15 people present may not have been able to examine either the
16 folders or their electronic equivalent. If anyone has any
17 objection to any part of it, they're at liberty to make
18 that objection, as long as it is done within a reasonably
19 short time like, for example, the end of tomorrow or some
20 time on Wednesday. Yes.
21
22 MS McNAUGHTON: Thank you. My colleague, Mr Elliott, will
23 call the first witness.
24
25 THE COMMISSIONER: Very well.
26
27 MR ELLIOTT: Commissioner, the first witness is Mr Dalby.
28
29 <SHANE EDWARD DALBY, sworn: [10.14am]
30
31 <EXAMINATION BY MR ELLIOTT:
32
33 MR ELLIOTT: Q. Mr Dalby, what is your full name?
34 A. Shane Edward Dalby.
35
36 Q. You are a resident of Queensland?
37 A. Yes.
38
39 Q. You are a builder by occupation?
40 A. (Nods).
41
42 Q. You will have to say "yes" for the benefit of the
43 transcript?
44 A. Yes.
45
46 Q. Are you the owner and director of a company called
47 Dalby Constructions Pty Ltd?
.14/09/2015 CFMEU QLD 7 S E DALBY (Mr Elliott)
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1 A. Yes.
2
3 Q. And that is a company through which you carry on
4 business as a builder?
5 A. Yes.
6
7 Q. How long has that business been running for?
8 A. Twelve, 15 years maybe, somewhere around there.
9
10 Q. Does it operate in one particular sector, the domestic
11 sector?
12 A. Domestic only, yes.
13
14 Q. Do you know David and Jenny Hanna?
15 A. Yes.
16
17 Q. And how long have you known them for?
18 A. Probably 10 years - yes, 10 years.
19
20 Q. How would you describe the nature of your relationship
21 with them?
22 A. Good friends.
23
24 Q. Do you live in the same part of Brisbane?
25 A. Yes.
26
27 Q. Approximately how far away? Are you neighbours?
28 A. No. No. We used to live in Cornubia and now we're in
29 Shayler Park, so 10, 15K apart.
30
31 MR ELLIOTT: Could Mr Dalby please be shown volume 1 of the
32 Cornubia MFI materials?
33
34 Q. I am showing you a folder of documents and if you open
35 it up you will see, in the bottom right-hand corner, there
36 are page numbers.
37 A. Yes.
38
39 Q. Could I ask you to go to page 20 of that folder.
40 A. Yes.
41
42 Q. You will see there a building contract?
43 A. Yes.
44
45 Q. Is that a building contract that you signed on behalf
46 of Dalby Constructions with the Hannas?
47 A. Yes.
.14/09/2015 CFMEU QLD 8 S E DALBY (Mr Elliott)
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1
2 Q. And that was for the construction of a new residential
3 house on a block in Cornubia?
4 A. Yes.
5
6 Q. You will see on page 20, at about halfway down the
7 page, just above a large thick black line, there is a note
8 and above that note there is two boxes, the owner is or is
9 not a resident owner, do you see that?
10 A. Yes.
11
12 Q. And the "not" box has been ticked.
13 A. All right.
14
15 Q. When you were engaged to undertake this building work
16 was there any residence on the block?
17 A. As in a premise?
18
19 Q. Yes.
20 A. Yes.
21
22 Q. What was there prior to the building that you
23 constructed?
24 A. There was another building there.
25
26 Q. Was it a residence?
27 A. Yes.
28
29 Q. Were the Hannas residing in that residence?
30 A. Yes.
31
32 Q. So they were living on the property but in a house,
33 obviously, that was already there?
34 A. Yes.
35
36 Q. If I could just ask you to go over to page 23, you
37 will see the contract in item 18 was created or executed in
38 early February 2013 - 2 February. Do you see that?
39 A. Yes.
40
41 Q. And in item 17, you will see item (a) says the plans
42 were supplied by the owner on 20 December 2012.
43 A. Yes.
44
45 Q. Could you just describe for the Commissioner the
46 background to the creation of this contract, how did it
47 come about? Did Mr Hanna approach you at some point in
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1 time?
2 A. Approached - we discussed in regards to building
3 a home there and it just eventuated from that, pretty much.
4
5 Q. Did he approach you would it have been in December,
6 about the time the plans were supplied?
7 A. I don't recall. It would have been close to that,
8 I would imagine, but I don't recall.
9
10 Q. Some time in the second half of 2012?
11 A. Probably, yes.
12
13 Q. Towards the end of the year?
14 A. Maybe, yes.
15
16 Q. If I could just ask you then to go back to page 21, to
17 item 1, where the works are described, somebody has written
18 in hand:
19
20 Construction of a new dwelling to lock up
21 stage
22
23 A. Yes.
24
25 Q. Could you just explain what that means?
26 A. That means taking a house to frame, roof, getting it
27 ready for services, and external linings and internal
28 linings to go on, so --
29
30 Q. Would that include - in terms of the framing, there is
31 obviously the exterior of the house?
32 A. So that would just include you just put your windows
33 in and get it ready for it to be lined.
34
35 Q. In terms of the internal linings, there would be
36 framing throughout the house?
37 A. Yes.
38
39 Q. But without --
40 A. That's done afterwards.
41
42 Q. Yes, but without the lining?
43 A. Yes.
44
45 Q. And what would it not include, typically?
46 A. What do you mean?
47
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1 Q. What sort of things would not be included in
2 a contract that was to take a dwelling to lock-up stage?
3 A. Pretty much from that stage on, from the internal and
4 external linings and on to the end.
5
6 Q. So all of the internal works that would need to be
7 undertaken were not included within the scope of your
8 contract?
9 A. No.
10
11 Q. So the lining of the walls?
12 A. No.
13
14 Q. Internal cabinetry?
15 A. No.
16
17 Q. Internal plumbing?
18 A. No.
19
20 Q. Tiling?
21 A. No.
22
23 Q. Air-conditioning works?
24 A. No.
25
26 Q. None of that was included in your contract? You will
27 see on the same page - I'm sorry, over the page, page 22,
28 item 10 --
29 A. Yes.
30
31 Q. -- the contract contemplated four stages of progress
32 payments?
33 A. Yes.
34
35 Q. Could you just very briefly explain for me what each
36 of those four phases involved?
37 A. So slab stage is slab on ground, concrete, poured,
38 done; frame is frame, roof, roof trusses, done, passed;
39 your roof on, metal roof, fascia, gutters; and your lock-up
40 is just your windows and straightening the frame and
41 getting it ready for your linings to go on.
42
43 Q. Could I then ask you to go forward in the same bundle
44 to page 25 where you should find the start of a series of
45 plans for the dwelling.
46 A. Yes.
47
.14/09/2015 CFMEU QLD 11 S E DALBY (Mr Elliott)
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1 Q. You will see from this copy of the plans that they're
2 dated in March 2013. In the bottom right-hand corner you
3 will see an "Approval" stamp?
4 A. Yes.
5
6 Q. Did you receive a copy of these approved plans at some
7 stage?
8 A. I did, yes.
9
10 Q. Were they given to you by Mr Hanna?
11 A. Yes.
12
13 Q. The plans were drawn up by a William H Wilson and
14 Associates. Did you have any dealings with them at all?
15 A. We use them.
16
17 Q. Did you retain them to do the final --
18 A. No, no, I just put them on to them to use them,
19 because we use them all the time.
20
21 Q. Can I ask you to go over to page 26. You will see on
22 the left-hand side of this landscape document a site plan?
23 A. Yes.
24
25 Q. Did that accurately record where the residence was to
26 be constructed on the lot as a whole?