Controversial union official John Setka has lost a key plank to his defamation case against Prime Minister Tony Abbott, who he has accused of portraying him as a "thug".
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The Court of Appeal's Chief Justice Marilyn Warren and Justices David Ashley and Simon Whelan ruled against Mr Setka, the CFMEU Victorian secretary, on Tuesday after he had tried to have part of Mr Abbott's defence against the defamation action struck out.
Mr Abbott is arguing a truth defence, pointing out Mr Setka had been accused of threats and intimidation for more than two decades, and that he had convictions for contempt of court, intimidation and wilful trespass dating back to 1988.
Mr Setka, who counsel assisting the royal commission into unions, Jeremy Stoljar, last month recommended police charge for blackmail for his role in an alleged "black ban" of concrete company Boral, claims Mr Abbott has gravely injured his reputation.
Mr Stoljar's submission called for Mr Setka to be charged for leading a "criminal conspiracy" to blackmail Boral into not supplying construction giant Grocon and freezing Boral out of almost all high-rise work in Melbourne's CBD.
The Napthine government has repeatedly attacked state Opposition Leader Daniel Andrews for his Labor factional links to the CFMEU and Mr Setka.
Mr Setka lodged the defamation writ against Mr Abbott in the Supreme Court in May 2012 when he was the Opposition Leader. The union official accused Mr Abbott of defaming him in remarks made at a Master Builders conference at Chirnside Park in February 2012.
He is also suing Sky News for broadcasting the remarks.
Mr Setka took legal action against Mr Abbott after he allegedly claimed the union official was trying to "stand over" people and turning up at the homes of builders uninvited.
Mr Abbott told the conference that "because so many of you have got to go on to [building] sites every day ... you've got to deal with the John Setkas of this world every day and the last thing you need is home visits from some of the gentlemen associated with some of the industrial organisations that you have to deal with every day and those home visits we know take place.
"We know they take place because people like Mr Setka have told us that they take place."
Mr Setka's writ said Mr Abbott's comments portrayed him as someone who unlawfully visited "the homes of people working in the construction industry for the purpose of intimidating them".
He said Mr Abbott's comments implied Mr Setka "is a thug in that he visits the homes of people working in the construction industry for the purpose of intimidating them" and "for the purpose of making demands that amount to extortion".
The three appeal judges on Tuesday dismissed Mr Setka's appeal against an earlier Supreme Court decision not to strike out part of Mr Abbott's defence where the politician, according to Mr Setka, had falsely claimed the union official had made "home visits" to intimidate construction figures.
Mr Setka's lawyers were given until Friday to file written submissions on the issue of paying Mr Abbott's legal costs. The defamation case is expected to return to the Supreme Court for trial at a later date.
