The inquiry heard claims that Andrew Zaf pulled a gun on construction union official Maurice Hill in 1994 during a dispute. After a meeting at Trades Hall at the time, Mr Zaf agreed to not threaten union officials. Mr Zaf on Wednesday said that Mr Hill had apologised to him at that meeting.

He described the gun claims as a "total fabrication" and "lies". "I've never threatened an official," Mr Zaf said."I agreed to appease the situation."

Mr Hill told the inquiry "there was definitely a gun produced ... It was a pistol of some sort." He said he couldn't recall giving a statement to police at the time but said another union official possibly did. He denied apologising to Mr Zaf, who was not charged by police.

Lawyers for the Construction, Forestry, Mining and Energy Union also cross-examined Mr Zaf over his previous evidence of giving a free roof to Mr Setka on his house.

They produced a series of photographs from the 1990s of Mr Setka's house that they say indicate part of the roof Mr Zaf said he supplied, the bull-nose, was added well after Mr Zaf claimed he supplied it. Mr Zaf said his claims were "all true" but conceded the bull-nose on the veranda could have been added later.

Mr Zaf has previously called the alleged gift of a free roof as a "bribe" to Mr Setka.

The inquiry also heard separate evidence about the large Pentridge Prison project, which was hit by delays. Developer Leigh Chiavaroli told the Royal Commission that sub-contractors were forced off the project under pressure by the CFMEU.

Mr Chiavaroli said one sub-contractor had told him "he had had enough" and had to leave as the union and its "Croatian Mafia"were "turning on him like animals".

Mr Chiavaroli said some contractors would turn up on a Saturday afternoon in a bid to avoid CFMEU representatives.

A worker, Thomas Kelly, was killed on the site in October 2009 and John Agius, for the CFMEU, said Mr Chiavaroli was trying to "scapegoat" the union for a series of its own problems it had on-site, including issues with finance, safety, securing settlements and retaining sub-contractors.

Mr Chiavaroli said:  "(I) categorically deny that" and said the union was to blame for the delays.

Mr Agius, cross-examining the developer, said another issue was that the developer was required to pay higher commercial building rates on site, not domestic rates it had wanted to pay.

"We had no option but to do that," Mr Chiavaroli said. "They (CFMEU) regarded it as commercial, we regarded it as domestic."

The inquiry also heard evidence that the project was affected by removing the remains of bushranger Ned Kelly. It was the second appearance by Mr Chiavaroli before the Royal Commission.