Union "animals" threatened to kill a plumber unless he raised his prices, a developer has told the unions royal commission.

But union lawyers responded by saying Melbourne developer Leigh Chiavaroli was looking for a scapegoat after his Pentridge Prison redevelopment stalled.

Mr Chiavaroli told the inquiry on Wednesday that Croatian officials from the Construction, Forestry, Mining and Energy Union (CFMEU) threatened plumber Joe Mellino to make him raise his prices on the job.

“He called it the Croatian mafia and that he was being pressured to the point where they were turning on him like animals,” Mr Chiavaroli told the inquiry on Wednesday.

“According to his words, I quote, ‘They’re like animals, they’ll kill me’.”

Mr Chiavaroli blamed CFMEU interference for the development stalling, but union lawyer John Agius SC said financial mismanagement and a dispute over bushranger Ned Kelly’s remains were behind it.

“I suggest to you that you’re scapegoating the CFMEU for the losses that were sustained because you do not want to take responsibility for the financial mismanagement of your own project,” Mr Agius said.

“I categorically deny that,” Mr Chiavaroli replied.

He agreed the discovery of Kelly’s remains had delayed the project, but denied it was the reason the developers had cash-flow problems.

The site was shut down after worker Thomas Kelly died in 2009, at which point the CFMEU became involved in the project.

Mr Chiavaroli said $30,000 was given to Mr Kelly’s widow, but denied promising to give her $100,000.

Mr Chiavaroli said the CFMEU told him they would shut the site down after Mr Kelly’s death unless he employed their occupational health and safety officer.

But Mr Agius said the site had already been shut down due to the death.

Builder Andrew Zaf, who says he built a free roof for CFMEU Victorian secretary John Setka, said he was threatened just three days after giving evidence to the commission in July.

Mr Zaf, who also denied pulling a gun on a union official in 1994, said two employees of Hells Angels bikie Peter Hewat went to get some equipment back from one of his sites.

“Two gentlemen came out of their truck, one on the passenger side with a baseball bat, and one on the driver’s side, he had a steel tyre lever,” Mr Zaf told the inquiry.

He said Mr Hewat’s towing company owed him money, but they believed he owed them money.

Former CFMEU official Maurice Hill told the commission Mr Zaf pulled a gun on him over a dispute in 1994, but Mr Zaf said it was “totally fabricated”.

By Angus Livingston